civ pro full text rule17-21

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Rule 17 notice to dismiss/motion to dismiss by plaintiff/court

Ruiz Jr vs CA (nothing in the rules that imposes a sanction for failure to submit acompromise agreement) p2

Rule 18 (PRETRIAL)

Intelining vs Philippine trust company(objective of pretrial) P12

Young vs CA (no 2nd pretrial without consent of parties) p16

Son vs Son (determination of issues in pretrial conference bars the consideration of otherquestions on appeal) p 25

IBAA vs IAC ( not all issues must be resolve, only those are necessary for resolution of thecase) p33

Rule 19 INTERVENTION

Roxas vs Dinglasan (interest –direct/immediate that intervenor will Gain/Lose p40

Barangay Matictic vs Elbinias ( Int- collertal, accessory, ancillary. Dismissal of original action,Complaint in intervention can no longer be acted upon) p 45

Foster -Gallego vs Galang (motion denying intervention is appealabe) p49

Rule 20 Calendar

Ang v Bello (purpose : to obviate public suspicion regarding assignment of cases) p61

Rule 21 SUBPPOENA

Adorio vs bersamin (no notice to other parties is required) p64

Collado v Bravo (absent any proceeding, suit or action, commenced or pending before court,

a subpoena may not be issued) p72



G.R. No. 101566 March 26, 1993

HON. FLORENCIO A. RUIZ, JR., SENT OF GOD FOUNDATION, INC., S OF G FOUNDATION,INC., RAUL G. FORES, SENEN P. VALERO and FATHER ODON DE CASTRO, petitioners,vs.THE HON. COURT OF APPEALS, SPS. OLEGARIO ORBETA and SUSANA ROSARIO S.

ORBETA,respondents.

Antonio Coronel and Norberto L. Villarama for petitioners.

Eladio B. Samson for private respondents.

Antonio E. Escober collaborating counsel for private respondents.

R E S O L U T I O N

GRIÑO-AQUINO, J.:

The private respondents, spouses Olegario Orbeta and Susana Rosario S. Orbeta, have filed amotion for reconsideration of the decision dated August 17, 1992 of this Court which reversed thedecision of the Court of Appeals 1 granting the petition for certiorari in CA-G.R. SP No. 17013, "SpousesOlegario Orbeta and Susana Rosario S. Orbeta, petitioners vs. Hon. Florencio A. Ruiz, Jr., et al." andupholding on procedural grounds, the orders of the Regional Trial Court of Ilocos Sur, dismissing theCrisologos' complaint and the Orbetas' answer with cross claim, in Civil Case No. 313-KC, entitled"Carmeling P. Crisologo, et al., vs. Sent of God Foundation Inc., et al."

This is a splinter case arising from the complaint filed on July 29, 1988 by Carmeling P. Crisologoand her children for revocation of two (2) deeds of donation: (a) the first was a donation made on

September 17, 1976, of a100-hectare island in Cabugao, Ilocos Sur; and (b) the second was a donation of two (2) lots inGuimod, San Juan, Ilocos Sur, to the Sent of God Foundation, Inc., which was represented in bothtransactions by Carmeling's niece, Susana Rosario Orbeta, and her husband, Olegario Orbeta, whowere members of the Sent of God Foundation, Inc., otherwise known as the Caryana Movement, areligious cult headed by a Benedictine monk, Father Odon de Castro, as the group's spiritualdirector. The donations were subject to three (3) conditions imposed by the donors, to wit:

(1) that the donated land shall be used exclusively to provide a monastic life andexperience according to the rules of St. Benedict, and for such other religious andcharitable purposes as may be determined by the donee;

(2) that the donee shall not sell, lease or allow the use of the parcels of land donatedor any part thereof for any other purposes; and

(3) that in the remote event that the donee no longer needs the property for itsreligious and charitable purposes, the same shall revert to the donors or their heirs.

Ten years later, on November 7, 1986, the Sent of God Foundation, Inc., represented by itschairman of the board of trustees, Dr. Raul Fores, with the consent of the donors, transferred thePuro-Salomague Island (renamed St. Benedict Island by Fr. Odon de Castro) to the S of G



Foundation, Inc., represented by Senen P. Valero, subject to the same conditions as the originaldonation.

Unfortunately, the Caryana Movement was denied canonical recognition and its spiritual director washimself expelled from the Benedictine order and stripped of his priestly functions by the Archbishopof Manila, Jaime Cardinal Sin.

Disturbed by these developments, for one of the conditions of her donation to the Movement wasthat the Island would be used "to provide a monastic life and experience according to the rules of St.Benedict," Mrs. Crisologo wrote a letter on February 8, 1988 to Dr. Fores, asking for the return of herisland. Dr. Fores assured her that the papers would be prepared for that purpose. On February 23,1988, she wrote another letter to Dr. Fores reminding him of his promise to return the Island andoffering to reimburse the Foundation for its improvements on the island. Dr. Fores asked for aconference with Mrs. Crisologo to hasten the return of the island to her. But shortly thereafter, in thesame month of February, 1988 and continuing up to March, the Sent of God Foundation, Inc. and Sof G Foundation, Inc., abandoned Puro-Salomague Island. Their agents destroyed and demolishedalmost all the improvements thereon.

A third letter dated March 9, 1988 was written by Mrs. Crisologo, addressed to Mrs. Concepcion(Chit) Feria, a member of the Sent of God Foundation, Inc., reiterating her request for the return ofthe island, but nothing happened.

On July 29, 1988, Mrs. Crisologo and her children filed a complaint (Civil Case No. 313-KC,Regional Trial Court, Branch 24, of Cabugao, Ilocos Sur) against the Sent of God Foundation, Inc.,the S of G Foundation, Inc., Raul G. Fores, Senen P. Valero, Fr. Odon de Castro and SpousesOlegario and Susana Rosario S. Orbeta for the revocation of the donation and the return of theisland to the donors.

In their answer dated August 30, 1988, the defendants (except the Orbetas) admitted the donationsbut denied that they had violated the conditions thereof. They further alleged that the Crisologos hadno basis for revoking the donations because canonical recognition is not required for a lay

community to live a Christian life in accordance with the rules of St. Benedict; that the expulsion ofFr. Odon de Castro from his Order is pending review by the authorities in Rome; and that the circularof the Archdiocese of Manila disallowing him to perform priestly functions was already known to theCrisologos when they gave their consent to the donation of the island to the S of G Foundation, Inc.,to which the island was transferred because the S of G Foundation is a qualified tax-exempt donee.They alleged that they did not destroy, but only "dismantled," their improvements on the islandpreparatory to the transfer of the group to Sabang in order to avoid harassment by Susana Orbetawho had been expelled by the Sent of God Foundation, Inc., allegedly for violating the rule of povertyof St. Benedict. They admitted Dr. Fores' promise to return the island to the Crisologos but gavereasons for the delay in effecting the reconveyance, among which was the legal problem allegedlyraised by dispossessed farmers. They denied that they abandoned the island for they merelytransferred from the upper portion thereof to the lower portion where the rule of poverty may be more

properly observed. Their answer contained a counterclaim for attorney's fees and expenses oflitigation. They prayed that the complaint be dismissed, or, in the alternative, that the Crisologos andthe Department of Agrarian Reform be compelled to interplead their claims to the island.

Plaintiffs filed an answer to the counterclaim on September 22, 1988.

The Orbetas filed a separate Answer with Cross-claim on September 30, 1988, making commoncause with the plaintiffs. They alleged that in January 1976, Fr. Odon de Castro instructed Mrs.Orbeta to look for an ideal place in Ilocos Sur to house the monastery of the Caryana Movement, so



she thought of approaching her aunt, Mrs. Crisologo, who is a devout Catholic and devotee of St.Benedict, and who is considered one of the biggest landowners in Ilocos Sur. Even if she had notmet Fr. Odon, Dr. Fores, and Senen Valero, pillars of the Sent of God Foundation, Inc., Mrs.Crisologo was persuaded by Mrs. Orbeta to give her Puro-Salomague Island for the use of theCaryana Movement. Upon inspection by Fr. Odon, the island was found suitable for the purposes ofthe movement, but since the Sent of God Foundation, Inc., did not have money to buy it, Mrs. Orbeta

persuaded her aunt to donate it to the Foundation subject to certain conditions already mentioned inthe complaint. The Orbetas confirmed that the Foundation violated the conditions of the donationwhen it was denied canonical permission to teach the monastic life according to the rules of St.Benedict. The Orbetas joined the plaintiffs' demand for the reversion of the island to the donors. TheOrbetas further alleged that because of the "misrepresentation, deceptions, questionable practicesand heretical teachings of defendant Fr. Odon de Castro, they (Orbetas) disassociated themselvesfrom the Caryana Movement; that as the denial of church recognition for the Caryana Movement andthe dismissal of Fr. Odon de Castro, as a Catholic monk of the Benedictine Order, violated theconditions of the donations, the Orbetas alleged that they have a legal obligation to return the islandto the plaintiffs; and that the alleged protest of the farmers is a concoction of the Foundations todelay the return of the island to the Crisologos for the tenancy case between some farmers and Mrs.Crisologo had been settled in 1980 yet, by an Order dated May 28, 1980 of the Minister of AgrarianReform.

The Orbetas asserted a cross claim against their co-defendants for moral and exemplary damagesand expenses of litigation because the refusal of the Foundations to reconvey the island to theCrisologos caused the Orbetas to be dragged into this case, and has put them (Orbetas) "in a badperspective"(p. 148, Rollo). They prayed that judgment be rendered for the plaintiffs and that the Foundationsand their co-defendants be ordered to pay damages.

On November 24, 1988, the Foundations, etc. filed a "Motion to Dismiss Crossclaim (of the Orbetas)and to Strike Out."

On December 5, 1988, the Foundations, etc. (except the Orbetas) filed a "Motion to Dismiss and to

Drop Defendants," alleging that: (1) the complaint states no cause of action against the Foundationsbecause they did not violate the conditions of the donation; and (2) the individual defendants (Fores,Valero and Fr. De Castro) are not real parties in interest for they merely acted for the Foundationswhich have legal personalities separate from their officers. Furthermore, the original deeds ofdonation in favor of the Sent of God Foundation, Inc. have already been cancelled by the executionof a third deed of donation by the Sent of God Foundation, Inc. in favor of the S of G Foundation,Inc., with the consent of the plaintiffs. The motion was set for hearing on December 16, 1988 at 2:00p.m.

A copy of the motion to dismiss was received by the Secretary of plaintiffs' counsel, AttorneyEduardo Alcantara, on December 14, 1988, or one day short of the reglementary 3-day notice. OnJanuary 2, 1989, Attorney Alcantara, who was in Manila when the motion was received in his officein Vigan, filed an "Explanation and Vigorous Opposition to the Motion to Dismiss and DropDefendants." However, on the same date, Judge Florencio A. Ruiz, Jr. issued an Order overrulingthe Opposition for "having been filed out of time" and dismissing the complaint because "the groundsalleged in support thereof (are) meritorious, even as no timely opposition to defendants' motion todismiss had been filed by any of the adverse parties on or before the scheduled date and time ofhearing thereon . . ." The Orbetas' cross claim was also dismissed because it had "no more leg tostand on." (p. 160, Rollo.)



On January 12, 1989, the plaintiffs filed a motion for reconsideration, which was adopted by theOrbetas in an urgent ex parte manifestation dated February 7, 1989. This motion was denied onFebruary 8, 1989. The Crisologos then sought a review of the order of dismissal by the Court of

Appeals through a petition for certiorari under Rule 65 of the Rules of Court, alleging grave abuse ofdiscretion on the part of the trial court. Docketed as CA-G.R. No. SP-16837, it was dismissed onMay 2, 1989, 2 on the ground that the proper remedy was an ordinary appeal. The appellate court ruled

that "since the petitioner did not appeal the questioned order of January 2, 1989, of respondent courtdismissing the complaint, said order had become final and executory." (p. 42, Rollo.)

The Orbetas who had not joined the Crisologos in CA-G.R. No.SP-16837, filed their own petition for certiorari in the Court of Appeals where it was docketed as CA-G.R. SP No. 17013. Their petition prospered. On September 28, 1990, the Court of

Appeals 3 annulled Judge Ruiz's order of dismissal and reinstated the complaint. Reconsideration of thisdecision was denied on August 27, 1991. The Foundations, etc. appealed to this Court which, aspreviously stated, reversed the Court of Appeals.

The Orbetas filed a motion for reconsideration of our decision. The Court denied it by resolutiondated October 21, 1992. However, the Orbetas filed a timely Motion to Recall that resolution. Theyinvited the court's attention to the fact that the resolution denying their motion for reconsideration did

not carry the necessary votes of three (3) justices for only Justices Cruz and Aquino voted on it asJustice Bellosillo took no part and Justice Medialdea was on sick leave of absence, when the motionfor reconsideration was deliberated upon. 4 Consequently, the Division decided to refer the case to theCourt En Banc which recalled the resolution for lack of the necessary votes and constituted a SpecialFirst Division 5 to deliberate on the Orbetas' motion for reconsideration.

After a careful review and study of the records, the Court finds merit in the motion forreconsideration. The Court of Appeals did not commit a reversible error in setting aside the orders ofJudge Florencio A. Ruiz, Jr. granting the motion to dismiss the complaint in Civil Case No. 313-KCbecause:

(1) Judge Ruiz gravely abused his discretion in proceeding to hear and grant the motion to dismiss

of the defendants (except the Orbetas) without the requisite 3-day notice to the plaintiffs; and

(2) The Orbetas are proper parties-in-interest to seek a review on certiorari of the trial court's orderdismissing the complaint in Civil Case No. 313-KC.

The trial court gravely abused its discretion in issuing the order of dismissal because the plaintiffswere given only two (2) days' notice (the Orbetas none at all) of the hearing of the motion to dismiss.The notice was received in the office of the plaintiffs' counsel (not by counsel himself) on December14, 1988. The motion was heard on December 16, 1988.

The motion to dismiss was filed after the defendants had already answered the complaint. Havingalready filed their answer, the Foundations were estopped from filing a motion to dismiss the

complaint, for a motion to dismiss should be filed "within the time for pleading," i.e., within the time toanswer (Sec. 1, Rule 16, Rules of Court).

The allegation of the defendants (except the Orbetas) that the complaint did not state a cause ofaction was not a proper ground to dismiss it for said defendants could not have joined issue uponthe material allegations of the complaint if the same did not state a sufficient cause of action againstthem. A careful perusal of the complaint of the Crisologos, and the Orbetas' "answer," shows that theelements of a cause of action are pleaded therein.



While the Orbetas were impleaded as defendants in the action, together with the Foundations, Fr.Odon de Castro, Dr. Raul G. Fores, and Senen Valero, they filed a separate answer makingcommon cause with the plaintiffs. Their answer included a cross claim for damages against their co-defendants. Their answer with cross-claim was, in effect, a complaint against the Sent of GodFoundation, Inc. and the other defendants. This peculiarity of their pleading could not have beenmissed by the trial court, for the other defendants in fact accused them of collusion with the plaintiffs.

In view of that circumstance, the trial court should have looked beyond the form, to the substance, oftheir pleading. In the interest of justice and orderly procedure, the trial court should have treated theiranswer as a complaint and should have ordered them to disassociate themselves from the otherdefendants and be joined as additional plaintiffs in the case, for that is the side with which they havealigned themselves.

The Orbetas had an interest in the subject matter of the Crisologos' suit for they were theconduit, through whom the Crisologos effected the donation of their island to the Sent of GodFoundation, Inc. They were signatories of the deed of donation of Puro-Salomague Island. Beinginstrumental in obtaining the donations from the Crisologos, they are de facto plaintiffs with an actualinterest in the enforcement of the conditions of the donation and in the recovery of the donatedproperty on account of the donee's violations of the conditions of the donation.

Being de facto plaintiffs, the Orbetas could file in the Court of Appeals a separate petition for reviewon certiorari of the trial court's order dismissing their demand for the reversion of the island to thedonors.

The finality of the trial court's order dismissing the Crisologos' complaint was not an obstacle to theplaintiffs' and the Orbetas' recourse to the Court of Appeals by a petition for certiorari under Rule 65of the Rules of Court for such a petition may be filed "within a reasonable time," not within the time toappeal (Great Pacific Life Assurance Corporation vs. NLRC, 188 SCRA 139; Andaya vs. NLRC, 188SCRA 253).

Even if appeal should have been the proper remedy against an oppressive and arbitrary order ordecision of a lower court, the aggrieved party may avail of the special civil action of certiorari when

appeal would not be a speedy and adequate remedy. In this case, appeal would have been neitherspeedy nor adequate for the plaintiffs and the Orbetas had not been given a chance to prove theircauses of action, hence, there was no evidence in the records upon which to anchor a judgment bythe Appellate Court in their favor.

. . . the Appellate Court can legally entertain the special civil action of certiorari in CA-G.R. No. 14821-SP considering the broader and primordial interests of justice whichcompel an occasional departure from the general rule that the extraordinary writof certiorari cannot substitute for a lost appeal, the order of March 15, 1979 havingbecome final upon the lapse of the reglementary period of appeal. (Pachoco vs.Tumangday and Fernando, etc., 108 Phil. 239; Co Chuan Seng vs. CA, 128 SCRA308; Destileria Limtuaco & Co. vs. IAC, 157 SCRA 706; Del Pozo, et al. vs. Judge

Penaco, 167 SCRA 577; Fernando Pelagio, et al. vs. The Hon. Court of Appeals, etal., G.R. No. 63188, June 13, 1990; Emphasis supplied.)

Certiorari is one such remedy. Considered extraordinary, it is made available onlywhen there is no appeal, nor any plain, speedy or adequate remedy in the ordinarycourse of the law (Rule 65, Rules of Court, Section 1). The long line of decisionsdenying the petition for certiorari , either before appeal was availed of or specially ininstances where the appeal period has lapsed, far outnumbers the instanceswhen certiorari was given due course. The few significant exceptions were: when



public welfare and the advancement of public policy dictate: or when the broaderinterests of justice so require, or when the writs issued are null (Yu Tirona vs.Nanawa, No. L-22107, September 30, 1967, 21 SCRA 395, 400; Director of Landsvs. Santamaria, 44 Phil. 594, 596, cited in 3 Moran, Comments on the Rules ofCourt, 170-172 (1980), or when the questioned order amounts to an oppressiveexercise of judicial authority . (Acain vs. IAC, 155 SCRA 100; Sunbeam Convenience

Foods Inc., et al. vs. Hon. Court of Appeals, et al., 181 SCRA 443; Emphasissupplied.)

IN VIEW OF ALL THE FOREGOING, we GRANT the motion for reconsideration and AFFIRM thedecision dated September 28, 1990 of the Court of Appeals in CA-G.R. SP No. 17013. The ordersdated January 2, 1989 andFebruary 8, 1989 of herein petitioner, Judge Florencio A. Ruiz, Jr., in CivilCase No. 313-KC are hereby ANNULLED AND SET ASIDE. Said civil case should proceed to trialon the merits with all reasonable dispatch. Costs against the petitioners.

SO ORDERED.

Romero and Campos, Jr., JJ., concur .

Separate Opinions

CRUZ, J., dissenting:

With all due respect, I must dissent from the resolution granting the motion for reconsideration of thedecision in the above-named case which I penned with the concurrence of Justice Carolina C. Griño-

Aquino and the late Justice Leo D. Medialdea.

The relevant facts are summarized as follows:

The Crisologos filed a complaint against the Sent of God and the Orbetas for revocation of donation.The Sent of God filed an answer resisting the complaint. The Orbetas confessed judgment and fileda cross-claim against the Sent of God. The Sent of God later filed a motion to dismiss the complaintfor lack of a cause of action. The motion was granted. The Crisologos moved for reconsideration.The Orbetas joined them because the dismissal included the cross-claim. Their motion was denied.

After the order of dismissal had become final and executory, the Crisologos challenged it before theCourt of Appeals in a special civil action for certiorari (CA-G.R. Sp. No. 16837). The petition wasdismissed on the ground that Rule 65 could not be used as a substitute for a lost appeal. TheCrisologos accepted this decision and did not appeal to this Court. Later, the Orbetas filed their ownpetition, also for certiorari under Rule 65, against the same order of the trial court (CA-G.R. Sp. No.17013). This time the Court of Appeals, through the same division but with a different membership,granted the petition and ordered the reinstatement of the complaint. The Sent of God then came tothis Court.



In the original ponencia, the Court sustained the Sent of God on the following main grounds:

1. The special civil action filed by the Crisologos was the wrong remedy and was used only as asubstitute for a lost appeal.

2. The dismissal of the complaint resulted in the dismissal of the cross-claim, which was defensive in

nature and could not exist independently of the complaint.

3. The Orbetas cannot have more rights than the Crisologos in attacking the dismissal of the latter'scomplaint.

In the present resolution, the majority first invokes procedural rules by questioning the validity of themotion to dismiss and by theorizing that the Orbetas should have been considered independentplaintiffs rather than just cross-claimants. It then turns around and rejects procedural rules bymaintaining that they should not stand in the way of substantial justice.

It is contended that the motion to dismiss was defective for lack of the three-day notice and that theSent of God was in estoppel, having already filed its answer.

Assuming these grounds to be valid, I submit they should have been raised within the reglementaryperiod before the Court of Appeals in an ordinary appeal (Villanueva v. CA, 205 SCRA 537; KabushiKaisha Isetan v. IAC, 203 SCRA 583; Sembrano v. Ramirez, 166 SCRA 30). This is considered aplain, speedy and adequate remedy under Section 39 of BP 129 and Section 19(a) of the InterimRules. Instead, the Crisologos filed a special civil action under Rule 65, which was correctlydismissed as an inappropriate remedy.

There is also the ingenious theory that the Orbetas should have been considered not mere cross-claimants but plaintiffs in their own right who therefore had the capacity to question the dismissal oftheir complaint against Sent of God.

If we are going to accept this nice technicality, then I think we should also check if the Orbetas paidthe prescribed filing fees to justify the docketing of their suit. If they did not (and this is virtuallycertain as the theory apparently never occurred to them), then their complaint should have been, forthat reason alone, dismissed at the outset. Neither would they have been entitled to appeal from thedismissal of the Crisologos' complaint inasmuch as, following the theory, they would not even becross-claimants therein.

The other thrust of the resolution is that even if the order of dismissal was not seasonablychallenged in an ordinary appeal, it could still be assailed under Rule 65 on the ground of substantial

justice.

This is an old refrain that is sung whenever the petitioner cannot defend his non-compliance with theprescribed procedure. The majority dissent cites a long list of cases to support the exception to therule, but given time I can submit a longer list to the contrary (Tupas v. CA, 193 SCRA 599; Bank of

America NT & SA v. CA, 186 SCRA 417; Dulos v. CA, 188 SCRA 414; Edra v. IAC, 179 SCRA344, among many others). The point is that if the Crisologos really believed they had a just cause ofaction, they should have asserted and defended it with all their attention according to the rules.Instead, they soundly slept on their rights and bestirred themselves only when it was too late.

The majority would now salvage the Crisologos' lost appeal by allowing the Orbetas (who have beenwith them all the way) to file their separate challenge to the dismissal of the Crisologos' complaint.



By allowing the Orbetas to do so, we shall in effect enable the Crisologos to indirectly correct theirinaction and mistake through the Orbetas, and, worse, by a method not permitted by the rules. TheOrbetas are using the same improper remedy employed by the Crisologos.

Procedural rules are not so trivial that they may be applied willy-nilly by the Court. As we saidin Limpot v. Court of Appeals (170 SCRA 367):

Rules of procedure are intended to ensure the orderly administration of justice andthe protection of substantive rights in judicial andextrajudicial proceedings. It is a mistake to suppose that substantive law andadjective law are contradictory to each other or, as has often been suggested, thatenforcement of procedural rules should never be permitted if it will result in prejudiceto the substantive rights of the litigants. This is not exactly true; the concept is muchmisunderstood. As a matter of fact, the policy of the courts is to give effect to bothkinds of law, as complementing each other, in the just and speedy resolution of thedispute between the parties. Observance of both substantive and procedural rights isequally guaranteed by due process whatever the source of such rights, be it theConstitution itself or only a statute or a rule of court.

May I humbly suggest that a decision already promulgated, presumably after it was carefully studiedby the members of the Court before they signed it, should not be overturned lightly on the basis of amotion for reconsideration that has adduced no new substantial arguments and only reiterated thetired prayer that we disregard procedural rules because this is a special case. In every such motion,the movant always pleads it has a special case, to excuse itsnon-observance of the Rules of Court.

We have dismissed thousands of petitions for non-compliance with Circulars 1-88, 19-91, and 28-91,which are all procedural rules. I cannot see why the petition of the Orbetas was not dismissed by theCourt of Appeals— as it was by us— on the strength of the substantial reasons discussed in ourdecision.

Melo, J., concurs.

# Separate Opinions

CRUZ, J., dissenting:

With all due respect, I must dissent from the resolution granting the motion for reconsideration of thedecision in the above-named case which I penned with the concurrence of Justice Carolina C. Griño-

Aquino and the late Justice Leo D. Medialdea.

The relevant facts are summarized as follows:

The Crisologos filed a complaint against the Sent of God and the Orbetas for revocation of donation.The Sent of God filed an answer resisting the complaint. The Orbetas confessed judgment and fileda cross-claim against the Sent of God. The Sent of God later filed a motion to dismiss the complaintfor lack of a cause of action. The motion was granted. The Crisologos moved for reconsideration.The Orbetas joined them because the dismissal included the cross-claim. Their motion was denied.

After the order of dismissal had become final and executory, the Crisologos challenged it before the



Court of Appeals in a special civil action for certiorari (CA-G.R. Sp. No. 16837). The petition wasdismissed on the ground that Rule 65 could not be used as a substitute for a lost appeal. TheCrisologos accepted this decision and did not appeal to this Court. Later, the Orbetas filed their ownpetition, also for certiorari under Rule 65, against the same order of the trial court (CA-G.R. Sp. No.17013). This time the Court of Appeals, through the same division but with a different membership,granted the petition and ordered the reinstatement of the complaint. The Sent of God then came to

this Court.

In the original ponencia, the Court sustained the Sent of God on the following main grounds:

1. The special civil action filed by the Crisologos was the wrong remedy and was used only as asubstitute for a lost appeal.

2. The dismissal of the complaint resulted in the dismissal of the cross-claim, which was defensive innature and could not exist independently of the complaint.

3. The Orbetas cannot have more rights than the Crisologos in attacking the dismissal of the latter'scomplaint.

In the present resolution, the majority first invokes procedural rules by questioning the validity of themotion to dismiss and by theorizing that the Orbetas should have been considered independentplaintiffs rather than just cross-claimants. It then turns around and rejects procedural rules bymaintaining that they should not stand in the way of substantial justice.

It is contended that the motion to dismiss was defective for lack of the three-day notice and that theSent of God was in estoppel, having already filed its answer.

Assuming these grounds to be valid, I submit they should have been raised within the reglementaryperiod before the Court of Appeals in an ordinary appeal (Villanueva v. CA, 205 SCRA 537; KabushiKaisha Isetan v. IAC, 203 SCRA 583; Sembrano v. Ramirez, 166 SCRA 30). This is considered a

plain, speedy and adequate remedy under Section 39 of BP 129 and Section 19(a) of the InterimRules. Instead, the Crisologos filed a special civil action under Rule 65, which was correctlydismissed as an inappropriate remedy.

There is also the ingenious theory that the Orbetas should have been considered not mere cross-claimants but plaintiffs in their own right who therefore had the capacity to question the dismissal oftheir complaint against Sent of God.

If we are going to accept this nice technicality, then I think we should also check if the Orbetas paidthe prescribed filing fees to justify the docketing of their suit. If they did not (and this is virtuallycertain as the theory apparently never occurred to them), then their complaint should have been, forthat reason alone, dismissed at the outset. Neither would they have been entitled to appeal from thedismissal of the Crisologos' complaint inasmuch as, following the theory, they would not even be

cross-claimants therein.

The other thrust of the resolution is that even if the order of dismissal was not seasonablychallenged in an ordinary appeal, it could still be assailed under Rule 65 on the ground of substantial

justice.

This is an old refrain that is sung whenever the petitioner cannot defend his non-compliance with theprescribed procedure. The majority dissent cites a long list of cases to support the exception to the



rule, but given time I can submit a longer list to the contrary (Tupas v. CA, 193 SCRA 599; Bank of America NT & SA v. CA, 186 SCRA 417; Dulos v. CA, 188 SCRA 414; Edra v. IAC, 179 SCRA344, among many others). The point is that if the Crisologos really believed they had a just cause ofaction, they should have asserted and defended it with all their attention according to the rules.Instead, they soundly slept on their rights and bestirred themselves only when it was too late.

The majority would now salvage the Crisologos' lost appeal by allowing the Orbetas (who have beenwith them all the way) to file their separate challenge to the dismissal of the Crisologos' complaint.By allowing the Orbetas to do so, we shall in effect enable the Crisologos to indirectly correct theirinaction and mistake through the Orbetas, and, worse, by a method not permitted by the rules. TheOrbetas are using the same improper remedy employed by the Crisologos.

Procedural rules are not so trivial that they may be applied willy-nilly by the Court. As we saidin Limpot v. Court of Appeals (170 SCRA 367):

Rules of procedure are intended to ensure the orderly administration of justice andthe protection of substantive rights in judicial andextrajudicial proceedings. It is a mistake to suppose that substantive law and

adjective law are contradictory to each other or, as has often been suggested, thatenforcement of procedural rules should never be permitted if it will result in prejudiceto the substantive rights of the litigants. This is not exactly true; the concept is muchmisunderstood. As a matter of fact, the policy of the courts is to give effect to bothkinds of law, as complementing each other, in the just and speedy resolution of thedispute between the parties. Observance of both substantive and procedural rights isequally guaranteed by due process whatever the source of such rights, be it theConstitution itself or only a statute or a rule of court.

May I humbly suggest that a decision already promulgated, presumably after it was carefully studiedby the members of the Court before they signed it, should not be overturned lightly on the basis of amotion for reconsideration that has adduced no new substantial arguments and only reiterated thetired prayer that we disregard procedural rules because this is a special case. In every such motion,

the movant always pleads it has a special case, to excuse itsnon-observance of the Rules of Court.

We have dismissed thousands of petitions for non-compliance with Circulars 1-88, 19-91, and 28-91,which are all procedural rules. I cannot see why the petition of the Orbetas was not dismissed by theCourt of Appeals— as it was by us— on the strength of the substantial reasons discussed in ourdecision.

Melo, J., concurs.



[G.R. No. 144190. March 6, 2002]

INTERLINING CORPORATION, PABLO GONZALES, SR., ARSENIO

GONZALES, ELENA TAN CHIN SUI AND THOMASGONZALES, petitioners, vs . PHILIPPINE TRUST

COMPANY, respondent .

D E C I S I O N

PUNO, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court

seeking to set aside the Decision, dated May 12, 2000, of the Court of Appeals in C.A.-

G.R. CV No. 41129, and its Resolution, dated July 25, 2000, denying petitioners Motion

for Reconsideration.

The records disclose that in April 1980, respondent Philippine Trust Company

(Philtrust) granted a P.5 million packing credit line and a P1.5 million domestic letter

of credit and trust receipt to petitioner Interlining Corporation for the importation of

raw materials for its business. A month later, individual petitioners Pablo Gonzales, Sr.,

Elena Tan Chin Sui, Pablo Gonzales, Jr., Thomas Gonzales and Arsenio Gonzales

executed an Undertaking of Suretyship agreement binding themselves to guarantee,

jointly and severally with petitioner corporation, all such amount as may be due to

respondent Philtrust by virtue of the availment of its credit facilities.

On numerous occasions, petitioner corporation availed of respondents creditfacilities. Partial payments were made by petitioner corporation but it failed to pay in

full its obligations, which amounted to over P2 million by June 1984, despite repeated

demands.

In July 1984, respondent filed a complaint for collection of a sum of money[1] against

petitioner corporation and the individual petitioners before the Regional Trial Court of

Manila. Pre-trial hearings were duly conducted by the trial court.

On April 7, 1989, the trial court issued its Pre-Trial Conference Order,[2] stating

in paragraph 5, under the heading Stipulations, the following:

5. Under the first, second, third and fourth causes of action, defendants Pablo

Gonzales, Sr., Elena Tan Chin Siu, Pablo Gonzales, Jr., Thomas Gonzales, and

Arsenio Gonzales were relieved from their obligations because there was

arrangement made between the plaintiff and the defendant corporation.

http://sc.judiciary.gov.ph/jurisprudence/2002/mar2002/144190.htm#_edn1









The content of said Order was based on the transcript of the pre-trial conference held

on March 6, 1989.

On December 14, 1990, respondents counsel Atty. Eulogio V. Reyes and petitioners

counsel Atty. Servando S. Timbol, Jr. submitted to the trial court a Joint Stipulation

of Facts and Motion for Summary Judgment[3]

stating therein two (2) issues forconsideration by the trial court, viz :

a) whether or not defendants (petitioners herein) can be made jointly or severallyliable to the plaintiff (respondent herein) in the amount claimed in the complaint;

b) whether or not there is novation which had released the individual defendants from

their obligations as sureties under the Deed of Undertaking of Suretyship.

On April 8, 1991, the trial court issued its 1st Supplemental Pre-Trial Order.[4] It

stated in paragraph III that, as per stipulation of the parties, the same two (2) issueswere submitted for resolution.

On July 9, 1982, the trial court issued its Decision finding for the respondent.

However, it ordered petitioner corporation to answer solely for its obligation. The trial

court absolved the individual petitioners from their joint and solidary liability for the

debt of petitioner corporation although there was no novation of the loan contract

between the parties. It held that the total liability for the obligation was assumed by

the petitioner corporation as per the parties stipulation during the April 8, 1991 Pre-

Trial Conference, particularly paragraph 5 thereof.

Respondent moved for reconsideration insofar as the trial court absolved theindividual petitioners from solidary liability. When its motion was denied, respondent

sought recourse before the Court of Appeals.

In its Decision,[5] dated May 12, 2000, the Court of Appeals found for the

respondent. It held that the Deed of Undertaking of Suretyship was not abrogated and

remained in full force and effect.It also found that as the respondent did not stipulate on

the exclusion of the solidary liability issue, the individual petitioners should be held

solidarily liable with petitioner corporation for the amount adjudged by the trial court.

When petitioners motion for reconsideration was denied, they filed the present

appeal, raising the following issues:I

THE COURT OF APPEALS COMMITTED AN ERROR OF LAW IN

DISREGARDING THE STIPULATIONS AGREED UPON IN THE PRE-

TRIAL ORDER OF THE REGIONAL TRIAL COURT OF MANILA

DATED MARCH 6, 1989.














II

THE COURT OF APPEALS COMMITED AN ERROR OF LAW IN

DISREGARDING THE AFFIRMATION OF THE PRE-TRIAL ORDER

DATED MARCH 6, 1989 MADE BY RESPONDENTS COUNSEL.

III

THE COURT OF APPEALS COMMITTED AN ERROR OF LAW IN

DISREGARDING THE FAILURE OF RESPONDENTS COUNSEL TO

CONTROVERT THE PRE-TRIAL ORDER DATED MARCH 6, 1989 UP TO THE

TIME THAT THE CASE WAS FINALLY DECIDED BY THE REGIONAL TRIAL

COURT OF MANILA.

We shall discuss the issues jointly.

Petitioners insist that as per the records, respondents counsel agreed in thestipulation of facts contained in the Pre-Trial Conference Order, dated March 6, 1989,

particularly paragraph 5 thereof, that the individual petitioners would be relieved from

their solidary obligations. Petitioners also charge that the contents of this Pre-Trial

Conference Order were confirmed by respondents counsel during the April 8, 1991 pre-

trial hearing of the case.[6] Hence, petitioners contend that respondent should be held as

bound by said agreement and the Court of Appeals erred in disregarding this

stipulation. Petitioners likewise point out that from the date of the issuance of the pre-

trial order on March 6, 1989 until the promulgation of the trial courts decision on July

9, 1992, respondents counsel did not controvert the stipulation they agreed upon and

should be considered estopped from attacking the assailed stipulation.

Respondent, on the other hand, contends that petitioners anchor their appeal on the

alleged Pre-Trial Conference Order, dated March 6, 1989, where it was allegedly agreed

upon by the parties counsels that the individual petitioners shall be relieved of their

solidary obligation. However, respondent argues that petitioners conveniently ignored

subsequent proceedings and pleadings where both parties submitted the issue of

solidary liability for resolution by the trial court.

We find no merit in the petition.

The conduct of a pre-trial in civil actions has been mandatory as early as January 1,1964, upon the effectivity of the Revised Rules of Court.[7] Pre-trial is a procedural

device intended to clarify and limit the basic issues between the parties. It thus paves

the way for a less cluttered trial and resolution of the case. Its main objective is to

simplify, abbreviate and expedite the trial, or totally dispense with it,[8] as in the case at

bar.















Prescinding therefrom, it is a basic legal precept that the parties are bound to honor

the stipulations they made during the pre-trial. The issue in the case at bar involves a

determination of whether or not the counsel of respondent agreed to stipulate as to the

release of the individual petitioners from their solidary liability.

A careful and thorough review of the records, particularly the pre-trial hearingsconducted on March 6, 1989 and April 8, 1991 and the subsequent pleadings in the case,

reveals that respondents counsel did not agree to relieve the individual petitioners of

their obligation. A close scrutiny of the transcript of the March 6, 1989 pre-trial

conference shows that the parties counsels merely stated their proposed stipulations.

Specifically, the trial judge opened the proceedings on said day by inquiring from the

counsels of the parties their respective positions on the facts and issues of the case.Both

counsels presented their proposed facts and issues but at no time did they commit

themselves to stipulate on any of the matters brought out during said conference. Nor

did the trial judge ask any of the counsels whether they agreed to stipulate on any of the

matters presented therein. In fact, what appears on the March 6, 1989 transcript wasa mere enumeration of the proposed stipulations by both counsels , most of which

were only copied by the stenographer from the counsels pre-trial briefs. There was no

agreement whatsoever on the proposed facts. This conclusion is further bolstered by the

fact that at the continuation of the pre-trial conference, the respondents counsel declared

that he would not agree to stipulate on the release of the individual petitioners on their

solidary liability.[9] Hence, in its 1st Supplemental Pre-Trial Order, dated April 8,

1991, the trial court itself included the solidary liability of the individualpetitioners as one of the issues to be resolved in the case .[10] Most importantly, the

same issue was repeatedly raised by both parties in subsequent proceedings and

pleadings filed in the trial court. In the Joint Stipulation of Facts, dated December 14,1990, signed by both counsels for respondent and petitioners and submitted to the trial

court, the solidary liability of the individual petitioners was clearly put in issue. Clearly,

the entire pre-trial proceedings undisputably show that the issue as to the solidary

liability of the individual petitioners should have been properly considered in the

resolution of the collection case.

Neither could respondent be faulted for failing to question paragraph 5 of the first

pre-trial Order, dated March 6, 1989, stating therein the release of the individual

petitioners from liability, asthe proceedings and pleadings subsequent thereto, filed

by both parties, clearly included the issue of solidary liability for resolution of thetrial court. Thus, it came as a surprise for the respondent that the decision rendered by

the trial court excluded the individual petitioners from liability, citing as ground therefor

the alleged stipulation made by by the respondent in March 1989.

IN VIEW WHEREOF, the petition is DISMISSED and the assailed Decision of

the Court of Appeals, dated May 12, 2000, is affirmed in toto. Costs against petitioners.











G.R. No. 81239 December 4, 1991

NELSON L. YOUNG and VIOLETA YOUNG, petitioners,vs.THE HONORABLE COURT OF APPEALS and INDUSTRIAL FINANCECORPORATION, respondents.

Nuyda & Associates for petitioners.

Santos S. Carlos for private respondent.

DAVIDE, JR., J.: p

This is a petition for review on certiorari under Rule 45 of the Rules of Court to set aside thedecision 1 of 24 August 1987 of respondent Court of Appeals in C.A.-G.R. CV No. 07484 2 Which affirmed in toto the decision of Branch

135 of the Regional Trial Court of Makati, Metro Manila of 3 May 1985 in Civil Case No. 1219.

The factual and procedural antecedents are not disputed.

On 3 July 1981, herein private respondent (hereinafter referred to as IFC), as assignee of a deed ofsale with chattel mortgage and the accompanying promissory note, filed a complaint against thepetitioners with the then Court of First Instance (now Regional Trial Court) of Rizal (at Pasig, MetroManila) for the payment of the total sum of P157,588.39 which became due on the note by reason ofits acceleration clause, the interest thereon, and of attorney's fees. The note was executed bypetitioners in favor of Baroq Motor Sales, Inc. in connection with their purchase of a cargo truck oninstallment basis. The case was docketed as Civil Case No. 41881 and was assigned to Branch VIof said court.

For failure to file their Answer within the reglementary period, the Pasig court, upon motion of IFC,declared petitioners in default in its order of 25 September 1981 and allowed IFC to present itsevidence ex-parte on 30 October 1981. However, on 30 September 1981, petitioners filed an

Answer With Counterclaim and a Motion to Admit Third-Party Complaint against WorldwideInsurance Co., Inc. with which they insured against loss or damage the cargo truck for P180,000.00.The Pasig court granted this motion on 15 October 1981.

On 15 October 1981, IFC filed its reply to the Answer. On 27 October 1981, petitioners filed a motionto reconsider the default Order of 25 September 1981, which the court granted on 30 October 1981.

On 4 December 1981, the Third-Party defendant filed its Answer with Compulsory Counterclaim.

Then, on 17 December 1981, the Pasig court set the case for pre-trial conference on 29 March 1982at 8:00 A.M.

When the case was called for pre-trial on 28 March 1982, neither petitioners nor their counselappeared despite due notice. Upon motion of IFC, the Pasig court issued an Order declaringpetitioners in default, allowing IFC to present its evidence ex-parte before a Commissioner anddismissing the third-party complaint without prejudice; however, since petitioners arrived shortlythereafter, the court gave them five (5) days from receipt of the Order within which to file any motionthey may deem necessary.



At 2:35 o'clock in the afternoon of 30 March 1982, IFC presented its evidence before theCommissioner designated by the Pasig court and rested its case.

On 7 April 1982, petitioners filed a motion to reconsider the 29 March 1982 Order declaring them indefault and dismissing the third-party complaint. They prayed that the order be lifted and that thecase be set for pre-trial conference. On 20 May 1982, the Pasig court issued the following Order:

Finding the motion for reconsideration filed by the defendants dated April 6, 1982, tobe well-taken and in the interest of justice, the Court grants the same. The Orderdated March 29, 1982 declaring defendants in default and dismissing the third partycomplaint is hereby reconsidered and set aside.Plaintiff's evidence, however, stands.(emphasis supplied)

Upon manifestation of IFC on 21 July 1982, the Pasig court set the case for hearing on 15 October1982. In a Notice of Hearing dated 11 October 1982, the hearing was reset to 21 January 1983.Then, on 14 December 1982, on the ground that the presiding judge was on leave, a notice wasissued resetting "the case" for 9 March 1983. No hearing took place on the latter date because of thereorganization of the judiciary in January 1983.

The case was subsequently transferred to Branch 135 of the Regional Trial Court of Makati, MetroManila, then presided over by Judge Rafael T. Mendoza, and was docketed therein as Civil CaseNo. 1219. This Branch (hereinafter referred to as the Makati Court) issued on 20 April 1983 a Noticeof Hearing (Pre-Trial Conference setting the hearing of the case for 24 June 1983 at 8:30 A.M.;however, due to the absence of the third-party defendant, the court, upon agreement of the partiespresent, reset the pre-trial conference to 2 September 1983.

On 2 September 1983, IFC, its counsel and the third-party defendant did not appear thus promptingthe Makati court to issue the following Order:

For failure of the plaintiff and counsel to appear today, despite due notice, as well asthe third party defendant and counsel, as prayed for by the defendant, throughcounsel, the complaint is hereby dismissed, and the third party defendant declaredas in default and third party plaintiff is allowed to present its. evidence ex parte onSeptember 8, 1983, at 2:00 P.M. in support of his third party complaint.

IFC received a copy of this Order on 20 September 1983.

Petitioners did not present their evidence.

On 25 May 1984, the Makati court issued the following Order:

It appearing that despite the lapse of time plaintiff has failed to take the necessarysteps to prosecute its case, this Court hereby orders the instant case dismissed forlack of interest to prosecute.

Upon IFC's motion for reconsideration of 13 September 1984, wherein it gave as reason for itsfailure to actively prosecute the case its occasional substitution of counsel and the transfer of thecase from Pasig to Makati, 3 the Makati court issued on 25 September 1984 an Order reading as follows:



Motu proprio this Court hereby modifies its order dated May 25, 1984 in the sensethat between the words "time" and "plaintiff", the words "third-party" should beinserted. In all other aspect (sic), the aforesaid order stands.

Accordingly, the motion of the plaintiff thru counsel dated September 11, 1984 isdeemed moot and academic.

As thus modified, the 25 May 1984 Order was then clearly directed against herein petitioners whodid not present,ex-parte, their evidence on 8 September 1983.

On 27 September 1984, IFC filed with the Makati court a manifestation and motion praying that thelatter's Order of 2 September 1983 dismissing the complaint be reconsidered and set aside, the casebe submitted for decision based on the evidence presented by the IFC and that petitioners' right topresent their evidence be considered to have been waived.

Petitioners on the other hand assert that they were not furnished with copies of the manifestationand motion and of the order of the court of 12 October 1984 requiring them to comment thereonwhich was sent to their counsel, but returned to the court with the stamped notation "Unclaimed." 4

On 14 February 1985, IFC filed a manifestation and motion reiterating its prayer that the case besubmitted for decision on the basis of the evidence it had presented. Reacting, petitioners againclaim that neither they nor their counsel received a copy thereof. 5 Pursuant thereto, the Makati court issued on 25

February 1985 an Order directing the court stenographer who took down the stenographic notes of the proceedings in the case before thePasig court to submit the transcripts thereof within ten (10) days from notice, after which "the instant case will be deemed submitted fordecision."

On 3 May 1985, the Makati court rendered its decision in Civil Case No. 1219, the Dispositiveportion of which reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against thedefendants, ordering the latter to pay plaintiff jointly and severally:

1. The amount of P134,472.34 plus penalty charges there on at the rate of 3% permonth from the filing of the complaint until fully paid;

2. The sum of P10,000.00 as attorney's fees;

3. Costs of suit. 6

Petitioners appealed from the decision to the Court of Appeals, which docketed the case as C.A.-G.R. CV No. 07484. They asserted therein that the Makati court erred in setting aside its 2September 1983 Order dismissing IFC's complaint and thereafter rendering a decision in the latter'sfavor, and contended in support thereof that said order had long become final and had the effect of

an adjudication on the merits pursuant to Section 3, Rule 117 of the Rules of Court. 7

The respondent court defined the issue before it in this wise:

... whether plaintiffs' [IFC's] failure to appear at the hearing set on September 2,1983—during which for such failure the Order dismissing the complaint was issued—may be considered a failure to prosecute or a failure to comply with the rules or withan order of the court below on the part of the plaintiff within the contemplation of Rule17, Section 3, supra. 8



Respondent court rejected the petitioners' contention. It held that pre-trial was set by the Pasig courtfor 29 March 1982. However, petitioners were declared in default; it was at that stage that therequirement of Section 1, Rule 20 of the Rules of Court was deemed to have been complied with,and what was subsequently set by the Makati court, first on 24 June 1983 and then on 2 September1983 upon a so-called "Notice of Hearing/ Pre-Trial Conference," "was and should have been ahearing and not a pre-trial," considering "that at that particular stage (on September 2, 1983) all of

the pleadings had already been submitted by the parties and plaintiff had already adduced itsevidence." Furthermore, it was held in Jalover vs. Ytoriaga 9 that where the plaintiff had already adduced evidence

and rested its case before the dismissal of said case, the absence of the plaintiff at a subsequent hearing cannot be considered a failure toprosecute on plaintiffs' part; it can only be construed as a waiver of the right to cross-examine the witnesses which the opposite party mightpresent at the hearing and to object to the admissibility of the evidence of the latter. 10 Moreover, respondent court considered assatisfactory IFC's explanation for its failure to prosecute the case. Hence, in the decision promulgated on 24 August 1987, respondent Courtof Appeals affirmed in toto the decision of the Makati court. Their motion for its reconsideration having been denied in the resolution of 21December 1987, petitioners came to this Court via this petition for review which they filed on 5 February 1988. 11 They urge Us to set asiderespondent court's decision because it erred:

(1) in not passing upon the issue of finality of the order dated September 2, 1983—dismissing plaintiff-appellee's complaint;

(2) in not concluding that the order dated September 2,1983 ... being final andexecutory, the lower court has lost jurisdiction to set aside the same;

(3) in misapplying the doctrine enunciated ... in the case of Jalover vs. Ytoriaga, 80SCRA 100, to the case at bar;

(4) in not concluding that after the order dated September 2, 1983 ... became finaland executory, the subsequent proceedings and the decision rendered anew by thetrial court dated May 3, 1985 are null and void. 12

We required the respondents to comment on the petition; 13 IFC complied with the order on 27 July 1988. 14

We then gave the petition due course and required the parties to submit their respectiveMemoranda, 15 which petitioners complied with on 28 October 1988 16 and the IFC only on 17 July 1990. 17

The principal issue in this case is whether or not the Makati court's order of 2 September 1983dismissing IFC's complaint for failure to appear on said date had long become final such that it waserror for the former to issue its order of 25 February 1985 granting IFC's 27 September 1984 motion(to set aside said order of 2 September 1983 and to decide the case on the basis of the evidence itearlier presented ex-parte pursuant to the default order of 29 March 1982). The issue in turnrevolves on the propriety and validity of the said dismissal order. If such order is valid, then certainlyit became final upon the lapse of fifteen (15) days from receipt thereof by IFC. Both IFC andpetitioners agree that the former received the order on 20 September 1983. Accordingly, per Section39 of B.P. Blg. 129, IFC had until 5 October 1983 within which to either file a motion to reconsiderthe order or to appeal therefrom. Upon the other hand, if the Order was null and void, as IFC claims,it never became final.

As to be expected, petitioners assert that the Order was valid since what was set for 2 September1983 was the pre-trial of the case; it was a re-setting of the pre-trial scheduled on 24 June 1983.Indeed, the Order of 24 June 1983 reads:

By agreement, pre-trial is reset to September 2, 1983. 18

Since IFC accepted the notice of pre-trial for 24 June 1983 and agreed to its re-setting, it is nowestopped from claiming that the Makati court should not have set the case for pre-trial since one had



already been had on 29 March 1982. Petitioners then conclude that since IFC failed to appear forpre-trial on 2 September 1983, the Makati court correctly dismissed the complaint pursuant toSection 2, Rule 20 of the Rules of Court which provides:

SECTION 2. Failure to appear at pre-trial conference.— A party who fails to appearat a pre-trial conference may be non-suited or considered as in default.

and that such dismissal amounts to an adjudication on the merits per Section 3, Rule 17 of the Rulesof Court, which reads as follows:

SECTION 3. Failure to prosecute.—If plaintiff fails to appear at the time of the trial, orto prosecute his action for an unreasonable length of time, or to comply with theserules or any order of the court, the action may be dismissed upon motion of thedefendant or upon the court's own motion. This dismissal shall have the effect of anadjudication upon the merits, unless otherwise provided by court.

Hence, it was error for the Makati court to set aside this Order in its 25 February 1985 Order on thebasis of IFC's 27 September 1984 manifestation and motion.

IFC does not dispute the fact that it neither filed a motion to reconsider or appealed from the order of2 September 1983. It, however, claims that the Makati court erred in dismissing the case on 2September 1983 since it had already offered its evidence on 30 March 1982 pursuant to the defaultorder of 28 March 1982 and that per the Order of 20 May 1982, while the default order was setaside, the court explicitly stated therein that "plaintiffs evidence, however, stands." In short, a partycannot be said "to have failed to prosecute when his evidence is already a part of the records of thecase and the court can decide the case based on the evidence already presented." 19 It then went on to

conclude that the 2 September 1983 Order is null and void and a void order is no order at all. Hence, even if it was received by IFC on 20September 1983, it never became final and did not produce any legal or binding effect. 20

Two (2) earlier cases decided eleven (1 1) years apart aid Us in resolving the issue in this case.

In Pioneer Insurance and Surety Corp., et al. vs. Hontanosas et al ., 21 decided on 31 August 1977, a pre-trial wasconducts between original plaintiffs and Pioneer on 5 May 1971. The latter opposed any amicable settlement; thereupon, plaintiffs markedtheir pre-trial exhibits, objections to which were re served by Pioneer. The parties then agreed to set the trial on the merits on 11 June 1971.However, after the complaint was amended to include an additional party defendant, the court set the case again for pre-trial on the basis ofthe amended complaint, and because defendants failed to appear at such pretrial, it declared them as in default, allowed the plaintiffs topresent their evidence ex-parte and thereafter rendered a decision in favor of the plaintiffs. This Court set aside the default order and ruledthat the judge issued it with grave and serious abuse of discretion and in excess of jurisdiction since:

... there is nothing in the Rules that empowers or authorizes the court to call asecond pre-trial hearing after it has called a first pre-trial duly attended by the parties,and lacking such authority, the court perforce lacks authority to declare a failure toprosecute on the part of the plaintiff for failing to attend such second pre-trial; it alsolacks the authority to declare the defendant "as in default " by reason of the latter'sfailure to be present at the said second pre-trial.

The extended disquisition of the Court reads:

Unquestionably, the present Rules make pre-trial mandatory. And the reason formaking pre-trial mandatory is that pre-trial conferences bring the parties together,thus making possible an amicable settlement or doing away with at least the non-essentials of a case from the beginning. (Borja vs. Roxas, 73 Phil. 647).



Philippine jurisprudence has laid down the legal doctrine that while it is true that it ismandatory for the parties and their attorneys to appear before the trial court for a pre-trial conference to consider inter alia the possibility of an amicable settlement, the rulewas by no means intended as animplacable bludgeon but as a tool to assist the trialcourt in the orderly and expeditious conduct of trials. The rule is addressed to thesound discretion of the trial court. (Rice and Corn Administration vs. Ong Ante, et al.,

G.R. No. L-30558, Oct. 4, 1971).

Both client and counsel must appear at the pre-trial. This is mandatory. Failure of theclient to appear is a ground for dismissal. (American Ins. Co. vs. Republic, 1967DPhil. 63; Hone Ins. Co. vs. United States Lines Co., 1967D Phil. 401, cited in Saulogvs. Custombuilt Manufacturing Corp., No. L-29612, Nov. 15, 1968; Taroma v. Sayo,L-37296, Oct. 30, 1975 (67 SCRA 508).

In the case of Insurance Co. of North America vs. Republic, et al ., G.R. No. L-26794,Nov. 15, 1967, 21 SCRA 887, the Supreme Court, speaking thru Justice Bengzon,held that Sec. 1, Rule 20 of the Rules requires the court to hold a pre-trial before thecase is heard and since in this case, a pre-trial has already been had, the fact that anamended complaint was later filed, did not necessitate another pre-trial. It wouldhave been impractical, useless and time-consuming to call another pre-trial.

xxx xxx xxx

The defendant Pioneer Insurance & Surety Corp. having complied with the order ofthe Court to appear and attend this pre-trial, and had manifested its opposition tosettling the case amicably, said party may no longer be compelled to attend a secondpre-trial hearing, and neither may it be punished by the court by its order declaringsaid defendant as in default. The mandatory character of a pre-trial and the seriousconsequences confronting the parties in the event that each party fails to attend thesame must impose a strict application of the Rule such that where we find noauthority for the Court to call another pre-trial hearing, as in fact there is none in said

Rule, the conclusion is inescapable that the respondent Judge committed a graveand serious abuse of discretion and acted in excess of jurisdiction in declaringdefendant Pioneer Insurance & Surety Corp. "as in default" for failure to attend thesecond pre-trial called by the Judge on February 29, 1972, In other words, there isnothing in the Rules that empowers or authorizes the court to call a second pre-trialhearing after it has called a first pre-trial duly attended by the parties, and lackingsuch authority, the court perforce lacks the authority to declare a failure to prosecuteon the part of the plaintiff for failing to attend such second pre-trial; it also lacks theauthority to declare the defendant "as in default" by reason of the latter's failure to bepresent at the said second pre-trial.

It serves no purpose for the court to call again another pre-trial where the parties had

previously agreed to disagree, where the issues had been joined and where the courtitself had been satisfied that a hearing on the merits is the next step to conduct as inthe instant case where the court, after the pre-trial on May 5, 1971, set the trial of thecase on its merits for June 11, 1971. Indeed, a second pre-trial is impractical,useless and time-consuming.

xxx xxx xxx



In Development Bank of the Philippines vs. Court of Appeals, et al., 22 decided on 26 January 1989, at a first pre-

trial conference, the defendants were declared by the trial court to be as in default and the plaintiff Development Bank of the Philippines(DBP) was allowed, as in fact it did, present its evidence ex-parte. But on motion of defendants, the order of default was set aside and thecase re-scheduled for pre-trial on which occasion, however, DBP was declared non-suited because the challenge of defendants concerningthe "adequacy and efficacy" of the power of attorney granted by DBP to its Assistant Manager to appear for it at pre-trial was sustained bythe trial court. The Court of Appeals having sustained the court a quo, this Court ruled that the effect of the following successive incidentstherein, to wit: the joinder of the issues, the scheduling of the pre-trial conference, the failure of defendants to appear at pre-trial, thedeclaration of defendant, and the ex-parte presentation of evidence by the plaintiff was "to terminate the pre-trial stage of the action and to

limit the effect of the subsequent lifting of the order of default issued against the private respondents to the restoration of their right to noticeof subsequent proceedings and to take part in the trial. 23 Such lifting, as has also been held by this Court on another occasion, did notrevert the action to the pre-trial stage or authorize, much less render mandatory, a second pre-trial. 24

We went on to say that:

The scheduling of a second pre-trial after DBP had finished presenting its evidencefrustrated, rather than advanced, the primary purpose of pre-trials of abbreviating trialby limitation and simplification of the issues, if not indeed of dispensing altogetherwith the necessity of trial. Neither is that purpose served by non-suiting a plaintiff atsuch a stage of the action. The correct course would have been to proceed with thetrial, in fact already well under way, allowing the defendants (private respondents) tocross-examine the plaintiffs (DBP's) witnesses and thereafter to offer their evidence.

In the present case, it is quite obvious that the Pasig court had no intention of reverting the case toits pre-trial stage. This is easily borne out by the fact that its Order of 20 May 1982 is silent as to theprayer in petitioner's motion of 7 April 1982 that "the case be set for pre-trial conference with duenotice to all parties concerned." Moreover, it subsequently sent a notice of hearing setting thehearing of the case on 15 October 1982, which was reset to 21 January 1983 in the notice dated 11October 1982. Yet, while this may be so, the parties herein and the Makati court failed to fullycomprehend the situation, which could have been due to the transfer of the case from the Pasigcourt and their failure to examine the records.

Thus, it is not clear whether the Makati court initially set the case for pre-trial or for hearing. Theheading of its 20 April 1983 Notice is rather vague, if not misleading. It read; "Notice of Hearing/Pre-Trial Conference." But, as the respondent court noted, its body refers to a setting of the, "hearing of

the case" on 24 June 1983. 25 Its personnel in charge of notices may have used the mimeographed blank forms but forgot to

cancel in appropriate words in the heading. In any case, the parties considered the notice as one for pre-trial for, on 24 June 1983, due to theabsence of the third-party defendant, IFC and the petitioners agreed to reset the pre-trial to 2 September 1983 and the court issued thecorresponding order. In essence, therefore, the parties in this case had voluntarily agreed that the case be set anew for pre-trial. And theMakati court, by its order, yielded, in effect, to the agreement of the parties. This fact brings this case out of the doctrine enunciated in thePioneer and DBP cases, and ingrafts, an exception thereto. No one can question the soundness and wisdom of the doctrine that the pre-trialstage is completed after a party had been ordered non-suited or declared as in default, as the case may be, and that an order lifting it doesnot revert the action to its pre-trial stage, or authorize, much less, a second pre-trial. However, neither the Rules nor the doctrine bars theparties from agreeing, after such lifting, to hold a pre-trial and to effectively accomplish its objectives which could not have been done at thefirst pre-trial because of the absence of the plaintiff, resulting in his non-suit, or the absence of the defendant, resulting in his being declaredas in default. The necessity for a second pre-trial may have been felt by the parties in this case considering that defendant had a third-partycomplaint and the third-party defendant had set up a compulsory counterclaim. At such pre-trial, the parties could consider the matter of anamicable settlement, the simplification of the issues and the possibility of obtaining stipulations or admissions of facts and of documents toavoid unnecessary proof which would, at the very least, shorten the proceedings. It must be remembered that the factual milieu surroundingthe default order in this case is entirely different from the Pioneer where the defaulted party attended the first pre-trial and rejected anyamicable settlement of the case. DBP involved the non-suit at the second pre-trial of a party which had already adduced its evidence ex-

parte at the first pre-trial after defendant was declared in default and was present at the second pre-trial; DBP was declared non-suited

simply because the authority of its representative was challenged.

Elsewise stated, IFC had waived the effect of the lifting of the order of default and had voluntarilyagreed to have another pre-trial.

For its failure to appear at the pre-trial on 2 September 1983, IFC could be validly non-suited and itscomplaint dismissed. Even if We follow the arguments of the respondent court and the IFC that theMakati court could not validly set the case for pre-trial and that the 2 September 1983 setting was infact for a hearing—and, therefore, for the cross-examination of the witness for IFC whose evidence



had been adduced ex-parte on 30 March 1982—the Makati court could undoubtedly dismiss thecomplaint under Section 3, Rule 17 of the Rules of Court because neither IFC nor its counselappeared and worse, its witness could not be cross-examined. Said section reads:

SECTION 3. Failure to prosecute.—If plaintiff fails to appear at the time of the trial , orto prosecute his action for an unreasonable length of time, or to comply with these

rules or any order of the court, the action may be dismissed upon motion of thedefendant or upon the court's own motion. This dismissal shall have the effect of anadjudication on the merits, unless otherwise provided by court.

When cross-examination is not done or completed due to causes attributable to the party offering thewitness, the uncompleted testimony is rendered incompetent and should be stricken from therecord. 26

In the instant case, the Makati court did not provide in its order of 2 September 1983 that thedismissal of the complaint was without prejudice. Hence, it had the effect of an adjudication on themerits. 27 This Order was received by IFC on 20 September 1983. IFC knew that it was an order issued in connection with the 2

September 1983 pre-trial conference— or hearing on the merits if it forgot the agreement it entered into with the adverse party on 24 June1983. Its counsel knew, or was supposed to know, that it had only fifteen (15) days from receipt of a copy thereof within which to either move

for its reconsideration or appeal therefrom. Yet, it did nothing until 27 September 1984, when it filed a manifestation and motion to set asidethe order and decide the case on the basis of the evidence it had presented on 30 March 1982.

Undoubtedly, at the time it filed the manifestation and motion, the 2 September 1983 order had longbecome final. Neither appeal nor a petition for relief from judgment was available to IFC. The Makaticourt had lost jurisdiction over the case. It had no authority to modify, annul or set aside the finalorder. Once a decision becomes final and executory, it is removed from the power and jurisdiction ofthe court which rendered it to further alter or amend it, much less revoke it. 28 This doctrine of finality of

judgment is grounded on fundamental considerations of public policy and sound practice that at the risk of occasional error, the judgments ofthe courts must become final at some definite date fixed by law. 29 To allow courts to amend final judgments will result in endlesslitigation.30

The foregoing discussions are more than sufficient to abort the theory of IFC that the Order of 2September 1983 was null and void and never had any binding effect because it had already

presented its evidence and, per Jalover vs. Ytoriaga, supra., such a party can not be considered tohave failed to prosecute. Jalover is not applicable in this case.

The conclusion We have reached may be harsh on IFC. But, it is quite clear from the records that itslept on its rights. It did nothing— absolutely nothing— for more than a year after receipt of thedismissal order of 2 September 1983. It slept too long on whatever right it had. Laws come to theassistance of the vigilant, not to those who sleep on their rights. Vigilantibus, non dormientibus, jurasubveniunt . If IFC's counsel neglected his duties, appropriate action under the Code of ProfessionalResponsibility may be taken against him.

It follows then that the Order of the Makati court of 25 February 1985 setting aside its 2 September1983 order and considering the case submitted for decision on the basis of the evidence of IFC, and

said court's decision of 3 May 1985 are null and void. Respondent court then committed a reversibleerror in affirming such decision.

WHEREFORE, the instant petition is GRANTED. The decision of the respondent court in C.A.-G.R.CV No. 07484 promulgated on 24 August 1987, and its resolution of 21 December 1987 in C.A.-G.R.CV No. 07484, and the decision of the Regional Trial Court of Makati, Branch 135, of 3 May 1985 inCivil Case No. 1219 are hereby SET ASIDE.

Costs against private respondent.



IT IS SO ORDERED.

Gutierrez, Jr., Bidin and Romero, JJ., concur.

Fernan, C.J., is on leave.



G.R. No. 73077 December 29, 1995

ESCOLASTICA MONTESCLAROS SON, and HEIRS OF ANASTACIO SON, petitioners,vs.CARMELINO SON, TEOFISTA SON, PRIMITIVO SON, CIPRIANA SON, ANATALIA SON,LAREANO SON, GERARDA SON and THE HONORABLE INTERMEDIATE APPELLATE

COURT, respondents.

KAPUNAN, J.:

The Revised Rules of Court was promulgated to provide a fair, orderly, and systematic procedure inthe prosecution and defense of cases. However, the rules are flexible and at times, in clearlymeritorious instances, liberally applied. This is one of them.

This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court to reverse andset aside the decision of the Court of Appeals in AC-G.R. CV No. 67364 dated 3 October 1985, the

dispositive portion of which reads as follows:

WHEREFORE, for reasons abovementioned, we hold that the evidence wasinsufficient to sustain the verdict and judgment is contrary to law, and the decision ofthe trial court is hereby set side and judgment is rendered:

(1) declaring the "Deed of Absolute Sale" dated November 5, 1957 (Exhs. "A" and"9") as null and void and of no legal effect;

(2) ordering the defendants to turn over to plaintiffs the possession of the land inquestion with an area of 6,324 square meters;

(3) ordering the defendants to pay plaintiffs the sum of P1,500.00 annually from 1972until actual delivery of the land to plaintiffs as their share in the produce thereof.

Costs against defendants-appellees.

SO ORDERED. 1

The facts material to the case are as follows:

Private respondents are the children and heirs of the late spouses Pedro Son, who died sometime inNovember 1957 and Marcelina Tudtud who died on 2 January 1972.

Petitioners are the heirs of Anastacio Son, brother of Pedro Son.

During his lifetime, Pedro Son inherited from his parents Juan Son and Susana Perilla a parcel ofland located at Caputatan Norte, Medellin, Cebu containing an area of two (2) hectares and seven(7) centares.

Sometime in 1972, upon discovery that a portion of said land, 6,324 square meters to be exact, wasbeing occupied by petitioners, private respondents demanded that the latter return the land to their



possession. Petitioners refused and claimed that they owned the said portion as evidenced by aDeed of Absolute Sale allegedly executed by Pedro Son on 5 November 1957. 2

On 2 September 1976 private respondents filed a complaint with the Court of First Instance of Cebufor annulment of the Deed of Absolute Sale dated 5 November 1957 on grounds of forgery and forrecovery of real property.

On 7 December 1976, during the pre-trial conference, the parties agreed to limit the issue to thevalidity or invalidity of the aforementioned deed of absolute sale. 3

On 10 September 1979 the trial court rendered a decision declaring the 5 November 1957 Deed of Absolute Sale null and void and ordering petitioners to return the subject land to privaterespondents. The dispositive portion reads, thus:

WHEREFORE, judgment is hereby rendered in favor of plaintiffs, and, accordingly,the "Deed of Absolute Sale" dated November 5, 1957 (Exhs. "A" and "9") is declarednull and void and of no legal effect; and defendants are directed (a) to turn over toplaintiffs the possession of the land in question with an area of 6,324 square meters,

more or less; (b) to pay plaintiffs as their share in the produce of the land the sum ofP1,500.00 annually from 1972 until actual delivery of the possession of the land toplaintiffs, with interest thereon at the legal rate; and (c) to pay to plaintiffs the amountof P1,500.00 as attorney's fees. Costs against defendants. 4

On 28 September 1979 petitioners filed a Motion for Reconsideration of the aforestated decisioninsisting that by virtue of an earlier Deed of Sale with Right to Repurchase, dated 17 December1951, wherein Pedro Son allegedly sold to petitioners one-half (1/2) of the land he inherited but witha right to repurchase within one (1) year, petitioners acquired ownership thereof for failure of PedroSon to redeem the same within the period stipulated. 5

On 27 December 1979 the trial court issued an order reversing its earlier decision, the dispositiveportion of which reads as follows:

WHEREFORE, the judgment of this Court contained in its decision dated September10, 1979, is hereby reconsidered and set aside, and another is entered dismissingthe complaint and ordering plaintiffs to pay defendants jointly and severally the sumof P1,500.00 as attorney's fees, with costs against plaintiffs.

SO ORDERED. 6

After their motion for reconsideration dated 24 January 1980 was denied by the trial court in its orderof 5 March 1980, 7 private respondents appealed to the Court of Appeals.

In reversing the decision of the trial court on 3 October 1985, the Court of Appeals ruled, thus:

xxx xxx xxx

Clearly, the question of validity of Exhibit "1" which is the "Deed of Sale with Right toRepurchase" executed by Pedro Son on December 17, 1951 discussed bydefendants in their motion for reconsideration had been waived by them. For indeed,the delimitation of issues at a pre-trial conference bars the consideration of otherquestions on appeal.



Defendants waited until the case was decided against them in the Court a quo beforethey raised— on a motion for reconsideration, the issue of non-exercise by PedroSon of his right to repurchase the land subject of Exhibit "1". Defendants' failure todisclose this defense is contrary to the purpose and spirit of pre-trial procedureestablished and conducted by our courts. It deprived the plaintiffs of the opportunityto study and prepare to meet this defense. The identity of the land subject of Exhibit

"A" and the land subject of Exhibit "1" were not even established by sufficientevidence. Both as a weapon of attack and defense, surprise should not be toleratedunder our Rules of Court.

Defendants are bound by the delimitation of the issues contained in the trial courts'order issued on the very day the pre-trial conference was held. Such order controlsthe subsequent course of action, unless modified before trial to prevent manifestinjustice. In this case, modification of the pre-trial order was never sought at theinstance of any party. 8

xxx xxx xxx

The Court of Appeals, however, upheld the trial court's ruling that the deed of sale dated 5November 1957 was simulated, forged and therefore null and void. 9 Hence, the present petition forreview, where the following issues are raised:

I

WHETHER OR NOT THE DEED OF SALE WITH RIGHT TO REPURCHASE, ALTHOUGH NOT TAKEN UP AS ONE OF THE ISSUES DURING THE PRE-TRIAL,MAY BE ADMITTED IN EVIDENCE CONSIDERING THAT THE SAME WASPROPERLY PLEADED AND THE ADVERSE PARTY NOT ONLY FAILED TOOBJECT TO THE PRESENTATION OF SAID DEED IN EVIDENCE BUT EVENCROSS-EXAMINED EXTENSIVELY ON THE SAME DURING THE TRIAL.

II

WHETHER OR NOT THE APPELLATE COURT GRAVELY MIS-APPREHENDEDTHE FACTS OR HAD EMBARKED ON PURE CONJECTURE AND SURMISESWHEN IT REVERSED THE FINDING OF THE TRIAL COURT TO THE EFFECTTHAT THE LAND COVERED BY THE DEED OF ABSOLUTE SALE DATEDNOVEMBER 5, 1957 IS PART OF THE SAME LAND COVERED BY THE DEED OFSALE WITH RIGHT TO REPURCHASE DATED DECEMBER 17, 1951.

III

WHETHER OR NOT THE APPELLATE COURT'S CONCLUSION IS BASED ON

PURE SPECULATION, CONJECTURE AND SURMISES, AND IN EFFECTVIOLATED THE RULE THAT PLAINTIFF MUST RELY ON THE STRENGTH OFHIS OWN EVIDENCE AND NOT ON THE WEAKNESS OF THE DEFENSE WHENIT CONCLUDED THAT THE DEED OF ABSOLUTE SALE DATED NOVEMBER 5,1957 IS NULL AND VOID— THE SAID CONCLUSION HAVING CAPITALIZEDMAINLY ON THE SUPPOSED DISCREPANCY IN THE TESTIMONIES OF THENOTARY PUBLIC AND THE DEFENDANT ANASTACIO SON BUT DISREGARDEDTOTALLY THE UNDISPUTED FACT THAT SAID NOTARIAL DEED WAS

ALREADY 18 YEARS OLD AND THAT THE DEFENDANTS (PETITIONERS



HEREIN) HAVE BEEN OCCUPYING THE LITIGATED LAND IN CONCEPT OFOWNERS FOR MORE THAN 20 YEARS. 10

There is merit in the petition.

We shall resolve the last issue first.

Petitioners' invocation of the principle that the plaintiff must rely on the strength of his own evidenceand not on the weakness of the evidence of the defendant is misplaced. What is being assailed bypetitioners is actually the credibility of private respondents' witnesses. Petitioners persist in theirargument that respondents' evidence, particularly the testimonies of Teofista Son Arcipe and herhusband Andres Arcipe, are inherently weak for being self-serving and biased. Petitioners likewisefault the trial court and the appellate court for relying and capitalizing on the inconsistencies in thetestimonies of their witnesses, Anastacio Son and Judge Teodoro Lim who notarized the 1957 Deedof Sale. 11

It is a time-honored principle that the matter of giving credence to evidence presented is bestaddressed by the trial judge who is in a better position than the appellate courts to appreciate the

weight and evidentiary value of the testimonies of witnesses who have appeared before him. 12

After a meticulous review of the records we see no reason to depart from the findings of the Court of Appeals and the trial court. In the case at bench, we fail to discover any misapprehension ofessential facts committed by both courts, which if considered, would have changed the outcome ofthe case. 13

It was but logical for the trial court and the Court of Appeals to consider the numerous disparities andcontradictions in the testimonies of petitioners' witnesses precisely because these were materialinconsistencies which had a direct bearing on the issue of whether the 1957 deed of sale executedby Pedro Son was valid or not.

Nevertheless, in asserting their right to the disputed property, petitioners did not rely solely on the1957 Deed of Sale. Petitioners, in addition, presented an earlier Deed of Sale with Right toRepurchase (dated 17 December 1951), allegedly covering the same lot, as evidence of their claimto the said property.

Petitioners contend that the agreement to limit the issue to the validity of the alleged Deed of Absolute Sale dated 5 November 1957, embodied in the pre-trial order, no longer controlledconsidering that private respondents failed to object when petitioners introduced the 1951 Deed ofSale with Right to Repurchase as evidence and, instead, even actively cross-examined AnastacioSon on his testimony regarding said deed. Private respondents' lapse, petitioners assert, amountedto a waiver.

We agree.

The issue, put simply, is whether or not the parties are bound by the delimitation of issues in the Pre-trial Order dated 7 December 1976. 14

Section 4, Rule 20 of the Revised Rules of Court provides that:

Sec. 4. Record of pre-trial results.— After the pre-trial the court shall make an orderwhich recites the action taken at the conference, the amendments allowed to the



pleadings, and the agreements made by the parties as to any of the mattersconsidered, such order shall limit the issues for trial to those not disposed of byadmissions or agreements of counsel and when entered controls the subsequentcourse of the action, unless modified before trial to prevent manifest injustice.(Emphasis ours)

A pre-trial hearing is meant to serve as a device to clarify and narrow down the basic issuesbetween the parties, to ascertain the facts relative to those issues and to enable the parties to obtainthe fullest possible knowledge of the issues and facts before civil trials and thus prevent that saidtrials are carried on in the dark. 15

Pre-trial is primarily intended to make certain that all issues necessary to the disposition of a caseare properly raised. Thus, to obviate the element of surprise, parties are expected to disclose at apre-trial conference all issues of law and fact which they intend to raise at the trial, except such asmay involve privileged or impeaching matters. The determination of issues at a pre-trial conferencebars the consideration of other questions on appeal. 16

However, as previously intimated, the rules are not applied with rigidity. To prevent manifest

injustice, some exceptions are admitted. The rules itself, specifically Section 5 of Rule 10 on Amended and Supplemental Pleadings, permits the following:

Sec. 5. Amendment to conform to or authorize presentation of evidence.— Whenissues not raised by the pleadings are tried by express or implied consent of theparties, they shall be treated in all respects, as if they had been raised in thepleadings. Such amendment of the pleadings as may be necessary to cause them toconform to the evidence and to raise these issues may be made upon motion of anyparty at any time, even after judgment; but failure so to amend does not affect theresult of the trial of these issues. If evidence is objected to at the trial on the groundthat it is not within the issues made by the pleadings, the court may allow thepleadings to be amended and shall do so freely when the presentation of the meritsof the action will be subserved thereby and the objecting party fails to satisfy the

court that the admission of such evidence would prejudice him in maintaining hisaction or defense upon the merits. The court may grant a continuance to enable theobjecting party to meet such evidence.

In Velasco v . Apostol , 17 we made the following qualification:

xxx xxx xxx

. . . A pre-trial order is not meant to be a detailed catalogue of each and every issuethat is to be or may be taken up during the trial. Issues that are impliedly includedtherein or may be inferable therefrom by necessary implication are as much integralparts of the pre-trial order as those that are expressly stipulated.

In fact, it would be absurd and inexplicable for the respondent company to knowinglydisregard or deliberately abandon the issue of non-payment of the premium on thepolicy considering that it is the very core of its defense. Correspondingly, We cannotbut perceive here an undesirable resort to technicalities to evade an issuedeterminative of a defense duly averred.

Furthermore, as private respondent correctly points out, evidence to prove such late payment was introduced without any objection by the adverse party . This lack of



objection amounts to an implied consent conferring jurisdiction on the court to trysaid issue. (emphasis ours)

xxx xxx xxx

The case at bar falls under this particular exception. Contrary to private respondents' contention,

petitioners did not raise the issue of the 1951 Deed of Sale with Right to Repurchase only in theirmotion for reconsideration before the trial court. In their answer to private respondents' originalcomplaint, petitioners categorically stated:

xxx xxx xxx

5. That during his lifetime on December 17, 1951, the late Pedro Son sold to theherein defendants with right to repurchase for a consideration of Two HundredPesos, One-Half (1/2) of the property which the said Pedro Son inherited from hisdeceased parents, which was designated as Lot No. 4 in the deed of extrajudicialpartition mentioned in the preceding paragraph 4 of this answer. Pedro Son was notable to repurchase the aforesaid portion sold to the defendants but the herein

defendants did not take advantage of said failure to repurchase because they did notconsolidate their ownership thereof.

6. Then on November 5, 1957, the said Pedro Son conveyed by way of absolute salea portion consisting of 6,324 square meters of the share which he inherited from hisdeceased parents. A deed of absolute sale was executed by the said Pedro Son andacknowledged before the Honorable Teodoro T. Lim, Municipal Judge of Medellin,Cebu and Notary Public Ex-Officio, a copy of which deed of sale has been attachedto the complaint as Annex "A". 18

xxx xxx xxx

Private respondents' failure to raise any objection: (a) when petitioners presented in evidence the1951 Deed of Sale with Right to Repurchase; 19 (b) when petitioners' counsel vigorously cross-examined respondent Teofista Son Arcipe on the aforementioned deed; 20 and (c) when Anastacio Sontestified on said document, 21 constitutes an implied assent on the part of respondents to depart from theissue contained in the pre-trial order.

Private respondents' implied consent to try the issue was further demonstrated by their owncounsel's extensive cross-examination of petitioners' witness Anastacio Son regarding both the 1951Deed of Sale with Right to Repurchase and the 1957 Deed of Absolute Sale. 22

Private respondents cannot claim that they were not adequately prepared to meet petitioners'defense. They were simply not "caught in surprise." On the other hand, they had every opportunity topresent rebuttal or counter-evidence on the issue.

On this point, we find most telling the testimony on cross-examination of private respondent TeofistaSon Arcipe:

xxx xxx xxx



Q Now, while your father was still alive and particularly in the year1951, did you know if your father had entered into any transactionconcerning this land in question with the defendant Anastacio Son?

A I don't know about that.

Q You are not aware then that sometime on December 17, 1951 yourfather executed a deed of sale with the right to repurchase, in favor of

Anastacio Son with respect to 1/2 of the land which he inherited fromhis parents?

A I don't know about that.

Q You claim to be familiar with the signature of your father, PedroSon, if you would be shown a document bearing such signature,would you be able to recognize the same?

A Yes, sir.

Q Alright. I am showing to you a document executed on December17, 1951 and acknowledged before municipal judge Sabas Y.Quijano, which purportedly bears the signature of Pedro Son, do yourecognize the signature of your father Pedro Son on this document?

A This signatur e is the signature of Pedro Son. 23

Finally, we find that the land subject of the 1951 Deed of Sale with Right to Repurchase was thesame property subject of the 1957 Deed of Absolute Sale.

Both deeds referred to the share of Pedro Son, the vendor, in the property which he and Anastacio

Son and the rest of their brothers and sisters inherited from their deceased parents.

The 1951 deed referred to "lot number four representing my (Pedro Son's) share according to theextra-judicial partition made on September 17, 1942 . . ." 24 The aforesaid extra-judicial partition, inturn, concerns the division of the property located in Caputatan Norte, Medellin, left by Juan Son andSusana Perilla among their children including Pedro and Anastacio. 25

On the other hand, the 1957 deed referred to "a part of my (Pedro Son's) share, title, right, andparticipation over a parcel of land located at the Barrio of Caputatan Norte, Municipality of Medellin,Province of Cebu, Philippines, to which I, together with my seven brothers and sisters, inherited fromour deceased parents Juan Son and Susana Perilla . . ." 26

From the foregoing, there can be no dispute then as to the identity of the property subject of the1951 and 1957 deeds. They are the same.

Private respondents' insistence that the 1951 and 1957 deeds are unrelated on grounds that theareas (1/2 of Pedro Son's share in the 1951 deed and only 6,324 square meters in the 1957 sale)and consideration (P200.00 in the 1951 deed and P350.00 in the 1957 document) are differentdeserves little merit.



We do not find peculiar Anastacio Son's explanation that he simply acceded to his brother's plea toreduce the area of the disputed lot and the P350.00 given by Anastacio to Pedro to pay for thelatter's food expenses be just considered as additional payment, 27 close family ties being a common

Filipino trait.

WHEREFORE, premises considered, the petition is GRANTED and the appealed decision is hereby

REVERSED AND SET ASIDE and the judgment of the trial court REINSTATED.

SO ORDERED.

Padilla, Davide, Jr., Bellosillo and



G.R. No. 74834 November 17, 1988

INSULAR BANK OF ASIA & AMERICA (NOW PHILIPPINE COMMERCIAL INTERNATIONALBANK), petitioner,vs.HON. INTERMEDIATE APPELLATE COURT, THE PHILIPPINE AMERICAN LIFE INSURANCE

CO., SPS. BEN MENDOZA & JUANITA M. MENDOZA, respondents.

Balili, Parado, Cavada & Maamo for petitioner.

Romulo, Mabanta, Buenaventura, Sayoc & Delos Angeles for respondent Spouses Mendozas.

Francisco, Zulueta & Associates for respondent Philam Life.

MELENCIO-HERRERA, J .:

An appeal by certiorari under Rule 45 of the Rules of Court by petitioner, the Insular Bank of Asiaand America (IBAA) [now the Philippine Commercial International Bank], from the judgment of thepublic respondent, then the Intermediate Appellate Court, * in CA-G.R. CV No. 03224.

Briefly, the antecedent facts disclose that sometime in 1976 and 1977 respondent spouses Ben S.Mendoza and Juanita M. Mendoza (the Mendozas, for brevity), obtained two (2) loans fromrespondent Philippine American Life Insurance Co. (Philam Life) in the total amount of P600,000.00to finance the construction of their residential house at Mandaue City. The said loans, with a 14%nominal interest rate, were to be liquidated in equal amortizations over a period of five (5) years fromMarch 1977 to March 1982.

To secure payment, Philam Life required that amortizations be guaranteed by an irrevocable

standby letter of credit of a commercial bank. Thus, the Mendozas contracted with petitioner InsularBank of Asia and America (IBAA) for the issuance of two (2) irrevocable standby Letters of Credit infavor of Philam Life for the total amount of P600,000.00. The first L/C for P500,000.00 was to expireon 1 October 1981 (Exhibit "7", IBAA) and the second for P100,000.00 on 1 January 1982 (Exhibit"8", IBAA) These two (2) irrevocable standby L/Cs were, in turn, secured by a real estate mortgagefor the same amount on the property of Respondent Spouses in favor of IBAA.

On 11 May 1977, the Mendozas executed a promissory note (No. L-562/77) in favor of IBAApromising to pay the sum of P100,000.00 plus 19% p.a. interest on 31 May 1979. Again, on 3 June1977, Respondent Spouses executed another Promissory Note (No. 564/77) binding themselves topay IBAA P100,000.00 plus 19% p.a. interest on 23 June 1979. Both Notes authorized IBAA "to sellat public or private sale such securities or things for the purpose of applying their proceeds to suchpayments" of many particular obligation or obligations" the Mendozas may have to IBAA. (Exhibits"34" and "35"-IBAA, Annex "D" p. 131, Rollo)

The Mendozas failed to pay Philam Life the amortization that fell due on 1 June 1978 so that PhilamLife informed IBAA that it was declaring both loans as "entirely due and demandable" and demandedpayment of P492,996.30 (Exhibit "H"). However, because IBAA contested the propriety of calling illthe entire loan, Philam Life desisted and resumed availing of the L/Cs by drawing on them for five (5)more amortizations.



On 7 September 1979, because the Mendozas defaulted on their amortization due on 1 September1979, Philam Life again informed IBAA that it was declaring the entire balance outstanding on bothloans, including liquidated damages, "immediately due and payable." Philam Life then demanded thepayment of P274,779.56 from IBAA but the latter took the position that, as a melee guarantor of theMendozas who are the principal debtors, its remaining outstanding obligation under the two (2)standby L/Cs was only P30,100.60. Later, IBAA corrected the latter amount and showed instead an

overpayment arrived at as follows:

Limit of Liability P 600,000.00

Less:

a) Paymentof Mendozas

P 280, 293.11

b) Payment

of IBAA

372,227.65

652,520.76

Overpaymentby IBAA

( P 52,520.76)

On 21 April 1980 the Real Estate Mortgage, which secured the two (2) standby L/Cs. wasextrajudicially foreclosed by, and sold at public auction for P775,000.00, to petitioner IBAA as thelone and highest bidder (Exhibit "17-Mendoza"). The bid price of P775,000.00 by petitioner IBAAwas arrived at as follows:

Principal (unpaidadvances under the 2

P432,386.07

standby LCs)plus interest &charges

Add:

a) Stipulated Attorney's fees(20%)

P86,477.20

b) Principals(clean loans)plus accrued

interest underP/Ns Nos.562/77 and



564/77 P255,346.95

c) Expenses offoreclosure

P 72.20

TOTAL P775,000.42

On a date that does not appear of record, Philam Life filed suit against Respondent Spouses andIBAA before the Regional Trial Court of Manila, Branch XXXXI, for the recovery of the sum ofP274,779.56, the amount allegedly still owing under the loan. After trial, said Court rendered aDecision finding that IBAA had paid Philam Life only P342,127.05 and not P372,227.65, as claimedby IBAA, because of a stale IBAA Manager's check in the amount of P30,100.60, which had to bededucted. With this deduction, the Trial Court arrived at the following computation:

Limit of Liability of IBAALess:

P 600,000.00

a) Payment byMendozas

P 280, 293.11

b) Payment byIBAA

P342,127.05 P622,420.16

Overpayment byIBAA

P 22,420.16

Thus, the Trial Court ruled:

ACCORDINGLY, judgment is hereby rendered ordering:

(1) Defendants-spouses Ben S. Mendoza and Juanita M. Mendoza to pay plaintiffPhilippine American Life Insurance Company the sum of P322,000.00 plus 2% permonth as penalty interest from September 12, 1979 until the whole amount is fullypaid, P10,000 as attorney's fees, and costs.

(2) Plaintiff Philippine American Life Insurance Company to refund the sum ofP22,420.16 to the defendant Insular Bank of Asia and America plus legal interestfrom March 31, 1980 until the whole amount is fully paid; and

(3) Dismissal of the counterclaim and crossclaim filed by the defendants- spousesagainst the plaintiff and the defendant IBAA, as well as the counterclaim filed bydefendant IBAA against the plaintiff. (pp. 28-29, Rollo)

In so deciding, the Trial Court took the position that IBAA, "as surety" was discharged of its liability tothe extent of the payment made by the Mendozas, as the principal debtors, to the creditor, PhilamLife.



Both Philam Life and Respondent Spouses appealed to respondent Appellate Court, which reversedthe Trial Court and ruled instead that IBAA's liability was not reduced by virtue of the paymentsmade by the Mendozas. Accordingly, the Appellate Court decreed:

WHEREFORE, premises considered, judgment is hereby rendered ordering:

1. Defendants-appellant spouses Ben S. Mendoza and Juanita M. Mendoza anddefendant-appellee IBAA to pay jointly and severally plaintiff-appellant Philamlife, thesum of P222,000.00 plus 2% per month as penalty interest from September 12, 1979until the whole amount is fully paid; plus P25,000.00, as attorney's fees, and costs;however, defendant-appellee IBAA shall only be liable up to the amount ofP296,294.05;

2. Dismissal of the claim by the IBAA for a refund of P22,420.16 from the Phil- American Life Insurance Co.; and

3. Dismissal of the counterclaim and cross-claim filed by the defendant- spousesagainst the plaintiff and the defendant IBAA, as well as the counterclaim filed by

defendant IBAA against the plaintiff.

No special pronouncement as to costs in this instance. (p. 51, Rollo).

Availing of the instant Petition, IBAA seeks a reversal of the aforesaid judgment and the affirmanceinstead of that of the Trial Court. We resolved to give due course. The issues addressed, as positedby IBAA, are:

1. Whether or not the partial payments made by the principal obligors (respondentMENDOZAS) would have the corresponding effect of reducing the liability of thepetitioner as guarantor or surety under the terms of the standby LCs in question.

2. Whether or not respondent Intermediate Appellate Court is correct in disregardinga documentary evidence (O.R. No. 74323, Exhibit 28-IBAA) showing the amountpaid by petitioner and which was admitted as evidence without objection on the paintof the counsel for the respondent Philam.

3. Whether or not the Intermediate Appellate Court is correct in passing sub-silenciothe following points raised by the petitioner in its Brief to sustain the decision of theTrial Court on some other grounds.

a. Effective rate of interest imposed by respondent Philam exceeded the allowableceiling;

b. Respondent Philam has no right to call in at one time the two standby letters ofcredit;

c. Respondent Philam failed to follow the condition in the two (2) standby letters ofcredit:

which could have otherwise altered the result of the decision.



4. Whether or not the award of attorney's fees to respondent Philam is proper in sofar as petitioner is affected. (p. 15, Rollo)

The pivotal issue is the first one. IBAA stresses that it has no more liability to Philam Life under thetwo (2) standby Letters of Credit and, instead, is entitled to a refund. Whereas Philam Life and theMendoza spouses separately maintain that IBAA's obligation under said two (2) L/Cs is original and

primary and is not reduced by the direct payments made by the Mendozas to Philam Life.

1. In construing the terms of a Letter of Credit, as in other contracts, it is the intention of the partiesthat must govern.

Letters of credit and contracts for the issuance of such letters are subject to the samerules of construction as are ordinary commercial contracts. They are to receive areasonable and not a technical construction and although usage and custom cannotcontrol express terms in letters of credit, they are to be construed with reference toall the surrounding facts and circumstances, to the particular and often varying termsin which they may be expressed, the circumstances and intention of the parties tothem, and the usages of the particular trade of business contemplated. (International

Banking Corp. vs. Irving National Bank, CCA N.Y. 283 F. 103, affirming DC 274 F.122; Old Colony Trust Co. vs. Lawyers' Title and Trust Co., CAA NY, 297 F. 152,cited in Vol. 72, CJS sec. 178, pp. 387-388).<äre||anº•1àw>

The terms of the subject Irrevocable Standby Letters of Credit read, in part, as follows:

This credit secures the payment of any obligation of the accountee to you under thatLoan Agreement hereto attached as Annex 'A' and made a part hereof, includingthose pertaining to (a) surcharges on defaulted account; stallments, (b) increasedinterest charges (in the event the law should authorize this increase), and (c)liabilities connected with taxes stipulated to be for Accountee's and providedhowever, that our maximum liabilities hereunder shall not exceed the amount ofP500,000.00 (Pl00.000.00 for the other LC).

Each drawing under this credit shall be available at any time after one (1) day fromdue date of the obligations therein secured. Each drawing under this credit shall beaccomplished by your signed statement in duplicate that the amount drawnrepresents payment due and unpaid by the accountee. (pp. 11-12, Decision, pp. 38-39, Rollo). [Emphasis our ].

Unequivocally, the subject standby Letters of Credit secure the payment of any obligation of theMendozas to Philam Life including all interests, surcharges and expenses thereon but not to exceedP600,000.00. But while they are a security arrangement, they are not converted thereby intocontracts of guaranty. That would make them ultra vires rather than a letter of credit, which is withinthe powers of a bank (Section 74[e], RA 337, General Banking Act). 1 The standby L/Cs are, "in effect

an absolute undertaking to pay the money advanced or the amount for which credit is given on the faith ofthe instrument." (Scribner v. Rutherford, 22 N.W. 670, 65 Iowa 551; Duval v. Trask,, 12 Mass. 154, citedin 38 CJS, Sec. 7, p. 1142). They are primary obligations and not accessory contracts. Being separateand independent agreements, the payments made by the Mendozas cannot be added in computingIBAA's liability under its own standby letters of credit. Payments made by the Mendozas directly to PhilamLife are in compliance with their own prestation under the loan agreements. And although thesepayments could result in the reduction of the actual amount which could ultimately be collected fromIBAA, the latter's separate undertaking under its L/Cs remains.



Both the Trial Court and the Appellate Court found, as a fact, that there still remains a balance onthe loan, Pursuant to its absolute undertaking under the L/Cs, therefore, IBAA cannot escape theobligation to pay Philam Life for this unexpended balance. The Appellate Court found it to beP222,000.00, arrived at by the Trial Court and adopted by the Appellate Court, as follows:

... In the summary of application of payments (Exhibit "KK") the plaintiff applied

Pl,918.00 as commitment fee, P4,397.66 as surcharges, P199,683.40 as interests,and P320,000.00 on the principal. The P58,000.00 which is covered by OR No.74396 was also applied "against the total loan." Since plaintiff applied P378,000.00against the total indebtedness of P600,000.00 there still remains an outstandingbalance on the principal P322,000.00 (should be P222,000.00) aside from theagreed penalty interest until the whole amount is fully paid. ... (Decision, Trial Court,p. 50, Rollo)

The amount of P222,000.00, therefore, considered as "any obligation of the accountee" under theL/Cs will still have to be paid by IBAA under the explicit terms thereof, which IBAA had itselfsupplied. Letters of credit are strictly construed to the end that the rights of those directly parties tothem may be preserved and their interest safeguarded (Moss vs. Old Colony Trust Co., 140 N.E.803, 246 Mass. 138, 152). <äre||anº•1àw> Like any other writing, it will be construed most strongly against thewriter and so as to be reasonable and consistent with honest intentions. On the whole, theconstruction will be generally a strict one (Lamborn vs. National Park Bank of New York, 208 N.Y.S.428, 212 App. Div. 25, affirming Id , 204 N.Y.S. 557,123 Misc. 211, affirmed Id.. 148 N.E. 664, 240N.Y. 520). As found by the Appellate Court, however, the amount payable should not exceedP296,294,05 (P600,000.00 less P303,705.95, the total amount found by the Appellate Court to havebeen paid by IBAA to Philam Life).

2. The second issue as to whether or not documentary evidence was disregarded by the AppellateCourt regarding the amount actually paid by IBAA to Philam Life, or P303,705.95 (not P342,127.05as found by the Trial Court), questions a finding of fact, which should be accorded not only respectbut even finality. It is not the function of this Court to analyze or weigh such evidence all over again,its jurisdiction being limited to reviewing errors of law that might have been committed by lower

Courts.

3. The third issue faults respondent Appellate Court with having passedsub-silencio over certain points raised by petitioner IBAA in his Brief sustaining the Decision of theTrial Court. It is accepted judicial practice, however, that Courts are not required to resolve all issuesraised in pleadings unless necessary for the resolution of the case. Apparently, respondent

Appellate Court deemed it unnecessary to pass upon those points. Be that as it may, suffice it tostate:

a) It is a matter of common knowledge in lending procedures that the nominal interest is differentfrom the effective rate of interest and that the discounting interest scheme as well as the principalamortization scheme are practices commonly resorted to by lending institutions. If IBAA disagreed

with the computation scheme adopted by Philam Life, which could have been detected in the earlystages of the controversy, IBAA could have interposed its objections.

b) The right to call in at one time the two standby L/Cs was specifically provided for in the Loan Agreement, which was specifically made an integral part of the L/Cs Section 8 thereof read:

... 8. The Lender shall have the light to declare the entire balance of the loans and allobligations of the borrower to the lender as immediately due and payable in case the



borrower fails for any reason to comply with any payment or other obligations of theLender. (p. 248, Rollo)

c) The omission by Philam Life to draw the required drafts on the standby L/Cs can be explained bythe fact that all the drafts were pre-prepared, pre-dated andpre-accepted by the Mendozas. Philam Life, therefore, could not have complied to the letter with the

provision in the L/Cs that drawings therefrom were to be made by drafts for each due and unpaidamortization. Besides, the accelaration of the entire balance of the loan was sufficient notice ofdishonor of the pre-drawn and pre-accepted drafts.

4. Coming now to the award of attorney's fees of P25,000.00, the same appears reasonable underthe circumstances of the case specially considering that in the foreclosure of the mortgage in itsfavor IBAA charged the Mendozas attorney's fees in the amount of P86,477.20, supra.

As to the liability of the Mendozas to IBAA, it bears recalling that the Mendozas, upon theirapplication for the opening and issuance of the Irrevocable Standby Letters of Credit in favor ofPhilam Life, had executed a Real Estate Mortgage as security to IBAA for any payment that thelatter may remit to Philam Life on the strength of said Letters of Credit; and that IBAA had recovered

from the Mendozas the amount of P432,386.07 when it foreclosed on the mortgaged property of saidspouses in the concept of "principal (unpaid advances under the 2 standby L/Cs plus interest andcharges)." In addition, IBAA had recovered P255,364.95 representing its clean loans to theMendozas plus accrued interest besides the fact that it now has the foreclosed property. As betweenIBAA and the Mendozas, therefore, there has been full liquidation. The remaining obligation ofP222,000.00 on the loan of the Mendozas, therefore, is now IBAA's sole responsibility to pay toPhilam Life by virtue of its absolute and irrevocable undertaking under the standby L/Cs. Speciallyso, since the promissory notes executed by the Mendozas in favor of IBAA authorized the sale of themortgaged security "for the purpose of applying their proceeds to ... payments" of their obligations toIBAA.

WHEREFORE, the Decision of respondent Intermediate Appellate Court, dated 20 December 1985,is hereby MODIFIED. Petitioner IBAA (now the Philippine Commercial International Bank) shall pay

Philippine American Life Insurance Company the sum of P222,000.00 plus 2% per month as penaltyinterest from 12 September 1979 until the whole amount is fully paid, but in no case to exceedP296,294.05, plus P25,000.00 as attorney's fees. No costs.

SO ORDERED



PhilippineLaw.info » Jurisprudence » 1969 » April »

PhilippineLaw.info » Jurisprudence » SCRA » Vol. 28 »

G.R. No. , 28 SCRA 430Republic of the Philippines

SUPREME COURT

Manila

EN BANC

May 30, 1969

G.R. No. L-27234

LEONORA T. ROXAS, plaintiff-appellee,

vs.

PEDRO DINGLASAN, defendant,

FRANCISCA MOJICA and VICTORIA DINGLASAN, intervenors-appellants.

Oscar F. Reyes for plaintiff-appellee.

Sabas M. Capili for intervenors-appellants.

CAPISTRANO, J.:

Appeal by intervenors Francisco Mojica and Victoria Dinglasan from the judgment of

the Court of First Instance of Batangas in Civil Case No. 1272 ordering foreclosure of

the mortgage constituted on a piece of land by defendant Pedro Dinglasan who, by

falsifying a public document, had secured a transfer certificate of title in his name to

the land previously sold to intervenors by its registered owner, Felisa Kalaw.

Felisa Kalaw was the registered owner with Certificate of Title No. 9125 of Lot No.

15679 with an area of 26,530 square meters, situated at Lipa City. On June 11, 1959,

she sold to Francisca Mojica by means of a public instrument an undivided portion of

11,530 square meters of the lot for the price of P938.50. In the same month and year,

she sold to Victoria Dinglasan by means of a private instrument the remaining portion

of 15,000 square meters for the price of P5,851.40. Long before and at the time of the

sales, Francisca Mojica and Victoria Dinglasan were in possession of the Lot. The

vendor's Certificate of Title No. 9125 was not delivered to the vendees because it was

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in the possession of another person to whom the lot had been mortgaged by Felisa

Kalaw.

Prior to December 29, 1961, Pedro Dinglasan, by falsifying a public document of

conveyance, succeeded in having Certificate of Title No. 9125 in the name of Felisa

Kalaw canceled and a new transfer Certificate of Title No. T-10392 issued in his

name. The record does not show when and how he had obtained possession of the

owner's duplicate certificate of title.

On December 29, 1961, Pedro Dinglasan mortgaged the lot to Leonora T. Roxas as

security for a loan of P7,000.00 with interest of 6% per annum, payable within a

period of ninety (90) days. The mortgagor's title having been delivered to the

mortgagee, she caused the instrument to be registered on the back of the said transfer

certificate of title. On April 3, 1962, the mortgagee, Leonora T. Roxas, instituted the

instant foreclosure suit against the mortgagor, Pedro Dinglasan, the latter having

failed or refused to pay the obligation on its due date. Said defendant was declared in

default. On April 18, 1962, Francisca Mojica and Victoria Dinglasan moved to

intervene and that their complaint in intervention annexed to the motion be admitted.

The complaint alleged that they were the owners of the lot, having purchased the same

from Felisa Kalaw, in June 1959; the title to said land was fraudulently transferred by

Pedro Dinglasan in his name; that Pedro Dinglasan mortgaged the land in favor of

plaintiff Leonora T. Roxas; that said mortgagor has been convicted of "Falsification of

Public Document by a Private Individual," and the document used by him in

transferring title in his name was the subject of the said felony. The intervenors

prayed that they be declared the true and absolute owners of the parcel of land

covered by Transfer Certificate of Title No. T-10392; that whatever document

executed by Pedro Dinglasan in transferring the ownership of the land in his name be

declared null and void; and that Transfer Certificate of Title No. T-10392 be orderedcanceled and another title issued in the intervenors' names.

After trial, the lower court rendered its decision finding that the mortgage was validly

constituted and its foreclosure was in order, that "this is not the time and place for

them (intervenors) to raise their claim of ownership over the property," and that the



intervenors were not entitled to any relief. Judgment was rendered ordering

foreclosure of the mortgage. From this judgment the intervenors appealed to the Court

of Appeals. Said court, however, certified the appeal of this Court on the ground that

it involves only questions of law.

The appellants contend that the lower court erred in not considering the complaint in

intervention as timely and appropriate. The contention is tenable. The question of

whether the complaint in intervention was seasonably filed is now beside the point,

considering that the lower court had previously granted the motion for leave to file the

said complaint, and its order allowing the motion has not been questioned. In fact,

although the defendant had been declared in default, the court, after the plaintiff had

rested her case, allowed the intervenors to present their evidence. The complaint in

intervention was appropriate, because the intervenors, as alleged owners of the land

sought to be foreclosed by the plaintiff, have an interest in the matter in litigation of

such direct and immediate character that they stand to gain or lose by the direct legal

operation and effect of the judgment (Garcia, etc., et al. vs. David, et al., 67 Phil. 279).

The appellants also contend that the lower court erred "in not declaring the contract of

mortgage between the plaintiff and defendant as null and void and consequently in not

dismissing forthwith plaintiff's action for foreclosure of mortgage." The contention is

unmeritorious in view of the following considerations:

1. The complaint in intervention was to vindicate ownership of the land in the

intervenors. The deeds of sale involving the parcel of land covered by Certificate of

Title No. 9125 in the name of the vendor, Felisa Kalaw, not having been registered,

the said intervenors did not acquire ownership of the land. It is well settled that in case

of sale of a piece of land titled under the Torrens System, it is the act of registration,

and not tradition, that transfers the ownership of the land sold. (Agbulos vs.

Alberto, G.R. No. L-17483, July 31, l962, citing Sec. 50, Act 496; Tuason vs.Raymundo, 28 Phil. 635; Sikatuna vs. Guevarra, 43 Phil. 371; Worcester vs.

Ocampo, 34 Phil. 646.)

The vendees-intervenors not having acquired the ownership of the land, their action to

vindicate ownership must fail because such action can prosper only upon proof by

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plaintiff that he is the owner. As pointed out, the intervenors did not acquire

ownership of the land because their deeds of sale were not registered.

2. The next question before us is whether the mortgage was valid. Article 2085 of the

New Civil Code requires that the mortgagor be the owner of the property mortgaged.

Although Pedro Dinglasan was not the owner of the property mortgaged because he

had secured title thereto thru fraud or falsification of a public document (C.N. Hodges

vs. Dy Buncio & Co., Inc., et. al., G.R. No. L-16096, October 30, 1962), the mortgage

was valid because Leonora T. Roxas was an innocent mortgagee for value, having

relied upon the mortgagor's transfer certificate of title which according to the Register

of Deeds was genuine and free from any objection. In the case of De Lara, et al. vs.

Ayrosa,G.R. No. L-16122, May 31, 1954, this Court held that where the certificate of

title wasalready in the name of the forger when the land was sold to an innocent

purchaser, the vendee had the right to rely on what appeared in the certificate and, in

the absence of anything to excite suspicion, was under no obligation to look beyond

the certificate and investigate the title of the vendor appearing on the face of said

certificate. In the recent case of Morales Development Company, Inc. vs. Court of

Appeals, et al ., G.R. No. L-26572, March 28, 1969, this Court, speaking thru Mr.

Chief Justice Concepcion, said:

Morales argues that it was not enough for the Deseos to have gone to the office of theRegister of Deeds and found therein that there were no flaws in the title of the Abellas

... [T]he Deseos were not bound to check the deeds of conveyance by Reyes to the

Abellas, and by Montinola to Reyes. Having found that the owner's duplicate copy of

TCT No. 21037, in the name of the Abellas, was a genuine copy of the original on file

with the office of the Register of Deeds, the Deseos were fully justified in relying

upon said TCT No. 21037, and had no legal obligation to make further investigation.

The principles enunciated in these cases are, in our opinion, applicable to a mortgageein good faith and for value.

Moreover, the intervenors were negligent. As the vendor did not deliver to them her

duplicate certificate of title, they should have consulted a good lawyer who could have

advised them to protect their rights by filing with the Office of the Register of Deeds

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an adverse claim under Section 110 of Act No. 496, as amended. Had they filed an

adverse claim, Pedro Dinglasan would not have been able to obtain cancellation of

Felisa Kalaw's certificate of title and the issuance of a new transfer certificate of title

in his name. They were, thus, negligent, and their negligence was the proximate cause

of their loss.

PREMISES CONSIDERED, the judgment appealed from is affirmed without

prejudice to allowing the intervenors-appellants to make the deposit mentioned in the

appealed judgment within ninety (90) days from date of finality of the judgment of

this Court, and without prejudice to the vendees, Francisca Mojica and Victoria

Dinglasan, bringing an action against the vendor, Felisa Kalaw, for the enforcement of

said vendor's warranty against eviction. No special pronouncement as to costs.

Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Fernando, and Barredo, JJ.,

concur.

Teehankee, J., took no part.

Concepcion, C.J., and Castro, J., are on leave.







G.R. No. L-48769 February 27, 1987

BARANGAY MATICTIC, Municipality of Norzagaray, Province of Bulacan, petitioner,vs.HONORABLE J. M. ELBINIAS as District Judge, CFI of Bulacan, Branch V and SPOUSESJOSE SERAPIO and GREGORIA PACIDA et al., respondents.

Danilo G. Evangelista for petitioner.

Nicomedes M. Mojado for respondent spouses Jose Serapio and Gregoria Pacida.

Jesus E. Mendoza for respondent Jose S. Merced.

ALAMPAY, J.:

Subject of the petition is the Order dated May 12, 1978 of the then Court of First Instance of

Bulacan, Branch V, dismissing without prejudice, Civil Case No. SM-234, entitled "Municipality ofNorzagaray vs. Jose Serapio, et al." Civil Case No. SM-234 is an expropriation proceeding filed bythe Municipality of Norzagaray which the public respondent judge dismissed on the ground that atthe time the original complaint was filed, the plaintiff municipality had not yet obtained the requisiteauthority from the Department Head or Office of the President, as required in Section 2245 of theRevised Administrative Code. Respondent Judge held that —

... since the filing of the amended complaint to cure this fatal defect, by submitting therequisite authority from the Office of the President as required by Section 2245 of theRevised Administrative Code, did not vest jurisdiction with this Court which it neverhad acquired even from the very filing of the original complaint — ... orders this casedismissed without prejudice. (Rollo, p. 19).

For municipalities, the municipal council shall exercise the right of eminent domain with the approvalof the President [Sec. 2245 (h), Revised Administrative Code].

The factual and procedural antecedents which led to the filing of this petition are as follows:

1. On December 7, 1968, petitioner (then called Barrio Matictic) filed with the then Court of FirstInstance of Bulacan, Branch V, an action for injunction, docketed as Civil Case No. SM-210,entitled Barrio Matictic vs. Zosimo Serapio, et al., praying therein that the defendants (who are theprivate respondents in the instant case) be enjoined from placing obstructions and closing the barrioroad and to allow plaintiff to remove the obstructions and repair the barrio road (the Poblacion-Tomana-Canyakan barrio road) so as "to enable the people and motorized vehicles the free use

thereof and convenient passage through it. ";

2. On January 28, 1969, Barrio Matictic filed a motion to dismiss the case on the ground that anexpropriation proceeding, not an injunction, is the better remedy and on the same date, the Court,Judge Ambrosio M. Geraldez then presiding, issued the corresponding order dismissing the case;

3. However, and also on January 28, 1969, a complaint for Eminent Domain was filed by theMunicipality of Norzagaray with the same court, docketed as Civil No. SM-234, CFI, Branch 1,Bulacan, and entitled "Municipality of Norzagaray vs. Jose Serapio, et al." Said case involves the



same property of the aforestated defendants that was the subject of Civil Case No. SM-210hereinabove referred to;

4. The defendants in Civil Case No. SM-234, Jose Serapio and Gregoria Pacida, on February 5,1979, filed a Motion to Dismiss alleging that the Court of First Instance of Bulacan has no jurisdictionover the subject of the action; that the complaint states no cause of action; and that plaintiff

(municipality of Norzagaray has no capacity to sue;)

5. On February 11, 1969, upon motion of plaintiff, the Court issued an order allowing plaintiff to takepossession of the property subject of the expropriation proceedings upon deposit of the sum ofP2,682.00;

6. On February 14, 1969, defendants Felicitas Serapio-Merced and Eustaquio Merced filed throughcounsel a Motion to Dismiss the expropriation case on several grounds. Their principal contention isthat the plaintiff municipality, in the absence of an approval from the Office of the President, may notproperly file the subject expropriation case;

7. On March 14, 1969, plaintiff filed an amended complaint alleging therein that it had obtained

authority from the Office of the President to institute expropriation proceedings. Private respondents,Jose Serapio and Gregoria Pacida, in turn, filed an Amended Motion to Dismiss, dated March 19,1969, reiterating therein plaintiff's lack of cause of action and that a subsequent authorization, even ifobtained, would not cure the jurisdictional defect attaching to the plaintiff's complaint when thesubject case was initially filed;

8. On August 18 and 19, 1969, the Court issued orders requiring plaintiff municipality to submit plansof the land to be expropriated, duly approved by the Bureau of Lands;

9. On January 22, 1970, for failure of the plaintiff to comply with the orders of August 18 and 19,1969, the Court issued an order dismissing said Civil Case No. SM-234 for failure of plaintiff to takethe necessary steps to prosecute its case;

10. Said order of dismissal, however, upon appeal by the municipality, was reversed by the Court of Appeals in its decision dated January 5, 1973. The Court of First Instance of Bulacan was ordered toproceed with the expropriation case pursuant to Sec. 3, Rule 67 of the Rules of Court;

11. The case went back to the court a quo, with Judge J.M. Elbinias presiding (now AssociateJustice of the Court of Appeals). But at this point of time the municipal mayor of Norzagaraydisplayed reluctance to prosecute the said case for eminent domain. In fact, he requested theMunicipal Council to withdraw the expropriation proceedings. The Municipal Council, however,refused to accede to the wishes of the mayor; Rollo pp. 98-99)

12. It appears then that a motion to dismiss dated April 3, 1978 was once more filed by thedefendants (private respondents herein) who reiterated their challenge to the jurisdiction of the said

trial court based on their argument that the initial lack of jurisdiction of a court cannot be cured by thefiling of an amended complaint;

13. Petitioner herein, Barangay Matictic, chagrined and confronted by the attitude of its mayor, andon its averment that the result of the expropriation case will greatly affect the social and economicdevelopment of the area in and around Barangay Matictic, filed on January 26, 1978 a Motion forIntervention in Civil Case No. SM-234. Respondent Judge issued an order taking notice of theMotion for Intervention and denied the motion to dismiss filed by the defendants until the motion forintervention shall have been considered by the trial court;



14. On May 12, 1978, respondent Judge, without taking any further action on petitioner's motion forintervention, issued an order dismissing, but without prejudice, the expropriation case — Civil CaseNo. SM-234, on the singular reason that at the time the expropriation case was initially filed therewas no showing of any prior Presidential approval-a requisite that should have been first compliedwith, pursuant to Section 2245 of the Revised Administrative Code. A motion for reconsideration ofthis decision was filed by plaintiff municipality. It insisted that presidential approval was, after all,

secured and that this fact was alleged in the plaintiff's amended complaint. Said motion forreconsideration was, however, denied in the order of the court below, dated January 15, 1978. Thisorder closed the case for the plaintiff municipality of Norzagaray inasmuch as it no longer appealedsaid order of dismissal.

Petitioner, Barangay Matictic, in this certiorari and mandamus case before us, simply complains thatin "... these orders, dated May 12, 1978 and June 15, 1978 (Annexes CC and DD) no resolution orruling was made by respondent Judge with respect to its motion for intervention which wasmentioned in the order dated January 26, 1978 (Annex AA) leaving petitioner (Barangay) no

personality to take part in the case (Rollo, p. 9). Consequently, it filed the instant petition for certiorariand mandamus to compel respondent Judge to allow and admit its complaint in intervention.

This petition was given due course, under the resolution of this Court, dated January 15, 1979(Rollo, p. 153) and on February 2, 1979, a temporary restraining order was issued enjoiningrespondents from exacting, charging and collecting toll fees for the use of the feeder road, subject ofthe expropriation proceedings until further orders from this Court (Rollo, p. 158).

The petition of Barangay Matictic is manifestly untenable.

Regarding the annulment and setting aside of the May 12, 1978 and June 15, 1979 orders of thepublic respondent, dismissing the expropriation proceedings, the proper party to appeal the same orseek a review of such dismissal, would be the Municipality of Norzagaray. Petitioner Barrio Matictic,which is a different political entity, and although a part and parcel of the aforesaid municipality, hasno legal personality to question the aforestated orders because by itself, it may not continue theexpropriation case. It must be considered that the subject orders of the court a quo were not

appealed by the Municipality of Norzagaray. The dismissal of the expropriation case, insofar as saidmunicipality is concerned, became final. The expropriation case ceased to exist and there isconsequently no more proceeding wherein Barangay Matictic may possibly intervene.

An intervention has been regarded as merely "collateral or accessory or ancillary to the principalaction and not an independent proceeding; an interlocutory proceeding dependent on and subsidiaryto, the case between the original parties." (Francisco, Rules of Court, Vol. I, p. 721). With the finaldismissal of the original action, the complaint in intervention can no longer be acted upon. In thecase of Clareza vs. Rosales, 2 SCRA 455, 457-458, it was stated that:

That right of the intervenor should merely be in aid of the right of the original party,like the plaintiffs in this case. As this right of the plaintiffs had ceased to exist, there is

nothing to aid or fight for. So the right of intervention has ceased to exist.

Consequently, it will be illogical and of no useful purpose to grant or even consider further hereinpetitioner's prayer for the issuance of a writ of mandamus to compel the lower court to allow andadmit the petitioner's complaint in intervention. The dismissal of the expropriation case has no lessthe inherent effect of also dismissing the motion for intervention which is but the unavoidableconsequence.



We are constrained to reject petitioner's averment that public respondent Judge "acted with graveand manifest abuse of discretion." Firstly, nothing is lost to the petitioner. If at all petitioner canrightfully establish that it is allowed by law to institute a separate and independent action of its own,then there would be no necessity for it to intervene in the case initiated by the Municipality ofNorzagaray which is now apparently no longer interested in continuing the expropriationproceedings. The dismissal of the expropriation case was without prejudice. The municipality of

Norzagaray, Bulacan can revive its action. There is no need for the proposed intervention of BarrioMatictic. What it may do is to urge the municipality to file its case anew. If the Barangay has obtainedauthority for itself to pursue the action of eminent domain, then the more reason there is to refuse itsintervention.

Approximately, if the rights of the party seeking to intervene not be prejudiced by any judgment in the case at bar and that it may be fully protected in a separate proceeding in then the exercise of judicial discretion in court , denying a motion forintervention is deemed correctly made. (See Pflieder vs. de Britanica, L-19077,October 20,1964, cited in 51 SCRA 368).

Considering the foregoing discussion indicating the lack of merit of the petition for certiorari, it willfollow that the writ of mandamus prayed for by petitioner cannot be granted for lack of legal basis.

WHEREFORE, the instant petition is hereby DENIED for lack of merit. The temporary restrainingorder earlier issued in this case by the Court, dated February 2, 1979, is hereby lifted and dissolved.

No costs.

SO ORDERED.



[G.R. No. 130228. July 27, 2004]

BERNABE FOSTER-GALLEGO, pet i t ioner, vs . SPOUSES ROMEO and

VIVIEN GALANG, VIVE REALTY CORPORATION, MUNICIPALITYOF PARAAQUE, TREASURER OF PARAAQUE, REGISTER OFDEEDS OF PARAAQUE, respondents .

D E C I S I O N

CARPIO, J .:

The Case

Before the Court is a petition for review[1] assailing the Decision[2] of 22 July 1997 ofthe Court of Appeals in CA-G.R. CV No. 43439. The Court of Appeals affirmed withmodification the Decision[3] of 8 July 1993 of the Regional Trial Court of Makati, MetroManila, Branch 148, in Civil Case No. 89-3898. The trial court rendered judgment againstLito Gallego (Gallego) and declared Romeo and Vivien Galang (Spouses Galang), theowners of the parcel of land subject of this case.

Antecedent Facts

Vive Realty Corporation (VRC) acquired several properties at a public auction heldby the Municipal Treasurer of Paraaque (Treasurer) on 29 October 1982. Among theseproperties was a parcel of land (Property) with an area of 330 square meters located inBarrio Kaybiga, Paraaque, Metro Manila, and covered by TCT No. 435402. The Treasurerexecuted a Final Bill of Sale[4] over the Property in favor of VRC on 25 November 1983.VRC then filed a petition, docketed as Civil Case No. 5801, to cancel the titles of theproperties VRC had purchased during the public auction. In a Decision [5] dated 19December 1983, the Regional Trial Court of Makati, Branch 138 (RTC-Branch 138),ordered the Register of Deeds to cancel 11 transfer certificates of title, including TCT No.435402, and to issue new titles in the name of VRC.

On 22 June 1984, the Spouses Galang purchased the Property from VRC through a

Deed of Absolute Sale.[6] The Register of Deeds later issued TCT No. (86872) 22786 overthe Property in the name of the Spouses Galang. The Spouses Galang took possessionof the Property and had it declared in their name for taxation purposes. They diligentlypaid the corresponding real property taxes.

In April 1989, Romeo Galang came home from Saudi Arabia and discovered a hollowblock fence along the perimeter of the Property. Gallego built the fence in March 1989.

Although the Spouses Galang brought the matter to the Barangay Lupon for possible

http://sc.judiciary.gov.ph/jurisprudence/2004/jul2004/130228.htm#_ftn1





















settlement, Gallego failed to appear at the barangay hall and instead sent his lawyer. On16 May 1989, the Spouses Galang filed a complaint for Quieting of Title withDamages[7] against Gallego. The case was raffled to the Regional Trial Court of Makati,Branch 146[8](RTC-Branch 146).

In his Answer with Counterclaim, Gallego alleged that his brother, Bernabe Foster-

Gallego, owned the Property. Gallego denied that his brother was delinquent in thepayment of real property taxes. Gallego asserted that his brother had never received anotice of delinquency or a notice of the public auction of the Property, much less a copyof RTC-Branch 138s decision cancelling TCT No. 435402. Gallego pointed out that TCTNo. 435402 and Tax Declaration No. A-022-00019 clearly indicated his brothers addressas No. 15 Tiller Green S.W. Washington D.C., USA. Since his brother is the true andlawful owner of the Property, Gallego argued that the Spouses Galang should not disturbhis possession as caretaker of the Property.

As Gallego subsequently failed to appear at the pre-trial conference and to submit hispre-trial brief, RTC-Branch 146 issued an Order [9] on 16 February 1990 declaring Gallego

in default and allowing the Spouses Galang to present their evidence ex parte. On 10March 1990, Gallego filed a motion to lift the order of default and to admit his pre-trialbrief. On the same day, Bernabe Foster-Gallego (petitioner) filed a motion for interventionwith an attached answer-in-intervention. RTC-Branch 146 denied Gallegos motion butgranted petitioners motion and admitted the answer-in-intervention.

RTC-Branch 146 set a pre-trial conference between the Spouses Galang andpetitioner. However, the pre-trial did not push through because petitioner filed on 2 August1990 a motion to admit third-party complaint, which RTC-Branch 146 granted.Summonses were issued on third-party defendant VRC, as well on the Municipality (nowCity), Treasurer, and Register of Deeds of Paraaque. VRC failed to file an answer to thethird-party complaint.

The case was subsequently re-raffled to the Regional Trial Court of Makati, Branch65[10] (RTC-Branch 65). On 4 March 1991, the Spouses Galang started presenting theirevidence ex parte against Gallego. Petitioner filed a motion to strike out theseproceedings and to hold in abeyance the hearing scheduled on 8 April 1991 on the groundthat not all the third-party defendants had filed their answers and pre-trial briefs. RTC-Branch 65 denied the motion in an Order dated 6 May 1991.[11]

Gallego and petitioner jointly filed a petition for certiorari with the Court of Appealspraying to annul the order. The appellate court dismissed the petition for lack of merit.Gallego and petitioner then elevated the matter to this Court, which denied their petitionand subsequent motion for reconsideration for lack of reversible error.

The Spouses Galang continued to present their evidence ex parte against Gallegoon 17 August 1992. On 24 August 1992, they submitted their written offer of evidenceand RTC-Branch 65 deemed the case involving the Gallego and the Spouses Galangsubmitted for decision. RTC-Branch 65 also ordered the Spouses Galang and petitionerto submit their position papers on the procedure to receive further evidence in the case.Both parties complied in September 1992.




















In October 1992, petitioner filed a motion to inhibit Judge Abad Santos who grantedthe motion and inhibited himself. The case was re-raffled to the Regional Trial Court ofMakati, Branch 148 (trial court). The trial court eventually decided the original case infavor of the Spouses Galang, and denied petitioners intervention and third-partycomplaint.

The Ruling of the Trial Court

The dispositive portion of the Decision of 8 July 1993 of the trial court reads:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the

plaintiffs and against defendant Lito Gallego removing any cloud or quieting of title

and ownership over the parcel of land covered by TCT No. (86872) 22786 of the

Register of Deeds of Pasay City with an area of 330 square meters more or less

situated in Barrio Kaybiga, Paraaque, Metro Manila, declaring them at this point intime as exclusive owner of said land and that said defendant Lito Gallego is hereby

ordered to pay plaintiffs moral damages in the amount of P10,000.00; attorneys fees

in the amount of P25,000.00 including the appearance fees and P3,000.00 as litigation

expenses.

With costs against the defendant Lito Gallego.

SO ORDERED.[12]

Dissatisfied with the trial courts decision, Gallego and the Spouses Galang appealedto the Court of Appeals.

The trial court also set for hearing the issue of whether trial on the merits shouldproceed on petitioners intervention and third-party complaint. After hearing the argumentsof the parties concerned and receiving their respective memoranda, the trial court issuedon 12 October 1993 the following Order:

WHEREFORE, premises considered,

(1) the order admitting the Answer in Intervention by Bernabe Gallego is hereby

reconsidered, and the Motion to Admit the same is hereby DENIED, and the Answer

in Intervention is hereby stricken off the record.

(2) the third party complaint filed by Bernabe Gallego is hereby denied admission,

and if it was already admitted, the admission is hereby reconsidered and said third

party complaint is hereby stricken off the records.

SO ORDERED.[13]











Petitioner received the trial courts order on 21 October 1993. Petitioner filed a motionfor reconsideration on 5 November 1993, which the trial court denied. Petitioner receiveda copy of the trial courts denial on 23 January 1995. Petitioner then filed on 26 January1995 a notice that he was appealing the Order to the Court of Appeals. Instead of filinghis own brief, however, petitioner joined in Gallegos appeal.

The Ruling of the Court of Appeals

The Court of Appeals held that petitioner had no legal personality to join Gallegosappeal, thus:

In fact, with the denial of his motion for intervention, intervenor-appellant never

became a party to the case. Thus, he had no legal personality to join defendant-

appellant in this appeal to impugn the decision of 8 July 1993, much less to use this

appeal as a mode to question the orders denying his intervention. Under Section 2,Rule 12 of the Rules of Court, the Rule then prevailing at the time the intervention of

intervenor-appellant was denied, any person desiring to intervene shall file a motion

for leave of court and that allowance or disallowance of the motion is addressed to the

sound discretion of the court. xxx once the court exercises its discretion, the same

cannot be reviewed save in instances where such discretion has been so exercised in

an arbitrary or capricious manner in which case a petition for certiorari may be

pursued. In other words, if intervenor-appellant believes that the lower court gravely

abused its discretion in denying his motion for intervention, his proper forum is

elsewhere and not in this appeal.

xxx

But even assuming that the questioned orders are final such that they can be the

proper subject of appeal, an examination of the records will show that intervenor-

appellants appeal was interposed out of time. The order of 12 October 1993 denying

the motion for intervention of intervenor-appellant was received by him on 21

October 1993; hence, pursuant to Section 39 of Batas Pambansa Bilang 129, he only

had a period of fifteen (15) days, or until 5 November 1993, within which to perfect

an appeal. Intervenor-appellant instead filed a motion for reconsideration on 5

November 1993 but this was denied by the lower court on 26 December 1994, a copyof the order of which was served on him on 23 January 1995. This means that

intervenor-appellant had until the next day, 24 January 1995, within which to perfect

his appeal considering that he filed his motion for reconsideration on the very last day

to appeal. It will be noted, however, that intervenor-appellant failed to beat his

deadline as he filed his notice of appeal only on 26 January 1995. This Court therefore



has no jurisdiction to review the assailed orders as they already lapsed into finality.

xxx

xxx

One last note. Intervenor-appellant is not without any remedy with the denial of hismotion for intervention. Whatever right or interest he may have over the subject

property will not in any way be affected by the judgment rendered against defendant-

appellant. If indeed there were some irregularities in the sale at public auction of the

property and in the cancellation of his title, intervenor-appellant may still avail of the

proper remedies under the rules.[14]

The Court of Appeals also affirmed the decision of the trial court but deleted the awardof damages to the Spouses Galang for lack of basis, as follows:

WHEREFORE, premises considered, the 8 July 1993 decision appealed from ishereby AFFIRMED, with MODIFICATION that the award in favor of plaintiffs-

appellants for moral damages, attorneys fees and litigation expenses is DELETED.

SO ORDERED.[15]

Gallego and the Spouses Galang did not appeal the appellate courts Decision of 22July 1997. However, petitioner filed before this Court a petition for reviewon certiorari assailing the Decision.

The Issues

Petitioner contends that:

1. THE COURT OF APPEALS SERIOUSLY ERRED IN NOT SETTING

ASIDE THE ORDER DATED OCTOBER 12, 1993 AND THE ORDER

DATED DECEMBER 26, 1994 AS WELL AS THE DECISION DATED

JULY 8, 1993 AND IN NOT RENDERING A DECISION RULING THAT:

a) THE TRIAL COURT ERRED IN RECONSIDERING THE ORDER

DATED APRIL 16, 1990 xxx;

b) THE TRIAL COURT GRAVELY ERRED IN REASONING THAT THE

DEFAULT ORDER AGAINST GALLEGO PRECLUDED THE

ADMISSION OF THE VERIFIED ANSWER-IN-INTERVENTION

AND THE VERIFIED THIRD-PARTY COMPLAINT OF

PETITIONER WHICH HAVE IPSO FACTO AND EFFECTIVELY











ADMITTED OR INSTALLED PETITIONER AS DEFENDANT OR

BECAME THE MAIN DEFENDANT AND INDISPENSABLE

PARTY OF THE CASE;

c) THE TRIAL COURT GRAVELY ERRED IN RULING THAT THE

INTERVENTION OF PETITIONER IS MERELY ANCILLARY TOTHE MAIN ACTION xxx;

d) THE TRIAL COURT GRAVELY ERRED IN NOT CONCLUDING

THAT THE NOTICE OF AUCTION SALE AND ITS PUBLICATION,

THE CERTIFICATE OF SALE, AND THE FINAL BILL OF SALE

INVOLVED ARE ALL VOID AB INITIO AND DID NOT AFFECT

THE EFFECTIVE AND STANDING VALIDITIY AND EXISTENCE

OF TCT NO. 435402 xxx;

e) THE TRIAL COURT GRAVELY ERRED IN NOT DECIDING THATxxx CIVIL CASE NO. 5801 OF THE RTC, BRANCH 138, MAKATI,

AND THE PROCEEDINGS AND DECISION DATED DECEMBER

19, 1993[16] THEREUNDER ARE VOID;

f) THE TRIAL COURT COMMITTED A SERIOUS ERROR IN NOT

DECIDING THAT EVEN ASSUMING THAT THE AUCTION

PROCEEDINGS WERE VALID, PETITIONER IN EFFECT HAD

REDEEMED HIS PROPERTY WHICH WAS ALLEGEDLY

AUCTIONED, WITHIN THE REDEMPTION PERIOD OF ONE (1)

YEAR BASED ON UNDISPUTED FACTS ON RECORD;

g) THE TRIAL COURT COMMITTED A SERIOUS MISTAKE IN NOT

DECIDING THAT THE DOCTRINE OF AN INNOCENT

PURCHASER FOR VALUE IS NOT APPLICABLE IN THIS CASE,

BECAUSE THE SPOUSES GALANG PURCHASED NOTHING

FROM VIVE REALTY CORPORATION WHOSE TITLE IS VOID AB

INITIO AND THEREFORE HAD NOTHING TO SELL;

h) THE TRIAL COURT SERIOUSLY ERRED IN NOT RULING THAT

TCT NO. 86872 (22786) IN THE NAME OF THE SPOUSESGALANG IS VOID AB INITIO AND PETITIONERS TCT NO. 435402

WHICH REMAINS UNCANCELLED IN THE NAME OF

PETITIONER AND IN HIS POSSESSION, IS STILL LEGALLY

EXISTING AND VALID;






i) THE TRIAL COURT GRAVELY ERRED IN NOT RULING THAT THE

ANSWER-IN-INTERVENTION IS A DIRECT ATTACK, NOT

COLLATERAL, ON THE TITLE OF SPOUSES GALANG;

2. THE COURT OF APPEALS SERIOUSLY ERRED IN CONCLUDING

THAT IT CANNOT REVIEW THE ORDER DATED OCTOBER 12,1993 AND THE ORDER DATED DECEMBER 26, 1994;

3. THE COURT OF APPEALS SERIOUSLY ERRED IN RULING THAT

PETITIONER FILED HIS NOTICE OF APPEAL LATE; BUT EVEN

ASSUMING IT TO BE SO, THE ONE-DAY[17] TARDINESS IS

EXCUSABLE AND STRICTLY TECHNICAL TO DEFEAT

PETITIONERS PROPERTY RIGHT OF WHICH HE IS BEING

DEPRIVED WITHOUT DUE PROCESS OF LAW; and

4. THE COURT OF APPEALS COMMITTED A SERIOUS ERROR IN THAT,ASSUMING PETITIONER HAD NO PERSONALITY TO JOIN THE

APPEAL OF GALLEGO AND THAT THE ORDERS DATED

OCTOBER 12, 1993 AND DATED DECEMBER 26, 1993

RESPECTIVELY ARE INTERLOCUTORY, PETITIONER HAS

STILL A REMEDY TO FILE HIS OWN ACTION TO ANNUL TCT

NO. (86872) 22786 IN THE NAMES OF THE SPOUSES GALANG.[18]

The original parties to this case chose not to appeal the Court of Appeals Decision of22 July 1997. The ruling of this Court thus pertains to petitioner only. We will not delve

into the issues between the Spouses Galang and Gallego.

In sum, the issues of this case are: (1) whether the Court of Appeals erred indismissing petitioners appeal from the trial courts orders disallowing petitionersintervention; (2) whether RTC-Branch 138s Decision of 19 December 1983 can bedeclared void in an action for quieting of title; and (3) whether petitioner is anindispensable party to the action for quieting of title.

The Ruling of the Court

The Court of A ppeals Did Not Err in Dismissing Pet it ioners App eal

True, this Court has on occasion held that an order denying a motion for interventionis appealable.[19] Where the lower courts denial of a motion for intervention amounts to afinal order, an appeal is the proper remedy,[20] as when the denial leaves the intervenorwithout further remedy or resort to judicial relief.


















However, the issue of whether petitioner correctly appealed the assailed orders ofthe trial court to the Court of Appeals is beside the point since petitioner did notinterpose his own appeal. Petitioner merely joined Gallegos appeal from the trial courtsdecision.

A prospective intervenors right to appeal applies only to the denial of his

intervention.[21] Not being a party to the case, a person whose intervention the court deniedhas no standing to question the decision of the court.[22] Petitioner thus had no legalpersonality to join Gallego in assailing the decision of the trial court. Petitioner couldquestion only the trial courts orders denying his intervention and striking off from therecords his answer-in-intervention, not the decision itself.

Moreover, petitioner filed his notice of appeal out of time. The Court of Appeals ruledthat:

xxx The order of 12 October 1993 denying the motion for intervention of intervenor-

appellant was received by him on 21 October 1993; hence, pursuant to Section 39 of

Batas Pambansa Bilang 129, he only had a period of fifteen (15) days, or until 5 November 1993, within which to perfect an appeal. Intervenor-appellant instead filed

a motion for reconsideration on 5 November 1993 but this was denied by the lower

court on 26 December 1994, a copy of the order of which was served on him on 23

January 1995. This means that intervenor-appellant had until the next day, 24 January

1995, within which to perfect his appeal considering that he filed his motion for

reconsideration on the very last day to appeal. It will be noted, however, that

intervenor-appellant failed to beat his deadline as he filed his notice of appeal only on

26 January 1995.[23]

Petitioner disputes the appellate courts findings. Petitioner claims that he filed hismotion for reconsideration on 3 November 1993, and not on 5 November. The deadlinefor his appeal was on 25 January 1995 and not on 24 January 1995. Petitioner concedesthat he filed his appeal a day late on 26 January 1993, but argues that this brief delay isstrictly technical.

The records show that petitioner filed with the trial court his motion for reconsiderationby registered mail on 3 November 1993,[24] and not on 5 November. However, as petitionerhimself admits, he still filed his appeal a day beyond the 25 January 1993 deadline.

An appeal from a courts judgment or final order is a statutory right, subject to the lawand the rules of procedure. The perfection of an appeal within the statutory or

reglementary period is not only mandatory but also jurisdictional. [25] Failure to interpose atimely appeal renders the assailed decision final and executory, and deprives theappellate court of jurisdiction to alter the final judgment or to entertain the appeal.[26]

Petitioner lost his right to appeal when he exceeded the fifteen-day period [27] grantedby law. Petitioner filed his motion for reconsideration on the thirteenth day of his fifteen-day period to appeal. The filing of a motion for reconsideration merely suspends therunning of the period to appeal.[28] Once the court denies the motion, the aggrieved party


































has only the remaining period from receipt of the order of denial to file hisappeal.[29] Petitioner thus had only two days from his receipt on 23 January 1995 of thetrial courts order denying the reconsideration, or up to 25 January 1995, to perfect hisappeal to the Court of Appeals. Petitioners failure to interpose his appeal on time renderedthe assailed orders of the trial court final.

Petitioner argues that his tardiness of one day is excusable, and cannot defeat hisproperty rights. Petitioner does not, however, offer any valid justification for the late filingof his appeal. Petitioner merely cites the lame excuse that his counsels assistant attorneymust have mistaken the handwritten received date of 1/23/95 on counsels copy of thetrial courts order denying petitioners motion for reconsideration as 1/25/95.[30] Although theCourt, under exceptional circumstances, has allowed late appeals in the interest of justiceand equity, this only applies to highly meritorious cases to prevent a grave injustice.[31] Thatis not the case here.

The allowance or disallowance of a motion to intervene is addressed to the sounddiscretion of the court hearing the case.[32] This discretion, once exercised, is not

reviewable by certiorari or mandamus save in instances where such discretion isexercised in an arbitrary or capricious manner .[33] Petitioner has not shown that the trialcourt acted capriciously or arbitrarily. That the trial court initially allowed petitioner tointervene but subsequently reconsidered and withdrew its permission does not prove, byitself, that the trial court acted in a manner warranting review. This is certainly not the firsttime a trial court initially allowed a motion for intervention and later reconsidered anddenied it.[34]

The trial court had a valid reason to deny petitioners intervention. An intervention isordinarily not permitted if the prospective intervenors rights can be fully protected in aseparate proceeding.[35] In this case, even if the trial court allowed it, petitionersintervention in the action for quieting of title would have been futile.

Reliefs Sough t by Peti t ioner are Not Av ai lable in an Ac t ion to Quiet Ti t le

It is evident from most of the issues raised and the reliefs prayed for that petitionersprincipal aim is to overturn the 19 December 1983 Decision of RTC-Branch 138 (RTC-Branch 138 Decision) cancelling his title. Petitioner seeks to set aside the RTC-Branch138 Decision, to uphold the validity of his title, and to annul the title held by the SpousesGalang. To this end, petitioner impleaded VRC, and the Municipality (now City), Treasurer

and Register of Deeds of Paraaque in a third-party complaint, alleging that these partiescommitted fraud and deprived petitioner of due process.

However, these issues whether fraud tainted the proceedings before RTC-Branch138, whether the Treasurer of Paraaque notified petitioner of the public auction of theProperty, and whether there was denial of petitioners right to due process cannot beresolved in a proceeding for quieting of title. The only issue in an action to quiet title iswhether there is a cloud on a title to real property because of any instrument, record,claim, encumbrance or proceeding that has a prima facie appearance of validity.[36]



































The issues petitioner raised would also necessarily require the trial court to reviewthe decision of another regional trial court. This is plainly beyond the powers of the trialcourt. Under the doctrine of non-interference, a trial court has no authority to interfere withthe proceedings of a court of equal jurisdiction,[37] much less to annul the final judgment ofa co-equal court.[38] The Court held in Metropol i tan Bank & Trust Co. v. Alejo [39] that an

action for quieting of title is not the appropriate remedy where the action would requirethe court hearing it to modify or interfere with the judgment or order of another co-equalcourt.

Even if it wanted to, the trial court could not declare the RTC-Branch 138 Decisionvoid, since that would be tantamount to annulling the decision of a co-equal court. The

jurisdiction to annul the judgment of a regional trial court lies with the Court of Appeals,[40] and not with another regional trial court. The trial court also did not err when itrecognized the auction sale of the Property, which RTC-Branch 138 had already upheld.

The instant petition must also fail because it anchors petitioners claim ona cancelled certificate of title. Petitioners cancelled title cannot cast a cloud on the current

title the Spouses Galang now hold. On 19 December 1983, RTC-Branch 138 cancelledTCT No. 435402 in its decision in Civil Case No. 5801. With the lapse of more than twodecades, RTC-Branch 138s Decision has long gained finality by operation of law. A

judgment becomes final upon the lapse of the reglementary period to appeal if no appealis perfected.[41]Being final, the RTC-Branch 138 Decision is no longer subject to review byappeal.

What petitioner is barred from directly appealing, however, he seeks to overturnthrough an appeal from another case heard by a different trial court. Obviously, petitionercannot do this. When a judgment of a lower court becomes final and executory, it is nolonger reviewable, directly or indirectly, by a higher court, not even by the SupremeCourt.[42]

Moreover, as correctly pointed out by the Court of Appeals, a certificate of title is notsubject to collateral attack. An attack is collateral when, in an action to obtain a differentrelief, an attack on the judgment is nevertheless made as an incident in theaction.[43] Under the Property Registration Decree, titles issued under the Torrens systemcan only be altered, modified or cancelled in direct proceedings in accordance with thelaw.[44]

In this case, petitioner raised the alleged nullity of TCT No. (86872) 22786 in hisanswer-in-intervention to the suit the Spouses Galang filed to quiet title. The petitionersinVil lanueva v. Court of A ppeals [45] also raised the supposed invalidity of respondentstitles in their answer to respondents complaint for recovery of ownership. The Court

disallowed the defense on the ground that it was a collateral attack on respondents title,that is, an indirect challenge to the final judgment and decree of registration that resultedin the issuance of the assailed title. In Vil lanueva , the Court declared that Section 48 ofthe Property Registration Decree required no less than a direct action for reconveyancefiled within the period provided by law.[46]

Petitioner argues that these rules do not apply to him. Citing Ferrer v.

Baut ista ,[47] petitioner alleges that the Spouses Galangs title is void ab initio because it























http://sc.judiciary.gov.ph/jurisprudence/2001/feb2001/117971.htm























originated from the allegedly void title issued to VRC. The Court held in Ferrer that a voidtitle is susceptible to direct and collateral attack.[48]

Ferrer does not apply to the case at bar. The void title referred to in Ferrer was basedon a free patent issued by the Director of Lands over alluvial property. The patent nullityof the assailed title in Ferrer arose, not from fraud or deceit, but from the fact that

the Bureau of Lands had no jurisdiction over land that had passed to privateownership.[49]

In this case, the trial court ordered the cancellation of petitioners title and the issuanceof a new title to VRC. The trial courts decision has long attained finality. Regional trialcourts exercise exclusive original jurisdiction over all civil actions involving title to realproperty.[50] The law authorizes regional trial courts, acting as land registration courts, toorder the cancellation and issuance of certificates of title.[51]

Unlike in Ferrer , there is also insufficient evidence in the records to verify at this timepetitioners allegations that RTC-Branch 138, the City Treasurer and Register of Deeds ofParaaque failed to observe the legal requirements of notice and due process on tax sales

of real property. Worse, petitioner anchors many of his arguments assailing the publicauction of the Property on the outmoded Assessment Law of 1939.[52] Presidential DecreeNo. 464 had long superseded the Assessment Law, which was no longer the applicablelaw when the tax sale of the Property took place in 1982.[53]

Petitioners allegations are better ventilated in a full-blown trial, and not in an actionfor quieting of title, which operates under the rules on declaratory relief. Petitioners chargethat the proceedings and decision of RTC-Branch 138 were void because of alleged dueprocess violations cannot be resolved in a suit to quiet title. The issue of whether a titlewas procured by falsification or fraud should be raised in an action expressly institutedfor the purpose.[54]

Petit ioner is Not an Ind ispen sable Party to the Act io n for Quiet ing of Ti t le

An indispensable party is a party who has such an interest in the controversy orsubject matter that a final adjudication cannot be made, in his absence, without injuringor affecting that interest.[55] A person is not an indispensable party if his interest in thecontroversy or subject matter is separable from the interest of the other parties, so thathe will not necessarily be injuriously affected by a decree that does complete justicebetween the other parties.[56] He is also not indispensable if his presence would merely

permit complete relief between him and those already parties to the action or will simplyavoid multiple litigations.[57]

Petitioner, whose title RTC-Branch 138 cancelled, is not an indispensable party tothe action for quieting of title. The assailed decision quieting title in favor of the SpousesGalang has no appreciable effect on petitioners title. Petitioners title could still becancelled with or without the trial courts declaration that the Spouses Galang are theowners of the Property at this time.[58]















































Further, the assailed decision does not bind p et i tioner. The rules on quieting oftitle[59] expressly provide that any declaration in a suit to quiet title shall not prejudicepersons who are not parties to the action. Given that the trial court denied petitionersintervention and struck it off from the records, petitioner is not a party to the instant case.Suits to quiet title are actions quasi in rem, and the judgment in such proceedings is

conclusive only between the parties to the action.[60]

There is also no legal basis for petitioners argument that the order declaring Gallego

in default rendered petitioner the ipso facto defendant of this case. Petitioner could havebut did not move to substitute Gallego during the proceedings before the court a quo.

On a final note, the Court fully agrees with the Court of Appeals that petitioner is notwithout other remedy. Assuming petitioner can prove his allegations, petitioner is at theleast entitled to recover damages from the parties that defrauded or deprived him of dueprocess.

WHEREFORE, we DENY the instant petition and AFFIRM the Decision of 22 July1997 of the Court of Appeals in CA-G.R. CV No. 43439.

SO ORDERED.

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










G.R. Nos. 76344-46 June 30, 1988

ANG KEK CHEN, petitioner,vs.THE HON. ABUNDIO BELLO, as Judge of the Metropolitan Trial Court of Manila, and thePEOPLE OF THE PHILIPPINES, respondents.

Eriberto D. Ignacio for petitioner.

YAP, C.J.:

Petitioner questions the alleged grave abuse of discretion amounting to excess of jurisdictioncommitted by respondent Judge Abundio Bello in violating Administrative Circular No. 7, datedSeptember 23, 1974, regarding the raffle of Criminal Cases Nos. 021429, 021430 and 021431, andprays that the Court orders the outright dismissal of the cases.

It appears from the records that on December 28, 1977, petitioner Ang was charged before the thenManila City Court (now Metropolitan Trial Court), Branch VIII, with the crimes of "MALTREATMENT,""THREATS," and "SLIGHT PHYSICAL INJURIES," committed according to the information asfollows:

Criminal Case No. 021429 (Maltreatment)

That on or about December 26, 1977, in the City of Manila, Philippines, the saidaccused did then and there wilfully, unlawfully and feloniously ill-treat by deed one,LE HE CO Y YU DE ANG by then and there, slapping her and giving her fist/blowson her head several times, without, however, inflicting upon said LE HE CO Y YU DE

ANG any physical injury.

Criminal Case No. 021430 (Threats)

That on or about December 25, 1977, in the City of Manila, Philippines, the saidaccused in the heat of anger, did then and there wilfully, unlawfully and feloniouslythreaten to commit a wrong and inflict bodily harm upon the person of Le He Co y YuDe Ang by then and there threatening to kill her but, accused, however, bysubsequent acts, did not persist in the Idea conceived in his threats.

Criminal Case No. 021431 (Slight Physical Injuries)

That on or about December 26, 1977, in the City of Manila, Philippines, the said

accused did then and there willfully, unlawfully and feloniously attack, assault anduse personal violence upon the person of one LUCRECIA ANG Y GO by then andthere slapping her on the face and by beating her thereby inflicting upon the saidLUCRECIA ANG Y GO physical injuries which have required and will require medicalattendance for a period of more than one but not more than 9 days and incapacitatedand will incapacitate the said Lucrecia Ang y Go from performing her customary laborduring the said period of time.



After the prosecution had presented its evidence, Ang filed a Demurrer to Evidence which wasdenied by the respondent court. Ang elevated the incident to the Regional Trial Court of Manila oncertiorari and prohibition with prayer for preliminary injunction and/or temporary restraining orders.The petition was likewise denied (Order dated November 18,1983). On appeal, the Court of Appealsaffirmed in toto the Regional Trial Court's Order.

Meanwhile, the then presiding judge of MTC Branch VIII (where the rases were pending) waspromoted to the Regional Trial Court of Manila. As a consequence, respondent judge, as officer-in-charge of the MTC (Manila), directed the return of the case records to the Clerk of Court for "re-raffle." Petitioner, however, alleged that he received the corresponding order only on August 23,1984, or AFTER the cases had already been actually "re-raffled" and assigned to respondent judgeon August 16, 1984.

On September 27, 1984, Ang filed a motion to re-raffle the cases, which was denied. Thesubsequent motion for reconsideration was likewise denied. 1 Hence, the present petition, allegingthat:

1. Respondent judge committed grave abuse of discretion amounting to excess of

jurisdiction in the manner he conducted the raffle of Criminal Cases Nos.021429,021430 and 021431 Annexes 'A', 'B' and 'C' hereof in gross violation ofCircular No. 7 of this Hon. Court in his capacity as Acting Executive Judge of theMetropolitan Trial Court of Manila resulting in the assignment to the branch presidedby himself of the aforesaid three (3) criminal cases and in denying peremptorily themotion for reconsideration filed by petitioner contesting the manner of said raffle.

2. This Hon. Court in the exercise of its rule making power and supervision over alllower courts as demonstrated in several cases decided by it since its reconstitutionunder the present administration in having displayed judicial statemanship andactivism and in the exercise of its equity jurisdiction may order the outright dismissalof the said three (3) Criminal Cases Nos. 021429, 021430 and 021431 Annexes "A","B" and "C" of this petition."

On November 17, 1986, the Court required the public respondents to comment on the petition. OnJanuary 26, 1987, the Solicitor General, in an Urgent Manifestation and Motion, prayed that theentire records of the case be ordered transmitted from Branch XIII, Metropolitan Court of Manila, tothe Solicitor General's Office, so that a comment may be prepared.

In the Comment dated June 23, 1987, the Solicitor General stated that the issue of the alleged non-compliance with the Court's circular regarding the raffle of cases was trivial, that the Court'sguidelines on the matter did not vest any substantive right and a violation thereof did not perse infringe any constitutional right of the accused, and that the raffling of cases did not involve anexercise of judicial function, but was a mere administrative matter involving the distribution of casesamong the different branches of the court, which could not be the subject matter of a special civil

action for certiorari. The Solicitor General, however, stated in his comment that in Criminal Case No.021430, for Light Threats, a review of the records showed no evidence on the alleged threat to kill,hence it should be dismissed. As regards Criminal Case 021429 (Maltreatment) and 021431 (SlightPhysical Injuries) the Solicitor General opined that it was premature to determine petitioner's guilt orinnocence, for unless rebutted, evidence on record appeared sufficient to establish the prosecution'scause.

The principal issue of alleged grave abuse of discretion in violation of Circular No. 7 of this Court,regarding the manner of raffle of cases, not denied or explained by public respondent, is not a trivial



one. The raffle of cases is of vital importance to the administration of justice because it is intended toinsure impartial adjudication of cases. By raffling the cases public suspicion regarding assignment ofcases to predetermined judges is obviated.

A violation or disregard of the Court's circular on how the raffle of cases should be conducted is notto be countenanced. A party has the right to be heard by an impartial and unbiased tribunal.

When the respondent judge conducted the raffle of the three criminal cases in question, apparentlyin violation of the Court's Circular No. 7, he did not only arouse the suspicion that he had someulterior motive for doing so, but he violated the cardinal rule that all judicial processes must be doneabove board. We consider the procedure of raffling cases to be an important element of judicialproceedings, designed precisely to give assurance to the parties that the court hearing their casewould be impartial. On this point, we found the petition meritorious.

Regarding the other prayer of petitioner for the outright dismissal of the cases invoking the equity jurisdiction of this Court, we are inclined to adopt the view of the Solicitor General that Criminal CaseNo. 021430 (for Light Threats) should be dismissed for lack of evidence. Even Hon. Manuel T.Reyes (later to become Justice of the Court of Appeals), before whom as a Regional Trial Judge the

case was brought on certiorari, was of the opinion that there was "utter paucity" of evidence withrespect to the charge of threats in Criminal Case No. 021430 to put to "serious doubt the legalcogency of the disputed orders of April 21 and July 20, 1983;" however, on procedural grounds herefrained from granting the petition. Considering the comment of the Solicitor General we find meritin petitioner's contention that Criminal Case No. 021430 should be dismissed.

Accordingly, the order of the respondent court denying petitioner's motion to re-raffle the criminalcases in question, except Criminal Case No. 021430 for threat which is hereby DISMISSED, is setaside and the said cases Criminal Cases No. 021429 and 021431 are remanded to the ExecutiveJudge for re-raffle in accordance with this Court's Circular No. 7.

SO ORDERED.

Melencio-Herrera, Paras, Padilla and Sarmiento, JJ., concur.



[G.R. No. 120074. June 10, 1997]

LEAH P. ADORIO, pet i t ioner, vs . HON. LUCAS P. BERSAMIN, Presiding

Judge, Regional Trial Court, Branch 96, Quezon City, respondent. PHILIP SEE, Interveno r.

D E C I S I O N

KAPUNAN, J .:

This is a special civil action for certiorari which seeks to set aside the Order of JudgeLucas P. Bersamin[1] dated May 5, 1995 insofar as it holds petitioner in direct contemptand sentences her therefor. The dispositive portion of said order reads:

WHEREFORE, the Motion For Inhibition And For Re-raffle Of Cases is herebygranted.

The complainant Philip See y Go and his former private prosecutor, Atty. Leah P.

Adorio, of the King & Adorio Law Offices, with address at No. 40 Landargun Street,

Quezon City, are hereby found guilty of direct contempt of this Court for disrespect to

the Court and its Presiding Judge and are accordingly sentenced to suffer

imprisonment of two (2) days in the City Jail of Quezon City and to pay a fine of

P200.00 each.

For the pupose of the execution of their sentence, complainant Philip See y Go andAtty. Leah P. Adorio are hereby directed to appear in person before the Court on May

23, 1995 at 10:00 oclock in the morning.

Pending execution of the sentence, the transmittal of the records to the Honorable

Executive Judge, through the Office of the Clerk of Court, for purposes of re-raffle

shall be held in abeyance.

SO ORDERED.[2]

Petitioner was counsel for Philip G. See, the private complainant in Criminal CaseNos. Q-94-55933 to Q-94-55957 involving violations of B.P. Blg. 22 pending before thesala of respondent Judge.[3]

Pre-trial in these cases was concluded on January 16, 1995. Upon agreement of theparties, trial on the merits was set on March 8, 15 and 22, all at 8:30 a.m.[4]

Unknown to petitioner, counsel for the accused filed several requests addressed tothe Branch Clerk of Court for the issuance of subpoenas duces tecum requiring officials

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of several banks to bring before the court on March 8, 1995 at 8:30 a.m., microfilm copiesof various checks. The subpoenas duces tecum were issued on February 6, 7 and 14,1995.[5]

On March 8, 1995, which petitioner supposed to be the date of the presentation ofthe prosecutions evidence, petitioner came to court and was surprised by the presence

of the bank officials therein.[6] During the hearing, respondent Judge called for a recess toenable counsel for the accused to confer with the bank officers.[7] When the case wasagain called, the following arguments took place:

Atty. Adorio:

Before we call our witness, your honor, may I now make of record that I wassurprised with the move this morning of all the bank officers, I was not informedabout any request for subpoena to the bank officers today. No copy of such requestwas given to the Private Prosecutor. And I also notice, your honor, that the subpoenaor rather no copy issued by this court was ever given to the private prosecutor. Atty.Rivera knows, he had already entered his appearance and he knows my address,why did he not furnish me a copy of his request for subpoena, your honor,considering that I have the right to examine his request, the materiality of hisrequest. I would like also to make of record, your honor, why they keep it as a secret,as a rule, the opposing party must be a party to whatever paper the other party mayfile, it seems that Atty. Rivera is hiding something from us. Whatever he wants toask the Court, I am entitled to know.

Atty. Rivera:

I dont think there is a reason or there is a need to be furnished with my request forsubpoena, that is the reason why she was not furnished, your honor. Besides, myrequest for subpoena this morning is not a litigated motion. I made this request foradvance in order that, when the defense turn to present evidence, it wont be delayed

because of non-availability of these exhibits. Atty. Adorio:

This is our day of presenting evidence, your honor. This is only my observation, yourhonor and may I request Atty. Rivera to give us all copies he submits to the Court.

Atty. Rivera:

May I request for particular rule for that....

Atty. Adorio:

Your honor, copies must be given to the opposing counsel, there is a ruling on thatyour honor....

Atty. Rivera:

This is not a litigated motion your honor.

C o u r t:

What is the problem of Atty. Adorio?

Atty. Adorio:















My only observation, your honor. And may I request Atty. Rivera to give us all copieshe submits to the Court.

Atty. Rivera:

May I request for that particular rule for furnishing request for subpoena to the othercounsel, your honor...

C o u r t:

What is this rule, will you cite the rule so that we can examine your protest you areinsinuating to the Court that there was something here, we dont even know therequest for subpoena. If anyone of my staff is.... towards the other side, you call meI can discipline them...

Atty. Adorio:

There was an instance, your honor, when this case was called by the Clerk forarraignment, the Clerk would say that the accused would be coming. And one time,your honor, the Court already issued an Order of arrest, and it was already past10:00 oclock in the morning when the accused arrived....[8]

Petitioner was apparently referring to an incident that allegedly occurred on July 13,1994, the date set for the accuseds arraignment. According to petitioner, the accusedfailed to appear in court on said date even after the third call at around 11:00a.m. Consequently, the Court ordered the issuance of a warrant of arrest and theconfiscation/cancellation of the accuseds bail bond. The clerk in charge of the record thenwent to the door separating the courtroom and the staffs office and whispered to someonein the office. After two minutes, the same clerk again rose from her seat, went back to thedoor, and announced to the Court that the accused would be late. Respondent Judgereplied that the Court will wait for the accused.[9]

However, on March 8, 1995, Philip See allegedly examined the record but found thatthe incidents which purportedly transpired during the arraignment were not reflectedtherein.[10]

The above revelations by Atty. Adorio prompted the following response fromrespondent judge:

C o u r t:

Will you call everybody, all the staff inside.... and you point to me who is that....? Ifyou want me to be disqualified in these cases, you make it in writing. You file yourmotion to inhibit, I will disqualify myself because I dont want to hear suchaccusations. Any participation of my staff which I am now parading before you... Idont like that kind of accusation.

Atty. Rivera:

I will join the court.

C o u r t:

O r d e r















As prayed for, the private prosecutor is hereby directed to file a Request for inhibitionin writing stating the grounds.

Pending consideration of the Request for Inhibition, hearing is hereby suspended.

So ordered.[11]

Pursuant to said order, petitioner filed a Motion for Inhibition and for Re-Raffle ofCases in behalf of her client, alleging that:

The filing of the request for issuance of subpoena duces tecum and the issuance of the

subpoena without notice on the private prosecutor were irregular for the following

reasons:

[a] The pre-trial of the case had beem terminated and the evidence for the prosecution

was scheduled to be heard on March 8, 1995. Thus, it was plaintiffs turn to present

evidence. Whatever request defendant wanted to make with the court which would

affect the right of the plaintiff to present evidence on the date scheduled wouldtherefore be of notice to private prosecutor so that no surprises would result and so

that plaintiff could also prepare questions for these bank officers involved and make

use of their presence.

[b] The act of the Court in issuing the subpoena for the bank officers to testify on

March 8, 1995 upon request of the defendant when it was not yet his turn to present

evidence is disruptive of orderly court procedure and shows bias on the part of the

court. It shows the control of the accused over the court and court procedure.

[c] This control was also manifest on July 13, 199[4], when accused was scheduledfor arraignment, when the latter failed to appear before the court despite the third call

at about 11:00 a.m. The Court then issued an Order for the issuance of a warrant of

arrest and the confiscation/cancellation of the bail bond. After this Order was given

orally in open court, the clerk who took charge of the records went to the door

between the sala and the office and whispered something to someone in the

office. After about two minutes, the same clerk again rose from her seat and went

back to the door and thereafter, she announced to the Court that the accused would be

late and the accused would be arriving. The Court then said that it will wait, if Alvin

Tan is coming. It is puzzling how the clerk knew that Alvin Tan would be coming

when he was not even present in court. However, none of these facts appeared in theOrder or in the Constancia.[12]

Petitioner prayed that (1) the judge inhibit himself from hearing the criminal cases; (2)said cases be re-raffled to another court; and (3) the hearing of said cases be suspendedpending the resolution of the Motion for Inhibition.[13]















The trial court granted said motion in an Order dated May 5, 1995. In the same order,declared petitioner and her client, in direct contempt. He explained thus:

The imputation that the Court has come under the control of the accused on account of

the issuance of the subpoena duces tecum upon his request but without notice to the

complainant or the public prosecutor is most unfair and disrespectful to the Court andis a highly irresponsible accusation on the part of the private complainant and the

private prosecutor (who had meanwhile withdrawn from the case). The issuance of a

subpoena at a partys instance is not subject to prior or simultaneous notice to the

adverse party of the request therefor, for, such notice is not required by the Rules of

Court . The grounds for disqualification are unworthy of any consideration. The

questioning by the private prosecutor of the issuance of the subpoena is unfounded

and due to a misplaced sense of procedural requirements.

x x x

As far as the text and language of the motion are concerned, the Court considers them

to be irresponsible and disrespectful , especially the accusation that the Court had

come under the control of the accused and had committed an irregularity of

procedure. These statements amount to an unmitigatedly disrespectful attitude

towards the Court and its Presiding Judge. They also display the dangerous

tendencies of a party and counsel who probably think of themselves as beyond

reproach. There is therefore no recourse but to find both the complainant and

his former private prosecutor guilty of direct contempt.[14]

On May 22, 1995, petitioner filed this special civil action for certiorari with a prayer fora temporary restraining order. This Court, in a Resolution dated June 5, 1995, issued atemporary restraining order enjoining respondent Judge from enforcing the impugnedorder.

A perusal of the trial courts order reveals that what respondent judge foundparticularly contemptuous were petitioners statements in her motion alleging that (1) theissuance of the subpoenas duces tecum was irregular; and (2) the court and courtprocedure were subject to the control of the accused.

Whether or not these statements constitute direct contempt is the issue whichconfronts this Court.

We rule in the affirmative.

Contrary to petitioners allegations, there was nothing irregular in the issuance of thesubpoenas duces tecum. Requests by a party for the issuance of subpoenas do notrequire notice to other parties to the action. No violation of due process results by suchlack of notice since the other parties would have ample opportunity to examine thewitnesses and documents subpoenaed once they are presented in court.[15]

Petitioner however argues that:











On March 8, 1995, the prosecution was scheduled to present its first witness, the

private complainant, Philip See, after a very long pre-trial period which started

sometime in September 1994. The regular [as against the irregular] procedure would

have been for the prosecution to proceed with the presentation of evidence pursuant to

Rule 119, Section 3 of the Rules of Court. The prosecution was not, however, able to

move along, due to the presence of numerous bank officials from various banks whoappeared pursuant to the subpoenas issued to them by the court.

Moreover, the person who requested for the subpoena was the counsel for the

accused. The regular or usual procedure would have been for the subpoena to be

issued during the pre-trial stage or during the time that the defense is presenting its

evidence and not during the time of presentation of evidence by the prosecution as

what happened in this case.

We do not find any merit in petitioners contentions. Rule 119, Section 3 of the Rules

of Court which prescribes the order of trial in criminal cases does not preclude the defensefrom procuring subpoenas duces tecum during the time of the prosecutions presentationof evidence. In this case, counsel for the accused felt that he needed the documentssubject of the subpoenas for his cross-examination of the prosecutionwitnesses. Accordingly, respondent judge called a recess to enable said counsel tosecure said documents from the bank officials. The order of trial was not in any wayaltered; counsel for the accused did not even attempt to call any of the bank officials tothe stand. Under these circumstances, the resulting delay cannot be consideredunreasonable nor irregular.

Nor do we find anything irregular in the accuseds arraignment. As counsel for the

accused points out:

xxx the fact that the Presiding Judge issued a warrant of arrest and ordered the

cancellation of the accuseds bond shows that he gives no special favor to the

accused. And it is of common knowledge that orders like that are easily

reconsidered/lifted even for excuses like traffic, ill health or failure to remember the

hearing. The fact that the Presiding Judge opted to wait for the accused upon

information that the latter is coming only shows that he was very aware of the

common practice. Waiting saved so much of the courts and parties time as it did away

with the usual motion for reconsideration and the necessity for a resetting.

xxx. Court personnels [ sic], practitioners and even judges know, of course that it is

not uncommon for litigants, especially those coming for trial late, to call the courts

office by phone. It is likewise not uncommon for litigants who follows-up [ sic]

matters in the office (like bailbonds, [ sic], release of rulings, etc.) to get acquainted

with or even become friends of - court clerks, secretaries, typists, stenographers or

sheriffs, in the office.



xxx. Besides, if the plaintiff found it necessary to have those matters stated in the

Order or placed on record, there were two (2) lawyers (the private and the public

prosecutors) who could have stood up and made the proper manifestations or

requests. But that incident happened way back 13 July 1994 and it is only now, in

their motion of 15 March 1995, that they mention the same in their vain attempt to

create an issue on the impartiality and fairness of the Presiding Judge. xxx.[16]

Petitioners allegation that the proceedings before the trial court were irregulartherefore lacks basis. Such statement, when read with petitioners remark that the so-called irregularities show the accuseds control over the court and court procedure, isnothing short of contemptuous.

The latter statement is particularly alarming for it implies that court proceedings are amere farce, and the court a mere stooge, a marionette subject to the manipulation of theopposing party. It suggests that the judge was moved by considerations other than hissense of justice and fair play thereby calling into question the integrity and independence

of the court. Such statement tends to bring the authority and administration of law intodisrespect and constitutes a violation of the Code of Professional Responsibility,specifically:

CANON 11 A lawyer shall observe and maintain the respect due to the courts and to

judicial officers and should insist on similar conduct by others.

x x x

Rule 11.03 A lawyer shall abstain from scandalous, offensive or menacing language

or behavior before the courts.

Rule 11.04 A lawyer shall not attribute to a judge motives not supported by the record

or having no materiality to the case.

Consequently, we rule that respondent judge did not commit grave abuse ofdiscretion in declaring petitioner guilty of direct contempt.

However, we find the penalty imposed by respondent Judge upon petitioner toosevere. Punishment in contempt cases are meted on a corrective principle to vindicatethe authority and dignity of the courts and the administration of justice. [17] Accordingly, wereduce the same to a fine of P200.00.

While petitioners client, Philip G. See, did not question the contempt order againsthim -- his motion for intervention and the accompanying motion for issuance ofclarificatory order merely questioned the scope of the temporary restraining order issuedby this Court -- the reduction of the penalty in favor of his former counsel should likewisebenefit him.Under the rules of criminal procedure, the judgment of the appellate courtshall affect even those accused who did not appeal insofar as said judgment is favorableand applicable to them.[18] By analogy, this rule should apply in contempt cases. Contempt















partakes of the nature of a criminal offense,[19] and the mode of procedure in contemptproceedings is assimilated as far as practicable to those adapted to criminalprosecutions.[20]

WHEREFORE, the Order dated May 5, 1995 issued by respondent judge isMODIFIED in that the penalty of imprisonment for Two (2) Days and a fine of Two

Hundred Pesos (P200.00) imposed on petitioner Leah Adorio and intervenor Phillip Seeis REDUCED to a fine of Two Hundred Pesos (P200.00) only. The Temporary RestrainingOrder is LIFTED and Criminal Case Nos. Q-94-55933 to Q-94-55957 is ordered re-raffledto another branch of the Regional Trial Court of Quezon City.

SO ORDERED.

Bellosillo, Vitug, and Hermosisima, Jr., JJ., concur .Padilla, (Chairman), J., on Leave.











A.M. No. P-99-1307 April 10, 2001 (Formerly OCA IPI No. 97-323-P)

LORENA O. COLLADO, complainant,vs.TERESITA G. BRAVO, Clerk of Court, Municipal Trial Court of Naguilian, La Union, respondent.

R E S O L U T I O N

QUISUMBING, J .:

In a complaint-affidavit dated July 14, 1997, complainant Lorena O. Collado charged respondentTeresita G. Bravo, Clerk of Court of the Municipal Trial Court (MTC) of Naguilian, La Union, withGrave Misconduct and/or Conduct Prejudicial to the Best Interest of the Service.

In her affidavit, complainant alleged that on July 11, 1997, she received through priority mail, asubpoena from the MTC of Naguilian, La Union, directing her to appear before the said court at 2:00P.M., July 14, 1997. 1 The subpoena was duly signed by respondent in her capacity as Clerk of

Court. Before proceeding to said court, complainant sought assistance from the Office of theGovernor of La Union and Mr. Arthur T. Madayag, Legal Assistant II of the Provincial Legal Office,who was detailed to accompany her to court.

Upon arriving at the MTC of Naguilian, complainant talked to respondent. When complainant askedfor copies of the complaint and other details of the case, respondent replied that no complaint hadbeen filed and her intention in issuing the subpoena was to allow a certain Perla Baterina, the laborrecruiter of complainant's son, Emmanuel Collado, to talk to complainant. 2

Complainant claimed that she felt humiliated, harassed, and experienced extreme nervousness as aresult of respondent's issuance of the subpoena.

In her answer dated October 6, 1997, respondent admitted issuing the subpoena. She claimed,however, that it was done with good intentions since she only acceded to the urgent request of thespouses Rogelio and Perla Baterina who came to her office on July 7, 1997, airing their grievancesagainst complainant. Respondent averred that her only purpose in issuing the subpoena was toenable complainant and the Baterinas to settle their differences. 3

In its Memorandum of February 8, 1999, the Office of the Court Administrator (OCA) recommendedthat the complaint be docketed as an administrative matter and respondent be fined Five ThousandPesos (P5,000.00) for Grave Misconduct with a Warning that the commission of a similar act wouldmerit a more serious penalty.

The Court required the parties to manifest whether they were willing to submit this case for decisionon the basis of the pleadings already filed. Respondent agreed. Though complainant had not yetresponded, and her compliance is now deemed waived, we shall now resolve her complaint.

Respondent's act of issuing the subpoena to complainant was evidently not directly or remotelyconnected with respondent's judicial or administrative duties. It appears that she merely wanted toact as a mediator or conciliator in the dispute between complainant and the Baterinas, upon therequest of the latter.

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Respondent as Clerk of Court is primarily tasked with making out and issuing all writs and processesissuing from the court. She should have known or ought to know what a subpoena is. "A subpoena isa process directed to a person requiring him to attend and to testify at the hearing or the trial of anaction, or at any investigation conducted by competent authority, or for the taking of hisdeposition." 4 She should have known that a process is "the means whereby a court compels theappearance of the defendant before it; or a compliance with its demands." 5 Hence, absent any

proceedings, suit, or action commenced or pending before a court, a subpoena may not issue. Inthis case, respondent knew there was no case filed against complainant. Neither had complainantcommenced any proceeding against the Baterinas for whose benefit the subpoena was issued.Respondent, then, had absolutely neither the power nor the authority nor the duty to issue asubpoena to the complainant. 6

Perusal of the subpoena she issued to complainant shows that the form used was the one used incriminal cases, giving complainant the impression that her failure to appear would subject her to "thepenalty of law," and that the subpoena was issued with the trial court's sanction. We find, therefore,that respondent was using without authority some element of state coercion against complainantwho was understandably compelled to heed the contents of the subpoena resulting in herhumiliation. Such naked abuse of authority by complainant could not be allowed to pass withoutappropriate sanction. Accordingly, this Court has no recourse but to agree with the recommendationof the OCA that respondent be disciplined and fined.

WHEREFORE, respondent Teresita G. Bravo is hereby found GUILTY of Grave Misconduct andConduct Prejudicial to the Best Interest of the Service for which she is fined Five Thousand Pesos(P5,000.00) with a WARNING that a repetition of the same or similar act would be treated moreseverely.

SO ORDERED.

Bellosillo, Mendoza, Buena and De Leon, Jr., JJ ., concur.





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