1

G.R. No. 155713. May 5, 2006.*

MILAGROS G. LUMBUAN,** petitioner, vs. ALFREDO A. RONQUILLO, respondent.

Local Government Code; Katarungang Pambarangay Law; Section 412(a) of Republic Act No. 7160 requires the parties to undergo a conciliation process before the Lupon Chairman or the Pangkat as a precondition to filing a complaint in court.—The primordial objective of the Katarungang Pambarangay Rules, is to reduce the number of court litigations and prevent the deterioration of the quality of justice which has been brought about by the indiscriminate filing of cases in the courts. To attain this objective, Section 412(a) of Republic Act No. 7160 requires the parties to undergo a conciliation process before the Lupon Chairman or the Pangkat as a precondition to filing a complaint in court.

PETITION for review on certiorari of the decision and resolution of the Court of Appeals.

The facts are stated in the opinion of the Court.

P.C. Nolasco & Associates for petitioner.

Ma. Theresa T. Balagtas-Gupo for respondent.

QUISUMBING, J.:

This petition for review on certiorari seeks to reverse and set aside the Decision1 dated April 12, 2002, of the Court of Appeals in CA-G.R. SP No. 52436 and its Resolution2 dated October 14, 2002, denying the petitioner’s motion for reconsideration.

The salient facts, as found by the Court of Appeals,3 are as follows:

Petitioner Milagros G. Lumbuan is the registered owner of Lot 19-A, Block 2844 with Transfer Certificate of Title No. 193264, located in Gagalangin, Tondo, Manila. On February 20, 1995, she leased it to respondent Alfredo A. Ronquillo for a period of three years with a monthly rental of P5,000. The parties also agreed that there will be a 10% annual increase in rent for the succeeding two years, i.e., 1996 and 1997,4 and the leased premises will be used exclusively for the respondent’s fastfood business, unless any other use is given, with the petitioner’s prior written consent.5

While the respondent at the start operated a fastfood business, he later used the premises as residence without the petitioner’s prior written consent. He also failed to pay the 10% annual increase in rent of P500/month starting 1996 and P1,000/month in 1997 to the present. Despite repeated verbal and written demands, the respondent refused to pay the arrears and vacate the leased premises.

On November 15, 1997, the petitioner referred the matter to the Barangay Chairman’s office but the parties failed to arrive at a settlement. The Barangay Chairman then issued a Certificate to File Action.6

On December 8, 1997, the petitioner filed against the respondent an action for Unlawful Detainer, docketed as Civil Case No. 157922-CV. It was raffled to the Metropolitan Trial Court (MeTC) of Manila, Branch 6. On December 15, 1997, the respondent received the summons and copy of the complaint. On December 24, 1997, he filed his Answer by mail. Before the MeTC could receive the respondent’s Answer, the petitioner filed a Motion for Summary Judgment dated January 7, 1998.7 Acting upon this motion, the MeTC rendered a decision8 on January 15, 1998, ordering the respondent to vacate and surrender possession of the leased premises; to pay the petitioner the amount of P46,000 as unpaid rentals with legal interest until fully paid; and to pay the petitioner P5,000 as attorney’s fees plus cost of the suit.

The respondent then filed a Manifestation calling the attention of the MeTC to the fact that his Answer was filed on time and praying that the decision be set aside. The MeTC denied the

prayer, ruling that the Manifestation was in the nature of a motion for reconsideration which is a prohibited pleading under the Rules on Summary Procedure.

Upon appeal, the case was raffled to the Regional Trial Court (RTC) of Manila, Branch 38, and docketed as Civil Case No. 98-87311. On July 8, 1998, the RTC rendered its decision9 setting aside the MeTC decision. The RTC directed the parties to go back to the Lupon Chairman or Punong Barangay for further proceedings and to comply strictly with the condition that should the parties fail to reach an amicable settlement, the entire records of the case will be remanded to MeTC of Manila, Branch 6, for it to decide the case anew.

The respondent sought reconsideration but the RTC denied the motion in an Order dated March 15, 1999. Thus, he sought relief from the Court of Appeals through a petition for review.10 On April 12, 2002, the appellate court promulgated a decision, reversing the decision of the RTC and ordering the dismissal of the ejectment case. The appellate court ruled that when a complaint is prematurely instituted, as when the mandatory mediation and conciliation in the barangay level had not been complied with, the court should dismiss the case and not just remand the records to the court of origin so that the parties may go through the prerequisite proceedings.

The petitioner filed a motion for reconsideration, which was denied by the appellate court. Hence, this present petition.

In the meantime, while this petition was pending before this Court, the parties went through barangay conciliation proceedings as directed by the RTC of Manila, Branch 38. Again, they failed to arrive at an amicable settlement prompting the RTC to issue an Order11 remanding the case to the MeTC of Manila, Branch 6, where the proceedings took place anew. On April 25, 2000, the MeTC rendered a second decision, the dispositive portion of which reads:

“WHEREFORE, premises considered, judgment on the merits is hereby rendered for the plaintiff as follows:

1 1. Ordering defendant and all persons claiming right of possession under him to voluntarily vacate the property located at Lot 19-A Block 2844, Gagalangin, Tondo, Manila and surrender possession thereof to the plaintiff;

2 2. Ordering defendant to pay to plaintiff the amount of P387,512.00 as actual damages in the form of unpaid rentals and its agreed increase up to January 2000 and to pay the amount of P6,500.00 a month thereafter until the same is actually vacated;

3 3. Ordering the defendant to pay to plaintiff the sum of P10,000.00 as and for attorney’s fees plus cost of the suit.

SO ORDERED.”12

The respondent appealed the foregoing decision. The case was raffled to RTC of Manila, Branch 22, and docketed as Civil Case No. 00-98173. The RTC ruled in favor of the petitioner and dismissed the appeal. The respondent elevated the case to the Court of Appeals, where it is now pending.

The sole issue for our resolution is:

[WHETHER] THE COURT OF APPEALS GRAVELY ERRED IN DISMISSING THE COMPLAINT FOR THE ALLEGED FAILURE OF THE PARTIES TO COMPLY WITH THE MANDATORY MEDIATION AND CONCILIATION PROCEEDINGS IN THE BARANGAY LEVEL.13

With the parties’ subsequent meeting with the Lupon Chairman or Punong Barangay for further conciliation proceedings, the procedural defect was cured. Nevertheless, if only to clear any lingering doubt why the Court of Appeals erred in dismissing the complaint, we shall delve on

2

the issue.

The petitioner alleges that the parties have gone through barangay conciliation proceedings to settle their dispute as shown by the Certificate to File Action issued by the Lupon/Pangkat Secretary and attested by the Lupon/Pangkat Chairman. The respondent, on the other hand, contends that whether there was defective compliance or no compliance at all with the required conciliation, the case should have been dismissed.

The primordial objective of the Katarungang Pambarangay Rules,14 is to reduce the number of court litigations and prevent the deterioration of the quality of justice which has been brought about by the indiscriminate filing of cases in the courts. To attain this objective, Section 412(a) of Republic Act No. 716015 requires the parties to undergo a conciliation process before the Lupon Chairman or the Pangkat as a precondition to filing a complaint in court,16 thus:

SECTION 412. Conciliation.—(a) Pre-condition to Filing of Complaint in Court.—No complaint, petition, action, or proceeding involving any matter within the authority of the lupon shall be filed or instituted directly in court or any other government office for adjudication, unless there has been a confrontation between the parties before the lupon chairman or the pangkat, and that no conciliation or settlement has been reached as certified by the lupon secretary or pangkat secretary as attested to by the lupon or pangkat chairman. . . .

Here, the Lupon/Pangkat Chairman and Lupon/Pangkat Secretary signed the Certificate to File Action stating that no settlement was reached by the parties. While admittedly no pangkat was constituted, it was not denied that the parties met at the office of the Barangay Chairman for possible settlement. The efforts of the Barangay Chairman, however, proved futile as no agreement was reached. Although no pangkat was formed, in our mind, there was substantial compliance with the law. It is noteworthy that under the aforequoted provision, the confrontation before the Lupon Chairman or the pangkat is sufficient compliance with the precondition for filing the case in court.17 This is true notwithstanding the mandate of Section 410(b) of the same law that the Barangay Chairman shall constitute a pangkat if he fails in his mediation efforts. Section 410(b) should be construed together with Section 412, as well as the circumstances obtaining in and peculiar to the case. On this score, it is significant that the Barangay Chairman or Punong Barangay is herself the Chairman of the Lupon under the Local Government Code.18

Finally, this Court is aware that the resolution of the substantial issues in this case is pending with the Court of Appeals. While ordinarily, we would have determined the validity of the parties’ substantial claims since to await the appellate court’s decision will only frustrate speedy justice and, in any event, would be a futile exercise, as in all probability the case would end up with this Court, we find that we cannot do so in the instant case.

It must be underscored that supervening events have taken place before the lower courts where the parties have been adequately heard, and all the issues have been ventilated. Since the records of those proceedings are with the Court of Appeals, it is in a better position to fully adjudicate the rights of the parties. To rely on the records before this Court would prevent us from rendering a sound judgment in this case. Thus, we are left with no alternative but to leave the matter of ruling on the merits to the appellate court.

WHEREFORE, the petition is GRANTED. The decision and resolution of the Court of Appeals in CA-G.R. SP No. 52436 are REVERSED and SET ASIDE, and the decision of the Regional Trial Court of Manila, Branch 38, in Civil Case No. 98-87311 is AFFIRMED.

The Court of Appeals is ordered to proceed with the appeal in CA-G.R. No. 73453 and decide the case with dispatch.

SO ORDERED.

Carpio, Carpio-Morales, Tinga and Velasco, Jr., JJ., concur.

Petition granted, judgment and resolution reversed and set aside.

Note.—Section 412(a) of Republic Act No. 7160 clearly provides that, as a precondition to filing a complaint in court, the parties shall go through the conciliation process either before the Lupon Chairman or the Pangkat. (Zamora vs. Heirs of Carmen Izquierdo, 443 SCRA 24 [2004])

[G.R. No. 140954. April 12, 2005]

HEIRS OF BERTULDO[1] HINOG: Bertuldo Hinog II, Bertuldo Hinog III, Bertuldo Hinog, Jr., Jocelyn Hinog, Bertoldo Hinog IV, Bertoldo Hinog V, Edgardo Hinog, Milagros H. Pabatao,

Lilian H. King, Victoria H. Engracia, Terisita C. Hinog, Paz H. Besana, Roberto C. Hinog, Vicente C. Hinog, Roel C. Hinog, Marilyn C. Hinog, Bebot C. Hinog, lordes C. Hinog, Pablo Chiong, Arlene Lanasang (All respresented by Bertuldo Hinog III), petitioners, vs. HON. ACHILLES MELICOR, in his capacity as Presiding Judge, RTC, Branch 4, 7th Judicial Region, Tagbiliran

City, Bohol, and CUSTODIO BALANE, RUFO BALANE, HONORIO BALANE, and TOMAS BALANE, respondents.

D E C I S I O N

AUSTRIA-MARTINEZ, J.:

Before us is a petition for certiorari and prohibition under Rule 65 of the Rules of Court which assails the Orders dated March 22, 1999, August 13, 1999 and October 15, 1999 of the Regional Trial Court, Branch 4, of Tagbilaran City, Bohol in Civil Case No. 4923.

The factual background of the case is as follows:

On May 21, 1991, private respondents Custodio, Rufo, Tomas and Honorio, all surnamed Balane, filed a complaint for Recovery of Ownership and Possession, Removal of Construction and Damages against Bertuldo Hinog (Bertuldo for brevity). They alleged that: they own a 1,399- square meter parcel of land situated in Malayo Norte, Cortes, Bohol, designated as Lot No. 1714; sometime in March 1980, they allowed Bertuldo to use a portion of the said property for a period of ten years and construct thereon a small house of light materials at a nominal annual rental of P100.00 only, considering the close relations of the parties; after the expiration of the ten-year period, they demanded the return of the occupied portion and removal of the house constructed thereon but Bertuldo refused and instead claimed ownership of the entire property.

Accordingly, private respondents sought to oust Bertuldo from the premises of the subject property and restore upon themselves the ownership and possession thereof, as well as the payment of moral and exemplary damages, attorneys fees and litigation expenses in amounts justified by the evidence. [2]

On July 2, 1991, Bertuldo filed his Answer. He alleged ownership of the disputed property by virtue of a Deed of Absolute Sale dated July 2, 1980, executed by one Tomas Pahac with the knowledge and conformity of private respondents.[3]

After the pre-trial, trial on the merits ensued. On November 18, 1997, private respondents rested their case. Thereupon, Bertuldo started his direct examination. However, on June 24, 1998, Bertuldo died without completing his evidence.

On August 4, 1998, Atty. Sulpicio A. Tinampay withdrew as counsel for Bertuldo as his services were terminated by petitioner Bertuldo Hinog III. Atty. Veronico G. Petalcorin then entered his appearance as new counsel for Bertuldo.[4]

On September 22, 1998, Atty. Petalcorin filed a motion to expunge the complaint from the record and nullify all court proceedings on the ground that private respondents failed to specify in the complaint the amount of damages claimed so as to pay the correct docket fees; and that under Manchester Development Corporation vs. Court of Appeals,[5] non-payment of the correct docket fee

3

is jurisdictional.[6]

In an amended motion, filed on October 2, 1998, Atty. Petalcorin further alleged that the private respondents failed to pay the correct docket fee since the main subject matter of the case cannot be estimated as it is for recovery of ownership, possession and removal of construction.[7]

Private respondents opposed the motion to expunge on the following grounds: (a) said motion was filed more than seven years from the institution of the case; (b) Atty. Petalcorin has not complied with Section 16, Rule 3 of the Rules of Court which provides that the death of the original defendant requires a substitution of parties before a lawyer can have legal personality to represent a litigant and the motion to expunge does not mention of any specific party whom he is representing; (c) collectible fees due the court can be charged as lien on the judgment; and (d) considering the lapse of time, the motion is merely a dilatory scheme employed by petitioners.[8]

In their Rejoinder, petitioners manifested that the lapse of time does not vest the court with jurisdiction over the case due to failure to pay the correct docket fees. As to the contention that deficiency in payment of docket fees can be made as a lien on the judgment, petitioners argued that the payment of filing fees cannot be made dependent on the result of the action taken.[9]

On January 21, 1999, the trial court, while ordering the complaint to be expunged from the records and the nullification of all court proceedings taken for failure to pay the correct docket fees, nonetheless, held:

The Court can acquire jurisdiction over this case only upon the payment of the exact prescribed docket/filing fees for the main cause of action, plus additional docket fee for the amount of damages being prayed for in the complaint, which amount should be specified so that the same can be considered in assessing the amount of the filing fees. Upon the complete payment of such fees, the Court may take appropriate action in the light of the ruling in the case of Manchester Development Corporation vs. Court of Appeals, supra.[10]

Accordingly, on January 28, 1999, upon payment of deficiency docket fee, private respondents filed a manifestation with prayer to reinstate the case.[11] Petitioners opposed the reinstatement[12] but on March 22, 1999, the trial court issued the first assailed Order reinstating the case.[13]

On May 24, 1999, petitioners, upon prior leave of court,[14] filed their supplemental pleading, appending therein a Deed of Sale dated November 15, 1982.[15] Following the submission of private respondents opposition thereto,[16] the trial court, in its Order dated July 7, 1999, denied the supplemental pleading on the ground that the Deed of Absolute Sale is a new matter which was never mentioned in the original answer dated July 2, 1991, prepared by Bertuldos original counsel and which Bertuldo verified; and that such new document is deemed waived in the light of Section 1, Rule 9[17] of the Rules of Court. The trial court also noted that no formal substitution of the parties was made because of the failure of defendants counsel to give the names and addresses of the legal representatives of Bertuldo, so much so that the supposed heirs of Bertuldo are not specified in any pleading in the case. [18]

On July 14, 1999, petitioners manifested that the trial court having expunged the complaint and nullified all court proceedings, there is no valid case and the complaint should not be admitted for failure to pay the correct docket fees; that there should be no case to be reinstated and no case to proceed as there is no complaint filed.[19]

After the submission of private respondents opposition[20] and petitioners rejoinder,[21] the trial court issued the second assailed Order on August 13, 1999, essentially denying petitioners manifestation/rejoinder. The trial court held that the issues raised in such manifestation/rejoinder are practically the same as those raised in the amended motion to expunge which had already been passed upon in the Order dated January 21, 1999. Moreover, the trial court observed that the Order dated March 22, 1999 which reinstated the case was not

objected to by petitioners within the reglementary period or even thereafter via a motion for reconsideration despite receipt thereof on March 26, 1999.[22]

On August 25, 1999, petitioners filed a motion for reconsideration[23] but the same was denied by the trial court in its third assailed Order dated October 15, 1999. The trial court held that the Manchester rule was relaxed in Sun Insurance Office, Ltd. vs. Asuncion.[24] Noting that there has been no substitution of parties following the death of Bertuldo, the trial court directed Atty. Petalcorin to comply with the provisions of Section 16, Rule 3 of the Rules of Court. The trial court also reiterated that the Order dated March 22, 1999 reinstating the case was not assailed by petitioners within the reglementary period, despite receipt thereof on March 26, 1999.[25]

On November 19, 1999, Atty. Petalcorin complied with the directive of the trial court to submit the names and addresses of the heirs of Bertuldo.[26]

On November 24, 1999, petitioners filed before us the present petition for certiorari and prohibition.[27] They allege that the public respondent committed grave abuse of discretion in allowing the case to be reinstated after private respondents paid the docket fee deficiency since the trial court had earlier expunged the complaint from the record and nullified all proceedings of the case and such ruling was not contested by the private respondents. Moreover, they argue that the public respondent committed grave abuse of discretion in allowing the case to be filed and denying the manifestation with motion to dismiss, despite the defect in the complaint which prayed for damages without specifying the amounts, in violation of SC Circular No. 7, dated March 24, 1988.

In their Comment, private respondents aver that no grave abuse of discretion was committed by the trial court in reinstating the complaint upon the payment of deficiency docket fees because petitioners did not object thereto within the reglementary period. Besides, Atty. Petalcorin possessed no legal personality to appear as counsel for the heirs of Bertuldo until he complies with Section 16, Rule 3 of the Rules of Court.[28]

At the outset, we note the procedural error committed by petitioners in directly filing the instant petition before this Court for it violates the established policy of strict observance of the judicial hierarchy of courts.

Although the Supreme Court, Court of Appeals and the Regional Trial Courts have concurrent jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction, such concurrence does not give the petitioner unrestricted freedom of choice of court forum.[29] As we stated in People vs. Cuaresma:[30]

This Court's original jurisdiction to issue writs of certiorari is not exclusive. It is shared by this Court with Regional Trial Courts and with the Court of Appeals. This concurrence of jurisdiction is not, however, to be taken as according to parties seeking any of the writs an absolute, unrestrained freedom of choice of the court to which application therefor will be directed. There is after all a hierarchy of courts. That hierarchy is determinative of the venue of appeals, and also serves as a general determinant of the appropriate forum for petitions for the extraordinary writs. A becoming regard for that judicial hierarchy most certainly indicates that petitions for the issuance of extraordinary writs against first level (inferior) courts should be filed with the Regional Trial Court, and those against the latter, with the Court of Appeals. A direct invocation of the Supreme Courts original jurisdiction to issue these writs should be allowed only when there are special and important reasons therefor, clearly and specifically set out in the petition. This is [an] established policy. It is a policy necessary to prevent inordinate demands upon the Courts time and attention which are better devoted to those matters within its exclusive jurisdiction, and to prevent further over-crowding of the Courts docket.[31]

The rationale for this rule is two-fold: (a) it would be an imposition upon the precious time of this Court; and (b) it would cause an inevitable and resultant delay, intended or otherwise, in the adjudication of cases, which in some instances had to be remanded or referred to the lower

4

court as the proper forum under the rules of procedure, or as better equipped to resolve the issues because this Court is not a trier of facts.[32]

Thus, this Court will not entertain direct resort to it unless the redress desired cannot be obtained in the appropriate courts, and exceptional and compelling circumstances, such as cases of national interest and of serious implications, justify the availment of the extraordinary remedy of writ of certiorari, calling for the exercise of its primary jurisdiction. Exceptional and compelling circumstances were held present in the following cases: (a) Chavez vs. Romulo[33] on citizens right to bear arms; (b) Government of the United States of America vs. Purganan[34] on bail in extradition proceedings; (c) Commission on Elections vs. Quijano-Padilla[35] on government contract involving modernization and computerization of voters registration list; (d) Buklod ng Kawaning EIIB vs. Zamora[36] on status and existence of a public office; and (e) Fortich vs. Corona[37] on the so-called Win-Win Resolution of the Office of the President which modified the approval of the conversion to agro-industrial area.

In this case, no special and important reason or exceptional and compelling circumstance analogous to any of the above cases has been adduced by the petitioners so as to justify direct recourse to this Court. The present petition should have been initially filed in the Court of Appeals in strict observance of the doctrine on the hierarchy of courts. Failure to do so is sufficient cause for the dismissal of the petition at bar.

In any event, even if the Court disregards such procedural flaw, the petitioners contentions on the substantive aspect of the case fail to invite judgment in their favor.

The unavailability of the writ of certiorari and prohibition in this case is borne out of the fact that petitioners principally assail the Order dated March 22, 1999 which they never sought reconsideration of, in due time, despite receipt thereof on March 26, 1999. Instead, petitioners went through the motion of filing a supplemental pleading and only when the latter was denied, or after more than three months have passed, did they raise the issue that the complaint should not have been reinstated in the first place because the trial court had no jurisdiction to do so, having already ruled that the complaint shall be expunged.

After recognizing the jurisdiction of the trial court by seeking affirmative relief in their motion to serve supplemental pleading upon private respondents, petitioners are effectively barred by estoppel from challenging the trial courts jurisdiction.[38] If a party invokes the jurisdiction of a court, he cannot thereafter challenge the courts jurisdiction in the same case.[39] To rule otherwise would amount to speculating on the fortune of litigation, which is against the policy of the Court.[40]

Nevertheless, there is a need to correct the erroneous impression of the trial court as well as the private respondents that petitioners are barred from assailing the Order dated March 22, 1999 which reinstated the case because it was not objected to within the reglementary period or even thereafter via a motion for reconsideration despite receipt thereof on March 26, 1999.

It must be clarified that the said order is but a resolution on an incidental matter which does not touch on the merits of the case or put an end to the proceedings.[41] It is an interlocutory order since there leaves something else to be done by the trial court with respect to the merits of the case.[42] As such, it is not subject to a reglementary period. Reglementary period refers to the period set by the rules for appeal or further review of a final judgment or order, i.e., one that ends the litigation in the trial court.

Moreover, the remedy against an interlocutory order is generally not to resort forthwith to certiorari, but to continue with the case in due course and, when an unfavorable verdict is handed down, to take an appeal in the manner authorized by law.[43] Only when the court issued such order without or in excess of jurisdiction or with grave abuse of discretion and when the assailed interlocutory order is patently erroneous and the remedy of appeal would not afford adequate and expeditious relief will certiorari be considered an appropriate remedy to assail an

interlocutory order.[44] Such special circumstances are absolutely wanting in the present case.

Time and again, the Court has held that the Manchester rule has been modified in Sun Insurance Office, Ltd. (SIOL) vs. Asuncion[45] which defined the following guidelines involving the payment of docket fees:

1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee, that vests a trial court with jurisdiction over the subject-matter or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fees within a reasonable time but in no case beyond the applicable prescriptive or reglementary period.

2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period.

3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified the same has been left for determination by the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the additional fee.

Plainly, while the payment of the prescribed docket fee is a jurisdictional requirement, even its non-payment at the time of filing does not automatically cause the dismissal of the case, as long as the fee is paid within the applicable prescriptive or reglementary period, more so when the party involved demonstrates a willingness to abide by the rules prescribing such payment.[46] Thus, when insufficient filing fees were initially paid by the plaintiffs and there was no intention to defraud the government, the Manchester rule does not apply.[47]

Under the peculiar circumstances of this case, the reinstatement of the complaint was just and proper considering that the cause of action of private respondents, being a real action, prescribes in thirty years,[48] and private respondents did not really intend to evade the payment of the prescribed docket fee but simply contend that they could not be faulted for inadequate assessment because the clerk of court made no notice of demand or reassessment.[49] They were in good faith and simply relied on the assessment of the clerk of court.

Furthermore, the fact that private respondents prayed for payment of damages in amounts justified by the evidence does not call for the dismissal of the complaint for violation of SC Circular No. 7, dated March 24, 1988 which required that all complaints must specify the amount of damages sought not only in the body of the pleadings but also in the prayer in order to be accepted and admitted for filing. Sun Insurance effectively modified SC Circular No. 7 by providing that filing fees for damages and awards that cannot be estimated constitute liens on the awards finally granted by the trial court.[50]

Thus, while the docket fees were based only on the real property valuation, the trial court acquired jurisdiction over the action, and judgment awards which were left for determination by the court or as may be proven during trial would still be subject to additional filing fees which shall constitute a lien on the judgment. It would then be the responsibility of the Clerk of Court of the trial court or his duly authorized deputy to enforce said lien and assess and collect the additional fees.[51]

It is worth noting that when Bertuldo filed his Answer on July 2, 1991, he did not raise the issue of lack of jurisdiction for non-payment of correct docket fees. Instead, he based his defense on a claim of ownership and participated in the proceedings before the trial court. It was only in September 22, 1998 or more than seven years after filing the answer, and under the auspices of a

5

new counsel, that the issue of jurisdiction was raised for the first time in the motion to expunge by Bertuldos heirs.

After Bertuldo vigorously participated in all stages of the case before the trial court and even invoked the trial courts authority in order to ask for affirmative relief, petitioners, considering that they merely stepped into the shoes of their predecessor, are effectively barred by estoppel from challenging the trial courts jurisdiction. Although the issue of jurisdiction may be raised at any stage of the proceedings as the same is conferred by law, it is nonetheless settled that a party may be barred from raising it on ground of laches or estoppel.[52]

Moreover, no formal substitution of the parties was effected within thirty days from date of death of Bertuldo, as required by Section 16, Rule 3[53] of the Rules of Court. Needless to stress, the purpose behind the rule on substitution is the protection of the right of every party to due process. It is to ensure that the deceased party would continue to be properly represented in the suit through the duly appointed legal representative of his estate.[54] Non-compliance with the rule on substitution would render the proceedings and judgment of the trial court infirm because the court acquires no jurisdiction over the persons of the legal representatives or of the heirs on whom the trial and the judgment would be binding.[55] Thus, proper substitution of heirs must be effected for the trial court to acquire jurisdiction over their persons and to obviate any future claim by any heir that he was not apprised of the litigation against Bertuldo or that he did not authorize Atty. Petalcorin to represent him.

The list of names and addresses of the heirs was submitted sixteen months after the death of Bertuldo and only when the trial court directed Atty. Petalcorin to comply with the provisions of Section 16, Rule 3 of the Rules of Court. Strictly speaking therefore, before said compliance, Atty. Petalcorin had no standing in the court a quo when he filed his pleadings. Be that as it may, the matter has been duly corrected by the Order of the trial court dated October 15, 1999.

To be sure, certiorari under Rule 65[56] is a remedy narrow in scope and inflexible in character. It is not a general utility tool in the legal workshop.[57] It offers only a limited form of review. Its principal function is to keep an inferior tribunal within its jurisdiction.[58] It can be invoked only for an error of jurisdiction, that is, one where the act complained of was issued by the court, officer or a quasi-judicial body without or in excess of jurisdiction, or with grave abuse of discretion which is tantamount to lack or in excess of jurisdiction,[59] not to be used for any other purpose,[60] such as to cure errors in proceedings or to correct erroneous conclusions of law or fact.[61] A contrary rule would lead to confusion, and seriously hamper the administration of justice.

Petitioners utterly failed to show that the trial court gravely abused its discretion in issuing the assailed resolutions. On the contrary, it acted prudently, in accordance with law and jurisprudence.

WHEREFORE, the instant petition for certiorari is DISMISSED for lack of merit.

No costs.

SO ORDERED.

Puno, (Chairman), Callejo, Sr., Tinga and Chico-Nazario, JJ., concur.

G.R. No. 117970. July 28, 1998.*

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. ULYSSES M. CAWALING, ERNESTO TUMBAGAHAN, RICARDO DE LOS SANTOS, and HILARIO CAJILO, accused-appellants.

Criminal Procedure; Courts; Jurisdiction; Statutory Construction; The jurisdiction of a court to try a criminal case is determined by the law in force at the time of the institution of the action; Exceptions.—The jurisdiction of a court to try a criminal case is determined by the law in force at the time of the institution of the action. Once the court acquires jurisdiction, it may not be ousted from the case by any subsequent events, such as a new legislation placing such proceedings under the jurisdiction of another tribunal. The only recognized exceptions to the rule, which find no application in the case at bar, arise when: (1) there is an express provision in the statute, or (2) the statute is clearly intended to apply to actions pending before its enactment.

Same; Same; Same; Sandiganbayan; Public Officers; In the absence of any allegation that the offense was committed in relation to the office of the accused or was necessarily connected with the discharge of their functions, the regional trial court, not the Sandiganbayan, has jurisdiction to hear and decide the case.—Jurisdiction is determined by the allegations in the complaint or information. In the absence of any allegation that the offense was committed in relation to the office of appellants or was necessarily connected with the discharge of their functions, the regional trial court, not the Sandiganbayan, has jurisdiction to hear and decide the case.

Constitutional Law; Double Jeopardy; Requisites.—There is double jeopardy when the following requisites are present: (1) a first jeopardy has attached prior to the second; (2) the first jeopardy has been validly terminated; and (3) a second jeopardy is for the same offense as that in the first. And the first jeopardy attaches only (a) after a valid indictment; (b) before a competent court; (c) after arraignment; (d) when a valid plea has been entered; and (e) when the accused was acquitted or convicted, or the case was dismissed or otherwise terminated without his express consent.

Criminal Law; Witnesses; Judgments; The general rule that factual findings of trial courts deserve respect and are not disturbed on appeal does not apply when the judge who penned the decision was not the same one who had heard the prosecution witnesses testify.—As a general rule, the factual findings of trial courts deserve respect and are not disturbed on appeal, unless some facts or circumstances of weight and substance have been overlooked, misapprehended or misinterpreted, and would otherwise materially affect the disposition of the case. This rule, however, does not apply when the judge who penned the decision was not the same one who had heard the prosecution witnesses testify, as in the present case. Nonetheless, we have carefully perused and considered the voluminous records of this case, and we find no reason to alter the findings of the court a quo in regard to the credibility of the prosecution witnesses and their testimonies.

Same; Same; Family members who have witnessed the killing of their loved one usually strive to remember the faces of the assailants.—The three aforementioned witnesses narrated in detail the assault against their brother Ronie and positively identified the appellants as the perpetrators. The trial court cannot be faulted for relying on their testimonies and accepting them as true, especially when the defense failed, to prove any ill motive on their part. In addition, family members who have witnessed the killing of their loved one usually strive to remember the faces of the assailants. Thus, the relationship per se of witnesses with the victim does not necessarily mean that the former are biased. On the contrary, it is precisely such relationship that would impel them to seek justice and put the real culprit behind bars, rather than impute the offense to the innocent.

Same; Murder; Autopsies; It is within the power of public officers to request or secure from the court, or any other competent authority, an order for autopsy.—First, Bebelinia Sacapaño merely cleaned the cadaver and made no further examination. Second, appellants had an opportunity to have the body examined again to determine or prove important matters, such as whether Ronie was drunk, if he fired a gun, how many and what caliber of guns were used in shooting him; they

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did not, however, avail themselves of this opportunity. As public officers, appellants knew that it was within their power to request or secure from the court, or any other competent authority, an order for another autopsy or any such evidence as may affirm their innocence. Third, their conviction lies in the strong and convincing testimonial evidence of the prosecution, not in the corroborative testimony of Bebelinia Sacapaño.

Same; Same; Witnesses; The testimony of a witness, although not formally offered in evidence, may still be admitted by the courts, if the other party does not object to its presentation.—Appellant Cawaling also questions the trial court’s reliance on the testimonies of Dr. Blandino Flores, Nelson Ilisan and Prosecutor Pedro Victoriano, Jr., for failure of the prosecution to offer them as evidence. In People vs. Java, this Court ruled that the testimony of a witness, although not formally offered in evidence, may still be admitted by the courts, if the other party does not object to its presentation. The Court explained: “Section 36 of [Rule 132] requires that an objection in the course of the oral examination of a witness should be made as soon as the grounds therefor shall become reasonably apparent. Since n objection to the admissibility of evidence was made in the court below, an objection raised for the first time on appeal will not be considered.” In the present case, a cursory reading of the stenographic notes reveals that the counsel for the appellants did not raise any objection when said witnesses testified on the matters now being impugned. Moreover, they repeatedly cross-examined the witnesses, which shows that they had waived their objections to the said testimonies of such witnesses.

Criminal Procedure; Prosecutors; Unlike judges who are mandated to display cold neutrality in hearing cases, prosecutors are not required to divest themselves of their personal convictions and refrain from exhibiting partiality—they may prosecute with earnestness and vigor but while they may strike hard blows, they are not at liberty to strike foul ones.—Appellant Mayor Cawaling questions the motive of Prosecutor Pedro Victoriano, Jr. This contention is likewise bereft of merit. Unlike judges who are mandated to display cold neutrality in hearing cases, prosecutors are not required to divest themselves of their personal convictions and refrain from exhibiting partiality. In this case, there is reasonable ground for Prosecutor Victoriano to believe that an offense has been committed and that the accused was probably guilty thereof. Under the circumstance, it is his sworn duty to see that justice is served. Thus, “[h]e may prosecute with earnestness and vigor—indeed, he should do so. But, while he may strike hard blows, he is not at liberty to strike foul ones. It is as much his duty to refrain from improper methods calculated to produce a wrongful conviction as it is to use every legitimate means to bring about a just one.”

Criminal Law; Murder; Justifying Circumstances; Self-Defense; Unlawful aggression on the part of the victim is a condition sine qua non for the successful invocation of self-defense.—Unlawful aggression on the part of the victim is a condition sine qua non for the successful invocation of self-defense. As factually found by the trial court, unlawful aggression did not start with the victim, but rather with the appellants. Cawaling and his men proceeded to the C & J-4 Kitchenette and waited for Ronie to come out. When the victim did, they chased and shot him without giving him any opportunity to defend himself.

Same; Same; Same; Same; Basic is the rule that when unlawful aggression ceases, the defender no longer has the right to kill or even wound the former aggressor.—Granting arguendo the veracity of the defense’s factual version, it is important to note that appellants admitted that Ronie was running away from them when they chased and shot him. Thus, unlawful aggression—assuming it was initially present—had ceased, and the appellants no longer had any right to pursue the offender. Basic is the rule that when unlawful aggression ceases, the defender no longer has the right to kill or even wound the former aggressor. Upon the cessation of the unlawful aggression and the danger or risk to life and limb, there should be a corresponding cessation of hostilities on the part of the person defending himself.

Same; Same; Same; Same; Jurisprudence teaches that when an accused admits having committed the crime but invokes self-defense to escape criminal liability, then the burden of proof is reversed and shifted to him.—Jurisprudence teaches that when an accused admits having committed the crime but

invokes self-defense to escape criminal liability, the burden of proof is reversed and shifted to him. He must then prove the elements of self-defense. It necessarily follows that he must now rely on the strength of his own evidence and not on the weakness of that of the prosecution; for even if the latter evidence were weak, it could not be disbelieved after the accused has admitted the killing. Thus, appellants must establish with clear and convincing evidence that the killing was justified, and that they incurred no criminal liability therefor. They failed to do so, and their conviction thus becomes inevitable.

Same; Same; Same; Lawful Performance of Duties; Requisites.—Appellants contend that the killing of Ronie resulted from the lawful performance of their duties as police officers. However, such justifying circumstance may be invoked only after the defense successfully proves that (1) the accused acted in the performance of a duty, and (2) the injury or offense committed is the necessary consequence of the due performance or lawful exercise of such duty. These two requisites are wanting in this case.

Same; Same; Same; Same; Performance of duties does not include murder.—The appellants, except Mayor Cawaling, were men in uniform who happened to be on duty when they killed Ronie. The victim was not committing any offense at the time. Killing the victim under the circumstances of this case cannot in any wise be considered a valid performance of a lawful duty by men who had sworn to maintain peace and order and to protect the lives of the people. As aptly held in People vs. De la Cruz, “Performance of duties does not include murder.” That Ronie was a troublemaker in their town is not an excuse; as the Court declared in the same case of People vs. De la Cruz, “Murder is never justified, regardless of the victim.”

Same; Same; Alibi and Denial; Alibi and denial, if not substantiated by clear and convincing evidence, are negative and self-serving evidence undeserving of weight in law.—We likewise brush aside the defenses of alibi and denial raised by Appellant De los Santos. Prosecution witnesses positively identified him and Fontamillas as part of the group which chased and shot Ronie Ilisan. It is elementary that alibi and denial are outweighed by positive identification that is categorical, consistent and untainted by any ill motive on the part of the eyewitness testifying on the matter. Alibi and denial, if not substantiated by clear and convincing evidence, are negative and self-serving evidence undeserving of weight in law.

Same; Same; Same; Alibi is always considered with suspicion and received with caution, not only because it is inherently weak and unreliable, but also because it is easily fabricated and concocted.—Alibi is always considered with suspicion and received with caution, not only because it is inherently weak and unreliable, but also because it is easily fabricated and concocted. It is therefore incumbent upon the appellant to prove that he was at another place when the felony was committed, and that it was physically impossible for him to have been at the scene of the crime at the time it was committed. This he failed to prove.

Same; Same; Evidence; Conspiracy; Direct proof of conspiracy is rarely found, for criminals do not write down their lawless plans and plots.—The trial court correctly appreciated the presence of conspiracy. Conspiracy exists when two or more persons come to an agreement concerning the commission of a felony and decide to commit it. Direct proof of conspiracy is rarely found, for criminals do not write down their lawless plans and plots. The agreement to commit a crime, however, may be deduced from the mode and manner of the commission of the offense or inferred from acts that point to a joint purpose and design, concerted action, and community of intent. It does not matter who inflicted the mortal wound, as the act of one is the act of all, and each incurs the same criminal liability.

Same; Same; Same; Equipoise Rule; Presumption of Innocence; The equipoise rule finds application if the inculpatory facts and circumstances are capable of two or more explanations, one of which is consistent with the innocence of the accused and the other consistent with his guilt, for then the evidence does not fulfill the test of moral certainty, and is not sufficient to support a conviction.—We reject appellants’ position that the equipoise rule should apply to this case. In People vs. Lagnas, the Court, through

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Mr. Justice Florenz D. Regalado, described this rule as follows: “Once again, albeit in effect a supportive and cumulative consideration in view of the preceding disquisition, the equipoise rule finds application in this case, that is, if the inculpatory facts and circumstances are capable of two or more explanations, one of which is consistent with the innocence of the accused and the other consistent with his guilt, then the evidence does not fulfill the test of moral certainty, and is not sufficient to support a conviction.”

Same; Same; Aggravating Circumstances; Treachery; The essence of treachery is the sudden and unexpected attack without the slightest provocation on the part of the person attacked.—Treachery exists when the malefactors employ means and methods that tend directly and especially to insure their execution without risk to themselves arising from the defense which the victims might make. The essence of treachery is the sudden and unexpected attack without the slightest provocation on the part of the person attacked. While we do not disregard the fact that the victim, together with his brother Vicente, was able to run towards a rice field, we still believe that treachery attended the killing. In People vs. Landicho, we ruled that treachery might still be appreciated even when the victim was warned of danger to his person, for “what is decisive is that the execution of the attack made it impossible for the victim to defend himself or to retaliate.”

Same; Same; Same; Abuse of Superior Strength; The aggravating circumstance of abuse of superior strength is deemed absorbed in treachery.—We cannot appreciate the aggravating circumstance of abuse of superior strength, however, as we have consistently ruled that it is deemed absorbed in treachery.

Same; Same; Same; Evident Premeditation; Requisites.—We also affirm the finding of the trial court that the prosecution failed to prove the attending circumstance of evident premeditation. To prove this aggravating circumstance, the prosecution must show the following: (1) the time when the offender determined to commit the crime; (2) an act manifestly indicating that the offender clung to his determination; and (3) a lapse of time, between the determination to commit the crime and the execution thereof, sufficient to allow the offender to reflect upon the consequences of his act. Nothing in the records shows how and when the plan to kill was hatched, or how much time had elapsed before it was carried out.

Same; Same; Damages; Formula for Loss of Earning Capacity.—We cannot do the same to the award of actual damages and lost earnings, however. The award of actual damages has no basis, as no receipts were presented to substantiate the expenses allegedly incurred. An alleged pecuniary loss must be established by credible evidence before actual damages may be awarded. Similarly erroneous is the award for loss of earning capacity, which should be computed as follows: “2/3 x [80 - age of victim at the time of death] x [reasonable portion of the annual net income which would have been received as support by heirs].”

Same; Same; Mitigating Circumstances; Voluntary Surrender; Requisites.—Appellants failed to prove the requisites for voluntary surrender, which are: (1) the offender has not been actually arrested; (2) the offender surrenders himself to a person in authority or to the latter’s agent; and (3) the surrender is voluntary. The records reveal that a warrant of arrest was actually served on Tumbagahan and Cajilo on September 2, 1987 and that they were in fact detained.

APPEAL from a decision of the Regional Trial Court of Romblon, Romblon, Br. 81.

The facts are stated in the opinion of the Court.

The Solicitor General for plaintiff-appellee.

Joselito R. Enriquez for E. Tumbagahan and H. Cajilo.

Soo, Gutierrez, Leogardo & Lee and Napolion Galit for accused-appellants.

PANGANIBAN, J.:

It is axiomatic that once an accused-appellant admits killing the victim, he bears the burden of establishing the presence of any circumstance like self-defense, performance of a lawful duty or, for that matter, double jeopardy, which may relieve him of responsibility, or which may mitigate his criminal liability.1 If he fails to discharge this burden, his conviction becomes inevitable. In this Decision, we also reiterate the following doctrines: (1) the regional trial court, not the Sandiganbayan, has jurisdiction over informations for murder committed by public officers, including a town mayor; (2) the assessment of trial courts on the credibility of witnesses and their testimonies deserve great respect; (3) the equipoise rule cannot be invoked where the evidence of the prosecution is overwhelming; (4) alibi cannot be believed in the face of credible testimony identifying the appellants; and (5) conspiracy may be proven by circumstantial evidence.

The Case

Before us is an appeal from the 34-page Decision2 dated October 21, 1994, promulgated by the Regional Trial Court of Romblon in Criminal Case No. OD-269. Convicted of murder were former Mayor Ulysses M. Cawaling and Policemen Ernesto Tumbagahan,3 Ricardo De los Santos and Hilario Cajilo.

Prior to the institution of the criminal case against all the appellants, an administrative case4 had been filed before the National Police Commission, in which Policemen Ernesto Tumbagahan, Ricardo De los Santos, Hilario Cajilo (three of herein appellants) and Andres Fontamillas were charged by Nelson Ilisan5 with the killing of his brother Ronie6 Ilisan. On April 6, 1986, Adjudication Board No. 147 rendered its Decision which found Tumbagahan, De los Santos, Cajilo and Fontamillas guilty of grave misconduct and ordered their dismissal from the service with prejudice.8 On June 26, 1986, the Board issued a resolution,9 dismissing the respondents’ motion for reconsideration for lack of merit.

Subsequently, on June 4, 1987, Second Assistant Provincial Fiscal Alexander Mortel filed, before the Regional Trial Court (RTC) of Odiongan, Romblon,10 an Information for murder11 against the appellants and Andres Fontamillas. The accusatory portion reads:

“That on or about the 4th day of December 1982, at around 9:00 o’clock in the evening, in the Poblacion, [M]unicipality of San Jose, [P]rovince of Romblon, Philippines, and within the jurisdiction of this Honorable Court, the said accused, with intent to kill, conspiring, confederating and mutually helping one another, did then and there, by means of treachery and with evident premeditation and taking advantage of their superior strenght [sic] willfully, unlawfully and feloniously attack, assault and shoot RONIE ILISAN, with the use of firearms, inflicting upon the latter multiple mortal injuries in different parts of his body which were the direct and immediate cause of his death.”

Accused Tumbagahan, De los Santos, Cajilo and Fontamillas, with the assistance of their lawyers Atty. Abelardo V. Calsado and Juanito Dimaano, pleaded not guilty when arraigned on February 15, 1988;12 while Accused Cawaling, assisted by Counsel Jovencio Q. Mayor, entered a plea of not guilty on March 16, 1988.13

After due trial,14 the court a quo15 rendered its Decision dated October 21, 1994,16 the decretal portion of which reads:

“WHEREFORE, this Court finds the accused (1) ULYSSES M. CAWALING, (2) ERNESTO TUMBAGAHAN, (3) RICARDO DELOS SANTOS, (4) HILARIO CAJILO, AND (5) ANDRES FONTAMILLAS GUILTY beyond reasonable doubt of the crime of MURDER under the Information, dated June 4, 1987, and sentences each of them to suffer the penalty of reclusion perpetua, with the accessory penalties of the law.

The accused, jointly and severally, are ORDERED to pay Nelson Elisan the sum of P6,000.00 as actual damages and the heirs of the deceased Ronie Elisan the sums of P116,666.66 by way of

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lost earnings and P50,000.00 as indemnity for death, without subsidiary imprisonment in case of insolvency, and to pay the costs.

The bail bonds of all the accused are ORDERED CANCELLED and all said accused are ORDERED immediately confined in jail.

The slug (Exh. A); the .38 caliber revolver (with 3 empty shells and 3 live bullets) (Exh. G); and the slug of bullet (Exh. H) are confiscated in favor of the government.

After the judgment has become final, the Officer-in-Charge, Office of the Clerk of Court, this Court, is ordered to deliver and deposit the foregoing Exhibits A, F, G and H, inclusive, to the Provincial Director, PNP, of the Province of Romblon properly receipted. Thereafter, the receipt must be attached to the record of the case and shall form part of the record.

The period of preventive imprisonment the accused had undergone shall be credited in their favor to its full extent pursuant to Article 29 of the Revised Penal Code, as amended.

The case against co-accused ALEX BATUIGAS who is at large is ORDERED ARCHIVED pending his arrest.”17

Hence, this appeal.18

The Facts

Version of the Prosecution

The trial court gives this summary of the facts as viewed by the prosecution witnesses:

“The killing occurred on December 4, 1982 at around 9:00 o’clock in the evening at the ricefield of Poblacion, San Jose, Romblon when the bright moon was already above the sea at an angle of about 45 degrees, or if it was daytime, it was about 9:00 o’clock in the morning (Imelda Elisan Tumbagahon, on direct examination, tsn, Jan. 17, 1989, p. 5, and on cross-examination, tsn, April 18, 1989, p. 22).

On December 4, 1982, about 8:00 o’clock or 8:30 o’clock in the evening, Vicente Elisan and his elder brother Ronie Elisan, the victim, were drinking tuba at C & J-4 Kitchenette of co-accused Andres Fontamillas in Poblacion, San Jose, Romblon. When they stood up to go home, Luz Venus, the wife of Diosdado Venus, told them not to go out because the accused were watching them outside about three (3) meters from the restaurant. Diosdado Venus accompanied them upon their request and they went out and walked towards home. About a hundred meters from the restaurant, the six (6) accused, that is, Mayor Cawaling, the four (4) policemen, namely, Hilario Cajilo, Andres Fontamillas, Ernesto Tumbagahan and Ricardo delos Santos, and civilian Alex Batuigas, the mayor’s brother-in-law, flashlighted them and Diosdado Venus ran going back. The two (2) brothers also ran towards home to the house of their elder sister Imelda Elisan Tumbagahon. Co-accused Andres Fontamillas and Hilario Cajilo blocked them on the gate of the fence of their sister’s house. Ronie Elisan ran towards the ricefield. The accused were chasing them. Vicente Elisan saw his brother Ronie f[a]ll down on the ricefield while he ran towards the bushes and la[y] on the ground. Ronie Elisan rose up by kneeling and raising his two (2) hands. All the six (6) accused approached him with their flashlights and shot him. Ronie fell down about twenty (20) meters from the bushes where Vicente Elisan hid behind the coconut tree. Co-accused Cawaling said [“]you left him, he is already dead.[”] Mayor Cawaling was armed with .45 caliber, policemen Andres Fontamillas and Hilario Cajilo were both with armalites, Ernesto Tumbagahan and Ricardo delos Santos were both with .38 caliber and so with civilian Alex Batuigas. They left towards the house of Mayor Cawaling. After they were gone, Vicente Elisan ran towards the house of his older brother Nelson Elisan. Upon seeing him, Vicente told Nelson that Ronie was already dead. Nelson said nothing. While they were there, elder sister Imelda Elisan Tumbagahon, who was crying came. She said: “Manong, patay ron si Ronie.” (Brother, Ronie is already dead). Nelson said [“]do not be noisy; they might come back and kill all of

us.[”] Imelda stopped crying.

After a while, brothers Nelson and Vicente Elisan went to the house of barangay captain Aldolfo Tumbagahon. The three (3) went to the townhall and called the police but there was none there. Going to the house of the Chief of Police Oscar Montero, they were told by his wife that Commander Montero was in the house of Mayor Cawaling. They proceeded to the place where Ronie Elisan was shot. The cadaver was brought to the house of Nelson Elisan. Vicente Elisan found an empty shell of a .45 caliber about three (3) arm’s length from the body of the victim. They surrendered it to the Napolcom.”19

Dr. Blandino C. Flores described the gunshot wounds of the victim as follows:

“Gunshot Wounds:

1. Shoulder:

Gun shot wound 1/2 x 1/2 inch in diameter shoulder right 2 inches from the neck with contussion [sic] collar s[u]rrounding the wound.

2. Right Axilla:

Gun shot wound 1/4 x 1/4 inch in diameter, 2 inches below the right nipple with contussion [sic] collar s[u]rrounding the wound.

3. Left Axilla:

Exit of the gun shot wound from the right axilla, measuring 1/2 x 1/2 inch with edges everted, one inch below the axilla and one inch below the level of the nipple.

4. Back:

Gun shot wound measuring 1/4 x 1/4 inch, along the vertebral column, right at the level of the 10th ribs with contussion [sic] collar.

5. Leg, Left:

Gun shot wound measuring 1/4 x 1/4 anterior aspect upper third leg with contussion [sic] collar, with the exit 1/2 x 1/2 posterior aspect upper third leg, left.”20

Based on the death certificate (Exhibit E) issued by Dr. Flores, Ronie Ilisan died of “severe hemorrhage and gun shot wo[unds].”21

Version of the Defense

Appellant Cawaling, in his 47-page Brief,22 presented his own narration of the incident as follows:

“At around 7:00 in the evening of December 4, 1982, Ulysses Cawaling, then the mayor of the [M]unicipality of San Jose in the [P]rovince of Romblon, arrived aboard a hired motorized boat from Manila in the seashore of San Jose. From the seashore, he immediately proceeded to his home. At around 7:30 in the evening, Cawaling went to the municipal hall to check on administrative matters that piled up in the course of his trip to Manila. He also went inside the police station (located inside the municipal building) to be apprised of any developments, after which he went out and joined Pfc. Tumbagahan and Pfc. Cajilo who were standing near the flagpole in front of the municipal building. The three engaged in a conversation. Cawaling learned that the two police officers were the ones assigned for patrol/alert for that night. The three of them went inside the INP office and there Cawaling informed the two policemen that he received information from reliable persons that certain persons were plotting to kill him and a member of the town’s police force. It is to be noted that this occurred at the height of the communist insurgency and political violence in the countryside in the early 80’s. Hence, such

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information was taken very seriously, having been relayed by sources independent of each other.

Cawaling, as town chief then empowered with supervisory authority over the local police, accompanied Pfc. Tumbagahan and Pfc. Cajilo in conducting patrol and surveillance operations around the small municipality. He usually did this as routine since Romblon was then plagued with political assassinations and armed conflict. On their way to the seashore, they passed by C & J-4 Kitchenette, and chanced upon Ronnie Ilisan and his brother Vicente Ilisan drinking liquor and discussing in very loud voices. They stopped right in the front of the restaurant and there they heard Ronnie Ilisan state in a very loud voice that he will kill a person that night. Inside the restaurant, without the knowledge then of Cawaling and the two police officers, witness Gil Palacio, who was buying cigarettes and Luz Venus, the cook/server of the restaurant, saw Ronnie Ilisan, very drunk, brandishing in the air a .38 caliber Smith and Wesson revolver with a protruding screw.

Initially dismissing Ronnie Ilisan’s statement as just another hollow swagger of an intoxicated person (“salitang lasing”), Cawaling and the two policemen proceeded on their way. After the patrol, they returned to the municipal building and stationed themselves in front. At around 8:30 in the evening, Ronnie Elisan passed by the municipal hall walking towards the direction of the house of Nelson Ilisan, another brother, and shouted the challenge, “gawas ang maisog,” meaning THOSE WHO ARE BRAVE, COME OUT. Cawaling and the two police officers again brushed aside [the] challenge as just another foolish drunken revelry [o]n the part of Ronnie Ilisan, a well-known troublemaker in the small municipality.

A few moments later, after Ronie Ilisan had passed by, they distinctly heard a gunshot and hysterical female voices shouting, “pulis, tabang” meaning POLICE! HELP! four times. Impelled by the call of duty, Cawaling and the two policemen immediately ran in the direction of the gunshot and the desperate female voices until they reached the house of Nelson Ilisan in San Jose Street. At this point, they saw Ronnie Ilisan holding a .38 caliber revolver. They also saw Vicente Ilisan, Francisco Tesnado, Fe Ilisan, the wife of Nelson and Delma Ilisan, the wife of Vicente, the latter two being the same persons who cried “pulis, tabang” four times. Cawaling then told Ronnie to surrender his gun but the latter responded by pointing the gun at Cawaling and pulling the trigger.

At the precise moment that the gun fired, Cawaling warned the two policemen to drop to the ground by shouting “dapa.” Fortunately, Cawaling was not hit. Ronnie Ilisan then turned around and ran towards the church. The two policemen gave chase. Cawaling, still shaken and trembling after the mischance was initially left behind but followed shortly. When Ronnie Ilisan reached the church, he turned around and again fired at the pursuing Pfc. Cajilo. Fortunately, the gun misfired. When they finally reached the ricefield, Pfc. Cajilo fired two (2) warning shots in the air for Ronnie to surrender. Ronnie responded by firing once again at Pfc. Tumbagahan but failed to hit the latter. At that instance, Pfc. Cajilo counter-fired at Ronnie Ilisan hitting him. Pfc. Tumbagahan also fired his weapon in the heat of exchange and also hit Ronnie Ilisan. As a result of the gunshot wounds, Ronnie Ilisan later on succumbed.

Pfc. Tumbagahan picked up the gun still in the hand of the dead Ronnie Ilisan and gave it to Pfc. Cajilo. The three, Cawaling, who subsequently caught up with them after the incident, and the two police officers, then proceeded to the police station located in the municipal building to formally report the incident in their station blotter.”23

The “Brief for All of the Accused-Appellants” filed by Atty. Napoleon U. Galit and the “Brief for Appellants Ernesto Tumbagahan and Hilario Cajilo” submitted by Atty. Joselito R. Enriquez merely repeated the facts as narrated by the trial court.

Ruling of the Trial Court

Finding the prosecution witnesses and their testimonies credible, the court a quo convicted the

appellants. The killing was qualified to murder because of the aggravating circumstances of abuse of superior strength and treachery. The trial court ruled that there was a notorious inequality of forces between the victim and his assailants, as the latter were greater in number and armed with guns. It further ruled that abuse of superior strength absorbed treachery, as it ratiocinated:

“ ‘Certain cases,’ an authority wrote, ‘involving the killing of helpless victim by assailants superior to them in arms or numbers, or victims who were overpowered before being killed, were decided on the theory that the killing was treacherous, when perhaps the correct qualifying circumstance would be abuse of superiority. In these cases the attack was not sudden nor unexpected and the element of surprise was lacking.’ (Id., I Aquino, pp. 423-424). In the instant case, we earlier ruled that the qualifying treachery should be considered as an exception to the general rule on treachery because it was not present at the inception of the attack. The killing was not sudden nor unexpected and the element of surprise was lacking. It is for this reason that we hold that alevosia should be deemed absorbed or included in abuse of superiority. Even assuming ex-gratia argumenti that it should be the other way around, the situation will not be of help, penaltywise, to the accused.”24

The defenses raised by the appellants were dismissed and their witnesses declared unworthy of belief for the following reasons:

1. It was highly improbable that Defense Witness Tesnado would not tell his wife (Dory) and Bebelinia Ilisan Sacapaño about the incident he had allegedly witnessed, more so when Sacapaño was the victim’s first cousin.

2. The spot report prepared by Station Commander Oscar M. Montero, the testimonies of Cajilo and Tumbagahan and the medical findings of Dr. Flores contradicted one another on the following details: the caliber of the gun used in shooting the victim, the wounds inflicted and the whereabouts of Cawaling during the shoot-out.

3. Cawaling and his men, armed with guns, could have immediately disarmed the victim at the initial encounter. The court could not understand why the victim was able to fire his gun, run, then stop and again fire his gun, without being caught.

4. The positive identification made by the prosecution witnesses prevails over the alibi posed by De los Santos and Fontamillas, a defense that was not corroborated by any other witness.

5. The .38 caliber revolver, allegedly owned by the victim, was in fact owned and used by Alex Batuigas.

6. The defense presented a photo and a sketch to prove that Imelda Ilisan Tumbagahan had an obstructed view of the killing. The trial court ruled that such evidence was misleading, because the window, from where said witness allegedly saw the incident, was at the eastern side of her house, and thus afforded a clear view of the incident, while the window referred to by the defense was at the southern portion.

7. The questioned testimonies of Dr. Flores, Nelson Ilisan and Provincial Prosecutor Pedro Victoriano, Jr., though not formally offered as evidence, may be admitted because of the failure of the defense to object thereto at the time they were called to testify.

8. The defense failed to prove that the prosecution witnesses had any ill motive to testify falsely against the appellants.

9. Appellants had a motive to kill the victim. Nelson Ilisan testified that his brother Ronie (the victim) had witnessed Bonifacio Buenaventura (a former chief commander of the San Jose Police Force) kill a certain Ruben Ventura. Cawaling, who was Buenaventura’s first cousin, wanted Ronie dead, because the latter had not followed his instruction to leave town to prevent him from testifying in said case.

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Assignment of Errors

The appellants, through their common counsel, Atty. Napoleon Galit, assign the following errors to the lower court:

1 “1. The trial court gravely erred in sustaining prosecutor’s theory of conspiracy and thus renders nugatory or has totally forgotten that policemen when in actual call of duty normally operate in group but not necessarily in conspiracy.

2 2. The trial court gravely erred in believing the theory of the prosecution that accused-appellant Ulysses Cawaling was one of the alleged co-conspirators in the killing of the deceased Ronnie Elisan.

3 3. The trial court gravely erred in not believing the defense of accused-appellant Ulysses Cawaling that he has nothing to do with the shooting incident except to shout to arrest the accused[,] which prompted his co-accused policemen to chase the accused and sho[o]t him when he resisted, after he fired at Mayor Cawaling.

4 4. The trial court gravely erred in not giving weight to accused-appellant policemen[’s] testimonies which carry the presumption of regularity.

5 5. The trial court gravely erred in not acquitting all the accused-appellants by applying ‘the equipoise rule’ thereby resulting [i]n reasonable doubts on the guilt.”25

In their joint brief,26 Appellants Tumbagahan and Cajilo cite these other errors:

1 “1. The trial court gravely erred in relying on the theory of the prosecution that accused-appellants Ernesto Tumbagahan and Hilario Cajilo were alleged co-conspirators in the killing of the victim, Ronie Ilisan.

2 2. The trial court gravely erred in not believing the defense that herein accused-appellants merely did a lawful duty when the shooting incident happened which led to the death of Ronnie Ilisan.

3 3. The trial court gravely erred in not acquitting herein accused-appellants by applying the equipoise rule, thereby resulting in reasonable doubt on their guilt.

4 4. Prescinding from the foregoing, herein accused-appellants do press and hold, that the lower court committed grave, serious and reversible error in appreciating the qualifying circumstance of treachery (alevosia).

5 5. The lower court committed grave, serious and reversible error in convicting both accused-appellants of murder, instead merely of homicide, defined and penalized under the Revised Penal Code.

6 6. The lower court committed grave, serious and reversible error in appreciating the qualifying circumstance of taking advantage of superior strength.

7 7. The consummated crime being merely homicide, the mitigating circumstance of voluntary surrender should be considered to lower the penalty of homicide.

8 8. The lower court committed error in not considering double jeopardy.

9 9. The lower court committed error in not dismissing the case for want of jurisdiction.”27

Appellant Cawaling imputes these additional errors to the court a quo:

1 “1. The trial court gravely erred in not acquitting herein accused-appellant, Ulysses M. Cawaling, considering that he had no part in the killing and the prosecution failed to prove his guilt beyond reasonable doubt;

1 2. The trial court gravely erred in not finding the shooting incident a result of hot pursuit and shoot-out between the deceased Ronnie Ilisan and the police officers in the performance of their duty and self-defense, and in sustaining the prosecution’s conspiracy theory;

2 3. The trial court gravely erred in not acquitting Accused-Appellant Ulysses M. Cawaling considering that there was blatant absence of due process in the proceedings tantamount to mistrial.”28

This Court’s Ruling

We affirm the conviction of the appellants. In so ruling, we will resolve the following issues: (1) jurisdiction of the trial court, (2) double jeopardy, (3) credibility of prosecution witnesses and their testimonies, (4) self-defense, (5) performance of lawful duty, (6) alibi, (7) conspiracy, (8) rule on equipoise, (9) qualifying circumstances, (10) damages, and (11) attending circumstances as they affect the penalty.

We shall address the first two issues as important preliminary questions and discuss the merits of the remaining ones, which we have culled from the errors cited by the appellants in their aforementioned briefs.

First Issue:

Jurisdiction of the Trial Court

Appellants Tumbagahan and Cajilo argue that the trial court erred when it assumed jurisdiction over the criminal case. They insist that the Sandiganbayan, not the regular courts, had jurisdiction to try and hear the case against the appellants, as they were public officers at the time of the killing which was allegedly committed by reason of or in relation to their office.

We do not agree.

The jurisdiction of a court to try a criminal case is determined by the law in force at the time of the institution of the action. Once the court acquires jurisdiction, it may not be ousted from the case by any subsequent events, such as a new legislation placing such proceedings under the jurisdiction of another tribunal. The only recognized exceptions to the rule, which find no application in the case at bar, arise when: (1) there is an express provision in the statute, or (2) the statute is clearly intended to apply to actions pending before its enactment.29

The statutes pertinent to the issue are PD 1606, as amended;30 and PD 1850, as amended by PD 1952 and BP 129.

Section 4 of PD 160631 reads:

“Sec. 4. Jurisdiction.—The Sandiganbayan shall exercise:

(a) Exclusive original jurisdiction in all cases involving:

x x x x x x x x x

(2) Other offenses or felonies committed by public officers and employees in relation to their office, including those employed in government-owned or controlled corporations, whether simple or complexed with other crimes, where the penalty prescribed by law is higher than prision correccional or imprisonment for six (6) years, or a fine of P6,000.00: PROVIDED, HOWEVER, that offenses or felonies mentioned in this paragraph where the penalty prescribed by law does not exceed prision correccional or imprisonment for six (6) years or a fine of P6,000.00 shall be tried by the proper Regional Trial Court, Metropolitan Trial Court, Municipal Trial Court and Municipal Circuit Trial Court.

x x x x x x x x x”

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However, former President Ferdinand Marcos issued two presidential decrees placing the members of the Integrated National Police under the jurisdiction of courts-martial. Section 1 of PD 1952,32 amending Section 1 of PD 1850, reads:

“SECTION 1. Court Martial Jurisdiction over Integrated National Police and Members of the Armed Forces.—Any provision of law to the contrary notwithstanding—(a) uniformed members of the Integrated National Police who commit any crime or offense cognizable by the civil courts shall henceforth be exclusively tried by courtsmartial pursuant to and in accordance with Commonwealth Act No. 408, as amended, otherwise known as the Articles of War; (b) all persons subject to military law under Article 2 of the aforecited Articles of War who commit any crime or offense shall be exclusively tried by courts-martial or their case disposed of under the said Articles of War; Provided, that, in either of the aforementioned situations, the case shall be disposed of or tried by the proper civil or judicial authorities when court-martial jurisdiction over the offense has prescribed under Article 38 of Commonwealth Act Numbered 408, as amended, or court-martial jurisdiction over the person of the accused military or Integrated National Police personnel can no longer be exercised by virtue of their separation from the active service without jurisdiction having duly attached beforehand unless otherwise provided by law:

PROVIDED FURTHER, THAT THE PRESIDENT MAY, IN THE INTEREST OF JUSTICE, ORDER OR DIRECT, AT ANY TIME BEFORE ARRAIGNMENT, THAT A PARTICULAR CASE BE TRIED BY THE APPROPRIATE CIVIL COURT.

As used herein, the term uniformed members of the Integrated National Police shall refer to police officers, policemen, firemen, and jail guards.”

On the other hand, the jurisdiction of regular courts over civil and criminal cases was laid down in BP 129, the relevant portion of which is quoted hereunder:

“Sec. 20. Jurisdiction in Criminal Cases.—Trial Courts shall exercise exclusive original jurisdiction in all criminal cases not within the exclusive jurisdiction of any court, tribunal or body, except those now falling under the exclusive and concurrent jurisdiction of the Sandiganbayan which shall hereafter be exclusively taken cognizance of by the latter.”33

In relation to the above, Section 4-a-2 of PD 1606, as amended by PD 1861, quoted earlier, lists two requisites that must concur before the Sandiganbayan may exercise exclusive and original jurisdiction over a case: (a) the offense was committed by the accused public officer in relation to his office; and (b) the penalty prescribed by law is higher than prision correccional or imprisonment for six (6) years, or higher than a fine of six thousand pesos (P6,000).34 Sanchez vs. Demetriou35 clarified that murder or homicide may be committed both by public officers and by private citizens, and that public office is not a constitutive element of said crime, viz.:

“The relation between the crime and the office contemplated by the Constitution is, in our opinion, direct and not accidental. To fall into the intent of the Constitution, the relation has to be such that, in the legal sense, the offense cannot exist without the office.

In other words, the office must be a constituent element of the crime as defined in the statute, such as, for instance, the crimes defined and punished in Chapter Two to Six, Title Seven, of the Revised Penal Code.

Public office is not the essence of murder. The taking of human life is either murder or homicide whether done by a private citizen or public servant, and the penalty is the same except when the perpetrator, being a public functionary, took advantage of his office, as alleged in this case, in which event the penalty is increased.

But the use or abuse of office does not adhere to the crime as an element; and even as an aggravating circumstance, its materiality arises, not from the allegations but on the proof, not from the fact that the criminals are public officials but from the manner of the commission of the crime.”

Furthermore, the Information filed against the appellants contains no allegation that appellants were public officers who committed the crime in relation to their office. The charge was for murder, a felony punishable under Article 248 of the Revised Penal Code. As clarified in Aguinaldo, et al. vs. Domagas, et al.,36 “[I]n the absence of such essential allegation, and since the present case does not involve charges of violation of R.A. No. 3019 (the Anti-Graft etc. Act), the Sandiganbayan does not have jurisdiction over the present case. (Bartolome vs. People, 142 SCRA 459 [1986]) Even before considering the penalty prescribed by law for the offense charged, it is thus essential to determine whether that offense was committed or alleged to have been committed by the public officers and employees in relation to their offices.”

Jurisdiction is determined by the allegations in the complaint or information.37 In the absence of any allegation that the offense was committed in relation to the office of appellants or was necessarily connected with the discharge of their functions, the regional trial court, not the Sandiganbayan, has jurisdiction to hear and decide the case.38

Second Issue:

Double Jeopardy

In seeking their acquittal, Appellants Tumbagahan and Cajilo also invoke their right against double jeopardy. They argue that the first jeopardy attached when a criminal case for murder was filed before the Judge Advocate General’s Office (JAGO), which was allegedly dismissed after several hearings had been conducted.39 We are not persuaded.

There is double jeopardy when the following requisites are present: (1) a first jeopardy has attached prior to the second; (2) the first jeopardy has been validly terminated; and (3) a second jeopardy is for the same offense as that in the first. And the first jeopardy attaches only (a) after a valid indictment; (b) before a competent court; (c) after arraignment; (d) when a valid plea has been entered; and (e) when the accused was acquitted or convicted, or the case was dismissed or otherwise terminated without his express consent.40

For a better appreciation of appellants’ argument, we must consider PD 3941 and its implementing rules,42 which prescribe the procedure before a military commission. A summary preliminary investigation shall be conducted before trial for the purpose of determining whether there is prima facie evidence to pursue trial before a military commission. The investigation report shall contain a summary of the evidence, the acts constituting the offense or offenses committed, and the findings and recommendations of the investigating officer. Thereafter, the report shall be forwarded to the judge advocate general, who shall determine for either the defense secretary or for the AFP chief of staff whether the case shall be referred for trial to a military commission.43 Where a prima facie case is found against the accused, formal charges shall be signed by a commissioned officer designated by the judge advocate general.44 The accused shall then be arraigned, during which the charge and specification shall be read and the accused shall enter his plea.45 After hearings, a record of the trial shall be forwarded to the AFP chief of staff for proper action.46

In the present case, the appellants have presented no sufficient and conclusive evidence to show that they were charged, arraigned and acquitted in a military commission, or that the case was dismissed therein without their consent. The defense merely offered as evidence certain disposition forms47 and a letter,48 dated March 8, 1983, recommending that the case against Appellants Tumbagahan, Cajilo and De los Santos be dropped and considered closed.49 No charge sheet and record of arraignment and trial were presented to establish the first jeopardy.

As pointed out by the solicitor general, “appellants were never arraigned, they never pleaded before the Judge Advocate General’s Office, there was no trial, and no judgment on the merits had been rendered.”50

Third Issue:

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Credibility of Witnesses

As a general rule, the factual findings of trial courts deserve respect and are not disturbed on appeal, unless some facts or circumstances of weight and substance have been overlooked, misapprehended or misinterpreted, and would otherwise materially affect the disposition of the case.51 This rule, however, does not apply when the judge who penned the decision was not the same one who had heard the prosecution witnesses testify,52 as in the present case. Nonetheless, we have carefully perused and considered the voluminous records of this case, and we find no reason to alter the findings of the court a quo in regard to the credibility of the prosecution witnesses and their testimonies.

Vicente Ilisan, the victim’s brother, narrated before the trial court the circumstances relevant to the crime:

“Q. In the evening of December 4, 1982, at about 8:00 or 8:30, where were you?

A. I was inside the restaurant of Andres Fontamillas.

x x x x x x x x x

Q. What were you doing there?

A. I was drinking tuba.

Q. When you were about to finish drinking tuba, what did you do?

A. I stood up preparing to go home.

Q. Were you able to leave that restaurant actually?

A. No, sir.

Q. Why?

A. Luz Venus told us not to go out when [I] stood up to go home.

Q. Do you know why you were advise[d] not to go out?

A. Yes, sir.

Q. Why?

A. Because we were being watched by Mayor Cawaling, Andres Fontamillas, Hilario Cajilo and Alex Bat[ui]gas.

x x x x x x x x x

Q. When you were informed by Luz Venus that you should not go out because Mayor Cawaling and the persons you mentioned were outside watching for you, what did you do?

A. We did not go out.

Q. Since you remained inside, what did you do?

A. I also viewed thru the window.

Q. Did you see them?

A. Yes, sir.

Q. How far were they from the restaurant?

A. About three meters.

Q. What were they doing outside the restaurant?

A. They were also viewing us.

Q. For how long did they remain there viewing you?

A. Just a short time.

Q. And later on, do you know where did they go? [sic]

A. No, sir. I went out from the restaurant and when I went out, I did not see them anymore.

Q. Before you went out of the restaurant, what did you do?

A. Diosdado Venus accompanied us.

Q. Why did you ask Diosdado Venus to accompany you?

A. Yes, sir. Because we were aware that we were being watched from outside so we asked to be accompanied by Diosdado Venus.

Q. From the restaurant accompanied by Diosdado Venus, what did you do?

A. Towards home.

Q. Were you able to reach home?

A. No, sir.

Q. Why, what happened on the way?

A. Diosdado Venus ran going back because we were lighted by a flashlight.

Q. How many flashlight[s] were trimed [sic] to you?

A. Six.

Q. Did you come to know who trimed [sic]

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the flashlight towards you?

A. Yes, sir.

Q. Who were they?

A. Mayor Cawaling, Andres Fontamillas, Hilario Cajilo, Ernesto Tumbagahan, Ricardo delos Santos and Alex Batuigas.

Q. How were you able to recognize them when that was night time?

A. Because the flashlight[s] were bright.

Q. When Diosdado Venus ran back to his restaurant, what did your brother Ronie Elisan and you do?

A. We also ran towards home.

Q. To whose house?

A. That of my older sister Imelda [E]lisan.

Q. Were you able to reach that house?

A. No, sir.

Q. Why, what happened when you ran away?

A. Andres Fontamillas and Hilario Cajilo were blocking us on the gate of the fence of my sister’s house.

Q. Since your way was blocked, where did Ronie Elisan go?

A. We ran towards the ricefield.

Q. When you ran, what did Mayor Cawaling do?

A. They were chasing us.

Q. What about Alex Batuigas, what did he do?

A. He also followed helping chasing us. [sic]

Q. What about the four policemen, what did they do?

A. The same. They were also chasing us.

Q. About how far is that restaurant [from] the spot where you were first lighted by the flashlight of the accused?

A. About one hundred meters.

Q. Now, according to you, you ran towards the ricefield, what happened while you were running towards the ricefield?

A. I saw my brother fell [sic] down.

Q. Fell down where?

A. On the ricefield.

Q. What about you, where were you when your brother fell down in the ricefield?

A. I ran towards the bushes.

Q. What did you do upon reaching the bushes?

A. I la[y] on the ground with my belly touch[ing] on the ground behind the coconut tree.

Q. When your brother according to you had fallen on the ricefield, what did he do thereafter?

A. He rose up, [raised] his hands and surrender[ed] to them.

Q. In rising, what was his position?

A. He was rising like this. (Witness demonstrating by kneeling [and] raising his two hands).

Q. While Ronie Elisan was kneeling and raising both of his hands, what happened?

A. Mayor Cawaling approached him together with the four policemen and his brother-in-law and they shot him.

Q. Do you know what weapon[s] were used in shooting your brother?

A. Yes, sir.

Q. What weapon were used?

A. The weapon of Mayor Cawaling is .45 caliber and that of Andres Fontamillas and Hilario Cajilo were both armalite and that of Ernesto Tumbagahan, Alex Batuigas and Ricardo delos Santos were .38 caliber.

Q. How were you able to identify their weapons?

A. Because the flashlight[s] were bright.

Q. Now, what happened to your brother when he was fired upon by the accused in this case?

A. He fell down.

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Q. And how far is that spot where your elder brother had fallen down to the spot where Diosdado Venus left you when he returned to the restaurant?

A. To my estimate it is about 300 meters.

Q. After your brother had fallen down, what did the accused do?

A. Mayor Cawaling said, [“]you left him, he is already dead.[”]

Q. Where did they go?

A. They went towards the house of Mayor Cawaling.”53

Imelda Tumbagahan was at home feeding her child when she heard her brother Ronie shouting for help. After getting a flashlight and looking through the window of her house, she saw Cawaling and Alex Batuigas chasing Ronie who was running towards her house. Tumbagahan and De los Santos prevented Ronie from entering the fence of her house, as a result of which, her brother ran towards a rice field nearby. There, on bended knees and with hands raised, Ronie was shot by Cawaling and his men.54

Nelson Ilisan also heard his younger brother Ronie shouting for help while being chased by the group of Cawaling. As Cajilo and Fontamillas blocked Ronie from entering the gate of Imelda’s house, the victim ran towards a rice field. Nelson stopped Cawaling and asked, “Nong, basi guinalagas ninyo ang acon hali? (Nong, why do you chase my brother?)” But the mayor merely continued chasing Ronie. Thereafter, Nelson saw his brother, on his knees with both hands raised, shot by appellants.55

The three aforementioned witnesses narrated in detail the assault against their brother Ronie and positively identified the appellants as the perpetrators. The trial court cannot be faulted for relying on their testimonies and accepting them as true,56 especially when the defense failed, to prove any ill motive on their part.57 In addition, family members who have witnessed the killing of their loved one usually strive to remember the faces of the assailants.58 Thus, the relationship per se of witnesses with the victim does not necessarily mean that the former are biased. On the contrary, it is precisely such relationship that would impel them to seek justice and put the real culprit behind bars, rather than impute the offense to the innocent.59

Appellant Cawaling submits that the prosecution witnesses tampered with the evidence by cleaning the cadaver before an autopsy could be done. “Such irregular washing of the cadaver by a close relative of the deceased, who is educated and who presumably knew perfectly well the need to preserve it in its original state for the medico-legal examination[,] is highly suspicious. It points to the fact that the relatives of the deceased wanted to hide, or erase something that would bolster and assist the defense (that is, state of drunkenness, powder burns or lack thereof, indicating the firing of a weapon or the proximity of the weapon used on the deceased, etc.).”60

Such contention is unavailing. First, Bebelinia Sacapaño merely cleaned the cadaver and made no further examination. Second, appellants had an opportunity to have the body examined again to determine or prove important matters, such as whether Ronie was drunk, if he fired a gun, how many and what caliber of guns were used in shooting him; they did not, however, avail themselves of this opportunity. As public officers, appellants knew that it was within their power to request or secure from the court, or any other competent authority, an order for another autopsy61 or any such evidence as may affirm their innocence. Third, their conviction lies in the strong and convincing testimonial evidence of the prosecution, not in the corroborative testimony of Bebelinia Sacapaño.

Relying on the testimonies of Luz Venus and Gil Palacio, Appellant Cawaling also pointed out that “[t]he power of observation of alleged eyewitness Vicente was severely affected by his intoxication. It may be inferred that an intoxicated person’s sense[s] of sight and hearing and of touch are less acute than those of a sober person and that his observation are inexact as to what actually occurred.”62

This argument is not persuasive. The evidence presented fails to show that Vicente was so intoxicated that night as to affect his powers of observation and retrospection. Defense Witness Palacio merely saw the witness drinking tuba on the night of the killing.63 Meanwhile the whole testimony of Luz on the matter mainly reveals that Ronie was the person she was referring to as drunk, as shown by this portion:64

“Q

When Ronie and Vicente both surnamed Ilisan entered the C & J-4 kitchenette what if any did you observe?

A I saw them so dr[u]nk (Nakita ko sila lasing na lasing).

Q Who was lasing na lasing or so dr[u]nk?

A Ronie Ilisan sir.”

Granting that Vicente was drunk, the conviction of the appellants is still inevitable in view of the positive declarations of Witnesses Nelson and Imelda, who unequivocally identified appellants as perpetrators of the senseless killing of their brother Ronie.

Appellant Cawaling also questions the trial court’s reliance on the testimonies of Dr. Blandino Flores,65 Nelson Ilisan66 and Prosecutor Pedro Victoriano, Jr.,67 for failure of the prosecution to offer them as evidence. In People vs. Java,68 this Court ruled that the testimony of a witness, although not formally offered in evidence, may still be admitted by the courts, if the other party does not object to its presentation. The Court explained: “Section 36 of [Rule 132] requires that an objection in the course of the oral examination of a witness should be made as soon as the grounds therefor shall become reasonably apparent. Since no objection to the admissibility of evidence was made in the court below, an objection raised for the first time on appeal will not be considered.” In the present case, a cursory reading of the stenographic notes reveals that the counsel for the appellants did not raise any objection when said witnesses testified on the matters now being impugned. Moreover, they repeatedly cross-examined the witnesses, which shows that they had waived their objections to the said testimonies of such witnesses.

Lastly, Appellant Mayor Cawaling questions the motive of Prosecutor Pedro Victoriano, Jr. This contention is likewise bereft of merit. Unlike judges who are mandated to display cold neutrality in hearing cases,69 prosecutors are not required to divest themselves of their personal convictions and refrain from exhibiting partiality. In this case, there is reasonable ground for Prosecutor Victoriano to believe that an offense has been committed and that the accused was probably guilty thereof.70 Under the circumstance, it is his sworn duty to see that justice is served.71 Thus, “[h]e may prosecute with earnestness and vigor—indeed, he should do so. But, while he may strike hard blows, he is not at liberty to strike foul ones. It is as much his duty to refrain from improper methods calculated to produce a wrongful conviction as it is to use every legitimate means to bring about a just one.”72 Further,

“Under the prevailing criminal procedure, the fiscal’s sphere of action is quite extensive, for he has very direct and active intervention in the trial, assuming as the Government’s representative the defense of society, which has been disturbed by the crime, and taking public action as though he were the injured party, for the purpose of securing the offender’s punishment, whenever the crime has been proved and the guilt of the accused as the undoubted perpetrator thereof established.”73

Fourth Issue:

Self-Defense

15

To escape criminal liability, the appellants also invoke the justifying circumstances of self-defense and lawful performance of duty.74 Allegedly, Ronie was firing his gun and shouting “Guwa ang maisog! (Come out who is brave!).” Then the mayor and the policemen arrived at the scene to pacify him. Ronie fired at them, which forced them to chase him and return fire.

We find this scenario bereft of plausibility.

Unlawful aggression on the part of the victim is a condition sine qua non for the successful invocation of self-defense.75 As factually found by the trial court, unlawful aggression did not start with the victim, but rather with the appellants. Cawaling and his men proceeded to the C & J-4 Kitchenette and waited for Ronie to come out. When the victim did, they chased and shot him without giving him any opportunity to defend himself.

Granting arguendo the veracity of the defense’s factual version, it is important to note that appellants admitted that Ronie was running away from them when they chased and shot him. Thus, unlawful aggression—assuming it was initially present—had ceased, and the appellants no longer had any right to pursue the offender. Basic is the rule that when unlawful aggression ceases, the defender no longer has the right to kill or even wound the former aggressor. Upon the cessation of the unlawful aggression and the danger or risk to life and limb, there should be a corresponding cessation of hostilities on the part of the person defending himself.76

Furthermore, the means employed to ward off the attack was unreasonably excessive. Being armed, the appellants could have easily ordered the victim to surrender. Even the first shot at his shoulder would have been sufficient to immobilize him, yet they fired a succession of shots at him while he was in no position to put up a defense.

Jurisprudence teaches that when an accused admits having committed the crime but invokes self-defense to escape criminal liability, the burden of proof is reversed and shifted to him. He must then prove the elements of self-defense.77 It necessarily follows that he must now rely on the strength of his own evidence and not on the weakness of that of the prosecution; for even if the latter evidence were weak, it could not be disbelieved after the accused has admitted the killing.78 Thus, appellants must establish with clear and convincing evidence that the killing was justified, and that they incurred no criminal liability therefor.79 They failed to do so, and their conviction thus becomes inevitable.80

Fifth Issue:

Lawful Performance of Duties

Appellants contend that the killing of Ronie resulted from the lawful performance of their duties as police officers. However, such justifying circumstance may be invoked only after the defense successfully proves that (1) the accused acted in the performance of a duty, and (2) the injury or offense committed is the necessary consequence of the due performance or lawful exercise of such duty.81 These two requisites are wanting in this case.

The appellants, except Mayor Cawaling, were men in uniform who happened to be on duty when they killed Ronie. The victim was not committing any offense at the time. Killing the victim under the circumstances of this case cannot in any wise be considered a valid performance of a lawful duty by men who had sworn to maintain peace and order and to protect the lives of the people. As aptly held in People vs. De la Cruz,82 “Performance of duties does not include murder.” That Ronie was a troublemaker in their town is not an excuse; as the Court declared in the same case of People vs. De la Cruz, “Murder is never justified, regardless of the victim.”

Sixth Issue:

Alibi

We likewise brush aside the defenses of alibi and denial raised by Appellant De los Santos.

Prosecution witnesses positively identified him and Fontamillas as part of the group which chased and shot Ronie Ilisan. It is elementary that alibi and denial are outweighed by positive identification that is categorical, consistent and untainted by any ill motive on the part of the eyewitness testifying on the matter. Alibi and denial, if not substantiated by clear and convincing evidence, are negative and self-serving evidence undeserving of weight in law.83

In fact, De los Santos failed to establish with clear and convincing evidence that it was physically impossible for him to have been at the scene of the crime during its commission.84 The evidence he had presented demonstrated only that, at the time, he was sleeping in his house, which was near the locus criminis.

Alibi is always considered with suspicion and received with caution, not only because it is inherently weak and unreliable, but also because it is easily fabricated and concocted.85 It is therefore incumbent upon the appellant to prove that he was at another place when the felony was committed, and that it was physically impossible for him to have been at the scene of the crime at the time it was committed.86 This he failed to prove.

Seventh Issue:

Conspiracy

The trial court correctly appreciated the presence of conspiracy. Conspiracy exists when two or more persons come to an agreement concerning the commission of a felony and decide to commit it. Direct proof of conspiracy is rarely found, for criminals do not write down their lawless plans and plots. The agreement to commit a crime, however, may be deduced from the mode and manner of the commission of the offense or inferred from acts that point to a joint purpose and design, concerted action, and community of intent.87 It does not matter who inflicted the mortal wound, as the act of one is the act of all, and each incurs the same criminal liability.88 We concur with the trial court’s elucidation:

“All of the accused chased the victim and his brother; four (4) of whom blocked their ways, first, to their elder brother Nelson Elisan’s house and, second, to their elder sister Imelda Elisan Tumbagahon’s house. Having changed course by proceeding to the ricefield in their desperate attempt to evade the accused, all the six (6) armed accused continued their pursuit. Their victim, having fallen on the rice paddy, and rising and kneeling on it with raised hands, all the said accused with their flashlights beamed on their victim, in a united and concerted manner, shot him. After Ronie Elisan had fallen down, co-accused Mayor Cawaling was even heard as saying ‘(Y)ou left [sic] him, he is already dead.’ x x x.”89

Eighth Issue:

Equipoise Rule

We reject appellants’ position that the equipoise rule should apply to this case.90 In People vs. Lagnas,91 the Court, through Mr. Justice Florenz D. Regalado, described this rule as follows:

“Once again, albeit in effect a supportive and cumulative consideration in view of the preceding disquisition, the equipoise rule finds application in this case, that is, if the inculpatory facts and circumstances are capable of two or more explanations, one of which is consistent with the innocence of the accused and the other consistent with his guilt, then the evidence does not fulfill the test of moral certainty, and is not sufficient to support a conviction.”

In this case, the inculpatory facts point to only one conclusion: appellants are guilty. As amplified in the discussion above, the Court agrees with the trial court that the guilt of the appellants was proven beyond reasonable doubt.

Ninth Issue:

Murder or Homicide?

16

The Information alleges three qualifying circumstances: treachery, evident premeditation and taking advantage of superior strength. If appreciated, any one of these will qualify the killing to murder. However, Appellants Tumbagahan and Cajilo posit that there was no treachery, reasoning that Ronie was not an unsuspecting victim, as he had been forewarned by Diosdado Venus of the presence of the appellants inside the restaurant, and there had been a chase prior to the killing. Further, they contend that abuse of superior strength is deemed absorbed in treachery, and that “the addition of abuse of superior strength to qualify the case to murder is nothing more than mere repetition—a legal chicanery, so to say. Similarly, where treachery is not proved, there can be no abuse of superior strength, vice-versa.”92

We partly agree.

Treachery exists when the malefactors employ means and methods that tend directly and specially to insure their execution without risk to themselves arising from the defense which the victims might make. The essence of treachery is the sudden and unexpected attack without the slightest provocation on the part of the person attacked.93 While we do not disregard the fact that the victim, together with his brother Vicente, was able to run towards a rice field, we still believe that treachery attended the killing.

In People vs. Landicho,94 we ruled that treachery might still be appreciated even when the victim was warned of danger to his person, for “what is decisive is that the execution of the attack made it impossible for the victim to defend himself or to retaliate.”

The appellants waited for Ronie to come out of the restaurant. All of them chased the victim and prevented him from seeking refuge either in the house of his sister Imelda or that of his brother Nelson. All of them carried firearms and flashlights. They fired their guns at the victim while he was on his knees with arms raised, manifesting his intention not to fight back.

We cannot appreciate the aggravating circumstance of abuse of superior strength, however, as we have consistently ruled that it is deemed absorbed in treachery.95

We also affirm the finding of the trial court that the prosecution failed to prove the attending circumstance of evident premeditation. To prove this aggravating circumstance, the prosecution must show the following: (1) the time when the offender determined to commit the crime; (2) an act manifestly indicating that the offender clung to his determination; and (3) a lapse of time, between the determination to commit the crime and the execution thereof, sufficient to allow the offender to reflect upon the consequences of his act.96 Nothing in the records shows how and when the plan to kill was hatched, or how much time had elapsed before it was carried out.

Tenth Issue:

Damages

The trial court awarded the following: (a) P50,000.00, as civil indemnity; (b) P6,000.00, as actual damages; and (c) P116,666.66, for lost earnings. In computing the latter, the trial court used the following formula:

“Total annual net income = 10% x total annual gross income

= .10 x P25,000.00

= P2,500.00

x x x x x x x x x

Loss of earning capacity of Ronie Elisan = 2/3 (90-20) x P2,500.00 = P116,666.66.”97

Consistent with jurisprudence, we affirm the ruling of the trial court awarding the amount of P50,000 as civil indemnity to the heirs of the victim.98

We cannot do the same to the award of actual damages and lost earnings, however. The award of actual damages has no basis, as no receipts were presented to substantiate the expenses allegedly incurred. An alleged pecuniary loss must be established by credible evidence before actual damages may be awarded.99 Similarly erroneous is the award for loss of earning capacity, which should be computed as follows:100

“2/3 x [80 - age of victim at the time of death] x [reasonable portion of the annual net income which would have been received as support by heirs]”

As testified to by Nelson Ilisan, the deceased had been earning an average of P100 daily or P3,000 monthly.101 From this monthly income must be deducted the reasonable amount of P1,000 representing the living and other necessary expenses of the deceased. Hence, the lost earnings of the deceased should be computed as follows:

= 2/3 x [80 - 22] x [P24,000]

= 2/3 x [58] x [P24,000]

= 2[P1,392,000]

3

= P2,784,000

3

= P928,000.

Eleventh Issue:

Aggravating and Mitigating Circumstances

Prior to the amendment of Section 248 of the Revised Penal Code,102 the imposable penalty for murder was reclusion temporal in its maximum period to death. In their Brief, Appellants Cajilo and Tumbagahan argue for the imposition of the lower penalty of reclusion temporal, contending that their filing of bail bonds/property bonds, before the order for their arrest was issued, should be treated as voluntary surrender.103

We cannot accept this contention. In the first place, it has no factual basis. The warrant for the arrest of herein appellants was issued on August 18, 1987,104 but appellants’ counsel filed the Urgent Motion for Bail only thereafter, on September 2, 1987.105 In the second place, appellants failed to prove the requisites for voluntary surrender, which are: (1) the offender has not been actually arrested; (2) the offender surrenders himself to a person in authority or to the latter’s agent; and

(3) the surrender is voluntary.106 The records reveal that a warrant of arrest was actually served on Tumbagahan and Cajilo107 on September 2, 1987 and that they were in fact detained.108

In view of the absence of any other aggravating or mitigating circumstance, the trial court correctly imposed reclusion perpetua.

WHEREFORE, the appeal is hereby DENIED and the assailed Decision is AFFIRMED with the following MODIFICATIONS: (1) the award of P6,000 as actual damages is DELETED, and (2) the award of loss of earning capacity is INCREASED to P928,000. Costs against appellants.

SO ORDERED.

Davide, Jr. (Chairman), Bellosillo, Vitug and Quisumbing, JJ., concur.

Appeal denied, judgment affirmed with modifications.

Notes.—The equipoise rule is applicable only where the evidence of the parties is evenly

17

balanced, not where the prosecution’s evidence is overwhelming and has not been overcome by the evidence of the defense. (People vs. Deunida, 231 SCRA 520 [1994])

Treachery cannot qualify the killing to murder when the victim was forewarned of the attack by the assailant, or when the attack was frontal, or the attack was not so sudden as to have caught the deceased completely unaware. (People vs. Sion, 277 SCRA 127 [1997])

——o0o——

G.R. No. 172172. February 24, 2009.*

SPS. ERNESTO V. YU and ELSIE ONG YU, petitioners, vs. BALTAZAR N. PACLEB, (Substituted by ANTONIETA S. PACLEB, LORNA PACLEB-GUERRERO, FLORENCIO C.

PACLEB, and MYRLA C. PACLEB), respondents.

Civil Procedure; Actions; The aim and object of an action determine its character. Whether a proceeding is in rem, or in personam, or quasi in rem for that matter, is determined by its nature and purpose, and by these only. A proceeding in personam is a proceeding to enforce personal rights and obligations brought against the person and is based on the jurisdiction of the person, although it may involve his right to, or the exercise of ownership of, specific property, or seek to compel him to control or dispose of it in accordance with the mandate of the court.—The settled rule is that the aim and object of an action determine its character. Whether a proceeding is in rem, or in personam, or quasi in rem for that matter, is determined by its nature and purpose, and by these only. A proceeding in personam is a proceeding to enforce personal rights and obligations brought against the person and is based on the jurisdiction of the person, although it may involve his right to, or the exercise of ownership of, specific property, or seek to compel him to control or dispose of it in accordance with the mandate of the court. The purpose of a proceeding in personam is to impose, through the judgment of a court, some responsibility or liability directly upon the person of the defendant. Of this character are suits to compel a defendant to specifically perform some act or actions to fasten a pecuniary liability on him. An action in personam is said to be one which has for its object a judgment against the person, as distinguished from a judgment against the propriety (sic) to determine its state. It has been held that an action in personam is a proceeding to enforce personal rights or obligations; such action is brought against the person. x x x On the other hand, a proceeding quasi in rem is one brought against persons seeking to subject the property of such persons to the discharge of the claims assailed. In an action quasi in rem, an individual is named as defendant and the purpose of the proceeding is to subject his interests therein to the obligation or loan burdening the property. Actions quasi in rem deal with the status, ownership or liability of a particular property but which are intended to operate on these questions only as between the particular parties to the proceedings and not to ascertain or cut off the rights or interests of all possible claimants. The judgments therein are binding only upon the parties who joined in the action.

Same; Same; An action for specific performance praying for the execution of a deed of sale in connection with an undertaking in a contract, such as the contract to sell, in this instance, is an action in personam.—We have held in an unbroken string of cases that an action for specific performance is an action in personam. In Cabutihan v. Landcenter Construction and Development Corporation, 383 SCRA 352 (2002), we ruled that an action for specific performance praying for the execution of a deed of sale in connection with an undertaking in a contract, such as the contract to sell, in this instance, is an action in personam.

Same; Same; Judgments; A judgment in personam, Civil Case No. 741-93 is binding only upon the parties properly impleaded therein and duly heard or given an opportunity to be heard.—Being a judgment in personam, Civil Case No. 741-93 is binding only upon the parties properly impleaded therein and duly heard or given an opportunity to be heard. Therefore, it cannot bind respondent since he was not a party therein. Neither can respondent be considered as privy thereto since his signature and that of his late first wife, Angelita Chan, were forged in the deed of sale.

PETITION for review on certiorari of the decision and resolution of the Court of Appeals.

The facts are stated in the opinion of the Court.

Esguerra & Blanco for petitioners.

PUNO, C.J.:

18

Before the Court is a Petition filed under Rule 45 of the Rules of Court assailing: (i) the Decision1 dated August 31, 2005 of the Court of Appeals in CA-G.R. CV No. 78629 setting aside the Decision2 dated December 27, 2002 of the Regional Trial Court in Civil Case No. 1325-96; and (ii) the Resolution3 dated April 3, 2006 of the Court of Appeals denying reconsideration of the said decision.

The facts are well established.

Respondent Baltazar N. Pacleb and his late first wife, Angelita Chan, are the registered owners of an 18,000-square meter parcel of land in Barrio Langcaan, Dasmariñas, Cavite, covered by Transfer Certificate of Title (TCT) No. T-1183754 (Langcaan Property).

In 1992, the Langcaan Property became the subject of three (3) documents purporting to transfer its ownership. On February 27, 1992, a Deed of Absolute Sale5 was entered into between Spouses Baltazar N. Pacleb and Angelita Chan and Rebecca Del Rosario. On May 7, 1992, a Deed of Absolute Sale6 was entered into between Rebecca Del Rosario and Ruperto L. Javier (Javier). On November 10, 1992, a Contract to Sell7 was entered into between Javier and petitioner Spouses Ernesto V. Yu and Elsie Ong Yu. In their contract, petitioner Spouses Yu agreed to pay Javier a total consideration of P900,000. Six hundred thousand pesos (P600,000) (consisting of P200,000 as previous payment and P400,000 to be paid upon execution of the contract) was acknowledged as received by Javier and P300,000 remained as balance. Javier undertook to deliver possession of the Langcaan Property and to sign a deed of absolute sale within thirty (30) days from execution of the contract.

All the aforementioned sales were not registered.

On April 23, 1993, petitioner Spouses Yu filed with the Regional Trial Court of Imus, Cavite, a Complaint8 for specific performance and damages against Javier, docketed as Civil Case No. 741-93, to compel the latter to deliver to them ownership and possession, as well as title to the Langcaan Property. In their Complaint, they alleged that Javier represented to them that the Langcaan Property was not tenanted. However, after they already paid P200,000 as initial payment and entered into an Agreement dated September 11, 1992 for the sale of the Langcaan Property, they discovered it was tenanted by Ramon C. Pacleb (Ramon).9 Petitioner spouses demanded the cancellation of their agreement and the return of their initial payment. Thereafter, petitioner spouses and Javier verified from Ramon if he was willing to vacate the property and the latter was agreeable. Javier then promised to make arrangements with Ramon to vacate the property and to pay the latter his disturbance compensation. Hence, they proceeded to enter into a Contract to Sell canceling the Agreement mentioned. However, Javier failed to comply with his obligations.

Javier did not appear in the proceedings and was declared in default. On September 8, 1994, the trial court rendered a Decision,10 the dispositive portion of which reads:

“WHEREFORE, judgment is hereby rendered for the plaintiff and against the defendant based on the sale of subject parcel of land to the former who is entitled thereby to the ownership and possession thereof from the said defendant who is further directed to pay damages of Thirty Thousand Pesos (P30,000.00) including attorney’s fees and expenses incurred by the plaintiff in this case as a consequence.

The defendant is further directed to deliver the certificate of title of the land to the plaintiff who is entitled to it as transferee and new owner thereof upon payment by the plaintiff of his balance of the purchase price in the sum of Three Hundred Thousand Pesos (P300,000.00) with legal interest from date.

SO ORDERED.”

The said Decision and its Certificate of Finality11 were annotated on TCT No. T-118375 as Entry No. 2676-7512 and Entry No. 2677-75,13 respectively.

On March 10, 1995, petitioner spouses and Ramon and the latter’s wife, Corazon Bodino, executed a “Kusangloob na Pagsasauli ng Lupang Sakahan at Pagpapahayag ng Pagtalikod sa Karapatan.”14 Under the said agreement, petitioner spouses paid Ramon the amount of P500,000 in exchange for the waiver of his tenancy rights over the Langcaan Property.

On October 12, 1995, respondent filed a Complaint15 for annulment of deed of sale and other documents arising from it, docketed as Civil Case No. 1199-95. He alleged that the deed of sale purportedly executed between him and his late first wife and Rebecca Del Rosario was spurious as their signatures thereon were forgeries. Respondent moved to have summons served upon Rebecca Del Rosario by publication since the latter’s address could not be found. The trial court, however, denied his motion.16 Respondent then moved to dismiss the case, and the trial court granted the motion in its Order17 dated April 11, 1996, dismissing the case without prejudice.

Meanwhile, on November 23, 1995, petitioner spouses filed an action for forcible entry against respondent with the Municipal Trial Court (MTC). They alleged that they had prior physical possession of the Langcaan Property through their trustee, Ramon, until the latter was ousted by respondent in September 1995. The MTC ruled in favor of petitioner spouses, which decision was affirmed by the Regional Trial Court.18 However, the Court of Appeals set aside the decisions of the lower courts and found that it was respondent who had prior physical possession of the property as shown by his payment of real estate taxes thereon.19

On May 29, 1996, respondent filed the instant case for removal of cloud from title with damages to cancel Entry No. 2676-75 and Entry No. 2677-75, the annotated Decision in Civil Case No. 741-93 and its Certificate of Finality, from the title of the Langcaan Property.20 Respondent alleged that the deed of sale between him and his late first wife and Rebecca Del Rosario, who is not known to them, could not have been possibly executed on February 27, 1992, the date appearing thereon. He alleged that on said date, he was residing in the United States21 and his late first wife, Angelita Chan, died twenty (20) years ago.22

On May 28, 1997, during the pendency of the instant case before the trial court, respondent died without having testified on the merits of his case. Hence, he was substituted by his surviving spouse, Antonieta S. Pacleb, and Lorna Pacleb-Guerrero, Florencio C. Pacleb and Myrla C. Pacleb representing the children with the first wife.23

On December 27, 2002, the trial court dismissed respondent’s case and held that petitioner spouses are purchasers in good faith.24 The trial court ratiocinated that the dismissal of respondent’s complaint for annulment of the successive sales at his instance “sealed the regularity of the purchase”25 by petitioner spouses and that he “in effect admits that the said sale…was valid and in order.”26 Further, the trial court held that the Decision in Civil Case No. 741-93 on petitioner spouses’ action for specific performance against Javier is already final and can no longer be altered. Accordingly, the trial court ordered the cancellation of TCT No. T-118375 in the name of respondent and the issuance of a new title in the name of petitioner spouses. The trial court also ordered the heirs of respondent and all persons claiming under them to surrender possession of the Langcaan Property to petitioner spouses.

On appeal by respondent, the Court of Appeals reversed and set aside the decision of the trial court.27 The Court of Appeals ruled that petitioner spouses are not purchasers in good faith and that the Decision in Civil Case No. 741-93 did not transfer ownership of the Langcaan Property to them. Accordingly, the appellate court ordered the cancellation of the annotation of the Decision in Civil Case No. 741-93 on the title of the Langcaan Property. The Court of Appeals denied reconsideration of said decision.28

Hence, this Petition.

Two issues are involved in the instant petition. The first is whether petitioner spouses are innocent purchasers for value and in good faith. The second is whether ownership over the Langcaan Property was properly vested in petitioner spouses by virtue of the Decision in Civil

19

Case No. 741-93.

Petitioner spouses argue that they are purchasers in good faith. Further, they contend that the Court of Appeals erred in finding that: “Ramon told him [Ernesto V. Yu] that the property is owned by his father, Baltazar, and that he is the mere caretaker thereof”29 since Ramon clarified that his father was the former owner of the Langcaan Property. In support of their stance, they cite the following testimony of petitioner Ernesto V. Yu:

Atty. Abalos: Mr. Witness, you testified during the direct that you acquired the subject property from one Ruperto Javier, when for the first time have you come to know Mr. Ruperto Javier?

A: I first came to know him in the year 1992 when he was accompanied by Mr. Kalagayan. He showed me some papers to the office.

Q: Do you know the exact date Mr. Witness?

A: I forgot the exact date, ma’am.

Q: More or less can you estimate what month?

A: Sometime in February or March 1992.

Q: When you said that the subject property was offered to you for sale, what did you do Mr. Witness, in preparation for a transaction?

A: I asked my lawyer Atty. Florencio Paredes to check and verify the Deed of Sale.

Q: And after Atty. Florencio Paredes verified the document you decided to buy the property?

A: No, ma’am. We visited the place.

Q: When was that?

A: I could not remember the exact date but I visited the place and I met the son, Ramon Pacleb. I went there in order to verify if the property is existing. When I verified that the property is existing Mr. Javier visited me again to follow-up what decision I have but I told him that I will wait for my lawyer’s advi[c]e.

Q: Mr. Witness, what particular instruction did you give to your lawyer?

A: To verify the title and the documents.

Court: Documents for the title?

A: Yes, Your Honor.

Atty. Abalos: When you were able to get the title in whose name the title was registered?

A: It was registered in the name of the older Pacleb.

Court: By the way Mr. Witness, when you said you met Ramon Pacleb the son of the owner of the property, was he residing there or he was (sic) just went there? When you visited the property did you find him to be residing in that property?

A: No, Your Honor.

Atty. Abalos: You mean to say Mr. Witness, you just met Mr. Ramon Pacleb in the place at the time you went there?

A: No, ma’am. He went to my office with Mr. Kalagayan. He was introduced to me at the Kelly Hardware. I do not know Mr. Ruperto Javier. He told me that there is a property that [is] tenanted and occupied by the son Ramon Pacleb after that I went with them to visit the place.

On (sic) there he introduced me [to] Mr. Ramon Pacleb the caretaker of the property and I told them that I will still look at the property and he gave me some documents and that (sic) documents I gave it to my lawyer for verification.

Q: You said that Mr. Ruperto Javier went to your office with Mr. Kalagayan, so the first time you visited the property you did not see Mr. Ramon Pacleb there?

A: No, ma’am. When I went there I met Ramon Pacleb the caretaker and he was the one who showed the place to us.

Q: Mr. Witness, since you visited the place you were able to see the allege[d] caretaker Mr. Ramon Pacleb, did you ask him regarding the property or the whereabouts of the registered owner, did you ask him?

A: When Ruperto introduced me to Mr. Ramon Pacleb he told me that he is the son of the owner and he is the caretaker and his father is in the States. He showed me the place, I verified and I saw the monuments and I told him I will come back to check the papers and if it is okay I will bring with me the surveyor.

Q: Could you estimate Mr. Witness, more or less what was the month when you were able to talk to Mr. Ramon Pacleb?

A: I am not sure but it was morning of February.

Q: So it was in February, Mr. Witness?

A: I am not sure if February or March.

Q: But definitely…

A: Before I purchased the property I checked the property.

Q: But that was definitely after Mr. Ruperto offered to you for sale the subject property?

x x x

Atty. Abalos: Okay, Mr. Witness, you said that you talked to Mr. Ramon Pacleb and he told you that his father is the owner of the property?

A: He told me that property is their former property and it was owned by them. Now, he is the tenant of the property.30 (Emphasis ours)

Petitioner spouses conclude that based on their personal inspection of the property and the representations of the registered tenant thereon, they had no reason to doubt the validity of the deeds of absolute sale since these were duly notarized. Consequently, the alleged forgery of Angelita Chan’s signature is of no moment since they had no notice of any claim or interest of some other person in the property despite their diligent inquiry.

We find petitioner spouses’ contentions without merit.

At the outset, we note that in petitioner Ernesto V. Yu’s testimony, he stated that he inspected the Langcaan Property and talked with the tenant, Ramon, before he purchased the same. However, in his Complaint for specific performance and damages which he filed against Javier, he alleged that it was only after he had entered into an Agreement for the sale of the property and his initial payment of P200,000 that he discovered that the property was indeed being tenanted by Ramon who lives in the said farm, viz.:

“8. Sometime on September 11, 1992, defendant came again to the Office of plaintiff reiterating his offer to sell said Lot No. 6853-D, containing an area of 18,000 square meters, at P75.00 per square meters (sic). Defendant manifested to the plaintiff that if his offer is acceptable to the plaintiff, he binds and obligates himself to pay the capital gains of previous transactions with

20

the BIR and register subject Lot No. 6853-D in his name (defendant). On these conditions, plaintiff accepted the offer and made [the] initial payment of Two Hundred Thousand Pesos (P200,000.00) to defendant by issuance and delivery of plaintiff’s personal check.

9. Sometime on September 11, 1992, plaintiff and defendant signed an AGREEMENT on the sale of Lot No. 6853-D of the subdivision plan (LRC) Psd-282604, containing an area of 18,000 square meters, more or less, located at Bo. Langcaan, Municipality of Dasmariñas, Province of Cavite, at a selling price of P75.00 per square meter. A xerox copy of this AGREEMENT signed by the parties thereto is hereto attached and marked as ANNEX “D” of this complaint.

10. Thereafter, however, plaintiff and defendant, with their surveyor discovered that subject Lot No. 6853-D offered for sale to the plaintiff is indeed being tenanted by one RAMON PACLEB who lives in the said farm.

11. In view of the foregoing developments, plaintiff informed defendant that he wanted the Agreement be cancelled and for the defendant to return the sum of TWO HUNDRED THOUSAND PESOS (P200,000.00).”31 (Emphasis supplied)

This inconsistency casts grave doubt as to whether petitioner spouses personally inspected the property before purchasing it.

More importantly, however, several facts should have put petitioner spouses on inquiry as to the alleged rights of their vendor, Javier, over the Langcaan Property.

First, it should be noted that the property remains to be registered in the name of respondent despite the two (2) Deeds of Absolute Sale32 purporting to transfer the Langcaan Property from respondent and his late first wife, Angelita Chan, to Rebecca Del Rosario then from the latter to Javier. Both deeds were not even annotated in the title of the Langcaan Property.

Second, a perusal of the two deeds of absolute sale reveals that they were executed only about two (2) months apart and that they contain identical provisions.

Third, it is undisputed that the Langcaan Property is in the possession of Ramon, the son of the registered owner. Regardless of the representations given by the latter, this bare fact alone should have made petitioner spouses suspicious as to the veracity of the alleged title of their vendor. Moreover, as noted by the Court of Appeals, petitioner spouses could have easily verified the true status of the Langcaan Property from Ramon’s wife, since the latter is their relative, as averred in paragraph 13 of their Answer in Civil Case No. 1199-95.33 The case law is well-settled, viz.:

“The law protects to a greater degree a purchaser who buys from the registered owner himself. Corollarily, it requires a higher degree of prudence from one who buys from a person who is not the registered owner, although the land object of the transaction is registered. While one who buys from the registered owner does not need to look behind the certificate of title, one who buys from one who is not the registered owner is expected to examine not only the certificate of title but all factual circumstances necessary for him to determine if there are any flaws in the title of the transferor, or in his capacity to transfer the land.

This Court has consistently applied the stricter rule when it comes to deciding the issue of good faith of one who buys from one who is not the registered owner, but who exhibits a certificate of title.”34 (Emphasis supplied)

Finally, as correctly pointed out by the Court of Appeals, the dismissal of Civil Case No. 1199-95 (the action to annul the successive sales of the property) cannot serve to validate the sale to petitioner spouses since the dismissal was ordered because Rebecca Del Rosario and Javier could no longer be found. Indeed, the dismissal was without prejudice.

Based on the foregoing, therefore, petitioner spouses cannot be considered as innocent

purchasers in good faith.

We now go to the second issue.

Petitioner spouses argue that the decision of the Regional Trial Court in Civil Case No. 741-93 as to the rightful owner of the Langcaan Property is conclusive and binding upon respondent even if the latter was not a party thereto since it involved the question of possession and ownership of real property, and is thus not merely an action in personam but an action quasi in rem.

In Domagas v. Jensen,35 we distinguished between actions in personam and actions quasi in rem.

“The settled rule is that the aim and object of an action determine its character. Whether a proceeding is in rem, or in personam, or quasi in rem for that matter, is determined by its nature and purpose, and by these only. A proceeding in personam is a proceeding to enforce personal rights and obligations brought against the person and is based on the jurisdiction of the person, although it may involve his right to, or the exercise of ownership of, specific property, or seek to compel him to control or dispose of it in accordance with the mandate of the court. The purpose of a proceeding in personam is to impose, through the judgment of a court, some responsibility or liability directly upon the person of the defendant. Of this character are suits to compel a defendant to specifically perform some act or actions to fasten a pecuniary liability on him. An action in personam is said to be one which has for its object a judgment against the person, as distinguished from a judgment against the propriety (sic) to determine its state. It has been held that an action in personam is a proceeding to enforce personal rights or obligations; such action is brought against the person.

x x x

On the other hand, a proceeding quasi in rem is one brought against persons seeking to subject the property of such persons to the discharge of the claims assailed. In an action quasi in rem, an individual is named as defendant and the purpose of the proceeding is to subject his interests therein to the obligation or loan burdening the property. Actions quasi in rem deal with the status, ownership or liability of a particular property but which are intended to operate on these questions only as between the particular parties to the proceedings and not to ascertain or cut off the rights or interests of all possible claimants. The judgments therein are binding only upon the parties who joined in the action.”

Civil Case No. 741-93 is an action for specific performance and damages filed by petitioner spouses against Javier to compel performance of the latter’s undertakings under their Contract to Sell. As correctly held by the Court of Appeals, its object is to compel Javier to accept the full payment of the purchase price, and to execute a deed of absolute sale over the Langcaan Property in their favor. The obligations of Javier under the contract to sell attach to him alone, and do not burden the Langcaan Property.36

We have held in an unbroken string of cases that an action for specific performance is an action in personam.37 In Cabutihan v. Landcenter Construction and Development Corporation,38 we ruled that an action for specific performance praying for the execution of a deed of sale in connection with an undertaking in a contract, such as the contract to sell, in this instance, is an action in personam.

Being a judgment in personam, Civil Case No. 741-93 is binding only upon the parties properly impleaded therein and duly heard or given an opportunity to be heard.39 Therefore, it cannot bind respondent since he was not a party therein. Neither can respondent be considered as privy thereto since his signature and that of his late first wife, Angelita Chan, were forged in the deed of sale.

All told, we affirm the ruling of the Court of Appeals finding that, as between respondent and

21

petitioner spouses, respondent has a better right over the Langcaan Property as the true owner thereof.

IN VIEW WHEREOF, the petition is DENIED. The decision of the Court of Appeals is affirmed. Costs against petitioners.

SO ORDERED.

G.R. No. 158407. January 17, 2005.*

FILOMENA DOMAGAS, petitioner, vs. VIVIAN LAYNO JENSEN, respondent.

Remedial Law; Actions; Whether a proceeding is in rem or in personam or quasi in rem for that matter, is determined by its nature and purpose and by these only; Actions for recovery of real property are in personam.—The settled rule is that the aim and object of an action determine its character. Whether a proceeding is in rem, or in personam, or quasi in rem for that matter, is determined by its nature and purpose, and by these only. A proceeding in personam is a proceeding to enforce personal rights and obligations brought against the person and is based on the jurisdiction of the person, although it may involve his right to, or the exercise of ownership of, specific property, or seek to compel him to control or dispose of it in accordance with the mandate of the court. The purpose of a proceeding in personam is to impose, through the judgment of a court, some responsibility or liability directly upon the person of the defendant.

Of this character are suits to compel a defendant to specifically perform some act or actions to fasten a pecuniary liability on him. An action in personam is said to be one which has for its object a judgment against the person, as distinguished from a judgment against the propriety to determine its state. It has been held that an action in personam is a proceeding to enforce personal rights or obligations; such action is brought against the person. As far as suits for injunctive relief are concerned, it is well-settled that it is an injunctive act in personam. In Combs v. Combs, the appellate court held that proceedings to enforce personal rights and obligations and in which personal judgments are rendered adjusting the rights and obligations between the affected parties is in personam. Actions for recovery of real property are in personam. On the other hand, a proceeding quasi in rem is one brought against persons seeking to subject the property of such persons to the discharge of the claims assailed. In an action quasi in rem, an individual is named as defendant and the purpose of the proceeding is to subject his interests therein to the obligation or loan burdening the property. Actions quasi in rem deal with the status, ownership or liability of a particular property but which are intended to operate on these questions only as between the particular parties to the proceedings and not to ascertain or cut off the rights or interests of all possible claimants. The judgments therein are binding only upon the parties who joined in the action.

Same; Same; An action for unlawful detainer or forcible entry is a real action and in personam.—From the aforementioned provisions of the Rules of Court and by its very nature and purpose, an action for unlawful detainer or forcible entry is a real action and in personam because the plaintiff seeks to enforce a personal obligation or liability on the defendant under Article 539 of the New Civil Code, for the latter to vacate the property subject of the action, restore physical possession thereof to the plaintiff, and pay actual damages by way of reasonable compensation for his use or occupation of the property.

Same; Same; Summons; Manner of Service of Summons in an Action in Personam.—In Asiavest Limited v. Court of Appeals, the Court had the occasion to state: In an action in personam, jurisdiction over the person of the defendant is necessary for the court to validly try and decide the case. Jurisdiction over the person of a resident defendant who does not voluntarily appear in court can be acquired by personal service of summons as provided under Section 7, Rule 14 of the Rules of Court. If he cannot be personally served with summons within a reasonable time, substituted service may be made in accordance with Section 8 of said Rule. If he is temporarily out of the country, any of the following modes of service may be resorted to: (a) substituted service set forth in Section 8; (2) personal service outside the country, with leave of court; (3) service by publication, also with leave of court; or (4) any other manner the court may deem sufficient.

Same; Same; Same; The statutory requirement of substituted service must be followed faithfully and strictly and any substituted service other than that authorized by the statute is rendered ineffective.—Strict compliance with the mode of service is required in order that the court may acquire

22

jurisdiction over the person of the defendant. The statutory requirement of substituted service must be followed faithfully and strictly and any substituted service other than that authorized by the statute is rendered ineffective.

Same; Same; Same; The term “dwelling house” or “residence” are generally held to refer to the time of service, hence it is not sufficient to leave the summons at the former’s dwelling house, residence or place of abode, as the case may be.—In Keister v. Navarro, the Court held that the term “dwelling house” or “residence” are generally held to refer to the time of service; hence, it is not sufficient to leave the summons at the former’s dwelling house, residence or place of abode, as the case may be. Dwelling house or residence refers to the place where the person named in the summons is living at the time when the service is made, even though he may be temporarily out of the country at the time. It is, thus, the service of the summons intended for the defendant that must be left with the person of suitable age and discretion residing in the house of the defendant. Compliance with the rules regarding the service of summons is as much important as the issue of due process as of jurisdiction.

Same; Same; Same; The service of the summons on a person at a place where he was a visitor is not considered to have been left at the residence or place or abode, where he has another place at which he ordinarily stays and to which he intends to return.—As gleaned from the said return, there is no showing that as of April 5, 1999, the house where the Sheriff found Oscar Layno was the latter’s residence or that of the respondent herein. Neither is there any showing that the Sheriff tried to ascertain where the residence of the respondent was on the said date. It turned out that the occupant of the house was a lessor, Eduardo Gonzales, and that Oscar Layno was in the premises only to collect the rentals from him. The service of the summons on a person at a place where he was a visitor is not considered to have been left at the residence or place or abode, where he has another place at which he ordinarily stays and to which he intends to return.

PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

Alejandro M. Villamil for petitioner.

Hermogenes S. Decano for respondent.

CALLEJO, SR., J.:

This is a petition for review on certiorari, under Rule 45 of the Rules of Court, of the Decision1 of the Court of Appeals (CA) in CA-G.R. CV No. 73995, which affirmed the Decision2 of the Regional Trial Court (RTC) of Dagupan City, Branch 44, in Civil Case No. 2000-0244-D, which declared null and void the decision of the Municipal Trial Court (MTC) of Calasiao, Pangasinan in Civil Case No. 879.3

The antecedent facts follow.

On February 19, 1999, petitioner Filomena Domagas filed a complaint for forcible entry against respondent Vivian Jensen before the MTC of Calasiao, Pangasinan. The petitioner alleged in her complaint that she was the registered owner of a parcel of land covered by Original Certificate of Title (OCT) No. P-30980, situated in Barangay Buenlag, Calasiao, Pangasinan, and with an area of 827 square meters. On January 9, 1999 the respondent, by means of force, strategy and stealth, gained entry into the petitioner’s property by excavating a portion thereof and thereafter constructing a fence thereon. As such, the petitioner was deprived of a 68-square meter portion of her property along the boundary line. The petitioner prayed that, after due proceedings, judgment be rendered in her favor, thus:

3. And, after trial, judgment be rendered:

a) DECLARING the writ of Preliminary Mandatory Injunction and Writ of Preliminary Injunction permanent;

b) ORDERING defendant, his representatives, agents and persons acting under her, to vacate the portion of the property of the plaintiff occupied by them and to desist from entering, excavating and constructing in the said property of the plaintiff described in paragraph 2 hereof and/or from disturbing the peaceful ownership and possession of the plaintiff over the said land, pending the final resolution of the instant action;

c) ORDERING defendant to pay reasonable rental at FIVE THOUSAND (P5,000.00) PESOS per month from January 9, 1999 up to the time she finally vacates and removes all constructions made by her in the property of the plaintiff and up to the time she finally restores the said property in the condition before her illegal entry, excavation and construction in the property of the plaintiff;

d) ORDERING defendant to pay actual damages in the amount of TWENTY THOUSAND (P20,000.00) PESOS; moral damages in the amount of TWENTY THOUSAND (P20,000.00) PESOS; attorney’s fees of THIRTY THOUSAND (P30,000.00) PESOS in retainer’s fee and ONE THOUSAND FIVE HUNDRED (P1,500.00) PESOS per court appearance fee; exemplary damages in the amount of TWENTY THOUSAND (P20,000.00) PESOS, and, costs.

Plaintiff further prays for other reliefs and remedies just and equitable in the premises.4

The case was docketed as Civil Case No. 879. The summons and the complaint were not served on the respondent because the latter was apparently out of the country. This was relayed to the Sheriff by her (the respondent’s) brother, Oscar Layno, who was then in the respondent’s house at No. 572 Barangay Buenlag, Calasiao, Pangasinan. The Sheriff left the summons and complaint with Oscar Layno, who received the same.5

Nonetheless, on May 17, 1999, the court rendered judgment ordering the respondent and all persons occupying the property for and in the latter’s behalf to vacate the disputed area and to pay monthly rentals therefor, including actual damages, attorney’s fees, and exemplary damages. The fallo of the decision reads:

1) Ordering the defendant, her representatives, agents and persons acting under her, to vacate the 68-square meters which she encroached upon;

2) Ordering the defendant to pay a monthly rental of P1,000.00 to the plaintiff;

3) To pay plaintiff actual damages of P20,000.00; attorney’s fees of P15,000.00 and exemplary damages in the amount of P20,000.00 plus the costs.

SO ORDERED.6

The respondent failed to appeal the decision. Consequently, a writ of execution was issued on September 27, 1999.

On August 16, 2000, the respondent filed a complaint against the petitioner before the RTC of Dagupan City for the annulment of the decision of the MTC in Civil Case No. 879, on the ground that due to the Sheriff’s failure to serve the complaint and summons on her because she was in Oslo, Norway, the MTC never acquired jurisdiction over her person. The respondent alleged therein that the service of the complaint and summons through substituted service on her brother, Oscar Layno, was improper because of the following: (a) when the complaint in Civil Case No. 879 was filed, she was not a resident of Barangay Buenlag, Calasiao, Pangasinan, but of Oslo, Norway, and although she owned the house where Oscar Layno received the summons and the complaint, she had then leased it to Eduardo Gonzales; (b) she was in Oslo, Norway, at the time the summons and the complaint were served; (c) her brother, Oscar Layno, was merely visiting her house in Barangay Buenlag and was not a resident nor an occupant thereof when he received the complaint and summons; and (d) Oscar Layno was never authorized to receive the summons and the complaint for and in her behalf.7

The respondent further alleged that the MTC had no jurisdiction over the subject matter of the

23

complaint in Civil Case No. 879 because the petitioner, the plaintiff therein, failed to show prior possession of the property. She further claimed that the alleged forcible entry was simply based on the result of the survey conducted by Geodetic Engineer Leonardo de Vera showing that the property of the respondent encroached on that of the petitioner.

The respondent filed a Manifestation dated August 31, 2000, and appended thereto the following: (a) a copy8 of her passport showing that she left the country on February 17, 1999; (b) a copy9 of the Contract of Lease dated November 24, 1997, executed by her and Eduardo D. Gonzales over her house for a period of three (3) years or until November 24, 2000; (c) her affidavit10 stating, inter alia, that she owned the house at Barangay Buenlag, Calasiao, Pangasinan, which she leased to Eduardo Gonzales; that she was married to Jarl Jensen, a citizen of Norway, on August 23, 1987 and had resided in Norway with her husband since 1993; that she arrived in the Philippines on December 31, 1998, but left on February 17, 1999; she returned to the Philippines on July 30, 2000 and learned, only then, of the complaint against her and the decision of the MTC in Civil Case No. 879; her brother Oscar Layno was not a resident of the house at Barangay Buenlag; and that she never received the complaint and summons in said case; (d) the affidavit11 of Oscar Layno declaring that sometime in April 1999, he was in the respondent’s house to collect rentals from Eduardo Gonzales; that the Sheriff arrived and served him with a copy of the summons and the complaint in Civil Case No. 879; and that he never informed the respondent of his receipt of the said summons and complaint; (e) an affidavit12 of Eduardo Gonzales stating that he leased the house of the respondent and resided thereat; the respondent was not a resident of the said house although he (Gonzales) allowed the respondent to occupy a room therein whenever she returned to the Philippines as a balikbayan; and that Oscar Layno was not residing therein but only collected the rentals.

In her answer to the complaint, the petitioner alleged that the respondent was a resident of Barangay Buenlag, Calasiao, Pangasinan and was the owner of the subject premises where Oscar Layno was when the Sheriff served the summons and complaint; that the service of the complaint and summons by substituted service on the respondent, the defendant in Civil Case No. 879, was proper since her brother Oscar Layno, a resident and registered voter of Barangay. Buenlag, Calasiao, Pangasinan, received the complaint and summons for and in her behalf.

The petitioner appended the following to her answer: (a) a copy13 of the Deed of Absolute Sale executed by Jose Layno in her favor, dated August 26, 1992, showing that the respondent was a resident of Barangay Buenlag, Calasiao, Pangasinan; (b) a Real Estate Mortgage14 executed by the respondent, dated February 9, 1999 showing that she was a resident of Barangay. Buenlag, Calasiao, Pangasinan; (c) the Joint Affidavit15 of Vicenta Peralta and Orlando Macalanda, both residents of Barangay Buenlag, Calasiao, Pangasinan, declaring that the respondent and her brother Oscar Layno were their neighbors; that the respondent and her brother had been residents of Barangay Buenlag since their childhood; that although the respondent left the country on several occasions, she returned to the Philippines and resided in her house at No. 572 located in the said barangay; and (d) the Voter’s Registration Record16 of Oscar Layno, approved on June 15, 1997.

After due proceedings, the trial court rendered a decision in favor of the respondent. The dispositive portion reads:

“WHEREFORE, judgment is rendered in favor of plaintiff Vivian Layno Jensen and against defendant Filomena Domagas, as follows:

1. The Decision of the Municipal Trial Court of Calasiao, Pangasinan in Civil Case No. 879, entitled Filomena Domagas versus Vivian Layno Jensen is declared null and void, for lack of jurisdiction over the person of the plaintiff and the subject matter.

2. Defendant Filomena Domagas is ordered to pay plaintiff, the following:

a.) Actual damages, representing litigation expenses in the amount of P50,000.00;

b.) Attorney’s fees in the amount of P50,000.00;

c.) Moral Damages in the amount of P50,000.00;

d.) Exemplary Damages in the amount of P50,000.00; and

e.) Costs of suit.

SO ORDERED.”17

The trial court declared that there was no valid service of the complaint and summons on the respondent, the defendant in Civil Case No. 879, considering that she left the Philippines on February 17, 1999 for Oslo, Norway, and her brother Oscar Layno was never authorized to receive the said complaint and summons for and in her behalf.

The petitioner appealed the decision to the CA which, on May 6, 2003, rendered judgment affirming the appealed decision with modifications. The CA ruled that the complaint in Civil Case No. 879 was one for ejectment, which is an action quasi in rem. The appellate court ruled that since the defendant therein was temporarily out of the country, the summons and the complaint should have been served via extraterritorial service under Section 15 in relation to Section 16, Rule 14 of the Rules of Court, which likewise requires prior leave of court. Considering that there was no prior leave of court and none of the modes of service prescribed by the Rules of Court was followed by the petitioner, the CA concluded that there was really no valid service of summons and complaint upon the respondent, the defendant in Civil Case No. 879.

Hence, the present petition.

The petitioner assails the decision of the CA, alleging that the appellate court erred in holding that the respondent’s complaint for ejectment is an action quasi in rem. The petitioner insists that the complaint for forcible entry is an action in personam; therefore, substituted service of the summons and complaint on the respondent, in accordance with Section 7, Rule 14 of the Rules of Court, is valid. The petitioner, likewise, asserts that Oscar Layno is a resident and a registered voter of Barangay Buenlag, Calasiao, Pangasinan; hence, the service of the complaint and summons on the respondent through him is valid.

The respondent, on the other hand, asserts that the action for forcible entry filed against her was an action quasi in rem, and that the applicable provision of the Rules of Court is Section 15 of Rule 14, which calls for extraterritorial service of summons.

The sole issue is whether or not there was a valid service of the summons and complaint in Civil Case No. 879 on the respondent herein who was the defendant in the said case. The resolution of the matter is anchored on the issue of whether or not the action of the petitioner in the MTC against the respondent herein is an action in personam or quasi in rem.

The ruling of the CA that the petitioner’s complaint for forcible entry of the petitioner against the respondent in Civil Case No. 879 is an action quasi in rem, is erroneous. The action of the petitioner for forcible entry is a real action and one in personam.

The settled rule is that the aim and object of an action determine its character.18 Whether a proceeding is in rem, or in personam, or quasi in rem for that matter, is determined by its nature and purpose, and by these only.19 A proceeding in personam is a proceeding to enforce personal rights and obligations brought against the person and is based on the jurisdiction of the person, although it may involve his right to, or the exercise of ownership of, specific property, or seek to compel him to control or dispose of it in accordance with the mandate of the court.20 The purpose of a proceeding in personam is to impose, through the judgment of a court, some responsibility or liability directly upon the person of the defendant.21 Of this character are suits

24

to compel a defendant to specifically perform some act or actions to fasten a pecuniary liability on him.22 An action in personam is said to be one which has for its object a judgment against the person, as distinguished from a judgment against the propriety to determine its state. It has been held that an action in personam is a proceeding to enforce personal rights or obligations; such action is brought against the person. As far as suits for injunctive relief are concerned, it is well-settled that it is an injunctive act in personam.23 In Combs v. Combs,24 the appellate court held that proceedings to enforce personal rights and obligations and in which personal judgments are rendered adjusting the rights and obligations between the affected parties is in personam. Actions for recovery of real property are in personam.25

On the other hand, a proceeding quasi in rem is one brought against persons seeking to subject the property of such persons to the discharge of the claims assailed.26 In an action quasi in rem, an individual is named as defendant and the purpose of the proceeding is to subject his interests therein to the obligation or loan burdening the property.27 Actions quasi in rem deal with the status, ownership or liability of a particular property but which are intended to operate on these questions only as between the particular parties to the proceedings and not to ascertain or cut off the rights or interests of all possible claimants. The judgments therein are binding only upon the parties who joined in the action.28

Section 1, Rule 70 of the Rules of Court provides:

Section 1. Who may institute proceedings, and when.—Subject to the provisions of the next succeeding section, a person deprived of the possession of any land or building in force, intimidation, threat, strategy, or stealth, or a lessor, vendor, vendee, or other person against whom the possession of any land or building is unlawfully withheld after the expiration or termination of the right to hold possession by virtue of any contract, express or implied, or the legal representatives or assigns of any such lessor, vendor, vendee, or other person, may, at any time within one (1) year after such unlawful deprivation or withholding of possession, bring an action in the proper Municipal Trial Court against the person or persons unlawfully withholding or depriving of possession, or any person or persons claiming under them, for the restitution of such possession, together with damages and costs.

Under Section 15, Rule 70 of the said Rule, the plaintiff may be granted a writ of preliminary prohibition or mandatory injunction:

Sec. 15. Preliminary Injunction.—The court may grant preliminary injunction, in accordance with the provisions of Rule 58 hereof, to prevent the defendant from committing further acts of dispossession against the plaintiff.

A possessor deprived of his possession through forcible entry or unlawful detainer may, within five (5) days from the filing of the complaint, present a motion in the action for forcible entry or unlawful detainer for the issuance of a writ of preliminary mandatory injunction to restore him in his possession. The court shall decide the motion within thirty (30) days from the filing thereof.

If, after proceedings, the trial court finds for the plaintiff, it shall then render judgment in his or her favor, thus:

Sec. 17. Judgment.—If, after trial, the court finds that the allegations of the complaint are true, it shall render judgment in favor of the plaintiff for the restitution of the premises, the sum justly due as arrears of rent or as reasonable compensation for the use and occupation of the premises, attorney’s fees and costs. If it finds that said allegations are not true, it shall render judgment for the defendant to recover his costs. If a counterclaim is established, the court shall render judgment for the sum found in arrears from either party and award costs as justice requires.

From the aforementioned provisions of the Rules of Court and by its very nature and purpose,

an action for unlawful detainer or forcible entry is a real action and in personam because the plaintiff seeks to enforce a personal obligation or liability on the defendant under Article 539 of the New Civil Code,29 for the latter to vacate the property subject of the action, restore physical possession thereof to the plaintiff, and pay actual damages by way of reasonable compensation for his use or occupation of the property.30

As gleaned from the averments of the petitioner’s complaint in the MTC, she sought a writ of a preliminary injunction from the MTC and prayed that the said writ be made permanent. Under its decision, the MTC ordered the defendant therein (the respondent in this case), to vacate the property and pay a “monthly rental” of P1,000.00 to the plaintiff therein (the petitioner in this case).

On the issue of whether the respondent was validly served with the summons and complaint by the Sheriff on April 5, 1999, the petitioner asserts that since her action of forcible entry against the respondent in Civil Case No. 879 was in personam, summons may be served on the respondent, by substituted service, through her brother, Oscar Layno, in accordance with Section 7, Rule 14 of the Rules of Court. The petitioner avers that Oscar Layno, a person of suitable age and discretion, was residing in the house of the respondent on April 5, 1999. She avers that the fact that the house was leased to and occupied by Eduardo Gonzales was of no moment. Moreover, the Sheriff is presumed to have performed his duty of properly serving the summons on the respondent by substituted service.

The contention of the petitioner has no merit.

In Asiavest Limited v. Court of Appeals,31 the Court had the occasion to state:

“In an action in personam, jurisdiction over the person of the defendant is necessary for the court to validly try and decide the case. Jurisdiction over the person of a resident defendant who does not voluntarily appear in court can be acquired by personal service of summons as provided under Section 7, Rule 14 of the Rules of Court. If he cannot be personally served with summons within a reasonable time, substituted service may be made in accordance with Section 8 of said Rule. If he is temporarily out of the country, any of the following modes of service may be resorted to: (a) substituted service set forth in Section 8; (2) personal service outside the country, with leave of court; (3) service by publication, also with leave of court; or (4) any other manner the court may deem sufficient.”32

Thus, any judgment of the court which has no jurisdiction over the person of the defendant is null and void.33

In the present case, the records show that the respondent, before and after his marriage to Jarl Jensen on August 23, 1987, remained a resident of Barangay Buenlag, Calasiao, Pangasinan. This can be gleaned from the Deed of Absolute Sale dated August 26, 1992 in which she declared that she was a resident of said barangay. Moreover, in the Real Estate Mortgage Contract dated February 9, 1999, ten days before the complaint in Civil Case No. 879 was filed, the petitioner categorically stated that she was a Filipino and a resident of Barangay Buenlag, Calasiao, Pangasinan. Considering that the respondent was in Oslo, Norway, having left the Philippines on February 17, 1999, the summons and complaint in Civil Case No. 879 may only be validly served on her through substituted service under Section 7, Rule 14 of the Rules of Court, which reads:

SEC. 7. Substituted service.—If, for justifiable causes, the defendant cannot be served within a reasonable time as provided in the preceding section, service may be effected (a) by leaving copies of the summons at the defendant’s residence with some person of suitable age and discretion then residing therein, or (b) by leaving the copies at defendant’s office or regular place of business with some competent person in charge thereof.

Strict compliance with the mode of service is required in order that the court may acquire

25

jurisdiction over the person of the defendant.34 The statutory requirement of substituted service must be followed faithfully and strictly and any substituted service other than that authorized by the statute is rendered ineffective.35 As the Court held in Hamilton v. Levy:36

. . . The pertinent facts and circumstances attendant to the service of summons must be stated in the proof of service or Officer’s Return; otherwise, any substituted service made in lieu of personal service cannot be upheld. This is necessary because substituted service is in derogation of the usual method of service. It is a method extraordinary in character and hence may be used only as prescribed and in the circumstances authorized by statute. Here, no such explanation was made. Failure to faithfully, strictly, and fully comply with the requirements of substituted service renders said service ineffective.37

In Keister v. Navarro,38 the Court held that the term “dwelling house” or “residence” are generally held to refer to the time of service; hence, it is not sufficient to leave the summons at the former’s dwelling house, residence or place of abode, as the case may be. Dwelling house or residence refers to the place where the person named in the summons is living at the time when the service is made, even though he may be temporarily out of the country at the time. It is, thus, the service of the summons intended for the defendant that must be left with the person of suitable age and discretion residing in the house of the defendant. Compliance with the rules regarding the service of summons is as much important as the issue of due process as of jurisdiction.39

The Return of Service filed by Sheriff Eduardo J. Abulencia on the service of summons reads:

Respectfully returned to the court of origin the herein summons and enclosures in the above-entitled case, the undersigned caused the service on April 5, 1999.

Defendant Vivian Layno Jensen is out of the country as per information from her brother Oscar Layno, however, copy of summons and enclosures was received by her brother Oscar Layno on April 5, 1999 as evidenced by his signature appearing in the original summons.

Calasiao, Pangasinan, April 6, 1999.

(Sgd.)

EDUARDO J. ABULENCIA

Junior Process Server40

As gleaned from the said return, there is no showing that as of April 5, 1999, the house where the Sheriff found Oscar Layno was the latter’s residence or that of the respondent herein. Neither is there any showing that the Sheriff tried to ascertain where the residence of the respondent was on the said date. It turned out that the occupant of the house was a lessor, Eduardo Gonzales, and that Oscar Layno was in the premises only to collect the rentals from him. The service of the summons on a person at a place where he was a visitor is not considered to have been left at the residence or place or abode, where he has another place at which he ordinarily stays and to which he intends to return.41

The Voter’s Registration Record of Oscar Layno dated June 15, 1997 wherein he declared that he was a resident of No. 572 Barangay Buenlag, Calasiao, Pangasinan, as well as the Joint Affidavit of Vicenta Peralta and Orlando Macasalda cannot prevail over the Contract of Lease the respondent had executed in favor of Eduardo Gonzales showing that the latter had resided and occupied the house of the respondent as lessee since November 24, 1997, and the affidavit of Eduardo Gonzales that Oscar Layno was not residing in the said house on April 5, 1999.

In sum, then, the respondent was not validly served with summons and the complaint in Civil Case No. 879 on April 5, 1999, by substituted service. Hence, the MTC failed to acquire jurisdiction over the person of the respondent; as such, the decision of the MTC in Civil Case No. 879 is null and void.

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit. No costs.

SO ORDERED.

Puno (Chairman), Austria-Martinez, Tinga and Chico-Nazario, JJ., concur.

26

G.R. No. 116111. January 21, 1999.*

REPUBLIC OF THE PHILIPPINES (Represented by the Acting Commissioner of Land Registration), petitioner, vs. COURT OF APPEALS, Spouses CATALINO SANTOS and THELMA BARRERO SANTOS, ST. JUDE’S ENTERPRISES, INC., Spouses DOMINGO CALAGUIAN and FELICIDAD CALAGUIAN, VIRGINIA DELA FUENTE and LUCY

MADAYA, respondents.

Estoppel; Doctrine of Equitable Estoppel; While the State cannot be put in estoppel by the mistakes or errors of its officials or agents, the government must not be allowed to deal dishonorably or capriciously with its citizens, and must not play an ignoble part or do a shabby thing; and subject to limitations, the doctrine of equitable estoppel may be invoked against public authorities as well as against private individuals.—The general rule is that the State cannot be put in estoppel by the mistakes or errors of its officials or agents. However, like all general rules, this is also subject to exceptions, viz.: “Estoppels against the public are little favored. They should not be invoked except in rare and unusual circumstances, and may not be invoked where they would operate to defeat the effective operation of a policy adopted to protect the public. They must be applied with circumspection and should be applied only in those special cases where the interests of justice clearly require it. Nevertheless, the government must not be allowed to deal dishonorably or capriciously with its citizens, and must not play an ignoble part or do a shabby thing; and subject to limitations x x x, the doctrine of equitable estoppel may be invoked against public authorities as well as against private individuals.”

Same; The real office of the equitable norm of estoppel is limited to supplying deficiency in the law, but it should not supplant positive law.—The Court further declared that “(t)he real office of the equitable norm of estoppel is limited to supply[ing] deficiency in the law, but it should not supplant positive law.”

Same; Land Registration; Land Titles; Laches; Words and Phrases; “Laches,” Defined; The Government’s prolonged inaction for nearly twenty years (starting from the issuance of titles in 1966 up to the filing of the Complaint in 1985), whereby it failed to correct and recover the alleged increase in the land area of a private party, militates against its cause, as it is tantamount to laches.—In the case at bar, for nearly twenty years (starting from the issuance of St. Jude’s titles in 1966 up to the filing of the Complaint in 1985), petitioner failed to correct and recover the alleged increase in the land area of St. Jude. Its prolonged inaction strongly militates against its cause, as it is tantamount to laches, which means “the failure or neglect, for an unreasonable and unexplained length of time, to do that which by exercising due diligence could or should have been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it.”

Same; Same; Same; Same; It is only fair and reasonable to apply the equitable principle of estoppel by laches against the government to avoid an injustice to the innocent purchasers for value.—The other private respondents—Spouses Santos, Spouses Calaguian, Dela Fuente and Madaya—bought such “expanded” lots in good faith, relying on the clean certificates of St. Jude, which had no notice of any flaw in them either. It is only fair and reasonable to apply the equitable principle of estoppel by laches against the government to avoid an injustice to the innocent purchasers for value.

Land Titles; Torrens System; Likewise time-settled is the doctrine that where innocent third persons, relying on the correctness of the certificate of title, acquire rights over the property, courts cannot disregard such rights and order the cancellation of the certificate—verily, all persons dealing with registered land may safely rely on the correctness of the certificate of title issued therefor, and the law or the courts do not oblige them to go behind the certificate in order to investigate again the true condition of the property.—Likewise time-settled is the doctrine that where innocent third persons, relying on the correctness of the certificate of title, acquire rights over the property, courts cannot disregard such rights and order the cancellation of the certificate. Such cancellation would impair public

confidence in the certificate of title, for everyone dealing with property registered under the Torrens system would have to inquire in every instance whether the title has been regularly issued or not. This would be contrary to the very purpose of the law, which is to stabilize land titles. Verily, all persons dealing with registered land may safely rely on the correctness of the certificate of title issued therefor, and the law or the courts do not oblige them to go behind the certificate in order to investigate again the true condition of the property. They are only charged with notice of the liens and encumbrances on the property that are noted on the certificate.

Same; Same; The main purpose of the Torrens System is to avoid possible conflicts of title to real estate and to facilitate transactions relative thereto by giving the public the right to rely upon the face of a Torrens Certificate of Title and to dispense with the need of inquiring further, except when the party concerned had actual knowledge of facts and circumstances that should impel a reasonably cautious man to make such further inquiry.—When private respondents-purchasers bought their lots from St. Jude, they did not have to go behind the titles thereto to verify their contents or search for hidden defects or inchoate rights that could defeat their rights to said lots. Although they were bound by liens and encumbrances annotated on the titles, private respondents-purchasers could not have had notice of defects that only an inquiry beyond the face of the titles could have satisfied. The rationale for this presumption has been stated thus: “The main purpose of the Torrens System is to avoid possible conflicts of title to real estate and to facilitate transactions relative thereto by giving the public the right to rely upon the face of a Torrens Certificate of Title and to dispense with the need of inquiring further, except when the party concerned had actual knowledge of facts and circumstances that should impel a reasonably cautious man to make such further inquiry (Pascua v. Capuyoc, 77 SCRA 78). Thus, where innocent third persons relying on the correctness of the certificate thus issued, acquire rights over the property, the court cannot disregard such rights (Director of Land v. Abache, et al., 73 Phil. 606).”

Same; Same; Purchasers in Good Faith; Words and Phrases; “Purchaser for Value” and “Good Faith,” Defined.—Petitioner never presented proof that the private respondents who had bought their lots from St. Jude were buyers in bad faith. Consequently, their claim of good faith prevails. A purchaser in good faith and for value is one who buys the property of another without notice that some other person has a right to or an interest in such property; and who pays a full and fair price for the same at the time of such purchase or before he or she has notice of the claims or interest of some other person. Good faith is the honest intention to abstain from taking any unconscientious advantage of another.

Same; Same; Words and Phrases; A figure in a certificate of title followed by the phrase “more or less” plainly means that the land area indicated is not precise.—It should be stressed that the total area of forty thousand six hundred twenty-three (40,623) square meters indicated on St. Jude’s original title (TCT No. 22660) was not an exact area. Such figure was followed by the phrase “more or less.” This plainly means that the land area indicated was not precise.

Same; Same; What defines a piece of titled property is not the numerical data indicated as the area of the land, but the boundaries or “metes and bounds” of the property specified in its technical description as enclosing it and showing its limits.—The discrepancy in the figures could have been caused by the inadvertence or the negligence of the surveyors. There is no proof, though, that the land area indicated was intentionally and fraudulently increased. The property originally registered was the same property that was subdivided. It is well-settled that what defines a piece of titled property is not the numerical data indicated as the area of the land, but the boundaries or “metes and bounds” of the property specified in its technical description as enclosing it and showing its limits.

Same; Same; The Torrens system is not a means of acquiring titles to lands—it is merely a system of registration of titles to lands.— The Torrens system is not a means of acquiring titles to lands; it is merely a system of registration of titles to lands. Consequently, land erroneously included in a Torrens certificate of title is not necessarily acquired by the holder of such certificate.

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Same; Same; Equity; In the interest of justice and equity, the titleholder may not be made to bear the unfavorable effect of the mistake or negligence of the State’s agents, in the absence of proof of his complicity in a fraud or of manifest damage to third persons.—But in the interest of justice and equity, neither may the titleholder be made to bear the unfavorable effect of the mistake or negligence of the State’s agents, in the absence of proof of his complicity in a fraud or of manifest damage to third persons. First, the real purpose of the Torrens system is to quiet title to land to put a stop forever to any question as to the legality of the title, except claims that were noted in the certificate at the time of the registration or that may arise subsequent thereto. Second, as we discussed earlier, estoppel by laches now bars petitioner from questioning private respondents’ titles to the subdivision lots. Third, it was never proven that Private Respondent St. Jude was a party to the fraud that led to the increase in the area of the property after its subdivision. Finally, because petitioner even failed to give sufficient proof of any error that might have been committed by its agents who had surveyed the property, the presumption of regularity in the performance of their functions must be respected. Otherwise, the integrity of the Torrens system, which petitioner purportedly aims to protect by filing this case, shall forever be sullied by the ineptitude and inefficiency of land registration officials, who are ordinarily presumed to have regularly performed their duties.

Same; Same; A Torrens certificate is evidence of an indefeasible title to property in favor of the person whose name appears thereon.— We cannot, therefore, adhere to the petitioner’s submission that, in filing this suit, it seeks to preserve the integrity of the Torrens system. To the contrary, it is rather evident from our foregoing discussion that petitioner’s action derogates the very integrity of the system. Time and again, we have said that a Torrens certificate is evidence of an indefeasible title to property in favor of the person whose name appears thereon.

VITUG, J., Concurring Opinion:

Land Titles; Torrens System; It is my understanding that the rule that the Court has here announced would not apply to a situation where the enlargement or expansion in area would result in an encroachment on or reduction of any area covered by a certificate of title previously issued.—The rule has been to the effect that a purchaser of registered land is not ordinarily required to explore further than what the record in the Registry indicates on its face in quest of any hidden defect or inchoate right which might adversely affect the buyer’s right over the property. Undoubtedly, to allow in the instant case the cancellation of the titles of herein private respondents would defeat rather than enhance the purpose and scheme of the Torrens System. It is my understanding, however, that the rule that the Court has here announced would not apply to a situation where the enlargement or expansion in area would result in an encroachment on or reduction of any area covered by a certificate of title previously issued. To rule otherwise would itself be to downgrade the integrity of the Torrens System.

PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

The Solicitor General for petitioners.

Public Attorney’s Office for Sps. Calaguian, V. dela Fuente and L. Madaya.

Simeon D. Canlas, for Catalino and Thelma Santos.

Cabrera & Associates for St. Jude Enterprises.

PANGANIBAN, J.:

Is the immunity of the government from laches and estoppel absolute? May it still recover the ownership of lots sold in good faith by a private developer to innocent purchasers for value, notwithstanding its approval of the subdivision plan and its issuance of separate individual certificates of title thereto?

The Case

These are the main questions raised in the Petition for Review before us, seeking to set aside the November 29, 1993 Decision1 of the Court of Appeals2 in CA-GR CV No. 34647. The assailed Decision affirmed the ruling3 of the Regional Trial Court of Caloocan City, Branch 125, in Civil Case No. C-111708, which dismissed petitioner’s Complaint for the cancellation of Transfer Certificates of Title (TCTs) to several lots in Caloocan City, issued in the name of private respondents.

In a Resolution4 dated July 7, 1994, the Court of Appeals denied the Republic’s motion for reconsideration.

The Facts

The facts of the case are not disputed. The trial court’s summary, which was adopted by the Court of Appeals, is reproduced below:

“Defendant St. Jude’s Enterprises, Inc. is the registered owner of a parcel of land known as Lot 865-B-1 of the subdivision plan (LRC) PSD-52368, being a portion of Lot 865-B located in Caloocan City containing an area of 40,623 square meters. For Lot 865-B-1 defendant St. Jude’s Enterprises, Inc. was issued TCT No. 22660 on July 25, 1966.

“Sometime in March 1966 defendant St. Judge’s Enterprises, Inc. subdivided Lot No. 865-B-1 under subdivision plan (LRC) PSD-55643 and as a result thereof the Register of Deeds of Caloocan City cancelled TCT No. 22660 and in lieu thereof issued Certificates of Title Nos. 23967 up to 24068 inclusive, all in the name of defendant St. Judge’s Enterprises, Inc. The subdivision of lot 865-B-1 [which was] covered [b] TCT No. 22660 was later found to have expanded and enlarged from its original area of 40,523 square meters to 42,044 square meters or an increase of 1,421 square meters. This expansion or increase in area was confirmed by the Land Registration Commission [to have been made] on the northern portion of Lot 865-B-1.

“Subsequently, defendant St. Judge’s Enterprises, Inc. sold the lots covered by TCT Nos. 24013 and 24014 to defendant Sps. Catalino Santos and Thelma Barreto Santos[;] TCT No. 24019 to defendant Sps. Domingo Calaguian and Felicidad de Jesus[;] TCT No. 24022 to defendant Virginia dela Fuente[;] and TCT No. 2402[3] to defendant Lucy Madaya. Accordingly, these titles were cancelled and said defendants were issued the following: TCT No. C-43319 issued in the name of Sps. Santos containing an area of 344 square meters[;] TCT No. 55513 issued in the name of defendants Sps. Calaguian containing an area of 344 square meters[;] TCT No. 13309 issued in the name of Sps. Santos[;] TCT No. 24069 issued in the name of Virginia dela Fuente containing an area of 350 square meters[;] and TCT No. C-46648 issued in the name of defendant Lucy Madaya with an area of 350 square meters.”5

“[On January 29, 1985, then Solicitor General Estelito Mendoza filed] an action seeking x x x the annulment and cancellation of Transfer Certificates of Title (TCT) Nos. 24015, 24017, 24018, 24020, 24021, 24024, 24025 and 24068 issued in the name of defendant St. Jude’s Enterprises, Inc.[;] Transfer Certificates of Title Nos. 13309 and C-43319 both registered in the name of Sps. Catalino Santos and Thelma B. Santos[;] TCT No. 55513 registered in the name of Sps. Domingo Calaguian and Felicidad de Jesus[;] TCT No. 24069 registered in the name of Virginia dela Fuente[;] and TCT No. C-46648 registered in the name of Lucy Madaya, principally on the ground that said Certificates of Title were issued on the strength of [a] null and void subdivision plan (LRC) PSD-55643 which expanded the original area of TCT No. 22660 in the name of St. Jude’s Enterprises, Inc. from 40,623 square meters to 42,044 square meters upon its subdivision.

“Defendants Virginia dela Fuente and Lucy Madaya were declared in default for failure to file their respective answers within the reglementary period.

“Defendants Sps. Catalino Santos and Thelma Barreto Santos, St. Jude’s Enterprises, Inc. and Sps. Domingo Calaguian and Felicidad Calaguian filed separate answers to the complaint.

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Defendants Sps. Domingo Calaguian and Sps. Catalino Santos interposed defenses, among others, that they acquired the lots in question in good faith from their former owner, defendant St. Jude’s Enterprises, Inc. and for value and that the titles issued to the said defendants were rendered incontrovertible, conclusive and indefeasible after one year from the date of the issuance of the titles by the Register of Deeds of Caloocan City.

“On the other hand, defendant St. Jude’s Enterprises, Inc. interposed defenses, among others, that the cause of action of plaintiff is barred by prior judgment; that the subdivision plan submitted having been approved by the LRC, the government is now in estoppel to question the approved subdivision plan; and the plaintiff’s allegation that the area of the subdivision increased by 1,421 square meters is without any basis in fact and in law.”6

Ruling of the Trial Court

On April 30, 1991, the trial court dismissed the Complaint.7 While the plaintiff sufficiently proved the enlargement or expansion of the area of the disputed property, it presented no proof that Respondent St. Jude Enterprises, Inc. (“St. Jude”) had committed fraud when it submitted the subdivision plan to the Land Registration Commission (LRC) for approval. Because the plan was presumed to have been subjected to investigation, study and verification by the LRC, there was no one to blame for the increase in the area “but the plaintiff[,] for having allowed and approved the subdivision plan.” Thus, the court concluded, the government was already “in estoppel to question the approved subdivision plan.”

The trial court also took into account the “absence of complaints from adjoining owners whose supposed lots [were] encroached upon by the defendants,” as well as the fact that an adjoining owner had categorically stated that there was no such encroachment. Finding that Spouses Santos, Spouses Calaguian, Dela Fuente and Madaya had bought their respective lots from St. Jude for value and in good faith, the court held that their titles could no longer be questioned, because under the Torrens system, such titles had become absolute and irrevocable. As regards the Republic’s allegation that it had filed the case to protect the integrity of the said system, the court said:

“x x x [S]ustaining the position taken by the government would certainly lead to disastrous consequences. Buyers in good faith would lose their titles. Adjoining owners who were deprived of a portion of their lot would be forced to accept the portion of the property allegedly encroached upon. Actions for recovery will be filed right and left[;] thus instead of preserving the integrity of the Torrens System it would certainly cause chaos rather than stability. Finally, if only to strengthen the Torrens System and in the interest of justice, the boundaries of the affected properties of the defendants should not be disturbed and the status quo should be maintained.”8

The solicitor general appealed the trial court’s Decision to the Court of Appeals.

Ruling of the Appellate Court

Citing several cases9 upholding the indefeasibility of titles issued under the Torrens system, the appellate court affirmed the trial court. It berated petitioner for bringing the suit only after nineteen (19) years had passed since the issuance of St. Jude’s title and the approval of the subdivision plan. The pertinent portion of the assailed Decision reads:10

“x x x Rather than make the Torrens system reliable and stable, [its] act of filing the instant suit rocks the system, as it gives the impression to Torrens title holders, like appellees, that their titles to properties can be questioned by the same authority who had approved the same even after a long period of time. In that case, no Torrens title holder shall be at peace with the ownership and possession of his land, for the Commission of Land Registration can question his title any time it makes a finding unfavorable to said Torrens title holder.”

Undaunted, petitioner seeks a review by this Court.11

The Issues

In this petition, the Republic raises the following issues for our resolution:12

4 “1. Whether or not the government is estopped from questioning the approved subdivision plan which expanded the areas covered by the transfer certificates of title in question;

5 “2. Whether or not the Court of Appeals erred when it did not consider the Torrens System as merely a means of registering title to land;

6 “3. Whether or not the Court of Appeals erred when it failed to consider that petitioner’s complaint before the lower court was filed to preserve the integrity of the Torrens System.”

We shall discuss the second and third questions together. Hence, the issues shall be (1) the applicability of estoppel against the State and (2) the Torrens system.

The Court’s Ruling

The petition is bereft of merit.

First Issue: Estoppel Against the Government

The general rule is that the State cannot be put in estoppel by the mistakes or errors of its officials or agents.13 However, like all general rules, this is also subject to exceptions, viz.:14

“Estoppels against the public are little favored. They should not be invoked except in rare and unusual circumstances, and may not be invoked where they would operate to defeat the effective operation of a policy adopted to protect the public. They must be applied with circumspection and should be applied only in those special cases where the interests of justice clearly require it. Nevertheless, the government must not be allowed to deal dishonorably or capriciously with its citizens, and must not play an ignoble part or do a shabby thing; and subject to limitations x x x, the doctrine of equitable estoppel may be invoked against public authorities as well as against private individuals.”

In Republic v. Sandiganbayan,15 the government, in its effort to recover ill-gotten wealth, tried to skirt the application of estoppel against it by invoking a specific constitutional provision.16 The Court countered:17

“We agree with the statement that the State is immune from estoppel, but this concept is understood to refer to acts and mistakes of its officials especially those which are irregular (Sharp International Marketing vs. Court of Appeals, 201 SCRA 299; 306 [1991]; Republic v. Aquino, 120 SCRA 186 [1983]), which peculiar circumstances are absent in the case at bar. Although the State’s right of action to recover ill-gotten wealth is not vulnerable to estoppel[;] it is non sequitur to suggest that a contract, freely and in good faith executed between the parties thereto is susceptible to disturbance ad infinitum. A different interpretation will lead to the absurd scenario of permitting a party to unilaterally jettison a compromise agreement which is supposed to have the authority of res judicata (Article 2037, New Civil Code), and like any other contract, has the force of law between parties thereto (Article 1159, New Civil Code; Hernaez vs. Kao, 17 SCRA 296 [1966]; 6 Padilla, Civil Code Annotated, 7th ed., 1987, p. 711; 3 Aquino, Civil Code, 1990 ed., p. 463). x x x.”

The Court further declared that “(t)he real office of the equitable norm of estoppel is limited to supply[ing] deficiency in the law, but it should not supplant positive law.”18

In the case at bar, for nearly twenty years (starting from the issuance of St. Jude’s titles in 1966 up to the filing of the Complaint in 1985), petitioner failed to correct and recover the alleged increase in the land area of St. Jude. Its prolonged inaction strongly militates against its cause, as it is tantamount to laches, which means “the failure or neglect, for an unreasonable and

29

unexplained length of time, to do that which by exercising due diligence could or should have within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it.”19

The Court notes private respondents’ argument that, prior to the subdivision, the surveyors erred in the original survey of the whole tract of land covered by TCT No. 22660, so that less than the actual land area was indicated on the title. Otherwise, the adjoining owners would have complained upon the partition of the land in accordance with the LRC-approved subdivision plan. As it is, Florencio Quintos, the owner of the 9,146 square-meter Quintos Village adjoining the northern portion of St. Jude’s property (the portion allegedly “expanded”), even attested on August 16, 1973 that “there [was] no overlapping of boundaries as per my approved plan (LRC) PSD 147766 dated September 8, 1971.”20 None of the other neighboring owners ever complained against St. Jude or the purchasers of its property. It is clear, therefore, that there was no actual damage to third persons caused by the resurvey and the subdivision.

Significantly, the other private respondents—Spouses Santos, Spouses Calaguian, Dela Fuente and Madaya—bought such “expanded” lots in good faith, relying on the clean certificates of St. Jude, which had no notice of any flaw in them either. It is only fair and reasonable to apply the equitable principle of estoppel by laches against the government to avoid an injustice21 to the innocent purchasers for value.

Likewise time-settled is the doctrine that where innocent third persons, relying on the correctness of the certificate of title, acquire rights over the property, courts cannot disregard such rights and order the cancellation of the certificate. Such cancellation would impair public confidence in the certificate of title, for everyone dealing with property registered under the Torrens system would have to inquire in every instance whether the title has been regularly issued or not. This would be contrary to the very purpose of the law, which is to stabilize land titles. Verily, all persons dealing with registered land may safely rely on the correctness of the certificate of title issued therefor, and the law or the courts do not oblige them to go behind the certificate in order to investigate again the true condition of the property. They are only charged with notice of the liens and encumbrances on the property that are noted on the certificate.22

When private respondents-purchasers bought their lots from St. Jude, they did not have to go behind the titles thereto to verify their contents or search for hidden defects or inchoate rights that could defeat their rights to said lots. Although they were bound by liens and encumbrances annotated on the titles, private respondents-purchasers could not have had notice of defects that only an inquiry beyond the face of the titles could have satisfied.23 The rationale for this presumption has been stated thus:24

“The main purpose of the Torrens System is to avoid possible conflicts of title to real estate and to facilitate transactions relative thereto by giving the public the right to rely upon the face of a Torrens Certificate of Title and to dispense with the need of inquiring further, except when the party concerned had actual knowledge of facts and circumstances that should impel a reasonably cautious man to make such further inquiry (Pascua v. Capuyoc, 77 SCRA 78). Thus, where innocent third persons relying on the correctness of the certificate thus issued, acquire rights over the property, the court cannot disregard such rights (Director of Land v. Abache, et al., 73 Phil. 606).”

In another case,25 this Court further said:

“The Torrens System was adopted in this country because it was believed to be the most effective measure to guarantee the integrity of land titles and to protect their indefeasibility once the claim of ownership is established and recognized. If a person purchases a piece of land on the assurance that the seller’s title thereto is valid, he should not run the risk of being told later that his acquisition was ineffectual after all. This would not only be unfair to him. What is worse is that if this were permitted, public confidence in the system would be eroded and land transactions would have to be attended by complicated and not necessarily conclusive

investigations and proof of ownership. The further consequence would be that land conflicts could be even more abrasive, if not even violent. The Government, recognizing the worthy purposes of the Torrens System, should be the first to accept the validity of titles issued thereunder once the conditions laid down by the law are satisfied.” [Italics supplied.]

Petitioner never presented proof that the private respondents who had bought their lots from St. Jude were buyers in bad faith. Consequently, their claim of good faith prevails. A purchaser in good faith and for value is one who buys the property of another without notice that some other person has a right to or an interest in such property; and who pays a full and fair price for the same at the time of such purchase or before he or she has notice of the claims or interest of some other person.26 Good faith is the honest intention to abstain from taking any unconscientious advantage of another.27

Furthermore, it should be stressed that the total area of forty thousand six hundred twenty-three (40,623) square meters indicated on St. Jude’s original title (TCT No. 22660) was not an exact area. Such figure was followed by the phrase “more or less.” This plainly means that the land area indicated was not precise. Atty. Antonio H. Noblejas, who became the counsel of St. Jude subsequent to his tenure as Land Registration Commissioner, offers a sensible explanation. In his letter28 to the LRC dated November 8, 1982, he gave the following information:

1 “a. Records show that our client owned a large tract of land situated in an area cutting the boundary of Quezon City and Caloocan City, then known as Lot 865-B, Psd-60608, and described in T.C.T. No. 100412, containing an area of 96,931 sq. meters, more or less.

2 b. It will be noted that on the northern portion of this Lot 865-B, Psd-60608, is x x x Lot 865-A, Psd-60608, which means that at a previous point of time, these 2 lots composed one whole tract of land.

3 c. On December 23, 1965, Lot 865-B, Psd-60608, was subdivided into 2 lots, denominated as Lot 865-B-1, with an area of 40,622 sq. meters, more or less, on the Caloocan side, and Lot 865-B-2, with an area of 56,308 sq. meters, more or less, on the Quezon City side, under Plan (LRC) Psd-52368.

4 d. On March 1-10, 1966, Lot 865-B-1, Psd-52368, then covered by T.C.T. No. N-22660, was subdivided into residential lots under Plan (LRC) Psd-55643, with a total area of 42,044 sq. meters, more or less.

5 e. It will be noted that Lot 865-B, Psd-60608, covered by T.C.T. No. 100412, contained an area of 96,931 sq. meters, more or less, but when subdivided under Plan (LRC) Psd-52368, into 2 lots, its total area shrank by 1 sq. meter, to wit:

Lot 865-B-1, Psd-52368 = 40,622 sq. meters

Lot 865-B-2, Psd-52368 = 53,300 ”

96,930 sq. meters

6 f. There is no allegation whatever in the Perez report that there was error in laying out the metes and bounds of Lot 865-B-1 in Plan (LRC) Psd-55643, as specified in the Technical Description of the said lot set forth in T.C.T. No. N-22660 covering the same. There is likewise no allegation, on the contrary there is confirmation from the boundary owner on the northern side, Mr. Florencio Quintos, that there is no overlapping of boundaries on the northern side of Lot 865-B-1, Psd-55643.

7 g. We respectfully submit that the area of 42,044 sq. meters stated in Plan (LRC) Psd-55643 as the size of Lot 865-B-a, is the more accurate area, confirmed by the Perez report ‘as per surveyor[’]s findings on the ground,’ which rectifies previous surveyor’s error in computing its area as 40,622 sq. meters in Plan (LRC) Psd-52368, which is about 3.5%

30

tolerable error (1,422 divided by 40,622 = .035).

8 h. It is well settled that in the identification of a parcel of land covered by a certificate of title, what is controlling are the metes and bounds as set forth in its Technical Description and not the area stated therein, which is merely an approximation as indicated in the ‘more or less’ phrase placed after the number of square meters.

9 i. There is thus no unauthorized expansion of the survey occasioned by the subdivision of Lot 865-B-1 under Plan (LRC) Psd-55643; consequently, LRC Circular No. 167, Series of 1967, finds no application thereto, as to bar the processing and registration in due course of transactions involving the subdivision lots of our client, subject hereof. This is apart from the fact that LRC Circular No. 167 has not been implemented by the Register of Deeds of Caloocan City or any proper government authority since its issuance in 1967, and that, in the interest of justice and equity, its restrictive and oppressive effect on transactions over certificates of titles of subdivisions that allegedly expanded on re-surveys, cannot be allowed to continue indefinitely.” (Italics supplied.)

The discrepancy in the figures could have been caused by the inadvertence or the negligence of the surveyors. There is no proof, though, that the land area indicated was intentionally and fraudulently increased. The property originally registered was the same property that was subdivided. It is well-settled that what defines a piece of titled property is not the numerical data indicated as the area of the land, but the boundaries or “metes and bounds” of the property specified in its technical description as enclosing it and showing its limits.29

Petitioner miserably failed to prove any fraud, either on the part of Private Respondent St. Jude or on the part of land registration officials who had approved the subdivision plan and issued the questioned TCTs. Other than its peremptory statement in the Complaint that the “expansion” of the area was “motivated by bad faith with intent to defraud, to the damage and prejudice of the government and of public interest,” petitioner did not allege specifically how fraud was perpetrated to cause an increase in the actual land size indicated. Nor was any evidence proffered to substantiate the allegation. That the land registration authorities supposedly erred or committed an irregularity was merely a conclusion drawn from the “table survey” showing that the aggregate area of the subdivision lots exceeded the area indicated on the title of the property before its subdivision. Fraud cannot be presumed, and the failure of petitioner to prove it defeats its own cause.

Second Issue: The Torrens System

True, the Torrens system is not a means of acquiring titles to lands; it is merely a system of registration of titles to lands.30 Consequently, land erroneously included in a Torrens certificate of title is not necessarily acquired by the holder of such certificate.31

But in the interest of justice and equity, neither may the titleholder be made to bear the unfavorable effect of the mistake or negligence of the State’s agents, in the absence of proof of his complicity in a fraud or of manifest damage to third persons. First, the real purpose of the Torrens system is to quiet title to land to put a stop forever to any question as to the legality of the title, except claims that were noted in the certificate at the time of the registration or that may arise subsequent thereto.32 Second, as we discussed earlier, estoppel by laches now bars petitioner from questioning private respondents’ titles to the subdivision lots. Third, it was never proven that Private Respondent St. Jude was a party to the fraud that led to the increase in the area of the property after its subdivision. Finally, because petitioner even failed to give sufficient proof of any error that might have been committed by its agents who had surveyed the property, the presumption of regularity in the performance of their functions must be respected. Otherwise, the integrity of the Torrens system, which petitioner purportedly aims to protect by filing this case, shall forever be sullied by the ineptitude and inefficiency of land registration officials, who are ordinarily presumed to have regularly performed their duties.33

We cannot, therefore, adhere to the petitioner’s submission that, in filing this suit, it seeks to preserve the integrity of the Torrens system. To the contrary, it is rather evident from our foregoing discussion that petitioner’s action derogates the very integrity of the system. Time and again, we have said that a Torrens certificate is evidence of an indefeasible title to property in favor of the person whose name appears thereon.

WHEREFORE, the petition is hereby DENIED and the assailed Decision is AFFIRMED.

SO ORDERED.

Romero (Chairman) and Gonzaga-Reyes, JJ., concur.

Vitug, J., Please see Concurring Opinion.

Purisima, J., I join J. Vitug’s concurring opinion.

CONCURRING OPINION

VITUG, J.:

The rule has been to the effect that a purchaser of registered land is not ordinarily required to explore further than what the record in the Registry indicates on its face in quest of any hidden defect or inchoate right which might adversely affect the buyer’s right over the property.1 Undoubtedly, to allow in the instant case the cancellation of the titles of herein private respondents would defeat rather than enhance the purpose and scheme of the Torrens System. It is my understanding, however, that the rule that the Court has here announced would not apply to a situation where the enlargement or expansion in area would result in an encroachment on or reduction of any area covered by a certificate of title previously issued. To rule otherwise would itself be to downgrade the integrity of the Torrens System.

Petition denied, judgment affirmed.

Note.—The principle of equitable estoppel states that where one or two innocent persons must suffer a loss, he who by his conduct made the loss possible must bear it. (Veloso vs. Court of Appeals, 260 SCRA 593 [1996])

——o0o——

31

G.R. No. 126603. June 29, 1998.*

ESTRELLITA J. TAMANO, petitioner, vs. HON. RODOLFO A. ORTIZ, Presiding Judge, RTC-Br. 89, Quezon City, HAJA PUTRI ZORAYDA A. TAMANO, ADIB A. TAMANO and the HON.

COURT OF APPEALS, respondents.

Marriage; Husband and Wife; Actions; Declaration of Nullity of Marriage; Jurisdiction; Venue; Personal actions, such as one for declaration of nullity of marriage, may be commenced and tried where the plaintiff or any of the principal plaintiffs resides, or where the defendant or any of the principal defendants resides, at the election of the plaintiff; What determines the nature of an action and correspondingly the court which has jurisdiction over it are the allegations made by the plaintiff.—Under The Judiciary Reorganization Act of 1980, Regional Trial Courts have jurisdiction over all actions involving the contract of marriage and marital relations. Personal actions, such as the instant complaint for declaration of nullity of marriage, may be commenced and tried where the plaintiff or any of the principal plaintiffs resides, or where the defendant or any of the principal defendants resides, at the election of the plaintiff. There should be no question by now that what determines the nature of an action and correspondingly the court which has jurisdiction over it are the allegations made by the plaintiff in this case. In the complaint for declaration of nullity of marriage filed by private respondents herein, it was alleged that Estrellita and Tamano were married in accordance with the provisions of the Civil Code. Never was it mentioned that Estrellita and Tamano were married under Muslim laws or P.D. No. 1083. Interestingly, Estrellita never stated in her Motion to Dismiss that she and Tamano were married under Muslim laws. That she was in fact married to Tamano under Muslim laws was first mentioned only in her Motion for Reconsideration.

Same; Same; Same; Same; Same; Pleadings and Practice; A court’s jurisdiction cannot be made to depend upon defenses set up in the answer, in a motion to dismiss, or in a motion for reconsideration, but only upon the allegations of the complaint.—Nevertheless, the Regional Trial Court was not divested of jurisdiction to hear and try the instant case despite the allegation in the Motion for Reconsideration that Estrellita and Tamano were likewise married in Muslim rites. This is because a court’s jurisdiction cannot be made to depend upon defenses set up in the answer, in a motion to dismiss, or in a motion for reconsideration, but only upon the allegations of the complaint. Jurisdiction over the subject matter of a case is determined from the allegations of the complaint as the latter comprises a concise statement of the ultimate facts constituting the plaintiff’s causes of action.

Same; Same; Same; Same; Same; Same; Where the complaint alleges that the couple were married in accordance with the Civil Code, it is the said Code that is applicable in a complaint for declaration of nullity of marriage.—As alleged in the complaint, petitioner and Tamano were married in accordance with the Civil Code. Hence, contrary to the position of petitioner, the Civil Code is applicable in the instant case. Assuming that indeed petitioner and Tamano were likewise married under Muslim laws, the same would still fall under the general original jurisdiction of the Regional Trial Courts.

Same; Same; Same; Same; Same; Code of Muslim Personal Laws (Presidential Decree 1083); Courts; The shari’a courts are not vested with original and exclusive jurisdiction when it comes to marriages celebrated under both civil and Muslim laws—Regional Trial Courts are not divested of their general original jurisdiction under Sec. 19, par. (6) of B.P. Blg. 129.—Article 13 of P.D. No. 1083 does not provide for a situation where the parties were married both in civil and Muslim rites. Consequently, the shari’a courts are not vested with original and exclusive jurisdiction when it comes to marriages celebrated under both civil and Muslim laws. Consequently, the Regional Trial Courts are not divested of their general original jurisdiction under Sec. 19, par. (6) of B.P. Blg. 129 which provides—Sec. 19. Jurisdiction in Civil Cases.—Regional Trial Courts shall exercise exclusive original jurisdiction: x x x (6) In all cases not within the exclusive jurisdiction of any court, tribunal, person or body exercising judicial or quasi-judicial functions. x x x x

PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

Emiliano S. Samson, R. Balderrama-Samson, Mary Anne B. Samson-Willis for petitioner.

AQSA Law Firm and Abbas & Associates for private respondents.

BELLOSILLO, J.:

This Petition for Review on Certiorari seeks to reverse and set aside the decision of the Court of Appeals of 30 September 1996 in CA-G.R. SP. No. 39656 which affirmed the decision of the Regional Trial Court-Br. 89, Quezon City, denying the motion to dismiss as well as the motion for reconsideration filed by petitioner Estrellita J. Tamano.

On 31 May 1958 Senator Mamintal Abdul Jabar Tamano (Tamano) married private respondent Haja Putri Zorayda A. Tamano (Zorayda) in civil rites. Their marriage supposedly remained valid and subsisting until his death on 18 May 1994. Prior to his death, particularly on 2 June 1993, Tamano also married petitioner Estrellita J. Tamano (Estrellita) in civil rites in Malabang, Lanao del Sur.

On 23 November 1994 private respondent Zorayda joined by her son Adib A. Tamano (Adib) filed a Complaint for Declaration of Nullity of Marriage of Tamano and Estrellita on the ground that it was bigamous. They contended that Tamano and Estrellita misrepresented themselves as divorced and single, respectively, thus making the entries in the marriage contract false and fraudulent.

Private respondents alleged that Tamano never divorced Zorayda and that Estrellita was not single when she married Tamano as the decision annulling her previous marriage with Romeo C. Llave never became final and executory for noncompliance with publication requirements.

Estrellita filed a motion to dismiss alleging that the Regional Trial Court of Quezon City was without jurisdiction over the subject and nature of the action. She alleged that “only a party to the marriage” could file an action for annulment of marriage against the other spouse,1 hence, it was only Tamano who could file an action for annulment of their marriage. Petitioner likewise contended that since Tamano and Zorayda were both Muslims and married in Muslim rites the jurisdiction to hear and try the instant case was vested in the shari’a courts pursuant to Art. 155 of the Code of Muslim Personal Laws.

The lower court denied the motion to dismiss and ruled that the instant case was properly cognizable by the Regional Trial Court of Quezon City since Estrellita and Tamano were married in accordance with the Civil Code and not exclusively in accordance with P.D. No. 10832 or the Code of Muslim Personal Laws. The motion for reconsideration was likewise denied; hence, petitioner filed the instant petition with this Court seeking to set aside the 18 July 1995 order of respondent presiding judge of the RTC-Br. 89, Quezon City, denying petitioner’s motion to dismiss and the 22 August 1995 order denying reconsideration thereof.

In a Resolution dated 13 December 1995 we referred the case to the Court of Appeals for consolidation with G.R. No. 118371. Zorayda and Adib A. Tamano however filed a motion, which the Court of Appeals granted, to resolve the Complaint for Declaration of Nullity of Marriage ahead of the other consolidated cases.

The Court of Appeals ruled that the instant case would fall under the exclusive jurisdiction of shari’a courts only when filed in places where there are shari’a courts. But in places where there are no shari’a courts, like Quezon City, the instant case could properly be filed before the Regional Trial Court.

Petitioner is now before us reiterating her earlier argument that it is the shari’a court and not the Under The Judiciary Reorganization Act of 1980,3 Regional Trial Courts have jurisdiction over all

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actions involving the contract of marriage and marital relations.4 Personal actions, such as the instant complaint for declaration of nullity of marriage, may be commenced and tried where the plaintiff or any of the principal plaintiffs resides, or where the defendant or any of the principal defendants resides, at the election of the plaintiff.5 There should be no question by now that what determines the nature of an action and correspondingly the court which has jurisdiction over it are the allegations made by the plaintiff in this case.6 In the complaint for declaration of nullity of marriage filed by private respondents herein, it was alleged that Estrellita and Tamano were married in accordance with the provisions of the Civil Code. Never was it mentioned that Estrellita and Tamano were married under Muslim laws or P.D. No. 1083. Interestingly, Estrellita never stated in her Motion to Dismiss that she and Tamano were married under Muslim laws. That she was in fact married to Tamano under Muslim laws was first mentioned only in her Motion for Reconsideration.

Nevertheless, the Regional Trial Court was not divested of jurisdiction to hear and try the instant case despite the allegation in the Motion for Reconsideration that Estrellita and Tamano were likewise married in Muslim rites. This is because a court’s jurisdiction cannot be made to depend upon defenses set up in the answer, in a motion to dismiss, or in a motion for reconsideration, but only upon the allegations of the complaint.7 Jurisdiction over the subject matter of a case is determined from the allegations of the complaint as the latter comprises a concise statement of the ultimate facts constituting the plaintiff’s causes of action.8

Petitioner argues that the shari’a courts have jurisdiction over the instant suit pursuant to Art. 13, Title II, P.D. No. 1083,9 which provides—

Art. 13. Application.—(1) The provisions of this Title shall apply to marriage and divorce wherein both parties are Muslims, or wherein only the male party is a Muslim and the marriage is solemnized in accordance with Muslim law or this Code in any part of the Philippines.

7 (2) In case of a marriage between a Muslim and a non-Muslim, solemnized not in accordance with Muslim law or this Code, the Civil Code of the Philippines shall apply.

8 (3) Subject to the provisions of the preceding paragraphs, the essential requisites and legal impediments to marriage, divorce, paternity and filiation, guardianship and custody of minors, support and maintenance, claims for customary dower (mahr), betrothal, breach of contract to marry, solemnization and registration of marriage and divorce, rights and obligations between husband and wife, parental authority, and the property relations between husband and wife shall be governed by this Code and other applicable Muslim laws.

As alleged in the complaint, petitioner and Tamano were married in accordance with the Civil Code. Hence, contrary to the position of petitioner, the Civil Code is applicable in the instant case. Assuming that indeed petitioner and Tamano were likewise married under Muslim laws, the same would still fall under the general original jurisdiction of the Regional Trial Courts.

Article 13 of P.D. No. 1083 does not provide for a situation where the parties were married both in civil and Muslim rites. Consequently, the shari’a courts are not vested with original and exclusive jurisdiction when it comes to marriages celebrated under both civil and Muslim laws. Consequently, the Regional Trial Courts are not divested of their general original jurisdiction under Sec. 19, par. (6) of BP Blg. 129 which provides—

Sec. 19. Jurisdiction in Civil Cases.—Regional Trial Courts shall exercise exclusive original jurisdiction: x x x (6) In all cases not within the exclusive jurisdiction of any court, tribunal, person or body exercising judicial or quasi-judicial functions x x x x

WHEREFORE, the instant petition is DENIED. The decision of the Court of Appeals sustaining the 18 July 1995 and 22 August 1995 orders of the Regional Trial Court-Br. 89, Quezon City, denying the motion to dismiss and reconsideration thereof, is AFFIRMED. Let the records of this

case be immediately remanded to the court of origin for further proceedings until terminated.

SO ORDERED.

Davide, Jr. (Chairman), Vitug, Panganiban and Quisumbing, JJ., concur.

Petition denied, judgment affirmed.

Notes.—Under Muslim Law, it is not “immoral” by Muslim standards for Judge Malik to marry a second time while his first marriage exists. (Sulu Islamic Association of Masjid Lambayong vs. Malik, 226 SCRA 193 [1993])

A petition to resume the use of maiden name filed by a Muslim divorcee is a superfluity and unnecessary proceeding since the law requires her to do so as her former husband is already married to another woman after obtaining a decree of divorce from her in accordance with Muslim laws. (Yasin vs. Judge, Shari’a District Court, 241 SCRA 606 [1995])

——o0o——

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G.R. No. 109656. November 21, 1996.*

LA TONDEÑA DISTILLERS, INC., petitioner, vs. THE HON. JUDGE BERNARDO T. PONFERRADA, JOAQUIN T. GOCHANGCO, ENRIQUE DY, QUINTIN DY, LITO ONG,

JERRY ONG and LUIS T. ONG, respondents.

Remedial Law; Certiorari; Appeals; An order denying a motion to dismiss is only interlocutory which is neither appealable until final judgment nor could it generally be assailed in certiorari.—An order denying a motion to dismiss is only interlocutory which is neither appealable until final judgment, nor could it generally be assailed on certiorari. The remedy of the aggrieved party is to file an answer pursuant to Sec. 4, Rule 16, and interpose as defenses, the objections raised in his motion to dismiss, proceed to trial, and in case of an adverse decision, elevate the whole case by appeal in due time.

Same; Same; Same; The extraordinary remedy of certiorari can be availed of only if the denial of the motion constitutes grave abuse of discretion.—The extraordinary remedy of certiorari can be availed of only if the denial of the motion constitutes grave abuse of discretion. In the case at bar, the lower court did not abuse its discretion in deferring action on the motion. Section 3 of Rule 16 sanctions deferment of hearing on the motion “until the trial if the ground alleged does not appear to be indubitable.” Clearly respondent judge had doubts on the allegation of petitioner’s good faith. This is a question of fact which necessitates presentation of evidence and is certainly far from indubitable. It is within the discretion of the court to defer action if the ground alleged does not appear to be indubitable and that deferment is only deemed a provisional denial of the motion to dismiss.

Same; Venue; Specific Performance; A complaint for specific performance with damages involving real property was held to be a personal action which may be filed in the proper court where the party resides.—We are not also persuaded by petitioner’s argument that venue should be lodged in Bago City where the lot is situated. The complaint is one for “specific performance with damages.” Private respondents do not claim ownership of the lot but in fact recognized title of defendants by annotating a notice of lis pendens. In one case, a similar complaint for “specific performance with damages” involving real property, was held to be a personal action, which may be filed in the proper court where the party resides. Not being an action involving title to or ownership of real property, venue, in this case, was not improperly laid before the RTC of Bacolod City.

SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.

The facts are stated in the opinion of the Court.

Siguion Reyna, Montecillo & Ongsiako for petitioner. Enrique S. Chua for private respondent.

FRANCISCO, J.:

The undisputed facts are simplified as follows:

1. Several persons1 (herein referred to as defendants) reneged on their contract to sell to private respondents a parcel of land2 located in Bago City;

2. This breach prompted private respondents to file on August 25, 1987 before the Regional Trial Court (RTC) of Bacolod City an action for “specific performance with damages” against defendants. A notice of lis pendens was annotated on the latter’s title although the same was cancelled on November 9, 1988 upon defendants filing a bond;

3. Pending the trial before the lower court on November, 1991, petitioner bought the above lot from defendants. Aggrieved, private respondents amended their complaint and impleaded petitioner as an additional defendant alleging that petitioner was not a buyer in good faith;

4. Subsequently, petitioner filed a motion to dismiss the amended complaint on two grounds: no cause of action and improper venue. In support of the first ground, petitioner asserts that it is a

buyer in good faith since the notice of lis pendens was already cancelled when it bought the lot. As for the second ground, petitioner argued that venue should be in Bago City where the lot is located and not in Bacolod City;

5. On October 1, 1992, petitioner received a resolution from the lower court denying their motion as there was need for the parties to present evidence on the question of good faith. Petitioner’s motion for reconsideration was also denied in a resolution they received on January 20, 1993;

6. More than three (3) months later, or on April 21, 1993, petitioner went directly to this Court via petition for certiorari under Rule 65 assailing the denial of their motions. On November 24, 1993, the court gave due course to the petition and required the parties to submit their memorandum.3 After the parties submitted their respective memoranda as directed, petitioner filed a “manifestation” alleging for the first time that it sold the lot sometime in September, 1992 to Distileria Bago, Inc. a separate entity with which the former has substantial stockholdings. Based on such admission, private respondents moved to dismiss the instant petition, arguing that petitioner is no longer a real party in interest, having sold the lot.

The issue posed herein involves the remedy of an aggrieved party when the lower court denies his motion to dismiss.

However, the petition should be dismissed outright for being filed beyond the reasonable period,4 the same having been filed only after more than three months from the time petitioner received a copy of the assailed RTC resolutions.

Even assuming that the petition was promptly filed, dismissal is still warranted on account of the following reasons:

First, an order denying a motion to dismiss is only interlocutory which is neither appealable until final judgment,5 nor could it generally be assailed on certiorari.6The remedy of the aggrieved party is to file an answer pursuant to Sec. 4, Rule 16, and interpose as defenses, the objections raised in his motion to dismiss, proceed to trial, and in case of an adverse decision, elevate the whole case by appeal in due time.7

Second, the extraordinary remedy of certiorari can be availed of only if the denial of the motion constitutes grave abuse of discretion.8 In the case at bar, the lower court did not abuse its discretion in deferring9 action on the motion. Section 3 of Rule 1610 sanctions deferment of hearing on the motion “until the trial if the ground alleged does not appear to be indubitable.” Clearly respondent judge had doubts on the allegation of petitioner’s good faith. This is a question of fact which necessitates presentation of evidence and is certainly far from indubitable.11 It is within the discretion of the court to defer action if the ground alleged does not appear to be indubitable12 and that deferment is only deemed a provisional denial of the motion to dismiss.13

Finally, We are not also persuaded by petitioner’s argument that venue should be lodged in Bago City where the lot is situated.14 The complaint is one for “specific performance with damages.” Private respondents do not claim ownership of the lot but in fact recognized title of defendants by annotating a notice of lis pendens. In one case,15 a similar complaint for “specific performance with damages” involving real property, was held to be a personal action, which may be filed in the proper court where the party resides. Not being an action involving title to or ownership of real property, venue, in this case, was not improperly laid before the RTC of Bacolod City.

Counsel for the petitioner should have meticulously observed the procedural guidelines established by the Rules of Court as well as by jurisprudence. We reiterate that the extraordinary remedy of certiorari is not intended to be a tool to delay litigation and must be resorted to only in cases of manifest grave abuse of discretion. The case at bench does not call for such extraordinary remedy. ACCORDINGLY, finding no grave abuse of discretion, the instant

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petition is DISMISSED.

SO ORDERED.

Narvasa (C.J., Chairman), Davide, Jr., Melo and Panganiban, JJ., concur.

Petition dismissed.

Note.—Errors of judgment or of procedure not relating to the court’s jurisdiction nor involving grave abuse of discretion are not reviewable by certiorari under Rule 65 of the Revised Rules of Court. (Rodriquez vs. Court of Appeals, 245 SCRA 150 [1995])

——o0o——

G.R. No. 146594. June 10, 2002.*

REBECCA T. CABUTIHAN, petitioner, vs. LANDCENTER CONSTRUCTION & DEVELOPMENT CORPORATION, respondent.

Actions; Pleadings and Practice; Venue; Actions affecting title to or possession of real property or an interest therein (real actions), shall be commenced and tried in the proper court that has territorial jurisdiction over the area where the real property is situated, while all other actions (personal actions) shall be commenced and tried in the proper courts where the plaintiff or any of the principal plaintiffs resides or where the defendant or any of the principal defendants resides.—We agree with petitioner. Sections 1 and 2, Rule 4 of the Rules of Court provide an answer to the issue of venue. Actions affecting title to or possession of real property or an interest therein (real actions), shall be commenced and tried in the proper court that has territorial jurisdiction over the area where the real property is situated. On the other hand, all other actions, (personal actions) shall be commenced and tried in the proper courts where the plaintiff or any of the principal plaintiffs resides or where the defendant or any of the principal defendants resides.

Same; Same; Same; Contracts; Breach of contract gives rise to a cause of action for specific performance or for rescission.—In the present case, petitioner seeks payment of her services in accordance with the undertaking the parties signed. Breach of contract gives rise to a cause of action for specific performance or for rescission. If petitioner had filed an action in rem for the conveyance of real property, the dismissal of the case would have been proper on the ground of lack of cause of action.

Same; Same; Parties; Neither a misjoinder nor a non-joinder of parties is a ground for the dismissal of an action—parties may be dropped or added by order of the court, on motion of any party or on the court’s own initiative at any stage of the action.—Again, we side with petitioner. Neither a misjoinder nor a non-joinder of parties is a ground for the dismissal of an action. Parties may be dropped or added by order of the court, on motion of any party or on the court’s own initiative at any stage of the action. The RTC should have ordered the joinder of such party, and noncompliance with the said order would have been ground for dismissal of the action.

Same; Same; Same; Necessary Parties; The non-inclusion of a necessary party does not prevent the court from proceeding with the action, and the judgment rendered therein shall be without prejudice to the rights of such party.—Although the Complaint prayed for the conveyance of the whole 36.5 percent claim without impleading the companions of petitioner as party-litigants, the RTC could have separately proceeded with the case as far as her 20 percent share in the claim was concerned, independent of the other 16.5 percent. This fact means that her companions are not indispensable parties without whom no final determination can be had. At best, they are mere necessary parties who ought to be impleaded for a complete determination or settlement of the claim subject of the action. The noninclusion of a necessary party does not prevent the court from proceeding with the action, and the judgment rendered therein shall be without prejudice to the rights of such party.

Same; Same; Docket Fees; Section 5, Rule 141 of the Rules of Court requiring the assessed value of the real estate, subject of an action, to be considered in computing the filing fees does not apply to an action for specific performance, which is classified as an action not capable of pecuniary estimation.—We hold that the trial court and respondent used technicalities to avoid the resolution of the case and to trifle with the law. True, Section 5, Rule 141 of the Rules of Court requires that the assessed value of the real estate, subject of an action, should be considered in computing the filing fees. But the Court has already clarified that the Rule does not apply to an action for specific performance, which is classified as an action not capable of pecuniary estimation.

Same; Same; Same; Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period.—Besides, if during the course of the trial, petitioner’s 20 percent claim on the Fourth Estate Subdivision can no longer be satisfied and the payment of

35

its monetary equivalent is the only solution left, Sunlife Insurance Office, Ltd. v. Asuncion holds as follows: “Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period.”

PETITION for review on certiorari of the orders of the Regional Trial Court of Pasig City, Br. 263.

The facts are stated in the opinion of the Court.

Prospero A. Anave for petitioner.

Francisco E. Antonio for respondent.

PANGANIBAN, J.:

Breach of contract gives rise to a cause of action for specific performance or for rescission. A suit for such breach is not capable of pecuniary estimation; hence, the assessed value of the real estate, subject of the said action, should not be considered in computing the filing fees. Neither a misjoinder nor a non-joinder of parties is a ground for dismissal of an action, because parties may be dropped or added at any stage of the proceedings.

The Case

Before us is a Petition for Review on Certiorari under Rule 45, assailing the Orders dated September 8, 2000 and November 21, 2000, promulgated by of the Regional Trial Court (RTC) of Pasig City, Branch 263.1 The first assailed Order disposed as follows:

“WHEREFORE, foregoing premises considered, this Court hereby resolves to dismiss the instant complaint.”2

Reconsideration was denied in the second challenged Order.3

The Facts

Culled from the pleadings, the facts of this case are as follows.

On December 3, 1996, herein respondent—Landcenter Construction & Development Corporation, represented by Wilfredo B. Maghuyop—entered into an Agreement4 with Petitioner Rebecca Cabutihan. The Agreement stipulates:

“WHEREAS, [respondent corporation], x x x is the absolute owner, x x x of a parcel of land situated at Kay-biga, Parañaque, Metro Manila covered under Transfer Certificate of Title No. (S-30409) (partially cancelled by TCT Nos. 110001 to 110239) and particularly described as follows:

‘A parcel of land (Plan Psu-80206, Case No. 290, G.L.R.O. Record No. 2291), situated in the Barrio of Kay-biga, Municipality of Parañaque, Province of Rizal. Bounded on the NE., by properties of Eulogio Cruz and Isidro Alano; on the E., by property of Justo Bernardo; on the SE., by properties of Marcelo Nofuente and Lorenzo Molera; on the SW., by properties of Higino and Pedro P. Lopez; on the W., by property of Odon Rodriguez; and on the NW., by properties of Evaristo de los Santos and Pastor Leonardo . . . . .; containing an area of ONE HUNDRED SEVEN THOUSAND AND FORTY SEVEN (107,047) SQUARE METERS, more or less.’

“WHEREAS, [respondent corporation] decided to engage the assistance of [petitioner] and x x x herein called the FACILITATOR for the purpose of facilitating and arranging the recovery of the property in question, as well as the financing of such undertakings necessary in connection thereto;

“WHEREFORE, premises considered and of the mutual covenants of the parties, they have

agreed, as follows:

1. The FACILITATOR undertakes to effect the recovery of the property subject hereof, including the financing of the undertaking, up to the registration of the same in the name of [respondent corporation], except any and all taxes due;

2. The FACILITATOR shall be responsible for whatever arrangements necessary in relation to the squatters presently occupying [a] portion of the property, as well as the legitimate buyers of lots thereof;

3. As compensation for the undertaking of the FACILITATOR, [she] shall be entitled to Twenty [Percent] (20%) of the total area of the property thus recovered for and in behalf of [respondent corporation].

x x x x x x x x x.”5

Armed with Board Resolution No. 01, Series of 1997,6 which had authorized her to represent the corporation, Luz Baylon Ponce entered into a February 11, 1997 Deed of Undertaking with a group composed of petitioner, Wenifredo P. Forro, Nicanor Radan, Sr. and Atty. Prospero A. Anave. The Deed states the following:

“WHEREAS, the UNDERTAKER [respondent corporation] solicited, engaged and hereby voluntarily acknowledges the assistance of certain persons, in recovering, arranging and financing the undertaking up to completion/consummation of the same;

“WHEREAS, the UNDERTAKER freely, voluntarily, unconditionally and irrevocably agreed, committed and undertook to compensate x x x said persons, in the manner, specified hereinbelow;

“WHEREFORE, considering the foregoing premises, and the mutual covenants of the parties, the UNDERTAKER hereby unconditionally and irrevocably [c]ommit[s] and [u]ndertake[s], as follows:

“1. To pay or compensate the following persons, based on the gross area of the afore-described parcel of land or gross proceeds of the sale thereof, as the case may be, to wit:

Rebecca T. Cabutihan ..................... 20%

Wenifredo P. Forro ........................ 10%

Nicanor Radan, Sr. ......................... 4%

Atty. Prospero A. Anave .................. 2.5%

TOTAL ...................... 36.5%

“2. Execute a Deed of Assignment unto and in favor of each of the persons above-mentioned corresponding to their respective shares in the subject parcel of land or in the proceeds thereof;

“3. This Undertaking as well as the Deed of Assignment above-stated shall be effective and binding upon the heirs, successors-in-interest, assigns or designates of the parties herein.”7

An action for specific performance with damages was filed by petitioner on October 14, 1999 before the RTC of Pasig City, Branch 263. She alleged:

“[6.] [Petitioner] accomplished her undertakings under the subject Agreement and the Undertaking. So in a letter dated 18 April 1997, x x x, [respondent corporation] was informed accordingly thereof. Simultaneously, [petitioner] demanded upon [respondent corporation] to execute the corresponding Deed of Assignment of the lots in the subject property, as compensation for the services rendered in favor of the [respondent corporation]. The subject letter was duly received and acknowledged receipt, by then Acting Corporate Secretary of the

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[respondent corporation].

“[7.] [Respondent corporation] failed and refused to act on x x x said demand of [petitioner]. Hence, [she] sent a letter dated May 8, 1997, to the Register of Deeds for Parañaque, to inform x x x said Office of x x x [her] claim x x x;

“[8.] x x x [T]he subject property was already transferred to and registered in the name of [respondent corporation] under Transfer Certificate of Title No. -123917-, of the Registry of Deeds for Parañaque City x x x;

x x x x x x x x x

“[10.] With x x x said title of the property now in the possession of the [respondent corporation], [petitioner] is apprehensive that the more that [she] will not be able to obtain from [respondent corporation], compliance with the afore-stated Agreement and Undertaking, to the extreme detriment and prejudice of [petitioner] and her group, x x x;

x x x x x x x x x

“[12.] Then in a letter,8 dated 10 September 1999, [petitioner] through counsel sent to [respondent corporation] a Formal Demand, to comply with its obligation x x x but x x x [respondent corporation] did not heed the demand, x x x.”9

Petitioner prayed, inter alia, that respondent corporation be ordered to execute the appropriate document assigning, conveying, transferring and delivering the particular lots in her favor. The lots represented compensation for the undertakings she performed and accomplished, as embodied in the Agreement.

Respondent then filed a Motion to Dismiss, alleging the following:

“5. Because of the troubled situation obtaining at the management level of [respondent corporation], the sale between [respondent corporation] and PCIB regarding the Fourth Estate Subdivision was not registered with the Register of Deeds office, although [respondent corporation] continued holding the deed of sale over the Fourth Estate Subdivision.

“6. A group of persons led by one Wilfredo Maghuyop, including herein [petitioner], Wenifredo Forro, Nicanor Radan, and others, taking advantage of the management mess at [respondent corporation], tried to grab ownership of the [respondent corporation], and with use of fraud, cheat, misrepresentation and theft of vital documents from the office of [respondent corporation], succeeded in filing with the Securities and Exchange Commission false papers and documents purporting to show that the Articles of Incorporation of [respondent corporation] had been amended, installing Maghuyop as president of [respondent corporation]. It was on these occasions that [petitioner] and her companions x x x, with use of fraud, stealth, tricks, deceit and cheat succeeded in letting Luz Baylon Ponce sign a so-called ‘Deed of Undertaking’ by virtue of which [respondent corporation] is duty-bound to give to [petitioner], Forro, Radan and Atty. Prospero Anave 36.5% of the land area of the Fourth Estate Subdivision as compensation for alleged services and expenses made by these people in favor of [respondent corporation]. They also caused said x x x Maghuyop to sign an ‘Agreement’ with [petitioner] expressing an obligation on the part of [respondent corporation] to give a big part of the land x x x to [petitioner]. These ‘Agreement’ and ‘Deed of Undertaking’ are being made by herein [petitioner] as her causes of action in the present case.

“Wilfredo Maghuyop was a stranger to [respondent corporation], and he was an impostor used by [petitioner] and her companions to barge into the management of [respondent corporation] for the purpose of stealing and creating an obligation against [respondent corporation] in their favor.

“7. But Luz Baylon Ponce, whose signature appears on the instrument denominated as ‘Deed of Undertaking,’ vehemently denies that she signed said instrument freely and voluntarily. She

says that Wenifredo Forro and Nicanor Radan were once real estate agents of [respondent corporation] who promised to help sell lots from her project Villaluz II Subdivision located [in] Malibay, Pasay City. According to Luz Baylon Ponce, the Board of Directors of [respondent corporation] negotiated with Forro and Radan for the latter to sell units/lots of Villaluz II Subdivision, and to help obtain a financier who would finance for the expenses for the reconstitution of the lost title of the Fourth Estate Subdivision situated [in] Sucat, Parañaque City. Shortly thereafter, these two men resigned from [respondent corporation] as agents, after they manipulated the signing of x x x said ‘Deed of Undertaking’ by Luz Baylon Ponce on February 11, 1997. The latter is an old woman 80 years of age. She is weak, has x x x poor sight, and is feeble in her mental ability. Forro and Radan inserted the ‘Deed of Undertaking’ among the papers intended for application for reconstitution of [respondent corporation’s] title which these men caused Luz Baylon Ponce to sign, and she unknowingly signed the ‘Deed of Undertaking.’ x x x.”10

In the Motion, respondent sought the dismissal of the Complaint on the grounds of (1) improper venue, (2) lack of jurisdiction over the subject matter, and (3) nonpayment of the proper docket fees. Specifically, it contended:

“8. That venue is improperly laid

x x x x x x x x x

“(b) In other words, the present case filed by [petitioner] is for her recovery (and for her companions) of 36.5% of [respondent corporation’s] land (Fourth Estate Subdivision) or her interest therein, x x x therefore, x x x the present case filed x x x is a real action or an action in rem.

“(c) x x x [Following] Section 1, Rule 4 of the Rules of Court, as amended x x x the present case should have been filed by [petitioner] with the proper court in Parañaque City which has jurisdiction over the x x x Fourth Estate Subdivision because said subdivision is situated in Parañaque City. Since [petitioner] filed the present case with this x x x [c]ourt in Pasig City, she chose a wrong venue x x x.

x x x x x x x x x

“9. That the [c]ourt has no jurisdiction over the subject matter of the claim

x x x x x x x x x

“(c) x x x Wenifredo P. Forro, Nicanor Radan, Sr. and Atty. Prospero A. Anave are not named as plaintiffs in the complaint. [Petitioner] x x x is not named as representative of Forro, Radan and Anave by virtue of a Special Power of Attorney or other formal written authority. According to the Rules, where the action is allowed to be prosecuted or defended by a representative or someone acting in a fiduciary capacity, the beneficiary shall be included in the title of the case and shall be deemed to be the real party in interest (Sec. 3, Rule 3, Rules of Court, as amended x x x).

x x x x x x x x x

“10. That a condition precedent for filing the claim has not been complied with

x x x x x x x x x

(b) Obviously, [petitioner] has not paid the docket or filing fees on the value of her land claim x x x. Thirty-six percent (36%) x x x is P180,000,000.00, x x x.”11

Ruling of the Trial Court

The RTC ruled that the allegations in the Complaint show that its primary objective was to recover real property. Equally important, the prayer was to compel respondent to execute the

37

necessary deeds of transfer and conveyance of a portion of the property corresponding to 36.5 percent of its total area or, in the alternative, to hold respondent liable for the value of the said portion, based on the prevailing market price. The RTC further ruled that, since the suit would affect the title to the property, it should have been instituted in the trial court where the property was situated.12

Furthermore, the action was filed only by petitioner. There was no allegation that she had been authorized by Forro, Radan and Anave to represent their respective shares in the compensation.

Finally, since this case was an action in rem, it was imperative for petitioner to pay the appropriate docket or filing fees equivalent to the pecuniary value of her claim, a duty she failed to discharge. Consequently, following Manchester Development Corp. v. Court of Appeals,13 the trial court never acquired jurisdiction over the case.

Hence, this Petition.14

Issues

In her Memorandum, petitioner phrases the issue in this wise:

“Whether or not the dismissal of the [C]omplaint was in accordance with the pertinent law and jurisprudence on the matter.”15

She argues that the RTC erred in dismissing her Complaint on the grounds of (1) improper venue, (2) non-joinder of necessary parties, and (3) non-payment of proper docket fees.

This Court’s Ruling

The Petition is meritorious.

First Issue:

Proper Venue

Maintaining that the action is in personam, not in rem, petitioner alleges that the venue was properly laid The fact that “she ultimately sought the conveyance of real property” not located in the territorial jurisdiction of the RTC of Pasig is, she claims, an anticipated consequence and beyond the cause for which the action was instituted.

On the other hand, the RTC ruled that since the primary objective of petitioner was to recover real property—even though her Complaint was for specific performance and damages—her action should have been instituted in the trial court where the property was situated, in accordance with Commodities Storage & Ice Plant Corp. v. Court of Appeals.16

We agree with petitioner. Sections 1 and 2, Rule 4 of the Rules of Court provide an answer to the issue of venue.17 Actions affecting title to or possession of real property or an interest therein (real actions), shall be commenced and tried in the proper court that has territorial jurisdiction over the area where the real property is situated. On the other hand, all other actions, (personal actions) shall be commenced and tried in the proper courts where the plaintiff or any of the principal plaintiffs resides or where the defendant or any of the principal defendants resides.

In Commodities Storage cited earlier, petitioner spouses obtained a loan secured by a mortgage over their land and ice plant in Sta. Maria, Bulacan. Because they had failed to pay the loan, the mortgage was foreclosed and the ice plant auctioned. Before the RTC of Manila, they sued the bank for damages and for the fixing of the redemption period. Since the spouses ultimately sought redemption of the mortgaged property, the action affected the mortgage debtor’s title to the foreclosed property; hence, it was a real action.18 Where the action affects title to the property, it should be instituted in the trial court where the property is situated.19

In National Steel Corp. v. Court of Appeals,20 the Court held that “an action in which petitioner

seeks the execution of a deed of sale of a parcel of land in his favor x x x has been held to be for the recovery of the real property and not for specific performance since his primary objective is to regain the ownership and possession of the parcel of land.”

However, in La Tondeña Distillers, Inc. v. Ponferrada,21 private respondents filed an action for specific performance with damages before the RTC of Bacolod City. The defendants allegedly reneged on their contract to sell to them a parcel of land located in Bago City—a piece of property which the latter sold to petitioner while the case was pending before the said RTC. Private respondent did not claim ownership but, by annotating a notice of lis pendens on the title, recognized defendants’ ownership thereof. This Court ruled that the venue had properly been laid in the RTC of Bacolod, even if the property was situated in Bago.

In Siasoco v. Court of Appeals,22 private respondent filed a case for specific performance with damages before the RTC of Quezon City. It alleged that after it accepted the offer of petitioners, they sold to a third person several parcels of land located in Montalban, Rizal. The Supreme Court sustained the trial court’s order allowing an amendment of the original Complaint for specific performance with damages. Contrary to petitioners’ position that the RTC of Quezon City had no jurisdiction over the case, as the subject lots were located in Montalban, Rizal, the said RTC had jurisdiction over the original Complaint. The Court reiterated the rule that a case for specific performance with damages is a personal action which may be filed in a court where any of the parties reside.

A close scrutiny of National Steel and Ruiz reveals that the prayers for the execution of a Deed of Sale were not in any way connected to a contract, like the Undertaking in this case. Hence, even if there were prayers for the execution of a deed of sale, the actions filed in the said cases were not for specific performance.

In the present case, petitioner seeks payment of her services in accordance with the undertaking the parties signed. Breach of contract gives rise to a cause of action for specific performance or for rescission.23 If petitioner had filed an action in rem for the conveyance of real property, the dismissal of the case would have been proper on the ground of lack of cause of action.

Second Issue:

Non-Joinder of Proper Parties

Petitioner claims that she was duly authorized and empowered to represent the members of her group and to prosecute their claims on their behalf via a Special Power of Attorney executed by Forro, Radan and Anave. Besides, she argues that the omission of her companions as plaintiffs did not prevent the RTC from proceeding with the action, because whatever judgment would be rendered would be without prejudice to their rights. In the alternative, she avers that the trial court may add or drop a party or parties at any stage of the action and on such terms as are just.

The RTC ruled that there was no allegation anywhere in the records that petitioner had been authorized to represent Forro, Radan and Anave, who were real parties-in-interest with respect to their respective shares of the 36.5 percent claim. Such being the case, the trial court never acquired jurisdiction over the subject matter of their claims.

Again, we side with petitioner. Neither a misjoinder nor a nonjoinder of parties is a ground for the dismissal of an action. Parties may be dropped or added by order of the court, on motion of any party or on the court’s own initiative at any stage of the action.24

The RTC should have ordered the joinder of such party, and noncompliance with the said order would have been ground for dismissal of the action.

Although the Complaint prayed for the conveyance of the whole 36.5 percent claim without impleading the companions of petitioner as party-litigants, the RTC could have separately proceeded with the case as far as her 20 percent share in the claim was concerned, independent

38

of the other 16.5 percent. This fact means that her companions are not indispensable parties without whom no final determination can be had.25 At best, they are mere necessary parties who ought to be impleaded for a complete determination or settlement of the claim subject of the action.26 The non-inclusion of a necessary party does not prevent the court from proceeding with the action, and the judgment rendered therein shall be without prejudice to the rights of such party.27

Third Issue:

Correct Docket Fees

Petitioner insists that the value of the real property, which was the subject of the contract, has nothing to do with the determination of the correct docket or filing fees.

The RTC ruled that although the amount of damages sought had not been specified in the body of the Complaint, one can infer from the assessed value of the disputed land that it would amount to P50 million. Hence, when compared to this figure, the P210 paid as docket fees would appear paltry.

We hold that the trial court and respondent used technicalities to avoid the resolution of the case and to trifle with the law. True, Section 5, Rule 141 of the Rules of Court requires that the assessed value of the real estate, subject of an action, should be considered in computing the filing fees. But the Court has already clarified that the Rule does not apply to an action for specific performance,28 which is classified as an action not capable of pecuniary estimation.29

Besides, if during the course of the trial, petitioner’s 20 percent claim on the Fourth Estate Subdivision can no longer be satisfied and the payment of its monetary equivalent is the only solution left, Sunlife Insurance Office, Ltd. v. Asuncion30 holds as follows: “Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period.”

WHEREFORE, the Petition is hereby GRANTED, and the assailed Orders REVERSED and SET ASIDE. The case is REMANDED to the court of origin which is ordered to PROCEED with deliberate speed in disposing of the case. No costs.

SO ORDERED.

Sandoval-Gutierrez and Carpio, JJ., concur.

Puno (Chairman), J., Abroad, on official leave.

Petition granted, orders reversed and set aside. Case remanded to court a quo.

Notes.—Venue in Pangasinan was improperly laid where the plaintiff was a resident of Los Angeles, California while his attorney-in-fact was a resident of Quezon City and the defendant claims to reside in Sorsogon while his “business address” is in Pasay City. (Baritua vs. Court of Appeals, 267 SCRA 331 [1997])

In procedural law, specifically for purposes of venue, it has been held that the residence of a person is his personal, actual or physical habitation or his actual residence or place of abode, which may not necessarily be his legal residence or domicile provided he resides therein with continuity and consistency. (Boleyley vs. Villanueva, 314 SCRA 364 [1999])

——o0o——

No. L-32170. March 31, 1971.

CITIZENS’ SURETY &INSURANCE COMPANY,INC., petitioner, vs. HON.JUDGE A. MELENCIO-HERRERA,SANTIAGO DACANAY, and JOSEFINA DACANAY, respondents.

Remedial law; Summons; Service of summons; Jurisdiction over defendant in actions in personam, how acquired.—In an action strictly in personam, personal service of summons, within the forum, is essential to the acquisition of jurisdiction over the person of the defendant, who does not voluntarily submit himself to the authority of the court. In other words, summons by publication cannot—consistently with the due process clause in the Bill of Rights—confer upon the court jurisdiction over said defendants.

Same; Due process; Personal service required to support a personal judgment.—Due process of law requires personal service to support a personal judgment, and, when the proceeding is strictly in personam brought to determine the personal rights and obligations of the parties, personal service within the state or a voluntary appearance in the case is essential to the acquisition of jurisdiction so as to constitute compliance with the constitutional requirement of due process.

Same; Prescription; Effect of.—The tolling of the period of prescription for as long as the debtor remains in hiding would properly be a matter of court record, and he can not emerge after a sufficient lapse of time from the dismissal of the case to profit from his own misdeed and claim prescription of his just debt.

PETITION to review an order of the Court of First Instance of Manila, Branch XVII. Melencio-Herrera, J.

The facts are stated in the opinion of the Court.

Dayos, Tesoro & Gloria, Jr. for petitioner.

Respondent Judge for and in his own behalf.

REYES, J.B.L., J.:

Petitioner Citizens’ Surety & Insurance Company, Inc. seeks review of an order of respondent Judge in Civil Case No. 77134 of the Court of First Instance of Manila, Branch XVII, entitled “Citizens’ Surety & Insurance Co., Inc. vs. Santiago Dacanay and Josefina Dacanay,” dismissing the complaint for lack of proper service of summons upon defendants.

The record is to the effect that petitioner had filed its complaint in the Court below, alleging that at request of defendant Santiago Dacanay, the plaintiff Surety Company had issued its Surety Bonds Nos. 4942 and 4944, the first, in favor of Gregorio Fajardo to guarantee payment of a P5,000-promissory note executed by said Dacanay, and the second, in favor of Manufacturers Bank & Trust Co., to guarantee payment of another promissory note in like amount; that in consideration of said bonds, Santiago and Josefina Dacanay executed Indemnity Agreements, binding themselves jointly and severally to indemnify plaintiff for any losses, costs and expenses which it might sustain in connection with the issuance of the bonds aforesaid, with interest at 12% per annum; that as additional security, the Dacanays mortgaged to plaintiff a parcel of land in Baguio City, covered by Certificate of Title No. T-8116, the mortgage having been duly recorded; that the promissory notes were not paid and as a result, plaintiff Surety was compelled to pay P5,000.00 to Gregorio Fajardo and P4,081.69 to the Manufacturers’ Bank; that the Dacanays failed to reimburse the Surety for such payments, whereupon the Surety caused the extrajudicial foreclosure of the mortgage to pay its claim of P12,941.69 representing its payments, interest and stipulated liquidated damages: that at the foreclosure sale, the land mortgaged was sold to plaintiff, as highest bidder, for the sum of P2,000.00—leaving an unsatisfied balance of P10,491.69, that plaintiff sought to recover from defendants Dacanay, plus 10% thereof as attorneys’ fees, and the costs.

At petitioner’s request, respondent Judge caused summons to be made by publication in the

39

newspaper Philippines Herald. But despite the publication and deposit of a prepaid copy of the complaint at the Manila post office, defendants did not appear within the period of 60 days from last publication, as required by the summons.

Plaintiff then asked that defendants be declared in default; but instead, the Judge, by order of May 16, 1970, asked it to show cause why the action should not be dismissed, the suit being in personam and defendants not having appeared. Then, on May 29, 1970, respondent Judge dismissed the case, despite plaintiff Surety’s argument that the summons by publication was sufficient and valid under section 16 of Rule 14 of the Revised Rules of Court.

We agree with respondent Judge that the action of plaintiff petitioner, being in personam, the Court could not validly acquire jurisdiction on a non-appearing defendant, absent a personal service of summons within the forum. We have explicitly so ruled in Pantaleon vs. Asunción, 105 Phil. 765, pointing out without such personal service, any judgment on a non-appearing defendant would be violative of due process. In the aforecited case this Court, through Justice Roberto Concepcion, now Chief Justice, ruled as follows:

“Apart from the foregoing, it is well-settled principle of Constitutional Law that, in an action strictly in personam, like the one at bar, personal service of summons, within the forum, is essential to the acquisition of jurisdiction over the person of the defendant, who does not voluntarily submit himself to the authority of the court. In other words, summons by publication cannot—consistently with the due process clause in the Bill of Rights—confer upon the court jurisdiction over said defendants.

‘Due process of law requires personal service to support a personal judgment, and, when the proceeding is strictly in personam brought to determine the personal rights and obligations of the parties, personal service within the state or a voluntary appearance in the case is essential to the acquisition of jurisdiction so as to constitute compliance with the constitutional requirement of due process.* * *

‘Although a state legislature has more control over the form of service on its own residents than nonresidents, it has been held that in actions in personam * * * service by publication on resident defendants, who are personally within the state and can be found therein is not “due process of law,” and a statute allowing it is unconstitutional.’ (16A C.J.S., pp. 786, 789; Italics ours.)”

The proper recourse for a creditor in the same situation as petitioner is to locate properties, real or personal, of the resident defendant debtor with unknown address and cause them to be attached under Rule 57, section 1(f), in which case, the attachment converts the action into a proceeding in rem or quasi in rem and the summons by publication may then accordingly be deemed valid and effective.

But because debtors who abscond and conceal themselves are also quite adept at concealing their properties, the dismissal of the case below by respondent Judge should be set aside and the case held pending in the court’s archives, until petitioner as plaintiff succeeds in determining the whereabouts of the defendants’ person or properties and causes valid summons to be served personally or by publication as the case may be. In this manner, the tolling of the period of prescription for as long as the debtor remains in hiding would properly be a matter of court record, and he can not emerge after a sufficient lapse of time from the dismissal of the case to profit from his own misdeed and claim prescription of his just debt.

WHEREFORE, the order of dismissal of the case issued by the Court below is hereby set aside, and in the interest of justice, the proceedings are ordered suspended, to be held pending until the plaintiff petitioner succeeds in ascertaining the whereabouts of the defendants and/or locating properties of the same, to enable proper summons to be issued conformably to this Opinion. No costs.

Concepcion, C.J., Makalintal, Zaldivar, Fernando, Teehankee, Barredo, Villamor and Makasiar,

JJ., concur.

Dizon and Castro, JJ., reserve their votes. Order set aside.

40

G.R. No. 156178. January 20, 2006.*

PHILIPPINE NATIONAL BANK and ASSET PRIVATIZATION TRUST, petitioners, vs. REFRIGERATION INDUSTRIES, INC., respondent.

Actions; Judgments; Summary Judgments; Words and Phrases; A “genuine issue” is an issue of fact which requires the presentation of evidence; When the facts as pleaded appear uncontested or undisputed, then there is no real or genuine issue or question as to the facts—summary judgment must then ensue as a matter of law, to weed out sham claims or defenses at an early stage of the litigation, to avoid the expenses and loss of time involved in the trial and to separate what is formal or pretended in denial or averment from what is genuine or substantial, so that the latter may subject a suitor to the burden of trial.—After considering the records of this case, we find that petitioners’ contention could not be upheld. We agree that the Court of Appeals correctly held that the summary judgment was properly rendered by the trial court. Firstly, it may be noted that PNB admitted in its May 11, 1989 letter to APT that the contested chattels belonged to RII, but were erroneously taken during the foreclosure of DMC’s properties; that these were eventually transferred to APT. Secondly, we also note that APT admitted that PNB wrote the letter dated May 11, 1989; and that APT wrote a letter dated May 29, 1989 to PNB. With these admissions, there is no genuine issue concerning RII’s ownership of the chattels and their erroneous delivery to APT had remained. A “genuine issue” is an issue of fact which requires the presentation of evidence. When the facts as pleaded appear uncontested or undisputed, then there is no real or genuine issue or question as to the facts. Summary judgment, as prescribed by the rules must then ensue as a matter of law, to weed out sham claims or defenses at an early stage of the litigation, to avoid the expense and loss of time involved in a trial, and to separate what is formal or pretended in denial or averment from what is genuine and substantial, so that only the latter may subject a suitor to the burden of trial.

Evidence; Admissions; Judicial admissions do not require proof and may not be contradicted in the absence of a prior showing that the admissions had been made through palpable mistake.—Contrary to petitioners’ claim that there was no admission on their part that respondent owned the chattels, our review of the records shows that petitioners failed to either specifically deny or directly assail and raise as an issue, the validity of the letter dated May 11, 1989 and the letter dated May 29, 1989. Their failure to deny the genuineness and due execution of the said documents amounts to a judicial admission pursuant to Section 8, Rule 8 of the Rules of Court. Judicial admissions do not require proof and may not be contradicted in the absence of a prior showing that the admissions had been made through palpable mistake. These letters are deemed admitted as evidence, and they likewise supersede the defenses interposed by petitioners in their respective answers.

PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

The Chief Legal Counsel for petitioner.

Juan G. Ranola, Jr. and Felix Daren R. Abante for Privatization and Management Office.

Marcelo P. Villanueva and John Paolo Roberto Calleza for respondent Refrigeration Industries.

QUISUMBING, J.:

This is a petition for review on certiorari seeking reversal of the Decision1 dated November 22, 2002, of the Court of Appeals in CA-G.R. CV No. 51912. The decision affirmed the Summary Judgment2 dated August 7, 1995, of the Regional Trial Court (RTC) of Makati, Branch 61, in Civil Case No. 13944.

The facts in this case are culled from the records.

Petitioners are the Philippine National Bank (PNB), a private banking corporation, and the Asset

Privatization Trust (APT), an agency created by Proclamation No. 50 that takes title to or possession, conserves, provisionally manages, and disposes assets, which have been identified for privatization or disposition, for the benefit of the National Government. Respondent Refrigeration Industries Inc. (RII) is a manufacturer of refrigerators and compressors.

Prior to 1984, respondent RII occupied a portion of the assembly plant of Delta Motor Corporation (DMC). RII installed in the plant equipment, machinery and other chattels RII used in its business.3

In February 1984, PNB, then a government-owned and controlled bank, foreclosed several parcels of real estate and chattels of DMC located at the DMC Compound. In an auction of the foreclosed properties, PNB was the highest bidder. Thus, it took possession of all chattels inside the DMC compound, both as owner of chattels and as mortgagee of the remaining properties.4

On June 18, 1984 when PNB took possession of the DMC compound, RII demanded the release of its properties still inside the compound, now the subject of the case, after RII made statements claiming ownership over them. PNB allowed RII to remove some of its personal properties from the DMC compound, upon the latter’s showing of proof of ownership. However, respondent failed to produce any proof of ownership,5 with respect to the contested properties found in Annex “C” of the Complaint. PNB’s refusal to release the subject properties led to the filing of a complaint by RII for Recovery of Possession with Damages before the RTC of Makati on June 10, 1986.

At all the scheduled pre-trial conferences, PNB consistently manifested in court its willingness to release the chattels conditioned upon RII’s showing of evidence of ownership. Eventually, some of the properties were released.

By virtue of Proclamation No. 50 as implemented by Administrative Circular No. 14 dated February 27, 1989, certain properties of RII inside DMC’s compound, with some other acquired assets of PNB covered by the Circular, were transferred to the Asset Privatization Trust (APT). Hence in 1992, APT was impleaded as a party-defendant. Pursuant to Republic Act No. 8758,6 the corporate existence of APT expired on December 31, 2000. On December 6, 2000, former President Joseph Estrada signed Executive Order No. 323 creating the Privatization and Management Office (PMO) which succeeded the APT. At the time, RII had not yet shown additional evidence to support its claim over the remaining personal properties in PNB’s possession.

Six (6) years later, on February 10, 1995, RII filed a Motion for Summary Judgment.7 It averred that there was no genuine issue to any material fact except the issue on damages, costs and attorneys’ fees. RII alleged that during the pre-trial conference, PNB manifested to APT, in a letter8 dated May 11, 1989, that the machineries and equipments of RII listed in Annex “C” of the complaint were erroneously transferred to APT, and that in a letter9 dated May 31, 1989, APT acknowledged the mistakes and agreed to release the properties to the authorized representative of RII.

Both PNB and APT (PMO) opposed the motion on the ground that there still existed a genuine factual issue, which was the ownership of the chattels.

On August 7, 1995, a Summary Judgment was rendered by the lower court, the decretal portion of which reads:

“WHEREFORE, premises above considered, and there is no genuine issue left to be litigated, the motion for summary judgment is hereby GRANTED, and judgment is hereby rendered for plaintiff as against defendants who are hereby ORDERED to effect the return of all the chattels and/or personal properties of plaintiff that were taken by them as stated in Annex “C” of the Complaint.

SO ORDERED.”10

41

PNB appealed to the Court of Appeals.

On November 22, 2002, the Court of Appeals affirmed in toto the trial court’s decision. Hence, this petition raising a single issue as follows:

THE HONORABLE COURT OF APPEALS DID NOT CONSIDER THE EXISTENCE OF A GENUINE ISSUE IN THIS CASE, THAT OF THE OWNERSHIP OF THE CONTESTED CHATTELS, THAT WOULD PRECLUDE ISSUANCE OF SUMMARY JUDGMENT.11

Simply put, was the summary judgment proper? Did the appellate court err in affirming the trial court’s decision?

Petitioners contend that the Court of Appeals gravely erred in affirming the summary judgment. There was no admission made as to RII’s ownership of the contested chattels, thus, there still exists a genuine issue as to a material fact that precludes the issuance of summary judgment.

After considering the records of this case, we find that petitioners’ contention could not be upheld. We agree that the Court of Appeals correctly held that the summary judgment was properly rendered by the trial court.

Firstly, it may be noted that PNB admitted in its May 11, 1989 letter to APT that the contested chattels belonged to RII, but were erroneously taken during the foreclosure of DMC’s properties; that these were eventually transferred to APT. Secondly, we also note that APT admitted that PNB wrote the letter dated May 11, 1989; and that APT wrote a letter dated May 29, 1989 to PNB. With these admissions, there is no genuine issue concerning RII’s ownership of the chattels and their erroneous delivery to APT had remained. A “genuine issue” is an issue of fact which requires the presentation of evidence. When the facts as pleaded appear uncontested or undisputed, then there is no real or genuine issue or question as to the facts.12

Summary judgment, as prescribed by the rules must then ensue as a matter of law, to weed out sham claims or defenses at an early stage of the litigation, to avoid the expense and loss of time involved in a trial, and to separate what is formal or pretended in denial or averment from what is genuine and substantial, so that only the latter may subject a suitor to the burden of trial.13

Contrary to petitioners’ claim that there was no admission on their part that respondent owned the chattels, our review of the records shows that petitioners failed to either specifically deny or directly assail and raise as an issue, the validity of the letter dated May 11, 1989 and the letter dated May 29, 1989. Their failure to deny the genuineness and due execution of the said documents amounts to a judicial admission pursuant to Section 8,14 Rule 8 of the Rules of Court.

Judicial admissions do not require proof and may not be contradicted in the absence of a prior showing that the admissions had been made through palpable mistake.15 These letters are deemed admitted as evidence, and they likewise supersede the defenses interposed by petitioners in their respective answers.

It may lastly be recalled that from the very start, PNB consistently manifested its willingness to release the said properties upon respondent’s proof of ownership over them. The correspondence between the parties shows that PNB actually admitted that the subject chattels belonged to RII but were erroneously transferred to petitioner APT. Conformably then, the trial court’s summary judgment is proper and correct. No reversible error was committed by the Court of Appeals in affirming it.

WHEREFORE, the instant petition is DENIED for lack of merit. The assailed Decision dated November 22, 2002 of the Court of Appeals in CA-G.R. CV No. 51912 is AFFIRMED. Costs against petitioners.

SO ORDERED.

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

Petition denied, assailed decision affirmed.

Notes.—Upon a motion for summary judgment, the sole function of the court is to determine whether or not there is an issue of fact to be tried, and any doubt as to the existence of an issue of fact must be resolved against the movant—courts are quite critical of the papers presented by the moving party but not of the papers in opposition thereto. (Garcia vs. Court of Appeals, 336 SCRA 475 [2000])

A motion for summary judgment is premised on the assumption that a scrutiny of the facts will disclose that the issues presented need not be tried either because these are patently devoid of substance or that there is no genuine issue as to any pertinent fact—it is a method sanctioned by the Rules of Court for prompt disposition of a civil action where there exists no serious controversy. (Raboca vs. Velez, 341 SCRA 543 [2000])

——o0o——

42

G.R. No. 146089. December 13, 2001.*

VIRGINIA GOCHAN, LOUISE GOCHAN, LAPU-LAPU REAL ESTATE CORPORATION, FELIX GOCHAN AND SONS REALTY CORPORATION, MACTAN REALTY DEVELOPMENT

CORPORATION, petitioners, vs. MERCEDES GOCHAN, ALFREDO GOCHAN, ANGELINA GOCHAN-HERNAEZ, MA. MERCED GOCHAN GOROSPE, CRISPO GOCHAN, JR., and

MARLON GOCHAN, respondents.

Actions; Docket Fees; The rule is well-settled that the court acquires jurisdiction over any case only upon the payment of the prescribed docket fees.—The rule is well-settled that the court acquires jurisdiction over any case only upon the payment of the prescribed docket fees. In the case of Sun Insurance Office, Ltd. (SIOL) v. Asuncion, this Court held that it is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee that vests a trial court with jurisdiction over the subject matter or nature of the action.

Same; Same; Pleadings and Practice; In this jurisdiction, the dictum adhered to is that the nature of an action is determined by the allegations in the body of the pleading or complaint itself, rather than by its title or heading.—It is necessary to determine the true nature of the complaint in order to resolve the issue of whether or not respondents paid the correct amount of docket fees therefor. In this jurisdiction, the dictum adhered to is that the nature of an action is determined by the allegations in the body of the pleading or complaint itself, rather than by its title or heading. The caption of the complaint below was denominated as one for “specific performance and damages.” The relief sought, however, is the conveyance or transfer of real property, or ultimately, the execution of deeds of conveyance in their favor of the real properties enumerated in the provisional memorandum of agreement. Under these circumstances, the case below was actually a real action, affecting as it does title to or possession of real property.

Same; Same; Same; Where the complaint filed with the trial court was in the nature of a real action although ostensibly denominated as one for specific performance, the basis for determining the correct docket fees shall be the assessed value of the property, or the estimated value thereof as alleged by the claimant.—In the case at bar, therefore, the complaint filed with the trial court was in the nature of a real action, although ostensibly denominated as one for specific performance. Consequently, the basis for determining the correct docket fees shall be the assessed value of the property, or the estimated value thereof as alleged by the claimant. Rule 141, Section 7, of the Rules of Court, as amended by A.M. No. 00-2-01-SC, provides: Section 7. Clerks of Regional Trial Courts.—x x x (b) x x x In a real action, the assessed value of the property, or if there is none, the estimated value thereof shall be alleged by the claimant and shall be the basis in computing the fees.

Same; Same; The liberal interpretation of the rules relating to the payment of docket fees as applied in the case of Sun Insurance Office, Ltd. v. Asuncion, 170 SCRA 274 (1989), cannot apply to the instant case as the respondents have never demonstrated any willingness to abide by the rules and to pay the correct docket fees.—We are not unmindful of our pronouncement in the case of Sun Insurance, to the effect that in case the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive period. However, the liberal interpretation of the rules relating to the payment of docket fees as applied in the case of Sun Insurance cannot apply to the instant case as respondents have never demonstrated any willingness to abide by the rules and to pay the correct docket fees. Instead, respondents have stubbornly insisted that the case they filed was one for specific performance and damages and that they actually paid the correct docket fees therefor at the time of the filing of the complaint.

Same; Forum Shopping; Test to Determine Whether There is Forum-Shopping; The deplorable practice of forum-shopping is resorted to by litigants who, for the purpose of obtaining the same relief, resort to two different fora to increase his or her chances of obtaining a favorable judgment in either one.—We agree with petitioners that they are not guilty of forum-shopping. The deplorable practice of forum-shopping is resorted to by litigants who, for the purpose of obtaining the same relief, resort to

two different fora to increase his or her chances of obtaining a favorable judgment in either one. In the case of Golangco v. Court of Appeals, we laid down the following test to determine whether there is forum-shopping: Ultimately, what is truly important to consider in determining whether forum-shopping exists or not is the vexation caused the courts and the parties-litigant by a person who asks different courts and/or administrative agencies to rule on the same or related causes and/or grant the same or substantially the same reliefs, in the process creating the possibility of conflicting decisions being rendered by the different fora upon the same issues.

Same; Same; There is no forum-shopping where the first petition involved the propriety of the affirmative defenses relied upon by petitioners and the second petition raised the issue of whether or not public respondent judge was guilty of manifest partiality warranting his inhibition from further hearing the case.—Likewise, we do not find that there is forum-shopping in the case at bar. The first petition, docketed as CA-G.R. SP. No. 49084, which is now the subject of the instant petition, involved the propriety of the affirmative defenses relied upon by petitioners in Civil Case No. CEB-21854. The second petition, docketed as CA-G.R. SP No. 54985, raised the issue of whether or not public respondent Judge Dicdican was guilty of manifest partiality warranting his inhibition from further hearing Civil Case No. CEB-21854. More importantly, the two petitions did not seek the same relief from the Court of Appeals. In CA-G.R. SP. No. 49084, petitioners prayed, among others, for the annulment of the orders of the trial court denying their motion for preliminary hearing on the affirmative defenses in Civil Case No. CEB-21854. No such reliefs are involved in the second petition, where petitioners merely prayed for the issuance of an order enjoining public respondent Judge Dicdican from further trying the case and to assign a new judge in his stead.

DAVIDE, C.J., Dissenting Opinion:

Certiorari; The trial court did not commit any grave abuse of discretion in denying the motion for a preliminary hearing on the affirmative defenses on the ground that such defenses do not appear to be indubitable.—I submit that the trial court did not commit any grave abuse of discretion in denying the motion for a preliminary hearing on the affirmative defenses on the ground that such defenses do not appear to be indubitable. The ponencia itself admits that only some of the defenses appeared indubitable. The last paragraph of page 10 of the latest draft of the ponencia reads: True, the trial court has the discretion to conduct a preliminary hearing on affirmative defenses. In the case at bar, however, the trial court committed a grave abuse of its discretion when it denied the motion for preliminary hearing. As we have discussed above, some of these defenses, which petitioners invoked as grounds for the dismissal of the action, appeared to be indubitable, contrary to the pronouncement of the trial court. Indeed, the abuse of discretion it committed amounted to an evasion of positive duty or virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law, which would have warranted the extraordinary writ of certiorari. Hence, the Court of Appeals erred when it dismissed the petition for certiorari filed by petitioners.

PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

Soo, Gutierrez, Leogardo & Lee for petitioners.

Zosa & Quijano Law Offices for respondents.

YNARES-SANTIAGO, J.:

This is a petition for review seeking to set aside the decision of the Court of Appeals dated September 10, 1999 in CA-G.R. SP No. 49084,1 as well as its Resolution2 dated November 22, 2000, denying the Motion for Reconsideration.

Respondents were stockholders of the Felix Gochan and Sons Realty Corporation and the Mactan Realty Development Corporation. Sometime in 1996, respondents offered to sell their

43

shares in the two corporations to the individual petitioners, the heirs of the late Ambassador Esteban Gochan, for and in consideration of the sum of P200,000,000.00. Petitioners accepted and paid the said amount to respondents. Accordingly, respondents issued to petitioners the necessary “Receipts.”3 In addition, respondents executed their respective “Release, Waiver and Quitclaim,”4 wherein they undertook that they would not initiate any suit, action or complaint against petitioners for whatever reason or purpose. In turn, respondents, through Crispo Gochan, Jr., required individual petitioners to execute a “promissory note,”5 undertaking not to divulge the actual consideration they paid for the shares of stock. For this purpose, Crispo Gochan, Jr. drafted a document entitled “promissory note” in his own handwriting and had the same signed by Felix Gochan, III, Louise Gochan and Esteban Gochan, Jr.

Unbeknown to petitioners, Crispo Gochan, Jr. inserted in the “promissory note” a phrase that says, “Said amount is in partial consideration of the sale.”6

On April 3, 1998, respondents filed a complaint against petitioners for specific performance and damages with the Regional Trial Court of Cebu City, Branch 11, docketed as Civil Case No. CEB-21854. Respondents alleged that sometime in November 1996, petitioner Louise Gochan, on behalf of all the petitioners, offered to buy their shares of stock, consisting of 254 shares in the Felix Gochan and Sons Realty Corporation and 1,624 shares of stock in the Mactan Realty Development Corporation; and that they executed a Provisional Memorandum of Agreement, wherein they enumerated the following as consideration for the sale:

9 1. Pesos: Two Hundred Million Pesos (P200M)

10 2. Two (2) hectares more or less of the fishpond in Gochan Compound, Mabolo, Lot 4F-2-B

11 3. Lot 2, Block 9 with an area of 999 square meters in Gochan Compound, Mabolo, Cebu

12 4. Three Thousand (3,000) square meters of Villas Magallanes in Mactan, Cebu

13 5. Lot 423 New Gem Building with an area of 605 square meters.7

Accordingly, respondents claimed that they are entitled to the conveyance of the aforementioned properties, in addition to the amount of P200,000,000.00, which they acknowledge to have received from petitioners. Further, respondents prayed for moral damages of P15,000,000.00, exemplary damages of P2,000,000.00, attorney’s fees of P14,000,000.00, and litigation expenses of P2,000,000.00.

Petitioners filed their answer, raising the following affirmative defenses: (a) lack of jurisdiction by the trial court for non-payment of the correct docket fees; (b) unenforceability of the obligation to convey real properties due to lack of a written memorandum thereof, pursuant to the Statute of Frauds; (c) extinguishment of the obligation by payment; (d) waiver, abandonment and renunciation by respondent of all their claims against petitioners; and (e) non-joinder of indispensable parties.

On August 7, 1998, petitioners filed with the trial court a motion for a preliminary hearing on the affirmative defenses. In an Order dated August 11, 1998, the trial court denied the motion, ruling as follows:

As the grant of said motion lies in the discretion of the court under Section 6 of Rule 16 of the 1997 Rules of Civil Procedure, this Court in the exercise of its discretion, hereby denies the said motion because the matters sought to be preliminarily heard do not appear to be tenable. For one, the statute of frauds does not apply in this case because the contract which is the subject matter of this case is already an executed contract. The statute of frauds applies only to executory contracts. According to Dr. Arturo M. Tolentino, a leading authority in civil law, since the statute of frauds was enacted for the purpose of preventing frauds, it should not be made the instrument to further them. Thus, where one party has performed his obligation under a contract, equity would agree that all evidence should be admitted to prove the alleged

agreement (PNB vs. Philippine Vegetable Oil Company, 49 Phil. 897). For another, the contention of the defendants that the claims of the plaintiffs are already extinguished by full payment thereof does not appear to be indubitable because the plaintiffs denied under oath the due execution and genuineness of the receipts which are attached as Annexes 1-A, 1-B and 1-C of defendants’ answer. This issue therefore has to be determined on the basis of preponderance of evidence to be adduced by both parties. Then, still for another, the contention that the complaint is defective because it allegedly has failed to implead indispensable parties appears to be wanting in merit because the parties to the memorandum of agreement adverted to in the complaint are all parties in this case. Then the matter of payment of docketing and filing fees is not a fatal issue in this case because the record shows that the plaintiffs had paid at least P165,000.00 plus in the form of filing and docketing fees. Finally, regarding exerting earnest efforts toward a compromise by the plaintiffs, the defendants cannot say that there is an absence of an allegation to this effect in the complaint because paragraph 11 of the complaint precisely states that “before filing this case, earnest efforts toward a compromise have been made.”

Petitioners’ motion for reconsideration of the above Order was denied by the trial court on September 11, 1998.

Petitioners thus filed a petition for certiorari with the Court of Appeals, docketed as CA-G.R. SP No. 49084. On September 10, 1999, the Court of Appeals rendered the appealed decision dismissing the petition on the ground that respondent court did not commit grave abuse of discretion, tantamount to lack or in excess of jurisdiction in denying the motion to hear the affirmative defenses.8

Again, petitioners filed a motion for reconsideration, but the same was denied by the Court of Appeals in its assailed Resolution of November 22, 2000.9

Petitioners, thus, filed the instant petition for review anchored on the following grounds:

I.

THE COURT OF APPEALS COMMITTED GRAVE AND PALPABLE ERROR IN FINDING THAT THE CORRECT DOCKET FEES HAVE BEEN PAID.

II.

THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN RULING THAT THE PMOA WAS A PARTIALLY EXECUTED CONTRACT AND HENCE NOT COVERED BY THE STATUTE OF FRAUDS.

III.

THE COURT OF APPEALS COMMITTED GRAVE ERROR IN DECIDING THAT THE CLAIMS OF PRIVATE RESPONDENTS HAVE NOT BEEN EXTINGUISHED BY PAYMENT OR FULL SETTLEMENT DESPITE THE PRESENCE OF RECEIPTS SIGNED BY THE PRIVATE RESPONDENTS SHOWING THE CONTRARY.

IV.

THE COURT OF APPEALS COMMITTED GRAVE ERROR IN RESOLVING THAT FELIX GOCHAN III AND ESTEBAN GOCHAN, JR. ARE NOT INDISPENSABLE PARTIES AND THEREFORE NEED NOT BE IMPLEADED AS PARTIES.10

Respondents filed their Comment,11 arguing, in fine, that petitioners are guilty of forum-shopping when they filed two petitions for certiorari with the Court of Appeals; and that the Court of Appeals did not err in dismissing the petition for certiorari.

The instant petition has merit.

The rule is well-settled that the court acquires jurisdiction over any case only upon the payment

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of the prescribed docket fees. In the case of Sun Insurance Office, Ltd. (SIOL) v. Asuncion,12 this Court held that it is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee that vests a trial court with jurisdiction over the subject matter or nature of the action.

Respondents maintain that they paid the correct docket fees in the amount of P165,000.00 when they filed the complaint with the trial court. Petitioners, on the other hand, contend that the complaint is in the nature of a real action which affects title to real properties; hence, respondents should have alleged therein the value of the real properties which shall be the basis for the assessment of the correct docket fees.

The Court of Appeals found that the complaint was one for specific performance and incapable of pecuniary estimation. We do not agree.

It is necessary to determine the true nature of the complaint in order to resolve the issue of whether or not respondents paid the correct amount of docket fees therefor. In this jurisdiction, the dictum adhered to is that the nature of an action is determined by the allegations in the body of the pleading or complaint itself, rather than by its title or heading.13 The caption of the complaint below was denominated as one for “specific performance and damages.” The relief sought, however, is the conveyance or transfer of real property, or ultimately, the execution of deeds of conveyance in their favor of the real properties enumerated in the provisional memorandum of agreement. Under these circumstances, the case below was actually a real action, affecting as it does title to or possession of real property.

In the case of Hernandez v. Rural Bank of Lucena,14 this Court held that a real action is one where the plaintiff seeks the recovery of real property or, as indicated in section 2(a) of Rule 4 (now Section 1, Rule 4 of the 1997 Rules of Civil Procedure), a real action is an action affecting title to or recovery of possession of real property.

It has also been held that where a complaint is entitled as one for specific performance but nonetheless prays for the issuance of a deed of sale for a parcel of land, its primary objective and nature is one to recover the parcel of land itself and, thus, is deemed a real action. In such a case, the action must be filed in the proper court where the property is located:

In this Court, the appellant insists that her action is one for specific performance, and, therefore, personal and transitory in nature.

This very issue was considered and decided by this Court in the case of Manuel B. Ruiz vs. J.M. Tuason & Co., Inc., et al., L-18692, promulgated 31 January 1963. There the Court, by unanimous vote of all the Justices, held as follows:

‘This contention has no merit. Although appellant’s complaint is entitled to be one for specific performance, yet the fact that he asked that a deed of sale of a parcel of land situated in Quezon City be issued in his favor and that a transfer certificate of title covering said parcel of land be issued to him shows that the primary objective and nature of the action is to recover the parcel of land itself because to execute in favor of appellant the conveyance requested there is need to make a finding that he is the owner of the land which in the last analysis resolves itself into an issue of ownership. Hence, the action must be commenced in the province where the property is situated pursuant to Section 3, Rule 5, of the Rules of Court, which provides that actions affecting title to or recovery of possession of real property shall be commenced and tried in the province where the property or any part thereof lies.”15

In the case at bar, therefore, the complaint filed with the trial court was in the nature of a real action, although ostensibly denominated as one for specific performance. Consequently, the basis for determining the correct docket fees shall be the assessed value of the property, or the estimated value thereof as alleged by the claimant. Rule 141, Section 7, of the Rules of Court, as amended by A.M. No. 00-2-01-SC, provides:

Section 7. Clerks of Regional Trial Courts.—x x x

(b) x x x

In a real action, the assessed value of the property, or if there is none, the estimated value thereof shall be alleged by the claimant and shall be the basis in computing the fees.

We are not unmindful of our pronouncement in the case of Sun Insurance,16 to the effect that in case the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive period. However, the liberal interpretation of the rules relating to the payment of docket fees as applied in the case of Sun Insurance cannot apply to the instant case as respondents have never demonstrated any willingness to abide by the rules and to pay the correct docket fees. Instead, respondents have stubbornly insisted that the case they filed was one for specific performance and damages and that they actually paid the correct docket fees therefor at the time of the filing of the complaint. Thus, it was stated in the case of Sun Insurance:17

The principle in Manchester could very well be applied in the present case. The pattern and the intent to defraud the government of the docket fee due it is obvious not only in the filing of the original complaint but also in the filing of the second amended complaint.

However, in Manchester, petitioner did not pay any additional docket fee until the case was decided by this Court on May 7, 1987. Thus, in Manchester, due to the fraud committed on the government, this Court held that the court a quo did not acquire jurisdiction over the case and that the amended complaint could not have been admitted inasmuch as the original complaint was null and void.

In the present case, a more liberal interpretation of the rules is called for considering that, unlike Manchester, private respondent demonstrated his willingness to abide by the rules by paying the additional docket fees as required. The promulgation of the decision in Manchester must have had that sobering influence on private respondent who thus paid the additional docket fee as ordered by the respondent court. It triggered his change of stance by manifesting his willingness to pay such additional docket fee as may be ordered.

Respondents accuse petitioners of forum-shopping when they filed two petitions before the Court of Appeals. Petitioners, on the other hand, contend that there was no forum-shopping as there was no identity of issues or identity of reliefs sought in the two petitions.

We agree with petitioners that they are not guilty of forum-shopping. The deplorable practice of forum-shopping is resorted to by litigants who, for the purpose of obtaining the same relief, resort to two different fora to increase his or her chances of obtaining a favorable judgment in either one. In the case of Golangco v. Court of Appeals,18 we laid down the following test to determine whether there is forum-shopping:

Ultimately, what is truly important to consider in determining whether forum-shopping exists or not is the vexation caused the courts and the parties-litigant by a person who asks different courts and/or administrative agencies to rule on the same or related causes and/or grant the same or substantially the same reliefs, in the process creating the possibility of conflicting decisions being rendered by the different fora upon the same issues.

In sum, two different orders were questioned, two distinct causes of action and issues were raised, and two objectives were sought; thus, forum shopping cannot be said to exist in the case at bar.

Likewise, we do not find that there is forum-shopping in the case at bar. The first petition, docketed as CA-G.R. SP. No. 49084, which is now the subject of the instant petition, involved the propriety of the affirmative defenses relied upon by petitioners in Civil Case No. CEB-21854.

45

The second petition, docketed as CA-G.R. SP No. 54985, raised the issue of whether or not public respondent Judge Dicdican was guilty of manifest partiality warranting his inhibition from further hearing Civil Case No. CEB-21854.

More importantly, the two petitions did not seek the same relief from the Court of Appeals. In CA-G.R. SP. No. 49084, petitioners prayed, among others, for the annulment of the orders of the trial court denying their motion for preliminary hearing on the affirmative defenses in Civil Case No. CEB-21854. No such reliefs are involved in the second petition, where petitioners merely prayed for the issuance of an order enjoining public respondent Judge Dicdican from further trying the case and to assign a new judge in his stead.

True, the trial court has the discretion to conduct a preliminary hearing on affirmative defenses. In the case at bar, however, the trial court committed a grave abuse of its discretion when it denied the motion for preliminary hearing. As we have discussed above, some of these defenses, which petitioners invoked as grounds for the dismissal of the action, appeared to be indubitable, contrary to the pronouncement of the trial court. Indeed, the abuse of discretion it committed amounted to an evasion of positive duty or virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law,19 which would have warranted the extraordinary writ of certiorari. Hence, the Court of Appeals erred when it dismissed the petition for certiorari filed by petitioners.

WHEREFORE, in view of the foregoing, the instant petition is GRANTED. This case is REMANDED to the Regional Trial Court of Cebu City, Branch 11, which is directed to forthwith conduct the preliminary hearing on the affirmative defenses in Civil Case No. CEB-21854.

SO ORDERED.

Kapunan and Pardo, JJ., concur.

Davide, Jr. (C.J., Chairman), Please see Dissenting Opinion.

Puno, J., I join the dissent of C.J. Davide, Jr.

DISSENTING OPINION

DAVIDE, JR., C.J.:

I respectfully make of record my dissent to both drafts of the decision penned by Mme. Justice Consuelo Y. Santiago.

I. The first draft

The first draft (1) sets aside the Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 49084 and the Orders of the Regional Trial Court of Cebu City, Branch 11, in Civil Case No. CEB-21854; and (2) orders of the dismissal of said civil case. I seriously doubt the propriety of this action, even if it is principally based on the non-payment of the deficiency of the docket fee. Sun Life Insurance Office Ltd. v. Asuncion (170 SCRA 274 [1989]) is not the final word on deficiency of docket fees. Tacay v. Regional Trial Court of Tagum, Davao del Norte, (180 SCRA 433, 443 [1989]) further liberalized the rule. Thus:

Two situations may arise. One is where the complaint or similar pleading sets out a claim purely for money or damages and there is no precise statement of the amounts being claimed. In this event the rule is that the pleading will ‘not be accepted nor admitted, or shall otherwise be expunged from the record.’ In other words, the complaint or pleading may be dismissed, or the claims as to which the amounts are unspecified may be expunged, although as aforestated the Court may, on motion, permit amendment of the complaint and payment of the fees provided the claim has not in the meantime become time-barred. The other is where the pleading does specify the amount of every claim, but the fees paid are insufficient; and here again, the rule now is that the court may allow a reasonable time for the payment of the prescribed fees, or the

balance thereof, and upon such payment, the defect is cured and the court may properly take cognizance of the action, unless in the meantime prescription has set in and consequently barred the right of action.

Where the action involves real property and a related claim for damages as well, the legal fees shall be assessed on the basis of both (a) the value of the property and (b) the total amount of related damages sought. The Court acquires jurisdiction over the action if the filing of the initiatory pleading is accompanied by the payment of the requisite fees, or, if the fees are not paid at the time of the filing of the pleading, as of the time of full payment of the fees within such reasonable time as the court may grant, unless, of course, prescription has set in in the meantime. But where—as in the case at bar—the fees prescribed for an action involving real property have been paid, but the amounts of certain of the related damages (actual, moral and nominal) being demanded are unspecified, the action may not be dismissed. The Court undeniably has jurisdiction over the action involving the real property, acquiring it upon the filing of the complaint or similar pleading and payment of the prescribed fee. And it is not divested of that authority by the circumstance that it may not have acquired jurisdiction over the accompanying claims for damages because of lack of specification thereof. What should be done is simply to expunge those claims for damages as to which no amounts are stated, which is what the respondent Courts did, or allow, on motion, a reasonable time for the amendment of the complaints so as to allege the precise amount of each item of damages and accept payment of the requisite fees therefor within the relevant prescriptive period.

Even if we would still cling to Sun Life, the rule therein laid down would still be applicable to this case, contrary to the assertion in the ponencia in question. The evil contemplated in Manchester case which prompted the pronouncement therein does not exist in the instant case.

Verily, there is good faith on the part of the private respondents in insisting on what their cause of action is. Even the Court of Appeals sustained their position in this issue.

Therefor, private respondents should only be required to pay the deficiency in docket fees.

II. The second draft

The second draft ponencia declares the trial court and the Court of Appeals as having acted with grave abuse of discretion in denying the motion for a preliminary hearing on the affirmative defenses. The order of the trial court denying the motion is an interlocutory order. There can be no appeal from such order of denial. A special civil action of certiorari under Rule 65 of the Rules of Court may be resorted to, but there must be a clear showing that the court had acted without or in excess of jurisdiction or with grave abuse of discretion amounting to lack of or in excess of jurisdiction. Grave abuse of discretion means arbitrary and despotic action.

I submit that the trial court did not commit any grave abuse of discretion in denying the motion for a preliminary hearing on the affirmative defenses on the ground that such defenses do not appear to be indubitable. The ponencia itself admits that only some of the defenses appeared indubitable. The last paragraph of page 10 of the latest draft of the ponencia reads:

True, the trial court has the discretion to conduct a preliminary hearing on affirmative defenses. In the case at bar, however, the trial court committed a grave abuse of its discretion when it denied the motion for preliminary hearing. As we have discussed above, some of these defenses, which petitioners invoked as grounds for the dismissal of the action, appeared to be indubitable, contrary to the pronouncement of the trial court. Indeed, the abuse of discretion it committed amounted to an evasion of positive duty or virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law, which would have warranted the extraordinary writ of certiorari. Hence, the Court of Appeals erred when it dismissed the petition for certiorari filed by petitioners. (italics supplied for emphasis.)

Accordingly, since the orders of the trial court are not tainted with grave abuse of discretion, the

46

Court of Appeals committed no error in dismissing the petition for certiorari against said orders.

I then vote to deny due course to the petition.

Petition granted, case remanded to trial court.

Notes.—A court cannot acquire jurisdiction over the subject matter of a case unless the docket fees are paid. (Philippine Pryce Assurance Corporation vs. Court of Appeals, 230 SCRA 164 [1994])

Although the payment of the proper docket fees is a jurisdictional requirement, the trial court may allow the plaintiff in an action to pay the same within a reasonable time before the expiration of the applicable prescriptive or reglementary period. (National Steel Corporation vs. Court of Appeals, 302 SCRA 522 [1999])

There was no clear rule on the payment of docket fees before the Sandiganbayan in 1988. (Yuchengco vs. Republic, 344 SCRA 641 [2000])

——o0o——

No. L-75919. May 7, 1987.*

MANCHESTER DEVELOPMENT CORPORATION, ET AL., petitioners, vs. COURT OF APPEALS, CITYLAND DEVELOPMENT CORPORATION, STEPHEN ROXAS, ANDREW

LUISON, GRACE LUISON and JOSE DE MAISIP, respondents.

Remedial Law; Civil Procedure; Complaint; Filing Fees; Environmental facts of Magaspi vs. Ramolete case, different from case at bar.—ln the Magaspi case, the action was considered not only one for recovery of ownership but also for damages, so that the filing fee for the damages should be the basis of assessment. Although the payment of the docketing fee of P60.00 was found to be insufficient, nevertheless, it was held that since the payment was the result of an "honest difference of opinion as to the correct amount to be paid as docket fee" the court "had acquired jurisdiction over the case and the proceedings thereafter had were proper and regular." Hence, as the amended complaint superseded the original complaint, the allegations of damages in the amended complaint should be the basis of the computation of the filing fee. In the present case no such honest difference of opinion was possible as the allegations of the complaint, the designation and the prayer show clearly that it is an action for damages and specific performance. The docketing fee should be assessed by considering the amount of damages as alleged in the original complaint.

Same; Same; Same; Same; Case is deemed filed only upon payment of the docket fee regardless of actual date of filing in court.—As reiterated in the Magaspi case the rule is well-settled "that a case is deemed filed only upon payment of the docket fee regardless of the actual date of filing in court." Thus, in the present case the trial court did not acquire jurisdiction over the case by the payment of only P410.00 as docket fee. Neither can the amendment of the complaint thereby vest jurisdiction upon the Court. For all legal purposes there is no such original complaint that was duly filed which could be amended. Consequently, the order admitting the amended complaint and all subsequent proceedings and actions taken by the trial court are null and void.

Same; Same; Same; Same; Basis of assessment of the docket fee should be the amount of damages in the original complaint and not in the amended complaint.—The Court of Appeals therefore, aptly ruled in the present case that the basis of assessment of the docket fee should be the amount of damages sought in the original complaint and not in the amended complaint.

Same; Same; Same; Same; Attorneys; Court frowns at practice of counsel who filed the original complaint of omitting any specification of the amount of damages in the prayer although the amount of over P78 million is alleged in the body of the complaint which is clearly intended to thwart payment of correct filing fees.—The Court cannot close this case without making the observation that it frowns at the practice of counsel who filed the original complaint in this case of omitting any specification of the amount of damages in the prayer although the amount of over P 78 million is alleged in the body of the complaint. This is clearly intended for no other purpose than to evade the payment of the correct filing fees if not to mislead the docket clerk in the assessment of the filing fee. This fraudulent practice was compounded when, even as this Court had taken cognizance of the anomaly and ordered an investigation, petitioner through another counsel filed an amended complaint, deleting all mention of the amount of damages being asked for in the body of the complaint. It was only when in obedience to the order of this Court of October 18, 1985, the trial court directed that the amount of damages be specified in the amended complaint, that petitioners' counsel wrote the damages sought in the much reduced amount of P10,000,000.00 in the body of the complaint but not in the prayer thereof. The design to avoid payment of the required docket f ee is obvious.

Same; Same; Same; Same; Same; Warning of Supreme Court that drastic action will be taken upon a repetition of the unethical practice.—The Court serves warning that it will take drastic action upon a repetition of this unethical practice.

Same; Same; Same; Same; Requirement that henceforth all complaints, petitions, answers and other similar pleadings should specify the amount of damages prayed for not only in the body of the pleading but

47

also in the prayer, and that the damages should be considered in the assessment of the filing fees; Any pleading that fails to comply with the requirement shall not be accepted or admitted.—To put a stop to this irregularity, henceforth all complaints, petitions, answers and other similar pleadings should specify the amount of damages being prayed for not only in the body of the pleading but also in the prayer, and said damages shall be considered in the assessment of the filing fees in any case. Any pleading that fails to comply with this requirement shall not be accepted nor admitted, or shall otherwise be expunged from the record.

Same; Same; Same; Same; Jurisdiction; Court acquires jurisdiction over any case only upon payment of the prescribed docket fee; An amendment of the complaint or similar pleading will not vest jurisdiction in the court, much less payment of the docket fee based on amount in the amended pleading Magaspi vs. Ramolete case which is inconsistent with this decision, is reversed.—The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. An amendment of the complaint or similar pleading will not thereby vest jurisdiction in the Court, much less the payment of the docket fee based on the amounts sought in the amended pleading. The ruling in the Magaspi case in so far as it is inconsistent with this pronouncement is overturned and reversed.

PETITION to review the decision of the Court of Appeals,

The facts are stated in the resolution of the Court.

Tanjuatco, Oreta and Tanjuatco for petitioners.

Pecabar Law Offices for private respondents.

RESOLUTION

GANCAYCO, J.:

Acting on the motion f or reconsideration of the resolution of the Second Division of January 28, 1987 and. another motion to refer the case to and to be heard in oral argument by the Court En Banc filed by petitioners, the motion to refer the case to the Court en banc is granted but the motion to set the case f or oral argument is denied.

Petitioners in support of their contention that the filing fee must be assessed on the basis of the amended complaint cite the case of Magaspi vs. Ramolete.1 They contend that the Court of Appeals erred in ruling that the filing fee should be levied by considering the amount of damages sought in the original complaint.

The environmental facts of said case differ from the present in that—

1. The Magaspi case was an action for recovery of ownership and possession of a parcel of land with damages,2 while the present case is an action for torts and damages and specific performance with prayer for temporary restraining order, etc.3

2. In the Magaspi case, the prayer in the complaint seeks not only the annulment of title of the defendant to the property, the declaration of ownership and delivery of possession thereof to plaintiffs but also asks for the payment of actual, moral, exemplary damages and attorney's fees arising therefrom in the amounts specified therein.4 However, in the present case, the prayer is for the issuance of a writ of preliminary prohibitory injunction during the pendency of the action against the dafendants' announced forfeiture of the sum of P3 Million paid by the plaintiff s for the property in question, to attach such property of defendants that maybe sufficient to satisfy any judgment that maybe rendered, and after hearing, to order defendants to execute a contract of purchase and sale of the subject property and annul defendants' illegal forfeiture of the money of plaintiff, ordering defendants jointly and severally to pay plaintiff actual, compensatory and exemplary damages as well as 25% of said amounts as maybe proved during the trial as attorney's fees and declaring the tender of payment of the purchase price of plaintiff valid and producing the effect of payment and to make the injunction permanent. The amount

of damages sought is not specified in the prayer although the body of the complaint alleges the total amount of over P78 Million as damages suffered by plaintiff.5

3. Upon the filing of the complaint there was an honest difference of opinion as to the nature of the action in the Magaspi case. The complaint was considered as primarily an action for recovery of ownership and possession of a parcel of land. The damages stated were treated as merely ancillary to the main cause of action. Thus, the docket fee of only P60.00 and P10.00 for the sheriff s fee were paid.6

In the present case there can be no such honest difference of opinion. As maybe gleaned from the allegations of the complaint as well as the designation thereof, it is both an action for damages and specific performance. The docket fee paid upon filing of complaint in the amount only of P410.00 by considering the action to be merely one for specific performance where the amount involved is not capable of pecuniary estimation is obviously erroneous. Although the total amount of damages sought is not stated in the prayer of the complaint yet it is spelled out in the body of the complaint totalling in the amount of P78,750,000.00 which should be the basis of assessment of the f iling fee,

4. When this under-assessment of the filing fee in this case was brought to the attention of this Court together with similar other cases an investigation was immediately ordered by the Court. Meanwhile plaintiff through another counsel with leave of court filed an amended complaint on September 12, 1985 for the inclusion of Philips Wire and Cable Corporation as co-plaintiff and by eliminating any mention of the amount of damages in the body of the complaint. The prayer in the original complaint was maintained. After this Court issued an order on October 15, 1985 ordering the re-assessment of the docket fee in the present case and other cases that were investigated, on November 12, 1985 the trial court directed plaintiffs to rectify the amended complaint by stating the amounts which they are asking for. It was only then that plaintiffs specified the amount of damages in the body of the complaint in the reduced amount of P10,000,000.00.7 Still no amount of damages were specified in the prayer. Said amended complaint was admitted.

On the other hand, in the Magaspi case, the trial court ordered the plaintiffs to pay the amount of P3,104.00 as filing fee covering the damages alleged in the original complaint as it did not consider the damages to be merely ancillary or incidental to the action for recovery of ownership and possession of real property.8 An amended complaint was filed by plaintiff with leave of court to include the government of the Republic as defendant and reducing the amount of damages, and attorney's fees prayed for to P100,000.00. Said amended complaint was also admitted.9

In the Magaspi case, the action was considered not only one for recovery of ownership but also for damages, so that the filing fee for the damages should be the basis of assessment. Although the payment of the docketing fee of P60.00 was found to be insufficient, nevertheless, it was held that since the payment was the result of an "honest difference of opinion as to the correct amount to be paid as docket fee" the court "had acquired jurisdiction over the case and the proceedings thereafter had were proper and regular."10 Hence, as the amended complaint superseded the original complaint, the allegations of damages in the amended complaint should be the basis of the computation of the filing fee.11

In the present case no such honest difference of opinion was possible as the allegations of the complaint, the designation and the prayer show clearly that it is an action for damages and specific performance. The docketing fee should be assessed by considering the amount of damages as alleged in the original complaint.

As reiterated in the Magaspi case the rule is well-settled "that a case is deemed filed only upon payment of the docket fee regardless of the actual date of filing in court."12 Thus, in the present case the trial court did not acquire jurisdiction over the case by the payment of only P410.00 as docket fee. Neither can the amendment of the complaint thereby vest jurisdiction upon the

48

Court.13 For all legal purposes there is no such original complaint that was duly filed which could be amended. Consequently, the order admitting the amended complaint and all subsequent proceedings and actions taken by the trial court are null and void.

The Court of Appeals therefore, aptly ruled in the present case that the basis of assessment of the docket fee should be the amount of damages sought in the original complaint and not in the amended complaint.

The Court cannot close this case without making the observation that it frowns at the practice of counsel who filed the original complaint in this case of omitting any specification of the amount of damages in the prayer although the amount of over P78 million is alleged in the body of the complaint. This is clearly intended for no other purpose than to evade the payment of the correct filing fees if not to mislead the docket clerk in the assessment of the filing fee. This fraudulent practice was compounded when, even as this Court had taken cognizance of the anomaly and ordered an investigation, petitioner through another counsel filed an amended complaint, deleting all mention of the amount of damages being asked for in the body of the complaint It was only when in obedience to the order of this Court of October 18, 1985, the trial court directed that the amount of damages be specified in the amended complaint, that petitioners' counsel wrote the damages sought in the much reduced amount of P 10,000,000.00 in the body of the complaint but not in the prayer thereof. The design to avoid payment of the required docket fee is obvious.

The Court serves warning that it will take drastic action upon a repetition of this unethical practice.

To put a stop to this irregularity, henceforth all complaints, petitions, answers and other similar pleadings should specify the amount of damages being prayed for not only in the body of the pleading but also in the prayer, and said damages shall be considered in the assessment of the filing fees in any case. Any pleading that fails to comply with this requirement shall not be accepted nor admitted, or shall otherwise be expunged from the record.

The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. An amendment of the complaint or similar pleading will not thereby vest jurisdiction in the Court, much less the payment of the docket fee based on the amounts sought in the amended pleading. The ruling in the Magaspi case14 in so far as it is inconsistent with this pronouncement is overturned and reversed.

WHEREFORE, the motion for reconsideration is denied for lack of merit.

SO ORDERED.

Teehankee, C.J., Yap, Fernan, Narvasa, Melencio-Herrera, Gutierrez, Jr, Cruz, Paras, Feliciano, Bidin, Sarmiento and Cortes, JJ., concur.

Paras, J., took no part; I was retained counsel of respondent Cityland Development Corporation.

Motion denied.

——o0o——

G.R. Nos. 79937-38. February 13, 1989.*

SUN INSURANCE OFFICE, LTD., (SIOL), E.B. PHILIPPS AND D.J. WARBY, petitioners, vs. HON. MAXIMIANO C. ASUNCION, Presiding Judge, Branch 104, Regional Trial Court,

Quezon City and MANUEL CHUA UY PO TIONG, respondents.

Remedial Law; Civil Procedure; Actions; Statutes regulating the procedure of courts are applicable to actions pending and undetermined at the time of their passage.—On the other hand, private respondent claims that the ruling in Manchester cannot apply retroactively to Civil Case No. Q-41177 for at the time said civil case was filed in court there was no such Manchester ruling as yet. Further, private respondent avers that what is applicable is the ruling of this Court in Magaspi v. Ramolete, wherein this Court held that the trial court acquired jurisdiction over the case even if the docket fee paid was insufficient. The contention that Manchester cannot apply retroactively to this case is untenable. Statutes regulating the procedure of the courts will be construed as applicable to actions pending and undetermined at the time of their passage. Procedural laws are retrospective in that sense and to that extent.

Same; Same; Same; Jurisdiction; Complaint; Docket Fees; It is not only the filing of the complaint, but the payment of the prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or nature of the action.—It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee, that vests a trial court with jurisdiction over the subject-matter or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period.

Same; Same; Same; Same; Same; Same; Permissive Counter-claims; Third-Party Claims; Permissive counter-claims, third-party claims and the like shall not be considered filed until and unless the prescribed filing fee is paid.—The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period.

Same; Same; Same; Same; Same; Same; Judgments; Lien; When the judgment of the courts awards a claim not specified in the pleading, the additional filing fee shall constitute a lien on the judgment.—Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified the same has been left for determination by the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the additional fee.

PETITION to review the decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles Law Offices for petitioners.

Tanjuatco, Oreta, Tanjuatco, Berenguer & Sanvicente Law Offices for private respondent.

GANCAYCO, J.:

Again the Court is asked to resolve the issue of whether or not a court acquires jurisdiction over a case when the correct and proper docket fee has not been paid.

On February 28, 1984, petitioner Sun Insurance Office, Ltd. (SIOL for brevity) filed a complaint with the Regional Trial Court of Makati, Metro Manila for the consignation of a premium refund on a fire insurance policy with a prayer for the judicial declaration of its nullity against private respondent Manuel Uy Po Tiong. Private respondent was declared in default for failure to file the required answer within the reglementary period.

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On the other hand, on March 28, 1984, private respondent filed a complaint in the Regional Trial Court of Quezon City for the refund of premiums and the issuance of a writ of preliminary attachment which was docketed as Civil Case No. Q-41177, initially against petitioner SIOL, and thereafter including E.B. Philipps and D.J. Warby as additional defendants. The complaint sought, among others, the payment of actual, compensatory, moral, exemplary and liquidated damages, attorney’s fees, expenses of litigation and costs of the suit. Although the prayer in the complaint did not quantify the amount of damages sought said amount may be inferred from the body of the complaint to be about Fifty Million Pesos (P50,000,000.00).

Only the amount of P210.00 was paid by private respondent as docket fee which prompted petitioners’ counsel to raise his objection. Said objection was disregarded by respondent Judge Jose P. Castro who was then presiding over said case.

Upon the order of this Court, the records of said case together with twenty-two other cases assigned to different branches of the Regional Trial Court of Quezon City which were under investigation for under-assessment of docket fees were transmitted to this Court. The Court thereafter returned the said records to the trial court with the directive that they be reraffled to the other judges in Quezon City, to the exclusion of Judge Castro. Civil Case No. Q-41177 was re-raffled to Branch 104, a sala which was then vacant.

On October 15, 1985, the Court en banc issued a Resolution in Administrative Case No. 85-10-8752-RTC directing the judges in said cases to reassess the docket fees and that in case of deficiency, to order its payment. The Resolution also requires all clerks of court to issue certificates of re-assessment of docket fees. All litigants were likewise required to specify in their pleadings the amount sought to be recovered in their complaints.

On December 16, 1985, Judge Antonio P. Solano, to whose sala Civil Case No. Q-41177 was temporarily assigned, issued an order to the Clerk of Court instructing him to issue a certificate of assessment of the docket fee paid by private respondent and, in case of deficiency, to include the same in said certificate.

On Jaunary 7, 1984, to forestall a default, a cautionary answer was filed by petitioners. On August 30, 1984, an amended complaint was filed by private respondent including the two additional defendants aforestated.

Judge Maximiano C. Asuncion, to whom Civil Case No. Q-41177 was thereafter assigned, after his assumption into office on January 16, 1986, issued a Supplemental Order requiring the parties in the case to comment on the Clerk of Court’s letter-report signifying her difficulty in complying with the Resolution of this Court of October 15, 1985 since the pleadings filed by private respondent did not indicate the exact amount sought to be recovered. On January 23, 1986, private respondent filed a “Compliance” and a “Re-Amended Complaint” stating therein a claim of “not less than P10,000,000.00 as actual compensatory damages” in the prayer. In the body of the said second amended complaint however, private respondent alleges actual and compensatory damages and attorney’s fees in the total amount of about P44,601,623.70.

On January 24, 1986, Judge Asuncion issued another Order admitting the second amended complaint and stating therein that the same constituted proper compliance with the Resolution of this Court and that a copy thereof should be furnished the Clerk of Court for the reassessment of the docket fees. The reassessment by the Clerk of Court based on private respondent’s claim of “not less than P10,000,000.00 as actual and compensatory damages” amounted to P39,786.00 as docket fee. This was subsequently paid by private respondent.

Petitioners then filed a petition for certiorari with the Court of Appeals questioning the said order of Judge Asuncion dated January 24, 1986.

On April 24, 1986, private respondent filed a supplemental complaint alleging an additional claim of P20,000,000.00 as damages so the total claim amounts to about P64,601,623.70. On

October 16, 1986, or some seven months after filing the supplemental complaint, the private respondent paid the additional docket fee of P80,396.00.1

On August 13, 1987, the Court of Appeals rendered a decision ruling, among others, as follows:

“WHEREFORE, judgment is hereby rendered:

1. Denying due course to the petition in CA-G.R. SP No. L-09715 insofar as it seeks annulment of the order

14 (a) denying petitioners’ motion to dismiss the complaint, as amended, and

15 (b) granting the writ of preliminary attachment, but giving due course to the portion thereof questioning the reassessment of the docketing fee, and requiring the Honorable respondent Court to reassess the docketing fee to be paid by private respondent on the basis of the amount of P25,401,707.00.”2

Hence, the instant petition.

During the pendency of this petition and in conformity with the said judgment of respondent court, private respondent paid the additional docket fee of P62,432.90 on April 28, 1988.3

The main thrust of the petition is that the Court of Appeals erred in not finding that the lower court did not acquire jurisdiction over Civil Case No. Q-41177 on the ground of non-payment of the correct and proper docket fee. Petitioners allege that while it may be true that private respondent had paid the amount of P182,824.90 as docket fee as herein-above related, and considering that the total amount sought to be recovered in the amended and supplemental complaint is P64,601,623.70 the docket fee that should be paid by private respondent is P257,810.49, more or less. Not having paid the same, petitioners contend that the complaint should be dismissed and all incidents arising therefrom should be annulled. In support of their theory, petitioners cite the latest ruling of the Court in Manchester Development Corporation vs. CA,4 as follows:

“The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. An amendment of the complaint or similar pleading will not thereby vest jurisdiction in the Court, much less the payment of the docket fee based on the amounts sought in the amended pleading. The ruling in the Magaspi Case in so far as it is inconsistent with this pronouncement is overturned and reversed.”

On the other hand, private respondent claims that the ruling in Manchester cannot apply retroactively to Civil Case No. Q-41177 for at the time said civil case was filed in court there was no such Manchester ruling as yet. Further, private respondent avers that what is applicable is the ruling of this Court in Magaspi v. Ramolete,5 wherein this Court held that the trial court acquired jurisdiction over the case even if the docket fee paid was insufficient.

The contention that Manchester cannot apply retroactively to this case is untenable. Statutes regulating the procedure of the courts will be construed as applicable to actions pending and undetermined at the time of their passage. Procedural laws are retrospective in that sense and to that extent.6

In Lazaro vs. Endencia and Andres,7 this Court held that the payment of the full amount of the docket fee is an indispensable step for the perfection of an appeal. In a forcible entry and detainer case before the justice of the peace court of Manaoag, Pangasinan, after notice of a judgment dismissing the case, the plaintiff filed a notice of appeal with said court but he deposited only P8.00 for the docket fee, instead of P16.00 as required, within the reglementary period of appeal of five (5) days after receiving notice of judgment. Plaintiff deposited the additional P8.00 to complete the amount of the docket fee only fourteen (14) days later. On the basis of these facts, this court held that the Court of First Instance did not acquire jurisdiction to hear and determine the appeal as the appeal was not thereby perfected.

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In Lee vs. Republic,8 the petitioner filed a verified declaration of intention to become a Filipino citizen by sending it through registered mail to the Office of the Solicitor General in 1953 but the required filing fee was paid only in 1956, barely 5-1/2 months prior to the filing of the petition for citizenship. This Court ruled that the declaration was not filed in accordance with the legal requirement that such declaration should be filed at least one year before the filing of the petition for citizenship. Citing Lazaro, this Court concluded that the filing of petitioner’s declaration of intention on October 23, 1953 produced no legal effect until the required filing fee was paid on May 23, 1956.

In Malimit vs. Degamo,9 the same principles enunciated in Lazaro and Lee were applied. It was an original petition for quo warranto contesting the right to office of proclaimed candidates which was mailed, addressed to the clerk of the Court of First Instance, within the one-week period after the proclamation as provided therefor by law.10 However, the required docket fees were paid only after the expiration of said period. Consequently, this Court held that the date of such payment must be deemed to be the real date of filing of aforesaid petition and not the date when it was mailed.

Again, in Garica vs. Vasquez,11 this Court reiterated the rule that the docket fee must be paid before a court will act on a petition or complaint. However, we also held that said rule is not applicable when petitioner seeks the probate of several wills of the same decedent as he is not required to file a separate action for each will but instead he may have other wills probated in the same special proceeding then pending before the same court.

Then in Magaspi,12 this Court reiterated the ruling in Malimit and Lee that a case is deemed filed only upon payment of the docket fee regardless of the actual date of its filing in court. Said case involved a complaint for recovery of ownership and possession of a parcel of land with damages filed in the Court of First Instance of Cebu. Upon the payment of P60.00 for the docket fee and 10.00 for the sheriffs fee, the complaint was docketed as Civil Case No. R-11882. The prayer of the complaint sought that the Transfer Certificate of Title issued in the name of the defendant be declared as null and void. It was also prayed that plaintiff be declared as owner thereof to whom the proper title should be issued, and that defendant be made to pay monthly rentals of P3,500.00 from June 2, 1948 up to the time the property is delivered to plaintiff, P500,000.00 as moral damages, attorney’s fees in the amount of P250,000.00, the costs of the action and exemplary damages in the amount ofP500,000.00.

The defendant then filed a motion to compel the plaintiff to pay the correct amount of the docket fee to which an opposition was filed by the plaintiff alleging that the action was for the recovery of a parcel of land so the docket fee must be based on its assessed value and that the amount of P60.00 was the correct docketing fee. The trial court ordered the plaintiff to pay P3,l04.00 as filing fee.

The plaintiff then filed a motion to admit the amended complaint to include the Republic as the defendant. In the prayer of the amended complaint the exemplary damages earlier sought was eliminated. The amended prayer merely sought moral damages as the court may determine, attorney’s fees of P100,000.00 and the costs of the action. The defendant filed an opposition to the amended complaint. The opposition notwithstanding, the amended complaint was admitted by the trial court. The trial court reiterated its order for the payment of the additional docket fee which plaintiff assailed and then challenged before this Court. Plaintiff alleged that he paid the total docket fee in the amount of P60.00 and that if he has to pay the additional fee it must be based on the amended complaint.

The question posed, therefore, was whether or not the plaintiff may be considered to have filed the case even if the docketing fee paid was not sufficient. In Magaspi, We reiterated the rule that the case was deemed filed only upon the payment of the correct amount for the docket fee regardless of the actual date of the filing of the complaint; that there was an honest difference of opinion as to the correct amount to be paid as docket fee in that as the action appears to be one

for the recovery of property the docket fee of P60.00 was correct; and that as the action is also one for damages, We upheld the assessment of the additional docket fee based on the damages alleged in the amended complaint as against the assessment of the trial court which was based on the damages alleged in the original complaint.

However, as aforecited, this Court overturned Magaspi in Manchester. Manchester involves an action for torts and damages and specific performance with a prayer for the issuance of a temporary restraining order, etc. The prayer in said case is for the issuance of a writ of preliminary prohibitory injunction during the pendency of the action against the defendants’ announced forfeiture of the sum of P3 Million paid by the plaintiffs for the property in question, the attachment of such property of defendants that may be sufficient to satisfy any judgment that may be rendered, and, after hearing, the issuance of an order requiring defendants to execute a contract of purchase and sale of the subject property and annul defendants’ illegal forfeiture of the money of plaintiff. It was also prayed that the defendants be made to pay the plaintiff, jointly and severally, actual, compensatory and exemplary damages as well as 25% of said amounts as may be proved during the trial for attorney’s fees. The plaintiff also asked the trial court to declare the tender of payment of the purchase price of plaintiff valid and sufficient for purposes of payment, and to make the injunction permanent. The amount of damages sought is not specified in the prayer although the body of the complaint alleges the total amount of over P78 Millon allegedly suffered by plaintiff.

Upon the filing of the complaint, the plaintiff paid the amount of only P410.00 for the docket fee based on the nature of the action for specific performance where the amount involved is not capable of pecuniary estimation. However, it was obvious from the allegations of the complaint as well as its designation that the action was one for damages and specific performance. Thus, this court held the plaintiff must be assessed the correct docket fee computed against the amount of damages of about P78 Million, although the same was not spelled out in the prayer of the complaint.

Meanwhile, plaintiff through another counsel, with leave of court, filed an amended complaint on September 12, 1985 by the inclusion of another co-plaintiff and eliminating any mention of the amount of damages in the body of the complaint. The prayer in the original complaint was maintained.

On October 15, 1985, this Court ordered the re-assessment of the docket fee in the said case and other cases that were investigated. On November 12, 1985, the trial court directed the plaintiff to rectify the amended complaint by stating the amounts which they were asking for. This plaintiff did as instructed. In the body of the complaint the amount of damages alleged was reduced to P10,000,000.00 but still no amount of damages was specified in the prayer. Said amended complaint was admitted.

Applying the principle in Magaspi that “the case is deemed filed only upon payment of the docket fee regardless of the actual date of filing in court,” this Court held that the trial court did not acquire jurisdiction over the case by payment of only P410.00 for the docket fee. Neither can the amendment of the complaint thereby vest jurisdiction upon the Court. For all legal purposes there was no such original complaint duly filed which could be amended. Consequently, the order admitting the amended complaint and all subsequent proceedings and actions taken by the trial court were declared null and void.13

The present case, as above discussed, is among the several cases of under-assessment of docket fee which were investigated by this Court together with Manchester. The facts and circumstances of this case are similar to Manchester. In the body of the original complaint, the total amount of damages sought amounted to about P50 Million. In the prayer, the amount of damages asked for was not stated. The action was for the refund of the premium and the issuance of the writ of preliminary attachment with damages. The amount of only P210.00 was paid for the docket fee. On January 23, 1986, private respondent filed an amended complaint wherein in the prayer it is

51

asked that he be awarded no less than P10,000,000.00 as actual and exemplary damages but in the body of the complaint the amount of his pecuniary claim is approximately P44,601,623.70. Said amended complaint was admitted and the private respondent was reassessed the additional docket fee of P39,786.00 based on his prayer of not less than P10,000,000.00 in damages, which he paid.

On April 24, 1986, private respondent filed a supplemental complaint alleging an additional claim of P20,000,000.00 in damages so that his total claim is approximately P64,601,620.70. On October 16, 1986, private respondent paid an additional docket fee of P80,396.00. After the promulgation of the decision of the respondent court on August 31, 1987 wherein private respondent was ordered to be reassessed for additional docket fee, and during the pendency of this petition, and after the promulgation of Manchester, on April 28, 1988, private respondent paid an additional docket fee of P62,132.92. Although private respondent appears to have paid a total amount of P182,824.90 for the docket fee considering the total amount of his claim in the amended and supplemental complaint amounting to about P64,601,620.70, petitioner insists that private respondent must pay a docket fee of P257,810.49.

The principle in Manchester could very well be applied in the present case. The pattern and the intent to defraud the government of the docket fee due it is obvious not only in the filing of the original complaint but also in the filing of the second amended complaint.

However, in Manchester, petitioner did not pay any additional docket fee untill the case was decided by this Court on May 7, 1987. Thus, in Manchester, due to the fraud committed on the government, this Court held that the court a quo did not acquire jurisdiction over the case and that the amended complaint could not have been admitted inasmuch as the original complaint was null and void.

In the present case, a more liberal interpretation of the rules is called for considering that, unlike Manchester, private respondent demonstrated his willingness to abide by the rules by paying the additional docket fees as required. The promulgation of the decision in Manchester must have had that sobering influence on private respondent who thus paid the additional docket fee as ordered by the respondent court. It triggered his change of stance by manifesting his willingness to pay such additional docket fee as may be ordered.

Nevertheless, petitioners contend that the docket fee that was paid is still insufficient considering the total amount of the claim. This is a matter which the clerk of court of the lower court and/or his duly authorized docket clerk or clerk in-charge should determine and, thereafter, if any amount is found due, he must require the private respondent to pay the same. Thus, the Court rules as follows:

6 1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee, that vests a trial court with jurisdiction over the subject-matter or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period.

7 2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period.

8 3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified the same has been left for determination by the court, the additional filing fee therefor shall constitute a lien on

the judgment. It shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the additional fee.

WHEREFORE, the petition is DISMISSED for lack of merit.

The Clerk of Court of the court a quo is hereby instructed to reassess and determine the additional filing fee that should be paid by private respondent considering the total amount of the claim sought in the original complaint and the supplemental complaint as may be gleaned from the allegations and the prayer thereof and to require private respondent to pay the deficiency, if any, without pronouncement as to costs.

SO ORDERED.

Fernan (C.J), Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Padilla, Bidin, Sarmiento, Cortes, Griño-Aquino, Medialdea and Regalado, JJ., concur.

Petition dismissed.

Note.—Court acquires jurisdiction over any case only upon payment of the prescribed docket fee. An amendment of the complaint or similar pleading will not vest jurisdiction in the court, much less payment of the docket fee based on amount in the amended pleading. (Manchester Development Corporation vs. Court of Appeals, 149 SCRA 562.)

——o0o——

52

G.R. Nos. 88075-77. December 20, 1989.*

MAXIMO TACAY, PONCIANO PANES and ANTONIA NOEL, petitioners, vs. REGIONAL TRIAL COURT OF TAGUM, Davao del Norte, Branches 1 and 2, Presided by Hon. Marcial Fernandez and Hon. Jesus Matas, respectively, PATSITA GAMUTAN, Clerk of Court, and

GODOFREDO PINEDA, respondents.

Remedial Law; Civil Procedure; Judgment; Dismissal of petition for failure to comply with Circular No. 1-88; Copies of challenged orders were not certified by the clerk of court or his duly authorized representative but by petitioner’s counsel which is not allowed.—It should be dismissed for failure to comply with this Court’s Circular No. 1-88 (effective January 1, 1989). The copies of the challenged Orders thereto attached were not certified by the proper Clerk of Court or his duly authorized representative. Certification was made by the petitioners’ counsel, which is not allowed.

Same; Same; Actions; Jurisdiction; Determinative of the court’s jurisdiction in actions for recovery of possession of real property is the nature thereof, not the amount of the damages allegedly arising from or connected with the issue of title or possession, and regardless of the value of the property.—It is true that the complaints do not state the amounts being claimed as actual, moral and nominal damages. It is also true, however, that the actions are not basically for the recovery of sums of money. They are principally for recovery of possession of real property, in the nature of an accion publiciana. Determinative of the court’s jurisdiction in this type of actions is the nature thereof, not the amount of the damages allegedly arising from or connected with the issue of title or possession, and regardless of the value of the property. Quite obviously, an action for recovery of possession of real property (such as an accion plenaria de posesion) or the title thereof, or for partition or condemnation of, or the foreclosure of a mortgage on, said real property—in other words, a real action—may be commenced and prosecuted without an accompanying claim for actual, moral, nominal or exemplary damages; and such an action would fall within the exclusive, original jurisdiction of the Regional Trial Court.

Same; Same; Same; Same; Jurisdiction of Regional Trial Courts under B.P. 129; Application of the rule.—Batas Pambansa Bilang 129 provides that Regional Trial Courts shall exercise exclusive original jurisdiction inter alia over “all civil actions which involve the title to, or possession of, real property, or any interest therein, except actions for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts.” The rule applies regardless of the value of the real property involved, whether it be worth more than P20,000.00 or not, infra. The rule also applies even where the complaint involving realty also prays for an award of damages; the amount of those damages would be immaterial to the question of the Court’s jurisdiction. The rule is unlike that in other cases—e.g., actions simply for recovery of money or of personal property, or actions in admiralty and maritime jurisdiction—in which the amount claimed, or the value of the personal property, is determinative of jurisdiction; i.e., the value of the personal property or the amount claimed should exceed twenty thousand pesos (P20,000.00) in order to be cognizable by the Regional Trial Court.

Same; Same; Same; Same; Filing Fees; Circular No. 7ofthe Supreme Court cannot be invoked as authority for dismissal of the actions at bar; Circular was avowedly inspired by the Manchester ruling.—Circular No. 7 of this Court, dated March 24, 1988, cannot thus be invoked, as the petitioner does, as authority for the dismissal of the actions at bar. That circular, avowedly inspired by the doctrine laid down in Manchester Development Corporation v. Court of Appeals, 149 SCRA 562 (May 7, 1987), has but limited application to said actions, as shall presently be discussed. Moreover, the rules therein laid down have since been clarified and amplified by the Court’s subsequent decision in Sun Insurance Office, Ltd. (SIOL) v. Asuncion, et al., G.R. Nos..79937-38, February 13, 1989.

Same; Same; Same; Same; Same; Purpose of Circular No. 7.—Circular No. 7 was aimed at the practice of certain parties who omit from the prayer of their complaints “any specification of the amount

of damages,” the omission being “clearly intended for no other purpose than to evade the payment of the correct filing fees if not to mislead the docket clerk, in the assessment of the filing fee.”

Same; Same; Same; Same; Same; Requirement in Circular No. 7 that complaints, etc. should specify the amount of damages being prayed for not only in the body of the pleading but also in the prayer has not been altered; New rule that trial courts are now authorized to allow payment of the fee within a reasonable time but not beyond the prescriptive or reglementary period; For damages arising after the filing of the complaint or similar pleading, the additional filing fee shall constitute a lien on the judgment.—As will be noted, the requirement in Circular No. 7 that complaints, petitions, answers, and similar pleadings should specify the amount of damages being prayed for not only in the body of the pleading but also in the prayer, has not been altered. What has been revised is the rule that subsequent “amendment of the complaint or similar pleading will not thereby vest jurisdiction in the Court, much less the payment of the docket fee based on the amount sought in the amended pleading,” the trial court now being authorized to allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period. Moreover, a new rule has been added, governing awards of claims not specified in the pleading—i.e., damages arising after the filing of the complaint or similar pleading—as to which the additional filing fee therefor shall constitute a lien on the judgment.

Same; Same; Same; Same; Same; Where the action is purely for recovery of money or damages, the docket fees are assessed on the basis of the aggregate amount claimed, exclusive only of interests and costs.—Where the action is purely for the recovery of money or damages, the docket fees are assessed on the basis of the aggregate amount claimed, exclusive only of interests and costs. In this case, the complaint or similar pleading should, according to Circular No. 7 of this Court, “specify the amount of damages being prayed for not only in the body of the pleading but also in the prayer, and said damages shall be considered in the assessment of the filing fees in any case.”

Same; Same; Same; Same; Same; Same; Rules to be applied where the complaint or similar pleading sets out a claim purely for money or damages, and there is no precise statement of the amounts being claimed, or where the pleading specifies the amount of every claim, but the fees paid are insufficient.—Two situations may arise. One is where the complaint or similar pleading sets out a claim purely for money or damages and there is no precise statement of the amounts being claimed. In this event the rule is that the pleading will “not be accepted nor admitted, or shall otherwise be expunged from the record.” In other words, the complaint or pleading may be dismissed, or the claims as to which the amounts are unspecified may be expunged, although as aforestated the Court may, on motion, permit amendment of the complaint and payment of the fees provided the claim has not in the meantime become time-barred. The other is where the pleading does specify the amount of every claim, but the fees paid are insufficient; and here again, the rule now is that the court may allow a reasonable time for the payment of the prescribed fees, or the balance thereof, and upon such payment, the defect is cured and the court may properly take cognizance of the action, unless in the meantime prescription has set in and consequently barred the right of action.

Same; Same; Same; Same; Same; Where the action involves real property and a related claim for damages, the legal fees shall be assessed on the basis of both the value of the property and the total amount of related damages sought; Rule where no amounts of the damages are specified.—Where the action involves real property and a related claim for damages as well, the legal fees shall be assessed on the basis of both (a) the value of the property and (b) the total amount of related damages sought. The Court acquires jurisdiction over the action if the filing of the initiatory pleading is accompanied by the payment of the requisite fees, or, if the fees are not paid at the time of the filing of the pleading, as of the time of full payment of the fees within such reasonable time as the court may grant, unless, of course, prescription has set in in the meantime. But where—as in the case at bar—the fees prescribed for an action involving real property have been paid, but the amounts of certain of the related damages (actual, moral and nominal) being demanded are unspecified, the action may not be dismissed. The Court undeniably has jurisdiction over the action involving the real

53

property, acquiring it upon the filing of the complaint or similar pleading and payment of the prescribed fee. And it is not divested of that authority by the circumstance that it may not have acquired jurisdiction over the accompanying claims for damages because of lack of specification thereof. What should be done is simply to expunge those claims for damages as to which no amounts are stated, which is what the respondent Courts did, or allow, on motion, a reasonable time for the amendment of the complaints so as to allege the precise amount of each item of damages and accept payment of the requisite fees therefor within the relevant prescriptive period.

JOINT PETITION for certiorari, prohibition and mandamus to review the orders of the Regional Trial Court of Tagum, Davao del Norte, Br. 1 and 2.

The facts are stated in the opinion of the Court.

Eduardo C. De Vera for petitioners.

RESOLUTION

NARVASA, J.:

In the Regional Trial Court at Tagum, Davao del Norte,1 three (3) actions for recovery of possession (acciones publicianas2) were separately instituted by Godofredo Pineda against three (3) defendants, docketed as follows:

16 1) vs. Antonia Noel Civil Case No. 2209

17 2) vs. Ponciano Panes Civil Case No. 2210

18 3) vs. Maximo Tacay Civil Case No. 2211.

Civil Cases Numbered 2209 and 2211 were raffled to Branch I of the Trial Court, presided over by Judge Marcial Hernandez. Civil No. 2210 was assigned to Branch 2, presided over by Judge Jesus Matas.

The complaints3 all alleged the same essential facts: (1) Pineda was the owner of a parcel of land measuring 790 square meters, his ownership being evidenced by TCT No. T-46560; (2) the previous owner had allowed the defendants to occupy portions of the land by mere tolerance; (3) having himself need to use the property, Pineda had made demands on the defendants to vacate the property and pay reasonable rentals therefor, but these demands had been refused; and (4) the last demand had been made more than a year prior to the commencement of suit. The complaints prayed for the same reliefs, to wit:

9 1) that plaintiff be declared owner of the areas occupied by the defendants;

10 2) that defendants and their “privies and allies” be ordered to vacate and deliver the portions of the land usurped by them;

11 3) that each defendant be ordered to pay:

10 1) P2,000 as monthly rents from February, 1987;

11 2) “Actual damages, as proven;”

12 3) “Moral and nominal damages as the Honorable Court may fix;”4

13 4) “P30,000.00, “as attorney’s fees, and representation fees of P5,000.00 per day of appearance;”

and

10 4) that he (Pineda) be granted such “further relief and remedies x x just and equitable in the premises.”

The prayer of each complaint contained a handwritten notation (evidently made by plaintiffs counsel) reading, “P5,000.00 as and for,” immediately above the typewritten words, “Actual damages, as proven,” the intention apparently being to make the entire phrase read, “5,000.00 as and for actual damages as proven.”5

Motions to dismiss were filed in behalf of each of the defendants by common counsel.6 Every motion alleged that the Trial Court had not acquired jurisdiction of the case—

“. . . for the reason that the x x complaint violates the mandatory and clear provision of Circular No. 7 of the x x Supreme Court dated March 24, 1988, by failing to specify all the amounts of damages which plaintiff is claiming from defendant;” and

“. . . for x x failure (of the complaint) to even allege the basic requirement as to the assessed value of the subject lot in dispute.”

Judge Matas denied the motion to dismiss filed in Civil Case No. 2210 but ordered the expunction of the “allegations in paragraph 11 of the x x complaint regarding moral as well as nominal damages.”7 On motion of defendant Panes, Judge Matas later ordered the striking out, too, of the “handwritten amount of ‘P5,000.00 as and for,’ including the typewritten words ‘actual damages as proven’ x x in sub-paragraph b of paragraph 4 in the conclusion and prayer of the complaint x x.”8

The motions to dismiss submitted in Civil Cases Numbered 2211 and 2209 were also denied in separate orders promulgated by Judge Marcial Fernandez.9 His Order in Case No. 2209 dated March 15, 1989 (a) declared that since the “action at bar is for Reivindicatoria, Damages and Attorney’s fees x x (d)efinitely this Court has the exclusive jurisdiction,” (b) that the claims for actual, moral and nominal damages “are only one aspect of the cause of action,” and (c) because of absence of specification of the amounts claimed as moral, nominal and actual damages, they should be “expunged from the records.”

Ascribing grave abuse of discretion to both Judges Matas and Fernandez in the rendition of the Orders above described, the defendants in all three (3) actions have filed with this Court a “Joint Petition” for certiorari, prohibition and mandamus, with prayer for temporary restraining order and/or writ of preliminary prohibitory injunction,” praying essentially that said orders be annulled and respondent judges directed to dismiss all the complaints “without prejudice to private respondent Pineda’s re-filing a similar complaint that complies with Circular No. 7.” The joint petition (a) re-asserted the proposition that because the complaints had failed to state the amounts being claimed as actual, moral and nominal damages, the Trial Courts aquo had not acquired jurisdiction over the three (3) actions in question—indeed, the respondent Clerk of Court should not have accepted the complaints which initiated said suits, and (b) it was not proper merely to expunge the claims for damages and allow “the so-called cause of action for ‘reivindicatoria’ to remain for trial” by itself.10

The joint petition should be, as it is hereby, dismissed. It should be dismissed for failure to comply with this Court’s Circular No. 1-88 (effective January 1, 1989). The copies of the challenged Orders thereto attached11 were not certified by the proper Clerk of Court or his duly authorized representative. Certification was made by the petitioners’ counsel, which is not allowed.

The petition should be dismissed, too, for another equally important reason. It fails to demonstrate any grave abuse of discretion on the part of the respondent Judges in rendering the Orders complained of or, for that matter, the existence of any proper cause for the issuance of the writ of mandamus. On the contrary, the orders appear to have correctly applied the law to the admitted facts.

It is true that the complaints do not state the amounts being claimed as actual, moral and nominal damages. It is also true, however, that the actions are not basically for the recovery of

54

sums of money. They are principally for recovery of possession of real property, in the nature of an accion publiciana. Determinative of the court’s jurisdiction in this type of actions is the nature thereof, not the amount of the damages allegedly arising from or connected with the issue of title or possession, and regardless of the value of the property. Quite obviously, an action for recovery of possession of real property (such as an accion plenaria de posesion) or the title thereof,12 or for partition or condemnation of, or the foreclosure of a mortgage on, said real property13—in other words, a real action—may be commenced and prosecuted without an accompanying claim for actual, moral, nominal or exemplary damages; and such an action would fall within the exclusive, original jurisdiction of the Regional Trial Court.

Batas Pambansa Bilang 129 provides that Regional Trial Courts shall exercise exclusive original jurisdiction inter alia over “all civil actions which involve the title to, or possession of, real property, or any interest therein, except actions for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts.”14 The rule applies regardless of the value of the real property involved, whether it be worth more than P20,000.00 or not, infra. The rule also applies even where the complaint involving realty also prays for an award of damages; the amount of those damages would be immaterial to the question of the Court’s jurisdiction. The rule is unlike that in other cases—e.g., actions simply for recovery of money or of personal property,15 or actions in admiralty and maritime jurisdiction16—in which the amount claimed,17 or the value of the personal property, is determinative of jurisdiction; i.e., the value of the personal property or the amount claimed should exceed twenty thousand pesos (P20,000.00) in order to be cognizable by the Regional Trial Court.

Circular No. 7 of this Court, dated March 24, 1988, cannot thus be invoked, as the petitioner does, as authority for the dismissal of the actions at bar. That circular, avowedly inspired by the doctrine laid down in Manchester Development Corporation v. Court of Appeals, 149 SCRA 562 (May 7, 1987), has but limited application to said actions, as shall presently be discussed. Moreover, the rules therein laid down have since been clarified and amplified by the Court’s subsequent decision in Sun Insurance Office, Ltd. (SIOL) v. Asuncion, et al., G.R. Nos. 79937-38, February 13, 1989.

Circular No. 7 was aimed at the practice of certain parties who omit from the prayer of their complaints “any specification of the amount of damages,” the omission being “clearly intended for no other purposes than to evade the payment of the correct filing fees if not to mislead the docket clerk, in the assessment of the filing fee.” The following rules were therefore set down:

1. All complaints, petitions, answers, and similar pleadings should specify the amount of damages being prayed for not only in the body of the pleading but also in the prayer, and said damages shall be considered in the assessment of the filing fees in any case.

2. Any pleading that fails to comply with this requirement shall not be accepted nor admitted, or shall otherwise be expunged from the record.

3. The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. An amendment of the complaint or similar pleading will not thereby vest jurisdiction in the Court, much less the payment of the docket fee based on the amount sought in the amended pleading.

The clarificatory and additional rules laid down in Sun Insurance Office, Ltd. v. Asuncion, supra, read as follows:

1. It is not simply the filing of the complaint or appropriate initiatory pleading, but (also) the payment of the prescribed docket fee that vests a trial court with jurisdiction over the subject-matter or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of

the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period.

2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period.

3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified, the same has been left for determination by the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the additional fee.”

As will be noted, the requirement in Circular No. 7 that complaints, petitions, answers, and similar pleadings should specify the amount of damages being prayed for not only in the body of the pleading but also in the prayer, has not been altered. What has been revised is the rule that subsequent “amendment of the complaint or similar pleading will not thereby vest jurisdiction in the Court, much less the payment of the docket fee based on the amount sought in the amended pleading,” the trial court now being authorized to allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period. Moreover, a new rule has been added, governing awards of claims not specified in the pleading—i.e., damages arising after the filing of the complaint or similar pleading—as to which the additional filing fee therefor shall constitute a lien on the judgment.

Now, under the Rules of Court, docket or filing fees are assessed on the basis of the “sum claimed,” on the one hand, or the “value of the property in litigation or the value of the estate,” on the other.18 There are, in other words, as already above intimated, actions or proceedings involving real property, in which the value of the property is immaterial to the court’s jurisdiction, account thereof being taken merely for assessment of the legal fees; and there are actions or proceedings, involving personal property or the recovery of money and/or damages, in which the value of the property or the amount of the demand is decisive of the trial court’s competence (aside from being the basis for fixing the corresponding docket fees).19

Where the action is purely for the recovery of money or damages, the docket fees are assessed on the basis of the aggregate amount claimed, exclusive only of interests and costs. In this case, the complaint or similar pleading should, according to Circular No. 7 of this Court, “specify the amount of damages being prayed for not only in the body of the pleading but also in the prayer, and said damages shall be considered in the assessment of the filing fees in any case.”

Two situations may arise. One is where the complaint or similar pleading sets out a claim purely for money or damages and there is no precise statement of the amounts being claimed. In this event the rule is that the pleading will “not be accepted nor admitted, or shall otherwise be expunged from the record.” In other words, the complaint or pleading may be dismissed, or the claims as to which the amounts are unspecified may be expunged, although as aforestated the Court may, on motion, permit amendment of the complaint and payment of the fees provided the claim has not in the meantime become time-barred. The other is where the pleading does specify the amount of every claim, but the fees paid are insufficient; and here again, the rule now is that the court may allow a reasonable time for the payment of the prescribed fees, or the balance thereof, and upon such payment, the defect is cured and the court may properly take cognizance of the action, unless in the meantime prescription has set in and consequently barred the right of action. Where the action involves real property and a related claim for damages as well, the legal fees shall be assessed on the basis of both (a) the value of the property and (b) the total amount of related damages sought. The Court acquires jurisdiction over the action if the filing of the initiatory pleading is accompanied by the payment of the requisite fees, or, if the

55

fees are not paid at the time of the filing of the pleading, as of the time of full payment of the fees within such reasonable time as the court may grant, unless, of course, prescription has set in in the meantime. But where—as in the case at bar—the fees prescribed for an action involving real property have been paid, but the amounts of certain of the related damages (actual, moral and nominal) being demanded are unspecified, the action may not be dismissed. The Court undeniably has jurisdiction over the action involving the real property, acquiring it upon the filing of the complaint or similar pleading and payment of the prescribed fee. And it is not divested of that authority by the circumstance that it may not have acquired jurisdiction over the accompanying claims for damages because of lack of specification thereof. What should be done is simply to expunge those claims for damages as to which no amounts are stated, which is what the respondent Courts did, or allow, on motion, a reasonable time for the amendment of the complaints so as to allege the precise amount of each item of damages and accept payment of the requisite fees therefor within the relevant prescriptive period.

WHEREFORE, the petition is DISMISSED, without pronouncement as to costs.

Fernan (C.J.), Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento, Cortés, Griño-Aquino, Medialdea and Regalado, JJ., concur.

Petition dismissed.

Notes.—Jurisdiction is determined by the law in force at the time of the commencement of the action. (Lee vs. Municipal Trial Court of Legaspi, 145 SCRA 408.)

There is no rule authorizing a court personnel or branch clerk of court to issue a “notice of case status.” (Koh vs. Intermediate Appellate Court, 144 SCRA 259.)

——o0o——

G.R. No. 88421. January 30, 1990.*

AYALA CORPORATION, LAS PIÑAS VENTURES, INC., AND FILIPINAS LIFE ASSURANCE COMPANY, INC., petitioners, vs. THE HONORABLE JOB B. MADAYAG, PRESIDING JUDGE,

REGIONAL TRIAL COURT, NATIONAL CAPITAL JUDICIAL REGION, BRANCH 145 and THE SPOUSES CAMILO AND MA. MARLENE SABIO, respondents.

Civil Procedure; Docket Fees; Amount of docket fees to be paid should be computed on the basis of the amount of damages stated in the complaint.—In Manchester Development Corporation vs. Court of Appeals a similar case involving an action for specific performance with damages, this Court held that the docket fee should be assessed by considering the amount of damages as alleged in the original complaint. However, the contention of petitioners is that since the action concerns real estate, the assessed value thereof should be considered in computing the fees pursuant to Section 5, Rule 141 of the Rules of Court. Such rule cannot apply to this case which is an action for specific performance with damages although it is in relation to a transaction involving real estate. Pursuant to Manchester, the amount of the docket fees to be paid should be computed on the basis of the amount of damages stated in the complaint.

Same; Same; Damages; Amount of any claim for damages arising on or before the filing of the complaint or any pleading should be specified.___In the latest case of Tacay vs. Regional Trial Court of Tagum, this Court had occasion to make the clarification that the phrase “awards of claims not specified in the pleading” refers only to “damages arising after the filing of the complaint or similar pleading xxxx as to which the additional filing fee therefor shall constitute a lien on the judgment.” The amount of any claim for damages, therefore, arising on or before the filing of the complaint or any pleading should be specified. While it is true that the determination of certain damages as exemplary or corrective damages is left to the sound discretion of the court, it is the duty of the parties claiming such damages to specify the amount sought on the basis of which the court may make a proper determination, and for the proper assessment of the appropriate docket fees. The exception contemplated as to claims not specified or to claims although specified are left for determination of the court is limited only to any damages that may arise after the filing of the complaint or similar pleading for then it will not be possible for the claimant to specify nor speculate as to the amount thereof.

Same; Same; Same; Same; A complaint which fails to specify the amount of damages being claimed suffers from a material defect. Trial court may either order said claim to be expunged from the record or order the amendment of the complaint within a reasonable time.—The amended and supplemental complaint in the present case, therefore, suffers from the material defect in failing to state the amount of exemplary damages prayed for. As ruled in Tacay the trial court may either order said claim to be expunged from the record as it did not acquire jurisdiction over the same or on motion, it may allow, within a reasonable time, the amendment of the amended and supplemental complaint so as to state the precise amount of the exemplary damages sought and require the payment of the requisite fees therefor within the relevant prescriptive period.

PETITION for prohibition to review the decision of the Regional Trial Court of Makati, Br. 145.

The facts are stated in the opinion of the Court.

Renato L. De la Fuente for petitioners.

Camilo L. Sabio for private respondents.

GANCAYCO, J.:

Once more the issue relating to the payment of filing fees in an action for specific performance with damages is presented by this petition for prohibition.

Private respondents filed against petitioners an action for specific performance with damages in the Regional Trial Court of Makati. Petitioners filed a motion to dismiss on the ground that the

56

lower court has not acquired jurisdiction over the case as private respondents failed to pay the prescribed docket fee and to specify the amount of exemplary damages both in the body and prayer of the amended and supplemental complaint. The trial court denied the motion in an order dated April 5, 1989. A motion for reconsideration filed by petitioners was likewise denied in an order dated May 18, 1989. Hence this petition.

The main thrust of the petition is that private respondent paid only the total amount of P1,616.00 as docket fees instead of the amount of P13,061.35 based on the assessed value of the real properties involved as evidenced by its tax declaration. Further, petitioners contend that private respondents failed to specify the amount of exemplary damages sought both in the body and the prayer of the amended and supplemental complaint.

In Manchester Development Corporation vs. Court of Appeals1 a similar case involving an action for specific performance with damages, this Court held that the docket fee should be assessed by considering the amount of damages as alleged in the original complaint.

However, the contention of petitioners is that since the action concerns real estate, the assessed value thereof should be considered in computing the fees pursuant to Section 5, Rule 141 of the Rules of Court. Such rule cannot apply to this case which is an action for specific performance with damages although it is in relation to a transaction involving real estate. Pursuant to Manchester, the amount of the docket fees to be paid should be computed on the basis of the amount of damages stated in the complaint.

Petitioners also allege that because of the failure of the private respondents to state the amount of exemplary damages being sought, the complaint must nevertheless be dismissed in accordance to Manchester. The trial court denied the motion stating that the determination of the exemplary damages is within the sound discretion of the court and that it would be unwarrantedly presumptuous on the part of the private respondents to fix the amount of exemplary damages being prayed for. The trial court cited the subsequent case of Sun Insurance vs. Judge Asuncion2 in support of its ruling.

The clarificatory and additional rules laid down in Sun Insurance are as follows:

1. It is not simply the filing of the complaint or appropriate initiatory pleading, but (also) the payment of the prescribed docket fee that vests a trial court with jurisdiction over the subject-matter or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period.

2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period.

3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified, the same has been left for determination by the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the additional fee.”

Apparently, the trial court misinterpreted paragraph 3 of the above ruling of this Court wherein it is stated that “where the judgment awards a claim not specified in the pleading, or if specified, the same has been left for the determination of the court, the additional filing fee therefor shall constitute a lien on the judgment” by considering it to mean that where in the body and prayer of the complaint there is a prayer, say for exemplary or corrective damages, the amount of which is left to the discretion of the Court, there is no need to specify the amount being sought,

and that any award thereafter shall constitute a lien on the judgment.

In the latest case of Tacay vs. Regional Trial Court of Tagum,3 this Court had occasion to make the clarification that the phrase “awards of claims not specified in the pleading” refers only to “damages arising after the filing of the complaint or similar pleading x x x x as to which the additional filing fee therefor shall constitute a lien on the judgment.” The amount of any claim for damages, therefore, arising on or before the filing of the complaint or any pleading should be specified. While it is true that the determination of certain damages as exemplary or corrective damages is left to the sound discretion of the court, it is the duty of the parties claiming such damages to specify the amount sought on the basis of which the court may make a proper determination, and for the proper assessment of the appropriate docket fees. The exception contemplated as to claims not specified or to claims although specified are left for determination of the court is limited only to any damages that may arise after the filing of the complaint or similar pleading for then it will not be possible for the claimant to specify nor speculate as to the amount thereof.

The amended and supplemental complaint in the present case, therefore, suffers from the material defect in failing to state the amount of exemplary damages prayed for.

As ruled in Tacay the trial court may either order said claim to be expunged from the record as it did not acquire jurisdiction over the same or on motion, it may allow, within a reasonable time, the amendment of the amended and supplemental complaint so as to state the precise amount of the exemplary damages sought and require the payment of the requisite fees therefor within the relevant prescriptive period.4

WHEREFORE, the petition is GRANTED. The trial court is directed either to expunge from the record the claim for exemplary damages in the amended and supplemental complaint, the amount of which is not specified, or it may otherwise, upon motion, give reasonable time to private respondents to amend their pleading by specifying its amount and paying the corresponding docketing fees within the appropriate reglementary or prescriptive period. No costs.

SO ORDERED.

Narvasa, Cruz, Griño-Aquino and Medialdea, JJ., concur.

Petition granted.

Note.—Docket fee should be assessed by considering the amount of damages as alleged in the original complaint. (Manchester Dev’t. Corp. vs. Court of Appeals, 149 SCRA 562.)

——o0o——

57

G.R. No. 179878. December 24, 2008.*

NEGROS ORIENTAL PLANTERS ASSOCIATION, INC. (NOPA), petitioner, vs. HON. PRESIDING JUDGE OF RTC-NEGROS OCCIDENTAL, BRANCH 52, BACOLOD CITY, and

ANICETO MANOJO CAMPOS, respondents.

Remedial Law; Civil Procedure; Pleadings and Practice; Verification; A party’s knowledge must be specifically alleged under oath to be either personal knowledge or at least based on authentic records.—The amendment was introduced in order to make the verification requirement stricter, such that the party cannot now merely state under oath that he believes the statements made in the pleading. He cannot even merely state under oath that he has knowledge that such statements are true and correct. His knowledge must be specifically alleged under oath to be either personal knowledge or at least based on authentic records.

Same; Same; Same; Same; The effect of the failure to properly verify a pleading is that the pleading shall be treated as unsigned.— The requirement for a Certification against Forum Shopping in Section 5, wherein failure to comply with the requirements is not curable by amendment of the complaint or other initiatory pleading, Section 4 of Rule 7, as amended, states that the effect of the failure to properly verify a pleading is that the pleading shall be treated as unsigned: A pleading required to be verified which contains a verification based on “information and belief,” or upon “knowledge, information and belief,” or lacks a proper verification, shall be treated as an unsigned pleading.

Same; Same; Same; Same; A pleading wherein the verification is merely based on the party’s knowledge and belief produces no legal effect, subject to the discretion of the court to allow the deficiency to be remedied.—A pleading, therefore, wherein the Verification is merely based on the party’s knowledge and belief produces no legal effect, subject to the discretion of the court to allow the deficiency to be remedied. In the case at bar, the Court of Appeals, in the exercise of this discretion, refused to allow the deficiency in the Verification to be remedied, by denying NOPA’s Motion for Reconsideration with attached Amended Petition for Certiorari.

Same; Same; Same; Same; Appellate court can reverse the exercise of discretion by a lower court but only in exceptional cases when there is grave abuse of discretion or adverse effect on the substantial rights of a litigant.—May an appellate court reverse the exercise of discretion by a lower court? The old case of Lino Luna v. Arcenas, 34 Phil. 80 (1916), states that it can, but only in exceptional cases when there is grave abuse of this discretion or adverse effect on the substantial rights of a litigant.

Same; Same; Same; Same; A party cannot expect its opponent to comply with the technical rules of procedure while, at the same time, hoping for the relaxation of the technicalities in its favor.—There is therefore no substantive right that will be prejudiced by the Court of Appeals’ exercise of discretion in the case at bar. While the payment of docket fees is jurisdictional, it is nevertheless unmistakably also a technicality. Ironically, in seeking the leniency of this Court on the basis of substantial justice, NOPA is ultimately praying for a Writ of Certiorari enjoining the action for breach of contract from being decided on the merits. What’s sauce for the goose is sauce for the gander. A party cannot expect its opponent to comply with the technical rules of procedure while, at the same time, hoping for the relaxation of the technicalities in its favor.

Same; Same; Docket Fees; Where the initiatory pleading is not accompanied by the payment of the docket fee, the court may allow payment of the fee within a reasonable period of time, but in no case beyond the applicable prescriptive or reglementary period.—In denying NOPA’s Motion to Dismiss, the RTC cited Sun Insurance Office, Ltd. (SIOL) v. Asuncion, 170 SCRA 274 (1989), wherein we modified our ruling in Manchester and decreed that where the initiatory pleading is not accompanied by the payment of the docket fee, the court may allow payment of the fee within a reasonable period of time, but in no case beyond the applicable prescriptive or reglementary period. The aforesaid ruling was made on the justification that, unlike in Manchester, the private respondent in Sun Insurance Office, Ltd. (SIOL) demonstrated his willingness to abide by the

rules by paying the additional docket fees required. NOPA claims that Sun is not applicable to the case at bar, since Campos deliberately concealed his claim for damages in the prayer.

Same; Same; Same; Where the party does not deliberately intend to defraud the court in payment of docket fees, and manifests its willingness to abide by the rules by paying additional docket fees when required by the court, the liberal doctrine enumerated in Sun Insurance and not the strict regulation set in Manchester will apply.—The rule is clear and simple. In case where the party does not deliberately intend to defraud the court in payment of docket fees, and manifests its willingness to abide by the rules by paying additional docket fees when required by the court, the liberal doctrine enunciated in Sun Insurance and not the strict regulations set in Manchester will apply.

PETITION for review on certiorari of the resolutions of the Court of Appeals.

The facts are stated in the opinion of the Court.

Moya Law Office for petitioner.

A. Florian O. Alcantara co-counsel for petitioner.

William N. Mirano for respondent.

CHICO-NAZARIO, J.:

What’s sauce for the goose is sauce for the gander.

This is a Petition for Review on Certiorari seeking the reversal of the Resolutions1 of the Court of Appeals dated 23 May 2007 and 16 August 2007, respectively, in CA-G.R. SP No. 02651 outrightly dismissing the Petition for Certiorari filed by petitioner Negros Oriental Planters Association, Inc. (NOPA) against private respondent Aniceto Manojo Campos (Campos).

On 17 March 1999, Campos filed a Complaint for Breach of Contract with Damages, docketed as Civil Case No. 99-10773, against NOPA before the Regional Trial Court (RTC) of Negros Occidental, Bacolod City. According to the Complaint, Campos and NOPA entered into two separate contracts denominated as Molasses Sales Agreement. Campos allegedly paid the consideration of the Molasses Sales Agreement in full, but was only able to receive a partial delivery of the molasses because of a disagreement as to the quality of the products being delivered.

On 17 August 2005, more than six years after NOPA filed its Answer, NOPA filed a Motion to Dismiss on the ground of an alleged failure of Campos to file the correct filing fee. According to NOPA, Campos deliberately concealed in his Complaint the exact amount of actual damages by opting to estimate the value of the unwithdrawn molasses in order to escape the payment of the proper docket fees.

On 30 June 2006, the RTC issued an Order denying the Motion to Dismiss. NOPA received this Order on 17 July 2006.

On 1 August 2006, NOPA filed a Motion for Reconsideration of the 30 June 2006 Order. On 5 January 2007, the RTC issued an Order denying NOPA’s Motion for Reconsideration.

On 2 April 2007, NOPA filed a Petition for Certiorari before the Court of Appeals assailing the Orders of the RTC dated 30 June 2006 and 5 January 2007.

On 23 May 2007, the Court of Appeals issued the first assailed Resolution dismissing the Petition for Certiorari on the following grounds:

1. Failure of the Petitioner to state in its Verification that the allegations in the petition are “based on authentic records,” in violation of Section 4, Rule 7, of the 1997 Rules of Civil Procedure, as amended by A.M. No. 00-2-10-SC (May 1, 2000), which provides:

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“—x x x—A pleading is verified by an affidavit that the affiant has read the pleading and that the allegations therein are true and correct of his personal knowledge or based on authentic records.

A pleading required to be verified which contains a verification based on “information and belief,” or lacks a proper verification, shall be treated as an unsigned pleading.”

2. Failure of the petitioner to append to the petition relevant pleadings and documents, which would aid in the resolution of the instant petition, in violation of Section 1, Rule 65 of the Rules of Court, such as:

a. Ex-parte Motion to Set the Case for Pre-Trial dated July 27, 1999;

b. Notice of Pre-Trial;

c. Motion for Leave to File Third Party Complaint;

d. Orders dated July 31, 2000, March 20 2001, November 17, 2004, and May 17, 2005, respectively;

e. Motion to Suspend the Proceedings dated August 10, 2003;

f. Motion to Dismiss for Failure to Prosecute; and

g. Motion for Reconsideration to the Order dated May 12, 2005.

Section 1, Rule 65 of the Rules of Court, provides:

“When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require.

The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification of non-forum shopping as provided in the paragraph of section 3, Rule 46.”

3. Failure of petitioner’s counsel to indicate in the petition his current IBP Official Receipt Number, in violation of Bar Matter No. 1132 and/or A.M. No. 287, which reads as follows:

“The Court resolved, upon recommendation of the Office of the Bar Confidant, to GRANT the request of the Board of Governors of the Integrated Bar of the Philippines and the Sanguniang Panlalawigan of Ilocos Norte to require all lawyers to indicate their Roll of Attorneys Number in all papers or pleadings submitted to the various judicial or quasi-judicial bodies in addition to the requirement of indicating the current Professional Tax Receipt (PTR) and the IBP Official Receipt or Lifetime Member Number.”2

On 22 June 2007, NOPA filed a Motion for Reconsideration of the above Resolution, attaching thereto an Amended Petition for Certiorari in compliance with the requirements of the Court of Appeals deemed to have been violated by NOPA. The Court of Appeals denied the said Motion in the second assailed Resolution dated 16 August 2007.

Hence, this Petition for Review on Certiorari, where NOPA raises the following issue and arguments:

ISSUE

WHETHER OR NOT THE PUBLIC RESPONDENT CA COMMITTED REVERSIBLE

ERROR WHEN IT RULED THAT THERE WAS NO SUBSTANTIAL COMPLIANCE WITH THE PROCEDURAL REQUIREMENTS WHEN PETITIONER FAILED TO ALLEGE IN ITS

VERIFICATION THAT THE ALLEGATIONS THEREIN ARE TRUE AND CORRECT OF HIS PERSONAL KNOWLEDGE OR BASED ON AUTHENTIC RECORDS AND FAILURE TO

ATTACH THE NECESSARY DOCUMENTS ON ITS PLEADINGS AS REQUIRED BY SECTION 1, RULE 65 OF THE 1997 RULES OF CIVIL PROCEDURE.3

ARGUMENTS

1. The requirement that a pleading be verified is merely formal and not jurisdictional. The court may give due course to an unverified pleading where the material facts alleged are a matter of record and the questions raised are mainly of law such as in a petition for certiorari.4

2. Petitioner had attached to its Petition for Certiorari clearly legible and duplicate original or a certified true copy of the judgment or final order or resolution of the court a quo and the requisite number of plain copies thereof and such material portions of the record as would support the petition.5

3. Substantial compliance of the rules, which was further supplied by the petitioner’s subsequent full compliance demonstrates its good faith to abide by the procedural requirements.6

4. The resolution of the important jurisdictional issue raised by the petitioner before the PUBLIC RESPONDENT CA would justify a relaxation of the rules.7

The original Verification in the original Petition for Certiorari filed by NOPA states as follows:

“1. That I am the President and Chairman of the Board of Directors of Negros Oriental Planters’ Association, Inc. (NOPA), the petitioner in this case, a domestic corporation duly organized under Philippine Laws, with principal place of business at Central Bais, Bais City, Philippines; that I am duly authorized by the Board of NOPA (Secretary’s Certificate attached as Annex “A”) to cause the preparation of the foregoing petition; and that I hereby affirm and confirm that all the allegations contained herein are true and correct to my own knowledge and belief;”8

NOPA claims that this Court has in several cases allowed pleadings with a Verification that contains the allegation “to the best of my knowledge” and the allegation “are true and correct,” without the words “of his own knowledge,” citing Decano v. Edu,9 and Quimpo v. De la Victoria.10 NOPA claims that the allegations in these cases constitute substantial compliance with the Rules of Court, and should likewise apply to the case at bar.

NOPA is mistaken. NOPA cited cases promulgated before 1 May 2000, when Section 4 of Rule 7 was amended by A.M. No. 00-2-10. Before the amendment, said Section 4 stated:

“SEC. 4. Verification.—Except when otherwise specifically required by law or rule, pleadings need not be under oath, verified or accompanied by affidavit.

A pleading is verified by an affidavit that the affiant has read the pleading and that the allegations therein are true and correct of his knowledge and belief.

As amended, said Section 4 now states:

SEC. 4. Verification.—Except when otherwise specifically required by law or rule, pleadings need not be under oath, verified or accompanied by affidavit.

A pleading is verified by an affidavit that the affiant has read the pleading and that the allegations therein are true and correct of his personal knowledge or based on authentic records.”

Clearly, the amendment was introduced in order to make the verification requirement stricter, such that the party cannot now merely state under oath that he believes the statements made in

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the pleading. He cannot even merely state under oath that he has knowledge that such statements are true and correct. His knowledge must be specifically alleged under oath to be either personal knowledge or at least based on authentic records.

Unlike, however, the requirement for a Certification against Forum Shopping in Section 5, wherein failure to comply with the requirements is not curable by amendment of the complaint or other initiatory pleading,11 Section 4 of Rule 7, as amended, states that the effect of the failure to properly verify a pleading is that the pleading shall be treated as unsigned:

“A pleading required to be verified which contains a verification based on “information and belief,” or upon “knowledge, information and belief,” or lacks a proper verification, shall be treated as an unsigned pleading.

Unsigned pleadings are discussed in the immediately preceding section of Rule 7:

“SEC. 3. Signature and address.—x x x.

x x x x

An unsigned pleading produces no legal effect. However, the court may, in its discretion, allow such deficiency to be remedied if it shall appear that the same was due to mere inadvertence and not intended for delay. Counsel who deliberately files an unsigned pleading, or signs a pleading in violation of this Rule, or alleges scandalous or indecent matter therein, or fails to promptly report to the court a change of his address, shall be subject to appropriate disciplinary action.” (5a)

A pleading, therefore, wherein the Verification is merely based on the party’s knowledge and belief produces no legal effect, subject to the discretion of the court to allow the deficiency to be remedied. In the case at bar, the Court of Appeals, in the exercise of this discretion, refused to allow the deficiency in the Verification to be remedied, by denying NOPA’s Motion for Reconsideration with attached Amended Petition for Certiorari.

May an appellate court reverse the exercise of discretion by a lower court? The old case of Lino Luna v. Arcenas12 states that it can, but only in exceptional cases when there is grave abuse of this discretion or adverse effect on the substantial rights of a litigant:

“Discretionary power is generally exercised by trial judges in furtherance of the convenience of the courts and the litigants, the expedition of business, and in the decision of interlocutory matters on conflicting facts where one tribunal could not easily prescribe to another the appropriate rule of procedure.

The general rule, therefore, and indeed one of the fundamental principles of appellate procedure is that decisions of a trial court which “lie in discretion” will not be reviewed on appeal, whether the case be civil or criminal at law or in equity.

We have seen that where such rulings have to do with minor matters, not affecting the substantial rights of the parties, the prohibition of review in appellate proceedings is made absolute by the express terms of the statute; but it would be a monstrous travesty on justice to declare that where the exercise of discretionary power by an inferior court affects adversely the substantial legal rights of a litigant, it is not subject to review on appeal in any case wherein a clear and affirmative showing is made of an abuse of discretion, or of a total lack of its exercise, or of conduct amounting to an abuse of discretion, such as its improper exercise under a misapprehension of the law applicable to the facts upon which the ruling is based.

In its very nature, the discretionary control conferred upon the trial judge over the proceedings had before him implies the absence of any hard-and-fast rule by which it is to be exercised, and in accordance with which it may be reviewed. But the discretion conferred upon the courts is not a willful, arbitrary, capricious and uncontrolled discretion. It is a sound, judicial discretion which should always be exercised with due regard to the rights of the parties and the demands

of equity and justice. As was said in the case of The Styria vs. Morgan (186 U.S., 1, 9):

“The establishment of a clearly defined rule of action would be the end of discretion, and yet discretion should not be a word for arbitrary will or inconsiderate action.” So in the case of Goodwin vs. Prime (92 Me., 355), it was said that “discretion implies that in the absence of positive law or fixed rule the judge is to decide by his view of expediency or by the demands of equity and justice.”

There being no “positive law or fixed rule” to guide the judge in the court below in such cases, there is no “positive law or fixed rule” to guide a court of appeal in reviewing his action in the premises, and such courts will not therefore attempt to control the exercise of discretion by the court below unless it plainly appears that there was “inconsiderate action” or the exercise of mere “arbitrary will,” or in other words that his action in the premises amounted to “an abuse of discretion.” But the right of an appellate court to review judicial acts which lie in the discretion of inferior courts may properly be invoked upon a showing of a strong and clear case of abuse of power to the prejudice of the appellant, or that the ruling objected to rested on an erroneous principle of law not vested in discretion.”13

The case at bar demonstrates a situation in which there is no effect on the substantial rights of a litigant. NOPA’s Petition for Certiorari is seeking the reversal of the Orders of the RTC denying NOPA’s Motion to Dismiss on the ground of failure to pay the proper docket fees. The alleged deficiency in the payment of docket fees by Campos, if there is any, would not inure to the benefit of NOPA.

There is therefore no substantive right that will be prejudiced by the Court of Appeals’ exercise of discretion in the case at bar. While the payment of docket fees is jurisdictional, it is nevertheless unmistakably also a technicality. Ironically, in seeking the leniency of this Court on the basis of substantial justice, NOPA is ultimately praying for a Writ of Certiorari enjoining the action for breach of contract from being decided on the merits. What’s sauce for the goose is sauce for the gander. A party cannot expect its opponent to comply with the technical rules of procedure while, at the same time, hoping for the relaxation of the technicalities in its favor.

There was therefore no grave abuse of discretion on the part of the Court of Appeals warranting this Court’s reversal of the exercise of discretion by the former. However, even if we decide to brush aside the lapses in technicalities on the part of NOPA in its Petition for Certiorari, we nevertheless find that such Petition would still fail.

NOPA seeks in its Petition for Certiorari for the application of this Court’s ruling in Manchester Development Corporation v. Court of Appeals,14 wherein we ruled that the court acquires jurisdiction over any case only upon payment of the prescribed docket fee. An amendment of the complaint or similar pleading will not thereby vest jurisdiction in the court, much less the payment of the docket fee based on the amount sought in the amended pleading.

In denying15 NOPA’s Motion to Dismiss, the RTC cited Sun Insurance Office, Ltd. (SIOL) v. Asuncion,16 wherein we modified our ruling in Manchester and decreed that where the initiatory pleading is not accompanied by the payment of the docket fee, the court may allow payment of the fee within a reasonable period of time, but in no case beyond the applicable prescriptive or reglementary period. The aforesaid ruling was made on the justification that, unlike in Manchester, the private respondent in Sun Insurance Office, Ltd. (SIOL) demonstrated his willingness to abide by the rules by paying the additional docket fees required. NOPA claims that Sun is not applicable to the case at bar, since Campos deliberately concealed his claim for damages in the prayer.

In United Overseas Bank (formerly Westmont Bank) v. Ros,17 we discussed how Manchester was not applicable to said case in view of the lack of deliberate intent to defraud manifested in the latter:

This Court wonders how the petitioner could possibly arrive at the conclusion that the private

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respondent was moved by fraudulent intent in omitting the amount of damages claimed in its Second Amended Complaint, thus placing itself on the same footing as the complainant in Manchester, when it is clear that the factual milieu of the instant case is far from that of Manchester.

First, the complainant in Manchester paid the docket fee only in the amount of P410.00, notwithstanding its claim for damages in the amount of P78,750,000.00, while in the present case, the private respondent paid P42,000.00 as docket fees upon filing of the original complaint.

Second, complainant’s counsel in Manchester claimed, in the body of the complaint, damages in the amount of P78,750.00 but omitted the same in its prayer in order to evade the payment of docket fees. Such fraud-defining circumstance is absent in the instant petition.

Finally, when the court took cognizance of the issue of non-payment of docket fees in Manchester, the complainant therein filed an amended complaint, this time omitting all mention of the amount of damages being claimed in the body of the complaint; and when directed by the court to specify the amount of damages in such amended complaint, it reduced the same from P78,750,000.00 to P10,000,000.00, obviously to avoid payment of the required docket fee. Again, this patent fraudulent scheme is wanting in the case at bar.

This Court is not inclined to adopt the petitioner’s piecemeal construction of our rulings in Manchester and Sun Insurance. Its attempt to strip the said landmark cases of one or two lines and use them to bolster its arguments and clothe its position with jurisprudential blessing must be struck down by this Court.

All told, the rule is clear and simple. In case where the party does not deliberately intend to defraud the court in payment of docket fees, and manifests its willingness to abide by the rules by paying additional docket fees when required by the court, the liberal doctrine enunciated in Sun Insurance and not the strict regulations set in Manchester will apply.”

In the case at bar, Campos filed an amount of P54,898.50 as docket fee, based on the amounts of P10,000,000.00 representing the value of unwithdrawn molasses, P100,000.00 as storage fee, P200,000.00 as moral damages, P100,000.00 as exemplary damages and P500,000.00 as attorney’s fees. The total amount considered in computing the docket fee was P10,900,000.00. NOPA alleges that Campos deliberately omitted a claim for unrealized profit of P100,000.00 and an excess amount of storage fee in the amount of P502,875.98 in its prayer and, hence, the amount that should have been considered in the payment of docket fees is P11,502,875.98. The amount allegedly deliberately omitted was therefore only P602,875.98 out of P11,502,875.98, or merely 5.2% of said alleged total. Campos’s pleadings furthermore evince his willingness to abide by the rules by paying the additional docket fees when required by the Court.

Since the circumstances of this case clearly show that there was no deliberate intent to defraud the Court in the payment of docket fees, the case of Sun should be applied, and the Motion to Dismiss by NOPA should be denied.

WHEREFORE, the Resolutions of the Court of Appeals dated 23 May 2007 and 16 August 2007, respectively, in CA-G.R. SP No. 02651, outrightly dismissing the Petition for Certiorari filed by petitioner Negros Oriental Planters Association, Inc. against private respondent Aniceto Manojo Campos, are AFFIRMED. No costs.

SO ORDERED.

Ynares-Santiago (Chairperson), Austria-Martinez, Nachura and Reyes, JJ., concur.

Resolutions affirmed.