civ pro cases new

8/12/2019 Civ Pro Cases New

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G.R. No. 84811 August 29, 1989

SOLID HOMES, INC., petitioner, vs.TERESITA PAYAWAL and COURT OF APPEALS, respondents.

We are asked to reverse a decision of the Court of Appeals sustaining the jurisdiction of the RegionalTrial Court of Quezon City over a complaint filed by a buyer, the herein private respondent, against thepetitioner, for delivery of title to a subdivision lot. The position of the petitioner, the defendant in thataction, is that the decision of the trial court is null and void ab initiobecause the case should have been

heard and decided by what is now called the Housing and Land Use Regulatory Board.

The complaint was filed on August 31, 1982, by Teresita Payawal against Solid Homes, Inc. before theRegional Trial Court of Quezon City and docketed as Civil Case No. Q-36119. The plaintiff alleged that thedefendant contracted to sell to her a subdivision lot in Marikina on June 9, 1975, for the agreed price of P28,080.00, and that by September 10, 1981, she had already paid the defendant the total amount of P38,949.87 in monthly installments and interests. Solid Homes subsequently executed a deed of sale overthe land but failed to deliver the corresponding certificate of title despite her repeated demands because,as it appeared later, the defendant had mortgaged the property in bad faith to a financing company. Theplaintiff asked for delivery of the title to the lot or, alternatively, the return of all the amounts paid by herplus interest. She also claimed moral and exemplary damages, attorney's fees and the costs of the suit.

Solid Homes moved to dismiss the complaint on the ground that the court had no jurisdiction, this beingvested in the National Housing Authority under PD No. 957. The motion was denied. The defendantrepleaded the objection in its answer, citing Section 3 of the said decree providing that "the NationalHousing Authority shall have exclusive jurisdiction to regulate the real estate trade and business inaccordance with the provisions of this Decree." After trial, judgment was rendered in favor of the plaintiffand the defendant was ordered to deliver to her the title to the land or, failing this, to refund to her thesum of P 38,949.87 plus interest from 1975 and until the full amount was paid. She was also awarded P5,000.00 moral damages, P 5,000.00 exemplary damages, P 10,000.00 attorney's fees, and the costs of thesuit.1

Solid Homes appealed but the decision was affirmed by the respondent court, 2which also berated theappellant for its obvious efforts to evade a legitimate obligation, including its dilatory tactics during thetrial. The petitioner was also reproved for its "gall" in collecting the further amount of P 1,238.47 fromthe plaintiff purportedly for realty taxes and registration expenses despite its inability to deliver the titleto the land.

In holding that the trial court had jurisdiction, the respondent court referred to Section 41 of PD No. 957itself providing that:

SEC. 41. Other remedies.-The rights and remedies provided in this Decree shall be in

addition to any and all other rights and remedies that may be available under existing laws.and declared that "its clear and unambiguous tenor undermine(d) the (petitioner's) pretension that thecourta quowas bereft of jurisdiction." The decision also dismissed the contrary opinion of the Secretaryof Justice as impinging on the authority of the courts of justice. While we are disturbed by the findings offact of the trial court and the respondent court on the dubious conduct of the petitioner, we neverthelessmust sustain it on the jurisdictional issue.

The applicable law is PD No. 957, as amended by PD No. 1344, entitled "Empowering the NationalHousing Authority to Issue Writs of Execution in the Enforcement of Its Decisions Under PresidentialDecree No. 957." Section 1 of the latter decree provides as follows:


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SECTION 1. In the exercise of its function to regulate the real estate trade and business andin addition to its powers provided for in Presidential Decree No. 957, the National HousingAuthority shall haveexclusive jurisdictionto hear and decide cases of the following nature:

A. Unsound real estate business practices;

B. Claims involving refund and any other claimsfiled by subdivision lot or condominiumunit buyer against the project owner, developer, dealer, broker or salesman; and

C. Cases involving specific performance of contractuala statutory obligationsfiled by buyersof subdivision lot or condominium unit against the owner, developer, dealer, broker orsalesman. (Emphasis supplied.)

The language of this section, especially the italicized portions, leaves no room for doubt that "exclusivejurisdiction" over the case between the petitioner and the private respondent is vested not in theRegional Trial Court but in the National Housing Authority. 3

The private respondent contends that the applicable law is BP No. 129, which confers on regional trialcourts jurisdiction to hear and decide cases mentioned in its Section 19, reading in part as follows:

SEC. 19.Jurisdiction in civil cases.-Regional Trial Courts shall exercise exclusive originaljurisdiction:

(1) In all civil actions in which the subject of the litigation is incapable of pecuniaryestimation;

(2) In all civil actions which involve the title to, or possession of, real property, or anyinterest therein, except actions for forcible entry into and unlawful detainer of lands orbuildings, original jurisdiction over which is conferred upon Metropolitan Trial Courts,Municipal Trial Courts, and Municipal Circuit Trial Courts;

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(8) In all other cases in which the demand, exclusive of interest and cost or the value of theproperty in controversy, amounts to more than twenty thousand pesos (P 20,000.00).

It stresses, additionally, that BP No. 129 should control as the later enactment, having been promulgatedin 1981, after PD No. 957 was issued in 1975 and PD No. 1344 in 1978.

This construction must yield to the familiar canon that in case of conflict between a general law and aspecial law, the latter must prevail regardless of the dates of their enactment. Thus, it has been held that-

The fact that one law is special and the other general creates a presumption that the specialact is to be considered as remaining an exception of the general act, one as a general law ofthe land and the other as the law of the particular case. 4

xxx xxx xxx


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The circumstance that the special law is passed before or after the general act does notchange the principle. Where the special law is later, it will be regarded as an exception to,or a qualification of, the prior general act; and where the general act is later, the specialstatute will be construed as remaining an exception to its terms, unless repealed expresslyor by necessary implication. 5

It is obvious that the general law in this case is BP No. 129 and PD No. 1344 the special law.

The argument that the trial court could also assume jurisdiction because of Section 41 of PD No. 957,earlier quoted, is also unacceptable. We do not read that provision as vesting concurrent jurisdiction onthe Regional Trial Court and the Board over the complaint mentioned in PD No. 1344 if only becausegrants of power are not to be lightly inferred or merely implied. The only purpose of this section, as wesee it, is to reserve. to the aggrieved party such other remedies as may be provided by existing law, like aprosecution for the act complained of under the Revised Penal Code. 6

On the competence of the Board to award damages, we find that this is part of the exclusive powerconferred upon it by PD No. 1344 to hear and decide "claims involving refund and any other claimsfiledby subdivision lot or condominium unit buyers against the project owner, developer, dealer, broker orsalesman." It was therefore erroneous for the respondent to brush aside the well-taken opinion of theSecretary of Justice that-

Such claim for damages which the subdivision/condominium buyer may have against theowner, developer, dealer or salesman, being a necessary consequence of an adjudication ofliability for non-performance of contractual or statutory obligation, may be deemednecessarily included in the phrase "claims involving refund and any other claims" used inthe aforequoted subparagraph C of Section 1 of PD No. 1344. The phrase "any other claims"is, we believe, sufficiently broad to include any and all claims which are incidental to or anecessary consequence of the claims/cases specifically included in the grant of jurisdictionto the National Housing Authority under the subject provisions.

The same may be said with respect to claims for attorney's fees which are recoverableeither by agreement of the parties or pursuant to Art. 2208 of the Civil Code (1) whenexemplary damages are awarded and (2) where the defendant acted in gross and evidentbad faith in refusing to satisfy the plaintiff 's plainly valid, just and demandable claim.

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Besides, a strict construction of the subject provisions of PD No. 1344 which would deny theHSRC the authority to adjudicate claims for damages and for damages and for attorney's fees

would result in multiplicity of suits in that the subdivision condominium buyer who wins a

case in the HSRC and who is thereby deemed entitled to claim damages and attorney's feeswould be forced to litigate in the regular courts for the purpose, a situation which is obviouslynot in the contemplation of the law. (Emphasis supplied.)7

As a result of the growing complexity of the modern society, it has become necessary to create more andmore administrative bodies to help in the regulation of its ramified activities. Specialized in the particularfields assigned to them, they can deal with the problems thereof with more expertise and dispatch thancan be expected from the legislature or the courts of justice. This is the reason for the increasing vestureof quasi-legislative and quasi-judicial powers in what is now not unreasonably called the fourthdepartment of the government.


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Statutes conferring powers on their administrative agencies must be liberally construed to enable themto discharge their assigned duties in accordance with the legislative purpose. 8Following this policy inAntipolo Realty Corporation v. National Housing Authority, 9the Court sustained the competence of therespondent administrative body, in the exercise of the exclusive jurisdiction vested in it by PD No. 957and PD No. 1344, to determine the rights of the parties under a contract to sell a subdivision lot.

It remains to state that, contrary to the contention of the petitioner, the case of Tropical Homes v.National Housing Authority 10is not in point. We upheld in that case the constitutionality of the

procedure for appeal provided for in PD No. 1344, but we did not rule there that the National HousingAuthority and not the Regional Trial Court had exclusive jurisdiction over the cases enumerated inSection I of the said decree. That is what we are doing now.

It is settled that any decision rendered without jurisdiction is a total nullity and may be struck down atany time, even on appeal before this Court. 11The only exception is where the party raising the issue isbarred by estoppel, 12which does not appear in the case before us. On the contrary, the issue was raisedas early as in the motion to dismiss filed in the trial court by the petitioner, which continued to plead it inits answer and, later, on appeal to the respondent court. We have no choice, therefore, notwithstandingthe delay this decision will entail, to nullify the proceedings in the trial court for lack of jurisdiction.

WHEREFORE, the challenged decision of the respondent court is REVERSED and the decision of theRegional Trial Court of Quezon City in Civil Case No. Q-36119 is SET ASIDE, without prejudice to the filingof the appropriate complaint before the Housing and Land Use Regulatory Board. No costs.

SO ORDERED.

G.R. No. 72566 April 12, 1988

DELBROS HOTEL CORPORATION, petitioner,vs.THE INTERMEDIATE APPELLATE COURT [FIRST SPECIAL CASES DIVISION], HILTON

INTERNATIONAL COMPANY, ACHIM IHLENFELD as successor to RICHARD CHAPMAN and

FLAVIANO MOSQUERA JR., the latter two in their respective capacities as former General Manager

and Comptroller of the Manila Hilton International Hotel, respondents.

FERNAN,J.:

This is a petition for certiorari with urgent prayer for the issuance of a temporary restraining orderand/or writ of preliminary injunction to nullify and resolutions dated September 5, 11 and 24, 1985,

issued by the then Intermediate Appellate court, now Court of Appeals, in AC-G.R. No. SP-07020, entitled"Hilton Hotels International, Inc, [Hilton International Co.] et al. vs. Hon Abelardo M. Dayrit, et al."

The antecedent facts are as follows:

On February 27,1985, petitioner Delbros Hotel Corporation [DELBROS, for short] filed before theRegional Trial Court of Manila a complaint for termination of agreement and damages, with prayer for theissuance of a restraining order and/or writ of preliminary mandatory injunction against privaterespondents Hilton Hotels International [now known as Hilton International Company] and RichardChapman, in his capacity as General Manager of Manila Hilton. In said complaint, docketed as Civil CaseNo. 85-29489 and raffled off to Branch XXIX presided over by Judge Abelardo M. Dayrit, it was alleged


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that pursuant to the Agreement and Lease entered into by and between DELBROS and Hilton HotelsInternational, Inc. [HILTON] on June 2,1964, later amended into a Management Agreement on June 9,1966, and its Supplemental Amendments of March 23, 1973 and November 22, 1976, DELBROS financed,built, furnished and equipped a first-class hotel of approximately 400 rooms, now known as the "ManilaHilton," the operation and management of which was granted to HILTON; that for their respectiveundertakings, DELBROS was to receive a share in the gross operating profit [GOP] of the hotel, as definedin Article V of the basic agreements, while HILTON was entitled to a management fee equivalent to fivepercent [5%] of the gross revenues and an incentive fee equivalent to ten percent [10%] of the GOP of the

hotel; that in violation of the terms of the agreement, HILTON a] refused, despite repeated demands, toremit to DELBROS its share in the GOP which as of December 31, 1984 amounted to P2,591,165.00 aswell as the excess of the normal working capital; b] transferred, without DELBROS' prior approval, aportion of the reserve funds to its operating funds; and, c] used said operating funds for capitalexpenditures without the consent of DELBROS; that in addition, HILTON grossly mismanaged the hoteland breached the trust and confidence reposed upon it by DELBROS; thereby causing DELBROS to defaultin its amortizations to the GSIS. 1

In their Answer with Compulsory counterclaim, therein defendants HILTON and Chapman specificallydenied the allegations of DELBROS and set forth the following as affirmative defenses: that DELBROS hadno valid and sufficient cause of action for failure to give a five-day notice of termination of theManagement Agreement as required under Article XI thereof; DELBROS' cause or causes of action, if any,were barred by estoppel or laches; DELBROS' claims or demands had been waived or abandoned; andthat the alleged violations of the Management Agreement were too trivial or insignificant to warrant thegrave penalty of termination of the Management Agreement after it had been in force for 17 years. Byway of compulsory counterclaim, HILTON and Chapman prayed for an award of moral damages in theamount of P1,000,000.00 each and the same amount each as exemplary damages plus attorney's fees. 2

On March 21, 1985, Judge Dayrit issued a writ of preliminary injunction, enjoining HILTON and Chapmanfrom:

a] Disposing, removing, tampering, destroying, or otherwise concealing corporate records,books of accounts, statement of accounts receivables, ledgers, vouchers, invoices, receipts,purchase orders, job orders, bank statements, returned checks, gate passes, incidentreports, debit/credit memos and/or any other document of similar nature, pertaining tothe operation, management and administration of the business and affairs of the hotelknown as the 'Manila Hilton' located at the United Nations Avenue, Ermita, Manila;

b] Disposing, removing, destroying, dissipating, or otherwise concealing hotel stocks[consisting of food, beverage, supplies and items of similar nature], furniture, furnishings,specialized hotel equipment [which term shall mean all equipment required for theoperation of kitchen, laundries, dry cleaning facilities, restaurants, bars, special lighting and

other equipment of similar nature] operating equipment [which term shall includechinaware, linens, silverware, kitchenwares and other similar items], operating and guestsupplies [which term shall include soaps, cleaning materials, matches, paper supplies,stationery and other similar items] and such other furnishings equipment and otherpersonal properties or assets as are normally required for the efficient and continuingoperation of the Manila Hilton;

c] Disbursing, expending and/or dissipating testimonies funds, time deposits, revenues,and income under the account of Hilton International Company and/or Manila Hiltonwithout prior approval from this Court, except only as may be necessary to prevent total orpartial disruption of the hotels services;


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d] Disbursing funds in payment to Hilton International Company or transferring funds toHilton's local bank accounts or offsetting hotel receivables in favor of Hilton InternationalCompany and/or its affiliated companies;

e] Remitting funds from their local bank accounts to their foreign offices. 3

A clarificatory order on this writ was issued on March 28, 1985.

From these orders, HILTON and Chapman went to the Intermediate Appellate Court on a petition forcertiorari docketed as AC-G.R. No. SP-06474. On July 3, 1985, the Third Special Cases Division of the IAC,to which the petition was assigned, issued a temporary restraining order enjoining the implementation ofthe orders of Judge Dayrit. The temporary restraining order was replaced on August 21, 1985 with a writof preliminary injunction. 4

Meanwhile, on April 12,1985, DELBROS filed in Civil Case No. 85-29489 a motion to admit SupplementalComplaint. The Supplemental Complaint impleaded as an additional defendant Flaviano Mosquera, Jr., inhis capacity as Comptroller of the Manila Hilton and sought the confirmation by the trial court of thetermination of the Management Contract effected by DELBROS through the service upon HILTON of thefive-day notice of termination provided thereunder, as well as the payment of DELBROS' share in the GOPof the hotel for the months of January and February 1985 and other damages.

Over the opposition of HILTON and Chapman, the lower court issued an Order on June 14, 1985,admitting the Supplemental Complaint, directing summons and copy of the supplemental complaint to beserved on the additional defendant and requiting HILTON and Chapman to answer the supplementalcomplaint within five [5] days from notice. Copies of the June 14, 1985 Order were received by theparties' counsels on June 21, 1985.

On July 6, 1986, an ex-parte motion for an extension of twelve [12] days to answer the supplementalcomplaint was filed in behalf of all the three defendants, HILTON, Chapman and Mosquera. Said motion,sent by registered mail, was not reserved by the trial court until July 16, 1985.

However, earlier, or on July 9, 1985, DELBROS had filed a motion to declare defendants HILTON andChapman in default with respect to the supplemental complaint. This was granted on even date andDELBROS allowed to present its evidence ex-parte in support of its supplemental complaint.

On July 15, 1986, the lower court rendered a judgment by default, confirming as legal and valid thetermination as of March 31, 1985 of the Management Agreement between the parties and ordering,among others, the defendants to immediately quit and surrender the Manila Hilton International Hotel toDELBROS' President as well as to pay DELBROS its share in the GOP of the hotel for the months of Januaryto March, 1985, plus legal interest thereon from the date of the filing of the Supplemental Complaint until

full payment thereof.5

Copies of the default judgment were served on the parties' counsels in themorning of July 18, 1985. In the afternoon of the same day, HILTON, et al. filed their Answer to theSupplemental Complaint, and on July 24, 1985, filed a notice of appeal from the judgment by default.

Meanwhile, on July 19, 1985, DELBROS moved for the execution of the judgment pending appeal.Although opposed by HILTON, et al., the motion was granted in a Special Order dated September 3, 1985.A writ of execution was issued and served upon defendants on the same day. The Partial Sheriff s Returnreads as follows:

That on September 3, 1985, copies of the Writ of Execution dated September 3, 1985together with the Judgment by Default dated July 15, 1985 and the Special Order dated


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September 3, 1985, all issued in the above-entitled case, were served and tendered uponthe following:

1. Defendant Hilton International, Inc. [now known as Hilton International Company]through Achim Ihlenfeld General Manager of Manila Hilton International Hotel; and,

2. Defendant Flaviano Mosquera, Jr. at their given addresses, as evidenced by theirsignatures acknowledging receipt of the aforementioned documents, hereto attached,

The aforesaid individuals, after carefully reading the documents served and afterconsuIting with their counsel by telephone voluntarily vacated and surrendered theirrespective offices at the Manila Hilton International. Thereupon, Delbros Hotel Corporationtook over possession and control over the management and operation of the Hotel asevidenced by notices of take over of the hotel signed by the President of Delbros HotelCorporation and addressed to all officers and employees, posted in strategic places in thehotel, a copy hereto attached.

The Notices of Garnishment were likewise served on the following banks:

1. Pilipinas Bank, Manila Hilton Branch

2. PNB, Ermita Branch

3. Bank of America, Paseo de Roxas Branch

as evidenced by the rubber stamp mark and signatures appearing on the duplicate originalcopies thereof, hereto attached.

The undersigned posted guard in the respective offices of Messrs. Ihlenfeld and Mosquera.

Manila, Philippines, September 3, 1985.

For the Sheriff ofManila

[Sgd.] Miguelito S.Navarro

Deputy Sheriff

Branch XXIX, RTC ofManila. 6

On the following day, September 4, 1985, HILTON, et al. instituted before the then Intermediate AppellateCourt a petition for certiorari with prayer for a restraining order/preliminary injunction, docketed as AC-G.R. No. SP-07020, to assail the Special Order of September 3, 1985 for allegedly having been issued withgrave abuse of discretion amounting to lack of jurisdiction. 7As prayed for, the First Special CasesDivision of the IAC, to which the petition was assigned, issued on September 5, 1985 a temporaryrestraining order enjoining the implementation and/or enforcement of the Special Order of September 3,1985.


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On September 9, 1985, HILTON, et al. filed in AC-G.R. No. SP-07020 an urgent ex-parte motion to deputizeManila police authorities to enforce/implement the restraining order of September 5, 1985. 8This wasopposed by DELBROS.

On September 11, 1985, the First Special Cases Division of the IAC issued a resolution reiterating 'thecontinuing efficacy of its restraining order dated September 5, 1985, enjoining the parties to conform tothe restraint against the execution/implementation of the Special Order dated September 3, 1985..." 9and on September 24,1985 granted HILTON's motion to deputize Manila police authorities to enforce

the restraining order of September 5, 1985. 10

DELBROS forthwith filed on September 25, 1985 an urgent motion for reconsideration of the resolutiondated September 24, 1985. When more than a month had elapsed without the IAC acting on its motion forreconsideration, petitioner filed the instant petition assailing as null and void the three orders issued inAC-G.R. No. SP-07020, and raising the following questions of law:

[1] Can a temporary restraining order,or a writ of preliminary injunction, for that matter,prohibit an act already performed and accomplished?

[2] Can a party in legal and actual possession and control be deprived of the same by meansof a temporary restraining order?

[3] Can a temporary restraining order continue to be enforced beyond twenty (20) daysfrom its issuance, contrary to paragraph 8 of the Interim or Transitional Rules andGuidelines relative to the implementation of the Judiciary Reorganization Act of 1981. (B.P.Blg. 129)? 11

In their comment, private respondents HILTON, Achim Ihlenfeld [successor of Chapman] and FlavianoMosquera, Jr. assailed the veracity of the Partial Sheriffs Return, contending that no take-over of thehotel's management was ever effected as no advice to surrender their offices was given to either Ihlenfeldand Mosquera, Jr., and that it is HILTON which continues to run and manage the hotel and which isrecognized by the employees as manager thereof; that the twenty-day lifespan of a temporary restrainingorder provided under B.P. 224 does not apply to the Court of Appeals; and that, at any rate, the SpecialOrder of September 3, 1985 which granted petitioner's motion for execution pending appeal is null andvoid, having as its basis an invalid judgment by default.

As aforesaid, the instant petition is focused primarily on the interlocutory orders dated September 5, 11and 24, 1985 issued in AC-G.R. No. SP-07020. These orders, however, are so inextricably connected withthe default order of July 9, 1985, the default judgment of July 15, 1985 as well as the Special Order datedSeptember 3, 1985, that to simply limit ourselves to said orders would afford the parties neithercomplete relief nor substantial justice, Thus, it becomes imperative that We should delve further back

into the proceedings taken in the trial court and in the process, preempt the jurisdiction of the appellatecourt before which the question of legality and propriety of the Special Order of September 3, 1985 hadbeen brought as well as the appeal filed by private respondents HILTON and Ihlenfeld [as successor toChapman] from the judgment by default.

Private respondents HILTON and Chapman were declared in default for failure to file an answer to theSupplemental Complaint. This is reversible error.

Fundamentally, default orders are taken on the legal presumption that in failing to file an answer, thedefendant does not oppose the allegations and relief demanded in the complaint. In the case at bar,however, no such presumption can arise vis-a-vis the Answer filed by HILTON and Chapman to the


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original complaint; their institution of the certiorari proceedings in AC-G.R. No. SP-06474 in opposition topetitioner's attempt to interfere with and/or take over the control and management of the hotelpendentelite; and their vigorous opposition to the admission of the supplemental complaint under consideration.These factors, of which the trial judge had full knowledge and notice, should have cautioned him fromprecipitately rendering the default order as well as the default judgment.

"A supplemental pleading is not like an amended pleading substitute for the original one. It does notsupersede the original, but assumes that the original pleading is to stand, and the issues joined under the

original pleading remain as issues to be tried in the action." 12While it is conceded that there is authorityin support of a default judgment being predicated upon defendant's failure to answer a supplementalcomplaint, 13the same cannot apply here. The reason is that although in the supplemental complaint, therelief prayed for was altered from termination of the management contract to judicial confirmation of itstermination, the basic and principal issue of whether or not petitioner was entitled to terminate themanagement contract, remained. As this basic issue had been previously traversed and joined by theAnswer filed by HILTON and Chapman, there was no necessity for requiring them to plead further to theSupplemental Complaint. Consequently, the trial judge did not have a legal ground for declaring them indefault for such failure to plead.

Another factor which the trial judge should have considered is that the supplemental complaint broughtin an additional defendant, Flaviano Mosquera, Jr. On this score, it would have been more prudent underthe liberal construction rule provided in Section 2, Rule 1 of the Rules of Court, for the trial court to havetreated the supplemental complaint as an amended complaint, and the original answer thereto assufficient; 14or otherwise to have waited for the answer of the newly-impleaded defendant before actingon the motion to declare the original defendants in default and rendering the default judgment,considering that a common cause of action has been asserted against the three defendants, so that theanswer of Mosquera, Jr. could inure to the benefit of the original defendants. 15As it turned out, theAnswer filed on July 18, 1985 was for and in behalf of all the defendants. Hence, under Sec. 4 of Rule 18,the court shall try the case against all upon the answer filed and render judgment upon the evidencepresented.

Indeed, no prejudice wouId result to petitioner had the trial judge taken a more prudent and judiciouscourse of action as above suggested. Acting as the trial judge did, grave, irreparable and serious damagecaused to private respondents. Such prejudice is compounded by the issuance of the Special Order ofSeptember 3, 1985 decreeing the execution pending appeal of the default judgment at a time whendefendant Mosquera was not yet declared in default. Consequently, any defense set up by him for himselfand for the benefit of his co-defendants was rendered practically inutile by the execution of the defaultjudgment.

Time ang again, this Court has expressed disfavor toward default judgments 16for the reason that:

A default judgment does not pretend to be based on the merits of the controversy. Itsexistence is justified by expediency. It may, however, amount to a positive and considerableinjustice to the defendant. The possibility of such serious consequences necessarilyrequires a careful examination of the circumstances under which a default order wasissued. And when no real injury would result to the interests of the plaintiff by thereopening of the case, the only objection to such action would, therefore, be solely on atechnicality. On such an infirm foundation, it would be a grevious error to sacrifice thesubstantial rights of a litigant. 17

Upon these considerations, the order of default dated July 9, 1985, the default judgment of July 15, 1985as well as the Special Order dated September 3, 1985, should be, as they are hereby set aside.


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With this conclusion, We could very wen write finish to this opinion, were it not for an important legalissue raised herein that has long awaited resolution by this Court; namely, whether or not paragraph 8 ofthe Interim Rules and Guidelines promulgated by this Court relative to the implementation of theJudiciary Reorganization Act of 1981 applies to the Court of Appeals.

The provision in the Interim Rules and Guidelines adverted to reads in full thus-.

8. Preliminary injunction not granted without notice; issuance of restraining order. No

preliminary injunction shall be granted without notice to the defendant. if it shall appearfrom the facts shown by affidavits or by verified complaint, that great or irreparable injurywould result to the applicant before the matter can be heard on notice, the Court to whichthe application for preliminary injunction was made, may issue a restraining order to beeffective only for a period of twenty days from date of its issuance, Within said twenty dayperiod, the court must cause an order to be served on the defendant, requiring him to showcause, at a specified time and place, why the injunction should not be granted, anddetermine within the same period whether or not the preliminary injunction shall begranted, and shall accordingly issue the corresponding order. In the event that theapplication for preliminary injunction is denied, the restraining order is deemedautomatically vacated.

The applicability of the above-quoted provision to the then Intermediate Appellate Court, now the Courtof Appeals, can hardly be doubted. The Interim Rules and Guidelines were promulgated to implement theJudiciary Reorganization Act of 1981 18which included the Intermediate Appellate Court among thecourts reorganized thereunder. This is emphasized in the preamble of the Interim Rules which states thatthe same shall apply to "all inferior courts according to the Constitution.' The term 'inferior courts' asused therein refers to all courts except the Supreme Court, the Sandiganbayan and the Court of TaxAppeals. Thus, paragraphs 14 and 15 of the Interim Rules expressedly provide for "Procedure in theIntermediate Appellate Court. "

Indeed, if paragraph 8 of the Interim Rules were not intended to apply to temporary restraining ordersissued by the respondent Court, there would have been absolutely no reason for the inclusion of saidparagraph in the Interim Rules. The limited life-span of temporary restraining orders issued by theregional trial courts and municipal trial courts is already provided for in B.P. Blg. 224. It was precisely toinclude the Intermediate Appellate Court within the same limitation as to the effectivity of its temporaryrestraining orders that B.P. Blg. 224 was incorporated in the Interim Rules, with the significant change ofthe word "judge" to "court", so as to make it clear and unequivocal that the temporary restraining orderscontemplated therein are those issued not only by trial judges but also by justices of the appellate court.

Private respondents argue that it is impractical to apply paragraph 8 of the Interim Rules to therespondent court because the latter's processes are enforceable throughout the country and there could

be instances when the twenty-day period of the effectivity of a temporary restraining order would lapsebefore it is served on the parties concerned. This allegation appears to be more illusory and imaginarythan real. Private respondents have not cited any single, actual instance when such eventuality hadoccurred. Its possibility is deemed remote and unlikely considering the present state of fast and efficientmodes of communication as well as the presumed eagerness of a party-litigant who has secured atemporary restraining order to have the same immediately served on the parties concerned with theleast waste of time.

WHEREFORE, the instant petition is hereby DISMISSED. The default order of July 9, 1985, the defaultjudgment dated July 15, 1985 and the Special Order of September 3, 1985 issued in Civil Case No. 85-29489 of the Regional Trial Court of Manila are hereby annulled and set aside. The Answer dated July 18,


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1985 filed by herein private respondents in Id case is ordered admitted and the case is remanded for trialon the merits. No pronouncement as to costs.

SO ORDERED.

Yap, Cruz, Paras, Gancayco, Padilla, Bidin, Sarmiento and Cortes, JJ., concur.

Narvasa, J., took no part;

Separate Opinions

MELENCIO-HERRERA,J.,

I join the Concurring and Dissenting Opinions of Mr. Justice Gutierrez. To settle all doubts, now that therevisions of the Rules of Court is on going, a categorical rule on the inclusion/exclusion of the Court ofAppeals from the coverage of the 20-day life-span of restraining orders, should be laid down.

TEEHANKEE, C.J., concurring:

The fourteen participating members of the Court are unanimousin their concurrence in the Court's basicjudgment on the merits annulling the trial court's questioned default order and judgment and specialorder of execution against respondent-defendant Hilton International Company and remanding the caseback to the trial court for trial on the merits.

Clearly, the trial court exceeded its jurisdiction and acted with grave abuse of discretion in rendering thedefault judgment against said respondent-defendant with respect to the supplemental complaint forfailure to answer petitioner-plaintiffs supplemental complaint (which supplemented but did notsupersede the original complaint and merely altered the relief prayed for from terminationof themanagement contract over the Manila Hilton Hotel tojudicial confirmationof its alleged termination)when the basic and main issue of whether or not petitioner was entitled to terminate respondent'smanagement contract as joined by respondent's answer to the original complaint had yet to be tried andadjudicated on the merits. There was no need for respondent to file yet another answer to thesupplemental complaint, since its answer to the original complaint stood as answer on the self-sameissue raised in the supplemental complaint, in the same way that a plaintiffs original complaint stands as

answer to a compulsory counterclaim filed by defendant with his answer.There are, however, four dissenting votes in the separate concurring and dissenting opinion filed, vis a visthe ten-member majority ruling (on the procedural issue raised by petitioner) that the twenty-day periodof effectivity of a temporary restraining order issued ex parte (within which period it must be replacedwith a preliminary injunction issued after prior notice and opportunity given the defendant to showcause why 91 such injunction should not be granted) is applicable to all lower courts established by lawunder the Constitution, including the Court of Appeals.

There is here an O. Henry twist. The majority upholds petitioner's submittal that the lifetime oftemporary restraining order issued ex parteis limited to 20 days if no preliminary injunction is issued


12/44

with notice and opportunity for the defendant to be heard in the interval, while the minority sustains thecontrary view, insofar as the Court of Appeals is concerned, i.e. that the. 20-day limit should not apply tothe Court of Appeals. If this issue were not procedural in character, then petitioner should prevail insteadof having its petition at bar dismissed. But as is evident, respondent has instead prevailed,notwithstanding the rejection of its contrary/view sustained by the minority that the lifetime of the Courtof Appeals' temporary restraining order should be without limit, since the Court has unanimouslyruledon the substantive issue that the Court of Appeals correctly issued the temporary restraining orderagainst execution of the void default judgment wrongfully issued by the trial judge.

So, the 20-day limitation on the effectivity of the Court of Appeal's temporary restraining order againstenforcement or execution of the default judgment became irrelevant, in view of this Court's unanimousruling on the substantive issue that such default judgment was void for having been issued with graveabuse of discretion and in excess of jurisdiction. Thus, petitioner has won the argument but neverthelesslost the case.

If petitioner had insisted in the Court of Appeals on its correct stand on the temporary restraining order'slimited 20-day lifetime, all that the Court of Appeals would have had to do was replace the temporaryrestraining order with a preliminary injunction with bond, as required by the law (B.P. Blg. 224, approvedApril 16,1982) and the Interim Rules (Section 8) of the January 11, 1983. Since petitioner chose not toawait the Court of Appeal's action on its motion for reconsideration and instead to file the petition at barwith prayer for a temporary restraining order against enforcement of the Court of Appeals' temporaryrestraining order against it, this Court's refusal to issue such temporary restraining order indicated thatpetitioner had not shown a clearprima facieright thereto and presaged this Court's ultimate ruling at baron the merits that the trial court's default judgment on the supplemental complaint was null and void andits execution had been properly and correctly restrained by the Court of Appeals. In other words, it is as ifthis Court, bound by no twenty-day limitation, had itself directly issued a temporary restraining orderagainst execution of the trial court's void default judgment.

The purpose of this concurrence is simply to place the issue at bar on the applicability of the legislativetwenty-day limitation on the lifetime of temporary restraining orders to the Court of Appeals in properbalance and perspective, in addition to the sound and valid reasons stated in the Court's decision.

Firstly, the majority ruling in no way indicates a lack of appreciation of the Court of Appeals'acknowledged importance and worth 'as our partner in the administration of justice" nor does it "equate"them with municipal courts and regional trial courts, as misperceived in the concurring and dissentingopinion The fact is that under both the 1935 1and the 1973 2Constitutions the legislature was grantedthe authority to repeal, alter or supplement the Rules of Court. Pursuant thereto, the Batasang Pambansaenacted B.P. Blg. 224 amending section 5 of Rule 58 of the Rules of Court "regulating the issuance ofrestraining orders" and imposing a twenty-day effectivity period for such restraining orders issued exparte, as adopted in section 8 of the Court's Interim Rules and Guidelines. The Batasang Pambansa meant

this legislative amendment of the Rules of Court (approved oil third reading on March 22, 1982 with 111yeas and no nays or abstentions" 3) to apply to all courts, including the Supreme Court, as shown in theresponse of the bill's (B.P. Blg. 293) author and sponsor Hilario G, Davide, Jr. during the deliberations onMarch 9, 1982:

Mr. Seno. If this bill is passed into law, would it apply to restraining orders by the SupremeCourt?

Mr. Davide. Mr. Speaker, it will apply to all courts.


13/44

Mr. Seno. Thank you, Mr Speaker. I want to make it of record so that the intention of the billwill be clear. 4

But the Supreme Court nevertheless has never considered itself bound by such twenty-day limitation oftemporary restraining orders issued by it in the exercise of its certiorari jurisdiction, where suchrestriction could be taken as a violation of the fundamental principle of separation of powers or aninterference by the legislature with the Supreme Court's exercise of its judicial power of settling andadjudicating actual controversies involving rights that are legally demandable and enforceable in much

the same way that this Court would not interfere with the legislative power of enacting the laws of theland. As stressed by the Court in its decision in PCGG vs. Hon. Emmanuel G. Pena,G.R. No. 77663,promulgated this month also, "(E)xecutive Order No. 1 thus effectively withholds jurisdiction over casesagainst the Commission [PCGG] from all lower courts, including the Court of Appeals, except theSandiganbayan in whom is vested original and exclusive jurisdiction and this Court. Early on, in specialcivil actions questioning challenged acts of the Commission, its submittal that the cited Executive Orderbars such actions in this Court was given short shrift because this Court, as the third great department ofgovernment vested with the judicial power and as the guardian of the Constitution, cannot be deprived ofits certiorari jurisdiction to pass upon and determine alleged violations of the citizens' constitutional andlegal rights under the Rule of Law.' In other words, the legislature was constitutionally empowered underthe 1935 and 1973 Constitutions to alter or modify the Rules of Court, as it did under B.P. Blg. 224,subject of this case. But this Court was and is exempt from such legislature made Rule. Manifestly, theCourt could not extend this exemption pertaining to the Supreme Court as a constitutional Court andrepository of the judicial power to a constitutionally lesser court established by law such as the Court ofAppeals.

(Parenthetically, it is noteworthy that the power given to Congress to repeal, alter or supplement theRules of Court as promulgated by the Supreme Court has now been deleted and excluded from our newConstitution [Art. VIII, sec. 5(5), 1987 Constitution 1.)

Secondly, the case at bar serves but to stress once more that the adjudication of cases is not subject tomathematical formulas or arithmetical timetables. But such periods and deadlines for the filing ofpleadings and effectivity of interlocutory orders are necessary for the orderly administration of justice.Here, the amendatory law provides the practical alternative that the issuing court (including the Court ofAppeals) must replace the temporary restraining order within the 20-day period, if it finds the plaintiffentitled to the injunctive relief after notice and hearing the adverse party's side, with a preliminaryinjunction with the corresponding injunction bond, which under the Rules of Court, must be in anadequate amount to indemnify the party enjoined for any loss or damage should the injunction be foundto have been wrongfully issued. But in extreme cases, such as the case at bar, where the legislativedeadline has not been followed (by the Court of Appeals, in this instance), substantial justice will stillprevail over the procedural rule and the injunctive relief against a void default judgment willnevertheless be granted and made permanent with a decision on the merits.

Lastly,the statement in the concurring and dissenting opinion describing as 'not only gratuitous but false'the majority opinion's basis for rejecting the argument that the twenty-day life of a temporary restrainingorder is impractical and insufficient, as there could be instances when the twenty- day life of the orderwould lapse before it is served on the parties concerned, is to be regretted. The rejection has sound basisin its statement of fact -that not a single actual instance has been cited wherein such eventuality hasoccurred in a case of the Court of Appeals. Then, the argument of impracticality and shortness of the timego to the wisdom, and not the conceded validity, of the legislature's imposition of the twenty-day lifetimeof the restraining order which was beyond the Court's jurisdiction to modify or set aside. Besides, asabove indicated, the law provides a practical alternative, when the twenty-day period is found


14/44

inadequatewhich is, to replace the restraining order with a no-time-limit preliminary injunctioncovered by an injunction bond.

GUTIERREZ,JR., J.: concurring and dissenting opinion:

I concur in the setting aside of the July 9, 1985 order of default, the July 15,1985 default judgment, andthe September 3, 1985 special order.

I, however, take strong exceptions to and accordingly dissent from the ruling that would bind the Court ofAppeals to the twenty-day life of a restraining order,

The majority opinion blithely discredits the respondents' argument that Court of Appeals processes areenforceable throughout the country and there could be instances when the twenty-day period wouldlapse before the temporary restraining order is served on the parties concerned. According to themajority opinion, this allegation appears to be more illusory and imaginary than real.

I am sorry to state that such a conclusion is not only gratuitous but false. I served in the Court of Appealsfor almost five and a half years. With more than one thousand decisions and full length resolutions that Ipenned for the appellate court, I humbly believe I can claim first hand knowledge of how long it takes toserve processes in the more distant parts of the country. Twenty days is not enough to serve therestraining order and get the answer or comments of the private respondent.

The more perceptive and distinguished members of the appellate court, the Justices most affected by ourruling, have voiced similar sentiments in their decisions. In Roberto T. Marquez v. Hon. Jose P. Castro, etal.AC- G.R. SP No. 02578, October 18, 1984, the court, through ponente Justice Vicente V. Mendoza, thenChairman and now Supreme Court Justice Edgardo L. Paras, and Justice Luis A. Javellana, stated:

The respondent spouses impliedly admit the charge but defend themselves on the groundthat the temporary restraining order issued in this case expired on February 27, 1984,twenty days after its issuance on February 7, 1984, in accordance with BP Blg. 224. Therespondents cite the decision inDionisio v. Court of first Instance, 124 SCRA 222 (1983)holding that upon the expiration of twenty days a temporary restraining order likewiseexpires.

On the other hand, the petitioner argues that BP Blg. 224 applies only to trial courts. Hepoints out that it would be absurd to apply the twenty-day period, which is counted fromthe date of issuance of the temporary restraining order, to appellate courts because of thepossibility at times of serving the order to remote parts of the country before the twentiethday. No such problem can possibly arise in the case of trial courts whose orders grantinginjunctions can be enforced only within the region, in accordance with Rule 3(a) of the

Interim Rules of Court. The petitioner points out that the case of Dionisio, which is invokedby the respondents, involved a Court of First Instance whose territorial jurisdiction is evenmore limited than a region.

There is much to commend the petitioner's interpretation of the law. BP Blg. 224 speaks ofa "judge" not Justice of the Intermediate Appellate Court. While in Rule 8 of the InterimRules of Court the word judge was changed to 'court' it is nevertheless plausible to arguethat no substantial change was intended since BP Blg. 224 is an act of the legislature andcannot possibly be amended by the Supreme Court under its rule making authority. TheSupreme Court may have the primary authority to promulgate a rule of court, but the


15/44

power to repeal, alter or supplement it belongs to the Batasan Pambansa under theConstitution

That is what was done in the case of the rule on injunction. The Supreme Courtpromulgated the Rules of Court, Rule 58, Section 5 of which provides for the issuance ofinjunctions By means of BP Blg. 224 the Batasan Pambansa amended Rule 58, Section 5. Wedo not believe that the Supreme Court can in turn amend the amendatory statuteconsistently with the Constitution.

The situation has not changed much since 1982 when I joined this Court on 1984 whenthe Marquezdecision was promulgated. If at all, communications in the country have worsened. I agreewith the appellate court that B.P. Blg. 224 is intended only for regional trial courts, metropolitan trialcourts, and municipal trial courts not the Court of Appeals. And certainly, not the Supreme Court. I wasalso a member of the Supreme Court when the Interim Rules were adopted and no matter how intensely Irack my memory, I simply cannot remember any deliberations which indicate that it was ever ourintention to include the Court of Appeals in the twenty-day limitation.

My objections to the twenty-day rule for restraining orders of the Court of Appeals are, however, basedon reasons more weighty than mere statutory construction or even the realities of the situation. To mymind, the ruling indicates a sad neglect on our part to properly appreciate the importance and worth ofthe Court of Appeals as our partner in the administration of justice.

Like the Supreme Court, the Court of Appeals is a national court whose jurisdiction embraces the entirecountry. The same reasons which impel us to exempt our restraining orders from the twenty-day ruleapply with equal force to the Court of Appeals.

More important, however, it is the Court of Appeals which enables us to function as a 'supreme court" ora court of cassation.

As this Court stated in Braulio Conde, et al. v. Intermediate Appellate Court, et al.(144 SCRA 144):

There are instances when this Court desires a further review of facts or a detailed analysisand systematic presentation of issues which the appellate court is in a more favoredposition to accomplish. Standing between the trial courts and the Supreme Court, theappellate court was precisely created to take over much of the work that used to bepreviously done by this Court. It has been of great help to the Supreme Court insynthesizing facts, issues, and rulings in an orderly and intelligible manner and inIdentifying errors which ordinarily might have escaped detection. Statistics will show thatthe great majority of petitions to review the decisions of the appellate court have beendenied due course for lack of merit in minute resolutions. The appellate court has,

therefore, freed this Court to better discharge its constitutional duties and perform its mostimportant work which, in the words of Dean Vicente G. Sinco, is less concerned with thedecision of cases that begin and end with the transient rights and obligations of thatparticular individuals but is more intertwined with the direction of national policies,momentous economic and social problems, the delimitation of governmental authority andits impact upon fundamental rights. (Philippine Political Law, 10th Edition, p. 323. ... (at pp.149- 150)

Since the Court of Appeals has freed us to better perform our constitutional duties, it is imperative thatwe should not deny it thetoolswith which to discharge its own functions faithfully I and speedily Itsmembers should be chosen with the same care and scrupulous attention given to the search for Supreme


16/44

Court Justices. Their compensation and allowances should not be too different from that given to us. Andinstead of being equated with municipal courts and regional trial courts, the Court of Appeals should beregarded as a court closer to the Supreme Court than any other court.

I am, therefore, constrained to regretfully dissent, in part, from the majority decision.

Melencio-Herrera, J., concurring and dissenting.

To settele all doubts, now that the revisions of the Rules of Court is ongoing, a categorical rule on theinclusion/exclusion of the Court of Appealss from the coverage of the 20-day life-span of restrainingorders, should be laid down.

Grino Aquino, concurring and dissenting

Separate Opinions

MELENCIO-HERRERA,J.,

I join the Concurring and Dissenting Opinions of Mr. Justice Gutierrez. To settle all doubts, now that therevisions of the Rules of Court is on going, a categorical rule on the inclusion/exclusion of the Court ofAppeals from the coverage of the 20-day life-span of restraining orders, should be laid down.

TEEHANKEE, C.J., concurring:

The fourteen participating members of the Court are unanimousin their concurrence in the Court's basicjudgment on the merits annulling the trial court's questioned default order and judgment and specialorder of execution against respondent-defendant Hilton International Company and remanding the caseback to the trial court for trial on the merits.

Clearly, the trial court exceeded its jurisdiction and acted with grave abuse of discretion in rendering thedefault judgment against said respondent-defendant with respect to the supplemental complaint forfailure to answer petitioner-plaintiffs supplemental complaint (which supplemented but did notsupersede the original complaint and merely altered the relief prayed for from terminationof themanagement contract over the Manila Hilton Hotel tojudicial confirmationof its alleged termination)when the basic and main issue of whether or not petitioner was entitled to terminate respondent'smanagement contract as joined by respondent's answer to the original complaint had yet to be tried andadjudicated on the merits. There was no need for respondent to file yet another answer to thesupplemental complaint, since its answer to the original complaint stood as answer on the self-same

issue raised in the supplemental complaint, in the same way that a plaintiffs original complaint stands asanswer to a compulsory counterclaim filed by defendant with his answer.

There are, however, four dissenting votes in the separate concurring and dissenting opinion filed, vis a visthe ten-member majority ruling (on the procedural issue raised by petitioner) that the twenty-day periodof effectivity of a temporary restraining order issued ex parte (within which period it must be replacedwith a preliminary injunction issued after prior notice and opportunity given the defendant to showcause why 91 such injunction should not be granted) is applicable to all lower courts established by lawunder the Constitution, including the Court of Appeals.


17/44

There is here an O. Henry twist. The majority upholds petitioner's submittal that the lifetime oftemporary restraining order issued ex parteis limited to 20 days if no preliminary injunction is issuedwith notice and opportunity for the defendant to be heard in the interval, while the minority sustains thecontrary view, insofar as the Court of Appeals is concerned, i.e. that the. 20-day limit should not apply tothe Court of Appeals. If this issue were not procedural in character, then petitioner should prevail insteadof having its petition at bar dismissed. But as is evident, respondent has instead prevailed,notwithstanding the rejection of its contrary/view sustained by the minority that the lifetime of the Courtof Appeals' temporary restraining order should be without limit, since the Court has unanimouslyruled

on the substantive issue that the Court of Appeals correctly issued the temporary restraining orderagainst execution of the void default judgment wrongfully issued by the trial judge.

So, the 20-day limitation on the effectivity of the Court of Appeal's temporary restraining order againstenforcement or execution of the default judgment became irrelevant, in view of this Court's unanimousruling on the substantive issue that such default judgment was void for having been issued with graveabuse of discretion and in excess of jurisdiction. Thus, petitioner has won the argument but neverthelesslost the case.

If petitioner had insisted in the Court of Appeals on its correct stand on the temporary restraining order'slimited 20-day lifetime, all that the Court of Appeals would have had to do was replace the temporaryrestraining order with a preliminary injunction with bond, as required by the law (B.P. Blg. 224, approvedApril 16,1982) and the Interim Rules (Section 8) of the January 11, 1983. Since petitioner chose not toawait the Court of Appeal's action on its motion for reconsideration and instead to file the petition at barwith prayer for a temporary restraining order against enforcement of the Court of Appeals' temporaryrestraining order against it, this Court's refusal to issue such temporary restraining order indicated thatpetitioner had not shown a clearprima facieright thereto and presaged this Court's ultimate ruling at baron the merits that the trial court's default judgment on the supplemental complaint was null and void andits execution had been properly and correctly restrained by the Court of Appeals. In other words, it is as ifthis Court, bound by no twenty-day limitation, had itself directly issued a temporary restraining orderagainst execution of the trial court's void default judgment.

The purpose of this concurrence is simply to place the issue at bar on the applicability of the legislativetwenty-day limitation on the lifetime of temporary restraining orders to the Court of Appeals in properbalance and perspective, in addition to the sound and valid reasons stated in the Court's decision.

Firstly, the majority ruling in no way indicates a lack of appreciation of the Court of Appeals'acknowledged importance and worth 'as our partner in the administration of justice" nor does it "equate"them with municipal courts and regional trial courts, as misperceived in the concurring and dissentingopinion The fact is that under both the 1935 1and the 1973 2Constitutions the legislature was grantedthe authority to repeal, alter or supplement the Rules of Court. Pursuant thereto, the Batasang Pambansaenacted B.P. Blg. 224 amending section 5 of Rule 58 of the Rules of Court "regulating the issuance of

restraining orders" and imposing a twenty-day effectivity period for such restraining orders issued exparte, as adopted in section 8 of the Court's Interim Rules and Guidelines. The Batasang Pambansa meantthis legislative amendment of the Rules of Court (approved oil third reading on March 22, 1982 with 111yeas and no nays or abstentions" 3) to apply to all courts, including the Supreme Court, as shown in theresponse of the bill's (B.P. Blg. 293) author and sponsor Hilario G, Davide, Jr. during the deliberations onMarch 9, 1982:

Mr. Seno. If this bill is passed into law, would it apply to restraining orders by the SupremeCourt?

Mr. Davide. Mr. Speaker, it will apply to all courts.


18/44

Mr. Seno. Thank you, Mr Speaker. I want to make it of record so that the intention of the billwill be clear. 4

But the Supreme Court nevertheless has never considered itself bound by such twenty-day limitation oftemporary restraining orders issued by it in the exercise of its certiorari jurisdiction, where suchrestriction could be taken as a violation of the fundamental principle of separation of powers or aninterference by the legislature with the Supreme Court's exercise of its judicial power of settling andadjudicating actual controversies involving rights that are legally demandable and enforceable in much

the same way that this Court would not interfere with the legislative power of enacting the laws of theland. As stressed by the Court in its decision in PCGG vs. Hon. Emmanuel G. Pena,G.R. No. 77663,promulgated this month also, "(E)xecutive Order No. 1 thus effectively withholds jurisdiction over casesagainst the Commission [PCGG] from all lower courts, including the Court of Appeals, except theSandiganbayan in whom is vested original and exclusive jurisdiction and this Court. Early on, in specialcivil actions questioning challenged acts of the Commission, its submittal that the cited Executive Orderbars such actions in this Court was given short shrift because this Court, as the third great department ofgovernment vested with the judicial power and as the guardian of the Constitution, cannot be deprived ofits certiorari jurisdiction to pass upon and determine alleged violations of the citizens' constitutional andlegal rights under the Rule of Law.' In other words, the legislature was constitutionally empowered underthe 1935 and 1973 Constitutions to alter or modify the Rules of Court, as it did under B.P. Blg. 224,subject of this case. But this Court was and is exempt from such legislature made Rule. Manifestly, theCourt could not extend this exemption pertaining to the Supreme Court as a constitutional Court andrepository of the judicial power to a constitutionally lesser court established by law such as the Court ofAppeals.

(Parenthetically, it is noteworthy that the power given to Congress to repeal, alter or supplement theRules of Court as promulgated by the Supreme Court has now been deleted and excluded from our newConstitution [Art. VIII, sec. 5(5), 1987 Constitution 1.)

Secondly, the case at bar serves but to stress once more that the adjudication of cases is not subject tomathematical formulas or arithmetical timetables. But such periods and deadlines for the filing ofpleadings and effectivity of interlocutory orders are necessary for the orderly administration of justice.Here, the amendatory law provides the practical alternative that the issuing court (including the Court ofAppeals) must replace the temporary restraining order within the 20-day period, if it finds the plaintiffentitled to the injunctive relief after notice and hearing the adverse party's side, with a preliminaryinjunction with the corresponding injunction bond, which under the Rules of Court, must be in anadequate amount to indemnify the party enjoined for any loss or damage should the injunction be foundto have been wrongfully issued. But in extreme cases, such as the case at bar, where the legislativedeadline has not been followed (by the Court of Appeals, in this instance), substantial justice will stillprevail over the procedural rule and the injunctive relief against a void default judgment willnevertheless be granted and made permanent with a decision on the merits.

Lastly,the statement in the concurring and dissenting opinion describing as 'not only gratuitous but false'the majority opinion's basis for rejecting the argument that the twenty-day life of a temporary restrainingorder is impractical and insufficient, as there could be instances when the twenty- day life of the orderwould lapse before it is served on the parties concerned, is to be regretted. The rejection has sound basisin its statement of fact -that not a single actual instance has been cited wherein such eventuality hasoccurred in a case of the Court of Appeals. Then, the argument of impracticality and shortness of the timego to the wisdom, and not the conceded validity, of the legislature's imposition of the twenty-day lifetimeof the restraining order which was beyond the Court's jurisdiction to modify or set aside. Besides, asabove indicated, the law provides a practical alternative, when the twenty-day period is found


19/44

inadequatewhich is, to replace the restraining order with a no-time-limit preliminary injunctioncovered by an injunction bond.

GUTIERREZ,JR., J.: concurring and dissenting opinion:

I concur in the setting aside of the July 9, 1985 order of default, the July 15,1985 default judgment, andthe September 3, 1985 special order.

I, however, take strong exceptions to and accordingly dissent from the ruling that would bind the Court ofAppeals to the twenty-day life of a restraining order,

The majority opinion blithely discredits the respondents' argument that Court of Appeals processes areenforceable throughout the country and there could be instances when the twenty-day period wouldlapse before the temporary restraining order is served on the parties concerned. According to themajority opinion, this allegation appears to be more illusory and imaginary than real.

I am sorry to state that such a conclusion is not only gratuitous but false. I served in the Court of Appealsfor almost five and a half years. With more than one thousand decisions and full length resolutions that Ipenned for the appellate court, I humbly believe I can claim first hand knowledge of how long it takes toserve processes in the more distant parts of the country. Twenty days is not enough to serve therestraining order and get the answer or comments of the private respondent.

The more perceptive and distinguished members of the appellate court, the Justices most affected by ourruling, have voiced similar sentiments in their decisions. In Roberto T. Marquez v. Hon. Jose P. Castro, etal.AC- G.R. SP No. 02578, October 18, 1984, the court, through ponente Justice Vicente V. Mendoza, thenChairman and now Supreme Court Justice Edgardo L. Paras, and Justice Luis A. Javellana, stated:

The respondent spouses impliedly admit the charge but defend themselves on the groundthat the temporary restraining order issued in this case expired on February 27, 1984,twenty days after its issuance on February 7, 1984, in accordance with BP Blg. 224. Therespondents cite the decision inDionisio v. Court of first Instance, 124 SCRA 222 (1983)holding that upon the expiration of twenty days a temporary restraining order likewiseexpires.

On the other hand, the petitioner argues that BP Blg. 224 applies only to trial courts. Hepoints out that it would be absurd to apply the twenty-day period, which is counted fromthe date of issuance of the temporary restraining order, to appellate courts because of thepossibility at times of serving the order to remote parts of the country before the twentiethday. No such problem can possibly arise in the case of trial courts whose orders grantinginjunctions can be enforced only within the region, in accordance with Rule 3(a) of the

Interim Rules of Court. The petitioner points out that the case of Dionisio, which is invokedby the respondents, involved a Court of First Instance whose territorial jurisdiction is evenmore limited than a region.

There is much to commend the petitioner's interpretation of the law. BP Blg. 224 speaks ofa "judge" not Justice of the Intermediate Appellate Court. While in Rule 8 of the InterimRules of Court the word judge was changed to 'court' it is nevertheless plausible to arguethat no substantial change was intended since BP Blg. 224 is an act of the legislature andcannot possibly be amended by the Supreme Court under its rule making authority. TheSupreme Court may have the primary authority to promulgate a rule of court, but the


20/44

power to repeal, alter or supplement it belongs to the Batasan Pambansa under theConstitution

That is what was done in the case of the rule on injunction. The Supreme Courtpromulgated the Rules of Court, Rule 58, Section 5 of which provides for the issuance ofinjunctions By means of BP Blg. 224 the Batasan Pambansa amended Rule 58, Section 5. Wedo not believe that the Supreme Court can in turn amend the amendatory statuteconsistently with the Constitution.

The situation has not changed much since 1982 when I joined this Court on 1984 whenthe Marquezdecision was promulgated. If at all, communications in the country have worsened. I agreewith the appellate court that B.P. Blg. 224 is intended only for regional trial courts, metropolitan trialcourts, and municipal trial courts not the Court of Appeals. And certainly, not the Supreme Court. I wasalso a member of the Supreme Court when the Interim Rules were adopted and no matter how intensely Irack my memory, I simply cannot remember any deliberations which indicate that it was ever ourintention to include the Court of Appeals in the twenty-day limitation.

My objections to the twenty-day rule for restraining orders of the Court of Appeals are, however, basedon reasons more weighty than mere statutory construction or even the realities of the situation. To mymind, the ruling indicates a sad neglect on our part to properly appreciate the importance and worth ofthe Court of Appeals as our partner in the administration of justice.

Like the Supreme Court, the Court of Appeals is a national court whose jurisdiction embraces the entirecountry. The same reasons which impel us to exempt our restraining orders from the twenty-day ruleapply with equal force to the Court of Appeals.

More important, however, it is the Court of Appeals which enables us to function as a 'supreme court" ora court of cassation.

As this Court stated in Braulio Conde, et al. v. Intermediate Appellate Court, et al.(144 SCRA 144):

There are instances when this Court desires a further review of facts or a detailed analysisand systematic presentation of issues which the appellate court is in a more favoredposition to accomplish. Standing between the trial courts and the Supreme Court, theappellate court was precisely created to take over much of the work that used to bepreviously done by this Court. It has been of great help to the Supreme Court insynthesizing facts, issues, and rulings in an orderly and intelligible manner and inIdentifying errors which ordinarily might have escaped detection. Statistics will show thatthe great majority of petitions to review the decisions of the appellate court have beendenied due course for lack of merit in minute resolutions. The appellate court has,

therefore, freed this Court to better discharge its constitutional duties and perform its mostimportant work which, in the words of Dean Vicente G. Sinco, is less concerned with thedecision of cases that begin and end with the transient rights and obligations of thatparticular individuals but is more intertwined with the direction of national policies,momentous economic and social problems, the delimitation of governmental authority andits impact upon fundamental rights. (Philippine Political Law, 10th Edition, p. 323. ... (at pp.149- 150)

Since the Court of Appeals has freed us to better perform our constitutional duties, it is imperative thatwe should not deny it thetoolswith which to discharge its own functions faithfully I and speedily Itsmembers should be chosen with the same care and scrupulous attention given to the search for Supreme


21/44

Court Justices. Their compensation and allowances should not be too different from that given to us. Andinstead of being equated with municipal courts and regional trial courts, the Court of Appeals should beregarded as a court closer to the Supreme Court than any other court.

I am, therefore, constrained to regretfully dissent, in part, from the majority decision.

Melencio-Herrera, J., concurring and dissenting.

To settele all doubts, now that the revisions of the Rules of Court is ongoing, a categorical rule on theinclusion/exclusion of the Court of Appealss from the coverage of the 20-day life-span of restrainingorders, should be laid down.

G.R. No. 90478 November 21, 1991

REPUBLIC OF THE PHILIPPINES (PRESIDENTIAL COMMISSION ON GOOD

GOVERNMENT), petitioner,vs.SANDIGANBAYAN, BIENVENIDO R. TANTOCO, JR. and DOMINADOR R. SANTIAGO, respondents.

Dominador R. Santiago for and in his own behalf and as counsel for respondent Tantoco, Jr.

NARVASA,J.:p

Private respondents Bienvenido R. Tantoco, Jr. and Dominador R. Santiago together with Ferdinand E.Marcos, Imelda R. Marcos, Bienvenido R. Tantoco, Sr., Gliceria R. Tantoco, and Maria Lourdes Tantoco-Pineda-are defendants in Civil Case No. 0008 of the Sandiganbayan. The case was commenced on July 21,1987 by the Presidential Commission on Good Government (PCGG) in behalf of the Republic of thePhilippines. The complaint which initiated the action was denominated one "for reconveyance, reversion,accounting, restitution and damages," and was avowedly filed pursuant to Executive Order No. 14 ofPresident Corazon C. Aquino.

After having been served with summons, Tantoco, Jr. and Santiago, instead of filing their answer, jointlyfiled a "MOTION TO STRIKE OUT SOME PORTIONS OF THE COMPLAINT AND FOR BILL OF PARTICULARSOF OTHER PORTIONS" dated Nov. 3, 1987. 1The PCGG filed an opposition thereto,2and the movants, areply to the opposition.3By order dated January 29, 1988, the Sandiganbayan, in order to expediteproceedings and accommodate the defendants, gave the PCGG forty-five (45) days to expand itscomplaint to make more specific certain allegations. 4

Tantoco and Santiago then presented a "motion for leave to file interrogatories under Rule 25 of theRules of Court" dated February 1, 1988, and "Interrogatories under Rule 25."5Basically, they sought ananswer to the question: "Who were the Commissioners of the PCGG (aside from its Chairman, Hon. RamonDiaz, who verified the complaint) who approved or authorized the inclusion of Messrs. Bienvenido

R. Tantoco, Jr. and Dominador R. Santiago as defendants in the ..case?"6The PCGG responded by filing amotion dated February 9, 1988 to strike out said motion and interrogatories as being impertinent,"queer," "weird," or "procedurally bizarre as the purpose thereof lacks merit as it is improper,impertinent and irrelevant under anyguise."7


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On March 18, 1988, in compliance with the Order of January 29, 1988, the PCGG filed an ExpandedComplaint.8As this expanded complaint, Tantoco and Santiago reiterated their motion for bill ofparticulars, through a Manifestation dated April 11, 1988.9

Afterwards, by Resolution dated July 4, 1988, 10the Sandiganbayan denied the motion to strike out, forbill of particulars, and for leave to file interrogatories, holding them to be without legal and factual basis.Also denied was the PCGG's motion to strike out impertinent pleading dated February 9, 1988. TheSandiganbayan declaredinter aliathe complaint to be "sufficiently definite and clear enough," there are

adequate allegations . . which clearly portray the supposed involvement and/or alleged participation ofdefendants-movants in the transactions described in detail in said Complaint," and "the other matterssought for particularization are evidentiary in nature which should be ventilated in the pre-trial or trialproper . ." It also opined that "(s)ervice of interrogatories before joinder of issue and without leave ofcourt is premature . . (absent) any special or extraordinary circumstances . . which would justify . . (thesame)."

Tantoco and Santiago then filed an Answer with Compulsory Counterclaim under date of July 18,1988.11In response, the PCGG presented a "Reply to Answer with Motion to Dismiss CompulsoryCounterclaim " 12

The case was set for pre-trial on July 31, 1989.13On July 25, 1989, the PCGG submitted its PRE-TRIAL. 14The pre-trial was however reset to September 11, 1989, and all other parties were required tosubmit pre-trial briefs on or before that date. 15

On July 27, 1989 Tantoco and Santiago filed with the Sandiganbayan a pleading denominated"Interrogatories to Plaintiff," 16and on August 2, 1989, an "Amended Interrogatories to Plaintiff"'17aswell as a Motion for Production and Inspection of Documents. 18

The amended interrogatories chiefly sought factual details relative to specific averments of PCGG'samended complaint, through such questions, for instance, as

1. In connection with the allegations . . in paragraph 1 . ., what specific property or propertiesdoes the plaintiff claim it has the right to recover from defendants Tantoco, Jr. and Santiago

for being ill-gotten?

3. In connection with the allegations . . in paragraph 10 (a) . . what specific act or acts . . werecommitted by defendants Tantoco, Jr. and Santiago in "concert with" defendant Ferdinand

Marcos and in furtherance or pursuit, of the alleged systematic plan of said defendant Marcos

to accumulate ill-gotten wealth?"

5. In connection with . . paragraph 13 . . , what specific act or acts of the defendants Tantoco,

Jr. and Santiago . . were committed by said defendants as part, or in furtherance, of thealleged plan to conceal assets of defendants Ferdinand and Imelda Marcos?

7. In connection with . . paragraph 15(c) . . is it plaintiff's position or theory of the case thatTourist Duty Free Shops, Inc., including all the assets of said corporation, are beneficially

owned by either or both defendants Ferdinand and Imelda Marcos and that the defendants

Tantoco, Jr. and Santiago, as well as, the other stockholders of record of the same corporation

are mere "dummies" of said defendants Ferdinand and /or Imelda R. Marcos?

On the other hand, the motion for production and inspection of documents prayed for examination andcopying of


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1) the "official records and other evidence" on the basis of which the verification of theAmended Complaint asserted that the allegations thereof are "true and correct;"

2) the documents listed in PCGG's Pre-Trial Brief as those "intended to be presented and . .marked as exhibits for the plaintiff;" and

3) "the minutes of the meeting of the PCGG which chronicles the discussion (if any) and thedecision (of the Chairman and members) to file the complaint" in the case at bar.

By Resolutions dated August 21, 1989 and August 25, 1989, the Sandiganbayan admitted the AmendedInterrogatories and granted the motion for production and inspection of documents (production beingscheduled on September 14 and 15, 1989), respectively.

On September 1, 1989, the PCGG filed a Motion for Reconsideration of the Resolution of August 25, 1989(allowing production and inspection of documents). It argued that

1) since the documents subject thereof would be marked as exhibits during the pre-trial on September11, 1989 anyway, the order for "their production and inspection on September 14 and 15, arepurposeless and unnecessary;"

2) movants already know of the existence and contents of the document which "are clearly described . .(in) plaintiff's Pre-Trial Brief;"

3) the documents are "privileged in character" since they are intended to be used against the PCGGand/or its Commissioners in violation of Section 4, Executive Order No. 1, viz.:

(a) No civil action shall lie against the Commission or any member thereof for anythingdone or omitted in the discharge of the task contemplated by this Order.

(b) No member or staff of the Commission shall be required to testify or produce evidencein any judicial, legislative, or administrative proceeding concerning matters within itsofficial cognizance.

It also filed on September 4, 1989 an opposition to the Amended Interrogatories, 19 which theSandiganbayan treated as a motion for reconsideration of the Resolution of August 21, 1989 (admittingthe Amended Interrogatories). The opposition alleged that

1) the interrogatories "are not specific and do not name the person to whom they are propounded . .," or"who in the PCGG, in particular, . . (should) answer the interrogatories;"

2) the interrogatories delve into "factual matters which had already been decreed . . as part of the proofof the Complaint upon trial . .;"

3) the interrogatories "are frivolous" since they inquire about "matters of fact . . which defendants . .sought to . . (extract) through their aborted Motion for Bill of Particulars;"

4) the interrogatories "are really in the nature of a deposition, which is prematurely filed and irregularlyutilized . . (since) the order of trial calls for plaintiff to first present its evidence."

Tantoco and Santiago filed a reply and opposition on September 18, 1989.


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After hearing, the Sandiganbayan promulgated two (2) Resolutions on September 29, 1989, the first,denying reconsideration (of the Resolution allowing production of documents), and the second,reiterating by implication the permission to serve the amended interrogatories on the plaintiff(PCGG). 20

Hence, this petition for certiorari.

The PCGG contends that said orders, both dated September 29, 1989, should be nullified because

rendered with grave abuse of discretion amounting to excess of jurisdiction. More particularly, it claims

a) as regards the order allowing the amended interrogatories to the plaintiff PCGG:

1) that said interrogatories are not specific and do not name the particular individuals towhom they are propounded, being addressed only to the PCGG;

2) that the interrogatories deal with factual matters which the Sandiganbayan (in denyingthe movants' motion for bill of particulars) had already declared to be part of the PCGG'sproof upon trial; and

3) that the interrogatories would make PCGG Commissioners and officers witnesses, incontravention of Executive Order No. 14 and related issuances; and

b) as regards the order granting the motion for production of documents:

1) that movants had not shown any good cause therefor;

2) that some documents sought to be produced and inspected had already been presentedin Court and marked preliminarily as PCGG's exhibits, and the movants had viewed,scrutinized and even offered objections thereto and made comments thereon; and

3) that the other documents sought to be produced are either

(a) privileged in character or confidential in nature and theiruse is proscribed by the immunity provisions of ExecutiveOrder No. 1, or

(b) non-existent, or mere products of the movants' suspicionand fear.

This Court issued a temporary restraining order on October 27, 1989, directing the Sandiganbayan todesist from enforcing its questioned resolutions of September 29, 1989 in Civil Case No. 0008. 21

After the issues were delineated and argued at no little length by the parties, the Solicitor Generalwithdrew "as counsel for plaintiff . . with the reservation, however, conformably with Presidential DecreeNo. 478, the provisions of Executive Order No. 292, as well as the decisional law of 'Orbos v. Civil ServiceCommission, et al.,' (G.R. No. 92561, September 12, 1990) 22to submit his comment/observation onincidents/matters pending with this . . Court if called for by circumstances in the interest of theGovernment or if he is so required by the Court." 23This, the Court allowed by Resolution dated January21, 1991. 24


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Subsequently, PCGG Commissioner Maximo A. Maceren advised the Court that the cases from which theSolicitor General had withdrawn would henceforth be under his (Maceren's) charge "and/or any of thefollowing private attorneys: Eliseo B. Alampay, Jr., Mario E. Ongkiko, Mario Jalandoni and such otherattorneys as it may later authorize." 25

The facts not being in dispute, and it appearing that the parties have fully ventilated their respectivepositions, the Court now proceeds to decide the case.

Involved in the present proceedings are two of the modes of discovery provided in the Rules of Court:interrogatories to parties , 26and production and inspection of documents and things. 27Now, itappears to the Court that among far too many lawyers (and not a few judges), there is, if not a regrettableunfamiliarity and even outright ignorance about the nature, purposes and operation of the modes ofdiscovery, at least a strong yet unreasoned and unreasonable disinclination to resort to them which isa great pity for the intelligent and adequate use of the deposition-discovery mechanism, coupled withpre-trial procedure, could, as the experience of other jurisdictions convincingly demonstrates, effectivelyshorten the period of litigation and speed up adjudication.28Hence, a few words about these remedies isnot at all inappropriate.

The resolution of controversies is, as everyone knows, the raison d'etre of courts. This essential functionis accomplished byfirst, the ascertainment of all the material and relevant facts from the pleadings andfrom the evidence adduced by the parties, and second, after that determination of the facts has beencompleted, by the application of the law thereto to the end that the controversy may be settledauthoritatively, definitely and finally.

It is for this reason that a substantial part of the adjective law in this jurisdiction is occupied withassuring that all the facts are indeed presented to the Court; for obviously, to the extent that adjudicationis made on the basis of incomplete facts, to that extent there is faultiness in the approximation ofobjective justice. It is thus the obligation of lawyers no less than of judges to see that this objective isattained; that is to say, that there no suppression, obscuration, misrepresentation or distortion of thefacts; and that no party be unaware of any fact material a relevant to the action, or surprised by anyfactual detail suddenly brought to his attention during the trial. 29

Seventy-one years ago, inAlonso v. Villamor, 30this Court described the nature and object of litigationand in the process laid down the standards by which judicial contests are to be conducted in thisjurisdiction. It said:

A litigation is not a game of technicalities in w