026 Republic vs. Hidalgo

9/5/2018 SUPREME COURT REPORTS ANNOTATED VOLUME 534
VOL. 534, OCTOBER 4, 2007 619

Republic vs. Hidalgo
*
G.R. No. 161657. October 4, 2007.
REPUBLIC OF THE PHILIPPINES, petitioner, vs. HON.

VICENTE A. HIDALGO, in his capacity as Presiding Judge
of the Regional Trial Court of Manila, Branch 37,
CARMELO V. CACHERO, in his capacity as Sheriff IV,
Regional Trial Court of Manila, and TARCILA LAPERAL
MENDOZA, respondents.
Remedial Law; Due Process; Due process, in its procedural

aspect, guarantees in the minimum the opportunity to be heard.—
Deprivation of procedural due process is obviously the petitioner’s
threshold theme. Due process, in its procedural aspect,
guarantees in the minimum the opportunity to be heard. Grave
abuse of discretion, however, cannot plausibly be laid at the
doorstep of the respondent judge on account of his having issued
the default order against the petitioner, then proceeding with the
hearing and eventually rendering a default judgment. For, what
the respondent judge did hew with what Section 3, Rule 9 of the
Rules of Court prescribes and allows in the event the defending
party fails to seasonably file a responsive pleading.
Same; Certiorari; Grave Abuse of Discretion; The act of the

respondent judge in rendering the default judgment after an order
of default was properly issued cannot be struck down as a case of
grave abuse of discretion; What connotes the term “grave abuse of
discretion.”—While the ideal lies in avoiding orders of default, the
policy of
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* FIRST DIVISION.
620
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620 SUPREME COURT REPORTS ANNOTATED
the law being to have every litigated case tried on its full merits,
the act of the respondent judge in rendering the default judgment
after an order of default was properly issued cannot be struck
down as a case of grave abuse of discretion. The term “grave abuse
of discretion,” in its juridical sense, connotes capricious, despotic,
oppressive or whimsical exercise of judgment as is equivalent to
lack of jurisdiction. The abuse must be of such degree as to
amount to an evasion of a positive duty or a virtual refusal to
perform a duty enjoined by law, as where the power is exercised
in a capricious manner. The word “capricious,” usually used in
tandem with “arbitrary,” conveys the notion of willful and
unreasoning action.
Same; Same; Same; The mere issuance by the trial court of the
order of default followed by a judgment by default can easily be
sustained as correct and doubtless within its jurisdiction.—Under
the premises, the mere issuance by the trial court of the order of
default followed by a judgment by default can easily be sustained
as correct and doubtless within its jurisdiction. Surely, a
disposition directing the Republic to pay an enormous sum
without the trial court hearing its side does not, without more,
vitiate, on due procedural ground, the validity of the default
judgment. The petitioner may have indeed been deprived of such
hearing, but this does not mean that its right to due process had
been violated. For, consequent to being declared in default, the
defaulting defendant is deemed to have waived his right to be
heard or to take part in the trial.
Same; New Trial; The cited reasons advanced by the petitioner

for a new trial are not recognized under Section 1, Rule 37 of the
Rules of Court for such recourse.—And going to another point, the
petitioner would ascribe jurisdictional error on the respondent
judge for denying its motion for new trial based on any or a mix of
the following factors, viz., (1) the failure to file an answer is
attributable to the negligence of the former handling solicitor; (2)
the meritorious nature of the petitioner’s defense; and (3) the
value of the property involved. The Court is not convinced. Even
as the Court particularly notes what the trial court had said on
the matter of negligence: that all of the petitioner’s pleadings
below bear at least three signatures, that of the handling solicitor,
the assistant solicitor and the Solicitor General himself, and
hence accountability should go up all the way to the top of the
totem pole of authority, the cited reasons advanced by the
petitioner for a new trial are not recognized under Section 1,
621
VOL. 534, OCTOBER 4, 2007 621
Rule 37 of the Rules of Court for such recourse. Withal, there is no

cogent reason to disturb the denial by the trial court of the motion
for new trial and the denial of the reiterative motion for
reconsideration.
SPECIAL CIVIL ACTION in the Supreme Court.

Certiorari and Prohibition.
The facts are stated in the opinion of the Court.
The Solicitor General for petitioner.
Apolonia A. Comia-Soguilon and Evelina R.
Tamayao-Volante for private respondents.
GARCIA, J.:
Via this verified petition for certiorari and prohibition

under Rule 65 of the Rules of Court, the Republic of the
Philippines (“Republic,” for short), thru the Office of the
Solicitor General (OSG), comes to this Court to nullify and
set aside the decision dated August 27, 2003 and other
related issuances of the Regional Trial Court (RTC) of
Manila, Branch 37, in its Civil Case No. 99-94075. In
directly invoking the Court’s original jurisdiction to issue
the extraordinary writs of certiorari and prohibition,
without challenge from any of the respondents, the
Republic gave as justification therefor the fact that the case
involves an over TWO BILLION PESO judgment against
the State, allegedly rendered in blatant violation of the
Constitution, law and jurisprudence.
By any standard, the case indeed involves a colossal sum
of money which, on the face of the assailed decision, shall
be the liability of the national government or, in fine, the
taxpayers. This consideration, juxtaposed with the
constitutional and legal questions surrounding the
controversy, presents special and compelling reasons of
public interests why direct recourse to the Court should be
allowed, as an exception to the policy on hierarchy of
courts.
622
At the core of the litigation is a 4,924.60-square meter lot

once covered by Transfer Certificate of Title (TCT) No.
118527 of the Registry of Deeds of Manila in the name of
the herein private respondent Tarcila Laperal Mendoza
(Mendoza), married to Perfecto Mendoza. The lot is
situated at No. 1440 Arlegui St., San Miguel, Manila, near
the Malacañang Palace complex. On this lot, hereinafter
referred to as the Arlegui property, now stands the
Presidential Guest House which was home to two (2)
former Presidents of the Republic and now appears 1
to be
used as office building of the Office of the President.
The facts:
Sometime in June 1999, Mendoza filed a suit with the
RTC of Manila for reconveyance and the corresponding
declaration of nullity of a deed of sale and title against the
Republic, the Register of Deeds of Manila and one Atty.
Fidel Vivar. In her complaint, as later amended, docketed
as Civil Case No. 99-94075 and eventually raffled to
Branch 35 of the court, Mendoza essentially alleged being
the owner of the disputed Arlegui property which the
Republic forcibly dispossessed her of and over which the
Register of Deeds of Manila issued TCT No. 118911 in the
name of the Republic.
Answering, the Republic set up, among other affirmative
defenses, the State’s immunity from suit.
The intervening legal tussles are not essential to this
narration. What is material is that in an Order of March
17, 2000, the RTC of Manila, Branch 35, dismissed
Mendoza’s complaint. The court would also deny, in
another order dated May 12, 2000, Mendoza’s omnibus
motion for reconsideration. On a petition for certiorari,
however, the Court of Appeals (CA), in CA-G.R. SP No.
60749, reversed the trial court’s assailed orders and
remanded the case to the court a quo for
_______________
1 Page 12 of the Decision of the RTC of Manila, Br. 37; Rollo, p. 59.
623
VOL. 534, OCTOBER 4, 2007 623

2
further proceedings. On appeal, this Court,3
in G.R. No.
155231, sustained the CA’s reversal action.
From Branch 35 of the trial court whose then presiding

judge inhibited himself from hearing the remanded Civil
Case No. 99-94075, the case was re-raffled to Branch 37
thereof, presided by the respondent judge.
On May 5, 2003, Mendoza filed a Motion for Leave of
Court to file a Third Amended Complaint with a copy of the
intended third amended complaint thereto attached. In the
May 16, 2003 setting to hear the motion, the RTC, in open
court and in the presence of the Republic’s counsel,
admitted the third amended complaint, ordered the
Republic to file its answer thereto within five (5) days from
May 16, 2003 and set a date for pre-trial.
In her adverted third amended complaint for recovery
and reconveyance of the Arlegui property, Mendoza
sought the declaration of nullity of a supposed deed of sale
dated July 15, 1975 which provided the instrumentation
toward the issuance of TCT No. 118911 in the name of the
Republic. And aside from the cancellation of TCT No.
118911, Mendoza4 also asked for the reinstatement of her
TCT No. 118527. In the same third amended complaint,
Mendoza averred that, since time immemorial, she and her
predecessors-in-interest had been in peaceful and adverse
possession of the property as well as of the owner’s
duplicate copy of TCT No. 118527. Such possession, she
added, continued “until the first week of July 1975 when a
group of armed men representing themselves to be members
of the Presidential Security Group [PSG] of the then
President Ferdinand E. Marcos, had forcibly entered [her]
residence and ordered [her] to turn over to them her … Copy
of TCT No. 118525 … and compelled her and the members
of her household to vacate the same …; thus, out of fear for
their
_______________
2 Annex “I,” Petition; id., at pp. 77 et seq.

3 Annex “J,” Petition, id., at p. 93.
4 Annex “K,” Petition; id., at pp. 94 et seq.
624

lives, [she] handed her Owner’s Duplicate Certificate Copy

of TCT No. 118527 and had left and/or vacated the subject
property.” Mendoza further alleged the following:
“1. Per verification, TCT No. 118527 had already been

cancelled by virtue of a deed of sale in favor of the
Republic allegedly executed by her and her
deceased husband on July 15, 1975 and
acknowledged before Fidel Vivar which deed was
annotated at the back of TCT No. 118527 under PE:
2035/T-118911 dated July 28, 1975; and
2. That the aforementioned deed of sale is fictitious as
she (Mendoza) and her husband have not executed
any deed of conveyance covering the disputed
property in favor of the Republic, let alone
appearing before Fidel Vivar.”
Inter alia, she prayed for the following:
“4. Ordering the … Republic to pay plaintiff [Mendoza]

a reasonable compensation or rental for the use or
occupancy of the subject property in the sum of
FIVE HUNDRED THOUSAND (P500,000.00)
PESOS a month with a five (5%) per cent yearly
increase, plus interest thereon at the legal rate,
beginning July 1975 until it finally vacates the
same;
5. Ordering the … Republic to pay plaintiff’s counsel a
sum equivalent to TWENTY FIVE (25%) PER
CENT of the current value of the subject property
and/or whatever amount is recovered under the
premises; Further, plaintiff prays for such other
relief, just and equitable under the premises.”
On May 21, 2003, the Republic, represented by the OSG,

filed a Motion for Extension (With Motion for Cancellation
of scheduled pre-trial). In it, the Republic manifested its
inability to simply adopt its previous answer and,
accordingly, asked that it be given a period of thirty (30)
days from May 21, 2003 or5 until June 20, 2003 within
which to submit an Answer. June 20, 2003 came and went,
but no answer was filed. On July 18, 2003 and again on
August 19, 2003, the
_______________
5 Annex “M,” Petition; id., at p. 108.
625
VOL. 534, OCTOBER 4, 2007 625

OSG moved for a 30-day extension at each instance. The

filing of the last two motions for extension proved to be an
idle gesture, however,
6
since the trial court had meanwhile
issued an order dated July 7, 2003 declaring the petitioner
Republic as in default and allowing the private respondent
to present her evidence ex parte.
The evidence for the private respondent, as plaintiff a
quo, consisted of her testimony denying having executed
the alleged deed of sale dated July 15, 1975 which paved
the way for the issuance of TCT No. 118911. According to
her, said deed is fictitious or inexistent, as evidenced by
separate certifications, the first (Exh. “E”), issued by the
Register of Deeds for Manila and the second (Exh. “F”), by7
the Office of Clerk of Court, RTC Manila. Exhibit “E”
states that a copy of the supposed conveying deed cannot,
despite diligent efforts
8
of records personnel, be located,
while Exhibit “F” states that Fidel Vivar was not a
commissioned notary public for and in the 9
City of Manila
for the year 1975. Three other witnesses testified, albeit
their testimonies revolved around the appraisal and rental
values of the Arlegui property.
Eventually,
10
the trial court rendered a judgment by
default for Mendoza and against the Republic. To the trial
court, the Republic had veritably confiscated Mendoza’s
property, and deprived her not only of the use thereof but
also denied her of the income she could have had otherwise
realized during all the years she was illegally dispossessed
of the same.
Dated August 27, 2003, the trial court’s decision
dispositively reads as follows:
_______________
6 Annex “A,” Petition; id., at p. 47.

7 Id., at p. 105.
8 Id., at p. 106.
9 Engr. Hernando Gozon, Jr. of the Cuervo Appraisers, Inc.; Mr. Renato
Chico of the Land Bank; and Engr. Israel Soguilon.
10 Per Judge Vicente A. Hidalgo; Annex “B,” Petition; Rollo, pp. 48 et
seq.
626

“WHEREFORE, judgment is hereby rendered:

1. Declaring the deed of sale dated July 15, 1975, annotated

at the back of [TCT] No. 118527 as PE:2035/T-118911, as
non-existent and/or fictitious, and, therefore, null and void
from the beginning;
2. Declaring that [TCT] No. 118911 of the defendant
Republic of the Philippines has no basis, thereby making
it null and void from the beginning;
3. Ordering the defendant Register of Deeds for the City of
Manila to reinstate plaintiff [Mendoza’s TCT] No. 118527;
4. Ordering the defendant Republic … to pay just
compensation in the sum of ONE HUNDRED FORTY
THREE MILLION SIX HUNDRED THOUSAND
(P143,600,000.00) PESOS, plus interest at the legal rate,
until the whole amount is paid in full for the acquisition of
the subject property;
5. Ordering the plaintiff, upon payment of the just
compensation for the acquisition of her property, to
execute the necessary deed of conveyance in favor of the
defendant Republic …; and, on the other hand, directing
the defendant Register of Deeds, upon presentation of the
said deed of conveyance, to cancel plaintiff’s TCT No.
118527 and to issue, in lieu thereof, a new Transfer
Certificate of Title in favor of the defendant Republic;
6. Ordering the defendant Republic … to pay the plaintiff the
sum of ONE BILLION FOUR HUNDRED EIGHTY
MILLION SIX HUNDRED TWENTY SEVEN
THOUSAND SIX HUNDRED EIGHTY EIGHT
(P1,480,627,688.00) PESOS, representing the reasonable
rental for the use of the subject property, the interest
thereon at the legal rate, and the opportunity cost at the
rate of three (3%) per cent per annum, commencing July
1975 continuously up to July 30, 2003, plus an additional
interest at the legal rate, commencing from this date until
the whole amount is paid in full;
7. Ordering the defendant Republic … to pay the plaintiff
attorney’s fee, in an amount equivalent to FIFTEEN (15%)
PER CENT of the amount due to the plaintiff. With
pronouncement as to the costs of suit.
SO ORDERED.” (Words in bracket and emphasis added.)
627
VOL. 534, OCTOBER 4, 2007 627

Subsequently, the Republic moved for, but was denied, a 11

new trial per order of the trial court of October 7, 2003. 12
Denied also was its subsequent plea for reconsideration.
These twin denial orders were followed by several orders
and processes issued by the trial court on separate dates as
hereunder indicated:
“1. November 27, 2003—Certificate of Finality

declaring 13the August 27, 2003 decision final and
executory.
2. December 17, 2003—Order denying the Notice of
Appeal filed on November 27, 2003, the same 14
having been filed beyond the reglementary period.
15
3. December 19, 2003—Order granting the private
respondent’s motion for execution.
16
4. December 22, 2003—Writ of Execution.”
Hence, this petition

17
for certiorari.
By Resolution of November 20, 2006, the case was set
for oral arguments. On January 22, 2007, when this case
was called for the purpose, both parties manifested their
willingness to settle the case amicably, for which reason
the Court gave them up to February 28, 2007 to submit the
compromise agreement for approval. Following several
approved extensions of the February 28, 2007 deadline, the
OSG, on August 6, 2007, manifested that it is submitting
the case for resolution on the merits owing to the inability
of the parties to agree on an acceptable compromise.
In this recourse, the petitioner urges the Court to strike
down as a nullity the trial court’s order declaring it in
default
_______________
11 Annex “C,” Petition; id., at pp. 62 et seq.

12 Annex “D,” Petition; id., at p. 70.
13 Annex “E,” Petition; id., at p. 71.
14 Annex “F,” Petition; id., at p. 72 et seq.
15 Annex “G,” Petition; id., at p. 75.
16 Annex “H,” Petition; id., at p. 76.
17 Rollo, p. 341.
628

and the judgment by default that followed. Sought to be

nullified, too, also on the ground that they were issued in
grave abuse of discretion amounting to lack or in excess of
jurisdiction, are the orders and processes enumerated
immediately above issued after the rendition of the default
judgment.
Petitioner lists five (5) overlapping grounds for allowing
its petition. It starts off by impugning the order of default
and the judgment by default. To the petitioner, the
respondent judge committed serious jurisdictional error
when he proceeded to hear the case and eventually
awarded the private respondent a staggering amount
without so much as giving the petitioner the opportunity to
present its defense.
Petitioner’s posture is simply without merit.
Deprivation of procedural due process is obviously the
petitioner’s threshold theme. Due process, in its procedural
aspect,18 guarantees in the minimum the opportunity to be
heard. Grave abuse of discretion, however, cannot
plausibly be laid at the doorstep of the respondent judge on
account of his having issued the default order against the
petitioner, then proceeding with the hearing and
eventually rendering a default judgment. For, what the
respondent judge did hew with what Section 3, Rule 9 of
the Rules of Court prescribes and allows in the event the
defending party fails to seasonably file a responsive
pleading. The provision reads:
“SEC. 3. Default; declaration of.—If the defending party fails to

answer within the time allowed therefor, the court shall, upon
motion of the claiming party with notice to the defending party,
and proof of such failure, declare the defending party in default.
Thereupon, the court shall proceed to render judgment granting
the claimant such relief as his pleading may warrant, unless the
court
19
in its discretion requires the claimant to submit evidence
….”
_______________
18 Roces v. Aportadera, Adm. Case No. 2936, March 31, 1995, 243 SCRA
108, citing cases.
19 First par. of Sec. 3
629
VOL. 534, OCTOBER 4, 2007 629

20
20
While the ideal lies in avoiding orders of default, the
policy of the law21being to have every litigated case tried on
its full merits, the act of the respondent judge in
rendering the default judgment after an order of default
was properly issued cannot be struck down as a case of
grave abuse of discretion.
The term “grave abuse of discretion,” in its juridical
sense, connotes capricious, despotic, oppressive or
whimsical exercise
22
of judgment as is equivalent to lack of
jurisdiction. The abuse must be of such degree as to
amount to an evasion of a positive duty or a virtual refusal
to perform a duty enjoined by law, as where the power is
exercised in a capricious manner. The word “capricious,”
usually used in tandem with “arbitrary,” 23
conveys the
notion of willful and unreasoning action.
Under the premises, the mere issuance by the trial court
of the order of default followed by a judgment by default
can easily be sustained as correct and doubtless within its
jurisdiction. Surely, a disposition directing the Republic to
pay an enormous sum without the trial court hearing its
side does not, without more, vitiate, on due procedural
ground, the validity of the default judgment. The petitioner
may have indeed been deprived of such hearing, but this
does not mean that its right to due process had been
violated. For, consequent to being declared in default, the
defaulting defendant is deemed to have waived his right to
be heard or to take part in the trial. The handling solicitors
simply squandered the Republic’s opportunity to be heard.
But more importantly, the
_______________
20 Citibank, N.A. v. Chua, G.R. No. 102300, March 17, 1993, 220 SCRA
75.
21 Lesaca v. Court of Appeals, G.R. No. 96432, October 21, 1992, 215
SCRA 17, citing Coombs v. Santos, 24 Phil. 446 (1913).
22 Regalado, Remedial Law Compendium, Vol. 1, 8th Revised Edition,
p. 718, citing Benito v. Commission on Elections, G.R. No. 134913, Jan. 19,
2001, 349 SCRA 705.
23 Olanolan v. Commission on Elections, G.R. No. 165491, March 31,
2005, 454 SCRA 807, citing cases.
630

law itself imposes such deprivation of the right to

participate as a form of penalty against one unwilling
without justification to join issue upon the allegations
tendered by the plaintiff.
And going to another point, the petitioner would ascribe
jurisdictional error on the respondent judge for denying its
motion for new trial based on any or a mix of the following
factors, viz., (1) the failure to file an answer is attributable
to the negligence of the former handling solicitor; (2) the
meritorious nature of the petitioner’s defense; and (3) the
value of the property involved.
The Court is not convinced. Even as the Court
particularly notes what the trial court had said on the
matter of negligence: that all of the petitioner’s pleadings
below bear at least three signatures, that of the handling
solicitor, the assistant solicitor and the Solicitor General
himself, and hence accountability should go up all the way
to the top of the totem pole of authority, the cited reasons
advanced by the petitioner for a new trial are not
recognized under Section
24
1, Rule 37 of the Rules of Court
for such recourse. Withal, there is no cogent reason to
disturb the denial by the trial court of the motion for new
trial and the denial of the reiterative motion for
reconsideration.
Then, too, the issuance 25
by the trial court of the Order
dated December 17, 2003 denying the petitioner’s notice of
appeal after the court caused the issuance on November 27,
2003 of a certificate of finality of its August 27, 2003
decision can hardly be described as arbitrary, as the
petitioner would have this Court believe. In this regard, the
Court takes stock of the following key events and material
dates set forth in the as-
_______________
24 Section 1. Grounds of and period for filing motion for new trial or
reconsideration.—x x x (a) Fraud, accident, mistake or excusable
negligence which ordinary prudence could not have guarded against and
by reason of which such aggrieved party has probably been impaired in
his right; or (b) Newly discovered evidence … .
25 Supra note 14.
631
VOL. 534, OCTOBER 4, 2007 631

sailed December 17, 2003 order, supra: (a) The petitioner,

thru the OSG, received on August 29, 2003 a copy of the
RTC decision in this case, hence had up to September 13,
2003, a Saturday, within which to perfect an appeal; (b) On
September 15, 2003, a Monday, the OSG filed its motion for
new trial, which the RTC denied, the OSG receiving a copy
of the order of denial on October 9, 2003; and (c) On
October 24, 2003, the OSG sought reconsideration of the
order denying the motion for new trial. The motion for
reconsideration was denied per Order dated November 25,
2003, a copy of which the OSG received on the same date.
Given the foregoing time perspective, what the trial
court wrote in its aforementioned impugned order of
December 17, 2003 merits approval:
“In the case at bar, it is clear that the motion for new trial filed on
the fifteenth (15th) day after the decision was received on August
29, 2003 was denied and the moving party has only the remaining
period from notice of notice of denial within which to file a notice
of appeal. x x x
Accordingly, when defendants [Republic et al.] filed their
motion for new trial on the last day of the fifteen day (15)
prescribed for taking an appeal, which motion was subsequently
denied, they had one (1) day from receipt of a copy of the order
denying … new trial within which to perfect [an] appeal … . Since
defendants had received a copy of the order denying their motion
for new trial on 09 October 2003, reckoned from that date, they
only have one (1) day left within which to file the notice of appeal.
But instead of doing so, the defendants filed a motion for
reconsideration which was later declared by the Court as pro
forma motion in the Order dated 25 November 2003. The
running of the prescriptive period, therefore, can not be
interrupted by a pro forma motion. Hence the filing of the notice
of appeal on 27 November 2007 came much too late 26for by then
the judgment had already become final and executory. (Words in
bracket added; Emphasis in the original.)”
_______________
26 Rollo, pp. 72-73.
632

It cannot be over-emphasized at this stage that the special

civil action of certiorari is limited to resolving only errors of
jurisdiction; it is not a remedy to correct errors of

judgment. Hence, the petitioner’s lament, partly covered by
and discussed under the first ground for allowing its
petition, about the trial court taking cognizance of the case
notwithstanding private respondent’s claim or action being
barred by prescription and/or laches cannot be considered
favorably. For, let alone the fact that an action for the
declaration of 27the inexistence of a contract, as here, does
not prescribe; that a void transfer28 of property can be
recovered by accion reivindicatoria; and that the legal
fiction of indefeasibility of a Torrens29title cannot be used as
a shield to perpetuate fraud, the trial court’s
disinclination not to appreciate in favor of the Republic the
general principles of prescription or laches constitutes, at
best, errors of judgment not correctable by certiorari.
The evidence adduced below indeed adequately supports
a conclusion that the Office of the President, during the
administration of then President Marcos, wrested
possession of the property in question and somehow
secured a certificate of title over it without a conveying
deed having been executed to legally justify the
cancellation of the old title (TCT No. 118527) in the name
of the private respondent and the issuance of a new one
(TCT No. 118911) in the name of petitioner Republic.
Accordingly, granting private respondent’s basic plea for
recovery of the Arlegui property, which was legally hers
all along, and the reinstatement of her cancelled certificate
of title are legally correct as they are morally right. While
not exactly convenient because the Office of the President
presently uses it for mix residence and office purposes,
restoring private respondent to her possession of the
Arlegui
_______________
27 Art. 1410, Civil Code.

28 Tolentino, Commentaries and Jurisprudence on the Civil Code, Vol.
IV, 1991 ed., p. 632.
29 Republic v. Court of Appeals, G.R. No. 60169, March 23, 1990, 183
SCRA 1990, citing Acot v. Kempis, 55 O.G. 2907.
633
VOL. 534, OCTOBER 4, 2007 633

property is still legally and physically feasible. For what

is before us, after all, is a registered owner of a piece of
land who, during the early days of the martial law regime,
lost possession thereof to the Government which
appropriated the same for some public use, but without
going through the legal process of expropriation, let alone
paying such owner just compensation.
The Court cannot, however, stop with just restoring the
private respondent to her possession and ownership of her
property. The restoration ought to be complemented by
some form of monetary compensation for having been
unjustly deprived of the beneficial use thereof, but not,
however, in the varying amounts and level fixed in the
assailed decision of the trial court and set to be executed by
the equally assailed writ of execution. The Court finds the
monetary award set forth therein to be erroneous. And the
error relates to basic fundamentals of law as to constitute
grave abuse of discretion.
As may be noted, private respondent fixed the assessed
value of her Arlegui property at P2,388,990.00. And in
the prayer portion of her third amended complaint for
recovery, she asked to be restored to the possession of her
property and that the petitioner be ordered to pay her, as
reasonable compensation or rental use or occupancy
thereof, the sum of P500,000.00 a month, or P6 Million a
year, with a five percent (5%) yearly increase plus interest
at the legal rate beginning July 1975. From July 1975
when the PSG allegedly took over the subject property to
July 2003, a month before the trial court rendered
judgment, or a period of 28 years, private respondent’s total
rental claim would, per the OSG’s computation, only
amount to P371,440,426.00. In its assailed decision,
however, the trial court ordered the petitioner to pay
private respondent the total amount of over P1.48 Billion
or the mind-boggling amount of P1,480,627,688.00, to be
exact, representing the reasonable rental for the property,
the interest rate thereon at the legal rate and the
opportunity cost. This figure is on top of the
P143,600,000.00 which represents
634

the acquisition cost of the disputed property. All told, the

trial court would have the Republic pay the total amount of
about P1.624 Billion, exclusive of interest, for the taking of
a property with a declared assessed value of P2,388,900.00.
This is not to mention the award of attorney’s fees in an
amount equivalent to 15% of the amount due the private

respondent.
In doing so, the respondent judge brazenly went around
the explicit
30
command of Rule 9, Section 3(d) of the Rules of
Court which defines the extent of the relief that may be
awarded in a judgment by default, i.e., only so much as has
been alleged and proved. The court acts in excess of
jurisdiction if it awards an amount beyond the claim made 31
in the complaint or beyond that proved by the evidence.
While a defaulted defendant may be said to be at the mercy
of the trial court, the Rules of Court and certainly the
imperatives of fair play see to it that32 any decision against
him must be in accordance with law. In the abstract, this
means that the judgment must not be characterized by
outrageous onesidedness, but by what is fair, just and
equitable that always underlie the enactment of a law.
Given the above perspective, the obvious question that
comes to mind is the level of compensation which—for the
use and occupancy of the Arlegui property—would be fair
to both the petitioner and the private respondent and, at
the same time, be within acceptable legal bounds. The
process of balancing the interests of both parties is not an
easy one. But surely, the Arlegui property cannot
possibly be assigned, even perhaps at the present real
estate business standards, a
_______________
30 (d) Extent of relief to be awarded.—A judgment rendered against a

party in default shall not exceed the amount or different in kind from that
prayed for nor award unliquidated damages.
31 Regalado, Remedial Law Compendium, Vol. 1, 8th ed., p. 173, citing
Pascua v. Florendo, L-38047, April 30, 1985, 136 SCRA 208.
32 Lim Tanhu v. Remolete, No. L-40098, August 29, 1975, 66 SCRA 452.
635
VOL. 534, OCTOBER 4, 2007 635

monthly rental value of at least P500,000.00 or

P6,000,000.00 a year, the amount private respondent
particularly sought and attempted to prove. This asking
figure is clearly unconscionable, if not downright
ridiculous, attendant circumstances considered. To the
Court, an award of P20,000.00 a month for the use and
occupancy of the Arlegui property, while perhaps a little
bit arbitrary, is reasonable and may be granted pro hac vice
considering the following hard realities which the Court

takes stock of:
“1. The property is relatively small in terms of actual

area and had an assessed value of only
P2,388,900.00;
2. What the martial law regime took over was not
exactly an area with a new and imposing structure,
if there was any; and
3. The Arlegui property had minimal rental value
during the relatively long martial law years, given
the very restrictive entry and egress conditions
prevailing at the vicinity at that time and even
after.”
To be sure, the grant of monetary award33

is not without
parallel. In Alfonso v. Pasay City, a case where a
registered owner also lost possession of a piece of lot to a
municipality which took it for a public purposes without
instituting expropriation proceedings or paying any
compensation for34 the lot, the Court, citing Herrera v.
Auditor General, ordered payment of just compensation
but in the form of interest when a return of the property
was no longer feasible.
The award of attorney’s fees equivalent to 15% of the
amount due the private respondent, as reduced herein, is
affirmed.
The assessment of costs of suit against the petitioner is,
however, nullified, costs not being allowed 35
against the
Republic, unless otherwise provided by law.
_______________
33 106 Phil. 1017 (1960).

34 102 Phil. 875 (1958).
35 Sec. 1, Rule 142 of the Rules of Court.
636

36
The assailed trial court’s issuance of the writ of execution
against government funds to satisfy its money judgment is
also nullified. It is basic that government funds and
properties may not be seized under writs of 37
execution or
garnishment
38
to satisfy such judgments. Republic v.
Palacio teaches that a judgment against the State
generally operates merely to liquidate and establish the

plaintiff’s claim in the absence of express provision;
otherwise, they can not be enforced by processes of law.
Albeit title to the Arlegui property remains in the
name of the petitioner Republic, it is actually the Office of
the President which has beneficial possession of and use
over it since the 1975 takeover. Accordingly, and in accord
with the elementary sense of justice, it behooves that office
to make the appropriate budgetary arrangements towards
paying private respondent what is due her under the
premises. This, to us, is the right thing to do. The
imperatives of fair dealing demand no less. And the Court
would be remiss in the discharge of its duties as dispenser
of justice if it does not exhort the Office of the President to
comply with what, in law and equity, is its obligation. If the
same office will undertake to pay its obligation with
reasonable dispatch or in a manner acceptable to the
private respondent, then simple justice, while perhaps
delayed, will have its day. Private respondent is in 39
the
twilight of her life, being now over 90 years of age. Any
delay in the implementation of this disposition would be a
bitter cut.
WHEREFORE, the decision of the Regional Trial Court
of Manila dated August 27, 2003 insofar as it nullified TCT
No.
_______________
36 Supra note 16.

37 Commissioner of Public Highways v. San Diego, No. L-30098,
February 18, 1970, 31 SCRA 616.
38 No. L-20322, May 29, 1968, 23 SCRA 899, citing Merritt v. Insular
Government, 34 Phil. 311 (1916).
39 See Motion for the Issuance of the Writ of Execution, Annex “Q,”
Petition; Rollo, pp. 134 et seq.
637
VOL. 534, OCTOBER 4, 2007 637

118911 of petitioner Republic of the Philippines and

ordered the Register of Deeds of Manila to reinstate private
respondent Tarcila L. Mendoza’s TCT No. 118527, or to
issue her a new certificate of title is AFFIRMED. Should it
be necessary, the Register of Deeds of Manila shall execute
the necessary conveying deed to effect the reinstatement of
title or the issuance of a new title to her.
It is MODIFIED in the sense that for the use and

occupancy of the Arlegui property, petitioner Republic is
ordered to pay private respondent the reasonable amount
of P20,000.00 a month beginning July 1975 until it vacates
the same and the possession thereof restored to the private
respondent, plus an additional interest of 6% per annum on
the total amount due upon the finality of this Decision until
the same is fully paid. Petitioner is further ordered to pay
private respondent attorney’s fees equivalent to 15% of the
amount due her under the premises.
Accordingly, a writ of certiorari is hereby ISSUED in the
sense that:
1. The respondent court’s assailed decision of August

27, 2003 insofar as it ordered the petitioner
Republic of the Philippines to pay private
respondent Tarcila L. Mendoza the sum of One
Billion Four Hundred Eighty Million Six Hundred
Twenty Seven Thousand Six Hundred Eighty Eight
Pesos (P1,480,627,688.00) representing the
purported rental use of the property in question,
the interest thereon and the opportunity cost at the
rate of 3% per annum plus the interest at the legal
rate added thereon is nullified. The portion
assessing the petitioner Republic for costs of suit is
also declared null and void.
2. The Order of the respondent court dated December
19, 2003 for the issuance of a writ of execution and
the Writ of Execution dated December 22, 2003
against government funds are hereby declared null
and void. Accordingly, the presiding judge of the
respondent court, the private respondent, their
agents and persons acting for and in their be-
638

Romonafe Corporation vs. National Power Corporation
halves are permanently enjoined from enforcing

said writ of execution.
However, consistent with the basic tenets of justice,

fairness and equity, petitioner Republic, thru the Office of
the President, is hereby strongly enjoined to take the
necessary steps, and, with reasonable dispatch, make the
appropriate budgetary arrangements to pay private
respondent Tarcila L. Mendoza or her assigns the amount

adjudged due her under this disposition.
SO ORDERED.
Puno (C.J., Chairperson), Sandoval-Gutierrez,

Corona and Azcuna, JJ., concur.
Writ of Certiorari issued.
Note.—Upon service of a judgment of default, the

remedy of a losing party was to file a motion for a new trial.
(Viron Transportation Co., Inc. vs. Court of Appeals, 400
SCRA 570 [2003])
——o0o——
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026 Republic vs. Hidalgo

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026 Republic vs. Hidalgo

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9/5/2018 SUPREME COURT REPORTS ANNOTATED VOLUME 534

VOL. 534, OCTOBER 4, 2007 619

REPUBLIC OF THE PHILIPPINES, petitioner, vs. HON.

Remedial Law; Due Process; Due process, in its procedural

Same; Certiorari; Grave Abuse of Discretion; The act of the

620 SUPREME COURT REPORTS ANNOTATED

Republic vs. Hidalgo

Same; New Trial; The cited reasons advanced by the petitioner

VOL. 534, OCTOBER 4, 2007 621

Republic vs. Hidalgo

Rule 37 of the Rules of Court for such recourse. Withal, there is no

SPECIAL CIVIL ACTION in the Supreme Court.

Via this verified petition for certiorari and prohibition

622 SUPREME COURT REPORTS ANNOTATED

Republic vs. Hidalgo

At the core of the litigation is a 4,924.60-square meter lot

VOL. 534, OCTOBER 4, 2007 623

From Branch 35 of the trial court whose then presiding

2 Annex “I,” Petition; id., at pp. 77 et seq.

624 SUPREME COURT REPORTS ANNOTATED

lives, [she] handed her Owner’s Duplicate Certificate Copy

“1. Per verification, TCT No. 118527 had already been

Inter alia, she prayed for the following:

“4. Ordering the … Republic to pay plaintiff [Mendoza]

On May 21, 2003, the Republic, represented by the OSG,

5 Annex “M,” Petition; id., at p. 108.

VOL. 534, OCTOBER 4, 2007 625

OSG moved for a 30-day extension at each instance. The

6 Annex “A,” Petition; id., at p. 47.

626 SUPREME COURT REPORTS ANNOTATED

“WHEREFORE, judgment is hereby rendered:

1. Declaring the deed of sale dated July 15, 1975, annotated

SO ORDERED.” (Words in bracket and emphasis added.)

VOL. 534, OCTOBER 4, 2007 627

Subsequently, the Republic moved for, but was denied, a 11

“1. November 27, 2003—Certificate of Finality

Hence, this petition

11 Annex “C,” Petition; id., at pp. 62 et seq.

628 SUPREME COURT REPORTS ANNOTATED

and the judgment by default that followed. Sought to be

“SEC. 3. Default; declaration of.—If the defending party fails to

VOL. 534, OCTOBER 4, 2007 629

630 SUPREME COURT REPORTS ANNOTATED

law itself imposes such deprivation of the right to

VOL. 534, OCTOBER 4, 2007 631

sailed December 17, 2003 order, supra: (a) The petitioner,

26 Rollo, pp. 72-73.

632 SUPREME COURT REPORTS ANNOTATED

It cannot be over-emphasized at this stage that the special

jurisdiction; it is not a remedy to correct errors of

27 Art. 1410, Civil Code.

VOL. 534, OCTOBER 4, 2007 633

property is still legally and physically feasible. For what

634 SUPREME COURT REPORTS ANNOTATED

the acquisition cost of the disputed property. All told, the

amount equivalent to 15% of the amount due the private

30 (d) Extent of relief to be awarded.—A judgment rendered against a

VOL. 534, OCTOBER 4, 2007 635

monthly rental value of at least P500,000.00 or

considering the following hard realities which the Court

“1. The property is relatively small in terms of actual

To be sure, the grant of monetary award33

33 106 Phil. 1017 (1960).

636 SUPREME COURT REPORTS ANNOTATED