[G.R. No. 215807. January 25, 2017.

ROSARIO E. CAHAMBING, petitioner, vs. VICTOR ESPINOSA

and JUANA ANG, respondents.

DECISION

PERALTA, J  : p

Before this Court is the Petition for Review on Certiorari under Rule 45

of the Rules of Court dated November 28, 2014 of petitioner Rosario E.
Cahambing that seeks to reverse and set aside the Decision 1 dated
November 29, 2013 and Resolution dated October 28, 2014 of the Court of
Appeals (CA), affirming the Order 2 dated September 22, 2009 and Resolution
dated February 25, 2010 of the Regional Trial Court (RTC), Branch 25,
Maasin City, Southern Leyte regarding the issuance of a writ of preliminary
injunction in Civil Case No. R-2912 for Annulment of Deed of Extra-Judicial
Partition.
The facts follow.
Petitioner and respondent Victor Espinosa are siblings and the children
of deceased spouses Librado and Brigida Espinosa, the latter bequeathing
their properties, among which is Lot B or Lot 354 with an area of 1,341 square
meters, more or less, situated in Maasin City, Southern Leyte, to the said
siblings in the same deceased spouses' respective Last Wills and Testaments
which were duly probated.
Deceased Librado and Brigida bequeathed their respective shares over
Lot 354 to respondent Victor Espinosa, however, Brigida subsequently
revoked and cancelled her will, giving her one-half (1/2) share over Lot 354 to
petitioner.
Brigida Espinosa and respondent Victor Espinosa, after the death of
Librado Espinosa, entered into an Extrajudicial Partition of Real Estate
subdividing Lot 354 into Lot 354-A, with an area of 503.5 square meters
adjudicated to Brigida Espinosa, and Lot 354-B, with an area of 837.5 square
meters, adjudicated to respondent Victor Espinosa, who eventually obtained a
certificate of title in his name.
Not being included in the partition of Lot 354, petitioner filed a complaint
against respondent Victor Espinosa and his representative, respondent Juana
Ang, for, among others, the annulment of the Extrajudicial Partition of Real
Property which was docketed as Civil Case No. R-2912.  AIDSTE

Incidentally, a commercial building named as Espinosa Building stands

on Lot No. 354. At the time of the filing of the complaint, the same building
had twelve (12) lessees, four (4) of whom pay rentals to petitioner, namely:
Pacifica Agrivet Supplies, Family Circle, Ariane's Gift Items, and Julie's
Bakeshop. Petitioner alleged that respondent Juana Ang prevailed upon
Pacifica Agrivet Supplies not to renew its lease contract with petitioner but to
enter into a contract of lease with respondent Victor Espinosa instead.
According to petitioner, respondent Juana Ang also threatened to do the
same thing with Julie's Bakeshop.
In one of the pre-trial conferences, the Clerk of Court, acting as
Commissioner, issued an Order dated April 16, 1998 directing the parties to
maintain the status quo.
Thereafter, respondent Victor Espinosa filed an Application for the
Issuance of a Writ of Preliminary Injunction with Prayer for the Issuance of a
Temporary Restraining Order dated March 3, 2009 against petitioner alleging
that the latter violated the status quo ante order by allowing her sons to
occupy the space rented by Jhanel's Pharmacy which is one of respondent
Victor Espinosa's tenants. Respondent Victor Espinosa, through his attorney-
in-fact, private respondent Juana Ang, alleged that petitioner's sons
constructed a connecting door through the partition separating their cellular
phone shop from Jhanel's Pharmacy and that the contract of lease between
the latter and respondent Victor Espinosa is still subsisting, hence, the entry
by petitioner's sons into the pharmacy's commercial space disturbed
the status quo ante.
The RTC, finding merit to the application for temporary restraining order
filed by respondent Victor Espinosa, granted the same on March 6, 2009.
Thereafter, the RTC, on September 22, 2009, issued an Order for the
issuance of a writ of preliminary injunction, the dispositive portion of which
reads as follows:
IN VIEW OF THE FOREGOING, the defendant's prayer for the
issuance of a writ of preliminary injunction is GRANTED. Accordingly,
upon defendant's filing, within ten (10) days from receipt hereof, of the
injunction bond in the sum of fifty thousand pesos (PhP50,000.00)
conditioned on defendant's paying all damages, the plaintiff may
sustain by reason of this injunction in case the Court should finally
decide that the defendant is not entitled thereto, let a writ of preliminary
injunction issue enjoining or restraining the plaintiff and all those
claiming rights under her from disturbing the possession of the
defendant to the leased premises or the "status quo ante" until after
 this case shall have been decided on the merits and/or until further
orders from this Court.
SO ORDERED.
After the denial of petitioner's motion for reconsideration in a Resolution
dated February 25, 2010, petitioner filed a petition on certiorari under Rule 65
of the Rules of Court, with the CA imputing grave abuse of discretion on the
part of the RTC when it granted the application for the issuance of a writ of
preliminary injunction filed by respondent Victor Espinosa. According to
petitioner, respondents themselves violated the status quo ante order when
they wrested the space rented by Pacifica Agrivet Supplies from petitioner's
control and that there was no compliance with the requisites for the issuance
of the writ of preliminary injunction.
The CA, on November 29, 2013, dismissed petitioner's petition
on certiorari, thus:
WHEREFORE, the petition is DENIED. The Order and the
Resolution, dated September 22, 2009 and February 25, 2010,
respectively, both issued by respondent court in Civil Case No. R-2912
STAND.
SO ORDERED.
In a Resolution dated October 28, 2014, the CA denied petitioner's
motion for reconsideration. Hence, the present petition.
Petitioner comes before this Court with the following issues for
resolution:
I.
ISSUES FOR RESOLUTION
A.
HE WHO SEEKS EQUITY MUST DO EQUITY. PRIVATE
RESPONDENTS TOOK THE LAW INTO THEIR OWN HANDS BY
WRESTING CONTROL OF THE SPACE BEING RENTED OUT TO
PACIFICA AGRIVET SUPPLIES AND UNDER THE CONTROL OF
MRS. ROSARIO CAHAMBING. THE HONORABLE COURT OF
APPEALS COMMITTED LEGAL ERROR IN VALIDATING THE WRIT
OF PRELIMINARY INJUNCTION GRANTED BY THE HONORABLE
RTC IN FAVOR OF PRIVATE RESPONDENTS DESPITE THE
LATTER'S CONDUCT WHICH DIRTIED AND SULLIED THEIR
HANDS.  AaCTcI

B.
THE WRIT OF PRELIMINARY INJUNCTION IS GRANTED ONLY IN
EXTRAORDINARY CASES WHERE THE REQUISITES ARE
COMPLIED WITH. THE HONORABLE COURT OF APPEALS
 COMMITTED LEGAL ERRORS IN VALIDATING THE WRIT OF
PRELIMINARY INJUNCTION GRANTED BY THE HONORABLE RTC
OF MAASIN CITY DESPITE THE LACK OF URGENCY AND
DESPITE THE FACT THAT RESPONDENTS' CLAIM FOR DAMAGES
ARE QUANTIFIABLE.
According to petitioner, the CA turned a blind eye and failed to consider
respondents' violation of the status quo when it wrested possession and
control of the space leased to Pacifica Agrivet Supplies and tried to do the
same with Lhuillier Pawnshop; thus, committing a grave error and amounts to
discrimination since the CA recognized the status quo as the situation where
petitioner was the lessor of Pacifica Agrivet Supplies.
Petitioner further claims that respondents failed to prove the elements
before an injunction could be issued and that the CA committed an error in
validating the writ of preliminary injunction without those requisites. In
particular, petitioner avers the following contentions: (1) the damage claimed
by respondents is quantifiable at P12,000.00 per month, hence, not
irreparable; (2) respondent, Victor Espinosa is at best a co-owner of the
subject property, while respondent Juana Ang is a stranger, and a co-owner
cannot exclude another co-owner, hence, respondent Victor Espinosa's right
is not clear and unmistakable; (3) there is no urgency involved because the
application for injunction was filed more than one year after the incident in
question; (4) contrary to the conclusion of the CA, the space occupied by
Jhanel's Pharmacy was voluntarily surrendered to petitioner by the lessee;
and (5) the CA committed grave legal errors when it failed to correct the
RTC's issuance of the writ of preliminary injunction.
In their Comment 3 dated June 4, 2015, respondents argue that they did
not have sullied hands when they applied for the writ of preliminary injunction.
They also point out that the issuance of the writ of preliminary injunction was
strictly in accordance with the Revised Rules on Civil Procedure.
Petitioner, in her Reply 4 dated August 14, 2015, reiterated her
arguments contained in the petition for review.
The present petition is void of any merit.
A close reading of the arguments raised by petitioner would show that
they are factual in nature. A petition for review filed under Rule 45 may raise
only questions of law. 5 The factual findings of the Court of Appeals, when
supported by substantial evidence, are generally conclusive and binding on
the parties and are no longer reviewable unless the case falls under the
recognized exceptions. 6 This court is not a trier of facts and we are not duty-
bound to re-examine evidence. 7
 Nevertheless, the CA did not err in ruling that the RTC did not commit
any grave abuse of discretion in issuing the questioned writ of preliminary
injunction.
In Philippine National Bank v. RJ Ventures Realty and Development
Corporation, et al., 8 this Court exhaustively discussed the nature of a writ of
preliminary injunction, thus:
Foremost, we reiterate that the sole object of a preliminary
injunction is to maintain the status quo until the merits can be
heard. 9 A preliminary injunction 10 is an order granted at any stage of
an action prior to judgment or final order, requiring a party, court,
agency, or person to refrain from a particular act or acts. It is a
preservative remedy to ensure the protection of a party's substantive
rights or interests pending the final judgment in the principal action. A
plea for an injunctive writ lies upon the existence of a claimed
emergency or extraordinary situation which should be avoided for
otherwise, the outcome of a litigation would be useless as far as the
party applying for the writ is concerned. 11
The grounds for the issuance of a Writ of Preliminary Injunction are
prescribed in Section 3 of Rule 58 of the Rules of Court. Thus:
SEC. 3. Grounds for issuance of preliminary injunction. — A
preliminary injunction may be granted when it is established:
(a) That the applicant is entitled to the relief demanded, and the
whole or part of such relief consists in restraining the commission or
continuance of the act or acts complained of, or in requiring the
performance of an act or acts, either for a limited period or perpetually;
(b) That the commission, continuance or non-performance of
the act or acts complained of during the litigation would probably work
injustice to the applicant; or
(c) That a party, court, agency or a person is doing, threatening,
or is attempting to do, or is procuring or suffering to be done, some act
or acts probably in violation of the rights of the applicant respecting the
subject of the action or proceeding, and tending to render the judgment
ineffectual. 
EcTCAD

Otherwise stated, for a Writ of Preliminary Injunction to issue, the

following requisites must be present, to wit: (1) the existence of a clear and
unmistakable right that must be protected, and (2) an urgent and paramount
necessity for the writ to prevent serious damage. 12 Indubitably, this Court has
likewise stressed that the very foundation of the jurisdiction to issue a writ of
injunction rests in the existence of a cause of action and in the probability of
irreparable injury, inadequacy of pecuniary compensation, and the prevention
of multiplicity of suits. 13 Sine dubio, the grant or denial of a writ of preliminary
injunction in a pending case, rests in the sound discretion of the court taking
cognizance of the case since the assessment and evaluation of evidence
towards that end involve findings of facts left to the said court for its
conclusive determination. 14 Hence, the exercise of judicial discretion by a
court in injunctive matters must not be interfered with except when there is
grave abuse of discretion. 15 Grave abuse of discretion in the issuance of writs
of preliminary injunction implies a capricious and whimsical exercise of
judgment that is equivalent to lack of jurisdiction, or where the power is
exercised in an arbitrary or despotic manner by reason of passion, prejudice
or personal aversion amounting to an evasion of positive duty or to a virtual
refusal to perform the duty enjoined, or to act at all in contemplation of law. 16
This Court agrees with the CA and the RTC that the elements for the
issuance of a writ of preliminary injunction are present in this case. As aptly
ruled by the CA:
In this case, respondent court correctly found that private
respondent Victor Espinosa had established a clear and unmistakable
right to a commercial space heretofore occupied by Jhanel's
Pharmacy. He had an existing Contract of Lease with the pharmacy up
to December 2009. Without prejudging the main case, it was
established that, at the time of the issuance of the status quo order
dated April 16, 1998, Jhanel's Pharmacy was recognized as one of
private respondent Victor Espinosa's tenants. In fact, petitioner
identified only Pacifica Agrivet Supplies, Family Circle, Ariane's Gift
Items and Julie's Bakeshop. As such, pursuant to the status quo order,
it is private respondent Victor Espinosa who must continue to deal with
Jhanel's Pharmacy. Correspondingly, the commercial space occupied
by Jhanel's Pharmacy must be deemed to be under the possession
and control of private respondent Victor Espinosa as of the time of the
issuance of the status quo order. The right of possession and control is
a clear right already established by the circumstances obtaining at that
time. Hence, petitioner's act of entering the premises of Jhanel's
Pharmacy, through her sons, is a material and substantial violation of
private respondent Victor Espinosa's right, which act must be enjoined.
The RTC was also able to make the following factual findings that
shows the urgency and the necessity of the issuance of the writ of preliminary
injunction in order to prevent serious damage:
By allowing the plaintiff to disturb the status quo ante which, for
purposes of this instant application, is limited to the admission by the
plaintiff regarding the lease by twelve lessees, including Jhanel's
Pharmacy, of the subject commercial building, the rentals of which only
four pertains to her, excluding Jhanel's Pharmacy, great and
irreparable injury would result to defendant not just because he would
be deprived of his right to collect rent from Jhanel's Pharmacy but
more importantly, because it would make doing business with him
 risky, unstable and unsound, especially with respect to his other
tenants having existing contracts with the defendant.
All of the above findings and considerations expounded in the CA's
assailed decision and resolution contain no reversible error, thus, they should
not be disturbed. It must always be remembered that the issuance of a writ of
preliminary injunction rests entirely on the discretion of the court and is
generally not interfered with except in cases of manifest abuse. 17 In this case,
no manifest abuse can be attributed to the RTC that issued the questioned
writ. This Court has also held that no grave abuse of discretion can be
attributed to a judge or body issuing a writ of preliminary injunction where a
party has not been deprived of its day in court as it was heard and it
exhaustively presented all its arguments and defenses. 18 Verily, petitioner
was given her day in court to present her side but as in all litigations, only one
party prevails.
WHEREFORE, the Petition for Review on Certiorari under Rule 45 of
the Rules of Court dated November 28, 2014 of petitioner Rosario E.
Cahambing is DENIED. Consequently, the Decision dated November 29,
2013 and Resolution dated October 28, 2014 of the Court of Appeals,
affirming the Order dated September 22, 2009 and Resolution dated February
25, 2010 of the Regional Trial Court, Branch 25, Maasin City, Southern Leyte,
are AFFIRMED.
SO ORDERED.  HSAcaE

 (Cahambing v. Espinosa, G.R. No. 215807, [January 25, 2017], 804 PHIL 412-
|||

423)

[G.R. No. 141849. February 13, 2007.]

ISABEL JAEL MARQUEZ, CELIA M. IDEA, LUISITA M.

ECLAVEA, MELVIRA M. VILLASANTE, RUEL MARQUEZ,
ZAIDA M. SARACENA, and ELOISA M.
PENAMORA, petitioners, vs. THE PRESIDING JUDGE (HON.
ISMAEL B. SANCHEZ), RTC Br. 58, Lucena City; THE HON.
EXECUTIVE JUDGE OF RTCs of Lucena City; THE
DEVELOPMENT BANK OF THE PHILIPPINES (DBP); and THE
PROVINCIAL SHERIFF OF QUEZON PROVINCE, respondents.

DECISION
VELASCO, JR., J  : p

The Case
Before us is a Petition for Review on Certiorari 1 under Rule 45 of
the Rules of Court, assailing the November 5, 1998 Decision 2 of the Court of
Appeals (CA) in CA-G.R. SP No. 29904, which affirmed the October 29, 1992
and December 23, 1992 Orders of the Lucena City Regional Trial Court (RTC)
Branch 58; and its January 31, 2000 Resolution 3 denying Marquez's Motion for
Reconsideration. It raises the core issue of the propriety of the denial by
respondent former Lucena City RTC Presiding Judge Ludivico C. Lopez of
Marquez's prayer for a writ of preliminary injunction in Civil Case No. 92-150
entitled Marcial M. Marquez v. The Development Bank of the Philippines and the
Provincial Sheriff of Quezon Province for Damages, Cancellation of Mortgage
and Certiorari with Prayer for Issuance of a Writ of Preliminary Injunction and/or
Restraining Order.
The Facts
Marcial M. Marquez was an incorporator and officer of Lucena
Entrepreneur and Agri-Industrial Development Corporation (LEAD), which was
incorporated on November 26, 1975 primarily to venture into and engage in
commercial deep-sea or "purse seine" fishing. LEAD's principals were graduates
of the Development Bank of the Philippines' (DBP's) Entrepreneurship
Development Program.
To carry out its objectives, LEAD needed capital for the construction of a
fishing vessel and the procurement of the required equipment and other
accessories. It applied for a loan with respondent DBP, which, on November 9,
1977, granted LEAD an agricultural loan of PhP 2,105,000.00 that would cover
the construction and procurement of the fishing vessel and the required
equipment, 4 subject to the required level of capitalization or equity ratio by
LEAD's principals. 5
Moreover, DBP required that the principals, including Marquez, be held
jointly and severally liable with borrower-corporation DEAL. 6 To secure the loan,
some of the principals of LEAD, namely, Mr. and Mrs. Venuso Bibit and Mr. and
Mrs. Eduardo Murallon, entered into a Real Estate Mortgage (REM) of two (2)
properties with DBP, particularly those covered by TCT Nos. T-136995 and T-
140765 with areas of 6,859 square meters and 7,222 square meters,
respectively. 7
To protect itself from manipulated and/or overpriced contract, the
construction of the fishing vessel and the procurement and installation of the
equipment and other accessories were subjected to DBP's local competitive
bidding in consonance with its standing policies. 8 Consequently, Trigon
Engineering and Shipbuilding Corporation (Trigon), based in Cebu City, won the
bid and was duly approved by DBP. 9 Thus, the corresponding Boat-building
Contract 10 was executed by and between LEAD and Trigon on June 2, 1978,
which stipulated, inter alia, that Trigon would complete the work within 150
calendar days from the perfection of the contract and, as consideration, LEAD
would pay Trigon PhP 1,955,000.00. 11
However, there were some problems encountered in the implementation of
the loan. First, some scheduled releases of the loan were withheld by DBP as the
capitalization or equity ratio of the principals of LEAD was not complied with.
Second, there were defects in the construction of the fishing vessel which
required compliance by Trigon before any subsequent releases of the loan could
be made. These contretemps delayed the construction of the fishing vessel for
over two (2) years, yet the fishing vessel was only 77.14% complete by then.
Third, the delay aggravated the situation for the boat construction was overtaken
by increases in costs of materials and machinery. Thus, the project could not be
completed at the original cost stipulated in the boat construction contract.
After threshing out the problem through a tripartite conference between
LEAD, Trigon, and DBP, it was agreed that LEAD would get the fishing vessel at
its present state and LEAD would complete the construction and installation of
the equipment and accessories, for which DBP would grant LEAD an additional
loan of PhP 714,600.00. 12 The additional loan was granted on July 29, 1981 and
was consolidated with the first loan. To secure the additional loan, an additional
REM, a second mortgage, was undertaken by Marquez and his wife on their
property covered by TCT No. T-24506 with an area of 3,315 square
meters. 13 The loan was fully released on February 8, 1982. In short, the fishing
vessel christened "F/B LEAD 1" was completed and launched; and because a
chattel mortgage was constituted on the fishing vessel, together with the
machineries and equipment on it, to secure the loan with DBP, it was insured
with the GSIS Property Insurance Fund in favor of DBP and/or LEAD.
Meanwhile, shortly after the additional loan was fully released to LEAD, on
September 3, 1982, DBP informed LEAD of the arrearage of PhP 906,887.58 of
its outstanding loan and to remit PhP 363,022.01 for the loan's interest. When
LEAD was not able to pay, DBP formed a collection committee; however, the
conferences with LEAD principals yielded negative results.
Subsequently, on the nights of June 21-22, 1985, disaster struck F/B
LEAD 1 as it sank off the coast of Unisan, Quezon at the height of a typhoon.
Upon receiving notice of such event, DBP filed an insurance claim with the GSIS,
which covered the fishing vessel for the period 1985-1986, and collected the
proceeds of PhP 1,186,145.00 which DBP applied to the loan account of LEAD
on December 9, 1986.
 For having defaulted on its contractual obligations, on July 21, 1992, DBP
demanded LEAD and its principals to settle their outstanding loan obligation, with
warning that non-settlement would compel DBP to institute the necessary legal
action to protect its interest, including appropriate actions to foreclose the
mortgaged properties. With the inaction of LEAD and its principals, on August 25,
1992, DBP was compelled to file with the Clerk of Court of the Quezon RTC an
application for foreclosure sale of the REMs constituted to secure its loan with
DBP.
On September 3, 1992, the Ex-Officio Provincial Sheriff of Quezon issued
a Notice of Extra-Judicial Sale on October 6, 1992 of the following properties
covered by TCT Nos. T-136995, T-140765, and T-24506 to satisfy the
mortgaged indebtedness of PhP 4,595,450.00. 14 The spouses Bibit and spouses
Murallon did not contest the scheduled sale.
Marquez, however, on October 5, 1992, instituted the instant action for
Damages, Cancellation of Mortgage and Certiorari with Prayer for Issuance of a
Writ of Preliminary Injunction and/or Restraining Order before the Lucena City
RTC, docketed as Civil Case No. 92-150, to forestall the extra-judicial foreclosure
sale of the property covered by TCT No. T-24506. 15 In gist, Marquez alleged that
LEAD's involvement in purse seine fishing was premised substantially on a
"partnership" with DBP and not that of a simple debtor-creditor relationship; that
the loan contracts and REM constituted for them were legally impaired, bereft of
consideration, and did not reflect the true and proper relationship between LEAD
and DBP; that DBP was liable for breach of agreement when it failed to deliver a
seaworthy and well-equipped fishing vessel; that DBP reneged on its
commitment to render technical expertise on purse seine fishing when needed
most; that LEAD was prejudiced by DBP's bureaucracy and the controversy with
its commissioned boat-builder, Trigon; that having collected the insurance
proceeds from GSIS after the sinking of the fishing vessel, it had extinguished
whatever obligations LEAD had with DBP; and that DBP refused in bad faith to
render an updated accounting or allow Marquez to scrutinize the loan account.
On October 6, 1992, the scheduled day for the extra-judicial sale,
respondent Presiding Judge issued an Order 16 granting a Temporary
Restraining Order (TRO) to maintain the status quo pending resolution of the
prayer for the issuance of a writ of preliminary injunction, and set the hearing on
October 14, 1992 for said action.
On October 14, 1992, respondent judge heard Marquez and DBP on the
propriety of issuing the injunctive writ. Parenthetically, on October 16, 1992, DBP
filed its Answer 17 with counterclaims against Marquez. On October 29, 1992,
respondent Judge issued the first assailed Order 18 denying Marquez's prayed for
injunctive writ, to which he filed his Motion for Reconsideration. 19 On December
2, 1992, Marquez filed an Urgent Motion to Restrain 20 the extra-judicial
foreclosure sale scheduled on December 28, 1992. Earlier, after the order of
denial was issued on October 29, 1992, DBP applied for an extra-judicial
foreclosure sale of the property covered by TCT No. T-24506, which was granted
through the Notice of Extra-judicial Sale 21 issued on November 24, 1992 by
respondent provincial sheriff.
Subsequently, on December 23, 1992, respondent Judge issued the
second assailed Order 22 denying Marquez's Motion for Reconsideration and
Urgent Motion to Restrain. Consequently, on December 28, 1992, as scheduled,
Marquez's property covered by TCT No. T-24506 was sold to DBP as the highest
bidder. 23
The Ruling of the Court of Appeals
However, the certificate of sale was not issued as Marquez was granted a
TRO 24 by the CA through a Petition for Certiorari 25 under Rule 65 of the Rules
of Court, where he assailed the Orders denying the issuance of a preliminary
injunction. After DBP filed its Comment 26 on April 23, 1993, the CA rendered the
assailed Decision 27 on November 5, 1998 affirming the RTC Orders. Marquez's
Motion for Reconsideration 28 of said Decision was however denied on January
31, 2000. 29
The appellate court held that P.D. 385 applied in the instant case and
found neither manifest abuse committed by the trial court nor any grave abuse of
discretion amounting to lack or excess of jurisdiction in denying the issuance of
the injunctive writ.
Unfortunately, Marcial M. Marquez died on January 24, 1995. 30 He was
then substituted by his heirs on January 20, 1999. 31
The Issues
In the instant petition for review filed by the heirs of Marcial M. Marquez,
the crucial issue to be dealt with in this petition is whether the trial court's refusal
to grant an injunction against the threatened extra-judicial foreclosure sale by
DBP constitutes grave abuse of judicial discretion amounting to lack or excess of
jurisdiction.
In support of the instant petition, petitioners raise the issues of applicability
of P.D. 385, denial of due process, and the extent of the loan covered by the
REM constituted on petitioners' realty under TCT No. T-24506.
However, the petition lacks merit.
Requisites for issuance of injunctive writ
The writ of preliminary injunction is issued to
 prevent threatened or continuous irremediable injury to some of the
parties before their claims can be thoroughly studied and adjudicated. Its
sole aim is to preserve the status quo until the merits of the case can be
heard fully. Thus, it will be issued only upon a showing of a clear and
unmistakable right that is violated. Moreover, an urgent necessity for its
issuance must be shown by the applicant. 32
Under Section 3, Rule 58 of the 1997 Revised Rules of Civil Procedure,
the issuance of a writ of preliminary injunction may be granted if the following
grounds are established, thus:
(a) That the applicant is entitled to the relief demanded, and the
whole or part of such relief consists in restraining the commission or
continuance of the act or acts complained of, or in requiring the
performance of an act or acts, either for a limited period or perpetually;
(b) That the commission, continuance or non-performance of the
act or acts complained of during the litigation would probably work
injustice to the applicant; or
(c) That a party, court, agency or a person is doing, threatening,
or is attempting to do, or is procuring or suffering to be done, some act
or acts probably in violation of the rights of the applicant respecting the
subject of the action or proceeding, and tending to render the judgment
ineffectual.
Prescinding from the provisions mentioned above, we have consistently
held that the requisites of preliminary injunction whether mandatory or prohibitory
are the following:
(1) the applicant must have a clear and unmistakable right, that is a
right in esse;
(2) there is a material and substantial invasion of such right;
(3) there is an urgent need for the writ to prevent irreparable injury to the
applicant; and
(4) no other ordinary, speedy, and adequate remedy exists to prevent
the infliction of irreparable injury. 33
Requisites for injunctive writ not present
We have reviewed the records and the pleadings of the parties and found
that, as contended by respondent DBP, Marquez and petitioners failed to
establish the essential requisites for the issuance of a writ of preliminary
injunction. Hence, the trial court did not commit any manifest abuse nor gravely
abused its discretion amounting to excess or lack of jurisdiction in denying the
writ of preliminary injunction as well as Marquez's Motion for Reconsideration.
Issuance of injunctive writ on sound discretion of the trial court
 It is basic that the issuance of a writ of preliminary injunction is addressed
to the sound discretion of the trial court, conditioned on the existence of a clear
and positive right of the applicant which should be protected. It is an
extraordinary, peremptory remedy available only on the grounds expressly
provided by law, specifically Section 3, Rule 58 of the Rules of
Court. 34 Moreover, extreme caution must be observed in the exercise of such
discretion. 35 It should be granted only when the court is fully satisfied that the
law permits it and the emergency demands it. 36 The very foundation of the
jurisdiction to issue a writ of injunction rests in the existence of a cause of action
and in the probability of irreparable injury, inadequacy of pecuniary
compensation, and the prevention of multiplicity of suits. Where facts are not
shown to bring the case within these conditions, the relief of injunction should be
refused. 37
In the instant case, both the trial court and the appellate court found that
Marquez was not entitled to the injunctive writ. Verily, the trial court has
exercised its sound discretion in denying the writ. The exercise of sound judicial
discretion by the lower court in injunctive matters should not be interfered with
except in cases of manifest abuse. 38 Indeed, a scrutiny of the records fails to
show any manifest abuse committed by respondent Presiding Judge.
Main Issue: Applicability of P.D. 385
P.D. 385 is clearly applicable in the instant case. The trial and appellate
courts' primary basis for denying the injunction sought by Marquez was P.D. 385,
which makes it
mandatory for government financial institutions . . . to foreclose
the collaterals and/or securities for any loan, credit, accommodation
and/or guarantees granted by them whenever their arrearages on such
account, including accrued interest and other charges, amount to at least
twenty percent (20%) of the total outstanding obligations, including
interests and other charges, as appearing in the books of account and/or
related records of the financial institution concerned. 39
Pursuant to the aforesaid law:
Sec. 2. No restraining order, temporary or permanent
injunction shall be issued by the court against any government
financial institution in any action taken by such institution in
compliance with the mandatory foreclosure provided in Section 1
hereof whether such restraining order, temporary or permanent
injunction is sought by the borrower(s) or any third party or
parties, except after due hearing in which it is established by the
borrower and admitted by the government financial institution
concerned that twenty percent (20%) of the outstanding arrearages
 had been paid after the filing of foreclosure proceedings . . .
(emphasis supplied).
A close examination of the attendant factual milieu of the instant case
shows that it is an undisputed fact that LEAD loaned from DBP PhP 2.105 million
and PhP 714,600.00. It is also undisputed that the spouses Marquez were
constituted jointly and severally liable in their personal capacity with LEAD as
regards the loan obligation. And, for the additional loan of PhP 714,600.00, the
Marquez spouses entered into a second mortgage (REM) of their property
covered by TCT No. T-24506. As of September 3, 1992, the loan balance with
the arrearages amounted to PhP 4,595,450.00 despite the previous application
of PhP 1,186,145.00 insurance proceeds from the GSIS. The account clearly
reveals that LEAD was in arrears in the payment of the loans. As a consequence,
the agreed 14% per annum interest had to be imposed. Absent any showing by
petitioners that LEAD had complied with the required 20% payment of the
arrearages, P.D. 385 must be obeyed.
Petitioners rely on Filipinas Marble Corporation (FMC) v. Court of
Appeals 40 to bolster their position that the trial court committed manifest abuse
and gravely abused its discretion in denying the issuance of the prayed for
injunctive writ.
We are not convinced.
The FMC case is not on all fours with the instant case. FMC had a $5
million loan with DBP conditioned on its entering into a three (3)-year
management contract with Bancom Systems Control, Inc. (Bancom), whose key
officers shall be appointed only with DBP's approval and made directly
responsible to DBP. In a complaint for annulment of the deeds of mortgage and
deed of assignment in favor of DBP, FMC averred failure of consideration as
regards the execution of the deeds and that DBP and Bancom mismanaged and
misspent the loan.
We ruled that we cannot make any conclusions on whether DBP and
Bancom actually misappropriated and misspent the $5 Million loan as this should
properly be litigated in the main action; thus, pending the outcome of such
litigation, P.D. 396 cannot automatically be applied for if it is really proven that
respondent DBP was responsible for the misappropriation of the loan, even if
only in part, then the foreclosure of the petitioners' properties under the
provisions of P.D. 385 to satisfy the whole amount of the loan would be a gross
mistake and would unduly prejudice FMC. It is only after trial on the merits can
the true amount of the loan which was applied wisely or not, for the benefit of the
petitioner, be determined. And consequently, the foreclosure proceedings
under P.D. 385 will have to await the determination of the trial on the merits.
Thus, since the issue of misappropriation of the proceeds of the loan was still
being litigated, the liability of FMC for the loan which was the basis of the
mortgage being foreclosed was not yet settled; hence, the Court granted an
injunction against the foreclosure sale.
In the instant case, the factual antecedents of FMC could hardly find
parallelism with the factual milieu of LEAD. While it is true that DBP released
most of the 2.105 million loan to Trigon, nonetheless, it was LEAD which dealt
and entered the contract with Trigon and the boat-building contract duly signed
by LEAD principal, Bibit. Moreover, while petitioners questioned the outstanding
amount of the mortgage loan, nevertheless, given the undisputed loans extended
to LEAD and the 14% per annum interest stipulated in the loan contracts, the
outstanding amount could hardly be contested given the undisputed delinquency
of LEAD. Besides, unlike in FMC, the instant case does not involve the issues of
a management contract and misappropriation of the proceeds of the loan.
It is our ruling in FMC that:
P.D. 385 was never meant to protect officials of government
lending institutions who take over the management of a borrower
corporation, lead that corporation to bankruptcy through
mismanagement or misappropriation of its funds, and who, after ruining
it, use the mandatory provisions of the decree to avoid the
consequences of their misdeeds.
The designated officers of the government financing institution
cannot simply walk away and then state that since the loans were
obtained in the corporation's name, then P.D. 385 must be peremptorily
applied and that there is no way the borrower corporation can prevent
the automatic foreclosure of the mortgage on its properties once the
arrearages reach twenty percent (20%) of the total obligation no matter
who was responsible. 41
This ruling could hardly find application in the instant case. Thus, we now
hold that P.D. 385, proscribing the issuance of an injunctive writ, applies. More
so, during the hearing for the issuance of the injunctive writ, Marquez and
petitioners had not shown that 20% of the arrearages of the mortgage loan had
been duly paid.
Petitioners failed to show a right in esse to be protected
We uphold the trial court and CA in their finding that Marquez had not
shown a right in esse to be protected. Indeed, the applicant's right must be clear
or unmistakable, that is, that the right is actual, clear and positive especially
calling for judicial protection. 42 Thus, an injunction will not issue to protect a right
not in esse and which may never arise or to restrain an act which does not give
rise to a cause of action.
 While not preempting the disposition of the main case, a close review of
the records at hand would show that the loan and the REM seem to be above
scrutiny. Respondent DBP had shown documentary evidence of how the
assailed transactions transpired, and how and why Marquez and other LEAD
principals signed and agreed to be solidarily liable for LEAD's loans as well as
their voluntary mortgage of their properties to secure said loans.
We need to stress that the original loan was granted in 1977 while the
additional loan was granted in 1981. Marquez signed as solidarily liable for both
loans but constituted a REM of his property (TCT No. T-24506), on second
mortgage, only for the additional loan. It cannot be gainsaid by the foregoing
facts that there was bad faith or malice in DBP's part in granting the loan, much
less were there circumstances shown that Marquez and the other LEAD
principals were compelled to enter into said contracts. Indeed, the
acknowledgements in front of a notary public of the loan and REM contracts
show the dealings between the parties to be apparently at arms length. Be that
as it may, if indeed there were defects and lack of consideration in the contracts,
Marquez was in delay in pursuing an action to defend his rights until the time that
the foreclosure sale was already well nigh imminent.
Application for injunctive relief construed strictly
The allegations in Marquez's complaint did not clearly make out his
entitlement to the injunctive relief prayed for. The rule requires that in order for a
writ of preliminary injunction to issue, the application should clearly allege facts
and circumstances showing the existence of the requisites. 43 It must be
emphasized that an application for injunctive relief is construed strictly against
the pleader. 44 As previously discussed, the trial court and the CA were not
convinced, based on the pleadings and the evidence presented in the hearing for
the issuance of the injunctive writ, that petitioners demonstrated a strong basis
for the grant of the injunctive writ. The allegations of the complaint on the
defense that the agreement was that of a partnership is at war with the loan and
mortgage documents they signed. Apparently, in resolving the prayer for
injunction, the courts a quo relied more on these documents than the bare
averments of petitioners on the alleged partnership.
Second Issue: No Denial of Due Process
We find no denial of due process as alleged by petitioners. They contend
that Marquez was denied his day in court as regards the hearing for the issuance
of the injunctive writ on October 14, 1992. A close scrutiny of the records,
specifically the excerpt of the transcript 45 of the October 14, 1992 hearing,
shows otherwise. In that hearing, the trial court properly ruled to dispense with
the testimony of Marquez as it already involved the merit of the case. Besides,
the points that Marquez wanted to testify on were included in the verified
complaint to prove that the relationship between LEAD and DBP was not that of
a mere debtor–creditor but a form of partnership. This issue has already been
tackled, but we will resolve the main case which cannot be done in a hearing for
the issuance of a writ of preliminary injunction that is a mere ancillary remedy.
Due process is served when the parties are given the opportunity to be
heard for the court to consider every piece of evidence presented in their
favor. 46 In the instant case, Marquez was present at the October 14, 1992
hearing and was able to argue his case for the issuance of the injunctive writ.
Thus, he cannot claim that respondent judge denied him due process. Verily, the
trial court must not delve into the primary issues raised in the main action in the
hearing for the issuance of an injunctive writ. The grant of an injunctive writ,
being an ancillary remedy, which could result in a premature resolution of the
case — or will grant the principal objectives of the parties — before the merits
can be passed upon, is proscribed, and the prayer for the relief will be properly
denied, 47 as in the instant case. Indeed, the evidence required for the trial court
to consider during the hearing was only a sample and intended merely to give it
an idea of the justification for the injunctive writ pending decision of the case on
the merits, which must rest on solid grounds. 48 As it is, Marquez had been given
ample opportunity to present evidence to support his prayer for the injunctive writ
and was therefore not denied due process.
Third Issue: Mortgage of Family Home
The issue of the property being a family home and not a corporate property
veers away from the clear contractual agreement of the REM. Undeniably, the
subject REM was a second mortgage as Marquez already mortgaged his
property (TCT No. T-24506) to another bank. Besides, it bears stressing that the
Marquez spouses were solidarily liable with LEAD for the loans. Thus,
respondent DBP could have even gone after the other properties of the Marquez
couple given such solidary liability for the outstanding loan with DBP. DBP has
reasonably and properly exercised its right to have the property covered by TCT
No. T-24506 subjected to an extra-judicial foreclosure sale.
WHEREFORE, we DENY this petition for lack of merit and AFFIRM the
assailed CA Decision and Resolution.
SO ORDERED.
 (Marquez v. Sanchez, G.R. No. 141849, [February 13, 2007], 544 PHIL 507-
|||

525)

#14

G.R. No. 214241

SPOUSES RAMON and LIGAYA GONZALES, Petitioners,
vs.
MARMAINE REALTY CORPORATION, represented by MARIANO MANALO, Respondent.

DECISION

PERLAS-BERNABE, J.:

Assailed in this petition for review on certiorari  are the Resolutions dated April 24, 2014  and
1 2

September l 0, 2014  of the Court of Appeals (CA) in CA-G.R. SP No. 132871, which dismissed the
3

petition for review filed by herein petitioners-spouses Ramon and Ligaya Gonzales (Sps. Gonzales)
before it on the ground of non-exhaustion of administrative remedies.

The Facts

The instant case arose from a Complaint4 dated October 30, 1997 for Recognition as Tenant with
Damages and Temporary Restraining Order filed by Sps. Gonzales against herein respondent
Marmaine Realty Corporation (Marmaine) before the Office of the Provincial Adjudicator,
Department of Agrarian Reform Adjudication Board (DARAB), Region IV (Tenancy Case). After
initially filing a Motion to Dismiss,  Marmaine seasonably filed an Answer with Counterclaim  and,
5 6

thereafter, trial ensued.

On January 6, 1998, the Provincial Agrarian Reform Adjudicator (PARAD) issued a

Resolution  ordering the issuance of a writ of preliminary injunction in Sps. Gonzales' favor. In view
7

thereof, Sps. Gonzales filed a Notice of Lis Pendens  dated September 26, 2000 before the Register
8

of Deeds of Batangas, which was then annotated on the certificates of title of Marmaine's properties.

After due proceedings, the PARAD issued a Decision  dated June 27, 2002 in the Tenancy Case,
9

dismissing Sps. Gonzales' complaint for lack of merit. Sps. Gonzales moved for
reconsideration,  which was, however, denied in an Order  dated August 7, 2002. Aggrieved, they
10 11

appealed  to the DARAB, but the latter affirmed the PARAD ruling in a Decision  dated October 17,
12 13

2008. Dissatisfied, Sps. Gonzales moved for reconsideration  of the DARAB 's October 17, 2008
14

Decision, but the same was denied in a Resolution  dated March 23, 2009. Due to the failure on the
15

part of Sps. Gonzales to further appeal, the DARAB Decision became final and executory on May 7,
2009, and an Entry of Judgment  was issued on January 19, 2012.
16

In view of the finality of the ruling in the Tenancy Case, Marmaine filed a Motion for Cancellation of
Notice of Lis Pendens  dated January 31, 2012.
17

The PARAD Ruling

In an Order  dated May 15, 2012, the PARAD initially denied Marmaine's motion on the ground
18

of, inter alia, prematurity because a civil case involving the same parties is still pending before the
Regional Trial Court of Rosario, Batangas, Branch 87, docketed as Civil Case No. RY2K-052.
However, on Marmaine's motion for reconsideration,  the PARAD issued an Order  dated December
19 20

4, 2012 setting aside its earlier Order and, accordingly, directed the Register of Deeds of Batangas
to cancel the notice of lis pendens annotated on Marmaine's certificates of title.  The PARAD held
21

that such cancellation is warranted in view of the final and executory judgment in the Tenancy Case
in Marmaine's favor. In this relation, the PARAD pointed out that the cancellation of the notice of lis
pendens only pertains to the Tenancy Case and does not involve Civil Case No. RY2K-052. 22
Sps. Gonzales moved for reconsideration  which was, however, denied in a Resolution  dated
23 24

October 16, 2013. Dissatisfied, petitioners went straight to the CA via a petition for review under
Rule 43 of the Rules of Court. 25

The CA Ruling

In a Resolution  dated April 24, 2014, the CA dismissed the petition on the ground of non-exhaustion
26

of administrative remedies. It held that Sps. Gonzales improperly elevated the case to it via a
petition for review under Rule 43 of the Rules of Court, pointing out that the proper remedy from a
PARAD's denial of a motion for reconsideration is an appeal to the DARAB, and not a petition for
review under Rule 43 of the Rules of Court. 27

Undaunted, Sps. Gonzales moved for reconsideration,  but was denied in a Resolution  dated
28 29

September 10, 2014; hence, this petition. 1âwphi1

The Issue Before the Court

The issues raised for the Court's resolution are as follows: (a) whether or not the CA erred in
dismissing the petition for review before it due to petitioners' failure to exhaust administrative
remedies; and (b) whether or not the PARAD correctly ordered the cancellation of the notice of lis
pendens annotated on the certificates of title of Marmaine's properties.

The Court's Ruling

The doctrine of exhaustion of administrative remedies is a cornerstone of our judicial system. The
thrust of the rule is that courts must allow administrative agencies to carry out their functions and
discharge their responsibilities within the specialized areas of their respective competence. The
rationale for this doctrine is obvious. It entails lesser expenses and provides for the speedier
resolution of controversies. Comity and convenience also impel courts of justice to shy away from a
dispute until the system of administrative redress has been completed.  In view of this doctrine,
30

jurisprudence instructs that before a party is allowed to seek the intervention of the courts, it is a pre-
condition that he avail himself of all administrative processes afforded him. Hence, if a remedy within
the administrative machinery can be resorted to by giving the administrative officer every opportunity
to decide on a matter that comes within his jurisdiction, then such remedy must be exhausted first
before the court's power of judicial review can be sought. The premature resort to the court is fatal to
one's cause of action. Accordingly, absent any finding of waiver or estoppel, the case may be
dismissed for lack of cause of action. 31

However, it must be clarified that the aforementioned doctrine is not absolute as it is subject to
certain exceptions; one of which is when the question involved is purely legal and will ultimately have
to be decided by the courts of justice.  In Vigilar v. Aquino,  the Court had the opportunity to explain
32 33

the rationale behind this exception, to wit:

It does not involve an examination of the probative value of the evidence presented by the parties.
There is a question of law when the doubt or difference arises as to what the law is on a certain state
of facts, and not as to the truth or the falsehood of alleged facts. Said question at best could be
resolved tentativelv by the administrative authorities. The final decision on the matter rests
not with them but with the courts of justice. Exhaustion of administrative remedies does not
apply, because nothing of an administrative nature is to be or can be done. The issue does
not require technical knowledge and experience but one that would involve the interpretation
and application of law.  (Emphasis and underscoring supplied)
34
In the case at bar, Sps. Gonzales correctly pointed out that the issue they raised before the
CA, i.e., the propriety of the cancellation of the Notice of Lis Pendens, falls within the aforesaid
exception as the same is a purely legal question, considering that the resolution of the same would
not involve an examination of the probative value presented by the litigants and must rest solely on
what the law provides on the given set of circumstances. 35

Verily, the CA erred in dismissing Sps. Gonzales' petition for review before it, considering that the
matter at issue - a question of law - falls within the known exceptions of the doctrine of exhaustion of
administrative remedies. In such a case, court procedure dictates that the instant case be remanded
to the CA for a resolution on the merits. However, when there is already enough basis on which a
proper evaluation of the merits may be had, as in this case, the Court may dispense with the time-
consuming procedure of remand in order to prevent further delays in the disposition of the case and
to better serve the ends of justice.  In view of the foregoing - as well as the fact that Sps. Gonzales
36

prayed for a resolution of the issue on the merits  - the Court finds it appropriate to finally settle the
37

conflicting claims of the parties.

"Lis pendens," which literally means pending suit, refers to the jurisdiction, power or control which a
court acquires over a property involved in a suit, pending the continuance of the action, and until
final judgment. Founded upon public policy and necessity, lis pendens is intended to keep the
properties in litigation within the power of the court until the litigation is terminated; and to prevent
the defeat of the judgment or decree by subsequent alienation. Its notice is an announcement to the
whole world that a particular property is in litigation and serves as a warning that one who acquires
an interest over said property does so at his own risk or that he gambles on the result of the litigation
over said property. The filing of a notice of lis pendens has a two-fold effect: (a) to keep the subject
matter of the litigation within the power of the court until the entry of the final judgment to prevent the
defeat of the final judgment by successive alienations; and (b) to bind a purchaser, bona fide or not,
of the land subject of the litigation to the judgment or decree that the court will promulgate
subsequently. 38

Under Section 14, Rule 13 of the Rules of Court, a notice of lis pendens may be cancelled "after
proper showing that the notice is for the purpose of molesting the adverse party, or that it is not
necessary to protect the rights of the party who caused it to be recorded." In the same vein, case law
likewise instructs that a notice of lis pendens may be cancelled in situations where: (a) there are
exceptional circumstances imputable to the party who caused the annotation; (b) the litigation was
unduly prolonged to the prejudice of the other party because of several continuances procured by
petitioner; (c) the case which is the basis for the lis pendens notation was dismissed for non-
prosequitur on the part of the plaintiff; or (d) judgment was rendered against the party who caused
such a notation. 39

In the case at bar, records show that the notice of lis pendens that Sps. Gonzales caused to be
annotated on Marmaine's certificates of title stemmed from the Tenancy Case filed by the former
against the latter. Since the Tenancy Case had already been decided against Sps. Gonzales with
finality, it is but proper that the PARAD order the cancellation of the notice of lis pendens subject of
this case. In this relation, the PARAD correctly ruled that its cancellation of the aforementioned
notice of lis pendens only pertains to the Tenancy Case and, thus, would not affect any other case
involving the same parties, such as Civil Case No. RY2K-052 pending before the Regional Trial
Court of Rosario, Batangas, Branch 87.

In sum, the PARAD properly ordered the cancellation of the notice of lis pendens that Sps. Gonzales
caused to be annotated on Marmaine's certificates of title in view of the finality of the decision in the
Tenancy Case.
WHEREFORE, the petition is hereby DENIED for lack of merit.

SO ORDERED.

G.R. No. 110263       July 20, 2001

ASIAVEST MERCHANT BANKERS (M) BERHAD, petitioner,

vs.
COURT OF APPEALS and PHILIPPINE NATIONAL CONSTRUCTION
CORPORATION, respondents.

DELEON, JR., J.:

Before us is a petition for review on certiorari of the Decision 1 of the Court of Appeals dated May
19,1993 in CA-G.R. CY No. 35871 affirming the Decision 2 dated October 14,1991 of the Regional
Trial Court of Pasig, Metro Manila, Branch 168 in Civil Case No. 56368 which dismissed the
complaint of petitioner Asiavest Merchant Bankers (M) Berhad for the enforcement of the money of
the judgment of the High Court of Malaysia in Kuala Lumpur against private respondent Philippine
National Construction Corporation. 1âwphi1.nêt

The petitioner Asiavest Merchant Bankers (M) Berhad is a corporation organized under the laws of
Malaysia while private respondent Philippine National Construction Corporation is a corporation duly
incorporated and existing under Philippine laws.

It appears that sometime in 1983, petitioner initiated a suit for collection against private respondent,
then known as Construction and Development Corporation of the Philippines, before the High Court
of Malaya in Kuala Lumpur entitled "Asiavest Merchant Bankers (M) Berhad v. Asiavest CDCP Sdn.
Bhd. and Construction and Development Corporation of the Philippines." 3

Petitioner sought to recover the indemnity of the performance bond it had put up in favor of private
respondent to guarantee the completion of the Felda Project and the nonpayment of the loan it
extended to Asiavest-CDCP Sdn. Bhd. for the completion of Paloh Hanai and Kuantan By Pass;
Project.

On September 13, 1985, the High Court of Malaya (Commercial Division) rendered judgment in
favor of the petitioner and against the private respondent which is also designated therein as the
"2nd Defendant. "

The judgment reads in full:

SUIT NO. C638 of 1983

Between
Asiavest Merchant Bankers (M) Berhad Plaintiffs
And
1. Asiavest -CDCP Sdn. Bhd. Defendant
2. Construction & Development Corporation of the
Philippines
 JUDGMENT

The 2nd Defendant having entered appearance herein and the Court having under Order 14, rule 3
ordered that judgment as hereinafter provided be entered for the Plaintiffs against the 2nd
Defendant.

IT IS THIS DAY ADJUDGED that the 2nd defendant do pay the Plaintiffs the sum of $5, 108,290.23
(Ringgit Five million one hundred and eight thousand two hundred and ninety and Sen twenty-three)
together with interest at the rate of 12% per annum on

(i) the sum of $2,586,866.91 from the 2nd day of March 1983 to the date of payment;
and

(ii) the sum of $2,521,423.32 from the 11th day of March 1983 to the date of payment;
and $350.00 (Ringgit Three Hundred and Fifty) costs.

Dated the 13th day of September, 1985.

Senior Assistant Registrar, High Court, Kuala Lumpur

This Judgment is filed by Messrs. Skrine & Co., 3rd Floor, Straits Trading Building, No.4, Leboh
Pasar, Besar, Kuala Lumpur, Solicitors for the Plaintiffs abovenamed. (VP/Ong/81194.7/83) 4

On the same day, September 13, 1985, the High Court of Malaya issued an Order directing the
private respondent (also designated therein as the "2nd Defendant") to pay petitioner interest on the
sums covered by the said Judgment, thus:

SUIT NO. C638 of 1983

Between
Asiavest Merchant Bankers (M) Berhad Plaintiffs
And
1. Asiavest -CDCP Sdn. Bhd. Defendants
2. Construction & Development Corporation of the
Philippines
BEFORE THE SENIOR ASSISTANT REGISTRAR
CIK SUSILA S. PARAM THIS 13th DAY OF IN
SEPTEMBER 1985 CHAMBERS

ORDER

Upon the application of Asiavest Merchant Bankers (M) Berhad, the Plaintiffs in this action AND
UPON READING the Summons in Chambers dated the 16th day of August, 1984 and the Affidavit of
Lee Foong Mee affirmed on the 14th day of August 1984 both filed herein AND UPON
HEARING Mr. T. Thomas of Counsel for the Plaintiffs and Mr. Khaw Chay Tee of Counsel for the
2nd Defendant abovenamed on the 26th day of December 1984 IT WAS ORDERED that the
Plaintiffs be at liberty to sign final judgment against the 2nd Defendant for the sum of
$5,108,290.23 AND IT WAS ORDERED that the 2nd Defendant do pay the Plaintiffs the costs of suit
at $350.00 AND IT WAS FURTHER ORDERED that the plaintiffs be at liberty to apply for payment
of interest AND upon the application of the Plaintiffs for payment of interest coming on for hearing on
the 1st day of August in the presence of Mr. Palpanaban Devarajoo of Counsel for the Plaintiffs and
Mr. Khaw Chay Tee of Counsel for the 2nd Defendant above-named AND UPON
HEARING Counsel as aforesaid BY CONSENT IT WAS ORDERED that the 2nd Defendant do pay
the Plaintiffs interest at a rate to be assessed AND the same coming on for assessment this day in
the presence of Mr. Palpanaban Devarajoo of Counsel for the Plaintiffs and Mr. Khaw Chay Tee of
Counsel for the 2nd Defendant AND UPON HEARING Counsel as aforesaid BY CONSENT IT IS
ORDERED that the 2nd Defendant do pay the Plaintiffs interest at the rate of 12% per annum on:

(i) the sum of $2,586,866.91 from the 2nd day of March 1983 to the date of payment; and

(ii) the sum Of $2,521,423.32 from the 11th day of March 1983 to the date of Payment.

Dated the 13th day of September,1985.

Senior Assistant Registrar, High Court, Kuala Lumpur. 5

Following unsuccessful attempts6 to secure payment from private respondent under the judgment,
petitioner initiated on September 5, 1988 the complaint before Regional Trial Court of Pasig, Metro
Manila, to enforce the judgment of the High Court of Malaya. 7

Private respondent sought the dismissal of the case via a Motion to Dismiss filed on October 5,
1988, contending that the alleged judgment of the High Court of Malaya should be denied
recognition or enforcement since on in face, it is tainted with want of jurisdiction, want of notice to
private respondent, collusion and/or fraud, and there is a clear mistake of law or fact. 8 Dismissal
was, however, denied by the trial court considering that the grounds relied upon are not the proper
grounds in a motion to dismiss under Rule 16 of the Revised Rules of Court. 9

On May 22, 1989, private respondent filed its Answer with Compulsory Counter claim's10 and therein
raised the grounds it brought up in its motion to dismiss. In its Reply filed11 on June 8, 1989, the
petitioner contended that the High Court of Malaya acquired jurisdiction over the Person of private
respondent by its voluntary submission the court's jurisdiction through its appointed counsel, Mr.
Khay Chay Tee. Furthermore, private respondent's counsel waived any and all objections to the
High Court's jurisdiction in a pleading filed before the court.

In due time, the trial court rendered its Decision dated October 14, 1991 dismissing petitioner's
complaint. Petitioner interposed an appeal with the Court of Appeals, but the appellate court
dismissed the same and affirmed the decision of the trial court in a Decision dated May 19, 1993.

Hence, the instant Petition which is anchored on two (2) assigned errors, 12 to wit:

THE COURT OF APPEALS ERRED IN HOLDING THAT THE MALAYSIAN COURT DID
NOT ACQUIRE PERSONAL JURISDICTION OVER PNCC, NOTWITHSTANDING THAT (a)
THE FOREIGN COURT HAD SERVED SUMMONS ON PNCC AT ITS MALAYSlA OFFICE,
AND (b) PNCC ITSELF APPEARED BY COUNSEL IN THE CASE BEFORE THAT COURT.

II
 THE COURT OF APPEALS ERRED IN DENYING RECOGNITION AND ENFORCEMENT
TO (SIC) THE MALAYSIAN COURT JUDGMENT.

Generally, in the absence of a special compact, no sovereign is bound to give effect within its
dominion to a judgment rendered by a tribunal of another country; 13 however, the rules of comity,
utility and convenience of nations have established a usage among civilized states by which final
judgments of foreign courts of competent jurisdiction are reciprocally respected and rendered
efficacious under certain conditions that may vary in different countries. 14

In this jurisdiction, a valid judgment rendered by a foreign tribunal may be recognized insofar as the
immediate parties and the underlying cause of action are concerned so long as it is convincingly
shown that there has been an opportunity for a full and fair hearing before a court of competent
jurisdiction; that the trial upon regular proceedings has been conducted, following due citation or
voluntary appearance of the defendant and under a system of jurisprudence likely to secure an
impartial administration of justice; and that there is nothing to indicate either a prejudice in court and
in the system of laws under which it is sitting or fraud in procuring the judgment. 15

A foreign judgment is presumed to be valid and binding in the country from which it comes, until a
contrary showing, on the basis of a presumption of regularity of proceedings and the giving of due
notice in the foreign forum Under Section 50(b), 16 Rule 39 of the Revised Rules of Court, which was
the governing law at the time the instant case was decided by the trial court and respondent
appellate court, a judgment, against a person, of a tribunal of a foreign country having jurisdiction to
pronounce the same is presumptive evidence of a right as between the parties and their successors
in interest by a subsequent title. The judgment may, however, be assailed by evidence of want of
jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact. In addition,
under Section 3(n), Rule 131 of the Revised Rules of Court, a court, whether in the Philippines or
elsewhere, enjoys the presumption that it was acting in the lawful exercise of its jurisdiction. Hence,
once the authenticity of the foreign judgment is proved, the party attacking a foreign judgment, is
tasked with the burden of overcoming its presumptive validity.

In the instant case, petitioner sufficiently established the existence of the money judgment of the
High Court of Malaya by the evidence it offered. Vinayak Prabhakar Pradhan, presented as
petitioner's sole witness, testified to the effect that he is in active practice of the law profession in
Malaysia;17 that he was connected with Skrine and Company as Legal Assistant up to 1981; 18 that
private respondent, then known as Construction and Development Corporation of the Philippines,
was sued by his client, Asiavest Merchant Bankers (M) Berhad, in Kuala Lumpur; 19 that the writ of
summons were served on March 17, 1983 at the registered office of private respondent and on
March 21, 1983 on Cora S. Deala, a financial planning officer of private respondent for Southeast
Asia operations;20 that upon the filing of the case, Messrs. Allen and Gledhill, Advocates and
Solicitors, with address at 24th Floor, UMBC Building, Jalan Sulaiman, Kuala Lumpur, entered their
conditional appearance for private respondent questioning the regularity of the service of the writ of
summons but subsequently withdrew the same when it realized that the writ was properly
served;21 that because private respondent failed to file a statement of defense within two (2) weeks,
petitioner filed an application for summary judgment and submitted affidavits and documentary
evidence in support of its claim;22 that the matter was then heard before the High Court of Kuala
Lumpur in a series of dates where private respondent was represented by counsel; 23 and that the
end result of all these proceedings is the judgment sought to be enforced.

In addition to the said testimonial evidence, petitioner offered the following documentary evidence:
 (a) A certified and authenticated copy of the Judgment promulgated by the Malaysian High
Court dated September 13, 1985 directing private respondent to pay petitioner the sum of
$5,108,290.23 Malaysian Ringgit plus interests from March 1983 until fully paid; 24

(b) A certified and authenticated copy of the Order dated September 13,1985 issued by the
Malaysian High Court in Civil Suit No. C638 of 1983; 25

(c) Computation of principal and interest due as of January 31, 1990 on the amount
adjudged payable to petitioner by private respondent; 26

(d) Letter and Statement of Account of petitioner's counsel in Malaysia indicating the costs
for prosecuting and implementing the Malaysian High Court's Judgment; 27

(e) Letters between petitioner's Malaysian counsel, Skrine and Co., and its local counsel,
Sycip Salazar Law Offices, relative to institution of the action in the Philippines; 28

(f) Billing Memorandum of Sycip Salazar Law Offices dated January 2, 1990 showing
attorney's fees paid by and due from petitioner; 29

(g) Statement of Claim, Writ of Summons and Affidavit of Service of such writ in petitioner's
suit against private respondent before the Malaysian High Court; 30

(h) Memorandum of Conditional Appearance dated March 28, 1983 filed by counsel for
private respondent with the Malaysian High Court; 31

(i) Summons in Chambers and Affidavit of Khaw Chay Tee, cotmsel for private respondent,
submitted during the proceedings before the Malaysian High Court; 32

(j) Record of the Court's Proceedings in Civil Case No. C638 of 1983. 33

(k) Petitioner 's verified Application for Summary Judgment dated August 14, 1984; 34 and

(l) Letter dated November 6, 1985 from petitioner's Malaysian Counsel to private
respondent's counsel in Malaysia.35

Having thus proven, through the foregoing evidence, the existence and authenticity of the foreign
judgment, said foreign judgment enjoys presumptive validity and the burden then fell upon the party
who disputes its validity, herein private respondent, to prove otherwise.

Private respondent failed to sufficiently discharge the burden that fell upon it - to prove by clear and
convincing evidence the grounds which it relied upon to prevent enforcement of the Malaysian High
Court judgment, namely, (a) that jurisdiction was not acquired by the Malaysian Court over the
person of private respondent due to alleged improper service of summons upon private respondent
and the alleged lack of authority of its counsel to appear and represent private respondent in the
suit; (b) the foreign judgment is allegedly tainted by evident collusion, fraud and clear mistake of fact
or law; and (c) not only were the requisites for enforcement or recognition allegedly not complied
with but also that the Malaysian judgment is allegedly contrary to the Constitutional prescription that
the "every decision must state the facts and law on which it is based." 36

Private respondent relied solely on the testimony of its two (2) witnesses, namely, Mr. Alfredo.
Calupitan, an accountant of private respondent, and Virginia Abelardo, Executive Secretary and a
member of the staff of the Corporate Secretariat Section of the Corporate Legal Division, of private
respondent, both of whom failed to shed light and amplify its defense or claim for non-enforcement
of the foreign judgment against it.

Mr. Calupitan's testimony centered on the following: that from January to December 1982 he was
assigned in Malaysia as Project Comptroller of the Pahang Project Package A and B for road
construction under the joint venture of private respondent and Asiavest Holdings; 37 that under the
joint venture, Asiavest Holdings would handle the financial aspect of the project, which is fifty-one
percent (51 %) while private respondent would handle the technical aspect of the project, or forty-
nine percent (49%);38 and, that Cora Deala was not authorized to receive summons for and in behalf
of the private respondent.39 Ms. Abelardo's testimony, on the other hand, focused on the following:
that there was no board resolution authorizing Allen and Gledhill to admit all the claims of petitioner
in the suit brought before the High Court of Malaya, 40 though on cross-examination she admitted that
Allen and Gledhill were the retained lawyers of private respondent in Malaysia. 41

The foregoing reasons or grounds relied upon by private respondent in preventing enforcement and
recognition of the Malaysian judgment primarily refer to matters of remedy and procedure taken by
the Malaysian High Court relative to the suit for collection initiated by petitioner. Needless to stress,
the recognition to be accorded a foreign judgment is not necessarily affected by the fact that the
procedure in the courts of the country in which such judgment was rendered differs from that of the
courts of the country in which the judgment is relied on. 42 Ultimately, matters of remedy and
procedure such as those relating to the service of summons or court process upon the defendant,
the authority of counsel to appear and represent a defendant and the formal requirements in a
decision are governed by the lex fori or the internal law of the forum, 43 i.e., the law of Malaysia in this
case.

In this case, it is the procedural law of Malaysia where the judgment was rendered that determines
the validity of the service of court process on private respondent as well as other matters raised by it.
As to what the Malaysian procedural law is, remains a question of fact, not of law. It may not be
taken judicial notice of and must be pleaded and proved like any other fact. Sections 24 and 25 of
Rule 132 of the Revised Rules of Court provide that it may be evidenced by an official publication or
by a duly attested or authenticated copy thereof. It was then incumbent upon private respondent to
present evidence as to what that Malaysian procedural law is and to show that under it, the assailed
service of summons upon a financial officer of a corporation, as alleged by it, is invalid. It did not.
Accordingly, the presumption of validity and regularity of service of summons and the decision
thereafter rendered by the High Court of Malaya must stand. 44

On the matter of alleged lack of authority of the law firm of Allen and Gledhill to represent private
respondent, not only did the private respondent's witnesses admit that the said law firm of Allen and
Gledhill were its counsels in its transactions in Malaysia, 45 but of greater significance is the fact that
petitioner offered in evidence relevant Malaysian jurisprudence 46 to the effect that (a) it is not
necessary under Malaysian law for counsel appearing before the Malaysian High Court to submit a
special power of attorney authorizing him to represent a client before said court, (b) that counsel
appearing before the Malaysian High Court has full authority to compromise the suit, and (c) that
counsel appearing before the Malaysian High Court need not comply with certain pre-requisites as
required under Philippine law to appear and compromise judgments on behalf of their clients before
said court.47

Furthermore, there is no basis for or truth to the appellate court's conclusion that the conditional
appearance of private respondent's counsel who was allegedly not authorized to appear and
represent, cannot be considered as voluntary submission to the jurisdiction of the High Court of
Malaya, inasmuch as said conditional appearance was not premised on the alleged lack of authority
of said counsel but the conditional appearance was entered to question the regularity of the service
of the writ of summons. Such conditional appearance was in fact subsequently withdrawn when
counsel realized that the writ was properly served. 48

On the ground that collusion, fraud and, clear mistake of fact and law tainted the judgment of the
High Court of Malaya, no clear evidence of the same was adduced or shown. The facts which the
trial court found "intriguing" amounted to mere conjectures and specious observations. The trial
court's finding on the absence of judgment against Asiavest-CDCP Sdn. Bhd. is contradicted by
evidence on record that recovery was also sought against Asiavest-CDCP Sdn. Bhd. but the same
was found insolvent.49 Furthermore, even when the foreign judgment is based on the drafts prepared
by counsel for the successful party, such is not per se indicative of collusion or fraud. Fraud to
hinder the enforcement within the jurisdiction of a foreign judgment must be extrinsic, i.e., fraud
based on facts not controverted or resolved in the case where judgment is rendered, 50 or that which
would go to the jurisdiction of the court or would deprive the party against whom judgment is
rendered a chance to defend the action to which he has a meritorious defense. 51 Intrinsic fraud is
one which goes to the very existence of the cause of action is deemed already adjudged, and it,
therefore, cannot militate against the recognition or enforcement of the foreign judgment. 52 Evidence
is wanting on the alleged extrinsic fraud. Hence, such unsubstantiated allegation cannot give rise to
liability therein.

Lastly, there is no merit to the argument that the foreign judgment is not enforceable in view of the
absence of any statement of facts and law upon which the award in favor of the petitioner was
based. As aforestated, the lex fori or the internal law of the forum governs matters of remedy and
procedure.53 Considering that under the procedural rules of the High Court of Malaya, a valid
judgment may be rendered even without stating in the judgment every fact and law upon which the
judgment is based, then the same must be accorded respect and the courts in the jurisdiction cannot
invalidate the judgment of the foreign court simply because our rules provide otherwise.

All in all, private respondent had the ultimate duty to demonstrate the alleged invalidity of such
foreign judgment, being the party challenging the judgment rendered by the High Court of Malaya.
But instead of doing so, private respondent merely argued, to which the trial court agreed, that the
burden lay upon petitioner to prove the validity of the money judgment. Such is clearly erroneous
and would render meaningless the presumption of validity accorded a foreign judgment were the
party seeking to enforce it be required to first establish its validity. 54

WHEREFORE, the instant petition is GRANTED. The Decision of the Court of Appeals dated May
19,1993 in CA-G.R CY No. 35871 sustaining the Decision dated October 14, 1991 in Civil Case No.
56368 of the Regional Trial Court of Pasig, Branch 168 denying the enforcement of the Judgment
dated September 13, 1985 of the High Court of Malaya in Kuala Lumpur is REVERSED and SET
ASIDE, and another in its stead is hereby rendered ORDERING private respondent Philippine
National Construction Corporation to pay petitioner Asiavest Merchant Bankers (M) Berhad the
amounts adjudged in the said foreign Judgment, subject of the said case.

Costs against the private respondent.

SO ORDERED.

#4

[G.R. No. 185145. February 5, 2014.]

 SPOUSES VICENTE AFULUGENCIA and LETICIA
AFULUGENCIA, petitioners, vs. METROPOLITAN BANK &
TRUST CO. and EMMANUEL L. ORTEGA, Clerk of Court,
Regional Trial Court and Ex-Officio Sheriff, Province of
Bulacan, respondents.

DECISION

DEL CASTILLO, J  : p

Section 6, 1 Rule 25 of the Rules of Court (Rules) provides that "a party not

served with written interrogatories may not be compelled by the adverse party to
give testimony in open court, or to give a deposition pending appeal." The
provision seeks to prevent fishing expeditions and needless delays. Its goal is to
maintain order and facilitate the conduct of trial.
Assailed in this Petition for Review on Certiorari  2 are the April 15, 2008
Decision 3 of the Court of Appeals (CA) in CA-G.R. SP No. 99535 which
dismissed petitioners' Petition for Certiorari for lack of merit and its October 2,
2008 Resolution 4 denying petitioners' Motion for Reconsideration. 5

Factual Antecedents

Petitioners, spouses Vicente and Leticia Afulugencia, filed a

Complaint 6 for nullification of mortgage, foreclosure, auction sale, certificate of
sale and other documents, with damages, against respondents Metropolitan
Bank & Trust Co. (Metrobank) and Emmanuel L. Ortega (Ortega) before the
Regional Trial Court (RTC) of Malolos City, where it was docketed as Civil Case
No. 336-M-2004 and assigned to Branch 7.
Metrobank is a domestic banking corporation existing under Philippine
laws, while Ortega is the Clerk of Court and Ex-officio Sheriff of the Malolos
RTC.
After the filing of the parties' pleadings and with the conclusion of pre-trial,
petitioners filed a Motion for Issuance of Subpoena Duces Tecum Ad
Testificandum  7 to require Metrobank's officers 8 to appear and testify as the
petitioners' initial witnesses during the August 31, 2006 hearing for the
presentation of their evidence-in-chief, and to bring the documents relative to
their loan with Metrobank, as well as those covering the extrajudicial foreclosure
and sale of petitioners' 200-square meter land in Meycauayan, Bulacan covered
by Transfer Certificate of Title No. 20411 (M). The Motion contained a notice of
hearing written as follows: 
aIDHET

NOTICE
The Branch Clerk of Court
Regional Trial Court
Branch 7, Malolos, Bulacan
Greetings:
Please submit the foregoing motion for the consideration and
approval of the Hon. Court immediately upon receipt hereof.
(signed)
Vicente C. Angeles 9
Metrobank filed an Opposition 10 arguing that for lack of a proper notice of
hearing, the Motion must be denied; that being a litigated motion, the failure of
petitioners to set a date and time for the hearing renders the Motion ineffective
and pro forma; that pursuant to Sections 1 and 6 11 of Rule 25 of the Rules,
Metrobank's officers — who are considered adverse parties — may not be
compelled to appear and testify in court for the petitioners since they were not
initially served with written interrogatories; that petitioners have not shown the
materiality and relevance of the documents sought to be produced in court; and
that petitioners were merely fishing for evidence.
Petitioners submitted a Reply 12 to Metrobank's Opposition, stating that the
lack of a proper notice of hearing was cured by the filing of Metrobank's
Opposition; that applying the principle of liberality, the defect may be ignored;
that leave of court is not necessary for the taking of Metrobank's officers'
depositions; that for their case, the issuance of a subpoena is not unreasonable
and oppressive, but instead favorable to Metrobank, since it will present the
testimony of these officers just the same during the presentation of its own
evidence; that the documents sought to be produced are relevant and will prove
whether petitioners have paid their obligations to Metrobank in full, and will settle
the issue relative to the validity or invalidity of the foreclosure proceedings; and
that the Rules do not prohibit a party from presenting the adverse party as its
own witness.

Ruling of the Regional Trial Court

On October 19, 2006, the trial court issued an Order 13 denying petitioners'

Motion for Issuance of Subpoena Duces Tecum Ad Testificandum, thus:
The motion lacks merit.
 As pointed out by the defendant bank in its opposition, the motion
under consideration is a mere scrap of paper by reason of its failure to
comply with the requirements for a valid notice of hearing as specified in
Sections 4 and 5 of Rule 15 of the Revised Rules of Court. Moreover,
the defendant bank and its officers are adverse parties who cannot be
summoned to testify unless written interrogatories are first served upon
them, as provided in Sections 1 and 6, Rule 25 of the Revised Rules of
Court.
Which provide, thus:
In view of the foregoing, and for lack of merit, the motion under
consideration is hereby DENIED.
SO ORDERED. 14
Petitioners filed a Motion for Reconsideration 15 pleading for leniency in the
application of the Rules and claiming that the defective notice was cured by the
filing of Metrobank's Opposition, which they claim is tantamount to notice. They
further argued that Metrobank's officers — who are the subject of the subpoena
— are not party-defendants, and thus do not comprise the adverse party; they
are individuals separate and distinct from Metrobank, the defendant corporation
being sued in the case.
In an Opposition 16 to the Motion for Reconsideration, Metrobank insisted
on the procedural defect of improper notice of hearing, arguing that the rule
relative to motions and the requirement of a valid notice of hearing are
mandatory and must be strictly observed. It added that the same rigid treatment
must be accorded to Rule 25, in that none of its officers may be summoned to
testify for petitioners unless written interrogatories are first served upon them.
Finally, it said that since a corporation may act only through its officers and
employees, they are to be considered as adverse parties in a case against the
corporation itself.
In another Order 17 dated April 17, 2007, the trial court denied petitioners'
Motion for Reconsideration. The trial court held, thus:
Even if the motion is given consideration by relaxing Sections 4
and 5, Rule 15 of the Rules of Court, no such laxity could be accorded to
Sections 1 and 6 of Rule 25 of the Revised Rules of Court  which require
prior service of written interrogatories to adverse parties before any
material and relevant facts may be elicited from them more so if the
party is a private corporation who could be represented by its officers as
in this case. In other words, as the persons sought to be subpoenaed by
the plaintiffs-movants are officers of the defendant bank, they are in
effect the very persons who represent the interest of the latter and
necessarily fall within the coverage of Sections 1 and 6, Rule 25 of
the Revised Rules of Court.  cDTaSH
 In view of the foregoing, the motion for reconsideration is hereby
denied.
SO ORDERED. 18

Ruling of the Court of Appeals

Petitioners filed a Petition for Certiorari  19 with the CA asserting this time

that their Motion for Issuance of Subpoena Duces Tecum Ad Testificandum is
not a litigated motion; it does not seek relief, but aims for the issuance of a mere
process. For these reasons, the Motion need not be heard. They likewise insisted
on liberality, and the disposition of the case on its merits and not on mere
technicalities. 20 They added that Rule 21 21 of the Rules requires prior notice
and hearing only with respect to the taking of depositions; since their Motion
sought to require Metrobank's officers to appear and testify in court and not to
obtain their depositions, the requirement of notice and hearing may be dispensed
with. Finally, petitioners claimed that the Rules — particularly Section 10, 22 Rule
132 — do not prohibit a party from presenting the adverse party as its own
witness.
On April 15, 2008, the CA issued the questioned Decision, which
contained the following decretal portion:
WHEREFORE, the petition is DISMISSED for lack of merit. The
assailed orders dated October 19, 2006 and April 17, 2007 in Civil Case
No. 336-M-2004 issued by the RTC, Branch 7, Malolos City, Bulacan,
are AFFIRMED. Costs against petitioners.
SO ORDERED. 23
The CA held that the trial court did not commit grave abuse of discretion in
issuing the assailed Orders; petitioners' Motion is a litigated motion, especially as
it seeks to require the adverse party, Metrobank's officers, to appear and testify
in court as petitioners' witnesses. It held that a proper notice of hearing,
addressed to the parties and specifying the date and time of the hearing, was
required, consistent with Sections 4 and 5, 24 Rule 15 of the Rules.
The CA held further that the trial court did not err in denying petitioners'
Motion to secure a subpoena duces tecum/ad testificandum, ratiocinating that
Rule 25 is quite clear in providing that the consequence of a party's failure to
serve written interrogatories upon the opposing party is that the latter may not be
compelled by the former to testify in court or to render a deposition pending
appeal. By failing to serve written interrogatories upon Metrobank, petitioners
foreclosed their right to present the bank's officers as their witnesses.
The CA declared that the justification for the rule laid down in Section 6 is
that by failing to seize the opportunity to inquire upon the facts through means
available under the Rules, petitioners should not be allowed to later on burden
Metrobank with court hearings or other processes. Thus, it held:
. . . Where a party unjustifiedly refuses to elicit facts material and
relevant to his case by addressing written interrogatories to the adverse
party to elicit those facts, the latter may not thereafter be compelled to
testify thereon in court or give a deposition pending appeal. The
justification for this is that the party in need of said facts having foregone
the opportunity to inquire into the same from the other party through
means available to him, he should not thereafter be permitted to unduly
burden the latter with courtroom appearances or other cumbersome
processes. The sanction adopted by the Rules is not one of compulsion
in the sense that the party is being directly compelled to avail of the
discovery mechanics, but one of negation by depriving him of evidentiary
sources which would otherwise have been accessible to him. 25  EcAISC

Petitioners filed their Motion for Reconsideration, 26 which the CA denied in

its assailed October 2, 2008 Resolution. Hence, the present Petition.

Issues

Petitioners now raise the following issues for resolution:

I
THE COURT OF APPEALS COMMITTED REVERSIBLE ERRORS IN
REQUIRING NOTICE AND HEARING (SECS. 4 AND 5, RULE
15, RULES OF COURT) FOR A MERE MOTION FOR SUBPOENA OF
RESPONDENT BANK'S OFFICERS WHEN SUCH REQUIREMENTS
APPLY ONLY TO DEPOSITION UNDER SEC. 6, RULE 25, RULES OF
COURT.
II
THE COURT OF APPEALS COMMITTED (REVERSIBLE) ERROR IN
HOLDING THAT THE PETITIONERS MUST FIRST SERVE WRITTEN
INTERROGATORIES TO RESPONDENT BANK'S OFFICERS BEFORE
THEY CAN BE SUBPOENAED. 27

Petitioners' Arguments

Praying that the assailed CA dispositions be set aside and that the Court
allow the issuance of the subpoena duces tecum/ad testificandum, petitioners
assert that the questioned Motion is not a litigated motion, since it seeks not a
relief, but the issuance of process. They insist that a motion which is subject to
notice and hearing under Sections 4 and 5 of Rule 15 is an application for relief
other than a pleading; since no relief is sought but just the process of subpoena,
the hearing and notice requirements may be done away with. They cite the case
of Adorio v. Hon. Bersamin,  28 which held that —
Requests by a party for the issuance of subpoenas do not require
notice to other parties to the action. No violation of due process results
by such lack of notice since the other parties would have ample
opportunity to examine the witnesses and documents subpoenaed once
they are presented in court. 29 
TAIDHa

Petitioners add that the Rules should have been liberally construed in their
favor, and that Metrobank's filing of its Opposition be considered to have cured
whatever defect the Motion suffered from.
Petitioners likewise persist in the view that Metrobank's officers — the
subject of the Motion — do not comprise the adverse party covered by the rule;
they insist that these bank officers are mere employees of the bank who may be
called to testify for them.

Respondents' Arguments

Metrobank essentially argues in its Comment 30 that the subject Motion for

the issuance of a subpoena duces tecum/ad testificandum is a litigated motion,
especially as it is directed toward its officers, whose testimony and documentary
evidence would affect it as the adverse party in the civil case. Thus, the lack of a
proper notice of hearing renders it useless and a mere scrap of paper. It adds
that being its officers, the persons sought to be called to the stand are
themselves adverse parties who may not be compelled to testify in the absence
of prior written interrogatories; they are not ordinary witnesses whose presence
in court may be required by petitioners at any time and for any reason.
Finally, Metrobank insists on the correctness of the CA Decision, adding
that since petitioners failed up to this time to pay the witnesses' fees and
kilometrage as required by the Rules, 31 the issuance of a subpoena should be
denied.

Our Ruling

The Court denies the Petition.

On the procedural issue, it is quite clear that Metrobank was notified of the
Motion for Issuance of Subpoena Duces Tecum Ad Testificandum; in fact, it filed
a timely Opposition thereto. The technical defect of lack of notice of hearing was
thus cured by the filing of the Opposition. 32
Nonetheless, contrary to petitioners' submission, the case
of Adorio cannot apply squarely to this case. In Adorio, the request for
subpoena duces tecum was sought against bank officials who were not parties
to the criminal case for violation of Batas Pambansa Blg. 22. The situation is
different here, as officers of the adverse party Metrobank are being compelled to
testify as the calling party's main witnesses; likewise, they are tasked to bring
with them documents which shall comprise the petitioners' principal evidence.
This is not without significant consequences that affect the interests of the
adverse party, as will be shown below.  TaCDcE

As a rule, in civil cases, the procedure of calling the adverse party to the
witness stand is not allowed, unless written interrogatories are first served upon
the latter. This is embodied in Section 6, Rule 25 of the Rules, which provides —
Sec. 6.   Effect of failure to serve written interrogatories. —
Unless thereafter allowed by the court for good cause shown and
to prevent a failure of justice, a party not served with written
interrogatories may not be compelled by the adverse party to give
testimony in open court, or to give a deposition pending appeal.
One of the purposes of the above rule is to prevent fishing expeditions and
needless delays; it is there to maintain order and facilitate the conduct of trial. It
will be presumed that a party who does not serve written interrogatories on the
adverse party beforehand will most likely be unable to elicit facts useful to its
case if it later opts to call the adverse party to the witness stand as its witness.
Instead, the process could be treated as a fishing expedition or an attempt at
delaying the proceedings; it produces no significant result that a prior written
interrogatories might bring.
Besides, since the calling party is deemed bound by the adverse party's
testimony, 33 compelling the adverse party to take the witness stand may result in
the calling party damaging its own case. Otherwise stated, if a party cannot elicit
facts or information useful to its case through the facility of written interrogatories
or other mode of discovery, then the calling of the adverse party to the witness
stand could only serve to weaken its own case as a result of the calling party's
being bound by the adverse party's testimony, which may only be worthless and
instead detrimental to the calling party's cause.
Another reason for the rule is that by requiring prior written interrogatories,
the court may limit the inquiry to what is relevant, and thus prevent the calling
party from straying or harassing the adverse party when it takes the latter to the
stand.
Thus, the rule not only protects the adverse party from unwarranted
surprises or harassment; it likewise prevents the calling party from conducting a
fishing expedition or bungling its own case. Using its own judgment and
discretion, the court can hold its own in resolving a dispute, and need not bear
witness to the parties perpetrating unfair court practices such as fishing for
evidence, badgering, or altogether ruining their own cases. Ultimately, such
unnecessary processes can only constitute a waste of the court's precious time,
if not pointless entertainment. 
cHDAIS

In the present case, petitioners seek to call Metrobank's officers to the

witness stand as their initial and main witnesses, and to present documents in
Metrobank's possession as part of their principal documentary evidence. This is
improper. Petitioners may not be allowed, at the incipient phase of the
presentation of their evidence-in-chief at that, to present Metrobank's officers —
who are considered adverse parties as well, based on the principle that
corporations act only through their officers and duly authorized agents 34 — as
their main witnesses; nor may they be allowed to gain access to Metrobank's
documentary evidence for the purpose of making it their own. This is tantamount
to building their whole case from the evidence of their opponent. The burden of
proof and evidence falls on petitioners, not on Metrobank; if petitioners cannot
prove their claim using their own evidence, then the adverse party Metrobank
may not be pressured to hang itself from its own defense.
It is true that under the Rules, a party may, for good cause shown and to
prevent a failure of justice, be compelled to give testimony in court by the
adverse party who has not served written interrogatories. But what petitioners
seek goes against the very principles of justice and fair play; they would want
that Metrobank provide the very evidence with which to prosecute and build their
case from the start. This they may not be allowed to do.
Finally, the Court may not turn a blind eye to the possible consequences of
such a move by petitioners. As one of their causes of action in their Complaint,
petitioners claim that they were not furnished with specific documents relative to
their loan agreement with Metrobank at the time they obtained the loan and while
it was outstanding. If Metrobank were to willingly provide petitioners with these
documents even before petitioners can present evidence to show that indeed
they were never furnished the same, any inferences generated from this would
certainly not be useful for Metrobank. One may be that by providing petitioners
with these documents, Metrobank would be admitting that indeed, it did not
furnish petitioners with these documents prior to the signing of the loan
agreement, and while the loan was outstanding, in violation of the law.
With the view taken of the case, the Court finds it unnecessary to further
address the other issues raised by the parties, which are irrelevant and would not
materially alter the conclusions arrived at.
WHEREFORE, the Petition is DENIED. The assailed April 15, 2008
Decision and October 2, 2008 Resolution of the Court of Appeals in CA-G.R. SP
No. 99535 are AFFIRMED.
SO ORDERED.
  (Spouses Afulugencia v. Metropolitan Bank and Trust Co., G.R. No. 185145,
|||

[February 5, 2014], 726 PHIL 196-212)

#5

G.R. No. 179161               January 22, 2010

PHILIPPINE NATIONAL BANK, Petitioner,

vs.
DKS INTERNATIONAL, INC. Respondents.

DECISION

DEL CASTILLO, J.:

Considering that the sub-lessee which was ordered by the court to surrender possession of the
disputed property in a case for forcible entry no longer possessed the same, having already
surrendered possession thereof to the lessor and not to the prevailing party which is the lessee, the
Regional Trial Court (RTC) recalled the Writ of Execution with Break Open it earlier issued. The
question which now confronts this Court is: Was the recall proper?

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the
Decision1 dated March 16, 2007 of the Court of Appeals (CA) in CA-G.R. SP No. 88098 which
denied petitioner’s Petition for Certiorari2 as well as the Resolution3 dated August 6, 2007 which
likewise denied its Motion for Reconsideration thereto.

Factual Antecedents

On June 9, 1978, the Philippine Government (through the now defunct Department of General
Services) and petitioner Philippine National Bank (PNB) entered into a Contract of Lease 4 where the
former leased in favor of the latter its 21,727-square meter land located at Numancia St., Binondo,
Manila. The contract was effective from August 1, 1978 to July 31, 2003 and renewable for a similar
period upon agreement of the parties. It also stipulated that except for its subsidiary corporations,
petitioner shall not directly or indirectly sublease, assign or encumber its leasehold rights in whole or
in part on the leased area to any person or corporation without the prior written approval of the
government.5

On October 12, 2000, respondent DKS International Inc. (DKS) applied for the sublease of a 9,500-
square meter portion of the aforesaid property with petitioner. In a letter 6 dated February 1, 2001,
petitioner informed Mr. Andres S. Dy (Dy) of DKS that petitioner’s Executive Committee had already
approved the amendments on the terms and conditions of the sublease. In another letter 7 dated
March 5, 2001, petitioner advised Dy that it was ready to turn over possession of said property and
required him to remit not later than March 15, 2001 the amount of ₱400,000.00 representing two
months security deposit. However, the Land Management Bureau (LMB) 8 denied on August 31,
2001 and December 5, 2001 petitioner’s request to sublease said portion of the property to
DKS.9 Hence, the sublease was not implemented.

Prior to DKS’ application for sublease, petitioner signified its intention to renew the lease for another
25 years through a letter dated August 24, 2000 to the LMB as the original lease was about to
expire. In a Memorandum dated May 6, 2002, then Secretary Heherson Alvarez (Sec. Alvarez) of
the Department of Environment and Natural Resources (DENR) approved the recommendation of
the LMB to renew the contract of lease for another 25 years effective August 1, 2003 or until August
1, 2028 with several conditions on the sublease, among which were: (1) that petitioner shall
sublease the 9,500-square meter area in favor of DKS for the same period of 25 years and, (2) that
DKS shall start its development of the portion of the property within two years from May 6, 2002 and
complete its development as proposed within seven years.10

On August 6, 2002, however, Sec. Alvarez ordered the recall of his May 6, 2002 Memorandum until
such time that the terms and conditions of the lease and the capability of the sub-lessees are re-
evaluated and approved.11 1avvphi1

Petitioner alleged that during the period recited above, it was in continuous and peaceful possession
of the property including the subject 9,500-square meter portion which it operated as a car park until
DKS, through force, intimidation, stealth and threat, forcibly and unlawfully took over possession on
October 9, 2002.

According to petitioner, Dy and two men in civilian clothes arrived at the car park at around 6:30 p.m.
on October 9, 2002. When the three requested the security guard on duty to let them enter the
premises, the latter initially refused but was eventually prevailed upon. Dy thereafter instructed the
two men to wear their complete security guard uniform and start their tour of duty in the area. The
two, thus, respectively positioned themselves inside and outside the gate of the area and prevented
the paying car park tenants from entering the premises. Two days later, 12 more security personnel
from the Frontliner Security Agency arrived. The following day, the Operations Officer of Frontliner
Security Agency posted at the car park’s main gate a notice which read, "This place is operated by
DKS, No trespassing". From then on, DKS had possession and control of the car park in violation of
petitioner’s right as lessee of said premises. 12

Hence, petitioner filed a case for forcible entry against DKS and Dy docketed as Civil Case No.
174024 which was raffled to the Metropolitan Trial Court (MeTC) of Manila, Branch 27. 13

While said case was pending, the DENR came up with a Final Endorsement 14 signed by Sec.
Alvarez on November 29, 2002, informing petitioner’s president, Lorenzo V. Tan, of the DENR’s
approval of petitioner’s request for renewal of the lease contract. In said endorsement, the DENR
endorsed three sub-lessees excluding DKS.

Finding in favor of petitioner, the MeTC rendered its Decision 15 dated August 20, 2003 in this wise:

WHEREFORE, judgment is hereby rendered ordering defendants DKS International, Inc., Michael
Dy and all persons claiming rights and interest under them:

1. To vacate the property covering 9,500 square meters located at Numancia Street,
Binondo, Manila, specifically designated as Lot No. 1, Block 1862 of the Manila Cadastre No.
13 and peacefully surrender possession thereof to plaintiff PNB;

2. To pay plaintiff PNB reasonable compensation in the amount of ₱200,000.00 per month
starting October 2002, until completely vacated and fully surrendered;

3. To pay attorney’s fees fixed in the reasonable amount of P10,000.00; and,

4. To pay the costs of the suit.

SO ORDERED.16

Upon motion17 of petitioner, the MeTC issued a Writ of Execution18 dated October 3, 2003 which,
however, was not implemented because of the timely appeal of respondents to the RTC.

On March 10, 2004, the RTC-Manila, Branch 40 rendered its Decision 19 affirming the Decision of the
MeTC and ordering the issuance of a writ of execution with break open order, viz:

WHEREFORE, the Decision, dated August 20, 2003, is AFFIRMED. Let the writ of execution be
issued without prejudice to an appeal that may be taken by defendants-appellants. Likewise, let a
break open order be issued authorizing this Court’s Sheriff to break open the gate or any other
facility for the ingress [to] and/or egress [from] of the subject premises and to employ all necessary
means to carry out the writ of execution. The Branch Sheriff is authorized to secure the assistance
and/or to deputize the Philippine National Police (PNP) in order to ensure effective enforcement of
the Writ of Execution.

SO ORDERED.20

Accordingly, a Writ of Execution with Break Open Order was issued on March 29, 2004. 21

On March 30, 2004, respondents appealed to the CA by way of Petition for Review which was
docketed as CA-G.R. SP No. 83129.

Meanwhile, before the Writ of Execution with Break Open Order could be implemented, respondents
filed before the RTC an Urgent Motion to Recall Writ and the Command to Sheriff With
Comment22 alleging that during the previous hearings of the case, they have proven that petitioner
filed a Complaint for Injunction with prayer for the issuance of a Temporary Restraining Order/Writ of
Preliminary Injunction and Damages23 against the government, docketed as Civil Case No. 03-0368-
CFM and raffled to Branch 118 of RTC-Pasay City (Pasay case). Apparently, the Final Endorsement
approving petitioner’s request for renewal of lease contract earlier issued by Sec. Alvarez was
withdrawn by his successor, Sec. Elisea G. Gozun (Sec. Gozun), on grounds that same was
contrary to law and public policy and that the issuance thereof was without factual and legal
bases.24 In view of said withdrawal, a repossession and take-over team was created by virtue of LMB
Special Order No. 2003-91.25 In a Memorandum dated May 27, 2003, Sec. Gozun directed the LMB
to immediately repossess and take over the subject property upon the expiration of the lease on July
31, 2003 thus, prompting petitioner to file the Pasay case. Unfortunately for petitioner, its application
for TRO was denied by said court.26

Respondents further alleged that when the RTC Pasay’s denial of the TRO was affirmed by the CA
in its Decision27 dated October 30, 2003 in a petition for certiorari docketed as CA-G.R. SP No.
78980, the government had taken over the premises by August 31, 2003. Thus, respondents
manifested that they cannot anymore surrender possession of the premises to petitioner as they are
no longer in possession thereof.

The government, through the LMB, also filed an Urgent Motion for Leave to Intervene on the Incident
Involving the Enforcement of the Writ of Execution and to Treat this Motion as The Intervention. 28 It
manifested therein that although it has nothing to do with the ejectment case, it vehemently objects
to the notice of the sheriff, particularly on the matter of surrendering possession of the premises to
petitioner. It pointed out that since the government was already in possession of the premises
following petitioner’s loss of any right of possession therein, it will be an abuse of discretion on the
part of the court to order that the property be taken from the government and to have the same
delivered to petitioner, under the guise of enforcing a writ of execution in the ejectment case. LMB
likewise sought permission to intervene in the incident involving the enforcement of the writ.

To these two motions, petitioner filed an Opposition with Manifestation 29 asserting that the two
motions are both pro forma, patently unmeritorious and serve no other purpose but to unduly delay
the implementation of the Writ of Execution and therefore, should be denied.

The RTC did not find merit in LMB’s prayer to intervene in the issue of the implementation of the writ.
In its Order30 dated July 14, 2004, it held that (1) the government’s intervention will unduly delay the
mandated immediate execution of the decision in the ejectment case to the prejudice of petitioner;
(2) the government’s rights may still be fully protected in a separate proceeding (particularly in the
Pasay case); and, (3) the intervention preempts the decision in the Pasay case. The RTC also did
not give credence to the claim of LMB that the government was already in possession of the
property subject of the writ of execution saying that same was a mere general claim. Said court,
thus, accordingly denied the two motions for lack of merit and again ordered the Branch Sheriff of
the MeTC to immediately implement the Writ of Execution with Break Open Order it earlier issued.

Upon motion for reconsideration of the government however, the RTC recalled the Writ of Execution
with Break Open Order. It considered the Sheriff’s Partial Return dated May 5, 2004 signed by the
Deputy Sheriff of MeTC-Manila, Br. 27, which reads:

This is to certify that on May 5, 2004 at around 10:50 in the morning, after the lapse of (the) five (5)-
day period given by the undersigned to the Defendants to voluntarily vacate the place which they
failed to do so, the undersigned, together with the representative of the Philippine National Bank,
assisted by police officers, went back [to] the premises in question at Numancia St., Binondo, Manila
to implement the Writ of Execution with a Break Open Order issued by Hon. Placido C. Marquez.
Thereat, Mr. Matusalem Ruperto, Commander of Sphinx Security Investigation and Detective
Services informed us that DKS has already turned over the premises to Land Management Bureau.
Mr. Matusalem Ruperto further informed the undersigned that Judge Marquez issued an order
[preventing us] from implementing the Writ. Our attention was caught by the phrase posted in the
premises that the same is government property. And upon further inquiry, said property is already
guarded by Sphinx Security Investigation and Detective Services.31

Thus, the RTC issued the Order dated July 29, 2004, 32 the pertinent portions of which read:

Considering that Land Management Bureau is now in physical possession of the subject property
and not defendants-appellants DKS International Inc. and Michael Dy, it would be a blunt error for
this Court to order the transfer of the physical possession of the government which is admittedly the
owner of the subject property to plaintiff-appellee Philippine National Bank. The [W]rit of [E]xecution
with [B]reak [O]pen [Order] dated March 29, 2001 issued by this Court can no longer be
implemented and the same must be recalled. The Sheriff is ordered to desist from implementing the
same. This renders movant Republic’s reply (to plaintiff-appellee’s opposition with manifestation
dated April 30, 2004) dated June 1, 2004, with attached verification and certificate against forum
shopping, with prayer that LMB’S urgent motion for leave to intervene etc., dated April 28, 2004 and
related pleadings moot and academic.

On the question of damages or monetary judgment referred to in the Writ of Execution with [B]reak
[O]pen [Order], dated March 29, 2004, plaintiff-appellee and defendants-appellants, thru counsel,
agreed that same should be left [for resolution to] the Honorable Court of Appeals which has taken
jurisdiction over the same.
WHEREFORE, in view of the foregoing, the Writ of Execution with [B]reak [O]pen [Order], dated
March 29, 2004, is recalled and the Deputy Sheriff of the Metropolitan Trial Court of Manila, Br. 27,
is directed to desist from implementing the same. The question of damages or monetary judgment
earlier referred to in this Order is left for resolution by the Honorable Court of Appeals. Consistent
with this Order, movant Republic’s reply (to plaintiff-appellee’s opposition with manifestation dated
April 30, 2004) dated June 1, 2004, and related pleadings, are now moot and academic.

SO ORDERED.

Expectedly, petitioner filed a motion for reconsideration33 of said Order but

said motion was denied in an Order dated October 18, 2004. 34

Hence, petitioner filed a Petition for Certiorari before the CA docketed as CA-G.R. SP No. 88098
imputing grave abuse of discretion amounting to lack of or in excess of jurisdiction on the part of the
RTC in recalling the writ of execution with break open order.

In the meantime, the CA rendered its Decision35 in CA-G.R. SP No. 83129 on June 28, 2005 denying
the petition and affirming in toto the Decision of the RTC in the forcible entry case. In said Decision,
the CA declared that the issue of the expiration of the lease and the take over of the property by the
government will not prevent the execution of the decision pending appeal, it being a basic rule that
decisions against the defendants in ejectment cases are immediately executory. 36 Respondents’
appeal37 from said Decision was denied by this Court in a Resolution dated December 12, 2005 and
same has attained finality on March 23, 2006. 38

On March 16, 2007, the CA promulgated its Decision39 in CA-G.R. SP No. 88098 denying the petition
for lack of merit. It ruled that the RTC committed no grave abuse of discretion amounting to lack of or
in excess of jurisdiction when it recalled the writ of execution with break open order. It held that the
expiration of the lease contract between petitioner and the government and the latter’s take-over
and/or repossession of the premises from respondents were supervening events.

Petitioner filed a Motion for Reconsideration but it was denied through a Resolution dated August 6,
2007.

Hence, this petition.

Issues

In this Petition for Review on Certiorari, petitioner raises the following issues:

THE COURT OF APPEALS RENDERED ITS ASSAILED DECISION DATED MARCH 16, 2007 AND
RESOLUTION DATED AUGUST 6, 2007 NOT IN ACCORD WITH LAW OR APPLICABLE
JURISPRUDENCE, MORE SPECIFICALLY:

(i) In passing upon an issue not submitted to it for resolution;

(ii) In declaring that petitioner PNB has no right of possession over the subject property;

(iii) In disregarding the uncontroverted findings of facts and the unassailed Decision of the
Metropolitan Trial Court of Manila, Branch 27 in Civil Case No. 174024-CV, which was later
affirmed by the Regional Trial Court of Manila, Branch 40 in Civil Case No. 03-108416; and
 (iv) In allowing the stay of the execution and recall of the break open order even in the
absence of the required supersedeas bond.40

Petitioner’s Arguments

In its assailed Decision, the CA made the following pronouncement:

It is undisputed that the property in dispute is owned by the Republic of the Philippines and that
PNB’s lease having expired on 31 July 2003, there being no renewal of the lease, the latter has no
right of possession over the subject property. As such, the right of possession of the subject property
belongs to the Republic of the Philippines, acting through the DENR and the LMB. 41

By the above-quoted portion of the CA Decision, petitioner claims that said court sweepingly ruled
on the issue of ownership and on the basis thereof granted possession of the disputed property to
the government. Petitioner contends that as the petition is an offshoot of a forcible entry case, the
CA should not have discussed the issue of ownership, because the only question that courts must
resolve in ejectment proceedings is who is entitled to the physical possession of the premises.
Petitioner further imputes error on the part of the CA when it passed upon the issue of the expiration
of the lease contract, which petitioner claims to be irrelevant to this case and is already subject of a
full-blown trial in RTC-Pasay.

Respondents’ Arguments

On the other hand, respondents posit that the CA must necessarily take notice of the facts that the
government is the owner of the subject property, that it is now in possession of the same and that
the lease contract between the government and the petitioner has already expired, since these same
facts constitute the supervening events which rendered the writ of execution with break open moot
and academic.

Our Ruling

The petition lacks merit.

It is well to remind petitioner that the sole issue raised before the CA in CA-G.R. SP No. 88098, is
whether or not the RTC gravely abused its discretion amounting to lack of or in excess of jurisdiction
when it recalled the writ of execution with break open order.

By grave abuse of discretion is meant such capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction.42 The abuse of discretion must be grave as where the power is
exercised in an arbitrary or despotic manner by reason of passion or personal hostility and must be
so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the
duty enjoined by or to act at all in contemplation of law.43 Grave abuse of discretion refers not merely
to palpable errors of jurisdiction or to violations of the Constitution, the law and jurisprudence. 44 It
refers also to cases in which, for various reasons, there has been gross misapprehension of facts. 45

We find that the CA correctly took notice of the government’s take-over and repossession of the
subject property, as these are the very same facts which the RTC considered to be the reasons why
the writ of execution with break open order it earlier issued cannot anymore be implemented.
Without discussing these issues, the CA would not be able to make a determination whether the
recall of the writ of execution was proper under the circumstances. Such an assessment is
imperative because the resolution of the issue of whether or not the RTC committed grave abuse of
discretion hinges on it.

However, we deem it proper to pronounce to be without binding effect the pronouncement of the CA
that there was no renewal of the lease contract between the government and petitioner. The
authority of the CA was confined only to ruling upon the issue of whether or not the RTC committed
grave abuse of discretion in issuing the order recalling the writ of execution. The determination of
whether there was a renewal or non-renewal of the contract of lease between petitioner and the
government is beyond the competence of the CA to pass upon, since it is already the subject of
litigation in the Pasay case. In fact, petitioner, in its Reply, 46 alleges that a Decision has already been
rendered in the Pasay case on August 29, 2008 wherein it was held that the Contract of Lease
between petitioner and the government has been validly and effectively renewed on July 31, 2003
for another period of 25 years. Thus, to avoid any confusion on the matter, we should defer to the
decision of the RTC in the Pasay case with respect to the issue of the renewal of the contract of
lease between the government and herein petitioner, without prejudice to the outcome of any appeal
in relation to said case.

This, notwithstanding a review of the record, nevertheless shows that the CA was correct in holding
that the RTC did not commit grave abuse of discretion or act in excess of its jurisdiction in issuing
the order which recalled the writ of execution with break open order.

By virtue of the Decisions of the MeTC and the RTC which both ruled in favor of petitioner in the
subject forcible entry case, petitioner was indeed, as a matter of right, entitled to a writ of execution
pursuant to Sec. 21, Rule 70 of the Rules of Court. 47 Thus, the RTC ordered the issuance of a writ of
execution with break open in the dispositive portion of its March 10, 2004 Decision. But before said
writ could be implemented, inescapable material facts and circumstances were brought to the
attention of the RTC. The respondents had already surrendered possession of the subject premises
to the government. Clearly, the portion of the Decision ordering respondents to vacate the subject
property and peacefully surrender possession thereof to petitioner has become impossible to
implement. For how can respondents surrender possession of the premises when they were no
longer in possession? And, as correctly observed by the RTC, it would be a misstep if the
government which is admittedly the owner of the subject property and which was not a party to the
ejectment case, would be ordered to vacate the same in order that possession thereof may be
delivered to petitioner. We thus hold that under these circumstances, the recall of the writ of
execution with break open order was warranted.

It is well to emphasize for purposes of clarity, however, that the portion of the Decision that has
become impossible to implement is only that portion respecting the order to vacate and surrender
possession of the property. Conversely, the portions which provide for the payment of reasonable
compensation and attorney’s fees in favor of petitioner remain enforceable. We note that this was
perceived by the parties themselves but they nevertheless agreed that the issue on the monetary
award be left to the discretion of the CA as shown by the following portions of the RTC’s July 29,
2004 Order:

On the question of damages or monetary judgment referred to in the Writ of Execution with
break open, dated March 29, 2004, plaintiff-appellee and defendants-appellants, thru counsel,
agreed that same should be left [for resolution to] the Honorable Court of Appeals which has
taken jurisdiction over the same.

WHEREFORE, in view of the foregoing, the Writ of Execution with [B]reak [O]pen [Order], dated
March 29, 2004, is recalled and the Deputy Sheriff of the Metropolitan Trial Court of Manila, Br. 27,
is directed to desist from implementing the same. The question of damages or monetary
judgment earlier referred to in this Order is left for resolution [to] the Honorable Court of
Appeals. Consistent with this Order, movant Republic’s reply (to plaintiff-appellee’s opposition with
manifestation dated April 30, 2004) dated June 1, 2004, and related pleadings, are now moot and
academic.

And, in view of the finality of the Decision of the CA in CA-G.R. SP No. 83129 which as earlier
stated, affirmed the Decision of the RTC, it is now up to petitioner to seek the execution of the
portion of the Decision respecting the monetary awards in the main case, if same has not yet been
enforced.

Petitioner next contends that the writ of execution with break open order was abruptly recalled
without respondents complying with the mandatory requirements of Sec. 19, Rule 70 of the Rules of
Court. Petitioner stresses that in order to stay the immediate execution of a judgment in an
ejectment case while an appeal is pending, the defendant must perfect his appeal, file a
supersedeas bond and periodically deposit the rentals which became due during the pendency of
the appeal. But despite the failure of respondents to post the required supersedeas bond, the CA still
affirmed the recall of the issuance of the writ of execution with break open order.

Petitioner’s contention fails to persuade us. Sec. 19, Rule 70 of the Rules of Court is not applicable
in this case. In Uy v. Santiago, 48 we held that it is only the execution of the MeTC or Municipal Trial
Courts’ judgment pending appeal with the RTC which may be stayed by compliance with the
requisites provided in Section 19, Rule 70 of the Rules of Court. This can be deduced from the
wordings of the subject provision, to wit:

Section 19. Immediate execution of judgment; how to stay same.- If judgment is rendered against
the defendant, execution shall issue immediately upon motion, unless an appeal has been perfected
and the defendant to stay execution files a sufficient supersedeas bond, approved by the Municipal
Trial Court and executed in favor of the plaintiff to pay the rents, damages, and costs accruing down
to the time of the judgment appealed from, and unless, during the pendency of the appeal, he
deposits with the appellate court the amount of rent due from time to time under the contract, if any,
as determined by the judgment of the Municipal Trial Court. In the absence of a contract, he shall
deposit with the Regional Trial Court the reasonable value of the use and occupation of the premises
for the preceding month or period at the rate determined by the judgment of the lower court on or
before the tenth day of each succeeding month or period. The supersedeas bond shall be
transmitted by the Municipal Trial Court, with the other papers, to the clerk of the Regional
Trial Court to which the action is appealed.

All amounts so paid to the appellate court shall be deposited with said court or authorized
government depositary bank, and shall be held there until the final disposition of the appeal, unless
the court, by agreement of the interested parties, or in the absence of reasonable grounds of
opposition to a motion to withdraw, or for justifiable reasons, shall decree otherwise. Should the
defendant fail to make the payments above prescribed from time to time during the pendency of the
appeal, the appellate court, upon motion of the plaintiff, and upon proof of such failure, shall order
the execution of the judgment appealed from with respect to the restoration of possession, but such
execution shall not be a bar to the appeal taking its course until the final disposition thereof on the
merits.

After the case is decided by the Regional Trial Court, any money paid to the Court by the defendant
for purposes of the stay of execution shall be disposed of in accordance with the provisions of the
judgment of the Regional Trial Court. In any case wherein it appears that the defendant has been
deprived of the lawful possession of land or building pending the appeal by virtue of the execution of
the judgment of the Municipal Trial Court, damages for such deprivation of possession and
restoration of possession may be allowed the defendant in the judgment of the Regional Trial Court
disposing of the appeal.

This is not the situation here. Respondents are not staying the execution of the judgment of the
MeTC pending appeal to the RTC as the latter court, in fact, had already rendered its judgment on
the appeal. Clearly, the above-quoted provision does not find any application in the present petition.

Petitioner likewise faults the CA in giving full credence to the Sheriff’s Partial Return dated May 5,
2004 stating that respondent DKS had already turned over possession of subject premises to the
government. Suffice it to state, though, that this matter is factual in nature and is beyond the scope
of a petition for review on certiorari. The resolution of factual issues is the function of lower courts,
whose findings on these matters are received with respect and considered binding by the Supreme
Court subject only to certain exceptions, none of which is present in this instant petition. 49 This is
especially true when the findings of the RTC have been affirmed by the CA as in this case.

Lastly, petitioner prays in the alternative that respondents be ordered to pay the monetary award as
contained in the RTC decision. We cannot, however, grant such relief as again, this is beyond our
competence in this petition. To reiterate, we are only confined here to reviewing errors of law
allegedly committed by the CA in its assailed Decision. Such relief should have been sought in the
appeal from the main case.

WHEREFORE, the petition is DENIED.

SO ORDERED.

G.R. No. 221029

REPUBLIC OF THE PHILIPPINES, Petitioner

vs
MARELYN TANEDO MANALO, Respondent

RESOLUTION

PERALTA, J.:

This petition for review on certiorari under Rule 45 of the Rules of Court (Rules) seeks to reverse
and set aside the September 18, 2014 Decision  and October 12, 2015 Resolution  of the Court of
1 2

Appeals (CA) in CA-G.R. CV No. 100076. The dispositive portion of the Decision states:

WHEREFORE, the instant appeal is GRANTED. The Decision dated 15 October 2012 of the

Regional Trial Court of Dagupan City, First Judicial Region, Branch 43, in SPEC. PROC. NO. 2012-
0005 is REVERSED and SET ASIDE.

Let a copy of this Decision be served on the Local Civil Registrar of San Juan, Metro Manila.

SO ORDERED. 3

The facts are undisputed.

On January 10, 2012, respondent Marelyn Tanedo Manalo (Manalo) filed a petition for cancellation
of

Entry of marriage in the Civil Registry of San Juan , Metro Manila, by virtueof a judgment of divorce
Japanese court.

Finding the petition to be sufficient in form and in substance, Branch 43 of the Regional Trial Court
(RTC) of Dagupan City set the case for initial hearing on April 25, 2012. The petition and the notice
of initial hearing were published once a week for three consecutive weeks in newspaper of general
circulation. During the initial hearing, counsel for Manalo marked the documentary evidence
(consisting of the trial courts Order dated January 25, 2012, affidavit of publication, and issues of the
Northern Journal dated February 21-27, 2012, February 28 - March 5, 2012, and March 6-12, 2012)
for purposes of compliance with the jurisdictional requirements.

The Office of the Solicitor General (OSG) entered its appearance for petitioner Republic of the
Philippines authorizing the Office of the City Prosecutor of Dagupan to appear on its behalf.
Likewise, a Manifestation and Motion was filed questioning the title and/or caption of the petition
considering that based on the allegations therein, the proper action should be a petition for
recognition and enforcement of a foreign judgment.

As a result, Manalo moved to admit an Amended Petition, which the court granted. The Amended
Petition, which captioned that if it is also a petition for recognition and enforcement of foreign
judgment alleged:

2. That petitioner is previously married in the Philippines to a Japanese national named YOSHINO
MINORO as shown by their Marriage Contract xxx;

3. That recently, a case for divorce was filed by herein [petitioner] in Japan and after die
proceedings, a divorce decree dated December 6, 2011 was rendered by the Japanese Court x x x;

4. That at present, by virtue of the said divorce decree, petitioner and her divorce Japanese husband
are no longer living together and in fact, petitioner and her daughter are living separately from said
Japanese former husband;

5. That there is an imperative need to have the entry of marriage in Civil Registry of San Juan, Metro
Manila cancelled, where the petitioner and the former Japanese husband's marriage was previously
registered, in order that it would not appear anymore that petitioner is still married to the said
Japanese national who is no longer her husband or is no longer married to her, she shall not be
bothered and disturbed by aid entry of marriage;

6. That this petition is filed principally for the purpose of causing the cancellation of entry of the
marriage between the petitioner and the said Japanese national, pursuant to Rule 108 of the
Revised Rules of Court, which marriage was already dissolved by virtue of the aforesaid divorce
decree; [and]

7. That petitioner prays, among others, that together with the cancellation of the said entry of her
marriage, that she be allowed to return and use her maiden surname, MANALO. 4

Manalo was allowed to testify in advance as she was scheduled to leave for Japan for her
employment. Among the documents that were offered and admitted were:
1. Court Order dated January 25, 2012, finding the petition and its attachments to be sufficient in
form and in substance;

2. Affidavit of Publication;

3. Issues of the Northern Journal dated February 21-27, 2012, February 28 - March 5, 2012, and
March 6-12, 2012;

4. Certificate of Marriage between Manalo and her former Japanese husband;

5. Divorce Decree of Japanese court;

6. Authentication/Certificate issued by the Philippine Consulate General in Osaka, Japan of the

Notification of Divorce; and

7. Acceptance of Certificate of Divorce. 5

The OSG did not present any controverting evidence to rebut the allegations of Manalo.

On October 15, 2012, the trial court denied the petition for lack of merit. In ruling that the divorce
obtained by Manalo in Japan should not be recognized, it opined that, based on Article 15 of the
New Civil Code, the Philippine law "does not afford Filipinos the right to file for a divorce whether
they are in the country or living abroad, if they are married to Filipinos or to foreigners, or if they
celebrated their marriage in the Philippines or in another country" and that unless Filipinos "are
naturalized as citizens of another country, Philippine laws shall have control over issues related to
Filipinos' family rights and duties, together with the determination of their condition and legal capacity
to enter into contracts and civil relations, inclusing marriages."
6

On appeal, the CA overturned the RTC decision. It held that Article 26 of the Family Code of the
Philippines (Family Code) is applicable even if it was Manalo who filed for divorce against her
Japanese husband because the decree may obtained makes the latter no longer married to the
former, capacitating him to remarry. Conformably with Navarro, et al. V. Exec. Secretary Ermita, et
al.  ruling that the meaning of the law should be based on the intent of the lawmakers and in view of
7

the legislative intent behind Article 26, it would be height of injustice to consider Manalo as still
married to the Japanese national, who, in turn, is no longer married to her. For the appellate court,
the fact that it was Manalo who filed the divorce case is inconsequential. Cited as similar to this case
was Van Dorn v. Judge Romilo, Jr.  where the mariage between a foreigner an a Filipino was
8

dissolved filed abroad by the latter.

The OSG filed a motion for reconsideration, but it was denied; hence, this petition.

We deny the petition and partially affirm the CA decision.

Divorce, the legal dissolution of a lawful union for a cause arising after the marriage, are of two
types: (1) absolute divorce or a vinculo matrimonii, which terminates the marriage, and (2) limited
divorce or a mensa et thoro, which suspends it and leaves the bond in full force.  In this jurisdiction,
9

the following rules exist:

1. Philippine law does not provide for absolute divorce; hence, our courts cannot grant it. 10
 2. Consistent with Articles 15  and 17  of the New Civil Code, the marital bond between two
11 12

Filipinos cannot be dissolved even by an absolute divorce obtained abroad. 13

3. An absolute divorce obtained abroad by a couple, who both aliens, may be recognized in
the Philippines, provided it is consistent with their respective national laws.
14

4. In mixed marriages involving a Filipino and a foreigner, the former is allowed to contract a
subsequent marriage in case the absolute divorce is validly obtained abroad by the alien
spouse capacitating him or her to remarry. 15

On July 6, 1987, then President Corazon C. Aquino signed into law Executive Order (E.O.) No. 209,
otherwise known as the Family Code of the Philippines, which took effect on August 3,
1988.  Shortly thereafter , E.O. No. 227 was issued on July 17, 1987.  Aside from amending Articles
16 17

36 and 39 of the Family Code, a second paragraph was added to Article 26.  This provision was
18

originally deleted by the Civil Code Revision Committee (Committee),but it was presented and
approved at a Cabinet meeting after Pres. Aquino signed E.O. No. 209.  As modified, Article 26 now
19

states:

Art. 26. All marriages solemnized outside the Philippines, in accordance with the laws in force in the
where country where they were solemnized, and valid there as such, shall also be valid in this
country, except those prohibited under Articles 35(1), (4), (5) and (6), 36, 37 and 38.

Where a marriage between Filipino citizen and a foreigner is validly celebrated and a divorce is
thereafter validly obtained abroad by the alien spouse capacitating him her to remarry under
Philippine law.

Paragraph 2 of Article 26 confers jurisdiction on Philippine courts to extend the effect of a foreign
divorce decree to a Filipino spouse without undergoing trial to determine the validity of the
dissolution of the marriage.  It authorizes our courts to adopt the effects of a foreign divorce decree
20

precisely because the Philippines does not allow divorce.  Philippine courts cannot try the case on
21

the merits because it is tantamount to trying a divorce case.  Under the principles of comity, our
22

jurisdiction recognizes a valid divorce obtained by the spouse of foreign nationality, but the legal
effects thereof, e.g., on custody, care and support of the children or property relations of the
spouses, must still be determined by our courts. 23

According to Judge Alicia Sempio-Diy, a member of the Committee, the idea of the amendment is to
avoid the absurd situation of a Filipino as still being married to his or her alien spouse, although the
latter is no longer married to the former because he or she had obtained a divorce abroad that is
recognized by his or national law.  The aim was that it would solved the problem of many Filipino
24

women who, under the New Civil Code, are still considered married to their alien husbands even
after the latter have already validly divorced them under their (the husbands') national laws and
perhaps have already married again. 25

In 2005, this Court concluded that Paragraph 2 of Article 26 applies to a case where, at the time of
the celebration of the marriage, the parties were Filipino citizens, but later on, one of them acquired
foreign citizenship by naturalization, initiated a divorce proceeding, and obtained a favorable decree.
We held in Republic of the Phils. v. Orbecido III: 26

The jurisprudential answer lies latent in the 1998 case of Quita v. Court of Appeals. In Quita, the
parties were, as in this case, Filipino citizens when they got married. The wife became naturalized
American citizen n 1954 and obtained a divorce in the same year. The court therein hinted, by the
way of obiter dictum, that a Filipino divorced by his naturalized foreign spouse is no longer married
under Philippine law and can thus remarry.

Thus, taking into consideration the legislative intent and applying the rule of reason, we hold that
Paragraph 2 of Article 26 should be interpreted to include cases involving parties who, at the time of
the celebration of the marriage were Filipino citizens, but later on, one of them becomes naturalized
as foreign citizen and obtains divorce decree. The Filipino spouse should likewise be allowed to
remarry as if the other party were foreigner at the time of the solemnization of the marriage. To rule
otherwise would be to sanction absurdity and injustice. x x x

If we are to give meaning to the legislative intent to avoid the absurd situation where the Filipino
spouse remains married to the alien spouse who after obtaining a divorce is no longer married to the
Filipino spouse, then the instant case must be deemed as coming within the contemplation of
Paragraph 2 of Article 26.

In view of the foregoing, we state the twin elements for the application of Paragraph 2 of Article 26
as follows:

1. There is a valid marriage that has been celebrated between a Filipino citizen and a foreigner; and

2. A valid divorce is obtained abroad by the alien spouse capacitating him or her to remarry.

The reckoning point is not the citizenship of the parties at the time of the celebration of marriage, but
their citizenship at the time valid divorced obtained abroad by the alien spouse capacitating the latter
to remarry.

Now, the Court is tasked to resolve whether, under the same provision, a Filipino citizen has the
capacity to remarry under Philippine law after initiating a divorce proceeding abroad and obtaining a
favorable judgment against his or her alien spouse who is capacitated to remarry. Specifically,
Manalo pleads for the recognition of enforcement of the divorced decree rendered by the Japanese
court and for the cancellation of the entry of marriage in the local civil registry " in order that it would
not appear anymore that she is still married to the said Japanese national who is no longer her
husband or is no longer married to her; [and], in the event that [she] decides to be remarried, she
shall not be bothered and disturbed by said entry of marriage," and to use her maiden surname.

We rule in the affirmative.

Both Dacasin v. Dacasin  and Van Dorn  already recognized a foreign divorce decree that was
28 29

initiated and obtained by the Filipino spouse and extended its legal effects on the issues of child
custody and property relation, respectively.

In Dacasin, post-divorce, the former spouses executed an Agreement for the joint custody of their
minor daughter. Later on, the husband who is a US citizen, sued his Filipino wife enforce the
Agreement, alleging that it was only the latter who exercised sole custody of their child. The trial
court dismissed the action for lack of jurisdiction, on the ground, among others, that the divorce
decree is binding following the "nationality rule" prevailing in this jurisdiction. The husband moved to
reconsider, arguing that the divorce decree obtained by his former wife is void, but it was denied. In
ruling that the trial court has jurisdiction to entertain the suit bu not to enforce the Agreement, which
is void, this Court said:
Nor can petitioner rely on the divorce decree's alleged invalidity - not because the Illinois court
lacked jurisdiction or that the divorced decree violated Illinois law, but because the divorce was
obtained by his Filipino spouse - to support the Agreement's enforceability . The argument that
foreigners in this jurisdiction are not bound by foreign divorce decrees is hardly novel. Van Dron v.
Romillo settled the matter by holding that an alien spouse of a Filipino is bound by a divorce decree
obtained abroad. There, we dismissed the alien divorcee's Philippine suit for accounting of alleged
post-divorce conjugal property and rejected his submission that the foreign divorce (obtained by the
Filipino spouse) is not valid in this jurisdiction x x x.
30

Van Dorn was decided before the Family Code took into effect. There, a complaint was filed by the
ex-husband , who is a US citizen, against his Filipino wife to render an accounting of a business that
was alleged to be a conjugal property and to be declared with right to manage the same. Van Dorn
moved to dismiss the case on the ground that the cause of action was barred by previous judgment
in the divorce proceedings that she initiated, but the trial court denied the motion. On his part, her
ex-husband averred that the divorce decree issued by the Nevada court could not prevail over the
prohibitive laws of the Philippines and its declared national policy; that the acts and declaration of a
foreign court cannot, especially if the same is contrary to public policy, divest Philippine courts of
jurisdiction to entertain matters within its jurisdiction . In dismissing the case filed by the alien
spouse, the Court discussed the effect of the foreign divorce on the parties and their conjugal
property in the Philippines. Thus:

There can be no question as to the validity of that Nevada divorce in any of the States of the United
States. The decree is binding on private respondent as an American citizen. For instance, private
respondent cannot sue petitioner, as her husband, in any State of the Union. What he is contending
in this case is that the divorce is not valid and binding in this jurisdiction, the same being contrary to
local law and public policy.

Is it true that owing to the nationality principle embodied in Article 15 of the Civil Code, only
Philippine nationals are covered by the policy and morality. However, aliens may obtain divorce
abroad, which may be recognized in the Philippines, provided they are valid according to their
national law. In this case, the divorce in Nevada released private respondent from the marriage from
standards of American law, under which divorce dissolves the marriage. As stated by the Federal
Supreme Court of the United States in Atherton vs. Atherton, 45 L. Ed. 794,799:

"The purpose and effect of a decree of divorce from the bond of matrimony by a court of competent
jurisdiction are to change the existing status or domestic relation of husband and wife, and to free
them both from the bond. The marriage tie, when thus severed as stone party, ceases to bind either.
A husband without a wife, or a wife without a husband, is unknown to the law. When the law
provides in the nature of penalty, that the guilty party shall not marry again, that party, as well as the
other, is still absolutely feed from the bond of the former marriage."

Thus, pursuant to his national law, private respondent is no longer the husband of petitioner. He
would have no standing to sue in the case below as petitioner's husband entitled to exercise control
over conjugal assets. As he is estopped by his own representation before said court from asserting
his right over the alleged conjugal property.

To maintain, as private respondent does, that under our laws, petitioner has to be considered still
married to private respondent and still subject to a wife's obligations under Article 109, et. seq. of the
Civil Code cannot be just. Petitioner should not be obliged to live together with, observe respect and
fidelity, and render support to private respondent. The latter should not continue to be one of her
heirs with possible rights to conjugal property. She should not be discriminated against in her own
country if the ends of justice are to be served.31
In addition, the fact that a validity obtained foreign divorce initiated by the Filipino spouse can be
recognized and given legal effects in the Philippines is implied from Our rulings in Fujiki v. Marinay,
et al.  and Medina v. Koike.
32 33

In Fujiki, the Filipino wife, with the help of her husband, who is a Japanese national, was able to
obtain a judgment from Japan's family court. Which declared the marriage between her and her
second husband, who is a Japanese national, void on the ground of bigamy. In resolving the issue of
whether a husband or wife of a prior marriage can file a petition to recognize a foreign judgment
nullifying the subsequent marriage between his her spouse and a foreign citizen on the ground of
bigamy, We ruled:

Fujiki has the personality to file a petition to recognize the Japanese Family Court judgment nullifying
the marriage between Marinay and Maekara on the ground of bigamy because the judgment
concerns his civil status as married to Marinay. For the same reason he has the personality to file a
petition under Rule 108 to cancel the entry of marriage between Marinay and Maekara in the civil
registry on the basis of the decree of the Japanese Family Court.

There is no doubt that the prior spouse has a personal and material interest in maintaining the
integrity of the marriage he contracted and the property relations arising from it. There is also no
doubt that he is interested in the cancellation of an entry of a bigamous marriage in the civil registry,
which compromises the public record of his marriage. The interest derives from the substantive right
of the spouse not only to preserve (or dissolve, in limited instances) his most intimate human
relation, but also to protect his property interests that arise by operation of law the moment he
contracts marriage. These property interests in marriage included the right to be supported "in
keeping with the financial capacity of the family" and preserving the property regime of the marriage.

Property rights are already substantive rights protected by the Constitution, but a spouse's right in a
marriage extends further to relational rights recognized under Title III ("Rights and Obligations
between Husband and Wife") of the Family Code. x x x 34

On the other hand, in Medina, the Filipino wife and her Japanese husband jointly filed for divorce,
which was granted.  Subsequently, she filed a petition before the RTC for judicial recognition of
1âwphi1

foreign divorce and declaration of capacity to remarry pursuant to Paragraph 2 of Article 26. The
RTC denied the petition on the ground that the foreign divorce decree and the national law of the
alien spouse recognizing his capacity to obtain a divorce must be proven in accordance with
Sections 24 and 25 of Rule 132 of the Revised Rules on Evidence. This Court agreed and ruled that,
consistent with Corpuz v. Sto. Tomas, et al.  and Garcia v. Recio,  the divorce decree and the
35 36

national law of the alien spouse must be proven. Instead of dismissing the case, We referred it to the
CA for appropriate action including the reception of evidence to determine and resolve the pertinent
factual issues.

There is no compelling reason to deviate from the above-mentioned rulings. When this Court
recognized a foreign divorce decree that was initiated and obtained by the Filipino spouse and
extended its legal effects on the issues of child custody and property relation, it should not stop short
in a likewise acknowledging that one of the usual and necessary consequences of absolute divorce
is the right to remarry. Indeed, there is no longer a mutual obligation to live together and observe
fidelity. When the marriage tie is severed and ceased to exist, the civil status and the domestic
relation of the former spouses change as both of them are freed from the marital bond.

The dissent is of the view that, under the nationality principle, Manalo's personal status is subject to
Philippine law, which prohibits absolute divorce. Hence, the divorce decree which she obtained
under Japanese law cannot be given effect, as she is, without dispute, a national not of Japan, bit of
the Philippines. It is said that that a contrary ruling will subvert not only the intention of the framers of
the law, but also that of the Filipino peopl, as expressed in the Constitution. The Court is, therefore,
bound to respect the prohibition until the legislature deems it fit to lift the same.

We beg to differ.

Paragraph 2 of Artilce 26 speaksof "a divorce x x x validly obtained abroad by the alien spouse
capacitating him or her to remarry." Based on a clear and plain reading of the provision, it only
requires that there be a divorce validly obtained abroad. The letter of the law does not demand that
the alien spouse should be the one who initiated the proceeding wherein the divorce decree was
granted. It does not distinguish whether the Filipino spouse is the petitioner or the respondent in the
foreign divorce proceeding. The Court is bound by the words of the statute; neither can We put
words in the mouth of lawmakers.  The legislature is presumed to know the meaning of the words to
37

have used words advisely and to have expressed its intent by the use of such words as are found in
the statute. Verba legis non est recedendum, or from the words if a statute there should be
departure." 38

Assuming, for the sake of argument, that the word "obtained" should be interpreted to mean that the
divorce proceeding must be actually initiated by the alien spouse, still, the Court will not follow the
letter of the statute when to do so would depart from the true intent of the legislature or would
otherwise yield conclusions inconsistent with the general purpose of the act.  Law have ends to
39

achieve, and statutes should be so construed as not to defeat but to carry out such ends and
purposes.  As held in League of Cities of the Phils. et al. v. COMELEC et. al.:
40 41

The legislative intent is not at all times accurately reflected in the manner in which the resulting law
is couched. Thus, applying a verba legis or strictly literal interpretation of a statute may render it
meaningless and lead to inconvience, an absurd situation or injustice. To obviate this aberration, and
bearing in mind the principle that the intent or the spirit of the law is the law itself, resort should be to
the rule that the spirit of the law control its letter.

To reiterate, the purpose of Paragraph 2 of Article 26 is to avoid the absurd situation where the
Filipino spouse remains married to the alien spouse who, after a foreign divorce decree that is
effective in the country where it was rendered, is no longer married to the Filipino spouse. The
provision is a corrective measure is free to marry under the laws of his or her countr.  Whether the
42

Filipino spouse initiated the foreign divorce proceeding or not, a favorable decree dissolving the
marriage bond and capacitating his or her alien spouse to remarry will have the same result: the
Filipino spouse will effectively be without a husband or wife. A Filipino who initiated a foreign divorce
proceeding is in the same place and in like circumstances as a Filipino who is at the receiving end of
an alien initiated proceeding. Therefore, the subject provision should not make a distinction. In both
instance, it is extended as a means to recognize the residual effect of the foreign divorce decree on
a Filipinos whose marital ties to their alien spouses are severed by operations of their alien spouses
are severed by operation on the latter's national law.

Conveniently invoking the nationality principle is erroneous. Such principle, found under Article 15 of
the City Code, is not an absolute and unbending rule. In fact, the mer e existence of Paragraph 2 of
Article 26 is a testament that the State may provide for an exception thereto. Moreover, blind
adherence to the nationality principle must be disallowed if it would cause unjust discrimination and
oppression to certain classes of individuals whose rights are equally protected by law. The courts
have the duty to enforce the laws of divorce as written by the Legislature only if they are
constitutional. 43
While the Congress is allowed a wide leeway in providing for a valid classification and that its
decision is accorded recognition and respect by the court of justice, such classification may be
subjected to judicial review.  The deference stops where the classification violates a fundamental
44

right, or prejudices persons accorded special protection by the Constitution.  When these violations
45

arise, this Court must discharge its primary role as the vanguard of constitutional guaranties, and
require a stricter and more exacting adherence to constitutional limitations.  If a legislative
46

classification impermissibly interferes with the exercise of a fundamental right or operates to the
peculiar disadvantage of a suspect class strict judicial scrutiny is required since it is presumed
unconstitutional, and the burden is upon the government to prove that the classification is necessary
to achieve a compelling state interest and that it is the least restrictive means to protect such
interest. 47

"Fundamental rights" whose infringement leads to strict scrutiny under the equal protection clause
are those basic liberties explicitly or implicitly guaranteed in the Constitution.  It includes the right to
48

free speech, political expression, press, assembly, and forth, the right to travel, and the right to
vote.  On the other hand, what constitutes compelling state interest is measured by the scale rights
49

and powers arrayed in the Constitution and calibrated by history.  It is akin to the paramount interest
50

of the state for which some individual liberties must give way, such as the promotion of public
interest, public safety or the general welfare.  It essentially involves a public right or interest that,
51

because of its primacy, overrides individual rights, and allows the former to take precedence over
the latter. 52

Although the Family Code was not enacted by the Congress, the same principle applies with respect
to the acts of the President which have the force and effect of law unless declared otherwise by the
court. In this case, We find that Paragraph 2 of Article 26 violates one of the essential requisites  of
53

the equal protection clause.  Particularly, the limitation of the provision only to a foreign divorce
54

decree initiated by the alien spouse is unreasonable as it is based on superficial, arbitrary, and
whimsical classification.

A Filipino who is married to another Filipino is not similarly situated with a Filipino who is married to a
foreign citizen. There are real, material and substantial differences between them. Ergo, they should
not be treated alike, both as to rights conferred and liabilities imposed. Without a doubt, there are
political, economic cultural, and religious dissimilarities as well as varying legal systems and
procedures, all too unfamiliar, that a Filipino national who is married to an alien spouse has to
contend with. More importantly, while a divorce decree obtained abroad by a Filipino against another
Filipino is null and void, a divorce decree obtained by an alien against his her Filipino spouse is
recognized if made in accordance with the national law of the foreigner. 55

On the contrary, there is no real and substantial difference between a Filipino who initiated a foreign
divorce proceedings a Filipino who obtained a divorce decree upon the instance of his or her alien
spouse . In the eyes of the Philippine and foreign laws, both are considered as Filipinos who have
the same rights and obligations in a alien land. The circumstances surrounding them are alike. Were
it not for Paragraph 2 of Article 26, both are still married to their foreigner spouses who are no longer
their wives/husbands. Hence, to make a distinction between them based merely on the superficial
difference of whether they initiated the divorce proceedings or not is utterly unfair. Indeed, the
treatment gives undue favor to one and unjustly discriminate against the other.

Further, the differentiation in Paragraph 2 Article 26 is arbitrary. There is inequality in treatment

because a foreign divorce decree that was initiated and obtained by a Filipino citizen against his or
her alien spouse would not be recognized even if based on grounds similar to Articles 35, 36, 37 and
38 of the Family Code.  In filing for divorce based on these grounds, the Filipino spouse cannot be
56

accused of invoking foreign law at whim, tantamount to insisting that he or she should be governed
with whatever law he or she chooses. The dissent's comment that Manalo should be "reminded that
all is not lost, for she may still pray for the severance of her martial ties before the RTC in
accordance with the mechanism now existing under the Family Code" is anything but comforting. For
the guidance of the bench and the bar, it would have been better if the dissent discussed in detail
what these "mechanism" are and how they specifically apply in Manalo's case as well as those who
are similarly situated. If the dissent refers to a petition for declaration of nullity or annulment of
marriage, the reality is that there is no assurance that our courts will automatically grant the same.
Besides, such proceeding is duplicitous, costly, and protracted. All to the prejudice of
our kababayan.

It is argued that the Court's liberal interpretation of Paragraph 2 of Artilce 26 encourages Filipinos to
marry foreigners, opening the floodgate to the indiscriminate practice of Filipinos marrying foreign
nationals or initiating divorce proceedings against their alien spouses.

The supposition is speculative and unfounded.

First, the dissent falls into a hasty generalization as no data whatsoever was sworn to support what
he intends to prove. Second, We adhere to the presumption of good faith in this jurisdiction. Under
the rules on evidence, it is disputable presumed (i.e., satisfactory if uncontradicted and overcome by
other evidence) that a person is innocent of crime or wrong,  that a person takes ordinary care of his
57

concerns,  that acquiescence resulted from a belief that the thing acquiesced in was conformable to
59

the law and fact,   that a man and woman deporting themselves as husband and wife have entered
60

into a lawful contract of marriage,  and that the law has been obeyed.  It is whimsical to easily
61 62

attribute any illegal, irregular or immoral conduct on the part of a Filipino just because he or she
opted to marry a foreigner instead of a fellow Filipino. It is presumed that interracial unions are
entered into out of genuine love and affection, rather than prompted by pure lust or profit. Third, We
take judicial notice of the fact that Filipinos are relatively more forbearing and conservative in nature
and that they are more often the victims or losing end of mixed marriages. And Fourth, it is not for Us
to prejudge the motive behind Filipino's decision to marry an alien national. In one case, it was said:

Motive for entering into a marriage are varied and complex. The State does not and cannot dictated
on the kind of life that a couple chooses to lead. Any attempt to regulate their lifestyle would go into
the realm of their right to privacy and would raise serious constitutional questions. The right marital
privacy allows married couples to structure their marriages in almost any way they see it fit, to live
together or live apart, to have children or no children, to love one another or not, and so on. Thus,
marriages entered into for other purposes, limited or otherwise, such as convenience,
companionship, money, status, and title, provided that they comply with all the legal requisites, are
equally valid. Love, though the ideal consideration in a marriage contract, is not the only valid cause
for marriage. Other considerations, not precluded by law, may validly support a marriage. 63

The 1987 Constitution expresses that marriage, as an inviolable social institution, is the foundation
of the family and shall be protected by the State.  Nevertheless, it was not meant to be a general
64

prohibition on divorce because Commissioner Jose Luis Martin C. Gascon, in response to a question
by Father Joaquin G. Bernas during the deliberations of the 1986 Constitutional Commission, was
categorical about this point.  Their exchange reveal as follows:
65

MR. RAMA. Mr. Presiding Officer, may I ask that Commissioner Bernas be recognized.

THE PRESIDING OFFICER (Mr. Colayco). Commissioner Bernas is recognized.

FR. BERNAS. Just one question, and I am not sure if it has been categorically answered. I refer
specifically to the proposal of Commissioner Gascon. Is this be understood as a prohibition of a
general law on divorce? His intention is to make this a prohibition so that the legislature cannot pass
a divorce law.

MR. GASCON. Mr. Presding Officer, that was not primarily my intention. My intention was primarily
to encourage the social institution of marriage, but not necessarily discourage divorce. But now that
the mentioned the issue of divorce, my personal opinion is to discourage it. Mr. Presiding Officer.

FR. BERNAS. No my question is more categorical. Does this carry the meaning of prohibiting a
divorce law?

MR. GASCON. No Mr. Presiding Officer.

FR. BERNAS. Thank you. 66

Notably, a law on absolute divorce is not new in our country. Effectivity March 11, 1917, Philippine
courts could grant an absolute divorce in the grounds of adultery on the part of the wife or
concubinage on the part of the husband by virtue of Act No. 2710 of the Philippine Legislature.  On
67

March 25, 1943, pursuant to the authority conferred upon him by the Commander-in-Chief fo the
Imperial Japanese Forces in the Philippines and with the approval of the latter, the Chairman of the
Philippine Executive Commission promulgated an E.O. No. 141 ("New Divorce Law"), which
repealed Act No. 2710 and provided eleven ground for absolute divorce, such as intentional or
unjustified desertion continuously for at least one year prior to the filing of the action, slander by
deed or gross insult by one spouse against the other to such an extent as to make further living
together impracticable, and a spouse's incurable insanity.  When the Philippines was liberated and
68

the Commonwealth Government was restored, it ceased to have force and effect and Act No. 2710
again prevailed.  From August 30, 1950, upon the effectivity of Republic Act No. 836 or the New
69

Civil Code, an absolute divorce obatined by Filipino citizens, whether here or abroad, is no longer
recognized. 70

Through the years, there has been constant clamor from various sectors of the Philippine society to
re-institute absolute divorce. As a matte of fcat, in the currnet 17th Congress, House Bill (H.B.) Nos.
116  1062  2380  and 6027  were filed in the House of representatives. In substitution of these bills,
71 72 73 74

H.B. No. 7303 entitled "An Act Instituting Absolute Divorce and Dissolution of Marriage in the
Philippines" or the Absolute Divorce Act of 2018 was submitted by the House Committee on
Population

And Family Relations of February 8, 2018. It was approved on March 19, 2018 on Third Reading -
with 134 in favor, 57 against, and 2 absentations. Under the bill, the grounds for a judicial decree of
absolute divorce are as follows:

1. The grounds for legal separation under Article 55 of the Family Code, modified or amended, as
follows:

a. Physical violence or grossly abusive conduct directed against the petitioner, a common
child, or a child of the petitioner;

b. Physical violence or moral pressure to compel the petitioner to change religious or political
affiliation;

c. Attempt of respondent to corrupt or induce the petitioner, a common child, or a child of a

petitioner, to engage in prostitution, or connivance in such corruption or inducement;
 d. Final judgment sentencing the respondent to imprisonment of more than six (6) years,
even if pardoned;

e. Drug addiction or habitual alchoholism ro chronic gambling of respondent;

f. Homosexuality of the respondent;

g. Contracting by the respondent of a subsequent bigamous marriage, whether in the

Philippines or abroad;

h. Marital infidelity or perversion or having a child with another person other than one's
spouse during the marriage, except when upon the mutual agreement of the spouses, a child
is born to them by in vitro or a similar procedure or when the wife bears a child after being a
victim of rape;

i. attempt by the respondent against the life of the petitioner, a common child or a child of a
petitioner; and

j. Abandonment of petitioner by respondent without justifiable cause for more than one (1)
year.

When the spouses are legally separated by judicial decree for more thath two (2) years, either or
both spouses can petition the proper court for an absolute divorce based on said judicial decree of
legal separation.

1. Grounds for annulment of marriage under Article 45 of the Family Code restated as follows:

a. The party in whose behalf it is sought to have the marriage annulled was eighteen (18)
years of age or over but below twety-one (21), and the marriage was solemnized without the
consent of the parents guradian or personl having substitute parental authority over the
party, in that order, unless after attaining the age of twenty-one (21) such party freely
cohabited with the other and both lived together as husband and wife;

b. either party was of unsound mind, unless such party after coming to reason, freely
cohabited with the other as husband and wife;

c. The consent of either party was obtained by fraud, unless such party afterwards with full
knowledge of the facts constituting the fraud, freely cohabited with the other husband and
wife;

d. consent of either party was obtained by force, intimidation or undue influence, unless the
same having disappeared or ceased, such party thereafter freely cohabited with the other as
husband and wife;

e. Either party was physically incapable of consummating the marriage with the other and
such incapacity continues or appears to be incurable; and

f. Either part was afflicted with the sexually transmissible infection found to be serious or
appears to be incurable.
Provided, That the ground mentioned in b, e and f existed either at the time of the marriage or
supervening after the marriage.

1. When the spouses have been separated in fact for at least five (5) years at the time the petition
for absolute divorce is filed, and the reconciliation is highly improbable;

2. Psychological incapacity of either spouse as provided for in Article 36 of the Family Code, whether
or not the incapacity was present at the time of the celebration of the marriage or later;

3. When one of the spouses undergoes a gender reassignment surgery or transition from one sex to
another, the other spouse is entitled to petition for absolute divorce with the transgender or
transsexual as respondent, or vice-versa;

4. Irreconcilable marital differences and conflicts which have resulted in the total breakdown of the
marriage beyond repair, despite earnest and repeated efforts at reconciliation.

To be sure, a good number of Filipinos led by the Roman Catholic Church react adversely to any
attempt to enact a law on absolute divorce, viewing it as contrary to our customs, morals, and
traditions that has looked upon marriage and family as an institution and their nature of permanence,

In the same breath that the establishment clause restricts what the government can do with religion,
it also limits what religious sects can or cannot do. They can neither cause the government to adopt
their particular doctrines as policy for everyone, nor can they cause the government to restrict other
groups. To do so, in simple terms, would cause the State to adhere to a particular religion and, thus
establish a state religion.
76

The Roman Catholic Church can neither impose its beliefs and convictions on the State and the rest
of the citizenry nor can it demand that the nation follow its beliefs, even if it is sincerely believes that
they are good for country.  While marriage is considered a sacrament, it has civil and legal
77

consequences which are governed by the Family Code.  It is in this aspect, bereft of any
78

ecclesiastical overtone, that the State has a legitimate right and interest to regulate.

The declared State policy that marriage, as an inviolable social institution, is a foundation of the
family and shall be protected by the State, should not be read in total isolation but must be
harmonized with other constitutional provision. Aside from strengthening the solidarity of the Filipino
family, the State is equally mandated to actively promote its total development.  It is also obligated to
79

defend, among others, the right of children to special protection from all forms of neglect, abuse,
cruelty, exploitation, and other conditions prejudicial to their development.  To Our mind, the State
80

cannot effectively enforce these obligation s if We limit the application of Paragraph 2 or Article 26
only those foreign divorce initiated by the alien spouse. It is not amiss to point that the women and
children are almost always the helpless victims of all forms of domestic abuse and violence. In fact,
among the notable legislation passed in order to minimize, if not eradicate, the menace are R.A. No.
9262 ("Anti-Violence Against Women and Their Children Act of 2004") R.A. No. 9710 ("The Magna
Carta of Women"), R.A. No 10354 ("The Responsible Parenthood and Reproductive Health Act of
2012") and R.A. No 9208 ("Anti-Trafficking in Person Act of 2003"), as amended by R.A. No.
10364 ("ExpandedAnti-Trafficking in Persons Act of 2012"). Moreover, in protecting and
strengthening the Filipino family as a basic autonomous social institution, the Court must not lose
sight of the constitutional mandate to value the dignity of every human person, guarantee full respect
for human rights, and ensure the fundamental equality before the law of women and men. 81

A prohibitive view of Paragraph 2 of Article 26 would do more harm than good. If We disallow a
Filipino citizen who initiated and obtained a foreign divorce from the coverage of Paragraph 2 Article
26 and still require him or her to first avail of the existing "mechanisms" under the Family Code, any
subsequent relationship that he or she would enter in the meantime shall be considered as illicit in
the eyes of the Philippine law. Worse, any child born out such "extra-marital" affair has to suffer the
stigma of being branded as illegitimate. Surely, these are just but a few of the adverse
consequences, not only to the parent but also to the child, if We are to hold a restrictive
interpretation of the subject provision. The irony is that the principle of inviolability of marriage under
Section 2, Article XV of the Constitution is meant to be tilted in favor of marriage and against unions
not formalized by marriage, but without denying State protection and assistance to live-in
arrangements or to families formed according to indigenous customs. 82

This Court should not turn a blind eye to the realities of the present time. With the advancement of
communication and information technology, as well as the improvement of the transportation system
that almost instantly connect people from all over the world, mixed marriages have become not too
uncommon. Likewise, it is recognized that not all marriages are made in heaven and that imperfect
humans more often than not create imperfect unions.  Living in a flawed world, the unfortunate
83

reality for some is that the attainment of the individual's full human potential and self fulfillment is not
found and achieved in the context of a marriage. Thus it is hypocritical to safeguard the quantity of
existing marriages and, at the same time, brush aside the truth that some of them are rotten quality.

Going back, we hold that marriage, being a mutual and shared commitment between two parties,
cannot possibly be productive of any good to the society where one is considered released from the
marital bond while the other remains bound to it.  In reiterating that the Filipino spouse should not be
84

discriminated against in his or her own country if the ends of justice are to be served, San Luis v.
San Luis  quoted:
85

x x x In Alonzo v. Intermediate Applellate Court, the Court stated:

But as has also been aptly observed, we test a law by its results: and likewise, we may add, by its
purposes. It is a cardinal rule that, in seeking the meaning of the law, the first concern of the judge
should be to discover in its provisions the intent of the lawmaker. Unquestionably, the law should
never be interpreted in such a way as to cause injustice as this is never within the legislative intent.
An indispensable part of that intent, in fact, for we presume the good motives of the legislature, is
to render justice.

Thus, we interpret and apply the law not independently of but in consonance with justice. Law and
justice are inseparable, and we must keep them so. To be sure, there are some laws that, while
generally valid, may seem arbitrary when applied in a particular case because only of our nature and
functions, to apply them just the same, in slavish obedience to their language. What we do instead is
find a balance between the sord and the will, that justice may be done even as the law is obeyed.

As judges, we are not automatons. We do not and must not unfeelingly apply the law as it worded,
yielding like robots to the literal command without regard to its cause and consequence. "Courts are
apt to err by sticking too closely to the words of law," so we are warned, by Justice Holmes agaian,
"where these words import a policy that goes beyond them."

xxxx

More that twenty centuries ago, Justinian defined justice "as the constant and perpetual wish to
render every one of his due." That wish continues to motivate this Court when it assesses the facts
and the law in ever case brought to it for decisions. Justice is always an essential ingredient of its
decisions. Thus when the facts warrant, we interpret the law in a way that will render justice,
presuming that it was the intention if the lawmaker, to begin with, that the law be dispensed with
justice.
86

Indeed, where the interpretation of a statute according to its exact and literal import would lead to
mischievous results or contravene the clear purpose of the legislature, it should be construed
according to its spirit and reason, disregarding as far as necessary the letter of the law.  A statute
87

may therefore, be extended to cases not within the literal meaning of its terms, so long as they come
within its spirit or intent.
88

The foregoing notwithstanding, We cannot yet write finis to this controversy by granting Manalo's
petition to recognize and enforce the divorce decree rendered by the Japanese court and to cancel
the entry of marriage in the Civil Registry of San Juan, Metro Manila.

Jurisprudence has set guidelines before the Philippine courts recognize a foreign judgment relating
to the status of a marriage where one of the parties is a citizen of foreign country. Presentation
solely of the divorce decree will not suffice.  The fact of divorce must still first be proven.  Before a a
89 90

foreign divorce decree can be recognized by our courts, the party pleading it must prove the divorce
as a fact and demonstrate its conformity to the foreign law allowing it. 91

x x x Before a foreign judgment is given presumptive evidentiary value, the document must first be
presented and admitted in evidence. A divorce obtained abroad is proven by the divorce decree
itself. The decree purports to be written act or record of an act of an official body or tribunal of
foreign country.

Under Sections 24 and 25 of Rule 132, on the other hand, a writing or document may be proven as a
public or official record of a foreign country by either (1) an official publication or (2) a copy thereof
attested by the officer having legal custody of the document. If the record is not kept in the
Philippines, such copy must be (a) accompanied by a certificate issued by the proper diplomatic or
consular officer in the Philippine foreign service stationed in the foreign country in which the record is
kept and (b)authenticated by the seal of his office. 92

In granting Manalo's petition, the CA noted:

In this case, Petitioner was able to submit before the court a quo the 1) Decision of the Japanese
Court allowing the divorce; 2) the Authentication/Certificate issued by the Philippines Consulate
General in Osaka, Japan of the Decree of Divorce; and 3) Acceptance of Certificate of Divorce byu
the Petitioner and the Japanese national. Under Rule 132, Sections 24 and 25, in relation to Rule
39, Section 48 (b) of the Rules of Court, these documents sufficiently prove the subject Divorce
Decree as a fact. Thus, We are constrained to recognize the Japanese Court's judgment decreeing
the divorce.93

If the opposing party fails to properly object, as in this case, the divorce decree is rendered
admissible a a written act of the foreign court.  As it appears, the existence of the divorce decree
94

was not denied by the OSG; neither was the jurisdiction of the divorce court impeached nor the
validity of its proceedings challenged on the ground of collusion, fraud, or clear mistake of fact or
law, albeit an opportunity to do so.95

Nonetheless, the Japanese law on divorce must still be proved.

x x x The burden of proof lies with the "party who alleges the existence of a fact or thing necessary in
the prosecution or defense of an action." In civil cases, plaintiffs have the burden of proving the
material defendants have the burden of proving the material allegations in their answer when they
introduce new matters. x x x

It is well-settled in our jurisdiction that our courts cannot take judicial notice of foreign laws. Like any
other facts, they must alleged and proved. x x x The power of judicial notice must be exercise d with
caution, and every reasonable doubt upon the subject should be resolved in the negative. 96

Since the divorce was raised by Manalo, the burden of proving the pertinent Japanese law validating
it, as well as her former husband's capacity to remarry, fall squarely upon her. Japanese laws on
persons and family relations are not among those matters that Filipino judges are supposed to know
by reason of their judicial function.

WHEREFORE, the petition for review on certiorari is DENIED. The September 18, 2014 Decision
and October 12, 2015 Resolution if the Court of Appeals in CA G.R. CV. No. 100076, are
AFFIRMED IN PART. The case is REMANDED to the court of origin for further proceedings and
reception of evidence as to the relevant Japanese law on divorce.

SO ORDERED

Then the RTC will order that the substance of the Petition be
published in a random newspaper once a week for 3 weeks. The case
will be calendared for first hearing and notices of this will be served to
the Philippine government offices concerned, to the last known
address of the ex-spouse, and to any other required parties.

Proof that these notices were served needs to be shown on the first
hearing date. After that, the lawyer will have the documents of the
case marked into the record of the Court.
As you can see, this is a court process with extensive pre-hearing
requirements. The trial itself requires the presentation of witnesses
and other evidence, as well as written memoranda, before the Court
will make a ruling.
The testimony of a witness will be through a judicial affidavit.
A judicial affidavit is used in order to speed up the trial.

#18

[ G.R. No. 198008, February 04, 2019 ]

 REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE REGIONAL
EXECUTIVE DIRECTOR, REGION X, DEPARTMENT OF PUBLIC WORKS AND
HIGHWAYS, PETITIONER, VS. BENJOHN FETALVERO, RESPONDENT.

DECISION
LEONEN, J.:
Money claims against the government cannot be the subject of writs of execution absent any showing that they have
been brought before the Commission on Audit, under this Court's Administrative Circular No. 10-2000[1] and
Commission on Audit Circular No. 2001-002.[2]

This is a Petition for Review on Certiorari[3] praying that the July 29, 2011 Decision[4] of the Court of Appeals be
reversed, and that the September 22, 2009[5] and April 23, 2010[6] Orders of the Regional Trial Court be annulled.
[7]
 Further, it is prayed that a temporary restraining order be issued to enjoin the trial court from implementing the
assailed Orders. The Court of Appeals affirmed the trial court Orders, which granted the Motion for the Issuance of an
Order for a Writ of Garnishment filed by Benjohn Fetalvero (Fetalvero).[8]

Fetalvero owned a 2,787-square meter parcel of land in Iligan City, Lanao del Norte. The lot was covered by Transfer
Certificate of Title (TCT) No. T-25,233 (a.f.).[9]

In 1999, the Department of Public Works and Highways, Region X took 569 square meters from Fetalvero's property
to be used in its flood control project. Fetalvero stated that the project's construction on that portion of land rendered
the remaining part useless, so he demanded payment for the entire area at P15,000.00 per square meter. However,
under Presidential Administrative Order No. 50, series of 1999, the just compensation Fetalvero was entitled to was
only P2,500.00 per square meter, or a total of P1,422,500.00, plus 10% thereof. The rate was based on the Bureau of
Internal Revenue zonal valuation in 1999, when the property was taken. Despite negotiations, the parties failed to
agree on the amount of just compensation.[10]

On February 13, 2008, the Republic of the Philippines (Republic), through the Office of the Solicitor General, filed
before the Regional Trial Court a Complaint[11] for expropriation against Fetalvero.[12] It prayed "for the determination
and payment of the just compensation and the entry of a judgment of condemnation of the 569 square meters portion
of [Fetalvero's] property."[13] The case, docketed as Civil Case No. 7118, was raffled to Branch 3 under Presiding
Judge Albert B. Abragan (Judge Abragan).[14]

Subsequently, the Office of the Solicitor General sent a letter[15] dated April 10, 2008 to Atty. Earnest Anthony L.
Lorea (Atty. Lorea), the Legal Staff Chief of the Department of Public Works and Highways, Region X. In its letter, the
Office of the Solicitor General deputized Atty. Lorea to assist it in Civil Case No. 7118, as his authority was "subject to
the reservation contained in the Notice of Appearance filed by [the] Solicitor General[.]"[16]

On April 16, 2008, the Office of the Solicitor General filed before the trial court a Notice of Appearance[17] dated April
10, 2008. It entered its appearance as counsel for the Republic in Civil Case No. 7118, and informed the trial court
that it authorized Atty. Lorea to appear on its behalf. It emphasized that since it "retain[ed] supervision and control of
the representation in [the] case and [had] to approve withdrawal of the case, non-appeal[,] or other actions which
appear to compromise the interest of the Gove1nment, only notices of orders, resolutions, and decisions served on
him will bind the [Republic]."[18]

On June 27, 2008, the trial court issued an Order[19] and referred the case to the Philippine Mediation Center for
mediation.[20]

On September 1, 2008, the parties entered into a Compromise Agreement, which read:

UNDERSIGNED PARTIES:                                                    

Regional Executive Director, Region 10, DPWH

-And-

Benjohn Fetalvero                                           

AGREE as follows:

1. That the area involved is 1,428 square meters.

2. That the price per square meter is Nine Thousand Five Hundred Pesos (PHP 9,500.00) per square meter or
a total of Thirteen Million Five Hundred Sixty[-]Six Thousand & 00/100 (PHP 13,566,000.00) which latter is the
amount to be paid in full b[y] the plaintiff to the defendant not later than September, 2009.

3. After September, 2009, it will earn interest at 12% per annum until fully paid.

4. Expenses for documentation and transfer to the account of Plaintiff.

IN WITNESS WHEREOF, the parties hereto have mutually and voluntarily agreed to the above stipulations and sign
this Agreement at PMC Iligan City, on this 1st day of September, 2008 for the consideration and approval of the
Honorable Court.

  (Sgd) illegible..  
Atty. Ernest Lorea (Sgd) Benjohn Fetalvero
Plaintiff/Complainant Defendant
   
        Assisted by:  
   
Atty. GERARDO D. PAGUIO ERWIN TRACY E. DACUP
Mediator Mediation Staff Asst. II
Mediation Supervisor/Coordinator[21]

Fetalvero filed before the trial court a motion to approve the Compromise Agreement and for the issuance of
judgment.[22]

On October 17, 2008, the trial court issued an Order[23] approving the Compromise Agreement. On November 6,
2008, the Republic received a copy of the Order.[24]

In a letter dated May 13, 2009, Jaime A. Pacanan, Assistant Secretary and Central Right of Way Committee Chair of
the Department of Public Works and Highways, Manila, requested advice from the Office of the Solicitor General
regarding the Compromise Agreement's legality.[25]

In its letter[26] dated June 4, 2009, the Office of the Solicitor General replied that the government cannot be bound by
the Compromise Agreement since it was not submitted to its office for review, which is a condition under the
deputation letter and the Notice of Appearance. Thus, it was improper for the Department of Public Works and
Highways to directly submit the Compromise Agreement to the trial court for judgment. Further, the Compromise
Agreement failed to state how it arrived at the just compensation of P9,500.00 per square meter.[27]

Meanwhile, Fetalvero filed on July 20, 2009 a Motion for the Issuance of an Order for a Writ of Garnishment for the
satisfaction of the trial court's October 17, 2008 Order.[28] He alleged that Sheriff Sandor B. Bantuas served a Writ of
Execution to Atty. Lorea on June 2, 2009 and June 24, 2009. Both times, the latter ignored it and refused to comply
with and satisfy the trial court's judgment. It was, therefore, necessary and just that the court issue a Writ of
Garnishment in his favor.[29]

The Republic opposed the Motion, arguing that since the Compromise Agreement was not legally binding, "it cannot
be the subject of a valid writ of execution or garnishment."[30] Moreover, the government still owns its funds and
properties that were in official depositaries; thus, these cannot be garnished or levied.[31]

In its September 22, 2009 Order,[32] the trial court granted Fetalvero's Motion. It held:

From the arguments of both defendant-movant and the plaintiff, the court is more inclined to agree with the
observation of defendant-movant considering that the record reveals that the Office of the Solicitor General was duly
furnished copy of the judgment of the court approving the Compromise Agreement dated October 17, 2008. Despite
the lapse of almost a year, the Office of the Solicitor General never lift[ed] a finger to question the validity of said
Compromise Agreement. The OSG is now precluded from questioning the validity of the compromise agreement. It
should be noted that judgment based on compromise agreement is immediately executory. Hence, the plaintiff cannot
now question the validity of the said judgment without transgressing the doctrine of immutability of judgment.[33]

The trial court further held that since the Office of the Solicitor General received a copy of the trial court's October 17,
2008 Order, the judgment was valid and binding on the Republic. Further, government funds in official depositaries
remain government funds only if there was no appropriation by law. The trial court found that funds were already
appropriated under SAA-SR 2009-05-001538 of the Department of Public Works and Highways "for payment of the
road-rights-of-way."[34] Hence, Fetalvero's Motion should be granted.[35]

The dispositive portion of the trial court's September 22, 2009 Order read:

WHEREFORE, finding the motion to be well-founded the same is hereby granted. The Sheriff of this Court may now
proceed with the garnishment of plaintiff's funds intended for the payment of road-rights-of-way under SAA-SR 2009-
05-001538 of the DPWH Main and/or Regional Office, as prayed for.

SO ORDERED.[36]

The Republic moved for reconsideration, but its Motion was denied by the trial court in its April 23, 2010 Order.[37]

The Republic, through the Regional Executive Director of the Department of Public Works and Highways, Region X,
filed before the Court of Appeals a Petition for Certiorari[38] against Fetalvero and Judge Abragan.[39] It again
contended that the Compromise Agreement was not binding on the Republic since it was not submitted to the Office
of the Solicitor General for review, and the basis for the amount of just compensation was not stated in it.[40] It insisted
that "government funds and properties may not be seized under writs of execution or garnishment to satisfy court
judgments."[41]

On July 29, 2011, the Court of Appeals rendered a Decision,[42] denying the Petition for lack of merit.[43] It found that
the Office of the Solicitor General received a copy of the trial court's October 17, 2008 Order, but did not file any
pleading or action to assail it. If the Office of the Solicitor General wanted to question the Compromise Agreement's
validity, it should have raised the matter immediately, not when the Order was about to be executed.[44] The Court of
Appeals added:

As adverted to, records show that the OSG was served a copy of the Order dated October 17, 2008 which approved
the compromise agreement. Hence, it was binding upon it. To rule otherwise would create havoc and absurdity in our
procedural system wherein no judgment based on compromise would ever be final and executory despite the OSG's
receipt of the same on the basis merely that the OSG did not previously receive a copy of the said compromise
subject of the said decision and/or order.[45]

The Court of Appeals further held that public funds may be seized or garnished if they were "already allocated by law
specifically for the satisfaction of the money judgment against the government."[46]

The dispositive pm1ion of the Court of Appeals Decision read:

WHEREFORE, premises considered, the instant petition for certiorari is DENIED for lack of merit. The assailed
Orders dated September 22, 2009 and April 23, 2010 are AFFIRMED in toto.

SO ORDERED.[47] (Emphasis in the original)

On October 6, 2011, the Republic, through the Office of the Solicitor General, filed before this Court a Petition for
Review on Certiorari[48] against Fetalvero. It prayed that the July 29, 2011 Decision of the Court of Appeals be
reversed and set aside.[49] Respondent submitted his Comment[50] dated February 8, 2012, while petitioner submitted
its Reply[51] dated July 17, 2012.

In its January 28, 2013 Resolution,[52] this Court gave due course to the Petition and informed the parties to submit
their respective memoranda. Petitioner submitted its Memorandum[53] dated April 29, 2013, while respondent
submitted his Memorandum[54] on May 6, 2013.
Petitioner asserts that the Court of Appeals erred in dismissing its Petition "on a purely technical ground."[55] It argues
that the Court of Appeals should have disposed the case based on its merit since it involves a substantial amount of
public funds. Petitioner reiterates that the Compromise Agreement is void since it was entered into contrary to the
reservation in the deputation letter and the Notice of Appearance. The Compromise Agreement was directly
submitted to the trial court without the Office of the Solicitor General's prior review and approval.[56]

Petitioner avers that the just compensation is grossly disadvantageous to the government. The actual market value of
properties in Mahayahay, Iligan City is P500.00 to P1,000.00 per square meter in 2003. However, the just
compensation for respondent's property in the Compromise Agreement is P9,500.00 per square meter. Since the
property was expropriated in 1999, petitioner argues that the just compensation should have been lower than the
properties' selling price in 2003. Moreover, the Compromise Agreement does not indicate how the parties arrived at
the just compensation.[57]

Finally, petitioner contends that despite the approval of the allocation under SAA-SR 2009-05-001538 and the partial
payment of the just compensation to respondent, it can still question the Compromise Agreement's validity. Assuming
that respondent proves that he has a claim, he cannot seize government funds by virtue of a writ of execution or
garnishment. He must first file it before the Commission on Audit under Commonwealth Act No. 327, as amended by
Section 26 of Presidential Decree No. 1445.[58]

On the other hand, respondent notes that the Compromise Agreement had been approved by the trial court on
October 17, 2008. Thus, it had already attained finality by the time petitioner questioned its validity in June 2009.
Respondent also points out that petitioner did not even avail of the remedies under the Rules of Court. It did not file
an appeal, a motion for new trial, a petition for relief, or a petition to annul the trial court Orders.[59] Instead, it filed a
petition for certiorari to "indirectly annul"[60] the judgments.

Respondent adds that the Court of Appeals correctly denied the Petition for Certiorari, since petitioner failed to show
that Judge Abragan, in issuing the assailed Orders, committed grave abuse of discretion:[61]

The issuance of the said orders which granted the motion for issuance of an order of writ of garnishment was not only
proper, it was imperative as well because the order/judgment of the court dated October 17, 2008 approving the
compromise agreement has long become final and executory, there being no motion for reconsideration or any
appellate action taken by the petitioner in respect of the said order despite its receipt of the same on November 6,
2008. It is well established that a compromise agreement may be enforced by a writ of execution.[62]

Lastly, respondent states that he was issued a Release of Funds to Cover Payment of Right-of-Way Claims for
Region X under SARO No. BMB-A-10-0018567 on September 23, 2010 in the amount of P898,266.30, and a
Disbursement Voucher in the same amount as partial payment or satisfaction of the court order in Civil Case No.
7118 on November 22, 2010.[63]

The issues for this Court's resolution are:

First, whether or not the Compromise Agreement is void for not having being submitted to the Office of the Solicitor
General for review;

Second, whether or not the Compromise Agreement is void since the amount of just compensation is allegedly
grossly disadvantageous to the government; and

Finally, whether or not government funds may be seized under a writ of execution or a writ of garnishment in
satisfaction of court judgments.

Petitioner claims that the Compromise Agreement is void because: (1) it was not submitted to the Office of the
Solicitor General for review; and (2) the amount of just compensation was grossly disproportionate to the property's
actual market value, and its computation was not in the Compromise Agreement.

Petitioner's contentions are partly meritorious.

On petitioner's first claim, this Court takes this opportunity to reiterate our ruling in Republic of the Philippines v.
Viaje, et al.,[64] which clarified the role of a deputized counsel in relation to the Office of the Solicitor General:
The power of the OSG to deputize legal officers of government departments, bureaus, agencies and offices to assist
it in representing the government is well settled. The Administrative Code of 1987 explicitly states that the OSG shall
have the power to "deputize legal officers of government departments, bureaus, agencies and offices to assist the
Solicitor General and appear or represent the Government in cases involving their respective offices, brought before
the courts and exercise supervision and control over such legal officers with respect to such cases." But it is likewise
settled that the OSG's deputized counsel is "no more than the 'surrogate' of the Solicitor General in any particular
proceeding" and the latter remains the principal counsel entitled to be furnished copies of all court orders, notices,
and decisions. . . . The appearance of the deputized counsel did not divest the OSG of control over the case and did
not make the deputized special attorney the counsel of record.[65] (Citations omitted)

Here, the Office of the Solicitor General, as the principal counsel, is shown in both the deputation letter addressed to
Atty. Lorea and the Notice of Appearance filed before the trial court.

The deputation letter read:

  RE: Civil Case No. 7118

  Regional Trial Court, Br. 03, Iligan City
REPUBLIC OF THE
PHILIPPINES, Rep. by the
REGIONAL EXECUTIVE
DIRECTOR, REGION X,
DEPT. OF PUBLIC WORKS
AND HIGHWAYS (Plaintiffs)
vs. BENJOHN FETALVERO
(Defendant).
x=============================x

Sir:

Pursuant to Section 35(7), E.O. No. 292 and Section 11(e), P.D. No. 1275, you are hereby deputized to assist the
Solicitor General in the above-captioned case.

Please be informed that your authority is subject to the reservation contained in the Notice of Appearance filed by
[the] Solicitor General in this case that only notices of orders, resolutions, and decisions served on him will bind the
Government, the entity, agency and/or official represented.

Upon promulgation of judgment, please submit immediately your report and recommendation to our Office for
evaluation.[66] (Emphasis supplied)

Meanwhile, the Notice of Appearance stated:

NOTICE OF APPEARANCE

The Branch Clerk of Court

RTC, Iligan City

G R E E T I N G S:

Please enter the appearance of the Office of the Solicitor General as counsel for the Republic of the Philippines in
the above-entitled case, and cause all notices of hearings, orders, resolutions, decisions, and other processes to be
served upon the said Office at 134 Amorsolo St., Legaspi Village, Makati City.

Atty. Earnest Anthony L. Lorea, Chief, Legal Staff, Department of Public Works and Highways (DPWH), Region 10,
Bulua, Cagayan de Oro City has been authorized to appear in this case and, therefore, should also be furnished
notices of hearings, orders[,] resolutions, decisions, and other processes. However, as the Solicitor General retains
supervision and control of the representation in this case and has to approve withdrawal of the case, non-appeal or
other actions which appear to compromise the interest of the Government, only notices of orders, resolutions, and
decisions served on him will bind the party represented.

Adverse parties are likewise requested to furnish both the Solicitor General and the Prosecutor with copies of their
pleadings and motions.[67] (Emphasis supplied)

In South Pacific Sugar Corporation, et al. v. Court of Appeals, et al.,[68] this Court explained that:

[The] reservation to "approve the withdrawal of the case, the non-appeal, or other actions which appear to
compromise the interest of the government" was meant to protect the interest of the government in case the
deputized . . . counsel acted in any manner prejudicial to government.[69] (Emphasis supplied, citation omitted)

When Atty. Lorea entered into mediation, he only did so on behalf of the principal counsel, the Solicitor General.
Mediation necessarily involves bargaining of the parties' interests, and a compromise agreement is one (1) of its
consequences. Under the reservation in the Notice of Appearance, Atty. Lorea must submit the resulting Compromise
Agreement to then Solicitor General Agnes VST Devanadera[70] for review and approval, especially since the amount
respondent claims is significantly larger than what he was allegedly only entitled to get. Without the Solicitor
General's positive action on the Compromise Agreement, it cannot be given any effect and cannot bind the Solicitor
General's client, the government.

Nonetheless, despite the lack of the Solicitor General's approval, this Court holds that the government is still bound
by the Compromise Agreement due to laches.

The Solicitor General is assumed to have known of the Compromise Agreement since, as principal counsel, she was
furnished a copy of the trial court's June 27, 2008 Order, which referred the case to mediation. Even if she did not
know that Atty. Lorea signed a Compromise Agreement, she was later informed of it through the copy of the trial
court's October 17, 2008 Order, which approved the Compromise Agreement. The Solicitor General received the
October 17, 2008 Order on November 6, 2008; yet, she filed no appeal or motion to contest the Order or the
Compromise Agreement's validity.

Thus, based on the deputation letter, which stated that "only notices of orders, resolutions, and decisions served on
[the Office of the Solicitor General] will bind the [g]overnment, the entity, agency[,] and/or official
represented[,]"[71] and the Notice of Appearance, which stated that "only notices of orders, resolutions, and decisions
served on [the Office of the Solicitor General] will bind the party represented[,]"[72] the Solicitor General's receipt of the
October 17, 2008 Order bound petitioner to the trial court's judgment.

In Viaje, et al., only the Office of the Solicitor General was furnished copies of court notices despite its request that
the trial court also furnish its deputized counsel with court notices.[73] This Court held:

It would have been more prudent for the RTC to have furnished the deputized counsel of its notices. All the same,
doing so does not necessarily clear the OSG from its obligation to oversee the efficient handling of the case. And
even if the deputized counsel was served with copies of the courts notices, orders and decisions, these will not be
binding until they are actually received by the OSG. More so in this case where the OSG's Notice of Appearance and
its Letter deputizing the LRA even contained the caveat that it is only notices of orders, resolutions and decisions
served on the OSG that will bind the Republic, the entity, agency and/or official represented. In fact, the proper basis
for computing a reglementary period and for determining whether a decision had attained finality is service on the
OSG.  As was stated in National Power Corporation v. National Labor Relations Commission:

The underlying justification for compelling service of pleadings, orders, notices and decisions on the OSG as principal
counsel is one and the same. As the lawyer for the government or the government corporation involved, the OSG is
entitled to the service of said pleadings and decisions, whether the case is before the courts or before a quasi-judicial
agency such as respondent commission. Needless to say, a uniform rule for all cases handled by the OSG simplifies
procedure, prevents confusion and thus facilitates the orderly administration of justice.[74] (Emphasis supplied,
citations omitted)

In Republic of the Philippines v. Intermediate Appellate Court,[75] the government failed to oppose the petition for
reconstitution. This is despite receiving copies of the petition and its annexes through the Registrar of Deeds, Director
of Lands, Solicitor General, and the Provincial Fiscal, and even after judgment on the compromise agreement.[76] This
Court held:

Thereafter, when judgment was rendered based on the compromise agreement without awaiting the report and
recommendation of the Land Registration Administration and the verification of the Registrar of Deeds concerned, its
failure to file a motion to set aside the judgment of the court after due notice likewise proves that no interest of the
government was prejudiced by such judgment.[77]

The Solicitor General could have contested the June 27, 2008 and October 17, 2008 Orders, but she did not. There
was no explanation of her inaction in any of the pleadings. By the time petitioner filed a Petition for Certiorari,
estoppel by laches has already set in.

In addition, petitioner only resorted to a petition or certiorari when it failed to appeal the case within the reglementary
period. In Nippon Paint Employees Union-Olalia v. Court of Appeals:[78]

It is elementary in remedial law that the use of an erroneous mode of appeal is cause for dismissal of the petition
for certiorari and it has been repeatedly stressed that a petition for certiorari is not a substitute for a lost appeal. This
is due to the nature of a Rule 65 petition for certiorari which lies only where there is "no appeal," and "no plain,
speedy and adequate remedy in the ordinary course of law." As previously ruled by this Court:

. . . We have time and again reminded members of the bench and bar that a special civil action for certiorari  under
Rule 65 lies only when "there is no appeal nor plain, speedy and adequate remedy in the ordinary course of
law." Certiorari can not be allowed when a party to a case fails to appeal a judgment despite the availability of that
remedy, certiorari not being a substitute for lost appeal. The remedies of appeal and certiorari are mutually exclusive
and not alternative or successive.[79] (Emphasis in the original, citations omitted)

Petitioner's second claim is a question of fact improper in a petition for review under Rule 45. In DST Movers
Corporation v. People's General Insurance Corporation:[80]

A Rule 45 petition pertains to questions of law and not to factual issues. Rule 45, Section 1 of the 1997 Rules of Civil
Procedure is unequivocal:

SECTION 1. Filing of Petition with Supreme Court. — A party desiring to appeal by certiorari from a judgment or final
order or resolution of the Court of Appeals, the Sandiganbayan, the Regional Trial Court or other courts whenever
authorized by law, may file with the Supreme Court a verified petition for review on certiorari. The petition shall raise
only questions of law which must be distinctly set forth.

This court's Decision in Cheesman v. Intermediate Appellate Court distinguished questions of law from questions of
fact:

As distinguished from a question of law — which exists "when the doubt or difference arises as to what the law is on
a certain state of facts" — "there is a question of fact when the doubt or difference arises as to the truth or the
falsehood of alleged facts;" or when the "query necessarily invites calibration of the whole evidence considering
mainly the credibility of witnesses, existence and relevancy of specific surrounding circumstances, their relation to
each other and to the whole and the probabilities of the situation."

Seeking recourse from this court through a petition for review on certiorari under Rule 45 bears significantly on the
manner by which this court shall treat findings of fact and evidentiary matters. As a general rule, it becomes improper
for this court to consider factual issues: the findings of fact of the trial court, as affirmed on appeal by the Court of
Appeals, are conclusive on this court. "The reason behind the rule is that [this] Court is not a trier of facts and it is not
its duty to review, evaluate, and weigh the probative value of the evidence adduced before the lower
courts."[81] (Citations omitted)

Moreover, this Court held in Gadrinab v. Salamanca, et al.:[82]

A judgment on compromise agreement is a judgment on the merits. It has the effect of res judicata, and is
immediately final and executory unless set aside because of falsity or vices of consent. The doctrine of immutability of
judgments bars courts from modifying decisions that have already attained finality, even if the purpose of the
modification is to correct errors of fact or law.[83] (Emphasis in the original)

II

The general rule is that government funds cannot be seized by virtue of writs of execution or garnishment.[84] This
doctrine has been explained in Commissioner of Public Highways v. San Diego:[85]

The universal rule that where the State gives its consent to be sued by private parties either by general or special
law, it may limit claimant's action "only up to the completion of proceedings anterior to the stage of execution" and
that the power of the Courts ends when the judgment is rendered, since government funds and properties may not be
seized under writs of execution or garnishment to satisfy such judgments, is based on obvious considerations of
public policy. Disbursements of public funds must be covered by the corresponding appropriation as required by law.
The functions and public services rendered by the State cannot be allowed to be paralyzed or disrupted by the
diversion of public funds from their legitimate and specific objects, as appropriated by law.[86]

Simply put, "no money can be taken out of the treasury without an appropriation[.]"[87] Here, the trial court already
found that:

[T]here is an appropriation intended by law for payment of road-rights-of-way. Defendant [respondent here] even
called the attention of the court of the existence of SAA-SR 2009-05-001538 of the DPWH Main and/or Regional
Office appertaining to the fund intended for payment of the road-rights-of-way.[88]

Even petitioner admitted in its Memorandum "the approval of allocation for payment of road right of way projects
within Region 10 under SAA-SR 2009-001538[.]"[89] Since there is an existing appropriation for the payment of just
compensation, and this Court already settled that petitioner is bound by the Compromise Agreement, respondent is
legally entitled to his money claim. However, he still has to go through the appropriate procedure for making a claim
against the Government.

In Atty. Roxas v. Republic Real Estate Corporation,[90]  this Court elaborated on the proper process of raising money
claims against the government. In that case, the trial court issued a writ of execution over the government funds for
payment of land reclaimed by Republic Real Estate Corporation. This Court held:

The case is premature. The money claim against the Republic should have been first brought before the Commission
on Audit.

The Writ of Execution and Sheriff De Jesus' Notice [of Execution] violate this Court's Administrative Circular No. 10-
2000 and Commission on Audit Circular No. 2001-002, which govern the issuance of writs of execution to satisfy
money judgments against government.

Administrative Circular No. 10-2000 dated October 25, 2000 orders all judges of lower courts to observe utmost
caution, prudence, and judiciousness in the issuance of writs of execution to satisfy money judgments against
government agencies. This Court has emphasized that:
....

. . . it is settled jurisprudence that upon determination of State liability, the prosecution, enforcement or satisfaction
thereof must still be pursued in accordance with the rules and procedures laid down in P[residential] D[ecree] No.
1445, otherwise known as the Government Auditing Code of the Philippines (Department of Agriculture v. NLRC, 227
SCRA 693, 701-02 [1993] citing Republic vs. Villasor, 54 SCRA 84 [1973]). All money claims against the Government
must first be filed with the Commission on Audit which must act upon it within sixty days. Rejection of the claim will
authorize the claimant to elevate the matter to the Supreme Court on certiorari and in effect sue the State thereby
(P[residential] D[ecree] [No.] 1445, Sections 49-50).

For its part, Commission on Audit Circular No. 2001-002 dated July 31, 2001 requires the following to observe this
Court's Administrative Circular No. 10-2000: department heads; bureau, agency, and office chiefs; managing heads
of government-owned and/or controlled corporations; local chief executives; assistant commissioners, directors,
officers-in-charge, and auditors of the Commission on Audit; and all others concerned.

Chapter 4, Section 11 of Executive Order No. 292 gives the Commission on Audit the power and mandate to settle all
government accounts. Thus, the finding that government is liable in a suit to which it consented does not translate to
enforcement of the judgment by execution.

As a rule, public funds may not be disbursed absent an appropriation of law or other specific statutory authority.
Commonwealth Act No. 327, as amended by Presidential Decree No. 1445, requires that all money claims against
government must first be filed before the Commission on Audit, which, in turn, must act upon them within 60 days.

Only when the Commission on Audit rejects the claim can the claimant elevate the matter to this Court on certiorari
and, in effect, sue the state. Carabao, Inc. v. Agricultural Productivity Commission has settled that "claimants have to
prosecute their money claims against the Government under Commonwealth Act 327 . . . and that the conditions
provided in Commonwealth Act 327 for filing money claims against the Government must be strictly observed."

In Star Special Watchman and Detective Agency, Inc. v. Puerto Princesa City:

Under Commonwealth Act No. 327, as amended by Section 26 of P.D. No. 1445, it is the C[ommission] o[n] A[udit]
which has primary jurisdiction to examine, audit and settle "all debts and claims of any sort" due from or owing the
Government or any of its subdivisions, agencies and instrumentalities, including government-owned or controlled
corporations and their subsidiaries[.]

[Republic Real Estate Corporation's] procedural shortcut must be rejected. Any allowance or disallowance of its
money claims is for the Commission on Audit to decide, subject only to [Republic Real Estate Corporation's] remedy
of appeal via a petition for certiorari before this Court.[91] (Emphasis in the original, citations omitted)

Here, as in Atty. Roxas, respondent failed to show that he first raised his claim before the Commission on Audit.
Without this necessary procedural step, respondent's money claim cannot be entertained by the courts through a writ
of execution.

III

Under Article III, Section 9 of the 1987 Constitution, "[p]rivate property shall not be taken for public use without just
compensation."[92]

This Court notes that for almost 20 years now, petitioner had been enjoying the use of respondent's property without
paying the full amount of just compensation under the Compromise Agreement. Respondent had been deprived of
his property for almost two (2) decades. In keeping with substantial justice, this Court imposes the payment of legal
interest on the remaining just compensation due to respondent. Consistent with this Court's ruling in Nacar v. Gallery
Frames,[93]  this Court imposes interest at the rate of twelve percent (12%) per annum from the time of taking until
June 30, 2013, and six percent (6%) per annum from July 1, 2013 until fully paid.[94]

Thus, respondent's money claim under the Compromise Agreement should be adjusted to reflect the interest rates
imposed by this Court.

WHEREFORE, premises considered, the Petition is PARTLY GRANTED. The Court of Appeals July 29, 2011
Decision in CA-G.R. SP No. 03710-MIN is REVERSED and SET ASIDE, insofar as it affirmed the September 22,
2009 and April 23, 2010 Orders of the Regional Trial Court in granting respondent Benjohn Fetalvero's Motion for the
Issuance of an Order for a Writ of Garnishment. This is without prejudice to his filing of adjusted money claim before
the Commission on Audit.

The remaining just compensation due to Benjohn Fetalvero under the Compromise Agreement is subject to interest
at the rate of twelve percent (12%) per annum from the time of taking until June 30, 2013, and six percent (6%) per
annum from July 1, 2013 until the allowance of the money claim by the Commission on Audit.

SO ORDERED.
Bonus 1

[G.R. No. 165575. February 2, 2011.]

ADELIA C. MENDOZA and as Attorney-in-Fact of ALICE

MALLETA, petitioners, vs. UNITED COCONUT PLANTERS
BANK, INC., respondent.

DECISION

PERALTA, J  : p

This is a petition for review on certiorari 1 of the Court of Appeals' Resolution

dated July 2, 2004, in CA-G.R. CV No. 79796, and its Resolution dated September 9,
2004, denying petitioners' motion for reconsideration. The Court of Appeals
dismissed the Appellants' Brief filed by petitioners for failure to comply with the
requirements under Section 13, Rule 44 of the 1997 Revised Rules of Civil Procedure.
The facts are as follows:
On November 5, 2001, petitioner Adelia Mendoza, attorney-in-fact of
petitioner Alice Malleta, filed a Complaint 2 for annulment of titles, foreclosure
proceedings and certificate of sale with the Regional Trial Court (RTC) of Lipa City,
Fourth Judicial Region.
In their Complaint, herein petitioners stated that on October 6, 1995, they
entered into a Real Estate Mortgage Contract with respondent United Coconut
Planters Bank (UCPB) in the amount of P4,925,000.00. 3 On August 27, 1998, the
properties were sold at public auction in the total amount of P31,300,000.00 to UCPB.
On September 17, 2001, an Affidavit of Consolidation was executed by UCPB.
Petitioners contended that the foreclosure proceedings violated due process and
the legal requirements under Act No. 3135, as amended, on the following grounds:
a) There was no valid and legal notice to petitioner Adelia Mendoza of
the foreclosure proceedings;
b) There was no valid and legal notice of the auction sale;
c) There was no valid and legal notice of the consolidation of
ownership; SCaITA

d) There was no valid publication and notice as required by law;

 e) There was a violation of Republic Act No. 3765, "An Act to Require
the Disclosure of Finance Charges in Connection with Extensions of Credit,"
specifically Section 6 of the law;
f) There was no clear and accurate financial statement showing the
application of payments of the plaintiffs (petitioners herein); and
g) There was no valid letter of demand showing the clear finance
charges.
Petitioners prayed that the foreclosure proceedings and Certificate of Sale be
annulled, and that if ever any new title is issued in lieu of their Transfer Certificates of
Titles, 4 the same should be cancelled and annulled; that respondent be ordered to pay
petitioners attorney's fees of P50,000.00 and litigation expenses of P20,000.00.
In its Answer with Compulsory Counterclaim, 5 respondent UCPB denied that
petitioners entered into a Real Estate Mortgage Contract with it in the amount of
P4,925,000.00, the truth being that petitioner Adelia Mendoza executed several
promissory notes in the total principal amount of P27,500,000.00, and to secure these
obligations she executed, together with petitioner Alice Malleta, several real estate
mortgages over several parcels of land in favor of UCPB.
Respondent denied that the foreclosure proceedings were legally defective, as
the said proceedings were done in accordance with the provisions of Act No. 3135, as
amended. It countered that the law does not require personal notice to the mortgagor
of the foreclosure proceedings and the auction sale, as the publication of the notice of
sale in a newspaper of general circulation constitutes constructive notice to the whole
world. Moreover, there is no legal requirement of personal notice to the mortgagor of
the consolidation of ownership, as the registration of the certificate of sale with the
Register of Deeds constitutes notice to the whole world that the mortgagor or any
interested party has one year from the date of such registration to redeem the
foreclosed properties. Respondent claimed that it complied with the posting
requirements, and that it had also complied with the provisions of Republic Act No.
3765 and had regularly furnished petitioners with statements of account pursuant to
standard banking practice.
Respondent contended that petitioners knew that the foreclosure was
forthcoming due to their default in the payment of their obligations. Petitioners had
been sent several verbal and written demands to pay their obligations and had been
warned that failure to settle their obligations would result in the foreclosure of their
properties. Further, petitioners had one year from the date of registration of the
certificate of sale to redeem their property, but they failed to do so.
Respondent denied that there was "non-disclosure of finance charges without
lawful and legal demand," since it had regularly sent petitioners statements of account
and had regularly given verbal and written notices to pay their obligations. It also
denied the allegations of lack of reconciliation and verification of accounts. In this
regard, respondent stated that petitioners could have easily verified their account with
the account officers of UCPB, but they failed to do so. TcICEA

As special and affirmative defenses, respondent stated that on August 9, 1994,

petitioner Mendoza applied for and was granted a credit line in the amount of P25
million, which is supported by a Loan Agreement. 6 On October 9, 1995, the credit
line was increased by P2.5 million, as evidenced by a Loan Agreement. 7 Petitioner
Mendoza availed of the said credit line in the aggregate principal amount of Twenty-
Seven Million Five Hundred Thousand Pesos (P27.5 million) and executed
promissory notes 8 therefor. Among other conditions, the promissory notes carried
acceleration clauses, making these notes immediately due and payable even before
maturity in case an event of default occurred, including, but not limited to, payment of
principal and interest amortizations.
Moreover, respondent stated that on August 10, 1995, as partial security for the
promissory notes, petitioner Malleta, through her attorney-in-fact, petitioner Adelia
Mendoza, executed a real estate mortgage in favor of UCPB over several parcels of
land registered under the name of Alice B. Malleta with the Register of Deeds of Lipa
City. Later, pursuant to petitioner Mendoza's commitment with UCPB, the titles of the
mortgaged properties were transferred under the name of Adelia B. Mendoza upon
release of the loan proceeds and the mortgage annotation was carried over to the new
titles.
According to respondent, on October 6, 1995, petitioner Mendoza executed a
real estate mortgage over 12 parcels of land, 9 all registered in her name, as additional
security for the said promissory notes.
Respondent stated that petitioner Mendoza failed to discharge her obligations
under the promissory notes, despite written and verbal demands made by UCPB upon
her, the latest of which was the demand letter dated January 29, 1998. 10 Hence, it had
no other recourse but to initiate foreclosure proceedings on the aforementioned
securities.
Respondent averred that on May 6, 1998, it filed a Petition 11 for Extrajudicial
Foreclosure of the mortgaged properties before the Ex Officio Sheriff of Lipa City.
On July 21, 1998, the Sheriff prepared a Notice of Sale 12 and set the date of
the public sale on August 27, 1998. 13 On July 28, 1998, the Sheriff posted the Notice
of Sale in three public places and the Notice was, likewise, published in Tambuling
Batangas, a newspaper of general circulation, on July 22 and 29, 1998, and on August
5, 1998. The certificate of posting and publisher's affidavit of publication were
attached as Annexes "12," 14 and "13," 15 respectively.
The public sale was conducted on August 28, 1998. The mortgaged properties
were sold in the amount of P31,300,000.00 to UCPB as the highest and winning
bidder. A Certificate of Sale 16 was issued in favor of UCPB, which was duly
registered in July 2000 at the back of the certificates of title of the mortgaged
properties with the Register of Deeds of Lipa City.  HSIaAT

Petitioners failed to redeem the foreclosed properties within the one-year

redemption period that expired on July 21, 2001. Consequently, UCPB consolidated
its ownership over the said properties and new certificates of title were issued under
its name.
Respondent stated that on August 27, 1998, the date of the auction sale,
petitioners' outstanding obligation was P58,692,538.63, as evidenced by a Statement
of Account. 17
According to respondent, the proceeds of the foreclosure sale amounted to
P31,300,000.00, leaving a deficiency of P27,392,538.63, an amount which it is
entitled to payment from petitioner Mendoza, together with penalties and interest due
thereon.
Respondent prayed that, after hearing, judgment be rendered (1) dismissing the
Complaint for lack of merit; (2) on the counterclaim, ordering petitioners to pay the
deficiency claim of P27,392,538.63, including the penalties and interests due thereon
from August 27, 1998, and P1 million as attorney's fees and P200,000.00 as litigation
expenses.
On March 25, 2003, respondent filed a Motion to Dismiss 18 for failure to
prosecute. Respondent contended that petitioners, through counsel, received a copy of
its Answer on August 26, 2002, as shown by the photocopy of the registry return
receipt. It stated that under Section 1, Rule 18 of the 1997 Rules of Civil Procedure,
petitioners have the positive duty to promptly set the case for pre-trial after the last
pleading had been filed. It stated that the Answer was the last pleading, since
petitioners failed to file a Reply thereon within the reglementary period.
Respondent stated that since August 26, 2002, or almost a period of six
months, petitioners had not taken steps to set the case for pre-trial as mandated by the
rules. Respondent submitted that the case should be dismissed for failure to prosecute
for an unreasonable period of time as provided by Section 3, Rule 17 of the 1997
Rules of Civil Procedure. It asserted that failure to set the case for pre-trial for almost
six (6) months is an unreasonable period of time, as a period of three (3) months had
been found to constitute an unreasonable period of time in Montejo v. Urotia. 19  
Petitioners, through counsel Atty. Jose P. Malabanan, filed an Opposition to
the Motion to Dismiss and Motion to Set the Case for Pre-trial, 20 and stated therein
that their counsel on record is Atty. Monchito C. Rosales, who died on December 22,
2002; that Atty. Jose P. Malabanan forgot the case because of the death of Atty.
Rosales (who is his law partner), and that he was setting the case for pre-trial.
Petitioners prayed that the Opposition and motion to set the case for pre-trial be
granted.
 On April 15, 2003, the RTC of Lipa City, Branch 12 issued an
Order 21 dismissing the case. The court found the Motion to Dismiss (for failure to
prosecute) to be in accordance with the rules. It stated that the records of the case
showed that since August 20, 2002, the issues in this case had already been joined,
and that Atty. Monchito C. Rosales was still alive then, yet he did not take any step to
have the case set for pre-trial. It found the claim of Atty. Jose P. Malabanan, that he
forgot about the case because of the death of Atty. Rosales, as unpardonable, flimsy
and an invalid excuse. TCHEDA

The Motion for Reconsideration of the Order dated April 15, 2003 was denied
for lack of merit by the trial court in an Order dated May 26, 2003. 22
Thereafter, petitioners appealed the trial court's Orders to the Court of Appeals,
and filed an Appellant's Brief on April 5, 2004.
On May 20, 2004, respondent filed a Motion to Dismiss Appeal on the ground
that the Appellant's Brief failed to comply with the requirements under Section 13,
Rule 44 of the 1997 Rules of Civil Procedure. Respondent contended that the
Appellant's Brief contained only the following topics: (1) Prefaratory Statement; (2)
Statement of Facts and Antecedent Proceedings; (3) Parties; (4) Statement of the
Case; (5) Issues; (6) Arguments/Discussion; and (7) Prayer. The Appellants' Brief did
not have the following items: (1) A subject index of the matter in the brief with a
digest of the arguments and page references, and a table of cases alphabetically
arranged, textbooks and statutes cited with references to the pages where they are
cited; (2) an assignment of errors; (3) on the authorities cited, references to the page
of the report at which the case begins and page of the report on which the citation is
found; (4) page references to the record in the Statement of Facts and Statement of the
Case.
Respondent contended that the absence of a specific assignment of errors or of
page references to the record in the Appellants' Brief is a ground for dismissal of the
appeal under Section 1 (f), Rule 50 of the 1997 Rules of Civil Procedure. 23
On June 4, 2004, petitioners filed an Opposition to Motion to Dismiss
Appeal. 24 They contended that the assignment of errors were only designated as
"Issues" in their Appellants' Brief; and although the designation of the "Assignment of
Error" may vary, the substance thereof remains. Moreover, petitioners stated that the
textbooks and statutes were cited immediately after the portion where they are quoted,
which is more convenient and facilitates ready reference of the legal and
jurisprudential basis of the arguments. They claimed that the absence of a subject
index does not substantially deviate from the requirements of the Rules of Court,
because one can easily go over the Appellants' Brief and can designate the parts with
nominal prudence. They pointed out that Section 6 of the Rules of Court provides for
a liberal construction of the Rules in order to promote their objective of securing a
just, speedy and inexpensive disposition of every action and proceeding.
 On July 2, 2004, the Court of Appeals issued a Resolution dismissing the
appeal. The dispositive portion of the Resolution reads:
WHEREFORE, in view of the foregoing, the defendant-appellee
UCPB's Motion to Dismiss Appeal is hereby GRANTED. This appeal is
ordered DISMISSED for failure to comply with Section 13, Rule 44 of the 1997
Revised Rules of Civil Procedure. 25
The Court of Appeals held that the right to appeal is a statutory right and a
party who seeks to avail of the right must faithfully comply with the rules. It found
that the Appellants' Brief failed to comply with Section 13, Rule 44 of the 1997
Revised Rules of Civil Procedure, thus:  EDACSa

In this case, the plaintiff-appellant's brief failed to provide an index, like

a table of contents, to facilitate the review of appeals by providing ready
references to the records and documents referred to therein. This Court has to
thumb through the brief page after page to locate the party's arguments, or a
particular citation, or whatever else needs to be found and considered. In so
doing, the plaintiff-appellant unreasonably abdicated her duty to assist this
Court in the appreciation and evaluation of the issues on appeal.
Further, the statement of facts is not supported by page references to the
record. Instead of reasonably complying with the requirements of the rules,
plaintiff-appellant annexed the plain photocopy of the documents being referred
to in the statements of facts. Thus, if only to verify the veracity of the
allegations in the brief and the existence of the attached documents, this Court
has to pore over the entire records of this case.
There is no merit in the plaintiff-appellant's argument that the
"Assignment of Error" was merely designated as "Issues" but the substance
thereof remains and should not cause the dismissal of the appeal. The Supreme
Court categorically stated in De Liano vs. Court of Appeals that the statement
of issues is not to be confused with the assignment of errors because they are
not one and the same, for otherwise, the rules would not have required a
separate statement of each. 26
Petitioners' motion for reconsideration was denied for lack of merit by the
Court of Appeals in its Resolution dated September 9, 2004. The appellate court held
that petitioners merely reiterated the arguments raised in their Opposition to Motion
to Dismiss Appeal, which arguments were already passed upon by the court.
Moreover, the Court of Appeals noted that despite ample opportunity, petitioners
never attempted to remedy the deficiency in their Appellants' Brief by filing another
brief in conformity with the rules, but obstinately maintained that their Appellants'
Brief substantially complied with the rules.
Hence, petitioners filed this petition raising the following issues:
I
 THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE
APPEAL NOTWITHSTANDING THE PETITIONERS' SUBSTANTIAL
COMPLIANCE [WITH] SECTION 13, RULE 44 [OF] THE 1997 RULES OF
CIVIL PROCEDURE.
II
THE HONORABLE REGIONAL TRIAL COURT OF LIPA CITY, BRANCH
12 ERRED IN ORDERING THE DISMISSAL OF PETITIONERS'
COMPLAINT ON THE GROUND OF FAILURE TO PROSECUTE THEIR
CAUSE OF ACTION FOR AN UNREASONABLE PERIOD OF TIME.
III
THE HONORABLE REGIONAL TRIAL COURT OF LIPA CITY, BRANCH
12 ERRED IN NOT HOLDING THAT RESPONDENT'S NON-
COMPLIANCE WITH THE POSTING REQUIREMENT UNDER SECTION
3, ACT NO. 3135 IS FATAL TO THE VALIDITY OF THE FORECLOSURE
PROCEEDINGS.
IV
THE EXTRAJUDICIAL FORECLOSURE PROCEEDINGS AND AUCTION
SALE OF THE SUBJECT REALTIES VIOLATE THE PROVISIONS OF
ARTICLE XVII OF THE CONTRACT OF MORTGAGE ENTERED INTO
BY AND BETWEEN THE PETITIONERS AND RESPONDENT ON 06
OCTOBER 1995.
V
RESPONDENT UNITED COCONUT PLANTERS BANK VIOLATED
SECTION 4 OF REPUBLIC ACT NO. 3765 ON THE REQUIREMENT OF
FULL DISCLOSURE OF FINANCE CHARGES IN CONNECTION WITH
THE EXTENSIONS OF CREDIT.
VI
PETITIONERS ARE ENTITLED TO REASONABLE ATTORNEY'S
FEES. 27
The main issue is whether or not the Court of Appeals erred in dismissing
petitioners' appeal on the ground that their Appellants' Brief failed to comply with
Section 13, Rule 44 of the 1997 Rules of Civil Procedure as the said brief did not have
a subject index, an assignment of errors, and page references to the record in the
Statement of Facts.
Petitioners argue that the absence of a subject index in their Appellants' Brief is
not a material deviation from the requirements of Section 13, Rule 44 of the 1997
Revised Rules of Civil Procedure, and that each portion of the 12-page brief was
boldly designated to separate each portion.
 Moreover, petitioners contend that while the "assignment of errors" was not
designated as such in their Appellants' Brief, the assignment of errors were clearly
embodied in the "Issues" thereof, which substantially complies with the rules.
The petition is without merit.
The right to appeal is neither a natural right nor a part of due process; it is
merely a statutory privilege, and may be exercised only in the manner and in
accordance with the provisions of law. 28 An appeal being a purely statutory right, an
appealing party must strictly comply with the requisites laid down in the Rules of
Court. 29
In regard to ordinary appealed cases to the Court of Appeals, such as this case,
Section 13, Rule 44 of the 1997 Rules of Civil Procedure provides for the contents of
an Appellant's Brief, thus:
Sec. 13. Contents of appellant's brief. — The appellant's brief shall
contain, in the order herein indicated, the following: 
aCHcIE

(a) A subject index of the matter in the brief with a digest of the
arguments and page references, and a table of cases alphabetically arranged,
textbooks and statutes cited with references to the pages where they are cited;
(b) An assignment of errors intended to be urged, which errors shall be
separately, distinctly and concisely stated without repetition and numbered
consecutively;
(c) Under the heading "Statement of the Case," a clear and concise
statement of the nature of the action, a summary of the proceedings, the
appealed rulings and orders of the court, the nature of the judgment and any
other matters necessary to an understanding of the nature of the controversy,
with page references to the record;
(d) Under the heading "Statement of Facts," a clear and concise
statement in a narrative form of the facts admitted by both parties and of those
in controversy, together with the substance of the proof relating thereto in
sufficient detail to make it clearly intelligible, with page references to the
record; 
(e) A clear and concise statement of the issues of fact or law to be
submitted to the court for its judgment;
(f) Under the heading "Argument," the appellant's arguments on each
assignment of error with page references to the record. The authorities relied
upon shall be cited by the page of the report at which the case begins and the
page of the report on which the citation is found;
(g) Under the heading "Relief," a specification of the order or judgment
which the appellant seeks; and
 (h) In cases not brought up by record on appeal, the appellant's brief
shall contain, as an appendix, a copy of the judgment or final order appealed
from.
In this case, the Appellants' Brief of petitioners did not have a subject index.
The importance of a subject index should not be underestimated. De Liano v. Court
of Appeals 30 declared that the subject index functions like a table of contents,
facilitating the review of appeals by providing ready reference. It held that:
[t]he first requirement of an appellant's brief is a subject index. The
index is intended to facilitate the review of appeals by providing ready
reference, functioning much like a table of contents. Unlike in other
jurisdictions, there is no limit on the length of appeal briefs or appeal
memoranda filed before appellate courts. The danger of this is the very real
possibility that the reviewing tribunal will be swamped with voluminous
documents. This occurs even though the rules consistently urge the parties to be
"brief" or "concise" in the drafting of pleadings, briefs, and other papers to be
filed in court. The subject index makes readily available at one's fingertips the
subject of the contents of the brief so that the need to thumb through the brief
page after page to locate a party's arguments, or a particular citation, or
whatever else needs to be found and considered, is obviated. 31  DSITEH

Moreover, the Appellants' Brief had no assignment of errors, but petitioners

insist that it is embodied in the "Issues" of the brief. The requirement under Section
13, Rule 44 of the 1997 Rules of Civil Procedure for an "assignment of errors" in
paragraph (b) thereof is different from a "statement of the issues of fact or law" in
paragraph (e) thereof. The statement of issues is not to be confused with the
assignment of errors, since they are not one and the same; otherwise, the rules would
not require a separate statement for each. 32 An assignment of errors is an enumeration
by the appellant of the errors alleged to have been committed by the trial court for
which he/she seeks to obtain a reversal of the judgment, while the statement of issues
puts forth the questions of fact or law to be resolved by the appellate court. 33
Further, the Court of Appeals found that the Statement of Facts was not
supported by page references to the record. De Liano v. Court of Appeals held:
. . . The facts constitute the backbone of a legal argument; they are
determinative of the law and jurisprudence applicable to the case, and
consequently, will govern the appropriate relief. Appellants should remember
that the Court of Appeals is empowered to review both questions of law and of
facts. Otherwise, where only a pure question of law is involved, appeal would
pertain to this Court. An appellant, therefore, should take care to state the facts
accurately though it is permissible to present them in a manner favorable to one
party. . . . Facts which are admitted require no further proof, whereas facts in
dispute must be backed by evidence. Relative thereto, the rule specifically
requires that one's statement of facts should be supported by page references to
the record. Indeed, disobedience therewith has been punished by dismissal of
the appeal. Page references to the record are not an empty requirement. If a
 statement of fact is unaccompanied by a page reference to the record, it
may be presumed to be without support in the record and may be stricken
or disregarded altogether. 34
The assignment of errors and page references to the record in the statement of
facts are important in an Appellant's Brief as the absence thereof is a basis for the
dismissal of an appeal under Section 1 (f), Rule 50, of the 1997 Rules of Civil
Procedure, thus:
SECTION 1.  Grounds for dismissal of appeal. — An appeal may be
dismissed by the Court of Appeals, on its own motion or on that of the appellee,
on the following grounds:
xxx xxx xxx
(f) Absence of specific assignment of errors in the appellant's brief, or of
page references to the record as required in section 13, paragraphs (a), (c), (d)
and (f) of Rule 44.
Rules 44 and 50 of the 1997 Rules of Civil Procedure are designed for the
proper and prompt disposition of cases before the Court of Appeals. 35 Rules of
procedure exist for a noble purpose, and to disregard such rules in the guise of liberal
construction would be to defeat such purpose. 36 The Court of Appeals noted in its
Resolution denying petitioners' motion for reconsideration that despite ample
opportunity, petitioners never attempted to file an amended appellants' brief
correcting the deficiencies of their brief, but obstinately clung to their argument that
their Appellants' Brief substantially complied with the rules. Such obstinacy is
incongruous with their plea for liberality in construing the rules on appeal. 37  ScTCIE

De Liano v. Court of Appeals held:

Some may argue that adherence to these formal requirements serves but
a meaningless purpose, that these may be ignored with little risk in the smug
certainty that liberality in the application of procedural rules can always be
relied upon to remedy the infirmities. This misses the point. We are not
martinets; in appropriate instances, we are prepared to listen to reason, and to
give relief as the circumstances may warrant. However, when the error relates to
something so elementary as to be inexcusable, our discretion becomes nothing
more than an exercise in frustration. It comes as an unpleasant shock to us that
the contents of an appellant's brief should still be raised as an issue now. There
is nothing arcane or novel about the provisions of Section 13, Rule 44. The rule
governing the contents of appellants' briefs has existed since the old Rules of
Court, which took effect on July 1, 1940, as well as the Revised Rules of Court,
which took effect on January 1, 1964, until they were superseded by the
present 1997 Rules of Civil Procedure. The provisions were substantially
preserved, with few revisions. 38
In fine, the Court upholds the Resolutions of the Court of Appeals dismissing
the appeal of petitioners on the ground that their Appellants' Brief does not comply
 with the requirements provided in Section 13, Rule 44 of the 1997 Rules of Civil
Procedure, as the dismissal is supported by Section 1 (f), Rule 50 of the 1997 Rules of
Civil Procedure and jurisprudence. 39 With the dismissal of the appeal, the other
issues raised by petitioners need not be discussed by the Court.
WHEREFORE, the petition is DENIED. The Court of Appeals' Resolutions
dated July 2, 2004 and September 9, 2004, in CA-G.R. CV No. 79796, are
hereby AFFIRMED.
Costs against petitioners.
SO ORDERED.
 (Mendoza v. United Coconut Planters Bank, Inc., G.R. No. 165575, [February 2, 2011],
|||

656 PHIL 342-360)

[G.R. No. 150656. April 29, 2003.]

MARGARITA ROMUALDEZ-LICAROS, petitioner, vs. ABELARDO B. LICAROS,

respondent.

Ongkiko, Kalaw, Manhit and Acorda Law Offices for petitioner.

Martinez & Perez Law Offices for respondent.

SYNOPSIS

This case arose when spouses Abelardo and Margarita Licaros executed an
Agreement of Separation of Properties and filed a petition for the dissolution of
the conjugal partnership of gains. The trial court granted the petition and
approved the separation of property agreement. Thereafter, Abelardo
commenced a civil case for the declaration of nullity of his marriage with
Margarita based on psychological incapacity. The summons was served by
publication through the Department of Foreign Affairs as Margarita was residing
abroad. Consequently, the trial court declared the marriage between Abelardo
and Margarita null and void. In this petition, Margarita attacked the validity of the
service of summons on her and the judgment dissolving the conjugal partnership
of gains.
The Supreme Court ruled that under Section 15 of Rule 14 of the Rules of Court,
a defendant who is a non-resident and is not found in the country may be served
with summons by extraterritorial service in four instances: (1) when the action
affects the personal status of the plaintiff; (2) when the action relates to, or the
subject of which is property within the Philippines, in which the defendant has or
claims a lien or interest, actual or contingent; (3) when the relief demanded
consists, wholly or in part, in excluding the defendant from any interest in
property located in the Philippines; or (4) when the property of the defendant has
been attached within the Philippines. In these instances, extraterritorial service of
summons may be effected under any of three modes: (1) by personal service out
of the country, with leave of court; (2) by publication and sending a copy of the
summons and order of the court by registered mail to the defendant's last known
address, also with leave of court; or (3) by any other means the judge may
consider sufficient. Applying the foregoing rule, the trial court required
extraterritorial service of summons to be effected on Margarita. The trial court's
prescribed mode of extraterritorial service does not fall under the first or second
mode specified in Section 15 of Rule 14, but under the third mode. This refers to
'any other means that the judge may consider sufficient."

The Court further ruled that it is bound by the factual findings of the trial and
appellate courts that the parties freely and voluntarily executed the petition for
dissolution of the conjugal partnership of gains and the agreement of separation
of properties and that there was no showing of coercion or fraud. The Court will
not examine the evidence introduced by the parties below to determine if the trial
and appellate courts correctly assessed and evaluated the evidence on record.
The decision of the Court of Appeals was affirmed.

SYLLABUS

1. REMEDIAL LAW; CIVIL PROCEDURE; SUMMONS; DEFINED. — Summons

is a writ by which the defendant is notified of the action brought against him.
Service of such writ is the means by which the court acquires jurisdiction over his
person. IHCDAS
2. ID.; ID.; ID.; EXTRATERRITORIAL SERVICE; ALLOWED WHEN THE CASE
IS ONE OF ACTIONS IN REM OR QUASI IN REM. — As a rule, when the
defendant does not reside and is not found in the Philippines, Philippine courts
cannot try any case against him because of the impossibility of acquiring
jurisdiction over his person unless he voluntarily appears in court. But when the
case is one of actions in rem or quasi in rem enumerated in Section 15, Rule 14
of the Rules of Court, Philippine courts have jurisdiction to hear and decide the
case. In such instances, Philippine courts have jurisdiction over the res, and
jurisdiction over the person of the non-resident defendant is not essential.

3. ID.; ACTIONS; ACTIONS IN PERSONAM AND ACTIONS IN REM OR QUASI

IN REM, DISTINGUISHED. — Actions in personam and actions in rem or quasi
in rem differ in that actions in personam are directed against specific persons and
seek personal judgments. On the other hand, actions in rem or quasi in rem are
directed against the thing or property or status of a person and seek judgments
with respect thereto as against the whole world.

4. ID.; ID.; SUMMONS; EXTRATERRITORIAL SERVICE; WHEN AND HOW

EFFECTED. — Under Section 15 of Rule 14, a defendant who is a non-resident
and is not found in the country may be served with summons by extraterritorial
service in four instances: (1) when the action affects the personal status of the
plaintiff; (2) when the action relates to, or the subject of which is property within
the Philippines, in which the defendant has or claims a lien or interest, actual or
contingent; (3) when the relief demanded consists, wholly or in part, in excluding
the defendant from any interest in property located in the Philippines; or (4) when
the property of the defendant has been attached within the Philippines. In these
instances, extraterritorial service of summons may be effected under any of three
modes: (1) by personal service out of the country, with leave of court; (2) by
publication and sending a copy of the summons and order of the court by
registered mail to the defendant's last known address, also with leave of court; or
(3) by any other means the judge may consider sufficient.

5. ID.; ID.; ID.; ID.; EFFECTED IN CASE AT BAR. — [T]he trial court required
extraterritorial service of summons to be effected on Margarita in the following
manner: ". . ., service of Summons by way of publication in a newspaper of
general circulation once a week for three (3) consecutive weeks, at the same
time, furnishing respondent copy of this Order as well as the corresponding
Summons and copy of the petition at her given address at No. 96 Mulberry Lane,
Atherton, California, U.S.A., thru the Department of Foreign Affairs, all at the
expense of petitioner." The trial court's prescribed mode of extraterritorial service
does not fall under the first or second mode specified in Section 15 of Rule 14,
but under the third mode. This refers to "any other means that the judge may
consider sufficient." HCaDIS

6. ID.; ID.; APPEALS; APPEAL BY CERTIORARI TO THE SUPREME COURT;

QUESTIONS OF FACTS SHALL NOT BE PASSED UPON BY THE SUPREME
COURT; CASE AT BAR. — The Court is bound by the factual findings of the trial
and appellate courts that the parties freely and voluntarily executed the
documents and that there is no showing of coercion or fraud. As a rule, in an
appeal by certiorari under Rule 45, the Court does not pass upon questions of
fact as the factual findings of the trial and appellate courts are binding on the
Court. The Court is not a trier of facts. The Court will not examine the evidence
introduced by the parties below to determine if the trial and appellate courts
correctly assessed and evaluated the evidence on record.

7. ID.; EVIDENCE; PRESUMPTIONS; A PERSON ACKNOWLEDGING AN

INSTRUMENT BEFORE AN OFFICER AUTHORIZED TO ADMINISTER OATHS
ACKNOWLEDGES THAT HE FREELY AND VOLUNTARILY EXECUTED THE
INSTRUMENT, GIVING RISE TO A PRIMA FACIE PRESUMPTION OF SUCH
FACT; CASE AT BAR. — The due and regular execution of an instrument
acknowledged before an officer authorized to administer oaths cannot be
overthrown by bare allegations of coercion but only by clear and convincing
proof. A person acknowledging an instrument before an officer authorized to
administer oaths acknowledges that he freely and voluntarily executed the
instrument, giving rise to a prima facie presumption of such fact. In the instant
case, Margarita acknowledged the Agreement before Consul Cortez. The
certificate of acknowledgment signed by Consul Cortez states that Margarita
personally appeared before him and "acknowledged before me that SHE
executed the same of her own free will and deed." Thus, there is a prima
faciepresumption that Margarita freely and voluntarily executed the Agreement.
Margarita has failed to rebut this prima facie presumption with clear and
convincing proof of coercion on the part of Abelardo.
8. ID.; ID.; A DOCUMENT ACKNOWLEDGED BEFORE A NOTARY PUBLIC IS
PRIMA FACIE EVIDENCE OF THE DUE AND REGULAR EXECUTION OF THE
DOCUMENT. — A document acknowledged before a notary public is prima facie
evidence of the due and regular execution of the document. A notarized
document has in its favor the presumption of regularity in its execution, and to
contradict the same, there must be evidence that is clear, convincing and more
than merely preponderant.

DECISION

CARPIO, J p:

The Case

This is a petition for review on certiorari 1 to annul the Decision 2 dated 9 August
2001 of the Court of Appeals in CA-G.R. SP No. 58487, as well as the Resolution
dated 23 October 2001 denying the motion for reconsideration. The Court of
Appeals dismissed the petition to annul the following decisions 3 rendered by
Branch 143 of the Regional Trial Court of Makati:

(1) The Decision dated 27 December 1990 4 granting the dissolution of the
conjugal partnership of gains of the spouses Abelardo B. Licaros and Margarita
Romualdez-Licaros;

(2) The Decision dated 8 November 1991 5 declaring the marriage between the
same spouses null and void.

The Facts

The antecedent facts as found by the Court of Appeals are as follows:

. . . Abelardo Licaros (Abelardo, for short) and Margarita Romualdez-Licaros.
(Margarita, hereafter) were lawfully married on December 15, 1968. Out of this
marital union were born Maria Concepcion and Abelardo, Jr. Ironically, marital
differences, squabbles and irreconcilable conflicts transpired between the
spouses, such that sometime in 1979, they agreed to separate from bed and
board.

In 1982, Margarita left for the United States and there, to settle down with her two
(2) children. In the United States, on April 26, 1989, Margarita applied for divorce
before the Superior Court of California, County of San Mateo (Annex "I",
Rejoinder, pp. 164-165) where she manifested that she does not desire
counseling at that time (Quotation, p. 166, Rollo). On August 6, 1990, Margarita
was granted the decree of divorce (Annex 2, Answer, p. 108, Rollo) together with
a distribution of properties between her and Abelardo (pp. 167-168, Rollo).

Not long after, on August 17, 1990, Abelardo and Margarita executed an
"Agreement of Separation of Properties" (pp. 60-64, Rollo). This was followed-up
by a petition filed on August 21, 1990 before the Regional Trial Court of Makati
for the dissolution of the conjugal partnership of gains of the spouses and for the
approval of the agreement of separation of their properties. This was docketed as
Special Proceeding No. 2551. On December 27, 1990, a decision was issued
granting the petition and approving the separation of property agreement.

For his part, on June 24, 1991, Abelardo commenced Civil Case No. 91-1757, for
the declaration of nullity of his marriage with Margarita, based on psychological
incapacity under the New Family Code. As Margarita was then residing at 96
Mulberry Lane, Atherton, California, U.S.A., Abelardo initially moved that
summons be served through the International Express Courier Service. The court
a quo denied the motion. Instead, it ordered that summons be served by
publication in a newspaper of general circulation once a week for three (3)
consecutive weeks, at the same time furnishing respondent a copy of the order,
as well as the corresponding summons and a copy of the petition at the given
address in the United States through the Department of Foreign Affairs, all at the
expense of Abelardo. Respondent was given sixty (60) days after publication to
file a responsive pleading.
On July 15, 1991, Process Server, Maximo B. Dela Rosa, submitted his Officer's
Return quoted hereunder:

"OFFICER'S RETURN

THIS IS TO CERTIFY that on July 3, 1991, I have served a copy of summons

and complaint with annexes together with order dated June 28, 1991 issued by
the Court in the above-entitled case upon defendant Margarita Romualdez-
Licaros c/o DFA. (sent by Mail) thru Pat G. Martines receiving Clerk of
Department of Foreign Affairs a person authorized to receive this kind of process
who acknowledged the receipt thereof at ADB Bldg., Roxas Blvd., Pasay City,
Metro Manila." (p. 40, Rollo)

As required by law, the case was referred to Trial Prosecutor Bruselas, Jr. to find
out any possible collusion between the parties in the case. Thereafter, with the
negative report on collusion, Abelardo was allowed to present his evidence ex-
parte. On November 8, 1991, the Decision (Annex "A", Petition) was handed
down in Civil Case No. 91-1757 declaring the marriage between Abelardo and
Margarita null and void.

Almost nine (9) years later, on April 28, 2000, the petition at bench was
commenced when Margarita received a letter dated November 18, 1991 from a
certain Atty. Angelo Q. Valencia informing her that she no longer has the right to
use the family name "Licaros" inasmuch as her marriage to Abelardo had already
been judicially dissolved by the Regional Trial Court of Makati on November 8,
1991. Asseverating to have immediately made some verifications and finding the
information given to be true, petitioner commenced the instant petition on the
following grounds:

(A) THERE WAS EXTRINSIC FRAUD IN THE PREPARATION AND FILING BY

ABELARDO OF THE PETITION FOR DISSOLUTION OF THE CONJUGAL
PARTNERSHIP OF GAINS AND ITS ANNEX, THE AGREEMENT OF
SEPARATION OF PROPERTIES.
(B) THE TRIAL COURT LACKED JURISDICTION TO HEAR AND DECIDE THE
PETITION FOR DECLARATION OF NULLITY OF MARRIAGE. 6

The Ruling of the Court of Appeals

The Court of Appeals debunked the claim of Margarita that there was extrinsic
fraud in the preparation and filing by Abelardo of the Petition for Dissolution of
Conjugal Partnership of Gains and its annex, the Agreement of Separation of
Properties. The Court of Appeals stated:

. . ., the extrinsic fraud alluded to consists of Abelardo coercing Margarita into

signing the petition to dissolve their conjugal partnership of gains together with
the agreement of separation of properties, by threatening to cut-off all financial
and material support of their children then still studying in the United States; that
petitioner had no hand directly or indirectly in the preparation of the petition and
agreement of separation of properties; that petitioner never met the counsel for
the petitioner, nor the notary public who notarized the deed; and, petitioner never
received any notice of the pendency of the petition nor a copy of the decision.

Antithetically, a meticulous perusal of the controversal petition (Annex "B-1") and

the agreement of separation of properties (pp. 60-64, Rollo) readily shows that
the same were signed by the petitioner on the proper space after the prayer and
on the portion for the verification of the petition. The same is true with the
agreement of separation of properties. What is striking to note is that on August
6, 1990, Margarita appeared before Amado P. Cortez, Consul of the Republic of
the Philippines at the San Francisco, California, United States Consulate Office,
to affirm and acknowledge before said official that she executed the agreement
of separation of properties of her own free will and deed, after being informed of
the contents thereof. And yet, there is no showing that Abelardo was with her at
the Philippine Consulate Office in confirming the separation of property
agreement. Moreover, on page 2 of the same agreement it is specifically stated
that such property separation document shall be "subject to approval later on by
the proper court of competent jurisdiction." The clear import of this is that the
agreement must have to be submitted before the proper court for approval, which
explains and confirms petitioner's signature on the petition filed in court.
In main, We see no indication nor showing of coercion or fraud from these facts,
which could very well be considered as extrinsic or collateral fraud to justify a
petition under Rule 47. From all indications, the pretended coerced documents
were rather freely and voluntarily executed by the parties therein knowing fully
well the imports thereof. This conclusion finds more weight if We consider the
fact that the separation of property was fully implemented and enforced, when
apparently both parties correspondingly received the properties respectively
assigned to each of them under the said document. 7

The Court of Appeals also rejected Margarita's claim that the trial court lacked
jurisdiction to hear and decide the Petition for Declaration of Nullity of Marriage
for improper service of summons on her. The case involves the marital status of
the parties, which is an action in rem or quasi in rem. The Court of Appeals ruled
that in such an action the purpose of service of summons is not to vest the trial
court with jurisdiction over the person of the defendant, but "only" to comply with
due process. The Court of Appeals concluded that any irregularity in the service
of summons involves due process which does not destroy the trial court's
jurisdiction over the res which is the parties' marital status. Neither does such
irregularity invalidate the judgment rendered in the case. Thus, the Court of
Appeals dismissed the petition for annulment of judgment, stating that:

At bar, the case involves the personal (marital) status of the plaintiff and the
defendant. This status is the res over which the Philippine court has acquired
jurisdiction. This is also the kind of action which the Supreme Court had ruled
that service or summons may be served extraterritorially under Section 15
(formerly Section 17) of Rule 14 and where such service of summons is not for
the purpose of vesting the trial court with jurisdiction over the person of the
defendant but only for the purpose of complying with the requirements of fair play
and due process. A fortiori, the court a quo had properly acquired jurisdiction
over the person of herein petitioner-defendant when summons was served by
publication and a copy of the summons, the complaint with annexes, together
with the Order of June 28, 1991, was served to the defendant through the
Department of Foreign Affairs by registered mail and duly received by said office
to top it all. Such mode was upon instruction and lawful order of the court and
could even be treated as 'any other manner the court may deem sufficient.' 8
Hence, the instant petition.

The Issues

The issues raised by Margarita are restated as follows:

I. Whether Margarita was validly served with summons in the case for declaration
of nullity of her marriage with Abelardo;

II. Whether there was extrinsic fraud in the preparation and filing by Abelardo of
the Petition for Dissolution of the Conjugal Partnership of Gains and its annex,
the Agreement of Separation of Properties.

The Court's Ruling

The petition is bereft of merit.

First Issue: Validity of the Service of Summons on Margarita

Margarita insists that the trial court never acquired jurisdiction over her person in
the petition for declaration of nullity of marriage since she was never validly
served with summons. Neither did she appear in court to submit voluntarily to its
jurisdiction.

On the other hand, Abelardo argues that jurisdiction over the person of a non-
resident defendant in an action in rem or quasi in rem is not necessary. The trial
and appellate courts made a clear factual finding that there was proper summons
by publication effected through the Department of Foreign Affairs as directed by
the trial court. Thus, the trial court acquired jurisdiction to render the decision
declaring the marriage a nullity.
Summons is a writ by which the defendant is notified of the action brought
against him. Service of such writ is the means by which the court acquires
jurisdiction over his person. 9

As a rule, when the defendant does not reside and is not found in the Philippines,
Philippine courts cannot try any case against him because of the impossibility of
acquiring jurisdiction over his person unless he voluntarily appears in court. But
when the case is one of actions in rem or quasi in rem enumerated in Section 15,
10 Rule 14 of the Rules of Court, Philippine courts have jurisdiction to hear and
decide the case. In such instances, Philippine courts have jurisdiction over the
res, and jurisdiction over the person of the non-resident defendant is not
essential. 11

Actions in personam 12 and actions in rem or quasi in rem differ in that actions in
personam are directed against specific persons and seek personal judgments.
On the other hand, actions in rem or quasi in rem are directed against the thing
or property or status of a person and seek judgments with respect thereto as
against the whole world. 13

At the time Abelardo filed the petition for nullity of the marriage in 1991, Margarita
was residing in the United States. She left the Philippines in 1982 together with
her two children. The trial court considered Margarita a non-resident defendant
who is not found in the Philippines. Since the petition affects the personal status
of the plaintiff, the trial court authorized extraterritorial service of summons under
Section 15, Rule 14 of the Rules of Court. The term "personal status" includes
family relations, particularly the relations between husband and wife. 14

Under Section 15 of Rule 14, a defendant who is a non-resident and is not found
in the country may be served with summons by extraterritorial service in four
instances: (1) when the action affects the personal status of the plaintiff; (2) when
the action relates to, or the subject of which is property within the Philippines, in
which the defendant has or claims a lien or interest, actual or contingent; (3)
when the relief demanded consists, wholly or in part, in excluding the defendant
from any interest in property located in the Philippines; or (4) when the property
of the defendant has been attached within the Philippines.

In these instances, extraterritorial service of summons may be effected under

any of three modes: (1) by personal service out of the country, with leave of
court; (2) by publication and sending a copy of the summons and order of the
court by registered mail to the defendant's last known address, also with leave of
court; or (3) by any other means the judge may consider sufficient.

Applying the foregoing rule, the trial court required extraterritorial service of
summons to be effected on Margarita in the following manner:

. . ., service of Summons by way of publication in a newspaper of general

circulation once a week for three (3) consecutive weeks, at the same time,
furnishing respondent copy of this Order as well as the corresponding Summons
and copy of the petition at her given address at No. 96 Mulberry Lane, Atherton,
California, U.S.A., thru the Department of Foreign Affairs, all at the expense of
petitioner. 15 (Emphasis ours)

The trial court's prescribed mode of extraterritorial service does not fall under the
first or second mode specified in Section 15 of Rule 14, but under the third mode.
This refers to " any other means that the judge may consider sufficient."

The Process Server's Return of 15 July 1991 shows that the summons
addressed to Margarita together with the complaint and its annexes were sent by
mail to the Department of Foreign Affairs with acknowledgment of receipt. The
Process Server's certificate of service of summons is prima facie evidence of the
facts as set out in the certificate. 16 Before proceeding to declare the marriage
between Margarita and Abelardo null and void, the trial court stated in its
Decision dated 8 November 1991 that "compliance with the jurisdictional
requirements hav(e) (sic) been duly established." We hold that delivery to the
Department of Foreign Affairs was sufficient compliance with the rule. After all,
this is exactly what the trial court required and considered as sufficient to effect
service of summons under the third mode of extraterritorial service pursuant to
Section 15 of Rule 14.
Second Issue: Validity of the Judgment Dissolving the Conjugal Partnership of
Gains

Margarita claims that Abelardo coerced her into signing the Petition for
Dissolution of the Conjugal Partnership of Gains ("Petition") and its annex, the
Agreement of Separation of Properties ("Agreement"). Abelardo allegedly
threatened to cut off all financial and material support to their children if Margarita
did not sign the documents.

The trial court did not find anything amiss in the Petition and Agreement that
Abelardo filed, and thus the trial court approved the same. The Court of Appeals
noted that a meticulous perusal of the Petition and Agreement readily shows that
Margarita signed the same on the proper space after the prayer and on the
portion for the verification of the petition. The Court of Appeals observed further
that on 6 August 1990, Margarita appeared before Consul Amado Cortez in the
Philippine Consulate Office in San Francisco, California, to affirm that she
executed the Agreement of her own free will. There was no showing that
Abelardo was at that time with her at the Philippine Consulate Office. Abelardo
secured judicial approval of the Agreement as specifically required in the
Agreement.

The Court is bound by the factual findings of the trial and appellate courts that
the parties freely and voluntarily executed the documents and that there is no
showing of coercion or fraud. As a rule, in an appeal by certiorari under Rule 45,
the Court does not pass upon questions of fact as the factual findings of the trial
and appellate courts are binding on the Court. The Court is not a trier of facts.
The Court will not examine the evidence introduced by the parties below to
determine if the trial and appellate courts correctly assessed and evaluated the
evidence on record. 17

The due and regular execution of an instrument acknowledged before an officer

authorized to administer oaths cannot be overthrown by bare allegations of
coercion but only by clear and convincing proof. 18 A person acknowledging an
instrument before an officer authorized to administer oaths acknowledges that he
freely and voluntarily executed the instrument, giving rise to a prima facie
presumption of such fact.

In the instant case, Margarita acknowledged the Agreement before Consul

Cortez. The certificate of acknowledgment signed by Consul Cortez states that
Margarita personally appeared before him and "acknowledged before me that
SHE executed the same of her own free will and deed." 19 Thus, there is a prima
facie presumption that Margarita freely and voluntarily executed the Agreement.
Margarita has failed to rebut this prima facie presumption with clear and
convincing proof of coercion on the part of Abelardo.

A document acknowledged before a notary public is prima facie evidence of the

due and regular execution of the document. 20 A notarized document has in its
favor the presumption of regularity in its execution, and to contradict the same,
there must be evidence that is clear, convincing and more than merely
preponderant. 21

WHEREFORE, the Decision of the Court of Appeals in CA-G.R. SP No. 58487

dismissing the petition to annul judgment is AFFIRMED. HIaTCc

SO ORDERED.

||| (Romualdez-Licaros v. Licaros, G.R. No. 150656, [April 29, 2003], 449 PHIL
824-838)

#13
[G.R. No. 234501. March 18, 2019.]

MERCANTILE INSURANCE CO., INC., petitioner, vs. SARA YI, also known as
SARAH YI, respondent.
DECISION

REYES, J.C., JR., J p:

Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of

Court, assailing the Decision 1 dated May 19, 2017 and the Resolution 2 dated
August 25, 2017 of the Court of Appeals (CA) in CA-G.R. CV No. 102408,
reversing the ruling of the Regional Trial Court (RTC) of Manila, Branch 36 which
dismissed the case of revival of judgment filed by respondent Sara Yi (Yi).

Relevant Antecedents

FAM MART Co., Inc. (FAM MART), owned and operated by Young C. Chun and
Young H. Chun, (the Chuns) was secured by an insurance policy issued by
petitioner Mercantile Insurance Company, Inc. (MIC), through its California
surplus lines broker, Great Republic Insurance Agency (GRI), under policy
number MIC 001007. 3

On February 14, 1991, 4 Yi was involved in an accident while within the premises
of FAM MART, a business establishment located at El Cajon, California, United
States of America. 5 As a result of which, her right little finger was severed. 6

FAM MART notified MIC of the accident in November 1991. A memorandum

from the latter, acknowledging that there is a valid policy in favor of FAM MART
and that a contract existed between FAM MART and MIC, was issued. 7

On March 16, 1992, Yi filed a personal injury action (Civil Case No. 649705) 8
against the Chuns. Upon service of summons, FAM MART tendered the claim to
its insurer, MIC. 9
Initially, MIC, through counsel, defended FAM MART in said personal injury
action without any reservation of rights. 10 However, sometime in August 1992, it
withdrew its representation. 11 ETHIDa

On October 14, 1993, the Superior Court of the State of California for the County
of San Diego (Superior Court of California) issued a judgment in favor of Yi. The
dispositive portion of which reads:

WHEREFORE, IT IS ORDERED, ADJUDGED AND DECREED that judgment be

entered for Plaintiff against Defendants, Fam Mart Co., Inc., Young C. Chun and
Young H. Chun, in the amount of $350,000.00. 12

On November 2, 1993, Yi, together with the Chuns, filed a complaint for breach
of insurance contract, breach of covenant of good faith and fair dealing, fraud
and negligent misrepresentation and negligence (Civil Case No. 670417) against
MIC. However, despite service of summons, MIC did not file any pleading.
Hence, a Judgment by Default 13 was issued by the Superior Court of California
on September 22, 1995, thus:

IT IS HEREBY ORDERED, ADJUDGED AND DECREED:

That Plaintiffs shall have judgment in their favor and against Defendants MIC and
GRI, and each of them, jointly and severally, for compensatory damages in the
sum of THREE HUNDRED FIFTY THOUSAND DOLLARS ($350,000.00), with
interest thereon at the rate of 10 percent per annum from October 14, 1993 to
September 8, 1995 in the amount of SIXTY[-]SIX THOUSAND FIVE HUNDRED
FORTY[-]SEVEN DOLLARS and SIXTY[-]SIX CENTS ($66,547.66).

That, in addition, Plaintiff YOUNG C. CHUN shall have judgment in his favor and
against Defendants MIC and GRI, and each of them, jointly and severally, for
general damages for emotional distress arising out of Defendant MIC and GRI's
breach of the covenant of good faith and fair dealing for failure to defend and
indemnify Plaintiff YOUNG C. CHUN in the underlying action in the amount of
ONE HUNDRED THOUSAND DOLLARS ($100,000[.00]).
That, in addition, Plaintiff YOUNG H. CHUN shall have judgment in his favor and
against Defendants MIC and GRI, and each of them, jointly and severally, for
general damages for emotional distress arising out of Defendant[s] MIC and
GRI's breach of the covenant of good faith and fair dealing for failure to defend
and indemnify Plaintiff YOUNG H. CHUN in the underlying action in the amount
of ONE HUNDRED THOUSAND DOLLARS ($100,000[.00]).

That, in addition, Plaintiffs shall recover from Defendant, MIC the sum of ONE
HUNDRED FIFTY THOUSAND DOLLARS ($150,000[.00]) as punitive damages.

That, in addition, Plaintiffs shall recover from Defendants, MIC and GRI, and
each of them, jointly and severally, reasonable attorney's fees as damages in the
amount of EIGHT THOUSAND DOLLARS ($8,000[.00]).

That, in addition, Plaintiffs shall recover from Defendants, MIC and GRI, and
each of them, jointly and severally, premiums paid in the amount of TWO
THOUSAND ONE DOLLARS and THIRTY[-]FIVE CENTS ($2,001.35). 14

Said Judgment became final and executory as no appeal was filed by any of the
parties. On September 21, 2005, a Notice of Renewal of Judgment 15 was
issued by the Superior Court of California allowing Yi to enforce the Judgment for
an additional period of 10 years from the date of Application for Renewal of
Judgment was filed. 16 Per Attachment to the Renewal of Judgment, 17 the
adjusted amount inclusive of interest owed by MIC to Yi and the Chuns
amounted to $1,552,664.67.

As Yi was not able to enforce the Judgment in California, she filed an action for
enforcement of judgment before the RTC. cSEDTC

MIC filed an Answer, denying the claims of Yi and its alleged liability. It averred
that it has no privity of contract with Yi and FAM MART as it was not aware of
any case of such nature considering that its operations are within the Philippines.
18

The RTC, in a Decision 19 dated September 30, 2013, dismissed the case for
lack of merit. In sum, the RTC maintained that Yi was not able to prove her claim
because the insurance policy was not presented in evidence and that it has no
jurisdiction over MIC as the latter was not properly served with summons. The
dispositive portion reads:

Based on the foregoing, the Court in:

1. Case No. 649705, the execution with respect to said judgment is denied
because Sara Yi had compromised with the defendant the award in said
judgment, thus[,] making it appear that there was satisfaction of judgment with
respect to foreign judgment in Case No. 649705. Likewise, the defendant is not
within the jurisdiction of the Philippines and was not served with Summons as the
court has no jurisdiction over foreign entity with no resident agent in the
Philippines.

2. With respect to Civil Case No. 670417, the plaintiff was not able to prove with
sufficient evidence that she is entitled to her claim. She was not able to show
even the existence of the insurer policy which can be the basis of the liability/ies
of the defendant and how defendant had been related to its sub-agent or
insurance companies abroad in relation to the company and officers involved in
such transaction. Failure to show such chain of transaction among the parties
alleged [sic] insurance companies; its relationship with defendant company and
her entitlement to the claims allegedly covered by a policy emanating from the
defendant and/or its officers agents is fatal to her claims. (Failure of the plaintiff
to show her insurable interest and how is the defendant liable to her). She was
not even able to identify the policy that covers her insurable interests.

Judgment by default in foreign country was rendered because allegedly

defendant Mercantile Insurance Company did not appear in the United States.
The defendant appeared before this Court and denies any participation with
respect to the claim of Ms. Sara Yi. Moreover, the defendant denied doing
business in foreign land. The plaintiff was not able to controvert such negative
assertion of the defendant with evidence. The plaintiff was not able to prove with
sufficient evidence that can be said to sustain preponderance of evidence where
she claims to be entitled to the relief prayed for or that she is entitled to what she
is claiming for in Civil Case No. 670417 because the policy that covers the
liability was not [shown,] hence the case is dismissed for lack of merit.

Furnish parties and counsel copies of this decision at their last known addresses.

SO ORDERED. 20 SDAaTC

Yi filed an appeal via Rule 44 of the Rules of Court before the CA.

In a Decision 21 dated May 19, 2017, the CA reversed and set aside the ruling of
the RTC and ordered MIC to pay the amount adjudged in the judgment rendered
by the Superior Court of California. The CA maintained that in an action to
enforce a foreign judgment, the matter left for proof is the foreign judgment itself.
Thus, it is not imperative on the part of Yi to provide proof of the insurance policy
and her insurable interest. The fallo thereof reads:

WHEREFORE, the instant petition for review is GRANTED. The Decision of the
Regional Trial Court of Manila, Branch 36 ("RTC") dismissing the case for lack of
merit in Civil Case No. 06-116386 is hereby REVERSED and SET ASIDE.
MERCANTILE INSURANCE COMPANY, INC. is ORDERED to pay SARA YI,
also known as SARAH YI, the amounts adjudged in the judgment rendered by
the Superior Court of the State of California in Case No. 670417.

SO ORDERED. 22

A Motion for Reconsideration filed by MCI was denied in a Resolution 23 dated

August 25, 2017, viz.:
IN VIEW WHEREOF, the instant motion for reconsideration is hereby DENIED
for lack of merit.

SO ORDERED. 24 AaCTcI

The Issue

Summarily, the issue in this case is whether or not the judgment issued by the
Superior Court of California may be enforced in our jurisdiction.

The Court's Ruling

Generally, in the absence of a special compact, no sovereign is bound to give

effect within its dominion to a judgment rendered by a tribunal of another country;
however, the rules of comity, utility and convenience of nations have established
a usage among civilized states by which final judgments of foreign courts of
competent jurisdiction are reciprocally respected and rendered efficacious under
certain conditions that may vary in different countries. 25

Certainly, the Philippine legal system has long ago accepted into its
jurisprudence and procedural rules the viability of an action for enforcement of
foreign judgment, as well as the requisites for such valid enforcement, as derived
from internationally accepted doctrines. 26

In our jurisdiction, a judgment or final order of a foreign tribunal creates a right of

action, and its non-satisfaction is the cause of action by which a suit can be
brought upon for its enforcement. 27

Section 48, Rule 39 of the Rules of Court explicitly provides for the conditions for
the recognition and enforcement of a foreign judgment, to wit:
SEC. 48. Effect of foreign judgments or final orders. — The effect of a judgment
or final order of a tribunal of a foreign country, having jurisdiction to render the
judgment or final order is as follows:

(a) In case of a judgment or final order upon a specific thing, the judgment or final
order is conclusive upon the title to the thing; and

(b) In case of a judgment or final order against a person, the judgment or final
order is presumptive evidence of a right as between the parties and their
successors in interest by a subsequent title.

In either case, the judgment or final order may be repelled by evidence of a want
of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law
or fact.

The causes of action arising from the enforcement of foreign judgment and that
arising from the allegations that gave rise to said foreign judgment differs, such
that the former stems from the foreign judgment itself, whereas the latter stems
from the right in favor of the plaintiff and its violation by the defendant's act or
omission. The evidence to be presented likewise differs. The case of Mijares v.
Rañada 28 illustrates in this wise:

There are distinctions, nuanced but discernible, between the cause of action
arising from the enforcement of a foreign judgment, and that arising from the
facts or allegations that occasioned the foreign judgment. They may pertain to
the same set of facts, but there is an essential difference in the right-duty
correlatives that are sought to be vindicated. For example, in a complaint for
damages against a tortfeasor, the cause of action emanates from the violation of
the right of the complainant through the act or omission of the respondent. On
the other hand, in a complaint for the enforcement of a foreign judgment
awarding damages from the same tortfeasor, for the violation of the same right
through the same manner of action, the cause of action derives not from the
tortious act but from the foreign judgment itself.
More importantly, the matters for proof are different. Using the above example,
the complainant will have to establish before the court the tortious act or
omission committed by the tortfeasor, who in turn is allowed to rebut these
factual allegations or prove extenuating circumstances. Extensive litigation is
thus conducted on the facts, and from there the right to and amount of damages
are assessed. On the other hand, in an action to enforce a foreign judgment, the
matter left for proof is the foreign judgment itself, and not the facts from which it
prescinds. EcTCAD

Guided by the foregoing, what is indispensable in an action for the enforcement

of a foreign judgment is the presentation of the foreign judgment itself as it
comprises both the evidence and the derivation of the cause of action. Further,
the above-cited rule provides that a foreign judgment against a person, i.e., an
action in personam, as in this case, is merely a presumptive evidence of rights
between the parties. Such judgment may be attacked by proving lack of
jurisdiction, lack of notice to the party, collusion, fraud, or clear mistake of fact or
law. 29 Thus, contrary to MIC's position, the burden is upon MIC to prove its
allegations against the validity of the foreign judgment sought to be enforced.

In disputing the foreign judgment, MIC argues that there was want of notice to it
as there was no proper service of summons in the trial before the California
court.

On this note, we highlight that matters of remedy and procedure such as those
relating to the service of process upon a defendant are governed by the lex fori
or the internal law of the forum, 30 which is the State of California in this case.
This Court is well aware that foreign laws are not a matter of judicial notice. Like
any other fact, they must be alleged and proven. 31

Section 24, Rule 132 of the Rules of Court provides that the records of the official
acts of a sovereign authority may be evidenced by an official publication thereof
or by a copy attested by its legal custodian, his deputy, and accompanied with a
certificate that such officer has a custody, in case the record is not kept in the
Philippines. If the office in which the record is kept is in a foreign country, the
certificate may be made by a secretary of the embassy or legation, consul
general, consul, vice-consul, or consular agent or by any officer in the foreign
service of the Philippines stationed in the foreign country in which the record is
kept, and authenticated by the seal of his office.

An exception to this rule, however, is recognized in the cases of Willamette Iron

& Steel Works v. Muzzal, 32 and Manufacturers Hanover Trust Co. v. Guerrero,
33 wherein we emphatically ruled that the testimony under oath of an attorney-at-
law of a foreign state, who quoted verbatim the applicable law and who stated
that the same was in force at the time the obligations were contracted, was
sufficient evidence to establish the existence of said law. In Manufacturers
Hanover Trust, we stated that it is necessary to state the specific law on which
the claim was based.

In this case, Atty. Robert G. Dyer (Atty. Dyer), member of the bar of the State of
California for more than 30 years, testified as to the applicable law related to
summons. In detail, he stated the exact pertinent provision under the California
Code of Civil Procedure, to wit: HSAcaE

Section 415.40. A summons may be served on a person outside this state in any
manner provided by this article or by sending a copy of the summons and of the
complaint to the person to be served by first-class mail, postage prepaid,
requiring a return receipt. Service of a summons by this form of mail is deemed
complete on the 10th day after such mailing.

Indeed, pursuant to the above-proven law in the State of California, the service of
summons by mail to MIC, an entity outside its state, was valid. As such law was
sufficiently alleged and proven, it is beyond the province of this Court's authority
to pass upon the issue as to the factual circumstances relating to the proper
service of summons upon MIC in the case before the State of California.

It is also significant to note that MIC impeaches the credibility of Atty. Dyer as an
expert witness for the first time on appeal. Before the RTC and the CA, MIC
merely raised the argument that Atty. Dyer failed to specifically cite the law of the
State of California with respect to service of summons.
MIC also contends that failure of Yi to implead the Chuns, who are indispensable
parties, renders all actions of the court null and void.

We find that Yi need not implead her co-plaintiffs so as to be afforded the relief
prayed for.

As aforementioned, the main consideration in an action for enforcement of a

foreign judgment is to put such judgment into force. Verily, direct involvement or
being the subject of the foreign judgment is sufficient to clothe a party with the
requisite interest to institute an action before our courts for the recognition of the
foreign judgment. 34

Our rules provide that an indispensable party is a party-in-interest without whom

no final determination can be had of an action. 35 The party's interest in the
subject matter of the suit and in the relief sought are so inextricably intertwined
with the other parties' that his legal presence as a party to the proceeding is an
absolute necessity. In his absence, there cannot be a resolution of the dispute of
the parties before the court which is effective, complete, or equitable. 36
Alternatively put, it is necessary that an indispensable party must be impleaded
so that a full resolution of the case can be obtained.

Here, it is apparent that the Chuns are not indispensable parties, whose inclusion
is determinative of the final outcome of the case. Their legal presence will not
render the resolution of the action incomplete and ineffective for there was a final
judgment already rendered by the foreign court. As previously mentioned, what
our courts will do is to recognize the foreign judgment as a fact 37 and enforce
the same as such foreign judgment creates a right of action in favor of Yi.
Relevantly, MIC's failure to satisfy the terms of the foreign judgment engenders a
cause of action as to Yi, who becomes clothed with requisite interest to institute
an action for enforcement.

WHEREFORE, premises considered, the instant petition is hereby DENIED.

Accordingly, the Decision dated May 19, 2017 and the Resolution dated August
25, 2017 of the Court of Appeals in CA-G.R. CV No. 102408 are AFFIRMED.
HESIcT
SO ORDERED.

||| (Mercantile Insurance Co., Inc. v. Yi, G.R. No. 234501, [March 18, 2019])