Heirs of Reinoso Sr. vs CAFacts:

The complaint for damages arose from the collision of a passengerjeepneyand a truck at around7:00 oclockin the evening ofJune 14, 1979alongE. Rodriguez Avenue,Quezon City. As a result, a passenger of thejeepney, Ruben Reinoso, Sr.(Reinoso), was killed. The passengerjeepneywas owned by Ponciano Tapales(Tapales)and driven by Alejandro Santos(Santos), while the truck was owned by Jose Guballa(Guballa)and driven by Mariano Geronimo(Geronimo).The heirs of Reinoso(petitioners)filed a complaint for damages against Tapales and Guballa. In turn, Guballa filed a third party complaint against Filwriters Guaranty Assurance Corporation (FGAC).The RTC rendered a decision in favor of the petitioners and against Guballa.

On appeal, the CA, set aside and reversed the RTC decision and dismissed the complaint on the ground of non-payment of docket fees pursuant to the doctrine laid down inManchesterv. CA.In addition, the CA ruled that since prescription had set in, petitioners could no longer pay the required docket fees.

Petitioners filed a motion for reconsideration of the CA decision but it was denied.

Hence, this appeal.

The petitioners argue that the ruling inManchestershould not have been applied retroactively in this case, since it was filed prior to the promulgation of theManchester decision in 1987. They plead that though this Court stated that failure to state the correct amount of damages would lead to the dismissal of the complaint, said doctrine should be applied prospectively. that at the time of the filing of the complaint in 1979, they were not certain of the amount of damages they were entitled to, because the amount of the lost income would still be finally determined in the course of the trial of the case.They claim that the jurisdiction of the trial court remains even if there was failure to pay the correct filing fee as long as the correct amount would be paid subsequently. that the alleged defect was never put in issue either in the RTC or in the CA.

Issue:

Whether or not should the case be dismissed for non-payment of docket fees.

Held:

The Court finds merit in the petition.

The rule is thatpayment in full of the docket fees within the prescribed period is mandatory.InManchester v. Court of Appeals,it was held that a court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. The strict application of this rule was, however, relaxed two (2) years after in the case ofSun Insurance Office, Ltd. v. Asuncion,wherein the Court decreed that where the initiatory pleading is not accompanied by the payment of the docket fee, the court may allow payment of the fee within a reasonable period of time, but in no case beyond the applicable prescriptive or reglementary period. This ruling was made on the premise that the plaintiff had demonstrated his willingness to abide by the rules by paying the additional docket fees required. Thus, in the more recent case ofUnited Overseas Bank v. Ros,The Court explained that where the party does not deliberately intend to defraud the court in payment of docket fees, and manifests its willingness to abide by the rules by paying additional docket fees when required by the court, the liberal doctrine enunciated inSun Insurance Office, Ltd., and not the strict regulations set inManchester, will apply.It has been on record that the Court, in several instances, allowed the relaxation of the rule on non-payment of docket fees in order to afford the parties the opportunity to fully ventilate their cases on the merits.

While there is a crying need to unclog court dockets on the one hand, there is, on the other, a greater demand for resolving genuine disputes fairly and equitably,for it is far better to dispose of a case on the merit which is a primordial end, rather than on a technicality that may result in injustice.In this case, it cannot be denied that the case was litigated before the RTC and said trial court had already rendered a decision.While it was at that level, the matter of non-payment of docket fees was never an issue. It was only the CA whichmotu propiodismissed the case for said reason.Considering the foregoing, there is a need to suspend the strict application of the rules so that the petitioners would be able to fully and finally prosecute their claim on the merits at the appellate level rather than fail to secure justice on a technicality,for, indeed, the general objective of procedure is to facilitate the application of justice to the rival claims of contending parties, bearing always in mind that procedure is not to hinder but to promote the administration of justice.We held in another case:

x x xIt bears stressing that the rules of procedure are merely tools designed to facilitate the attainment of justice.They were conceived and promulgated to effectively aid the court in the dispensation of justice.Courts are not slaves to or robots of technical rules, shorn of judicial discretion.In rendering justice, courts have always been, as they ought to be, conscientiously guided by the norm that, on the balance, technicalities take a backseat against substantive rights, and not the other way around.Thus, if the application of the Rules would tend to frustrate rather than promote justice, it is always within the power of the Court to suspend the Rules, or except a particular case from its operation.

The petitioners, however, are liable for the difference between the actual fees paid and the correct payable docket fees to be assessed by the clerk of court which shall constitute a lien on the judgment pursuant to Section 2 of Rule 141 which provides:SEC. 2. Fees in lien. Where the court in its final judgment awards a claim not alleged, or a relief different from, or more than that claimed in the pleading, the party concerned shall pay the additional fees which shall constitute a lien on the judgment in satisfaction of said lien. The clerk of court shall assess and collect the corresponding fees.As the Court has taken the position that it would be grossly unjust if petitioners claim would be dismissed on a strict application of theManchesterdoctrine, the appropriate action, under ordinary circumstances, would be for the Court to remand the case to the CA. Considering, however, that the case at bench has been pending for more than 30 years and the records thereof are already before this Court, aremand of the case to the CA would only unnecessarily prolong its resolution.In the higher interest of substantial justice and to spare the parties from further delay, the Court will resolve the case on the merits.Vivas vs Monetary Board of BSPThe Facts:The corporate life of the Rural Bank of Faire, Incorporated, a rural banking institution, expired on May 31, 2005. Alfredo Vivas and his principals acquired the controlling interest in RBFI in January, 2006 and an internal audit conducted thereon. The Bangko Sentral ng Pilipinas then issued the Certificate of Authority to RBFI extending the corporate life of RBFI, and approved its renaming to the Eurocredit Community Bank Inc (ECBI). The Integrated Supervision Department of the BSP then conducted a general audit of the bank pursuant to Section 28 of RA 7653 for the cut-off date of December 31, 2007. InApril, 2008, examiners from the Department of Loand and Credit cancelled the rediscounting line of the bank. Thereafter, the Monetary Board issued Resolution No. 1255 placing ECBI under Prompt corrective Action. (PCA). Several violations were noted by the Monetary Board, notably, ECBIs transferring the majority shares of RBFI without securing prior approval of the MB in violation of the Manual of Regulation For Banks; establishment and operation of bank sub-offices without the prior approval of the BSP; failure by the bank to aloo the BSP examiners from examining and inspecting its books and records, in violation of Secs. 25 and 34 of RA 7653; for its failure to comply with the required examination, the BSP imposed on ECBI a penalty and referring the matter to the Office of the Special Investigation for the filing of appropriate legal action. Resolution No. 823 issued by the MB approved the issuance of a cease and desist order against ECBI enjoining it from pursuing acts and transactions considered unsafe or unsound. The OSI also filed charges for Estafa through Falisification of Public Documents against some of its officials and employees. The MB also denied ECBIs appeal on its being placed on the PCA framework; and reminded it of the submission of the financial reports for the year 2007 and 2007. It also denied reconsideration of Resolution No. 726 on the imposition of the fine. Finally, the Monetary Board issued Resolution No. 276 on March 4, 2010, placing ECBI under receivership on the basis of the recommendation of the Office of Special Investigation which reads:

On the basis of the examination findings as of 30 September 2009 as reported by the Integrated Supervision Department (ISD) II, in its memorandum dated 17 February 2010, which findings showed that the Eurocredit Community Bank, Inc. a Rural Bank (Eurocredit Bank) (a) is unable to pay its liabilities as they become due in the ordinary course of business; (b) has insufficient realizable assets to meet liabilities; (c) cannot continue in business without involving probable losses to its depositors and creditors; and (d) has willfully violated a cease and desist order of the Monetary Board for acts or transactions which are considered unsafe and unsound banking practices and other acts or transactions constituting fraud or dissipation of the assets of the institution, and considering the failure of the Board of Directors/management of Eurocredit Bank to restore the banks financial health and viability despite considerable time given to address the banks financial problems, and that the bank had been accorded due process, the Board, in accordance with Section 30 of Republic Act No. 7653 (The New Central Bank Act), approved the recommendation of ISD II as follows:

1. To prohibit the Eurocredit Bank from doing business in the Philippines and to place its assets and affairs under receivership; and

2. To designate the Philippine Deposit Insurance Corporation as Receiver of the bank.

Petitioner Alfeo Viva for himself and on behalf of the other shareholders of ECBI filed a petition for prohibition with prayer for issuance of status quo order or writ of preliminary injunction to present respondents for closing Eurocredit and placing it on receivership, and that the management and operation of ECBI be restored to its Board of Directors.

The Issue:Whether or not the issuance of the cease and desist order was attended by grave abuse of discretion;

Whether or not the application of Section 30 of the New Central Bank Act was proper, instead of Section 11 and 14 of the Rural Banks Act of 1982;

Whether or not there was a diminution or invasion of the powers of the Supreme Court in delegating to the Bangko Sentral ng Pilipinas the power to place rural banks under receivership, thus unconstitutional for being in violation of Section 2, Article VIII of the 1987 Constitution.

The Ruling:The petition must fail.

Vivas Availed of the Wrong RemedyTo begin with, Vivas availed of the wrong remedy. The MB issued Resolution No. 276, dated March 4, 2010, in the exercise of its power under R.A. No. 7653. Under Section 30 thereof, any act of the MB placing a bank under conservatorship, receivership or liquidation may not be restrained or set aside except on a petition forcertiorari. Pertinent portions of R.A. 7653 read:

Section 30.

x x x x.

The actions of the Monetary Board taken under this section or under Section 29 of this Act shall be final and executory, and may not be restrained or set aside by the courtexceptonpetition forcertiorarion the ground that the action taken was in excess of jurisdiction or with such grave abuse of discretion as to amount to lack or excess of jurisdiction. The petition for certiorari may only be filed by the stockholders of record representing the majority of the capital stock within ten (10) days from receipt by the board of directors of the institution of the order directing receivership, liquidation or conservatorship.

x x x x. [Emphases supplied]

Prohibition is already unavailingGranting that a petition for prohibition is allowed, it is already an ineffective remedy under the circumstances obtaining. Prohibition or a writ of prohibition is that process by which a superior court prevents inferior courts, tribunals, officers, or persons from usurping or exercising a jurisdiction with which they have not been vested by law, and confines them to the exercise of those powers legally conferred. Its office is to restrain subordinate courts, tribunals or persons from exercising jurisdiction over matters not within its cognizance or exceeding its jurisdiction in matters of which it has cognizance.1In our jurisdiction, the rule on prohibition is enshrined in Section 2, Rule 65 of the Rules on Civil Procedure, to wit:

Sec. 2.Petition for prohibition When the proceedings of any tribunal, corporation, board, officer or person, whether exercising judicial, quasi-judicial or ministerial functions, are without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that the judgment be rendered commanding the respondent to desist from further proceedings in the action or matter specified therein, or otherwise granting such incidental reliefs as the law and justice require.

x x x x.

Indeed, prohibition is a preventive remedy seeking that a judgment be rendered which would direct the defendant to desist from continuing with the commission of an act perceived to be illegal.2As a rule, the proper function of a writ of prohibition is to prevent the doing of an act which is about to be done. It is not intended to provide a remedy for acts already accomplished.3Though couched in imprecise terms, this petition for prohibition apparently seeks to prevent the acts of closing of ECBI and placing it under receivership. Resolution No. 276, however, had already been issued by the MB and the closure of ECBI and its placement under receivership by the PDIC were already accomplished. Apparently, the remedy of prohibition is no longer appropriate. Settled is the rule that prohibition does not lie to restrain an act that is already afait accompli.4The Petition Should Have Been Filed in the CAEven if treated as a petition for certiorari, the petition should have been filed with the CA. Section 4 of Rule 65 reads:

Section 4.When and where petition filed. The petition shall be filed not later than sixty (60) days from notice of the judgment, order or resolution. In case a motion for reconsideration or new trial is timely filed, whether such motion is required or not, the sixty (60) day period shall be counted from notice of the denial of said motion.

The petition shall be filed in the Supreme Court or, if it relates to the acts or omissions of a lower court or of a corporation, board, officer or person, in the Regional Trial Court exercising jurisdiction over the territorial area as defined by the Supreme Court. It may also be filed in the Court of Appeals whether or not the same is in aid of its appellate jurisdiction, or in the Sandiganbayan if it is in aid of its appellate jurisdiction. If it involves the acts or omissions of aquasi-judicial agency, unless otherwise provided by law or these Rules, the petition shall be filed in and cognizableonlyby theCourt of Appeals. [Emphases supplied]

That the MB is a quasi-judicial agency was already settled and reiterated in the case ofBank of Commerce v. Planters Development Bank And Bangko Sentral Ng Pilipinas.5Doctrine of Hierarchy of Courts Even in the absence of such provision, the petition is also dismissible because it simply ignored the doctrine of hierarchy of courts. True, the Court, theCAand theRTChave original concurrent jurisdiction to issue writs of certiorari, prohibition and mandamus. The concurrence of jurisdiction, however, does not grant the party seeking any of the extraordinary writs the absolute freedom to file a petition in any court of his choice. The petitioner has not advanced any special or important reason which would allow a direct resort to this Court. Under the Rules of Court, a party may directly appeal to this Court only onpure questions of law.6In the case at bench, there are certainly factual issues as Vivas is questioning the findings of the investigating team.

Strict observance of the policy of judicial hierarchy demands that where the issuance of the extraordinary writs is also within the competence of the CA or the RTC, the special action for the obtainment of such writ must be presented to either court. As a rule, the Court will not entertain direct resort to it unless the redress desired cannot be obtained in the appropriate lower courts; or where exceptional and compelling circumstances, such as cases of national interest and with serious implications, justify the availment of the extraordinary remedy of writ of certiorari, prohibition, or mandamus calling for the exercise of its primary jurisdiction.7The judicial policy must be observed to prevent an imposition on the precious time and attention of the Court.

The MB Committed No Grave Abuse of DiscretionIn any event, no grave abuse of discretion can be attributed to the MB for the issuance of the assailed Resolution No. 276.

Vivas insists that the circumstances of the case warrant the application of Section 11 of R.A. No. 7353, which provides:

Sec. 11. The power to supervise the operation of any rural bank by the Monetary Board as herein indicated shall consist in placing limits to the maximum credit allowed to any individual borrower; in prescribing the interest rate, in determining the loan period and loan procedures, in indicating the manner in which technical assistance shall be extended to rural banks, in imposing a uniform accounting system and manner of keeping the accounts and records of rural banks; in instituting periodic surveys of loan and lending procedures, audits, test-check of cash and other transactions of the rural banks; in conducting training courses for personnel of rural banks; and, in general, in supervising the business operations of the rural banks.

The Central Bank shall have the power to enforce the laws, orders, instructions, rules and regulations promulgated by the Monetary Board, applicable to rural banks; to require rural banks, their directors, officers and agents to conduct and manage the affairs of the rural banks in a lawful and orderly manner; and, upon proof that the rural bank or its Board of Directors, or officers are conducting and managing the affairs of the bank in a manner contrary to laws, orders, instructions, rules and regulations promulgated by the Monetary Board or in a manner substantially prejudicial to the interest of the Government, depositors or creditors, to take over the management of such bank when specifically authorized to do so by the Monetary Board after due hearing process until a new board of directors and officers are elected and qualified without prejudice to the prosecution of the persons responsible for such violations under the provisions of Sections 32, 33 and 34 of Republic Act No. 265, as amended.

x x x x.

The thrust of Vivas argument is that ECBI did not commit any financial fraud and, hence, its placement under receivership was unwarranted and improper. He asserts that, instead, the BSP should have taken over the management of ECBI and extended loans to the financially distrained bank pursuant to Sections 11 and 14 of R.A. No. 7353 because the BSPs power is limited only to supervision and management take-over of banks, and not receivership.

Vivas argues that implementation of the questioned resolution was tainted with arbitrariness and bad faith, stressing that ECBI was placed under receivership without due and prior hearing, invoking Section 11 of R.A. No. 7353 which states that the BSP may take over the management of a rural bank after due hearing.8He adds that because R.A. No. 7353 is a special law, the same should prevail over R.A. No. 7653 which is a general law.

The Court has taken this into account, but it appears from all over the records that ECBI was given every opportunity to be heard and improve on its financial standing. The records disclose that BSP officials and examiners met with the representatives of ECBI, including Vivas, and discussed their findings.9There were also reminders that ECBI submit its financial audit reports for the years 2007 and 2008 with a warning that failure to submit them and a written explanation of such omission shall result in the imposition of a monetary penalty.10More importantly, ECBI was heard on its motion for reconsideration. For failure of ECBI to comply, the MB came out with Resolution No. 1548 denying its request for reconsideration of Resolution No. 726. Having been heard on its motion for reconsideration, ECBI cannot claim that it was deprived of its right under the Rural Bank Act.

Close Now, Hear LaterAt any rate, if circumstances warrant it, the MB may forbid a bank from doing business and place it under receivershipwithout prior notice and hearing. Section 30 of R.A. No. 7653 provides, viz:

Sec. 30.Proceedings in Receivership and Liquidation. Whenever, upon report of the head of the supervising or examining department, the Monetary Board finds that a bank or quasi-bank:

(a) is unable to pay its liabilities as they become due in the ordinary course of business: Provided, That this shall not include inability to pay caused by extraordinary demands induced by financial panic in the banking community;

(b) has insufficient realizable assets, as determined by the Bangko Sentral, to meet its liabilities; or

(c) cannot continue in business without involving probable losses to its depositors or creditors; or

(d) has wilfully violated a cease and desist order under Section 37 that has become final, involving acts or transactions which amount to fraud or a dissipation of the assets of the institution; in which cases, the Monetary Board may summarily andwithout need for prior hearingforbid the institution from doing business in the Philippines and designate the Philippine Deposit Insurance Corporation asreceiverof the banking institution. [Emphases supplied.]

x x x x.

Accordingly, there is no conflict which would call for the application of the doctrine that a special law should prevail over a general law. It must be emphasized that R.A .No. 7653 is a later law and under said act, the power of the MB over banks, including rural banks, was increased and expanded. The Court, in several cases, upheld the power of the MB to take over bankswithout need for prior hearing. It is not necessary inasmuch as the law entrusts to the MB the appreciation and determination of whether any or all of the statutory grounds for the closure and receivership of the erring bank are present. The MB, under R.A. No. 7653, has been invested with more power of closure and placement of a bank under receivership for insolvency or illiquidity, or because the banks continuance in business would probably result in the loss to depositors or creditors. In the case ofBangko Sentral Ng Pilipinas Monetary Board v. Hon. Antonio-Valenzuela,11the Court reiterated the doctrine of close now, hear later, stating that it was justified as a measure for the protection of the public interest. Thus:

The close now, hear later doctrine has already been justified as a measure for the protection of the public interest. Swift action is called for on the part of the BSP when it finds that a bank is in dire straits.Unless adequate and determined efforts are taken by the government against distressed and mismanaged banks, public faith in the banking system is certain to deteriorate to the prejudice of the national economy itself, not to mention the losses suffered by the bank depositors, creditors, and stockholders, who all deserve the protection of the government.12[Emphasis supplied]

InRural Bank of Buhi, Inc. v. Court of Appeals,13the Court also wrote that

x x xdue process does not necessarily require a prior hearing; a hearing or an opportunity to be heard may be subsequent to the closure. One can just imagine the dire consequences of a prior hearing: bank runs would be the order of the day, resulting in panic and hysteria. In the process, fortunes may be wiped out and disillusionment will run the gamut of the entire banking community.14The doctrine is founded on practical and legal considerations to obviate unwarranted dissipation of the banks assets and as a valid exercise of police power to protect the depositors, creditors, stockholders, and the general public.15Swift, adequate and determined actions must be taken against financially distressed and mismanaged banks by government agencies lest the public faith in the banking system deteriorate to the prejudice of the national economy.

Accordingly, the MB can immediately implement its resolution prohibiting a banking institution to do business in the Philippines and, thereafter, appoint the PDIC as receiver. The procedure for the involuntary closure of a bank is summary and expeditious in nature. Such action of the MB shall be final and executory, but may be later subjected to a judicial scrutiny via a petition forcertiorarito be filed by the stockholders of record of the bank representing a majority of the capital stock. Obviously, this procedure is designed to protect the interest of all concerned, that is, the depositors, creditors and stockholders, the bank itself and the general public. The protection afforded public interest warrants the exercise of a summary closure.

In the case at bench, the ISD II submitted its memorandum, dated February 17, 2010, containing the findings noted during the general examination conducted on ECBI with the cut-off date of September 30, 2009. The memorandum underscored the inability of ECBI to pay its liabilities as they would fall due in the usual course of its business, its liabilities being in excess of the assets held. Also, it was noted that ECBIs continued banking operation would most probably result in the incurrence of additional losses to the prejudice of its depositors and creditors. On top of these, it was found that ECBI had willfully violated the cease-and-desist order of the MB issued in its June 24, 2009 Resolution, and had disregarded the BSP rules and directives. For said reasons, the MB was forced to issue the assailed Resolution No. 276 placing ECBI under receivership. In addition, the MB stressed that it accorded ECBI ample time and opportunity to address its monetary problem and to restore and improve its financial health and viability but it failed to do so.

In light of the circumstances obtaining in this case, the application of the corrective measures enunciated in Section 30 of R.A. No. 7653 was proper and justified. Management take-over under Section 11 of R.A. No. 7353 was no longer feasible considering the financial quagmire that engulfed ECBI showing serious conditions of insolvency and illiquidity. Besides, placing ECBI under receivership would effectively put a stop to the further draining of its assets.

No Undue Delegation of Legislative PowerLastly, the petitioner challenges the constitutionality of Section 30 of R.A. No. 7653, as the legislature granted the MB a broad and unrestrained power to close and place a financially troubled bank under receivership. He claims that the said provision was an undue delegation of legislative power. The contention deserves scant consideration.

Preliminarily, Vivas attempt to assail the constitutionality of Section 30 of R.A. No. 7653 constitutes collateral attack on the said provision of law. Nothing is more settled than the rule that the constitutionality of a statute cannot be collaterally attacked as constitutionality issues must be pleaded directly and not collaterally.16A collateral attack on a presumably valid law is not permissible. Unless a law or rule is annulled in a direct proceeding, the legal presumption of its validity stands.17Be that as it may, there is no violation of the non-delegation of legislative power. The rationale for the constitutional proscription is that legislative discretion as to the substantive contents of the law cannot be delegated. What can be delegated is the discretion to determinehowthe law may be enforced, notwhatthe law shall be. The ascertainment of the latter subject is a prerogative of the legislature. This prerogative cannot be abdicated or surrendered by the legislature to the delegate.18There are two accepted tests to determine whether or not there is a valid delegation of legislative power,viz, the completeness test and the sufficient standard test. Under the first test, the law must be complete in all its terms and conditions when it leaves the legislature such that when it reaches the delegate the only thing he will have to do is enforce it. Under the sufficient standard test, there must be adequate guidelines or stations in the law to map out the boundaries of the delegates authority and prevent the delegation from running riot. Both tests are intended to prevent a total transference of legislative authority to the delegate, who is not allowed to step into the shoes of the legislature and exercise a power essentially legislative.19In this case, under the two tests, there was no undue delegation of legislative authority in the issuance of R.A. No. 7653. To address the growing concerns in the banking industry, the legislature has sufficiently empowered the MB to effectively monitor and supervise banks and financial institutions and, if circumstances warrant, to forbid them to do business, to take over their management or to place them under receivership. The legislature has clearly spelled out the reasonable parameters of the power entrusted to the MB and assigned to it only the manner of enforcing said power. In other words, the MB was given a wide discretion and latitude only as to how the law should be implemented in order to attain its objective of protecting the interest of the public, the banking industry and the economy.

WHEREFORE, the petition for prohibition isDENIED.

Holy Trinity Realty vs AbacanFacts:

A parcel of land located in Sumapang, Malolos City is registered in the name of Freddie Santiago (Santiago) under Transfer Certificate of Title. Petitioner Holy Trinity Realty Development Corporation (HTRDC) acquired the property from Santiago, but later found that the lot was already occupied by some individuals, among them respondent-spouses Carlos and Elizabeth Abacan.

HTRDC then filed a complaint for forcible entry against respondent-spouses and the other occupants. It withdrew the complaint, however, because it needed to verify the exact location of the property, which the occupants claimed was covered by emancipation patents issued by the Department of Agrarian Reform Adjudication Board (DARAB).

HTRDC commenced a complaint with the DARAB for cancellation of emancipation patents against some of the occupants of the land. The provincial adjudicator ordered the cancellation of the emancipation patents of the occupants of the land.The DARAB later affirmed the decision of the provincial adjudicator.

HTRDC filed a complaint for unlawful detainer and damages with the MTCC of Malolos against the occupants of the subject land, again including respondent spouses.Petitioner alleged that from the time it purchased the property in 1999 until the pendency of the DARAB case, it had no immediate need for the subject parcel of land. When the need arose, it made both verbal and written demands on the occupants to vacate the property. Despite its final demand on 17 June 2003, the occupants failed to vacate the property. Thus, HTRDC had to resort to the filing of an ejectment case against them.

Proceedings in the MTCC ensued, culminating in a Decision in favor of HTRDC. The trial court ordered the occupants to vacate the premises and to pay reasonable rent, attorneys fees and costs of suit. Thus, the Decision became final and executory.

Meanwhile, the provincial agrarian reform officer (PARO) filed an action for annulment of sale against HTRDC. Respondents thereafter moved to stay execution on the ground that a supervening event had transpired.The MTCC denied the motion, ruling that the mere filing of an action by the PARO did not materially change the situation of the parties, and hence, may not be considered as a supervening event.

In order to prevent the enforcement of the writ of execution and demolition, respondents filed several actions in the Regional Trial Court (RTC), to wit: (1) annulment of judgment;(2) Special Civil Action for certiorari;and (3) quieting of title.The RTC dismissed the action. Respondents did not appeal any of the adverse rulings.The MTCC issued an Alias Writ of Execution and an Alias Special Order of Demolitio.Respondents moved to quash both writs on the ground that Emancipation Patent had been issued in their favor during the pendency of the case.

From the Order of the MTCC denying their motion to quash, respondents filed directly with the CA a Special Civil Action for Certiorari with Prayer for a Temporary Restraining Order and Writ of Preliminary Injunction.

The appellate court issued a Writ of Preliminary Injunctionand ultimately granted the petition for certiorari. The CA held that the MTCC had no jurisdiction over the unlawful detainer case.

Aggrieved by the decision of the CA, petitioner HTRDC filed the instant petition for review before this Court.

Issue:

Whether or not the Court of Appeals decision is correct.

Held:

We find merit in the instant petition.Before proceeding to the merits of the case, we first deal with a procedural issue.

HTRDC correctly argued that respondents erred in filing the special civil action for certiorari directly with the CA instead of the RTC. In doing so, they violated the time-honored principle of respect for the hierarchy of courts. While this Court, the CA, and the RTC have concurrent jurisdiction to issue writs of certiorari the parties to a suit are not given unbridled freedom to choose between court forums. Judicial hierarchy indicates that "petitions for the issuance of extraordinary writs against first level ("inferior") courts should be filed with the RTC, and those against the latter, with the CA."Therefore, respondents petition for certiorari was dismissible outright on procedural grounds.

Turning now to the merits of the petition, we find that the CA committed reversible error in ruling that the MTCC had no jurisdiction over the unlawful detainer case. What was before it was a petition for certiorari against the MTCCs denial of respondents motion to quash. The petition was not directed at the MTCCs Consolidated Decision, nor could it be, because a Rule 65 petition for certiorari must be filed not later than 60 days from notice of the judgment.Since respondents failed to timely appeal the Consolidated Decision, it has long attained finality and has become immutable and unalterable pursuant to the doctrine on finality of judgment.Thus, as respondents sole argument in their motion to quash was the existence of a material supervening event, and as the MTCCs denial of their motion was premised on the conclusion that their subsequent acquisition of ownership was not a supervening event, the resolution of the present case should be limited to that issue.

REPUBLICOF THE PHILIPPINES et al. v.HONORABLERAMONS. CAGUIOA et al.536 SCRA 193 (2007), EN BANCCongress enactedRepublicAct (R.A) No. 7227 or the BasesConversionand Development Act of 1992 which created the Subic Special Economic and Freeport Zone (SBF) and the Subic Bay Metropolitan Authority (SBMA). Section 12 of R.A No. 7227 of the law provides that no taxes, local and national, shall be imposed within the Subic Special Economic Zone. Pursuant to the law, Indigo Distribution Corporation, et al., which are alldomesticcorporations doing business at the SBF, applied for and were granted Certificates of Registration and TaxExemptionby the SBMA.

Congress subsequently passed R.A. No. 9334, which provides that all applicable taxes, duties, charges, includingexcise taxesdue thereon shall be applied to cigars and cigarettes, distilled spirits, fermented liquors and wines brought directly into the duly chartered or legislated freeports of the Subic Economic Freeport Zone. On the basis of Section 6 of R.A. No. 9334, SBMAissuedaMemorandumdeclaring that, all importations of cigars, cigarettes, distilled spirits, fermented liquors and wines into the SBF, shall be treated as ordinary importations subject to all applicable taxes, duties and charges, includingexcise taxes.

Upon its implementation, Indigo et al., sought for a reconsideration of the directives on the imposition of duties and taxes, particularlyexcise taxesby the Collector of Customs and the SBMA Administrator. Their request was subsequently denied prompting them to file with the RTC of Olongapo City a special civil action for declaratory relief to have certain provisions of R.A. No. 9334 declared as unconstitutional. They prayed for the issuance of a writ of preliminary injunction and/or Temporary Restraining Order (TRO) and preliminary mandatory injunction. The same was subsequentlygranted by JudgeRamonCaguioa. The injunction bond was approved at One Million pesos (P1,000,000).

ISSUES:Whether or not public respondent judge committed grave abuse of discretion amounting to lack or excess in jurisdiction in peremptorily and unjustly issuing the injunctive writ in favor of private respondents despite the absence of thelegalrequisites for its issuance

HELD:One such case of grave abuse obtained in this case when Judge Caguioaissuedhis Order of May 4, 2005 and the Writ of Preliminary Injunction on May 11, 2005 despite the absence of a clear and unquestionedlegalright of private respondents. In holding that the presumption ofconstitutionalityand validity of R.A. No. 9334 was overcome by private respondents for the reasons public respondent cited in his May 4, 2005 Order, he disregarded the fact that as a condition sine qua non to the issuance of a writ of preliminary injunction, private respondents needed also to show a clearlegalright that ought to be protected. That requirement is not satisfied in this case. To stress, the possibility of irreparable damage without proof of an actual existing right would not justify an injunctive relief.

Indeed, Sections 204 and 229 of the NIRC provide for the recovery of erroneously or illegally collected taxes which would be the nature of theexcise taxespaid by private respondents should Section 6 of R.A. No. 9334 be declared unconstitutional or invalid.

The Court finds that public respondent had also ventured into the delicate area which courts are cautioned from taking when deciding applications for the issuance of the writ of preliminary injunction. Having ruled preliminarily against theprimafacie validity of R.A. No. 9334, he assumed in effect the proposition that private respondents in their petition for declaratory relief were duty bound to prove, thereby shifting to petitioners the burden of proving that R.A. No. 9334 is not unconstitutional or invalid.

In the same vein, the Court finds Judge Caguioa to have overstepped his discretion when he arbitrarily fixed the injunction bond of the SBF enterprises at only P1million. Rule 58, Section 4(b) provides that a bond is executed in favor of the party enjoined to answer for all damages which it may sustain by reason of the injunction. The purpose of the injunction bond is to protect the defendant against loss or damage by reason of the injunction in case the court finally decides that the plaintiff was not entitled to it, and the bond is usually conditioned accordingly.

Whether this Court must issue the writ of prohibition, suffice it to stress that being possessed of the power to act on the petition for declaratory relief, public respondent can proceed to determine the merits of the main case. Moreover, lacking the requisite proof of public respondents alleged partiality, this Court has no ground to prohibit him from proceeding with the case for declaratory relief. For these reasons, prohibition does not lie.

Republic vs G Holdings Inc.Facts:

The Committee on Privatization approved the proposal of the Asset Privatization Trust (APT) for the negotiated sale of 90% of the shares of stock of the government-owned Maricalum Mining Corporation (MMC). Learning of the governments intention to sell MMC, the respondent G Holdings, Inc. signified its interest to purchase MMC and submitted the best bid.The series of negotiations between the petitioner Republic of the Philippines, through the APT as its trustee,and G Holdings culminated in the execution of a purchase and sale agreement. Under the agreement, the Republic undertook to sell and deliver 90% of the entire issued and outstanding shares of MMC, as well as its company notes, to G Holdings in consideration of the purchase price ofP673,161,280. It also provided for a down payment ofP98,704,000 with the balance divided into four tranches payable in installment over a period of ten years. Subsequently, a disagreement on the matter of when the installment payments should commence arose between the parties. The Republic claimed that it should be on the seventh month from the signing of the agreement while G Holdings insisted that it should begin seven months after the fulfillment of the closing conditions.Unable to settle the issue, G Holdings filed a complaint for specific performance and damages with the Regional Trial Court of Manila, Branch 49, against the Republic to compel it to close the sale in accordance with the purchase and sale agreement. The trial court rendered its decision. It ruled in favor of G Holdings. The Solicitor General filed a notice of appeal on behalf of the Republic. Contrary to the rules of procedure, however, the notice of appeal was filed with the Court of Appeals (CA), not with the trial court which rendered the judgment appealed from.Issue:

Whether or not the case should be dismissed

Held:

Before anything else, we note that the instant petition suffers from a basic infirmity for lack of the requisite imprimatur from the Office of the Solicitor General, hence, it is dismissible on that ground.The general rule is that only the Solicitor General can bring or defend actions on behalf of the Republic of the Philippines and that actions filed in the name of the Republic, or its agencies and instrumentalities for that matter, if not initiated by the Solicitor General, should be summarily dismissed.As an exception to the general rule, the Solicitor General is empowered 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.

Here, the petition was signed and filed on behalf of the Republic by Atty. Raul B. Villanueva, the executive officer of the legal department of the APT, and Atty. Rhoel Z. Mabazza.However, they did not present any proof that they had been duly deputized by the Solicitor General to initiate and litigate this action. Thus, this petition can be dismissed on that ground.

The Republic, through the APT, filed a petition for annulment of judgment with the CA. It claimed that the decision should be annulled on the ground of abuse of discretion amounting to lack of jurisdiction on the part of the trial court. It characterized the fashion by which the trial court handled the case as highly aberrant and peculiar because the courta quopromulgated its decision prior to the submission of the Republics formal offer of evidence and without ruling on the admissibility of the evidence offered by G Holdings. The Republic also asserted that the failure of the Solicitor General to file the notice of appeal with the proper forum amounted to extrinsic fraud which prevented it from appealing the case.A petition for annulment of judgment is an extraordinary action.By virtue of its exceptional character, the action is restricted exclusively to the grounds specified in the rules,namely, (1) extrinsic fraud and (2) lack of jurisdiction.The rationale for the restriction is to prevent the extraordinary action from being used by a losing party to make a complete farce of a duly promulgated decision that has long become final and executory.The remedy may not be invoked where the party has availed himself of the remedy of new trial, appeal, petition for relief or other appropriate remedy and lost, or where he has failed to avail himself of those remedies through his own fault or negligence.

Lack of jurisdiction as a ground for annulment of judgment refers to either lack of jurisdiction over the person of the defending party or over the subject matter of the claim. Where the court has jurisdiction over the defendant and over the subject matter of the case, its decision will not be voided on the ground of absence of jurisdiction.

Borra vs. CA, HAWAIIAN PHILIPPINE COMPANY (HPC) G.R. No. 167484 September 9, 2013

Facts: On September 12, 1997, herein petitioners filed with the NLRC Regional Arbitration Branch No. VI in Bacolod City two separate complaints which were docketed as RAB Case No. 06-09-10698-97 and RAB Case No. 06-09-10699-97. RAB Case No.06-09-10698-97 was filed against herein private respondent alone, while RAB Case No. 06-09-10699-97 impleaded herein private respondent and a certain Fela Contractor as respondents. In RAB Case No. 06-09-10698-97, herein petitioners asked that they be recognized and confirmed as regular employees of herein private respondent and further prayed that they be awarded various benefits received by regular employees for three (3) years prior to the filing of the complaint, while in RAB Case No. 06-09-10699-97,herein petitioners sought for payment of unpaid wages, holiday pay, allowances, 13th month pay, service incentive leave pay, moral and exemplary damages also during the three (3) years preceding the filing of the complaint. On January 9, 1998, private respondent (HPC) filed a Motion to Dismiss RAB Case No. 06-09-0698-97 on the ground of res judicata. The Labor Arbiter granted the same. Petitioners appealed to the NLRC which set aside the Order of the Labor Arbiter, reinstated the complaint in RAB Case No. 06-09-10698-97 and remanded the same for further proceedings. HPC appealed to the CA which affirmed the decision of the NLRC. The SC likewise affirmed the decision of the CA and remanded the case to the Labor Arbiter to determine which among Fela contractor and HPC is the real employer of the petitioners. In the meantime, the Labor Arbiter rendered a Decision.

In RAB Case No. 06-09-10699-97 holding that there is no employer-employee relations between private respondent and petitioners. And no appeal was taken therefrom. Thus, the same became final and executory. As a consequence of the finality of the Decision in RAB Case No. 06-09-10699-97, herein private respondent again filed a Motion to DismissRAB Case No. 06-09-10698-97 on the ground, among others, of res judicata. Private respondent HPC contended that the final and executory Decision of the Labor Arbiter in RAB Case No. 06-09-10699-97, which found no employer-employee relations between private respondent and petitioners, serves as a bar to the further litigation of RAB Case No. 06-09-10698-97. Said Motion To Dismiss was denied. As a result, private respondent HPC filed a petition for certiorari (Rule 65) before the CA which granted the same. Hence, this petition.

Issue: Whether or not HPC availed of the proper remedy when its Motion To Dismiss was dismissed by the Labor Arbiter in RAB Case No. 06-09-10698-97.

Held:Yes. It is settled that jurisdiction over the subject matter is conferred by law and it is not within the courts, let alone the parties, to themselves determine or conveniently set aside. In this regard, it should be reiterated that what has been filed by private respondent with the CA is a special civil action for certiorari assailing the Labor Arbiter's Order which denied its motion to dismiss. Section 3, Rule V of the NLRC Rules of Procedure, which was then prevailing at the time of the filing of private respondent's petition for certiorari with the CA, clearly provides: SECTION 3. MOTION TO DISMISS. - On or before the date set for the conference, the respondent may file a motion to dismiss. Any motion to dismiss on the ground of lack of jurisdiction, improper venue, or that the cause of action is barred by prior judgment, prescription or forum shopping, shall be immediately resolved by the Labor Arbiter by a written order. An order denying the motion to dismiss or suspending its resolution until the final determination of the case is not appealable. The Labor Arbiter committed a grave abuse of discretion when it did not dismiss RAB Case No. 06-09-10698-97 upon motion of HPC on the ground of res judicata. The Court explained: Conclusiveness of judgment finds application when a fact or question has been squarely put in issue, judicially passed upon, and adjudged in a former suit by a court of competent jurisdiction. The fact or question settled by final judgment or order binds the parties to that action (and persons in privity with them or their successors-in-interest), and continues to bind them while the judgment or order remains standing and unreversed by proper authority on a timely motion or petition; the conclusively-settled fact or question cannot again be litigated in any future or other action between the same parties or their privies and successors-in-interest, in the same or in any other court of concurrent jurisdiction, either for the same or for a different cause of action. Thus, only the identities of parties and issues are required for the operation of the principle of conclusiveness of judgment.De la Rosa vs Roldan

Facts:

The spouses Adriano Rivera and Aurora Mercado were the owners of two (2) parcels of land located in Tarlac, Tarlac, both covered by respective titles; the spouses Rivera executed a deed of sale2over the properties in favor of the spouses Arsenio Dulay and Asuncion dela Rosa. Gideon dela Rosa, one of Asuncion's brothers, was one of the instrumental witnesses in the deed. To pay for the property, the spouses Dulay, who were members of the Government Service Insurance System (GSIS), secured aP9,500.00 loan and executed a real estate mortgage over the two lots as security therefor. On September 16, 1957, the Register of Deeds issued TCT Nos. 29040 and 29041 in the names of the spouses Dulay.

The spouses Dulay forthwith took possession of the lots, except a 500-square-meter portion which was then occupied by Gideon dela Rosa and his wife Angela and the portion where the house of Corazon Medina stood. The spouses Dulay declared the property for taxation purposes in their names and paid the realty taxes therefor. The spouses Dulay made demands on Gideon, Angela and Corazon to vacate the premises, as their three daughters would be constructing their respective houses thereon. Gideon, Angela and Corazon refused to do so, prompting the spouses to file a complaint for recovery of possession (accion publiciana) against them with the then Court of First Instance (CFI) of Tarlac. The spouses Dulay alleged,inter alia, that they bought the lots from the spouses Rivera in 1957; defendants occupied a 370-square-meter portion on the western side, and were claiming ownership over one-half of the property, as shown by their letter to plaintiffs appended to their complaint; and they needed the property so that their daughters, who already had their respective families, could build houses thereon. The spouses Dulay prayed that defendants be evicted from the property and be required to pay reasonable compensation for their use of the premises.The spouses Dela Rosa and Corazon Medina appealed to the CA. The appellate court rendered judgment granting the appeal and reversed the trial courts ruling.In the meantime, Gideon died. His wife Angela and Corazon Medina continued residing in the property without paying any rentals therfor. Asuncion Dulay passed away, survived by her husband Arsenio and their children. Arsenio and his children, filed a complaint for unlawful detainer against Corazon and Angela, in the MTC of Tarlac. Angela filed a complaint against Arsenio and his children in the MTC of Tarlac for recovery of ownership, reconveyance, cancellation of title, and damages.The MTC rendered judgement in favor of Corazon and Angela and ordered the dismissal of the complaint on the-round of lack of Jurisdiction. The court held that the issue between the parties was one of ownership and not merely possession de facto.

Arsenio and his children appealed to the RTC and it reversed the decision of the MTC and ordered the eviction of defendants, holding that the issue was the entitlement to the physical possession de factoof the property, an issue within the exclusive jurisdiction of the MTC.Corazon and Angela moved to reconsider the decision, which the RTC denied. They filed a petition for reviewin the CA. The CA affirmed the decision of the RTC and ruled that, contrary to the claim of Angela, there was no trust created over one-half of the property in her favor. Since the complaint against Angela and Corazon in the MTC was one for unlawful detainer, The MTC had exclusive jurisdiction over the case.Issue:Whether the MTC had jurisdiction over the action of respondents (plaintiffs therein)Held:

The Supreme Court agree with the decision of the CA that the action of respondents against petitioners was one for unlawful detainer, and that the MTC had jurisdiction over the same. Indeed, petitioners claimed ownership over one-half of the property in their answer to the complaint and alleged that respondents were merely trustees thereof for their benefit as trustors; and, during the pre-trial, respondents admitted having filed their complaint for recovery of possession of real property (accion publiciana) against petitioners before the CFI of Tarlac, docketed as Civil Case No. 6261. However, these did not divest the MTC of its inceptial jurisdiction over the complaint for unlawful detainer of respondents.

It is settled jurisprudence that what determines the nature of an action as well as which court or body has jurisdiction over it arethe allegations of the complaint and the character of the relief sought, whether or not plaintiff is entitled to any and all of the reliefs prayed for.27The jurisdiction of the court or tribunal over the nature of the action cannot be made to depend upon the defenses set up in the court or upon a motion to dismiss, for otherwise, the question of jurisdiction would depend almost entirely on defendant. Once jurisdiction is vested, the same is retained up to the end of the litigation.28Jurisdiction cannot be conferred by the voluntary act or agreement of the parties; it cannot be acquired through or waived, enlarged or diminished by their act or omission. Neither is it conferred by the acquiescence of the court. It is neither for the court nor the parties to violate or disregard the rule, this matter being legislative in character. Thus, the jurisdiction over the nature of an action and the subject matter thereof is not affected by the theories set up by defendant in an answer or motion to dismiss.29Section 3 of Republic Act No. 7691, amending Section 33(2) of Batas Pambansa Blg. 129, which was the law in effect when respondents filed their complaint against petitioners, provides that "Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts exercise exclusive original jurisdiction over cases of forcible entry and unlawful detainer; provided that, when, in such cases, defendant raises the questions of ownership in his pleadings and the question of possession cannot be resolved without deciding the issue of ownership, the issue of ownership shall be resolved only to determine the issues of possession."