Civpro-finals-3rd.docx

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Guy vs. Court of Appeals Facts: The instant controversies arose from a family dispute. Gilbert Guy is the son of Francisco and Simny Guy. Geraldine, Gladys and Grace are his sisters. The family feud involves the ownership and control of 20,160 shares of stock of Northern Islands Co., Inc. engaged in the manufacture, distribution, and sales of various home appliances bearing the 3-D trademark. Northern Islands is a family-owned corporation organized by spouses Francisco and respondent Simny Guy and incorporated in said corporation was Lincoln Continental Development Corporation, Inc. as a holding company of the 50% shares of stock of Northern Islands in trust for their three (3) daughters, respondents Geraldine, Gladys and Grace. Sometime in December 1986, upon instruction of spouses Guy, Atty. Andres Gatmaitan, president of Lincoln Continental, indorsed in blank Stock Certificate No. 132 (covering 8,400 shares) and Stock Certificate No. 133 (covering 11,760 shares) and delivered them to Simny. Spouses Guys found that their son Gilbert has been disposing of the assets of their corporations without authority. In order to protect such assets, Sinmy surrendered the two stock certificates to Emilia Tabugadir and then registered it in the names of respondent sisters. Adding insult to injury, during a special meeting of the stockholders of Northern Islands, everybody except Gilbert was elected as officers. This development started the warfare between Gilbert and his sisters. On November 18, 2004, Gilbert filed with this Court a petition for certiorari, docketed as G.R. No. 165849, alleging that the Court of Appeals (Eighth Division), in granting an injunctive relief in favor of respondents, committed grave abuse of discretion tantamount to lack or in excess of jurisdiction. The petition also alleges that respondents resorted to forum shopping.

Issues: (1) whether respondents are guilty of forum shopping; and (2) whether they are entitled to the injunctive relief granted in CA-G.R. SP No. 87104. Held: A party is guilty of forum shopping when he repetitively avails of several judicial remedies in different courts, simultaneously or successively, all substantially founded on the same transactions and the same essential facts and circumstances, and all raising substantially the same issues either pending in, or already resolved adversely by some other court. In their petition, respondents prayed for the annulment of the writ of preliminary injunction issued by the RTC after the expiration of the TRO issued by the Tenth Division of the Court of Appeals. Evidently, this relief is not identical with the relief sought by respondents in CA-G.R. SP No. 85069. Clearly, the second element of litis pendentia the identity of reliefs sought - is lacking in the two petitions filed by respondents with the appellate court. Thus, we rule that no grave abuse of discretion amounting to lack or excess of jurisdiction may be attributed to the Court of Appeals for giving due course to respondent's petition in CA-G.R. SP No. 87104. On the second issue, for a party to be entitled to an injunctive writ, he must show that there exists a right to be protected and that the acts against which the injunction is directed are violative of this right. In granting the respondent's application for injunctive relief and making the injunction permanent, the Court of Appeals (Seventh Division) found that they have shown their clear and established right to the disputed 20,160 shares of stock because: (1) they have physical possession of the two stock certificates equivalent to the said number of shares; (2) Lincoln Continental is a mere trustee of the Guy family; and (3) respondents constitute a majority of the board of directors of Northern Islands, and accordingly have management and control of the company.. The appellate court then ruled that the trial court committed grave abuse of discretion in issuing a writ of preliminary mandatory injunction in favor of Guy. The writ actually reduced the membership of Northern Islands board to just one

member - Gilbert Guy. Moreover, he failed to establish by clear and convincing evidence his ownership of the shares of stock in question. The Court of Appeals then held there was an urgent necessity to issue an injunctive writ in order to prevent serious damage to the rights of respondents and Northern Islands. Molina vs. Court of Appeals The facts, as culled from the parties' pleadings, are as follows: On May 2, 1996, the Philippine Daily Inquirer published a news item, which reads in part: PACC coddled GO, 2 NBI execs claim By Teddy Molina and Juliet Pascual PDI Northern Luzon Bureau xxx

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NBI agents reportedly raided a vacation house in San Fernando, La Union, owned by Raymundo Armovit, Go's lawyer, in September. They missed Go, who left the house hours before the agents came. The source said Go was also in Vigan in November, during which he attended the wedding anniversary of a movie couple. . . . 3 On May 3, 1996, the same newspaper reported that: NBI exec says Go tipped off by PACC By Teddy Molina and Juliet Pascual PDI Northern Luzon Bureau

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AN OFFICIAL of the National Bureau of Investigation in Northern Luzon accused the Presidential Anti-Crime Commission of leaking out to Rolito Go a planned raid by NBI agents on a vacation house in San Fernando, La Union, where the convicted killer was hiding at the time. The raiders belonging to the NBI Special Operations Group missed Go but found some of his personal belongings near the house's swimming pool, the source, who asked not to be identified said. This happened in September at the vacation home of Go's lawyer, Raymundo Armovit, or eight months before the PACC arrested him on Tuesday in Lubao, Pampanga. "After the La Union raid, it was hard to track Go because he was moving as if he was receiving advice," the source further claimed. . .4 As a consequence, private respondent Raymundo Armovit filed a complaint for libel against petitioners, alleging that they caused to be published reports that maliciously accused him of harboring and/or concealing a convicted murderer. In a resolution dated October 31, 1996, the Provincial Prosecutor of Ilocos Sur found probable cause and recommended the filing of an Information for libel against petitioners.5 Accordingly, on November 28, 1996, two Informations for libel were filed with the RTC of Vigan, Ilocos Sur.6 On December 12, 1996, petitioners sought a review of the resolution dated October 31, 1996 by the Office of the Regional State Prosecutor. The latter reversed the

findings of the Provincial Prosecutor and directed the latter to withdraw the Informations filed. However, the RTC of Vigan, Ilocos Sur denied the motion to withdraw the indictments on the ground that there was probable cause for the filing of the Informations. Petitioners moved to reconsider the denial, but this motion was similarly denied. Petitioners then elevated the case to the Court of Appeals via a special civil action for certiorari, docketed as CA-G.R. SP No. 54397. On September 30, 1999, the appellate court resolved the case as follows: WHEREFORE, in view of the foregoing, the petition is hereby DISMISSED. SO ORDERED.7 The Court of Appeals found that the copies of the assailed orders of the trial court were purportedly certified, but there was no showing whatsoever of the authority of the person who certified the same. Moreover, the seal of the trial court could not be identified on the copies of said orders. Furthermore, the petition was not accompanied by all the pleadings and documents pertinent thereto. Petitioners then moved for reconsideration, but this was likewise denied. Hence, the instant petition, grounded on the allegation that: THE COURT OF APPEALS ERRED IN DISMISSING THE PETITION FOR CERTIORARI AND PROHIBITION ON MERE TECHNICALITIES SUCH AS: 1.) PETITIONERS FAILED TO SHOW THE AUTHORITY OF THE PERSON WHO CERTIFIED THE COPIES OF

THE ATTACHED ORDERS; 2.) THE SEAL OF THE TRIAL COURT COULD NOT BE IDENTIFIED FROM THE COPIES SUBMITTED; 3) PETITIONERS DID NOT ATTACH COPIES OF ALL PLEADINGS AND DOCUMENTS; AND 4.) THE JUDGE OF THE LOWER COURT WAS NOT IMPLEADED, AND COMPLETELY DISREGARDING THE MERITS OF THE PETITION.8 Simply stated, the issue is: Did the Court of Appeals commit a reversible error of law in dismissing the petition? We find that it did. Petitioners contend, firstly, that they should not be faulted for such technical defects as the failure to indicate the authority of the certifying officer or the inscrutable imprint of the trial court's seal because they did not have a hand in the preparation of the documents. After all, they only relied in good faith on the authority and diligence of the court personnel who prepared and authenticated the subject documents, considering that said personnel are presumed to know the procedural and technical requirements and because of the presumption that official duty has been regularly performed. According to petitioners, it was too harsh and arbitrary for the Court of Appeals to fault them for the oversight committed by the trial court personnel. Second, petitioners aver that their failure to attach the pleadings and documents relevant to the petition is immaterial as the Supreme Court, in a long line of cases, has given due course to similarly faulty petitions in the interests of equity and justice and merely directed that the lacking pleadings and documents be attached. Lastly, petitioners claim that they did not err if they only mentioned in the caption of the petition the trial court and not the trial court judge. After all, it is clear from the enumeration of parties against whom or against which a petition for certiorari may be filed, namely, any tribunal, board or officer exercising judicial or quasi-judicial functions in Rule 65, Section 19 of the

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Rules of Court that they need not implead the officer or the trial court judge who committed the grave abuse of discretion, amounting to want or excess of jurisdiction. Instead of addressing the issue and the petitioners' arguments, private respondent's submission focuses on the merits of the libel case. Thus, we are unable to agree with his contentions insofar as they lack direct pertinence to the present petition. A litigation is a contest in which each contending party fully and fairly lays before the court the facts in issue and then, brushing aside as wholly trivial and indecisive all imperfections of form and technicalities, asks that justice be done on the merits.10 Hence, Rule 1, Section 611 of the Rules of Court mandates that rules of procedure shall be liberally interpreted. In the instant case, we agree with petitioners that the Court of Appeals erred in stressing too much petitioners' failure to comply with technicalities. We cannot attribute to petitioners the perceived defects on the attached copies of the trial court's orders because petitioners did not have control over their preparation. Moreover, Rule 131, Section 3 (ff)12 of the Rules of Court lays the

NYK International vs. NLRC Facts: Publico filed a complaint for illegal dismissal against petitioner NYK and its manager, petitioner Cathy Ng. LA rendered decision holding the dismissal illegal, NLRC affirmed. petitioners impugned the NLRC decision by way of a special civil action of certiorari filed before the Court of Appeals ascribing grave abuse of discretion amounting to lack or excess of jurisdiction to public respondent NLRC for affirming the ruling of the Labor Arbiter. the appellate court dismissed the petition outright for noncompliance with Section 1 of Rule 65 of the 1997 Rules of Civil Procedure as the petition was merely accompanied by a certified xerox copy of the assailed NLRC decision, instead of a certified true copy thereof

presumption in petitioners' favor that they followed the pertinent rules on attaching certified copies of the orders subject of their petition below. As private respondent failed to show evidence to rebut this presumption, the presumption must stand. We likewise rule that in the present case, the alleged failure to attach all pleadings and documents is not a sufficient ground to dismiss the petition. In appropriate cases, the courts may liberally construe procedural rules in order to meet and advance the cause of substantial justice.13 We have held that lapses in the literal observation of a procedural rule will be overlooked when they do not involve public policy, when they arose from an honest mistake or unforeseen accident, when they have not prejudiced the adverse party, nor deprived the court of its authority.14 In the instant case, petitioners' failure to append: (1) herein respondent's Answer to the Petition for Review filed on January 2, 1997; (2) petitioners' Memorandum filed on April 28, 1997; and (3) respondent's Memorandum filed on May 16, 1997, all of which were mentioned in the petition for certiorari before the appellate court do not touch on public policy, nor do they deprive the appellate

as required by the Rules of Court, as well as other pleadings and documents. MR denied. Hence this petition for review. ISSUE: WON CA should have given due course to the petition HELD: Section 1 of Rule 65,[10] 1997 Rules of Civil Procedure, requires that the petition shall be accompanied by a certified true copy of the judgment or order subject thereof, together with copies of all pleadings and documents relevant and pertinent thereto. the disputed document although stamped as certified true copy is not an authenticated original of such certified true copy, but only a xerox copy thereof, in contravention of

court of its authority. No right of respondent is prejudiced or adversely affected. Lastly, it is not required under Rule 65, Section 1 of the Rules of Court that the trial judge himself be impleaded in a petition for certiorari. The rule clearly states that a petition for certiorari may be filed against the tribunal, board or officer exercising judicial or quasi-judicial functions.15 The inclusion of the tribunal, which issued the decision, as nominal party, was substantially complied with. When petitioners mentioned the Regional Trial Court, Branch 21 of Vigan, Ilocos Sur, they also referred necessarily to the judge who issued the assailed resolutions. WHEREFORE, the instant petition is GRANTED. The resolutions of the Court of Appeals in CA-G.R. SP No. 54397, dated September 30, 1999 and May 2, 2000 are REVERSED and SET ASIDE. The Court of Appeals is hereby directed to reinstate the petition for certiorari filed by petitioners in CA-G.R. SP No. 54397, with dispatch. SO ORDERED.

paragraph 3 of the above-quoted guidelines. Hence, no error may be ascribed to the Court of Appeals in dismissing the petition for certiorari outright. petitioners here have not shown any compelling reason for us to relax the rule. Petitioners are hereby reminded that the right to file a special civil action of certiorari is neither a natural right nor a part of due process. A writ of certiorari is a prerogative writ, never demandable as a matter of right, never issued except in the exercise of judicial discretion.[11] Hence, he who seeks a writ of certiorari must apply for it only in the manner and strictly in accordance with the provisions of the law and the Rules. Bulawan vs. Aquende

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FACTS: On 1 March 1995,Bulawan filed a complaint for annulment of title,reconveyanceand damages against Lourdes Yap (Yap) and the Register of Deeds before the trial court docketed as Civil Case No. 9040.Bulawan claimed that she is the owner of Lot No. 1634-B of Psd153847 covered by Transfer Certificate of Title (TCT) No. 13733 having bought the property from its owners, brothers Santos and FranciscoYaptengco(Yaptengco brothers), who claimed to have inherited the property from Yap Chin Cun. Bulawan alleged that Yap claimed ownership of the same property and caused the issuance of TCT No. 40292 in Yaps name. In her Answer, Yap clarified that she asserts ownership of Lot No. 1634-A of Psd-187165, which she claimed is the controlling subdivision survey for Lot No. 1634. Yap also mentioned that, in Civil Case No. 5064, the trial court already declared that Psd-153847 was simulated by the Yaptengco brothers and that their claim on Lot No. 1634-B was void. The trial court likewise adjudged Yap Chin Cunas the rightful owner of Lot No. 1634-B. Yap also stated that Lot No. 1634-B was sold by Yap Chin Cunto the Aquende family. On 26 November 1996, the trial court ruled in favor of Bulawan. Yap appealed. On 20 July 2001, the Court of Appeals dismissed Yaps appeal. On 7 February 2002, the trial courts 26 November 2006 Decision became final and executory per entry of judgment dated 20 July 2001. On 19 July 2002, the trial court issued a writ of execution. In a letter dated 24 July 2002, the Register of Deeds informed Aquende of the trial courts writ of execution and required Aquende to produce TCT No. 40067 so that a memorandum of the lien may be annotated on the title. On 25 July 2002,Aquende wrote a letter to the Register of Deeds questioning the trial courts writ of execution against his property. Aquende alleged that he was unaware of any litigation involving his property

having received no summons or notice thereof, nor was he aware of any adverse claim as no notice of lis pendens was inscribed on the title. On 2 August 2002,Aquende filed a Third Party Claim against the writ of execution because it affected his property and, not being a party in Civil Case No. 9040, he argued that he is not bound by the trial courts 26 November 1996 Decision. In a letter dated 5 August 2002,the Clerk of Court said that a Third Party Claim was not the proper remedy because the sheriff did not levy upon or seize Aquende's property. Moreover, the property was not in the sheriffs possession and it was not about to be sold by virtue of the writ of execution. Aquende then filed a Notice of Appearance with Third Party Motion and prayed for the partial annulment of the trial courts 26 November 1996 Decision, specifically the portion which ordered the cancellation of Psd187165 as well as any other certificate of title issued pursuant to Psd-187165.Aquende also filed a Supplemental Motion where he reiterated that he was not a party in Civil Case No. 9040 and that since the action was in personam or quasi in rem, only the parties in the case are bound by the decision. In its 19 February 2003 Order, the trial court deniedAquendesmotions. According to the trial court, it had lost jurisdiction to modify its 26 November 1996 Decision when the Court of Appeals affirmed said decision. Thereafter, Aquende filed a petition for annulment of judgment before the Court of Appeals on the grounds of extrinsic fraud and lack of jurisdiction. The Court of Appeals ruled in favor of Aquende.

judgment may be annulled on the grounds of extrinsic fraud and lack of jurisdiction. Fraud is extrinsic where it prevents a party from having a trial or from presenting his entire case to the court, or where it operates upon matters pertaining not to the judgment itself but to the manner in which it is procured.The overriding consideration when extrinsic fraud is alleged is that the fraudulent scheme of the prevailing litigant prevented a party from having his day in court.On the other hand, lack of jurisdiction refers to either lack of jurisdiction over the person of the defending party or over the subject matter of the claim, and in either case the judgment or final order and resolution are void.Where the questioned judgment is annulled, either on the ground of extrinsic fraud or lack of jurisdiction, the same shall be set aside and considered void. In his petition for annulment of judgment, Aquende alleged that there was extrinsic fraud because he was prevented from protecting his title when Bulawan and the trial court failed to implead him as a party. Bulawan also maintained that the trial court did not acquire jurisdiction over his person and, therefore, its 26 November 1996 Decision is not binding on him. In its 26 November 2007 Decision, the Court of Appeals found merit in Aquende's petition and declared that the trial court did not acquire jurisdiction over Aquende, who was adversely affected by its 26 November 1996 Decision. We find no error in the findings of the Court of Appeals. Moreover, annulment of judgment is a remedy in law independent of the case where the judgment sought to be annulled was rendered. Consequently, an action for annulment of judgment may be availed of even if the judgment to be annulled had already been fully executed or implemented.

ISSUE: Did the CA err in taking cognizance of the petition for annulment of judgment? HELD: In a petition for annulment of judgment, the

Therefore, the Court of Appeals did not err when it took cognizance of Aquende's petition for annulment of judgment and overturned the trial courts 26 November 1996 Decision even if another division of the Court of

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Appeals had already affirmed it and it had already been executed.

Amendment and/or Reconsideration of Nordec Phil. and Dr. Malvar.

Lopez vs. Esquivel

The antecedent facts of both Petitions are recounted as follows:

The petitioners in G.R. No. 168734, namely, Marcelino, Felisa, Leonardo and Zoilo, all surnamed Lopez (Lopez siblings), seek to reverse and set aside the Decision[2] dated 14 February 2005 and Resolution[3] dated 27 June 2005 of the Court of Appeals in CA-G.R. CV No. 70200. In its assailed Decision, the appellate court affirmed in toto the Decision[4] dated 11 January 2001 of the Regional Trial Court (RTC) of Antipolo City, Branch 73, in Civil Case No. 96-4193, which (1) ordered the Lopez siblings to vacate and to convey to Jose Esquivel, Jr. (Esquivel) and Carlito Talens (Talens) a parcel of land, measuring 2.6950 hectares, situated in Barrio dela Paz, Antipolo, Rizal[5] (subject property); and (2) directed the Register of Deeds of Marikina, Metropolitan Manila,[6] to divest the Lopez siblings of their title over the subject property and to issue title over the same property in the names of Esquivel and Talens. In its assailed Resolution, the appellate court denied for lack of merit the Motion for Reconsideration of the Lopez siblings. On the other hand, Noel Rubber and Development Corporation (Nordec Phil.) and Dr. Potenciano Malvar (Dr. Malvar), the petitioners in G.R. No. 170621, pray for the setting aside of the Resolutions dated 6 October 2005[7] and 16 November 2005[8] of the Court of Appeals in CA-G.R. SP No. 91428. The Court of Appeals, in its questioned Resolution dated 6 October 2005, dismissed for prematurity the Petition for Annulment of Judgment filed by Nordec Phil. and Dr. Malvar under Rule 47 of the 1997 Revised Rules of Civil Procedure, assailing the RTC Decision dated 11 January 2001 in Civil Case No. 96-4193, as they were not impleaded in said case, neither as indispensable nor necessary parties. The appellate court, in its other questioned Resolution dated 16 November 2005, denied the Motion for

G.R. No. 168734 Hermogenes Lopez (Hermogenes) was the father of the Lopez siblings. During Hermogenes lifetime, he applied with the Bureau of Lands for a homestead patent over a parcel of land, with an area of 19.4888 hectares, located in Barrio dela Paz, Antipolo, Rizal. Hermogenes application was docketed as Homestead Patent No. 138612. After ascertaining that the land was free from claim of any private person, the Bureau of Lands approved Hermogenes application. In 1939, Hermogenes submitted his final proof of compliance with the residency and cultivation requirements of the Public Land Act. As a matter of course, the aforesaid parcel of land was surveyed by a government surveyor and the resulting plan H-138612 was approved by the Director of Lands on 7 February 1939. The Director of Lands, thereafter, ordered the issuance of the homestead patent in Hermogenes name. The patent was subsequently transmitted to the Register of Deeds of Rizal for transcription and issuance of the corresponding certificate of title[9] in Hermogenes name.[10] Unaware that he had already been awarded a homestead patent over the 19.4888-hectare land, Hermogenes sold[11] the same to Ambrocio Aguilar (Aguilar) by virtue of a Deed of Absolute Sale[12] dated 31 July 1959. Years later, it was allegedly discovered that the subject property, with an area of 2.6950 hectares, was erroneously included in survey plan H-138612 of Hermogenes property. The subject property supposedly formed part of the land owned by Lauro Hizon (Hizon), which adjoined that of Hermogenes. Resultantly, on 29 November 1965, Hermogenes executed a Quitclaim[13] over his rights and interests to the subject

property[14]

in Hizons favor. Hizon, in turn, sold the subject property to Esquivel and Talens, as evidenced by a Deed of Absolute Sale of Unregistered Land[15] dated 26 August 1968. Hermogenes died[16] on 20 August 1982. The Lopez siblings, as Hermogenes heirs, filed an action with the RTC of Antipolo, Rizal, Branch 71, for the cancellation of the Deed of Absolute Sale dated 31 July 1959, executed between Hermogenes and Aguilar, and which involved the entire 19.4888-hectare land. It was docketed as Civil Case No. 463-A. In a Decision[17] dated 5 February 1985, the RTC declared the aforesaid Deed of Absolute Sale null and void ab initio as it was made in violation of Section 118 of Commonwealth Act No. 141, otherwise known as the Public Land Act, as amended. The said RTC Decision was affirmed in toto by the Court of Appeals in its Decision[18] dated 18 August 1987 in CA-G.R. CV No. 06242. In a Resolution[19] dated 13 April 1988, this Court denied Aguilars appeal, docketed as G.R. No. 81092, for being filed late. On 4 March 1993, on the basis of the Deed of Absolute Sale of Unregistered Land dated 26 August 1968 executed by Hizon in their favor, Esquivel and Talens filed an Application for Registration of the subject property with the RTC of Antipolo, Rizal, Branch 73. It was docketed as LRC Case No. 93-1211. The Lopez siblings filed an opposition to the application in LRC Case No. 93-1211, asserting, among other grounds, that: (1) they did not know the persons and personal circumstances of Esquivel and Talens who were not the formers adjoining property owners; (2) the subject property, which Esquivel and Talens sought to have registered, was already titled under the Torrens system and covered by Transfer Certificates of Title (TCT) No. 207990 to No. 207997[20] in the names of the Lopez siblings; and (3) Tax Declaration No. 04-10304 of Esquivel and Talens covering the subject property was spurious. The Lopez siblings also moved for the dismissal of LRC Case No. 93-1211 invoking the final and executory Decision[21] dated 5 February 1985 of the

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RTC of Antipolo, Rizal, Branch 71, in Civil Case No. 463A, which affirmed Hermogenes title to the 19.4888hectare land, that included the subject property. The RTC rendered its Decision[22] on 4 April 1995 in LRC Case No. No. 93-1211, granting the Application for Registration of the subject property filed by Esquivel and Talens. Accordingly, the Lopez siblings filed a Motion for Reconsideration of the said RTC judgment. Acting on the Motion of the Lopez siblings, the RTC issued an Order[23] dated 23 May 1996 in which it corrected several errors in its earlier decision, i.e., a typographical error on the area of the subject property, and a mistake in the conversion of the area of the subject property from square meters to hectares. The RTC also stated in the same Order that it could not direct the amendment of the TCTs in the names of the Lopez siblings, to exclude therefrom the subject property which was adjudged to Esquivel and Talens, as the RTC was sitting only as a land registration court. The RTC, thus, advised Esquivel and Talens to file an action for reconveyance of the subject property and only when Esquivel and Tales succeed in such action can they subsequently cause the registration of the subject property in their names. Following the advice of the RTC, Esquivel and Talens filed with the RTC of Antipolo, Rizal, Branch 73, on 2 October 1996, a Complaint[24] for Reconveyance and Recovery of Possession of the subject property against the Lopez siblings. The case was docketed as Civil Case No. 96-4193. In their Complaint, Esquivel and Talens alleged that when the Lopez siblings had the land they inherited from Hermogenes registered, they included the subject property, which Hermogenes already conveyed to Hizon in the Quitclaim dated 29 November 1965. Hence, the subject property was erroneously included in TCTs No. 207990 to No. 207997, issued by the Register of Deeds of Marikina, Metro Manila, in the names of the Lopez siblings. The subject property is presently occupied and in the physical possession of the Lopez siblings.[25]

In their Answer with Compulsory Counterclaim, the Lopez siblings denied all the allegations of Esquivel and Talens. As their special defenses, the Lopez siblings called attention to the non-compliance by Esquivel and Talens with Section 5, Rule 7 of the 1997 Revised Rules of Civil Procedure, on non-forum shopping, considering that there was another case before the RTC of Antipolo, Rizal, Branch 71,[26] also involving the subject property and the issues on the genuineness and validity of the Deed of Absolute Sale of Unregistered Land dated 26 August 1968, executed by Hizon in favor of Esquivel and Talens. The Lopez siblings further averred that the cause of action of Esquivel and Talens was already barred by the statute of limitations and laches since they failed to assert their alleged rights to the subject property for 25 years.[27] The Lopez siblings additionally interposed that the Quitclaim involving the subject property, invoked by Esquivel and Talens, was ineffective, because by the time it was executed by Hermogenes in favor of Hizon on 29 November 1965, Hermogenes had already sold his entire 19.4888hectare land, of which the subject property was part, to Aguilar on 31 July 1959. The Lopez siblings finally argued that the said Quitclaim was a nullity as it contravened Section 17[28] of the Public Land Act, as amended.[29] On 11 January 2001, the RTC rendered a Decision in Civil Case 96-4193, granting the prayer of Esquivel and Talens for the reconveyance and recovery of possession of the subject property. The RTC held that the Deed of Absolute Sale dated 31 July 1959 between Hermogenes and Aguilar was already declared null and void ab initio by a court of competent jurisdiction. Therefore, the Lopez siblings were estopped from asserting said Deed to defeat the rights of Esquivel and Talens to the subject property. The RTC also ruled that Esquivel and Talens were not guilty of laches because as early as 1986, they had declared the subject property in their names for taxation purposes. Moreover, in 1993, Esquivel and Talens filed before the RTC an application for registration of the subject property, LRC Case No.

93-1222, where they obtained a favorable judgment. The RTC lastly found that the action for reconveyance of Esquivel and Talens was not yet barred by prescription as it was instituted within the 30-year prescriptive period. The Lopez siblings filed an appeal of the aforementioned RTC Decision to the Court of Appeals, docketed as CA-G.R. CV No. 70200. In their Appellants Brief, the Lopez siblings assigned the following errors: 1.

2.

The trial court presided by Judge Mauricio M. Rivera erred in failing to dismiss this case for reconveyance on the grounds of: (a) prescription of action; and (b) laches; [Hermogenes] was no longer the owner of the property when he executed the [quitclaim] dated [29 November 1965] because of the previous sale to third party on [31 July 1959];

3.

There was (sic) no prior records in the Bureau of Lands or in the assessors office that [Hizon], the predecessor-in-interest of the [Esquivel and Talens] is a landholder or a previous tax declarant;

4.

The court a quo thru the same judge indiscreetly based primarily the appealed decision on its erroneous findings and conclusions in LRC Case

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No. 93-1211 contrary to the findings and conclusions of this Honorable Court among others in CA G.R. CV No. 07745, entitled Ambrocio Aguilar v. Heirs of Fernando Gorospe, et al. promulgated on 31 August 1989; in CA G.R. CV No. 06242, entitled Marcelino Lopez, et al. v. Sps. Ambrocio [Aguilar] and Pelagia Viray promulgated on 18 August 1987; and the findings and conclusions of the Supreme Court in G.R. No. 90380 entitled Santos v. Court of Appeals promulgated on 13 September 1990 among others. 5.

Having already erred in favor of the [Esquivel and Talens], the same presiding judge of the trial court erringly proceeded to conduct hearing and to decide this case despite the consolidation of Civil Case No. 95-3693 entitled Angelina Hizon, et al. v. Carlito Talens, et al., involving the same subject property and the efficacy and validity of the [quitclaim] solely relied upon by the [Esquivel and Talens].[30]

On 14 February 2005, the Court of Appeals rendered its Decision dismissing the appeal of the Lopez siblings and affirming in toto the RTC Decision dated 11 January 2001. The appellate court ruled that the Lopez siblings are barred by the doctrine of estoppel in pais from challenging the Quitclaim executed by Hermogenes over the subject property in favor of Hizon on 29 November 1965 on the ground that Hermogenes no longer owned the subject property at that time. The Lopez siblings themselves, as Hermogenes heirs, filed with the RTC Civil Case No. 463-A for the cancellation of the Deed of Absolute Sale involving the 19.4888-hectare land (which included the subject property), executed by Hermogenes in favor of Aguilar on 31 July 1959. The Lopez siblings obtained a favorable judgment in Civil Case No. 463-A as the RTC therein declared void ab initio the aforesaid Deed of Absolute Sale. Hence, the Lopez siblings are now estopped from asserting the validity of the same Deed of Absolute Sale so as to void or nullify the Quitclaim executed by Hermogenes in favor of Aguilar, on which Esquivel and Talens based their claim to the subject property. Any deviation by the Lopez siblings from their previous position would definitely cause injury and prejudice to Esquivel and Talens, who acted relying on the knowledge that the previous sale between Hermogenes and Aguilar of the land, which included the subject property, was already adjudged void ab initio. The Lopez siblings, moreover, were only subrogated to whatever rights and interests their father Hermogenes still had over the subject property upon the latters death in 1982. They were, thus, bound by the Quitclaim Hermogenes executed in 1965 involving the subject property.[31] The Motion for Reconsideration of the aforesaid Decision filed by the Lopez siblings was denied by the Court of Appeals in a Resolution dated 27 June 2005. The Lopez siblings are presently before this Court seeking the resolution of the following issues:

I.

II.

Whether or not the [Court of Appeals] erred in applying the rule of estoppel in disregard of the law of the case doctrine (a) in the Decision promulgated on [13 September 1990] in G.R. No. 90380 entitled Eduardo Santos v. The Honorable Court of Appeals; (b) in the Decision [E]n [B]anc promulgated on [24 September 2002] in G.R. No. 123780, entitled In Re: Petition Seeking for Clarification as to the Validity and Forceful Effect of Two (2) Final and Executory but conflicting Decisions of [this Court] Col. Pedro Cabuay, Jr. v. Marcelino Lopez, et al; and (c) in the Decision promulgated on [5 March 2003] in G.R. No. 127827 entitled Eleuterio Lopez, et al. v. The Hon. Court of Appeals, Spouses Marcelino Lopez and Cristina Lopez, et al.; Whether or not the [appellate court] was correct in applying the rule of estoppel in pais in disregard of the peremptory and [personal-tothe-applicants-homestead] provisions of the Public Land Law or Commonwealth Act 141, as amended;

III.

Are the [Esquivel and Talens] and their predecessor-in-interest barred by the statute of limitations?

IV.

Are the [Esquivel and Talens] and their predecessor-in-interest guilty of laches?

V.

The quitclaim relied upon by [Esquivel and Talens] is intrinsically

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void and has violated the provisions of the Public Land Law.[32]

The Lopez siblings aver that a deeper analysis of the assailed Decision of the Court of Appeals will reveal the latters utter disregard for or deviation from the law of the case set by this Court in its Decisions in Santos v. Court of Appeals,[33] Group Commander, Intelligence & Security Group, Philippine Army v. Dr. Malvar,[34] and Lopez v. Court of Appeals,[35] where the issue on the validity of the homestead patent granted to Hermogenes, father of the Lopez siblings, was already passed upon. In these three Decisions, the Court already declared the homestead patent awarded to Hermogenes valid. Therefore, the Court of Appeals erred in applying the rule on estoppel in disregard of the doctrine of law of the case. The Lopez siblings further argue that the assailed Decision of the Court of Appeals runs counter to the personal-to-the-homestead-applicant policy[36]provisions embodied in Sections 12, 13, and 17 of the Public Land Act, as amended, that this Court upheld in Santos, Cabuay, and Lopez. The Court precisely disregarded the rule on estoppel in pais or the principle of trust in said three cases as it had no room for application under the tenor or context of the mandatory personal-to-the-homestead-applicant policy provisions of the Public Land Act, as amended. It was, thus, erroneous for the appellate court to apply estoppel in pais in ruling against the Lopez siblings in its assailed judgment. The Lopez siblings additionally avow that in the proceedings conducted on Hermogenes homestead application by the Bureau of Lands, it was verified that the land applied for, which included the subject property, was disposable public land. If it was true that the subject property was only erroneously included in the homestead patent awarded to Hermogenes, then such an award could only be challenged by the government in an action for reversion under Section

101 of the Public Land Act, as amended; or objected to by a private person under Section 102 of the same statute. Resultantly, Esquivel and Talens could not have availed themselves of the recourse prescribed by Section 38[37] of Act No. 496, otherwise known as the Land Registration Act, in their action for reconveyance of the subject property.Section 38 of the Land Registration Act may only be availed of by an aggrieved owner whose property was fraudulently included in a decree of registration. A decree of registration under the Land Registration Act merely confirms, but does not confer, ownership over private land so as to bring it under the operation of the Torrenssystem. The remedies provided under Sections 101 and 102 of the Public Land Act, on one hand, and Section 38 of the Land Registration Act, on the other, are exclusive of each other, considering the basic distinction in the subject matters thereof, i.e., the award or grant of public land in the former, and the registration of private land in the latter. The Lopez siblings also maintain that Hizon, predecessor-in-interest of Esquivel and Talens, who claimed ownership over the subject property, was duty bound to exercise the diligence of a good father of the family by opposing or taking exception to Hermogenes homestead application, which included said property. Even after the homestead patent over the subject property was already awarded to Hermogenes, Hizon still had opportunity to protest the same before the Bureau of Lands, prior to the registration of said homestead patent with the Register of Deeds. For failing to take appropriate actions, Hizon, and his successorsin-interest, Esquivel and Talens, are now barred from doing so by the statute of limitations and laches. Finally, the Lopez siblings assert that the reliance by the Court of Appeals on the legal efficacy of the Quitclaim involving the subject property executed by Hermogenes in favor of Hizon is misplaced. The reason for the renunciation, waiver, or repudiation by Hermogenes of his rights to the subject property in Hizons favor, as stated in the said Quitclaim, is not a

recognized cause or consideration for conveyance of a parcel of land subject of a homestead patent under the prohibitive and mandatory provisions of the Public Land Act, as amended. Moreover, whatever efficacy the Quitclaim had was already barred by the ruling of this Court en bancin Cabuay and Lopez. The instant Petition is meritorious. Since the issues in this case are interrelated, the Court shall discuss them concurrently. Law of the case has been defined as the opinion delivered on a former appeal. It is a term applied to an established rule that when an appellate court passes on a question and remands the case to the lower court for further proceedings, the question there settled becomes the law of the case upon subsequent appeal. It means that whatever is once irrevocably established as the controlling legal rule or decision between the same parties in the same case continues to be the law of the case, whether correct on general principles or not, so long as the facts on which such decision was predicated continue to be the facts of the case before the court.[38]Thus, the court reviewing the succeeding appeal will not re-litigate the case but instead apply the ruling in the previous appeal. This enables the appellate court to perform its duties satisfactorily and efficiently which would be impossible if a question, once considered and decided by it, were to be litigated anew in the same case and upon any and subsequent appeal.[39] Given the foregoing, it is apparent that the Decisions of this Court in Santos, Cabuay, and Lopez, cited by the Lopez siblings in their instant Petition, cannot be regarded as the law of the case herein. The law of the case applies only when (1) a question is passed upon by an appellate court, and (2) the appellate court remands the case to the lower court for further proceedings; the lower court and even the appellate courts on subsequent appeal of the case are, thus, bound by how such question had been previously

9

settled. It must be emphasized, therefore, that the law of the case finds application only in the same case between the same parties. The Petition at bar is without question separate and distinct from Santos, Cabuay, and Lopez, although they may all involve, in varying degrees, the homestead patent granted to Hermogenes over the 19.8222-hectare land, which included the subject property. First, Santos, Cabuay, and Lopez, directly tackled the validity of the homestead patent granted to Hermogenes over the 19.8222-hectare land; while, in the instant case, the validity of the homestead patent thus granted to Hermogenes is no longer in issue, but it is alleged herein that said patent erroneously included the subject property. Second, to recall, the instant Petition originated from Civil Case No. 96-4193, the Complaint for Reconveyance and Recovery of the subject property filed by Esquivel and Talens against the Lopez siblings before the RTC of Antipolo, Rizal, Branch 73. In no instance was a question or issue in Civil Case No. 96-4193 ever been previously raised to an appellate court. Santos, Cabuay, and Lopez, did not pass upon any question or issue raised before this Court from Civil Case No. 96-4193. And thirdly, despite the fact that all these cases may have common antecedent facts and sometimes involved the same personalities, the Lopez siblings (herein petitioners) and Esquivel and Talens (herein respondents) were not parties in Santos, Cabuay, and Lopez. The Court now proceeds to resolve the issue of whether Esquivel and Talens have a right to the reconveyance of the subject property based on the Quitclaim executed by Hermogenes in Hizons favor on 29 November 1965. Such determination shall be dependent on whether the Quitclaim was executed beyond the period within which encumbrance or alienation of the land acquired by homestead patent is prohibited; and whether the Quitclaim effected a valid conveyance of the subject property from Hermogenes to Hizon.

Section 118 of the Public Land Act, as amended, prohibits any encumbrance or alienation of lands acquired under homestead provisions from the date of the approval of application and for a term of five years from and after the date of issuance of the patent or grant. The same provision provides that no alienation, transfer, or conveyance of any homestead after five years and before 25 years after issuance of title shall be valid without the approval of the Secretary of Agriculture and Natural Resources, which approval shall not be denied except on constitutional and legal grounds.

owner of my above-cited parcel of land by the name of [Hizon] has duly caused the survey of his land bordering mine x x x; that after the actual execution of the survey of the land of said [Hizon], it was found out that the land which has been in his possession for many many years or since time immemorial is within my plan denominated as H-138612;

In this case, the subject property was included, whether correctly or erroneously, in the 19.4888hectare land awarded to Hermogenes, by virtue of a homestead patent, issued on 7 February 1939. The Quitclaim over the subject property, a 2.6950-hectare portion of the said 19.4888-hectare land, was executed by Hermogenes in Hizons favor on 29 November 1965. Between the date of issuance of the homestead patent to Hermogenes and that of the execution of the Quitclaim, more than 26 years had passed. Therefore, the execution of the Quitclaim was no longer within the five-year period within which the land covered by the homestead patent issued to Hermogenes must not be encumbered or alienated; and was also beyond the period between five and 25 years following the issuance of patent within which approval of the Secretary of Environment and Natural Resources is still necessary to make the alienation or encumbrance valid.[40]

5. That in fairness and in justice to [Hizon], I herewith renounce, repudiate and unconditionally and irrevocably waive and quitclaim all my rights, shares, interests or participations on the above-described parcel of land in favor of [Hizon], of legal age, Filipino, married to Angelina Villarosa and a resident of Antipolo, Rizal, and for this purpose I am agreeable that my plan H-138612 be duly amended so as to segregate the above-described portion which is owned by the aforesaid [Hizon].[41]

Although it has been established that the Quitclaim was executed beyond any of the prohibitive and/or restrictive periods under the Public Land Act, as amended, the Court must next look into whether the Quitclaim had the effect of validly conveying the subject property to Hizon. The pertinent portions of the Quitclaim in question read as follows: 2. That it has come to my personal knowledge that a boundary

xxxx

It can be gleaned from the afore-quoted paragraphs of the Quitclaim that the intention of Hermogenes in executing the same was to restore to Hizon the subject property, which Hermogenes believed to have been mistakenly included in his homestead patent. It is worthy to note, however, that the subject property was part of the 19.4888-hectare land covered by the homestead patent awarded by the Bureau of Lands to Hermogenes. The 19.4888-hectare land was identified and measured in a survey conducted by a government surveyor and the resulting plan H-138612

10

was approved by the Director of Lands. The approval of survey plan H-138612 and the grant of the homestead patent over the 19.4888-hectare land in favor of Hermogenes, performed as part of the official functions of the Director of Lands and the Bureau of Lands, enjoy the presumption of regularity.[42] Reasonable doubt is thus cast on the supposed mistake which resulted in the inclusion of the subject property in the 19.4888-hectare land awarded to Hermogenes by virtue of the homestead patent. Even assuming that the homestead patent awarding the 19.4888-hectare land to Hermogenes did erroneously include the subject property, Hermogenes could not simply convey said property to Hizon, nor could Hizon easily recover the same, by virtue of a mere Quitclaim. Lands acquired under homestead patents come from the public domain. If the subject property was erroneously included in the homestead patent awarded to Hermogenes, then the subject property must be returned to the State and not to Hizon. Furthermore, the survey plan conducted and homestead patent issued in Hermogenes name covered a 19.4888-hectare land; to exclude therefrom the 2.6950-hectare subject property (since it purportedly belonged to Hizon) would mean that Hermogenes actually acquired land with an area less that what he was awarded under the homestead patent. This complication reveals that any alleged mistake as regards the subject property is not a simple and private matter between Hermogenes and Hizon; but is primarily a problem between Hermogenes and the State, the latter having awarded the 19.4888-hectare land to the former by virtue of the homestead patent. A homestead patent is one of the modes to acquire title to public lands suitable for agricultural purposes. Under the Public Land Act, as amended, a homestead patent is one issued to any citizen of this country, over the age of 18 years or the head of a family, and who is not the owner of more than 24 hectares of land in the country. To be qualified, the applicant must show that he has resided continuously for at least one

year in the municipality where the land is situated and must have cultivated at least one-fifth of the land applied for.[43] In this case, the Bureau of Lands approved Hermogenes application for homestead patent over the 19.4888-hectare land after finding him qualified for the same.In contrast, the only evidence supporting Hizons claim to the subject property was the Quitclaim. There is no other proof that Hizon possessed, cultivated, and introduced improvements on the subject property. Neither is there any showing that after the execution of the Quitclaim, Hizon himself applied for a homestead patent over the subject property. In fact, it is undisputed that the subject property has always been in the possession of Hermogenes, then the Lopez Siblings. Hizon and Esquivel and Talens never came into the possession of the subject property even after the execution of the supposed deeds of conveyances in their favor. The Court also cannot consider the subject property to have been held in trust by Hermogenes for and on behalf of Hizon. Settled is the rule that a homestead applicant must personally comply with the legal requirements for a homestead grant. The homestead applicant himself must possess the necessary qualifications, cultivate the land, and reside thereon. It would be a circumvention of the law if an individual were permitted to apply in behalf of another, as the latter may be disqualified or might not comply with the residency and cultivation requirements.[44] In the end, the Quitclaim dated 29 November 1965 could not have validly conveyed or transferred ownership of the subject property from Hermogenes to Hizon. It is null and void for being contrary to the provisions of the Public Land Act, as amended. As a result, Hizon acquired no right over the subject property which he could have sold to Esquivel and Talens; and the Deed of Absolute Sale of Unregistered Land dated 26 August 1968 executed by Hizon in favor

of Esquivel and Talens, is similarly void for lack of an object. Even granting arguendo, that the Quitclaim is valid and transferred ownership of the subject property from Hermogenes to Hizon, the latter and his successors-in-interest, Esquivel and Talens, are now barred by the statute of limitations and laches from asserting their rights to the subject property, after failing to exercise the same for an unreasonable length of time. Laches has been defined as the failure of or neglect for an unreasonable and unexplained length of time to do that which by exercising due diligence, could or should have been done earlier, or to assert a right within reasonable time, warranting a presumption that the party entitled thereto has either abandoned it or declined to assert it. Thus, the doctrine of laches presumes that the party guilty of negligence had the opportunity to do what should have been done, but failed to do so.[45] In the instant case, when Esquivel and Talens filed with the RTC their application for registration of the subject property on 5 March 1993, 28 years had passed since the execution by Hermogenes of the Quitclaim covering the subject property in favor of Hizon on 29 November 1965; and 25 years elapsed from the execution by Hizon of the Deed of Absolute Sale of the subject property in favor of Esquivel and Talens on 26 August 1968. During these periods, without providing any reasons therefor, neither Hizon nor Esquivel and Talens took possession of the subject property or exercised in any other way their rights over the same. Finally, concerning this Petition, is the issue of whether the Lopez siblings are estopped from questioning the validity of the Quitclaim, as ruled by the Court of Appeals? It bears to point out that the question of estoppel is relevant only if the Lopez siblings are challenging the validity of the Quitclaim on the ground that when Hermogenes executed the same, he had already previously sold his 19.4888-hectare land, which

11

included the subject property, to Aguilar. In recollection, the Lopez siblings successfully had the said sale of the land by Hermogenes to Aguilar nullified. Since the Court herein refuses to give effect to the Quitclaim in question on other grounds already discussed above, the issue of estoppel actually loses relevance and need not be resolved anymore. Considering the pronouncements of this Court that the Quitclaim covering the subject property executed by Hermogenes in favor of Hizon is null and void for being contrary to the provisions of the Public Land Act, as amended, on homestead grants; and that the Deed of Absolute Sale of the subject property executed by Hizon in favor of Esquivel and Talens is null and void for lack of a proper object, then Esquivel and Talens have no basis to ask for the reconveyance of the subject property. Hizon never owned the subject property and could never have sold the same to Esquivel and Talens.

G.R. No. 170621 A Petition for Annulment of Judgment was filed with the Court of Appeals by Nordec Phil., a corporation organized and existing under the laws of the Philippines; and Dr. Malvar, President and General Manager of petitioner Nordec Phil., docketed as CA G.R. CV No. 91428. The Lopez siblings, Esquivel, and Talens, were named respondents in CA-G.R. CV No. 91428 (and also herein), being the parties in Civil Case No. 96-4193, wherein the RTC of Antipolo, Rizal, Branch 73, rendered the Decision dated 11 January 2001, which Nordec Phil. and Dr. Malvar was seeking to have annulled by the Court of Appeals. Atty. Sergio Angeles (Atty. Angeles) and Atty. George A. Ang Cheng (Atty. Ang Cheng) were similarly impleaded as respondents in said petition before the appellate court on account of their involvement as counsels for the parties in Civil Case No. 96-4193.

In its Decision dated 11 January 2001 in Civil Case No. 96-4193, the RTC granted the action for reconveyance of the subject property to Esquivel and Talens. The subject property, however, was already supposedly sold by Lopez siblings to Nordec Phil. and Dr. Malvar. Nordec Phil. and Dr. Malvar alleged in their Petition for Annulment of Judgment that the Lopez siblings, the successors-in-interest of Hermogenes, were the registered owners of 15 parcels of land situated at Overlooking, Sumulong Highway, Barangay Sta. Cruz, (formerly Barrio dela Paz), Antipolo City, Rizal, covered by plan (LRC) Psd-3289610, with a total area of 19.4888 hectares.[46] Among these parcels of land were Lots 1, 2, 3, 4, 7 and 8, covered by TCTs No. 207990 to No. 207997[47] of the Registry of Deeds of Marikina City, with an aggregate area of 2.875 hectares, and which constituted the subject property.[48] Beginning 20 April 1994, Nordec Phils. and Dr. Malvar purchased the afore-mentioned lots from the Lopez siblings and their assigns, namely, Atty. Angeles and Rogelio Amurao (Amurao),[49] as evidenced by several Deeds of Absolute Sale and Deeds of Conditional Sale. Immediately after making such purchases, Nordec Phils. and Dr. Malvar introduced large scale improvements on the subject property, among which were several business establishments[50] with a cost of no less than P50,000,000. In 1996, when the subject property was involved in Civil Case No. 96-4130 heard before the RTC of Antipolo, Rizal, Branch 74, entitled Heirs of Elino Adia v. Heirs of Hermogenes Lopez, it was Atty. Angeles who represented and protected the interest of Nordec Phils. and Dr. Malvar in said case by filing a Motion to Dismiss.[51]In Cabuay, Jr., wherein Dr. Malvar and the Lopez siblings were named the respondents in the Petition Seeking for Clarification as to the Validity and Forceful Effect of the Two (2) Final and Executory but Conflicting Decisions of this Court involving the subject property, it was also Atty. Angeles who appeared for Nordec Phils. and Dr. Malvar.

Sometime after 2 August 2004, Atty. Angeles again informed Nordec Phil. and Dr. Malvar that there was another case filed against the Lopez siblings involving the subject property. The said case was the action for reconveyance filed by Esquivel and Talens, docketed as Civil Case No. 96-4193 before RTC of Antipolo, Rizal, Branch 73, but which was already, by then, the subject of an appeal before the Court of Appeals, docketed as CA-G.R. CV No. 70200 (and which would eventually reach this Court in G.R. No. 168734). Atty. Angeles, however, belittled this most recent case involving the subject property, and even showed to Nordec Phils. and Dr. Malvar the Motion to Resolve Appeal dated 2 August 2004, which he filed in CA-G.R. CV No. 70200, together with the Brief for the Lopez siblings. Yet, Nordec Phils. and Dr. Malvar conducted their own inquiry, and were surprised to discover that the Decision rendered by the RTC on 11 January 2001 in Civil Case No. 96-4193 was actually adverse to their rights and interest; and despite this, they were neither impleaded nor represented therein. Even Atty. Angeles, the supposed counsel for Nordec Phils. and Dr. Malvar, did not lift a finger to protect their rights in said case. Further intensive investigation revealed to Nordec Phils. and Dr. Malvar that the 11 January 2001 Decision of the RTC in Civil Case No. 96-4193 was rendered under circumstances amounting to extrinsic fraud and lack or denial of due process, insofar as said Decision adversely affected their rights and interests to the subject property. Among the circumstances which allegedly amounted to extrinsic fraud and lack or denial of due process, were described by Nordec Phils. and Dr. Malvar as follows: (1) when Esquivel and Talens instituted Civil Case No. 96-4193, they personally and through their caretakers, already knew that Nordec Phils. and Malvar already bought and took possession of the subject property, but Esquivel and Talens, through their counsel Atty. Ang Cheng deliberately failed to implead Nordec Phils. and Dr. Malvar; and (2) Atty. Angeles, who was supposed to protect the rights and interests of Nordec Phils. and Dr. Malvar, as their

12

counsel, had an adverse personal interest in the subject property as he unconscionably taken, by way of champertous attorneys fees, almost the whole of the 19.4888-hectare land inherited by the Lopez siblings from Hermogenes. Given the foregoing circumstances and the unsuccessful attempt of Nordec Phil. and Dr. Malvar to intervene in CA-G.R. No. 70200, Nordec Phil. and Dr. Malvar opted to file with the Court of Appeals a Petition to annul the Decision dated 11 January 2001 of the RTC in Civil Case No. 96-4193, granting the reconveyance of the subject property to Esquivel and Talens. Their Petition was docketed as CA-G.R. SP No. 91428. Nordec Phil. and Dr. Malvar prayed in their Petition that the 11 January 2001 Decision of the RTC in Civil Case No. 96-4193 be annulled for the reason that they were not impleaded therein even as they were necessary, if not indispensable, parties. Nordec Phil. and Dr. Malvar additionally prayed that any writ of execution and other orders, which may have been or may thereafter be issued to enforce the said RTC decision, be declared ineffective, insofar as they and their assigns are concerned. On 6 October 2005, the Court of Appeals issued its assailed Resolution in CA-G.R. SP No. 91428 dismissing the Petition of Nordec Phil. and Dr. Malvar. According to the said Resolution, the RTC Decision dated 11 January 2001 in Civil Case No. 96-4193 could not be the proper subject of the said Petition for Annulment of Judgment given that the very same decision was still pending appeal before this Court in G.R. No. 168734 and, thus, was not yet final and executory. In addition, should the Court of Appeals take cognizance of such a Petition, it could result in contrary and inconsistent rulings by the appellate court and this Court. Nordec Phils. and Dr. Malvar asseverate that they were not impleaded as defendants in Civil Case No. 96-4193 where the RTC rendered its Decision dated 11 January 2001, affecting the rights and interest of Nordec Phils. and Dr. Malvar to the subject property. The

remedies of new trial, appeal, petition for relief or other appropriate remedies are also no longer available to Nordec Phils. and Dr. Malvar because of the extrinsic fraud committed upon them by the Lopez siblings, Esquivel, Talens, Atty. Angeles, and Atty. Ang Cheng; and of the lack of jurisdiction on the part of the RTC to take cognizance of Civil Case No. 96-4193 and to render the 11 January 2001 Decision therein. Even the Motion for Intervention of Nordec Phils. and Dr. Malvar in CAG.R. No. 70200, the appeal of the 11 January 2001 Decision of the RTC, was not allowed by the Court of Appeals. Therefore, it is neither improper nor premature for Nordec Phil. and Malvar to file a Petition for the annulment of the said 11 January 2001 Decision of the RTC in Civil Case No. 96-4193, even though the said Decision, after being affirmed in toto by the Court of Appeals, is now pending appeal before this Court. Nordec Phils. and Dr. Malvar additionally argue that the Court of Appeals resolved the question of procedure in a manner that was patently not in accordance with the 1997 Rules of Civil Procedure, particularly, when it held that (1) Rule 47 does not cover the judgment of the RTC in this particular case; and (2) Nordec Phils. and Dr. Malvar still had an adequate remedy in seeking intervention in G.R. No. 167834, the appeal to this Court of the RTC Decision dated 11 January 2001, as affirmed by the Court of Appeals. Nordec Phils. and Dr. Malvar insist that since Rules 37, 38 and 41 of the 1997 Rules of Civil Procedure on motion for new trial, petition for relief, and appeal, respectively, simply mention judgments or final orders, without making any distinction as to whether or not the same is final and executory; it should follow that where only the words judgments or final orders are similarly used in Rule 47 on annulment of judgments, then such words should be understood to also refer to all judgments or final orders, regardless of whether they are final and executory.

The issues and arguments raised by Nordec Phils. and Dr. Malvar all boil down to the question of whether the Court of Appeals erred in dismissing their Petition for Annulment of Judgment for being premature since the judgment sought to be annulled is still the subject of a Petition for Review before this Court, docketed as G.R. No. 168734, and is not yet final and executory. The Court answers in the negative. The ordinary remedies of a motion for new trial or reconsideration and a petition for relief from judgment are remedies available only to parties in the proceedings where the assailed judgment is rendered. In fact, it has been held that a person who was never a party to the case, or even summoned to appear therein, cannot make use of a petition for relief from judgment.[52] Indubitably, Nordec Phils. and Dr. Malvar cannot avail themselves of the aforesaid ordinary remedies of motion for new trial, petition for relief from judgment, or appeal, because they were not parties to the proceedings in Civil Case No. 96-4193 in which the RTC Decision dated 11 January 2001 sought to be annulled was rendered. Nordec Phils. and Dr. Malvar also cannot seek the annulment of the 11 January 2001 Decision of the RTC in Civil Case No. 96-4193. An action for annulment of judgment is a remedy in law independent of the case where the judgment sought to be annulled was rendered. The purpose of such action is to have the final and executory judgment set aside so that there will be a renewal of litigation. It is resorted to in cases where the ordinary remedies of new trial, appeal, petition for relief from judgment, or other appropriate remedies are no longer available through no fault of the petitioner, and is based on only two grounds: extrinsic fraud, and lack of jurisdiction or denial of due process. A person need not be a party to the judgment sought to be annulled, and it is only essential that he can prove his allegation that the judgment was obtained by the use of fraud and

13

collusion and thereby.[53]

he

would

be

adversely

affected

An action to annul a final judgment on the ground of fraud lies only if the fraud is extrinsic or collateral in character. Fraud is regarded as extrinsic where it prevents a party from having a trial or from presenting his entire case to the court, or where it operates upon matters pertaining not to the judgment itself but to the manner in which it is procured. The overriding consideration when extrinsic fraud is alleged is that the fraudulent scheme of the prevailing litigant prevented a party from having his day in court.[54] It is, thus, settled that the purpose of a Petition for Annulment of Judgment is to have the final and executory judgment set aside so that there will be a renewal of litigation. If the judgment sought to be annulled, like in this case, is still on appeal or under review by a higher court, it cannot be regarded as final, and there can be no renewal of litigation because the litigation is actually still open and on-going. In this light, the arguments of Nordec Phil. and Dr. Malvar that the judgments or final orders need not be final and executory for it to be annulled must fail. This Court, therefore, finds no error in the dismissal by the Court of Appeals of the Petition for Annulment of Judgment filed by Nordec Phil. and Dr. Malvar, on the ground of prematurity. Given that the 11 January 2001 Decision of the RTC in Civil Case No. 964193 was still pending appeal before this Court, the Court of Appeals could not take cognizance of the Petition for annulment of the same judgment, for if it had done so, then it would risk promulgating a ruling which could be contrary to and inconsistent with the ruling of this Court on the appeal of the judgment.

1. respondent Francisco Provido filed a petition for the probate of the Last Will and Testament of the late Soledad Provido Elevencionado A. ALLEGATION: he was the heir of the decedent and the executor of her will. B. RTC’s RULING: allowed the probate of the will and directed the issuance of letters testamentary to respondent 2. Petitioners after 4 months filed a motion for the reopening of the probate proceedings

1) petitioners were deemed notified of the hearing by publication and that the deficiency in the payment of docket fees is not a ground for the outright dismissal of the petition. 2) RTC’s Decision was already final and executory even before petitioners’ filing of the motion to reopen 3. Petitioners filed a petition to annule RTC’s decision

A.

CLAIMs:

A. CLAIM: there was a compromise agreement between petitioners and respondents and they learnt the probate proceeding only in July 2001

1)

they are the intestate heirs of the decedent.

B.

CA’s RULING: petition dismissed

2) RTC did not acquire jurisdiction over the petition due to non-payment of the correct docket fees, defective publication, and lack of notice to the other heirs.

1) no showing that petitioners failed to avail of or resort to the ordinary remedies of new trial, appeal, petition for relief from judgment, or other appropriate remedies through no fault of their own

3)

will could not have been probated because:

A)

the signature of the decedent was forged;

ISSUE: W/N the allowance of the will to probate should be annulled for failure to mention the petitioners as parties

B) the will was not executed in accordance with law, that is, the witnesses failed to sign below the attestation clause;

HELD: No

C) the decedent lacked testamentary capacity to execute and publish a will;

a. Under the Rules of Court, any executor, devisee, or legatee named in a will, or any other person interested in the estate may, at any time after the death of the testator, petition the court having jurisdiction to have the will allowed.[36] Notice of the time and place for proving the will must be published for three (3) consecutive weeks, in a newspaper of general circulation in the province,[37] as well as furnished to the designated or other known heirs, legatees, and devisees of the testator

D) the will was executed by force and under duress and improper pressure; E) the decedent had no intention to make a will at the time of affixing of her signature; and

Alaban vs. CA

F) she did not know the properties to be disposed of, having included in the will properties which no longer belonged to her.

FACTS:

B.

RTC’s Ruling: denied motion

1.

Probate of a will is considered action in rem

b. Petitioners became parties publication of the notice of hearing

due

to

the

14

2. The filing of motion to reopen is similar to a motion for new trial a. The ruling became final and executor because the motion was filed out of time b. Given that they knew of the decision 4 months after they could have filed a petition for relief from judgment after the denial of their motion to reopen. 3. petition for annulment of judgment must still fail for failure to comply with the substantive requisites, a. An action for annulment of judgment is a remedy in law independent of the case where the judgment sought to be annulled was rendered b. PURPOSE: to have the final and executory judgment set aside so that there will be a renewal of litigation. c. 2 Grounds: extrinsic fraud, and lack of jurisdiction or denial of due process d. An action to annul a final judgment on the ground of fraud lies only if the fraud is extrinsic or collateral in character i. Extrinsic if it prevents a party from having a trial or from presenting his entire case to the court, or where it operates upon matters pertaining not to the judgment itself but to the manner in which it is procured. 4. notice is required to be personally given to known heirs, legatees, and devisees of the testator a. the will states that the respondent was instituted as the sole heir of the decedent thus he has no legal obligation to mention petitioners in the petition for probate or personally notify them Triumph International vs. Apostol and Opulencia FACTS:

Respondent Apostol was hired as assistant manager by petitioner Triumph International (Phils.), Inc. (TIPI) in March 1991, and was terminated by TIPI on 21 January 2000. On the other hand, respondent Opulencia was hired as a warehouse helper by TIPI sometime in 1990, and was the company‘s warehouse supervisor at the time of the termination of his employment on 21 January 2000. Apostol was the immediate superior of Opulencia. On 14 and 15 August 1999, TIPI conducted an inventory cycle count of its direct and retail sales in its Muñoz warehouse. The inventory cycle count yielded discrepancies between its result and the stock list balance Sugue (TIPI‘s Marketing Services Manager) sent a ―show-cause letter‖ to Apostol, TIPI‘s Assistant Manager-Warehouse and Distribution, requiring him to explain in writing the negative variance based on the inventory cycle count. On 21 January 2000, TIPI, through Sugue, served notices to Apostol and Opulencia, stating that their employment had been terminated for committing infractions of the company‘s rules and regulations. Specifically, Apostol was found to have committed Offense No. 3 (Fraud or willful breach by an employee of the trust reposed in him by the Company) and Offense No. 25 (Using, uttering or saying profane, indecent, abusive, derogatory and/or indecorous words or language against the employer or supervisor), while Opulencia was found to have committed Offense No. 3 only.

On 20 February 2004, the Court of Appeals rendered judgment, reversing and setting aside the NLRC Decision. MR was filed by the TIPI, but was denied, hence this appeal. ISSUES: (1) Whether the issues raised by TIPI in this case entail an evaluation of the factual findings of the Court of Appeals, which is proscribed in a petition for review on certiorari where only questions of law may be raised. (2) Whether the Court of Appeals exceeded its jurisdiction when it reversed the factual findings of the Labor Arbiter and the NLRC RULING: (1) Respondents refer to Section 1, Rule 45 of the 1997 Rules of Civil Procedure which states: “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.”

On 28 January 2000, Apostol and Opulencia filed with the Labor Arbiter a complaint for illegal dismissal and non-payment of salaries and other benefits against TIPI.

Applying the above rule, respondents maintain that the instant petition should be dismissed motu proprio by this Court.

Labor Arbiter rendered a Decision dismissing the Complaint for lack of merit.

As a general rule, petitions for review under Rule 45 of the Rules of Civil Procedure filed before this Court may only raise questions of law. However, jurisprudence has recognized several exceptions to this rule.

On appeal, the NLRC affirmed the Decision of the Labor Arbiter.

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In Almendrala v. Ngo, we have enumerated several instances when this Court may review findings of fact of the Court of Appeals on appeal by certiorari, to wit: (1) when the findings are grounded entirely on speculation, surmises or conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on misapprehension of facts; (5) when the find ings of fact are conflicting; (6) when in making its findings the Court of Appeals went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; (7) when the findings are contrary to that of the trial court; (8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioner’s main and reply briefs are not disputed by the respondent; (10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; or (11) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion.

proper vehicle for such review is a Special Civil Action for Certiorari under Rule 65 of the Rules of Court, and that the case should be filed in the Court of Appeals in strict observance of the doctrine of the hierarchy of courts. Moreover, it is already settled that under Section 9 of Batas Pambansa Blg. 129, as amended by Republic Act No. 7902, the Court of Appeals—pursuant to the exercise of its original jurisdiction over petitions for certiorari—is specifically given the power to pass upon the evidence, if and when necessary, to resolve factual issues. Section 9 clearly states: “x x x The Court of Appeals shall have the power to try cases and conduct hearings, receive evidence and perform any and all acts necessary to resolve factual issues raised in cases falling within its original and appellate jurisdiction, including the power to grant and conduct new trials or further proceedings. x x x” However, equally settled is the rule that factual findings of labor officials, who are deemed to have acquired expertise in matters within their jurisdiction, are generally accorded not only respect but even finality by the courts when supported by substantial evidence, i.e., the amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. But these findings are not infallible. When there is a showing that they were arrived at arbitrarily or in disregard of the evidence on record, they may be examined by the courts.

proper and with sufficient basis, it is incumbent upon this Court to make its own evaluation of the evidence on record.

Navarro vs. Executive Secretary Facts: In 2006, RA 9355, An Act Creating the Province of Dinagat Islands was passed into law. Petitioners in this case, were former political leaders in Surigao del Norte whose land area was affected by the creation of the new province. the petitioners filed a petition for certiorari seeking to nullify RA 9355 for being void on the ground that the new province did not meet the statutory requirements for population and land area. The SC ruled in their favor and proclaimed the said law as unconstitutional. Thereafter, the Comelec issued Resolution 8970 w/c was about the upcoming elections. In this resolution, they had 3 scenarios, all of w/c affect the petitioners as political figures in the region. In 2010, the SC issued an Entry for Judgment, stating that the decision in this case had become final and executory. Petitioners then filed an Urgent Motion to Recall Entry of Judgment. Issue: WON such Motion should be granted and RA 9355 is constitutional. Held:

In this case, the factual findings of the Court of Appeals are different from those of the NLRC and the Labor Arbiter. These conflicting findings led to the setting aside by the Court of Appeals of the decision of the NLRC which affirmed the Labor Arbiter. In view thereof, we deem a review of the instant case proper. (2) The power of the Court of Appeals to review NLRC decisions via a Petition for Certiorari under Rule 65 has been settled as early as our decision in St. Martin Funeral Home v. NLRC. In said case, we held that the

In this case, the NLRC sustained the factual findings of the Labor Arbiter. Thus, these findings are generally binding on the appellate court, unless there was a showing that they were arrived at arbitrarily or in disregard of the evidence on record. Questioned in a petition for certiorari under Rule 65, these factual findings were reexamined and reversed by the Court of Appeals for being “not in accord with the evidence on record and the applicable law or jurisprudence.” To determine if the Court of Appeals’ eexamination of factual findings and reversal of the NLRC decision are

Yes and yes. COMELEC Resolution No. 8790 spawned the peculiar circumstance of proper party interest for movants-intervenors only with the specter of the decision in the main case becoming final and executory. More importantly, if the intervention be not entertained, the movants-intervenors would be left with no other remedy as regards to the impending nullification of their election to their respective positions. Thus, to the Courts mind, there is an

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imperative to grant the Urgent Motion to Recall Entry of Judgment by movants-intervenors.

- Jomoc heirs executed again a Deed of Extrajudicial Settlement with Absolute Sale of Registered Land in

Despite the new province not meeting the requirements for land area and population, the SC held the creation of the same as valid since the intention of the framers of the LGC w/c provides the aforementioned requirements, the primary consideration in the creation of a province is the annual income. Dinagat province showed an income of at

favor of sps. Lim and the latter intervened in the civil case.

least 4 times more than the legally required 20M. The delivery of basic services to its constituents has been proven possible and sustainable. Rather than looking at the results of the plebiscite and the May 10, 2010 elections as mere fait accompli circumstances which cannot operate in favor of Dinagats existence as a province, they must be seen from the perspective that Dinagat is ready and capable of becoming a province. This Court should not be instrumental in stunting such capacity. Heirs of Maura So vs. Obliosca

- Trial Court ruled in favor of petitioner. - CA affirmed RTC’s decision - Heirs of Jomoc and Sps. Lim filed separate petitions for review with SC - SC ruled that the petitioner has better right over the property and became final and executory on Nov. 25, 1991 - Petitioner filed a motion for execution. - Respondents opposed because they did not participate in the sale and are not parties to the case. - Trial Court granted the motion for execution. Register of deeds cancelled title of Jomoc Heirs and issued a

FACTS: Pantaleon Jomoc was the owner of a parcel of land in Cagayan De Oro. The property was inherited by his heirs including the respondents (Jomoc Heirs). Jomoc Heirs executed a Deed of Extrajudicial settlement with Absolute Sale of Registered Land in favor of the Petitioner (Maura So). 3 of the respondents (Lucila, Abundia and Elvira) failed to sign the document and the document was not notarized but, the petitioner still made partial payment for the property. Petitioner demanded the execution of a final deed of conveyance but the Jomoc Heirs refused. Petitioner then filed a Complaint for specific performance against the Jomoc Heirs to execute and deliver the deed of sale.

- Respondents filed a complaint for legal redemption with RTC of Misamis Oriental praying that they be allowed to exercise their right to redeem. - On April 27, 1994, RTC resolved the case in favor of the respondents ordering the petitioner to allow the respondents to exercise their substantive right of legal redemption and shares of plaintiff’s co-heirs. - In a resolution, RTC granted petitioner’s motion of reconsideration. Respondent moved for MR and RTC issued an order granting respondent’s MR reinstating previous ruling. THIRD CASE - Petitioner filed a petition for review on certiorari with RTC - RTC denied for failure to show that judgment is tainted with grave abuse of discretion and for being the wrong remedy - Court likewise denied petitioner’s MR

TCT in the name of the petitioner.

- Minute Resolution became final and executory.

SECOND CASE

- Petitioner filed with CA a petition for annulment of judgment.

- Jomoc heirs filed a petition for certiorari with the CA on the ground that the Respondents were not parties to the case and are being deprived of their right over the property. - CA dismissed on the ground that respondents were aware of the pendency of the case but did not intervene

- CA denied. - CA also denied petitioner’s MR  Hence this petition.

and that the case is barred by res judicata.

ISSUE/S:

FIRST CASE

- Respondents filed a petition for review on certiorari with the SC but was denied.

WON annulment of judgment is the proper remedy -NO

- A civil case was filed against the Jomoc heirs except for the 3 respondents who failed to sign.

- Resolution became final and executory on June 20, 1994

HELD:

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The annulment of judgment is only allowed in exceptional cases and may not be invoked where (1) where the party has availed himself of the remedy of new trial, appeal, petition for relief or other appropriate remedy and lost OR (2) where he has failed to avail of himself of those remedies through his own fault or negligence. Since the petitioner availed of a petition for review on certiorari under Rule 45, the remedy of annulment of judgment is no longer available. The present case is peculiar in the sense that it involves 3 final and executory judgments. 1. This Court's Decision in which upheld the sale of the whole property by the Jomoc heirs, including the herein respondents, to petitioner Maura So. 2. The Court's Resolution in which sustained the order of execution of the said decision against the herein respondents despite the fact that they were not partydefendants in the first case. 3. The Court's Minute Resolution which denied Maura So's petition for review of the RTC Decision granting respondents' right to redeem the property. 3rd judgment is in conflict with the 2 previous judgments. The ruling that the respondents remained owners to the land is patently erroneous because this SC had already pronounced in the first 2 cases that the whole property had already been sold to Maura So. RTC was barred from holding otherwise under the doctrine of conclusiveness of judgment which precludes the relitigation of a particular fact already passed upon by a court. It behooves the court to set things right in order to prevent a grave injustice from being committed against Maura So who had, for 15 years since the first decision was executed, already considered herself to be the owner of the property. The Court is not precluded from rectifying errors of judgment if blind and stubborn

adherence to the doctrine of immutability of final judgments would involve the sacrifice of justice for technicality.

Magaling vs. Ong

From the preceding arguments and counter-arguments, the threshold issues proper for this Court's consideration are, given the facts of the case, whether or not the Court of Appeals erred in: 1) making the Spouses Magaling and Termo Loans jointly and severally liable to Ong for... the obligation incurred by the corporation;

Facts:

Ruling:

CA-... which made petitioner Lucia Magaling, together with her spouse, Reynaldo Magaling,[5] and Termo[6] Loans Credit

The petition is not meritorious.

Petition is granted.

Corporation, jointly and severally liable to respondent Peter Ong for the corporate obligation of the aforenamed corporation as adjudged in the RTC Decision dated 23 June 1999. against the spouses Reynaldo Magaling and Lucila Magaling (Spouses Magaling) and Termo Loans Credit Corporation (Termo Loans). Complaint alleged that: Sps. Reynaldo Magaling and Lucila Magaling are the controlling stockholders/owners of Thermo (sic) Loans and Credit Corp. and had used the corporation as mere alter ego or adjunct to evade the payment of valid obligation... defendant Reynaldo Magaling, (sic) approached plaintiff in his store at Lipa City and induced him to lend him money and/or his company Thermo (sic) Loans and Credit Corp. with undertaking to pay interest Based on the assurance and representation of Reynaldo Magaling, Peter Ong extended loan to defendants. As of September 1997, the principal loan extended to defendants stands at P350,000.00... postdated checks... d... dishonored... ishonored bu Despite demands, oral and written,... , refused and neglected and still fail Issues:

It is basic that a corporation is a juridical entity with legal personality separate and distinct from those acting for and in its behalf and, in general, from the people comprising it. There are times, however, when solidary liabilities... s may be incurred and the veil of corporate fiction may be pierced Exceptional circumstances warranting such disregard of a separate personality are summarized as follows: When directors and trustees or, in appropriate case, the officers of a corporation: (a) vote for or assent to patently unlawful acts of the corporation; (b) act in bad faith or with gross negligence in directing the corporate affairs; (c) are guilty of conflict of interest to the prejudice of the corporation, its stockholders or members, and other persons;[41] When a director or officer has consented to the issuance of watered down stocks or who, having knowledge thereof, did not forthwith file with the corporate secretary his written objection thereto;[42] When a director, trustee or officer has contractually agreed or stipulated to hold himself personally and solidarily liable with the corporation;[43] or

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When a director, trustee or officer is made, by specific provision of law, personally liable for his corporate action.[44] In making the Spouses Magaling co-defendants of Termo Loans, Ong alleged in his Complaint for Sum of Money filed with the RTC that the spouses Reynaldo Magaling and Lucia Magaling were the controlling stockholders and/or owners of Termo Loans, and that they had used the... corporation to evade the payment of a valid obligation. The appellate court eventually found the Spouses Magaling equally liable with Termo Loans for the sum of money sought to be collected by Ong. As explained above, to hold a director, a trustee or an officer personally liable for the debts of the corporation and, thus, pierce the veil of corporate fiction, bad faith or gross negligence by the director, trustee or officer in directing the corporate affairs must be... established clearly and convincingly. Bad faith is a question of fact and is evidentiary. Bad faith does not connote bad judgment or negligence. It imports a dishonest purpose or some moral obliquity and conscious wrongdoing. It means breach of a known duty through some ill... motive or interest. It partakes of the nature of fraud In the present case, there is nothing substantial on record to show that Reynaldo Magaling, as President of Termo Loans, has, indeed, acted in bad faith in inviting Ong to invest in Termo Loans and/or in obtaining a loan from Ong for said corporation in order to warrant his... personal liability. From all indications, the proceeds of the investment and/or loan were indeed utilized by Termo Loans. Likewise, bad faith does not arise just because a corporation fails to pay its obligations, because the inability to pay one's obligation is not synonymous... with fraudulent intent not to honor the obligations. The foregoing discussion notwithstanding, this Court still cannot totally absolve Reynaldo Magaling from any liability considering his gross negligence in directing the affairs of Termo Loans; thus, he must be made personally liable for the debt of Termo Loans to Ong

In order to pierce the veil of corporate fiction, for reasons of negligence by the director, trustee or officer in the conduct of the transactions of the corporation, such negligence must be gross. Gross negligence is one that is characterized by the want of even slight care,... acting or omitting to act in a situation where there is a duty to act, not inadvertently but willfully and intentionally with a conscious indifference to consequences insofar as other persons may be affected;[47] and must be established by clear and... convincing evidence. Parenthetically, gross or willful negligence could amount to bad faith.[48]

A.

In the case at bar, in their Memorandum filed before the RTC, the Spouses Magaling argued that "the Amended Complaint did not allege that Reynaldo Magaling was guilty of gross negligence or bad faith in directing the affairs of the corporation"; and that respondent

Q. Where you tried to retrieve or will you try to retrieve the financial statement of this company

Ong was not able to adduce evidence to offset the effect of the particular allegation. Hence, they insist that it was unfair for the appellate court to conclude that Reynaldo Magaling failed to exercise the necessary diligence in running Termo Loans. We disagree. Reynaldo Magaling's gross negligence became apparent, undeniable and proven during the course of the proceedings in the trial court. Reynaldo Magaling was the lone witness presented in court to belie the claim of Ong. On cross-examination, he (Reynaldo Magaling) clearly and... plainly shed light on how Termo Loans was run under his aegis... businessman engaged in similar lines of lending company and being the President, the former President of Themo (sic) Loans, you had .... you were furnished with final.... with financial statement of the company... was it not? A. I do not remember that, sir. did not call a meeting of the Directors and other stock holders that your company is going down?

No more, Your Honor, because no Directors attended the meeting. Where are now the financial records of the company? Q. How about your own personal records A. I do not know

Reynaldo Magaling's very own testimony gave reason for the appellate court's finding of gross negligence on his part. Instead of the intended effect of refuting the supposition that Termo Loans was assiduously managed, Reynaldo Magaling's foregoing testimony only convincingly... displayed his gross negligence in the conduct of the affairs of Termo Loans. From our standpoint, his casual manner, insouciance and nonchalance, nay, indifference, to the predicament of the distressed corporation glaringly exhibited a lackadaisical attitude from a top... office of a corporation, a conduct totally abhorrent in the corporate world. WHEREFORE, premises considered, the instant petition is DENIED. Accordingly, the assailed 31 August 2005 Decision and 28 June 2006 Amended Decision, both of the Court of Appeals in CA-G.R. CV No. 70954, are hereby AFFIRMED. Valmonte vs. CA Facts: Petitioner Lourdes A. Valmonte is a foreign resident. Petitioners Lourdes and Alfredo are husband and wife both residents of U.S.A. Petitioner Alfredo D. Valmonte, who is a member of the Philippine bar, however, practices his profession in the Philippines, commuting for this purpose between his residence in

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the state of Washington and Manila, where he holds office at Ermita, Manila. Private respondent Rosita Dimalanta, who is the sister of petitioner filed an action for partition of real and property and accounting of rentals against petitioners. She alleged that, the plaintiff is of legal age, a widow and is at present a resident of Missouri, U.S.A., while the defendants are spouses but, for purposes of this complaint may be served with summons at Gedisco Center, Unit 304, 1564 A. Mabini St., Ermita, Manila where defendant Alfredo D. Valmonte as defendant Lourdes Arreola Valmonte’s spouse holds office and where he can be found. He husband was also her counsel, who has a law office in the Philippines. The summons were served on her husband. Petitioner in a letter, referred private respondent’s counsel to her husband as the party to whom all communications intended for her should be sent. Service of summons was then made upon petitioner Alfredo at his office in Manila. Alfredo D. Valmonte accepted his summons, but not the one for Lourdes, on the ground that he was not authorized to accept the process on her behalf. Accordingly the process server left without leaving a copy of the summons and complaint for petitioner Lourdes A. Valmonte. Petitioner Alfredo D. Valmonte thereafter filed his Answer with Counterclaim. Petitioner Lourdes A. Valmonte, however, did not file her Answer. For this reason private respondent moved to declare her in default. Petitioner Alfredo D. Valmonte entered a special appearance in behalf of his wife and opposed the private respondent’s motion. RTC denied the MR of respondents. CA declared petitioner Lourdes in default. Said decision was received by Alfredo hence this petition.

quasi in rem. Such an action is essentially for the purpose of affecting the defendant’s interest in a specific property and not to render a judgment against him. As petitioner Lourdes A. Valmonte is a nonresident who is not found in the Philippines, service of summons on her must be in accordance with Rule 14, § 17. Such service, to be effective outside the Philippines, must be made either: (1)

by personal service;

(2) by publication in a newspaper of general circulation in such places and for such time as the court may order, in which case a copy of the summons and order of the court should be sent by registered mail to the last known address of the defendant; or (3) in any other manner which the court may deem sufficient. In the case at bar, the service of summons upon petitioner Lourdes A. Valmonte was not done by means of any of the first two modes. This mode of service, like the first two, must be made outside the Philippines, such as through the Philippine Embassy in the foreign country where the defendant resides. The service of summons on petitioner Alfredo D. Valmonte was not made upon the order of the court as required by Rule 14, § 17 and certainly was not a mode deemed sufficient by the court which in fact refused to consider the service to be valid and on that basis declare petitioner Lourdes A. Valmonte in default for her failure to file an answer.

Issue: Whether or not petitioner Lourdes A. Valmonte was validly served with summons.

Secondly, the service in the attempted manner on petitioner was not made upon prior leave of the trial court as required also in Rule 14, § 17. As provided in § 19, such leave must be applied for by motion in writing, supported by affidavit of the plaintiff or some person on his behalf and setting forth the grounds for the application.

Held: NO. There was no valid service of summons on Lourdes. The action herein is in the nature of an action

Finally, because there was no order granting such leave, petitioner Lourdes was not given ample time to file her

Answer which, according to the rules, shall be not less than sixty (60) days after notice. Trader Royal Bank vs. IAC Facts: RTC Pasay: Traders Royal Bank Instituted a suit against Remco Alcohol Distillery, Inc. (REMCO) for the recovery of sum of Php 2,382,258.71 (civil case 9894) Traders obtained a writ of preliminary attachment directed against the assets and properties of REMCO Pursuant to the attachment, Sheriff Santiago levied 4,600 barrels of aged alcohol found within the premises of Remco Inc. La Tondena filed a third party claim with the Sheriff, claiming ownership over the property. RTC Pasay: La Tondena filed a complaint-in-intervention in civil case 9894, alleging that it made advances to REMCO amounting to Php 3 million which remains outstanding as of date and that the attached properties are owned by La Tondena. Without foregoing complaint-in-intervention having passed upon by the Pasay RTC, a “Motion to Withdraw,” praying that it be allowed to withdraw alcohol and molasses from REMCO plant, was granted. Pasay RTC reconsidered its order granting “motion to withdraw” and declared the alcohol which has not been withdrawn remains in the ownership of REMCO and denied La Tondena’s motion to intervene. La Tondena filed a Motion for Reconsideration reiterating its request to withdraw alcohol from Remco Distillery Plant and they prayed that the portion of the order declaring REMCO as the owner of the alcohol be reconsidered and stricken off said order. RTC Bulacan: La Tondena instituted Civil Case 7003-M, in which it asserted its claim of ownership over the properties attached in Civil Case 9894 and also prayed for the issuance of writ of preliminary injunction. Traders filed a motion to dismiss or opposition to the application of writ of preliminary injunction. La Tondena opposed Traders’ motion to dismiss. RTC Bulacan: issued an order declaring La Tondena to be the owner of the disputed alcohol and granting their application for injunctive relief. RTC Pasay: issued an

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order requiring Sheriff Santiago to : (1) enforce the writ of preliminary attachment previously issued by the court and (2) prevent respondent Sheriff and La Tondena from withdrawing disputed alcohol and (3) to require them to explain and show cause why they should not be cited for contempt for withdrawing attached alcohol. Intermediate Appellate Court: Traders bank filed a petition for certiorari and prohibition with application for writ of preliminary injunction to set aside the order by RTC Bulacan in Civil Case 7003-M and to compel La Tondena to return the alcohol to their original location. IAC dismissed the petition for lack of legal and factual basis, holding that the Judge did not commit grave abuse of discretion in issuing the order and the writ of preliminary injunction. Appeal to SC. Issue/s: Whether or not the Judge of RTC Bulacan acted without jurisdiction in entertaining Civil Case 7003-M and in authorizing the issuance of a writ of preliminary injunction – No Whether or not the order of the Bulacan court constitutes undue and illegal interference with the exercise by the Pasay court of its coordinate and coequal authority on matters properly brought before it. – No Held: The instant petition is hereby dismissed and the decision of the Intermediate Appellate Court in AC-G.R. No. SP-01860 is affirmed, with costs against petitioner Traders Royal Bank. The applicable provision is Section 14, Rule 57 of the Rules of Court. The foregoing rule explicitly sets forth the remedy that may be availed of by a person who claims to be the owner of property levied upon by attachment which is: (1)

To lodge a third- party claim with the sheriff,

(2) And if the attaching creditor posts an indemnity bond in favor of the sheriff, to file a separate and independent action to vindicate his claim (Abiera vs. Court of Appeals, 45 SCRA 314).

This precisely was the remedy resorted to by private respondent La Tondeñ a when it filed the vindicatory action before the Bulacan Court. The issue in this case was already decided in Manila Herald Publishing Inc. vs Ramos which states: The judge trying such action may render judgment ordering the sheriff of whoever has in possession the attached property to deliver it to the plaintiff-claimant or desist from seizing it. It follows further that the court may make an interlocutory order, upon the filing of such bond as may be necessary, to release the property pending final adjudication of the title. Jurisdiction over an action includes jurisdiction over an interlocutory matter incidental to the cause and deemed necessary to preserve the subject matter of the suit or protect the parties' interests. The rule that no court has the power to interfere by injunction with the judgments or decrees of a concurrent or coordinate jurisdiction having equal power to grant the injunctive relief sought by injunction, is applied in cases where no third-party claimant is involved, in order to prevent one court from nullifying the judgment or process of another court of the same rank or category, a power which devolves upon the proper appellate court . The purpose of the rule is to avoid conflict of power between different courts of coordinate jurisdiction and to bring about a harmonious and smooth functioning of their proceedings Strategic Alliance Development Corp vs. Star Infrastructure Development Corp. Petitioner Strategic Alliance Development Corporation (STRADEC) is a domestic corporation primarily engaged in the business of a development with principal place of business at Bayambang, Pangasinan t. Along with five individuals4 and three other corporations,5 STRADEC incorporated respondent Star Infrastructure Development Corporation (SIDC) for the purpose of engaging in the general construction business with the original principal place of business at Pasig City, then

moved to Poblacion Sur, Bayambang, Pangasinan7 and, later, to Lipa, Batangas. STRADEC fully paid and owned 49% of the 5,000,000 shares of stock into which SIDC’s authorized capital stock. In 2004, respondents Yujuico and Sumbilla, in their respective capacities as then President and Treasurer of STRADEC, executed a Promissory Note for and in consideration of a loan in the sum ofP10,000,000.00 ostensibly extended in favor of said corporation by respondent Robert L. Wong, one of the incorporators of SIDC.9 As security for the payment of the principal as well as the stipulated interests thereon, a pledge constituted over STRADEC’s entire shareholdings in SIDC was executed by respondent Yujuico on 1 April 2005.10 In view of STRADEC’s repeated default on its obligations,11 however, the shares thus pledged were sold by way of the 26 April 2005 notarial sale conducted in Makati City by respondent Raymond M. Caraos. Having tendered the sole bid of P11,800,000.00,12 respondent Wong was issued the corresponding certificates of stocks by respondent Bede S. Tabalingcos, SIDC’s Corporate Secretary for the years 2004 and 2005, after the transfer was recorded in the corporation’s stock and transfer book.13 In 2006,Quiambao, in his capacity as President and Chairman of the Board of Directors of STRADEC, commenced the instant suit with the filing of the petition before a commercial court in Batangas City alleging four causes of action, to wit: that respondents Yujuico and Sumbilla were not authorized to enter into any loan agreement with respondent Wong, that the auction sale was held in a wrong venue, that the transfer of STRADED shares in SIDC was made fraudulently and that the 30 July 2005 annual stockholders meeting and 20 July 2006 special stockholder’s meeting of SIDC where the change of principal place of business was approved is invalid pending determination of the legitimate Board of Directors for STRADEC.

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Issue: Whether or not the cause of action of petitioners is an intra-corporate dispute. Ruling: Meritorious. An intra-corporate dispute is understood as a suit arising from intra-corporate relations or between or among stockholders or between any or all of them and the corporation. Applying what has come to be known as the relationship test, it has been held that the types of actions embraced by the foregoing definition include the following suits: (a) between the corporation, partnership or association and the public; (b) between the corporation, partnership or association and its stockholders, partners, members, or officers; (c) between the corporation, partnership or association and the State insofar as its franchise, permit or license to operate is concerned; and, (d) among the stockholders, partners or associates themselves. As the definition is broad enough to cover all kinds of controversies between stockholders and corporations, the traditional interpretation was to the effect that the relationship test brooked no distinction, qualification or any exemption whatsoever. However, the unqualified application of the relationship test has been modified on the ground that the same effectively divests regular courts of jurisdiction over cases for the sole reason that the suit is between the corporation and/or its corporators. It was held that the better policy in determining which body has jurisdiction over a case would be to consider not only the status or relationship of the parties but also the nature of the question that is the subject of their controversy.33 Under the nature of the controversy test, the dispute must not only be rooted in the existence of an intra-corporate relationship, but must also refer to the enforcement of the parties' correlative rights and obligations under the Corporation Code as well as the internal and intra-corporate regulatory rules of the corporation.34 The combined application of the relationship test and the nature of the controversy test

has, consequently, become the norm in determining whether a case is an intra-corporate controversy or is purely civil in character.

to rid STRADEC of its shares in SIDC and its right as a stockholder to participate in the latter’s corporate affairs.

In the case at bench, STRADEC’s first and second causes of action seek the nullification of the loan and pledge over its SIDC shareholding contracted by respondents Yujuico, Sumbilla and Wong as well the avoidance of the notarial sale of said shares conducted by respondent Caraos.

Moreover, pursuant to Section 5.2 of Republic Act No. 8799,41 otherwise known as the Securities Regulation Code, the jurisdiction of the SEC over all cases enumerated under Section 5 of Presidential Decree No. 902-A has been transferred to RTCs designated by this Court as SCCs42 pursuant to A.M. No. 00-11-03-SC promulgated on 21 November 2000.

Applying the relationship test, we find that STRADEC’s first and second causes of action qualify as intra-corporate disputes since said corporation and respondent Wong are incorporators and/or stockholders of SIDC. Having acquired STRADEC’s shares thru the impugned notarial sale conducted by respondent Caraos, respondent Wong appears to have further transferred said shares in favor of CTCII, a corporation he allegedly formed with members of his own family. By reason of said transfer, CTCII became a stockholder of SIDC and was, in fact, alleged to have been recognized as such by the latter and its corporate officers. Considering that they fundamentally relate to STRADEC’s status as a stockholder and the alleged fraudulent divestment of its stockholding in SIDC, the same causes of action also qualify as intra-corporate disputes under the nature of the controversy test. As part of the fraud which attended the transfer of its shares, STRADEC distinctly averred, among other matters, that respondents Yujuico and Sumbilla had no authority to contract a loan with respondent Wong; that the pledge executed by respondent Yujuico was simulated since it did not receive the proceeds of the loan for which its shares in SIDC were set up as security; that irregularities attended the notarial sale conducted by respondent Caraos who sold said shares to respondent Wong; that the latter unlawfully transferred the same shares in favor of CTCII; and, that SIDC and its officers recognized and validated said transfers despite being alerted about their defects. Ultimately, the foregoing circumstances were alleged to have combined

On the issue of venue and jurisdiction, unlike the SEC which is a tribunal of limited jurisdiction, special commercial courts (SCC) like the RTC are still competent to tackle civil law issues incidental to intracorporate disputes filed before them. Section 5.2 of R.A. No. 8799 directs merely the Supreme Court's designation of RTC branches that shall exercise jurisdiction over intra-corporate disputes. Nothing in the language of the law suggests the diminution of jurisdiction of those RTCs to be designated as SCCs. The assignment of intra-corporate disputes to SCCs is only for the purpose of streamlining the workload of the RTCs so that certain branches thereof like the SCCs can focus only on a particular subject matter. The RTC exercising jurisdiction over an intracorporate dispute can be likened to an RTC exercising its probate jurisdiction or sitting as a special agrarian court. The designation of the SCCs as such has not in any way limited their jurisdiction to hear and decide cases of all nature, whether civil, criminal or special proceedings. At any rate, it cannot be gainsaid that STRADEC correctly commenced its petition before the RTC exercising jurisdiction over SIDC’s principal place of business which was alleged to have been transferred from Bayambang, Pangasinan to Lipa, Batangas.51 It matters little that STRADEC, as pointed out by respondents, also questions the validity of the 30 July

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2005 SIDC stockholders’ annual meeting where the aforesaid change in the address of its principal place of business was allegedly approved. Said matter should be properly threshed out in the proceedings before the RTC alongside such issues as the validity of the transfers of STRADEC’s shares to respondents Wong and CTCII, the propriety of the recording of said transfers in SIDC’s books, STRADEC’s status as a stockholder of SIDC, the legality of the 20 July 2006 SIDC stockholders’ special meeting or, for that matter, Cezar T. Quiambao’s authority to represent STRADEC in the case at bench.1avvphi1 On the principle that a corporation is a legal entity with a personality separate and distinct from its individual stockholders or members and from that of its officers who manage and run its affairs,56 we find that the other pending actions have little or no bearing to the issues set forth in STRADEC’spetition which, at bottom, involve the transfer of its own shareholding in SIDC and its status and rights as such stockholder Australian Professional Realty vs. Municipality of Padre Garcia Facts: Fire razed to the ground the old public market of respondent Municipality of Padre Garcia, Batangas. The municipal government, invited petitioner Australian Professional Realty, Inc. (APRI) to rebuild the public market and construct a shopping center. A Memorandum of Agreement (MOA)2 was executed between petitioner APRI and respondent, represented by Mayor Gutierrez. Victor Reyes was elected as municipal mayor of respondent. Respondent, through Mayor Reyes, initiated a Complaint for Declaration of Nullity of Memorandum of Agreement with Damages before the Regional Trial Court (RTC) of Rosario, Batangas. The RTC issued an Order declaring petitioners in default and allowing respondent to present evidence ex parte. The RTC ruled that the Memorandum of Agreement is hereby declared null and void for being contrary to law

and public policy and the structures found within the unfinished PADRE GARCIA SHOPPING CENTER are hereby declared forfeited in favor of the Municipality of Padre Garcia. After learning of the adverse judgment, petitioners filed a Petition for Relief from Judgment. This Petition was denied by the RTC. Petitioners later filed before the CA a Petition for Certiorari and Prohibition. Also, petitioners filed before the CA a Motion for the Issuance of Status Quo Order and Motion for Issuance of Temporary Restraining Order and/or Writ of Preliminary Injunction. The CA issued a Resolution denying the said motion. Issue: Whether the CA committed grave abuse of discretion in denying petitioners’ Motion for the Issuance of Status Quo Order and Motion for Issuance of Temporary Restraining Order and/or Writ of Preliminary Injunction (Motion for Injunction). Ruling: NO. The CA did not commit grave abuse of discretion. Essential to granting the injunctive relief is the existence of an urgent necessity for the writ in order to prevent serious damage. A TRO issues only if the matter is of such extreme urgency that grave injustice and irreparable injury would arise unless it is issued immediately. Thus, to be entitled to the injunctive writ, petitioners must show that (1) there exists a clear and unmistakable right to be protected; (2) this right is directly threatened by an act sought to be enjoined; (3) the invasion of the right is material and substantial; and (4) there is an urgent and paramount necessity for the writ to prevent serious and irreparable damage. In this case, no grave abuse of discretion can be imputed to the CA. This is so because APRI has no clear legal right. A perusal of the Motion for Injunction and its accompanying Affidavit filed before the CA shows that petitioners rely on their alleged right to the full and faithful execution of the MOA. However, their rights under the MOA have already been declared inferior or inexistent in relation to respondent in the RTC case, under a judgment that has become final and

executory.23 At

the very least, their rights under the MOA are precisely disputed by respondent. Hence, there can be no "clear and unmistakable" right in favor of petitioners to warrant the issuance of a writ of injunction. Where the complainant’s right or title is doubtful or disputed, injunction is not proper.2 Allgemeine-Bau-Chemie Phils. Vs. Metropolitan Bank Allgemein filed before Muntinlupa Regional Trial Court a motion for intervention, with prayer for the annulment of the extra-judicial foreclosure sale, delivery of title, and damages and for the issuance of a temporary restraining order and/or writ of preliminary injunction enjoining respondent Metropolitan Bank & Trust Co. (Metrobank) to consolidate its title and take possession of its properties. The RTC, however, denied the same. Hence, Allgemein filed a separate petition for the issuance of a temporary restraining order and a writ of preliminary injunction with the Court of Appeals. The CA denied Allgemein‘s prayer for the issuance of a writ of preliminary injunction for failure to establish a clear and unmistakable right to the subject properties. ISSUE: Whether or not the appellate court committed grave error in denying Allgemein‘s prayer for a writ of preliminary injunction HELD: It is axiomatic that what determines the nature of an action and hence, the jurisdiction of a court, are the allegations of the complaint and the character of the relief sought. Allgemein‘s only prayer in CA-G.R. No. 71217 is “for the preservation of the status quo, that is, Allgemein, having in possession over the subject properties for several years, shall retain such

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possession until the controversy before the said trial court has been finally resolved and Metrobank be prevented from taking over such possession.” Clearly, what Allgemein filed with the appellate court was an original action for preliminary injunction which is a provisional and extra-ordinary remedy calculated to preserve or maintain the status quo of things and is availed of to prevent actual or threatened acts, until the merits of the case can be heard. An original action for injunction is outside the jurisdiction of the Court of Appeals, however. Under B.P. 129, the appellate court has original jurisdiction only over actions for annulment of judgments of the RTCs and has original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus and quo warranto, and auxiliary writs or processes whether or not they are in aid of its appellate jurisdiction. Thus, for want of jurisdiction, the petition before the appellate court should have been dismissed outright. Cabili vs.Balindog Facts: -Complainant Atty. Tomas Ong Cabili (Atty. Cabili) was counsel of the Heirs of Jesus Ledesma in the latter’s action for damages against the Mindanao State University (MSU) and others arising from the death of the late Jesus Ledesma in Civil Case 06-254 of the Regional Trial Court (RTC) of Iligan City, Branch 6. -The RTC rendered judgment against the defendants, including MSU, ordering them to pay damages to the Heirs. On appeal, the Court of Appeals (CA) affirmed the RTC decision which became final and executory. - March 6, 2009 the RTC Branch 6 caused the issuance of a writ of execution against the defendants. The Office of the Solicitor General (OSG) belatedly filed an opposition to the issuance of the writ, resulting in its denial on the ground of mootness of the motion.

- Meantime, the Sheriff of Branch 6, Sheriff Gerard Peter Gaje, served a notice of garnishment on MSUs funds with the Land Bank of the Philippines Marawi City Branch by reason of MSUs failure to obey the writ. - On April 1, 2009, to prevent seizure of its Land Bank deposits that it needed for operations, MSU filed a special civil action of prohibition and mandamus with application for the issuance of a temporary restraining order (TRO) and, subsequently, a preliminary injunction before the RTC Branch 8, presided over by respondent acting presiding judge, Judge Rasad G. Balindong, against Land Bank and Sheriff Gaje - In its petition, MSU averred that it is a state university, funded by appropriations law enacted by Congress; that despite OSG opposition to the issuance of a writ of execution against it, such writ was issued and Sheriff Gaje garnished upon MSUs deposits with Land Bank, who in turn gave notice to MSU that it was putting on hold the sum ofP2,726,189.90 on its deposit, that this money being government funds, Sheriff Gaje was executing on the same in violation of Commission on Audit (COA) Circular 2001-002 dated July 31, 2001 and SC Administrative Circular 10-2000; and that unless restrained, the garnishment of government fund would disrupt MSUs operations. -After due hearing, Judge Balindong issued a TRO, enjoining Land Bank and Sheriff Gaje from proceeding with the garnishment of the MSU deposit with Land Bank. To determine whether the issuance of a writ of preliminary injunction was warranted, Judge Balindong heard the parties and required them to submit memoranda. Instead of submitting a memorandum, Sheriff Gaje filed a motion to dismiss on the ground that RTC Branch 8 had no jurisdiction to issue an injunction order against another court of equal rank. Finding merit, on April 28, 2009 Judge Balindong issued an Order, dismissing the petition. - For having initially taken cognizance of the case and issuing a TRO, Atty. Cabili filed the present administrative action Judge Balindong for gross

ignorance of the law, grave abuse of authority, abuse of discretion and/or grave misconduct prejudicial to the interest of the judicial service. The Office of the Court Administrator (OCA) found ground to hold Judge Balindong guilty of gross ignorance of the law for interfering with the judgment of a co-equal court. It recommended the imposition of a fine of P40,000.00 on Judge Balindong with a stern warning against a future offense. Issue: WON not Judge Balindong of RTC Branch 8 acted with gross ignorance of the law when he issued the TRO, pending hearing on the application for preliminary injunction that enjoined Sheriff Gaje from garnishing MSUs Congress-appropriated operating funds for the satisfaction of the judgment of RTC Branch 6 – in effect, violating the Doctrine of Judicial Stability or NonInterference Ruling: -The doctrine of judicial stability or non-interference in the regular orders or judgments of a co-equal court is an elementary principle in the administration of justice: No court can interfere by injunction with the judgments or orders of another court of concurrent jurisdiction having the power to grant the relief sought by the injunction. The rationale for the rule is founded on the concept of jurisdiction: a court that acquires jurisdiction over the case and renders judgment therein has jurisdiction over its judgment, to the exclusion of all other coordinate courts, for its execution and over all its incidents, and to control, in furtherance of justice, the conduct of ministerial officers acting in connection with this judgment. -Where an execution order has been issued is considered as still pending, so that all the proceedings on the execution are still proceedings in the suit. A court which issued a writ of execution has the inherent power, for the advancement of justice, to correct errors of its ministerial officers and to control its own processes. To hold otherwise would be to divide the

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jurisdiction of the appropriate forum in the resolution of incidents arising in execution proceedings. Splitting of jurisdiction is obnoxious to the orderly administration of justice. - Jurisprudence shows that a violation of this rule warrants the imposition of administrative sanctions. - If Sheriff Gaje committed any irregularity or exceeded his authority in the enforcement of the writ, the proper recourse for MSU was to file a motion with, or an application for relief from, the same court which issued the decision, not from any other court, or to elevate the matter to the CA on a petition for certiorari. In this case, MSU filed the proper motion with the Iligan City RTC (the issuing court), but, upon denial, proceeded to seek recourse through another co-equal court presided over by the respondent Judge. - It is not a viable legal position to claim that a TRO against a writ of execution is issued against an erring sheriff, not against the issuing Judge. A TRO enjoining the enforceability of a writ addresses the writ itself, not merely the executing sheriff. The duty of a sheriff in enforcing writs is ministerial and not discretionary.