17.eternal garden v. ca

8/9/2019 17.Eternal Garden v. CA

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FIRST DIVISION

[G.R. No. 124554. December 9, 1997]

ETERNAL GARDENS MEMORIAL PARK ORPORATION, petitioner,vs. O!RT O" APPEALS #$% NORT& P&ILIPPINE !NION MISSIONO" T&E SE'ENT& DA( AD'ENTISTS, respondents.

D E I S I O N

KAP!NAN, J .)

This case is the derivative of G.R. No. 73794, which was decided b theSeco!d Divisio! of this "o#rt o! Se$te%ber &9, &9''.(&)

The a!tecede!ts are as fo**ows+()

-etitio!er G/-" a!d $rivate res$o!de!t N-0/ e!tered i!to a 1a!dDeve*o$%e!t 2ree%e!t dated October , &97. 0!der the aree%e!t, G/-"was to deve*o$ a $arce* of *a!d ow!ed b N-0/ i!to a %e%oria* $ar5 s#bdividedi!to *ots. The $arties f#rther areed 6

(d) THAT the FIRST PARTY shall receive forty (40%) percent of the ross collection

less Perpet!al "are Fees (#hich in no case shall e$ceed 0% of the price per lot !nless

other#ise areed !pon &y &oth parties in #ritin) or 'et ross "ollection ('") frothis pro*ect+ This shall &e reitted onthly &y the S,"-'. PARTY in the follo#in

anner/ (i) Forty (40%) percent of the '" pl!s (ii) if it &ecoes necessary for the

FIRST PARTY to vacate the property earlier than t#o years fro the date of this

areeent at the option of the FIRST PARTY an additional ao!nt e1!ivalent to t#enty

(20%) percent of the '" as cash advance for the first fo!r (4) years #ith interest at

t#elve (2%) percent per ann! #hich cash advance shall &e ded!cti&le o!t of the

proceeds fro the FIRST PARTY3s 40% fro the th year on#ard+ The S,"-'.

PARTY f!rther arees that if the FIRST PARTY shall desire to have its pro*ected

receiva&les collected at the th year the S,"-'. PARTY shall assist in havin the sae

disco!nted in advance+

The P+ illion initial payent entioned in the .eed of A&sol!te Sale coverin the

first phase of the pro*ect shall &e ded!cted o!t of the proceeds fro the FIRST PARTY3s40% at the end of the th year+ S!&se1!ent payents ade &y the S,"-'. PARTY on

acco!nt of the stated p!rchase price in said .eed of A&sol!te Sale shall &e chared

http://sc.judiciary.gov.ph/jurisprudence/1997/dec1997/124554.htm#_edn1






aainst #hat is d!e to the FIRST PARTY !nder this 5A'. .,6,5-P7,'T

AR,,7,'T+89:

1ater, two c*ai%a!ts of the $arce* of *a!d s#rfaced 6 /asi*o state a!d theheirs of a certai! Vice!te Si!so! !car!acio!. G/-" th#s fi*ed a! actio! for

i!ter$*eader aai!st /asi*o state a!d N-0/, doc5eted as "ivi* "ase No. 9before the Reio!a* Tria* "o#rt of 8a*oo5a! "it, ra!ch &:. The Si!so! heirsi! t#r! fi*ed a! actio! for ;#ieti! of tit*e aai!st G/-" a!d N-0/, doc5eted as"ivi* "ase No. "6&&'3 before ra!ch & of the sa%e co#rt.

Fro% these two cases, severa* $roceedi!s e!s#ed. O!e s#ch case, fro%the i!ter$*eader actio!, c#*%i!ated i! the fi*i! a!d s#bse;#e!t reso*#tio! of G.R.No. 73794. I! G.R. No. 73794, G/-" assai*ed the a$$e**ate co#rt<s reso*#tio!re;#iri! =$etitio!er ter!a* Garde!s (to) de$osit whatever a%o#!ts are d#efro% it #!der the 1a!d Deve*o$%e!t 2ree%e!t with a re$#tab*e ba!5 to bedesi!ated b the res$o!de!t co#rt.>(4)

I! the Decisio! of Se$te%ber &9, &9'', the co#rt r#*ed th#s+

PR,7IS,S "-'SI.,R,. (a) the petition is .IS7ISS,. for lac; of erit< (&) this

case (toether #ith all the clais of the intervenors on the erits) is R,7A'.,. to thelo#er co!rt for f!rther proceedins< and (c) the Resol!tion of the Third .ivision of this

"o!rt of =!ly > ?>@ re1!irin the deposit &y the petitioner (see footnote )8: of the

ao!nts contested in a depository &an; STA'.S (the 7otion for Reconsideration

thereof &ein here&y .,'I,. for reasons already disc!ssed) !ntil after the decision on

the erits shall have &ecoe final and e$ec!tory+

!tr of ?#d%e!t was %ade o! 2$ri* 4, &9'9.()

So%eti%e thereafter, the tria* co#rt re!dered decisio!s i! "ivi* "ase Nos.9 @i!ter$*eaderA a!d "6&&'3 @;#ieti! of tit*eA. These decisio!s werea$$ea*ed to the "o#rt of 2$$ea*s, a!d the a$$ea*s were co!so*idated.

The a$$e**ate co#rt re!dered ?#d%e!t i! the co!so*idated case o!Dece%ber &7, &99& as fo**ows+ @a.A the tria* co#rt<s decisio! i! "ivi* "ase No.9 was affir%ed i!sofar as it dis%issed the c*ai%s of the i!terve!ors, i!c*#di!the /asi*o state, a!d the tit*es of N-0/ to the s#b?ect $arce* of *a!d weredec*ared va*idB a!d @b.A the tria* co#rt<s decisio! i! "ivi* "ase No. "6&&'3 i!

favor of the Si!so! heirs was reversed a!d set aside.(7)

Fro% the co!so*idated decisio!, the Si!so! heirs, /asi*o state a!dG/-" each fi*ed with this "o#rt their $etitio!s for review o! certiorari. The$etitio! fi*ed b the Si!so! heirs doc5eted as G.R. No. &:34764' was de!iedfor fai*#re to co%$* with "irc#*ar No. '69&, (') a!d e!tr of ?#d%e!t %ade o!C#* 7, &99. G.R. No. &:&9 fi*ed b the /asi*o state was de!ied for fai*#reof $etitio!er to raise s#bsta!tia* *ea* iss#es,(9) a!d e!tr of ?#d%e!t %ade o!


















2##st &9, &99. G.R. Nos. &:33:63& fi*ed b G/-" was de!ied for fai*#re toco%$* with "irc#*ar No. &969&,(&:) a!d e!tr of ?#d%e!t %ade o! C#* :,&993. G/-"<s other $etitio!, this ti%e #!der R#*e , doc5eted as G.R. Nos.&:74647 was dis%issed for havi! bee! fi*ed o#t of ti%e a!d for *ac5 of %erit.

Fo**owi! these, the "o#rt, thro#h the Third Divisio!, iss#ed a Reso*#tio!dated Dece%ber &, &993 i! G.R. No. 73794, th#s+

BH,R,F-R, considerin that the o#nership of the property in disp!te has no# &eensettled #ith finality the "o!rt sees no f!rther leal o&stacle in carryin o!t the respective

covenants of the parties to the 5and .evelopent Areeent+ $ $ $+ In respect to the

!t!al acco!ntin re1!ired to deterine the reainin accr!ed rihts and lia&ilities of

said parties the case is here&y reanded to the "o!rt of Appeals for proper deterination

and disposition+

All other incidental otions involvin +R+ 'o+ @9@?4 still pendin #ith this "o!rt are

here&y declared 7--T and are '-T,. BITH-CT A"TI-'+ 8:

I! co%$*ia!ce with the S#$re%e "o#rt reso*#tio!, the "o#rt of 2$$ea*s$roceeded with the dis$ositio! of the case, doc5eted therei! as "2 G.R. S- No.:4'9, a!d re;#ired the $arties to a$$ear at a sched#*ed heari! o! C#!e &,&994, =with co#!se* a!d acco#!ta!ts, as we** as boo5s of acco#!ts a!d re*atedrecords,< to deter%i!e the re%ai!i! accr#ed rihts a!d *iabi*ities of said$arties.>(&)

"iti! the fo**owi! $rovisio! of the *a!d deve*o$%e!t aree%e!t+

(e) THAT the S,"-'. PARTY shall ;eep proper &oo;s and acco!ntin records of all

transactions affectin the sale of said eorial lots #hich records shall &e open for

inspection &y the FIRST PARTY at any tie d!rin !s!al office ho!rs+ The S,"-'.

PARTY shall also render to the FIRST PARTY a onthly acco!ntin report of all sales

and cash collections effected the precedin onth+ It is also !nderstood that all financial

stateents shall &e s!&*ect to ann!al a!dit &y a rep!ta&le e$ternal acco!ntin fir #hichsho!ld &e accepta&le to the FIRST PARTY+89:

the a$$e**ate co#rt re;#ired G/-" to $rod#ce at the sched#*ed heari!s thefo**owi! doc#%e!ts+

@aA state%e!ts of %o!th* ross i!co%e fro% the ear &9'&, s#$$orted bco$ies of the co!tractsaree%e!ts of the sa*e of *ots tob#ersc#sto%ersB a!d

@bA s#%%ar state%e!ts, b %o!th, of the fort $er ce!t @4:EA share i!the =!et ross> i!co%e #!der the *a!d deve*o$%e!t aree%e!tbetwee! the $arties.(&4)














The acco#!ti! of the $arties< res$ective ob*iatio!s was referred to the"o#rt<s 2cco#!ta!t, /s. "ar%e!cita 2!e*o, with the co!c#rre!ce of the $arties,to who% the doc#%e!ts were to be s#b%itted. (&)

N-0/ $re$ared a!d s#b%itted a S#%%ar of Sa*es a!d Tota* 2%o#!ts D#e

based o! the fo**owi! doc#%e!ts it *i5ewise s#b%itted to the co#rt+

(&)

26& 1a!d Deve*o$%e!t 2ree%e!t eec#ted betwee! N-0/ a!dG/-" o! October , &97.

26 S#b%itta* of re;#ire%e!ts fi*ed b G/-" to the Sec#rities a!dcha!e "o%%issio! dated C#* , &97 re+ its a$$*icatio! todeve*o$, se** a!d %ai!tai! a first c*ass $rivate ce%eter $art sit#ated i!aesa, 8a*oo5a! "it o! the 3 has. $ro$ert of -0" of N-0/. G/-"<s a$$*icatio! ca**s for the deve*o$%e!t of 3&,3 *aw!t$e %e%oria* *ots for #!derro#!d a!d above ro#!d i!ter%e!t, a!d:,':' arde! a!d fa%i*estates %e%oria* *ots for above ro#!di!ter%e!t, or a tota* of ,&34 %e%oria* *ots.

263 G/-" Dai* Sa*es Re$ort which shows that fro% &97', &979, &9':a!d &9'& G/-" has so*d &9,37 %e%oria* *ots with ross sa*esa%o#!ti! to -,4&,'79.7:.

263a /achi!e co$ of G/-" Dai* Sa*es Re$ort dated Dece%ber 9,&979 showi! that i! &97' it so*d ,':%e%oria* *ots va*#ed at -9&,7&.4: a!d i! &979 it so*d ,:3%e%oria* *ots va*#ed at -&&,943,3&.::.

263a6& ee5* Sa*es Re$ort of G/-" corres$o!di! to the $eriodDece%ber to 3&, &979, showi! c#%#*ative* as of said date it hasso*d a tota* of ,:3 %e%oria* *ots fro% Ca!#ar & to Dece%ber 9,&979.

263a6 Sa*es Re$ort of G/-" for the $eriod Febr#ar & to &', &9':.

263a64 1etter of Gabrie* O. Vida, ec#tive Vice -reside!t a!d Ge!era*/a!aer of G/-", dated 2$ri* 9, &9':, to -astor ie!ve!ido "a$#*istati! a%o! others that for the ear &97', G/-" has so*d ,':%e%oria* *ots a!d i! the first ;#arter of &9': fro% Ca!#ar & to 2$ri* ,it has so*d ,4&' %e%oria* *ots, for a tota* ross sa*es of &:,73:

%e%oria* *ots.

263b G/-" Dai* Sa*es Re$ort which show that fro% &97' #$ toDece%ber 9, &9': it has so*d a tota* of &,3 %e%oria* *ots with sa*esva*#e of -3',:',99.4:.

263b6& 2re s#$$orti! sa*es records a!dor wee5* sa*es re$orts of

263b6 G/-" i! re*atio! to hibit H263b.<







263b63

263b64

263b6

2636 263b67

264 2#dited Fi!a!cia* State%e!t of G/-" for &9' which it fi*edwith the Sec#rities a!d cha!e "o%%issio! o! 2$ri* &, &9'$#rs#a!t to the re$ortoria* re;#ire%e!ts of the S", withacco%$a!i! ba*a!ce sheet a!d state%e!t of i!co%e a!d e$e!ses,co!sisti! of five @A $aes.

26 2ct#a* Gross -rofit Rate of G/-" for the ear &9' which showsthat it so*d 3,3 %e%oria* *ots va*#ed at -,99,:&.:.

26 /achi!e co$ of 2ss#%$tio!s to -ro?ected "ash F*ow a!d I!co%eState%e!ts $re$ared b G/-" with ass#%$tio!s that the ,:::%e%oria* *ots wo#*d be so*d a!d that &E of tota* sa*es $er ear arecash sa*es a!d 'E are o! i!sta**%e!t a!d that i!sta**%e!t sa*es are$aab*e over a $eriod of : %o!ths at &E i!terest $er a!!#%.

267 For%#*a for "o%$#tatio! of I!terest I!co%e for 1ots So*d o!I!sta**%e!t.

26' Sa*es -rice 2!a*sis based o! 1aw! "*ass /e%oria* 1ots for the$eriod &97' to &9'', i!c*#sive.

26'a -rice *ist iss#ed b G/-" effective Dece%ber &, &977.

269 "o%$#tatio! of i!terest d#e for #se of N-0/ share.

269a 1etter dated 2$ri* &&, &9'3 of 2*fo!so -. Roda, -reside!t of -0" of N-0/ showi! s#%%ar of ross co**ectio!s fro% %e%oria* *ots sa*esstarti! Ca!#ar &97' #$ to C#!e &9', i!c*#sive, $er co%$#tatio!ive! to -0" b G/-".

269b 2re va*idati! doc#%e!ts co!sisti! of acco#!ti! *eders

269c i! s#$$ort of the co%$#tatio!s ive! b G/-" to -0"

269d as %e!tio!ed i! Dr. Roda<s 1etter dated 2$ri* &&, &9'3.

26&: -ro%issor Note of G/-" dated 2$ri* , &97 iss#ed to N-0/for a *oa! of -7:,::: for which G/-" areed to $a &E i!terest$er a!!#%.

-rice 1ist of /e%oria* 1ots of I/12J2NG -I1I-INO,



6& IN". effective Febr#ar 3, &9'&.

" -rice 1ist of /e%oria* 1ots of I/12J2NG -I1I-INO,

"6& IN". effective /arch &, &9'.

"6D -rice 1ist of /e%oria* 1ots of I/12J2NG -I1I-INO,

D6& IN". effective Febr#ar &', &9'3.

D6

-rice 1ist of /e%oria* 1ots of I/12J2NG -I1I-INO,

6& IN". effective Ca!#ar 3, &9'4.

6

F -rice 1ist of /e%oria* 1ots of I/12J2NG -I1I-INO,F6& IN". effective C#* 9, &9'4.

F6

G -rice 1ist of /e%oria* 1ots of I/12J2NG -I1I-INO,

G6& IN". effective /arch &, &9'.

G6

-rice 1ist of /e%oria* 1ots of I/12J2NG -I1I-INO, IN". effectiveC#* &, &9'7.

I -rice 1ist of /e%oria* 1ots of I/12J2NG -I1I-INO, IN". effectiveCa!#ar 4, &9'9.

C -rice 1ist of /e%oria* 1ots of I/12J2NG -I1I-INO, IN". effective 2##st , &9'9.

8 -rice 1ist of /e%oria* 1ots of I/12J2NG -I1I-INO,

86& IN". effective Febr#ar 4, &99:.

1 -rice 1ist of /e%oria* 1ots of I/12J2NG -I1I-INO, IN". effective

Febr#ar , &99&./ -rice 1ist of /e%oria* 1ots of I/12J2NG -I1I-INO,

/6& IN". effective October , &99&.

N -rice 1ist of /e%oria* 1ots of I/12J2NG -I1I-INO,

N6& IN". effective Febr#ar , &99.



O -rice 1ist of /e%oria* 1ots of I/12J2NG -I1I-INO, IN". effectiveOctober 9, &99.

- -rice 1ist of /e%oria* 1ots of I/12J2NG -I1I-INO, IN". effectiveCa!#ar &, &993.

K -rice 1ist of /e%oria* 1ots of I/12J2NG -I1I-INO, IN". effectiveFebr#ar &, &993.

R -rice 1ist of /e%oria* 1ots of I/12J2NG -I1I-INO,

R6& IN". effective /arch &, &993.

S -rice 1ist of /e%oria* 1ots of I/12J2NG -I1I-INO,

S6& IN". effective Se$te%ber &, &993.

T -rice 1ist of /e%oria* 1ots of /2NI12 //ORI21

T6& -2R8 effective Ca!#ar &, &9'.T6

T63

T64

0 -rice 1ist of /e%oria* 1ots of /2NI12 //ORI21

06& -2R8 effective C#!e &, &99&.

06

063

064

V -rice 1ist of /e%oria* 1ots of /2NI12 //ORI21

V6& -2R8 effective Nove%ber , &99&.

V6

V63

V64

-rice 1ist of /e%oria* 1ots of O1J "ROSS

6& //ORI21 -2R8 effective Dece%ber &, &9'7.

6

63



It a$$ears that G/-" did !ot s#b%it a! doc#%e!t whatsoever to aid thea$$e**ate co#rt i! its %a!dated tas5. Th#s, i! a Reso*#tio! dated Ca!#ar &9,&99, the a$$e**ate co#rt dec*ared+

$ $ $ () that ,ternal ardens 7eorial Par; "orporation has #aived its rihts to present

the records and doc!ents necessarily for acco!ntin #hich records they #erespecifically re1!ired to preserve !nder the parties3 5and .evelopent Areeent< and (2)

that it #ill no# proceed Dto the !t!al acco!ntin re1!ired to deterine the reaininaccr!ed rihts and lia&ilities of the said parties $ $ $E ordered &y the S!pree "o!rt in its

Resol!tion of .ece&er ??9 (p+ @ rec+) and that the "o!rt #ill proceed to do #hat it

is re1!ired to do on the &asis of the doc!ents s!&itted &y the 'orth Philippine Cnion

7ission of the Seventh .ay Adventists only+8@:

/s. 2!e*o s#b%itted her Re$ort dated Ca!#ar 3&, &99, to which thea$$e**ate co#rt re;#ired the $arties to co%%e!t o!.(&')

G/-" too5 ece$tio! to the a$$e**ate co#rt<s havi! co!sidered it to havewaived its riht to $rese!t doc#%e!ts. (&9) "o!sideri! G/-"<s ar#%e!ts, theco#rt set a heari! date where N-0/ wo#*d $rese!t its doc#%e!ts =accordi!to the R#*es (of "o#rt), a!d ivi! the $rivate res$o!de!t (G/-") theo$$ort#!it to ob?ect thereto.>(:)

S#bse;#e!t*, N-0/ as5ed for a!d the a$$e**ate co#rt iss#ed a subpoenaduces tecum a!d subpoena ad testificandum to G/-"<s -reside!t, /r. Gabrie*O. Vida re;#iri! hi% to $rod#ce the fo**owi! doc#%e!ts+

&. "o$ies of Deeds of Sa*e corres$o!di! to each %e%oria* *ot so*d

s#b?ect of the 1a!d Deve*o$%e!t 2ree%e!t betwee! the $artiesB

. 1ists of a** %e%oria* *ots so*d #!der or affecti! the said 1a!dDeve*o$%e!t 2ree%e!t with a! i!dicatio! of the t$es 5i!ds of %e%oria* *ots a!d the corres$o!di! $rices at which each was so*da!d the dates whe! each *ot was so*dB

3. 1ists of a** the ow!ers of the %e%oria* *ots affected b the 1a!dDeve*o$%e!t 2ree%e!tB

4. "o$ies of a** the a!!#a* a#dits %ade b the eter!a* acco#!ti! fir%$#rs#a!t to $rovisio! @aA of the 1a!d Deve*o$%e!t 2ree%e!tB

. "o$ies of a** a#dited fi!a!cia* state%e!ts of TRN21 fro% &97' tothe $rese!tB

. "o$ies of a** %o!th* acco#!ti! re$orts of a** sa*es a!d cashco**ectio!s reardi! a** the %e%oria* *ots so*d #!der the 1a!dDeve*o$%e!t 2ree%e!t $#rs#a!t to $rovisio! @eA of the said 1a!dDeve*o$%e!t 2ree%e!tB











7. The !a%es of the De$ositorTr#stee a!5s which acted as thede$ositortr#stee of f#!ds co**ected b TRN21 $#rs#a!t to$rovisio! @fA of the s#b?ect 1a!d Deve*o$%e!t 2ree%e!tB

'. 2** other acco#!ti! boo5s a!d records o! a** tra!sactio!s affecti! a**

the %e%oria* *ots covered #!der the 1a!d Deve*o$%e!t 2ree%e!tB9. 1ist of a** the cor$orate officers a!d e%$*oees of TRN21 fro%

&97 #$ to the $rese!t whose d#ties a!d res$o!sibi*ities i!vo*ved therecordi! of a** sa*es a!d other tra!sactio!s a!d the safe5ee$i! of s#ch records re*ati! to the sa*e of the %e%oria* *ots s#b?ect of the1a!d Deve*o$%e!t 2ree%e!t. (&)

N-0/ a*so fi*ed a Re;#est for 2d%issio! of the doc#%e!ts it had ear*ier s#b%itted to the "o#rt a!!eed to the S#%%ar of Sa*es a!d Tota* 2%o#!tsD#e, addressed to /r. Vida.()G/-", however, fi*ed a De!ia* to the Re;#estfor 2d%issio!, a**ei! that it was witho#t 5!ow*ede or i!for%atio! of thedoc#%e!ts, ece$t for the 1a!d Deve*o$%e!t 2ree%e!t of October , &97. (3)

N-0/ the! reiterated its re;#est for a!d was ra!ted b the a$$e**ate co#rt,a subpoena duces tecum and subpoena ad testificandum, this ti%e addressed tothe "hief of the Records Divisio! of G/-".(4) N-0/ f#rther fi*ed a /otio! for -rod#ctio!, I!s$ectio! a!d -hotoco$i! of Doc#%e!ts a!d oo5s of 2cco#!tsof G/-", i! $artic#*ar+

&. /aster Deve*o$%e!t a!dor O$eratio!a* -*a! of ter!a* Garde!s for /e%oria* -ar5 at aesa, /etro /a!i*a s#b?ect of the 1a!dDeve*o$%e!t 2ree%e!t.

. I!ve!tor of %e%oria* *ots deve*o$ed a!d so*d b ter!a* #!der the1a!d Deve*o$%e!t 2ree%e!t a!d the t$e of %e%oria* *ots deve*o$eda!d so*d, i.e., whether *aw! t$e, fa%i* estate t$e, arde! estate t$ea!d the !#%ber of each t$e deve*o$ed a!d so*d.

3. 1ist of b#ers a!d ow!ers of %e%oria* *ots so*d #!der the 1a!dDeve*o$%e!t 2ree%e!t a!d the corres$o!di! sa*es co!tracts.

4. Records of !#%ber of %e%oria* *ots so*d o! i!sta**%e!t ter%s, a!dthose so*d o! cash basis.

. Sa*es a!d %ar5eti! records as to the !#%ber of %e%oria* *otseffected b the 1a!d Deve*o$%e!t 2ree%e!t so*d i! each of thefo**owi! ears+ &97', &979, &9':, &9'&, &9', &9'3, &9'4, &9',&9', &9'7, &9'', &9'9, &99:, &99&, &99, &993, &994 a!d &99.

. /o!th* acco#!ti! records of co**ectio!s fro% sa*es of %e%oria* *ots#!der the 1a!d Deve*o$%e!t 2ree%e!t fro% &97' to &99, i!c*#sive.












7. Jear6e!d a#dited fi!a!cia* state%e!ts of ter!a* Garde!s /e%oria*-ar5 "or$oratio! fro% &977 to &99, i!c*#sive.

'. -rice *ist of ter!a*<s %e%oria* $*ot *ots affected b the 1a!dDeve*o$%e!t 2ree%e!t coveri! the $eriod &977 to &99.

9. 1ist of accredited a!dor a#thoriLed ae!ts, bro5ers, sa*es%e!, a!dsa*es co#!se**ors of ter!a* fro% &977 to &99 a!d their addresses.

&:. Records of co**ectio!s re$rese!ti! &:E of the ross co**ectio!s o!each %e%oria* *ot so*d #!der the 1a!d Deve*o$%e!t 2ree%e!t, for $er$et#a* care fees a!d co!stit#ti! a tr#st f#!d to sec#re $er$et#a*care of the %e%oria* $ar5 affected b the 1a!d Deve*o$%e!t

2ree%e!t.()

1ater, N-0/ fi*ed a seco!d Re;#est for 2d%issio!s addressed to /r.Vida. e was as5ed to %a5e the fo**owi! ad%issio!s+

+ That the a!ditor retained &y ,ternal ardens 7eorial Par; "orp+ to a!dit and

e$aine its financial position and #hich prepared ,ternal3s a!dited financial stateents

for the years ?>2 ?>9 and ?>4 #as the a!ditin and acco!ntin firs of =os!e Arceo

"o+ "PAs #ith office at the 2nd Floor Roan R+ Santos G!ildin Plaa oeti7anila+

2+ That the a!ditor retained &y ,ternal ardens 7eorial Par; "orp+ to a!dit and

e$aine its financial position and #hich prepared ,ternal3s a!dited financial stateent

for the Fiscal years ?> and ?> #as Roseller A+ .itanco "PA #ith offices at 'o+

Plata Street T!ato 7ala&on 7etro 7anila+

9+ That the a!ditor retained &y ,ternal ardens 7eorial Par; "orp+ to a!dit and

e$aine its financial position and #hich prepared ,ternal3s a!dited financial stateents

for the Fiscal years ?>@ ?>> ?>? ??0 ?? ??2 and ??9 #as Gernardino T+

.ela "r! "PA #ith offices at 'o+ ? Interior II J>th Street a!nin K!eon "ity+

4+ That tr!e and faithf!l copies of the a!dited financial stateents of ,ternal ardens

7eorial Par; "orp+ for the Fiscal years ?> to ??9 incl!sive specifically those

referred to in pararaphs 2 and 9 of this Re1!est #ere s!&itted to and filed #ith the

G!rea! of Internal Reven!e as an interal part of ,ternal3s Incoe Ta$ Ret!rns as #ell

as #ith the Sec!rities and ,$chane "oission in copliance #ith the reportorialre1!ireents of the said Sec!rities and ,$chane "oission+

+ That each of the follo#in doc!ents e$hi&ited #ith and attached to this re1!est are

tr!e and faithf!l copies of the oriinal and en!ine doc!ents th!s/





a. 2!!e =2> @i!c*#sive of s#b6%ar5i!s fro% 2!!ees =26&> to =269>A isthe a#dit re$ort $re$ared b the acco#!ti! fir% of Cos#e, 2rceo M "o.,@"-2sA, of the fi!a!cia* $ositio! of ter!a* Garde!s /e%oria* -ar5"or$. at 3& Dece%ber &9'B

b. 2!!e => @i!c*#sive of s#b6%ar5i!s fro% 2!!ees =6&> to =63>A isthe a#dit re$ort $re$ared b the acco#!ti! fir% of Cos#e, 2rceo M "o.,@"-2sA of the fi!a!cia* $ositio! of ter!a* Garde!s /e%oria* -ar5"or$. at 3& Dece%ber &9'3B

c. 2!!e ="> @i!c*#sive of s#b6%ar5i!s fro% 2!!ees ="6&> to ="6>A isthe a#dit re$ort $re$ared b the acco#!ti! fir% of Cos#e, 2rceo M "o.@"-2sA of the fi!a!cia* $ositio! of ter!a* Garde!s /e%oria* -ar5"or$. at 3& Dece%ber &9'4B

d. 2!!e =D> @i!c*#sive of s#b6%ar5i!s fro% 2!!ees =D6&> to =D63>A isthe a#dit re$ort $re$ared b Rose**er 2. Dita!co, "-2 of the fi!a!cia*$ositio! of ter!a* Garde!s /e%oria* -ar5 "or$. at 3& Dece%ber &9'B

e. 2!!e => @i!c*#sive of s#b6%ar5i!s fro% 2!!ees =6&> to =6'>A isthe a#dit re$ort $re$ared b er!ardi!o T. De*a "r#L, "-2, of thefi!a!cia* $ositio! of ter!a* Garde!s /e%oria* -ar5 "or$. at 3&Dece%ber &9'7B

f. 2!!e =F> @i!c*#sive of s#b6%ar5i!s fro% 2!!ees =F6&> to =F67>A isthe a#dit re$ort $re$ared b er!ardi!o T. De*a "r#L, "-2, of thefi!a!cia* $ositio! of ter!a* Garde!s /e%oria* -ar5 "or$. at 3&

Dece%ber &9'9B

. 2!!e =G> @i!c*#sive of s#b6%ar5i!s fro% 2!!ees =G6&> to =G69>A isthe a#dit re$ort $re$ared b er!ardi!o T. De*a "r#L, "-2, of thefi!a!cia* $ositio! of ter!a* Garde!s /e%oria* -ar5 "or$., at 3&Dece%ber &99:B

h. 2!!e => @i!c*#sive of s#b6%ar5i!s fro% 2!!ees =6&> to =6&3>A isthe a#dit re$ort $re$ared b er!ardi!o T. De*a "r#L, "-2, of thefi!a!cia* $ositio! of ter!a* Garde!s /e%oria* -ar5 "or$., at 3&Dece%ber &99&B

i. 2!!e =I> @i!c*#sive of s#b6%ar5i!s fro% 2!!ees =I6&> to =I6'>A is thea#dit re$ort $re$ared b er!ardi!o T. De*a "r#L, "-2, of the fi!a!cia*$ositio! of ter!a* Garde!s /e%oria* -ar5 "or$. at 3& Dece%ber &99B

?. 2!!e =C> @i!c*#sive of s#b6%ar5i!s fro% 2!!ees =C6&> to =C67>A is thea#dit re$ort $re$ared b er!ardi!o T. De*a "r#L, "-2, of the fi!a!cia*



$ositio! of ter!a* Garde!s /e%oria* -ar5 "or$. at 3& Dece%ber &993.()

/ea!whi*e, G/-" fai*ed to $rese!t the doc#%e!ts re;#ired bthe subpoena. It f#rther fi*ed a De!ia* a!dor Ob?ectio! to the Re;#ests for

2d%issio! o! the ro#!d that it co#*d !ot %a5e co%$ariso! of the doc#%e!tswith the orii!a*s thereof.(7)

O! Nove%ber &:, &99, /s. 2!e*o s#b%itted her Re$ort.(')

I! a Reso*#tio! dated Ca!#ar &, &99, the "o#rt of 2$$ea*s a$$roved there$ort of /s. 2!e*o, fi!di! this =to be a ?#st a!d fair acco#!t of what ter!a*Garde!s a!d /e%oria* -ar5 owes to the $etitio!er North -hi*i$$i!e 0!io!/issio! of the Seve!th6Da 2dve!tists, a!d accordi!* orders the for%er to $aa!d t#r! over to the *atter the a%o#!ts of -&7,:,&9.:: as $ri!ci$a* a!d-&7,3,4&.:: i! i!terest .>(9)

G/-" fi*ed a /otio! for Reco!sideratio!, which was de!ied for *ac5 of %erit b the a$$e**ate co#rt i! a Reso*#tio! dated 2$ri* &, &99. (3:)

O! 2$ri* 9, &99, G/-" fi*ed a /otio! for te!sio! of Ti%e to Fi*e-etitio! for "ertiorari a!d -rohibitio! with this "o#rt, doc5eted as G.R. No.&44, see5i! the review of the a$$e**ate co#rt<s Reso*#tio!s dated Ca!#ar&, &99 a!d 2$ri* &, &99. (3&) The "o#rt ra!ted this %otio! for ete!sio!,(3) a!d o! /a 7, &99, G/-" fi*ed the i!sta!t $etitio!.(33)

It a$$ears, however, that i! a Re$ort dated /a 3&, &99 i! "26G.R. S- No.:4'9, the "o#rt of 2$$ea*s i!for%ed the $arties that its Ca!#ar &, &99

Reso*#tio! had attai!ed fi!a*it co!sideri! the fo**owi!+

The respondent ,ternal ardens 7eorial Par; received copy of the 8=an!ary ??:

resol!tion on =an!ary 22 ?? and after t#elve (2) days fro its receipt or on Fe&r!ary

2 ?? filed a otion for reconsideration thereof+ This "o!rt denied ,ternal arden3s

otion for reconsideration in a resol!tion pro!lated April 2 ?? a copy of #hich it

received on April > ??+ After eleven () days fro receipt of the resol!tion denyin

its otion for reconsideration or on April 2 ?? (sic) it filed a otion for e$tension to

file a petition for revie# #ith the S!pree "o!rt+

It is 1!ite clear that after the denial of its otion for reconsideration ,ternal ardens had

only three (9) days left of the releentary period to file a petition for revie# or only !pto April 2 ?? &!t ,ternal ardens allo#ed that period to lapse and then filed itsotion to e$tend to file its petition on April 2? ?? J #hich is eiht (>) days &eyond the

period of finality of the resol!tion so!ht to &e revie#ed &y the S!pree

"o!rt+ "onse1!ently the resol!tion of =an!ary ?? had attained finality &efore

,ternal ardens filed its otion to e$tend &efore this Honora&le "o!rt+894:





















!tr of ?#d%e!t was %ade o! C#!e , &99.(3)

Fo**owi! the above i!cide!ts, o! C#!e :, &99, G/-" fi*ed i! G.R. No.73794 a! =O$$ositio! a!dor "o%%e!t to the Re$ort of the "o#rt of 2$$ea*sdated 3& /a &99> with the $raer+

$ $ $ to disreard and n!llify the Report of the "o!rt of Appeals dated 7ay 9 ?? and

at the sae tie allo# or tolerate the First .ivision of the Honora&le S!pree "o!rt to

resolved (sic) the petitioner ,ternal ardens Petition for Certiorari aainst the "o!rt ofAppeals and 'PC7 #ith +R+ 'o+ 244+ 89:

I! retort to G/-"<s o$$ositio!, a*so i! G.R. No. 73794, N-0/ fi*ed o! C#!e&&, &99 a! O%!ib#s /otio! @aA to dis%iss the $etitio! i! G.R. No. &44, or @bA to co!so*idate the two $etitio!s, a!d @cA for the iss#a!ce of a writ of eec#tio!. N-0/ co!te!ded that as a co!se;#e!ce of the a$$e**ate co#rt<sreso*#tio!s i! "2 G.R. S- No. :4'9 havi! attai!ed fi!a*it, a writ of eec#tio!

%a be iss#ed #!der G.R. No. 73794, a!d G/-" co#*d !o *o!er fi*e ase$arate $etitio! s#ch as that doc5eted as G.R. No. &44.(37)

I! its "o%%e!t fi*ed o! C#* &7, &99, i! G.R. No. &44, N-0/ $raed for the de!ia* of the $etitio! for =bei! frivo*o#s a!d di*ator>, citi! G/-"<svio*atio! of "irc#*ar No. :4694 o! for#% sho$$i!, i! refere!ce to its @G/-"<sA$*eadi!s fi*ed i! G.R. No. 73794. N-0/ $oi!ted o#t that the re*iefs so#ht bG/-" i! G.R. No. &44 were =ide!tica*> to those i! its O$$ositio! 2!dOr "o%%e!t to the Re$ort of the "o#rt of 2$$ea*s dated 3& /a &99 fi*ed i! G.R.No. 73794.(3')

O! Dece%ber , &99, the Reio!a* Tria* "o#rt of 8a*oo5a! "it, ra!ch&:, iss#ed a! Order i! the case of orii!, "ivi* "ase No. 9,ra!ti! N-0/<s %otio! for eec#tio! of ?#d%e!t. (39) 2 writ of eec#tio! wass#bse;#e!t* iss#ed b that tria* co#rt o! Ca!#ar 7, &997.(4:)

eca#se of the tria* co#rt<s iss#a!ce of the writ of eec#tio!, o! Ca!#ar &:,&997, G/-" fi*ed i! G.R. No. &44 a! 0re!t /otio! for Restrai!i! Order

2!dOr I!?#!ctio! a!d /otio! for "o!te%$t of "o#rt. G/-" $raed that=$e!di! reso*#tio! of the $etitio! to $ro%$t* iss#e a restrai!i! order a!dor i!?#!ctio! aai!st C#de Cai%e Discaa of the RT" r. &: of 8a*oo5a! "it i!"ivi* "ase No. 9 .> (4&)

G/-" a*so fi*ed i! G.R. No. 73794 o! Ca!#ar &7, &997 a! 0re!t /otio!for Restrai!i! Order 2!dOr I!?#!ctive Re*ief with the sa%e $raer as i! its0re!t /otio! fi*ed i! G.R. No. &44.(4)

I! G.R. No. &44, the "o#rt ra!ted G/-"<s %otio! a!d iss#ed ate%$orar restrai!i! order aai!st the tria* co#rt<s order dated Dece%ber &,&99 a!d writ of eec#tio! dated Ca!#ar 7, &997.(43)





















I! a Reso*#tio! dated Ca!#ar 7, &997 iss#ed i! G.R. No. 73794, the "o#rtde!ied for *ac5 of %erit G/-"<s 0re!t /otio!. (44)

The thresho*d ;#estio! here is whether ter!a* Garde!s ti%e* fi*ed its$etitio! for review fro% the "o#rt of 2$$ea*s< Ca!#ar &, &99 a!d 2$ri* &, &99

Reso*#tio!s.e restate the %ateria* dates th#s+

G/-" received a co$ of the Ca!#ar &, &99 Reso*#tio! o! Ca!#ar ,&99. Twe*ve das fro% s#ch recei$t, or o! Febr#ar , &99, G/-" fi*ed its/otio! for Reco!sideratio!. O! 2$ri* &', &99, G/-" received the a$$e**ateco#rt<s Reso*#tio! of 2$ri* &, &99 de!i! its /otio! for Reco!sideratio!. O!

2$ri* 9, &99, or e*eve! das fro% its recei$t of the de!ia* of its %otio! for reco!sideratio!, G/-" fi*ed a %otio! for ete!sio! of ti%e to fi*e its =-etitio!for Certiorari a!d -rohibitio!> a!d co!c#rre!t* $aid the *ea* fees.

e fi!d that G/-"<s /otio! for te!sio! of Ti%e to Fi*e a -etitio! for Review was ti%e* fi*ed o! 2$ri* 9, &99, s#ch %otio! havi! bee! fi*ed e*eve!das fro% recei$t of the a$$e**ate co#rt<s de!ia* of its %otio! for reco!sideratio!. S#$re%e "o#rt "irc#*ar No. &: dated 2##st ', &9' o!%odes a!d $eriods of a$$ea* $rovides th#s+

() APP,A5S GY ",RTI-RARI T- TH, SCPR,7, "-CRT

In an appeal &y certiorari to this "o!rt !nder R!le 4 of the R!les of "o!rt Section 2 of

the Interi R!les and Section @ of P. 0 a party ay file a petition for revie#

on certiorari of the *!dent of a reional trial co!rt the "o!rt of Appeals or the

Sandian&ayan #ithin fifteen days fro notice of *!dent or of the denial of his otion

for reconsideration filed in d!e tie and payin at the sae tie the correspondin

doc;et fee (Section of R!le 4)+ In other #ords in the event a otion for

reconsideration is filed and denied the period of fifteen days &eins to r!n aain fro

notice of denial (See "odilla vs+ ,steno ?@ S"RA 9< T!rinan vs+ "acdad 22

S"RA 94)+

A otion for e$tension of tie to file a petition for revie# on certiorari ay &e filed #ith

the S!pree "o!rt #ithin the releentary period payin at the sae tie the

correspondin doc;et fee+84:

hi*e the $etitio! fi*ed b G/-" $#r$orts to be o!e of certiorari #!der R#*e of the Revised R#*es of "o#rt, we sha** treat it as havi! bee! fi*ed #!der R#*e 4, co!sideri! that it was fi*ed withi! the &6da re*e%e!tar $eriod for the fi*i! of a $etitio! for review o! certiorari. 2s the "o#rt stated i! DelsanTransport Lines, Inc. vs. Court of Appeals, where the "o#rt was *ibera* i! itsa$$*icatio! of the R#*es of "o#rt i! the i!terest of ?#stice+ =It ca!!ot be







c*ai%ed that this $etitio! is bei! #sed as a s#bstit#te for a$$ea* after thatre%ed has bee! *ost thro#h the fa#*t of $etitio!er. /oreover, stri$$ed of a**eatio!s of Hrave ab#se of discretio!,< the $etitio! act#a** avers errors of

?#d%e!t rather tha! of ?#risdictio!, which are the s#b?ect of a $etitio! for review.>(4)

The /a 3&, &99 Re$ort of the "o#rt of 2$$ea*s i!for%ed the $arties thatthe Ca!#ar &, &99 Reso*#tio! had attai!ed fi!a*it, erro!eo#s* a$$*i! ther#*e a$$*icab*e to $etitio!s for review fi*ed with the "o#rt of 2$$ea*s fro% a fi!a*

?#d%e!t or order of the reio!a* tria* co#rt.(47)

e ca!!ot a!d do !ot i! the i!sta!t case vacate a!d set aside the /a 3&,&99 Re$ort. The re$ort is !ot before this "o#rt o! review. e %#st however,withi! the %i*ie# of this case, reard the re$ort i%$erti!e!t b the fact of G/-"havi! ti%e* fi*ed its %otio! for ete!sio! of ti%e to fi*e its $etitio! o! 2$ri* 9,&99.

e a*so co!sider that the co!se;#e!ces of the iss#a!ce of the re$ort, that is,the e!tr of ?#d%e!t i! the a$$e**ate co#rt a!d the writ of eec#tio! iss#ed bthe tria* co#rt i! the case of orii!, i!etricab* affect the reso*#tio! of the i!sta!tcase. e!ce, the ratio!a*e for o#r restrai!i! order of Ca!#ar &, &997.

e !et co!sider whether, as asserted b N-0/, G/-"<s $etitio! %#st bes#%%ari* dis%issed o! the ro#!d of for#% sho$$i!. N-0/ $oi!ts toG/-"<s O$$ositio! a!dor "o%%e!t to the Re$ort of the "o#rt of 2$$ea*sdated /a 3&, &99 fi*ed i! G. R. No. 73794 vis-a-vis its -etitio! for Review i!the i!sta!t case, a!d the two 0re!t /otio!s for the Iss#a!ce of a Te%$orar

Restrai!i! Order fi*ed i! G.R. No. 73794 a!d i! the i!sta!t case.N-0/ asserts that the re*iefs so#ht b G/-" i! its o$$ositio! a!d i! its

$etitio! are =ide!tica*.> e disaree. The $etitio! here see5s the setti! aside of the "o#rt of 2$$ea*s< Ca!#ar &, &99 a!d 2$ri* &, &99 Reso*#tio!s.

The O$$ositio! i! G.R. No. 73794, o! the other ha!d, so#ht the !#**ificatio!of the /a 3&, &99 Re$ort a!d as a coro**ar, for the i!sta!t case to be =a**owedor to*erated.>

The o$$ositio! a!d the $etitio! do !ot see5 to $rovo5e fro% this "o#rt thereso*#tio! of a sa%e iss#e, the evi* which Revised "irc#*ar No. '69& a!d its

co%$a!io! 2d%i!istrative "irc#*ar No. :4694 address. e read the o$$ositio! i!G.R. No. 73794 as a co%$*e%e!t to the $etitio! here, to which it %a5escateorica* a!d e$ress refere!ce. (4') e co!sider it as %ere* a %atter of disco#rse a!d e%$hasis that ter!a* Garde!s reiterated its case i! the *ater $*eadi!.

Reardi! the %otio!s for the iss#a!ce of a te%$orar restrai!i! order fi*edb G/-" o! Ca!#ar &:, &997 i! the i!sta!t case a!d o! Ca!#ar &7, &997 i!









G.R. No. 73794, we co!sider the eie!c which %a have $ro%$ted G/-" tofi*e the %otio!s i! both cases. The tria* co#rt i! the case of orii!, actedfavorab* o! N-0/<s %otio! for the iss#a!ce of a writ of eec#tio!, the basis of which is the a**eed fi!a*it of the a$$e**ate co#rt<s Ca!#ar &, &99Reso*#tio!. The tria* co#rt r#*ed that the i!sta!t case de!o%i!ated as a! orii!a*

actio! for certiorari =does !ot i!terr#$t the co#rse of the $ri!ci$a* actio! (G.R. No.73794) !or the r#!!i! of the $eriod i! the $roceedi!.> (49) To !ot sta theeec#tio! co!sideri! the tria* co#rt<s ratioci!atio! wo#*d re!der %oot G/-"<sre%ed i! the i!sta!t case.

N-0/ a*so co!te!ds that G/-" has co%%itted $er?#r, $oi!ti! to thecertificatio! #!der oath fi*ed b G/-", thro#h its -reside!t Gabrie* O. Vida,where he states =that there is !o other case $e!di! i! a! co#rt or trib#!a* i! the-hi*i$$i!es, with the sa%e iss#es i! this case .>(:)

2ai!, we disaree. It does !ot a$$ear that G/-" was to $#rs#e the two

cases co!c#rre!t*. G/-" fi*ed this !ew $etitio!, a!d did !ot assai* thea$$e**ate co#rt<s reso*#tio! #!der G.R. No. 73794, as i! fact the "o#rt hasi!for%ed the $arties that !o f#rther $*eadi!s were to be e!tertai!ed i! G.R. No.73794 after re%a!d to the "o#rt of 2$$ea*s.(&)

G/-" !et asserts that the Reso*#tio! of the Third Divisio! datedDece%ber &, &993 orderi! the re%a!d to the "o#rt of 2$$ea*s of the case for acco#!ti! =cha!ed, %odified a!d reversed> the Se$te%ber &9, &9'' Decisio!of the Seco!d Divisio! which ordered the re%a!d of the case to the tria*co#rt. G/-" co!te!ds that the Third Divisio! =is i! vio*atio! of the co!stit#tio!which $rovides that !o doctri!e or $ri!ci$*e of *aw *aid dow! i! a decisio! en

banc or i! divisio! %a be cha!ed %odified or revised b the "o#rt ece$twhe! sitti! en banc .>()

G/-" had raised the ver sa%e iss#e i! its /otio! for Reco!sideratio!(3) of the Dece%ber &, &993 Reso*#tio!. The "o#rt, i! itsReso*#tio! dated Febr#ar &4, &994 had de!ied the %otio! with fi!a*it for *ac5 of %erit.

Need*ess to sa, the ar#%e!t raised b G/-" is #tter* witho#tco!se;#e!ce. 2t the ti%e the Se$te%ber &9, &9'' Decisio! was re!dered, thetwo civi* cases 6 i!ter$*eader a!d ;#ieti! of tit*e 6 were sti** $e!di!. hat was

bro#ht before the a$$e**ate co#rts a!d s#b?ect of G.R. No. 73794 were %erei!cide!ts, a!d !ot the ?#d%e!t of the tria* co#rtB th#s, the re%a!d to the tria*co#rt for f#rther $roceedi!s o! the %erits of the case. The Dece%ber &, &993Reso*#tio! was iss#ed after the iss#e of ow!ershi$ of the s#b?ect $arce* of *a!dwas a*read reso*ved with fi!a*it. hat was *eft for the co#rts to do was to havea! acco#!ti! do!e of the rihts a!d *iabi*ities of G/-" a!d N-0/, th#s, there%a!d to the "o#rt of 2$$ea*s.













e !ow co!sider the %erits of the case.

The ist of G/-"s< co!te!tio!s is that it owes the a%o#!t of o!* -3,:::,:::.:: *ess adva!ces a!d !ot -&7,:,&9.:: as $ri!ci$a*a!d -&7,3,4&.:: i! i!terest as co%$#ted b "o#rt 2cco#!ta!t "ar%e!cita

". 2!e*o.

(4)

G/-" first co!te!ds that the a$$e**ate co#rt, i! a$$oi!ti! a! acco#!ta!t to%a5e the co%$#tatio!s, de*eated ?#dicia* f#!ctio!, s#ch as to deter%i!e thead%issibi*it of evide!ce.()

0!der the Revised I!ter!a* R#*es of the "o#rt of 2$$ea*s, that co#rt has the 6

d+ A!thority to receive evidence and perfor any and all acts necessary for the resol!tion

of fact!al iss!es raised in cases fallin #ithin its oriinal *!risdiction+

For the $ro$er dis$ositio! of the case, the a$$e**ate co#rt, #!der the above6

;#oted a#thorit, desi!ated a! acco#!ta!t =to receive, co**ate a!d a!a*Le thedoc#%e!ts to be fi*ed b the $arties.>()

No ?#dicia* f#!ctio! was eercised b /s. 2!e*o. She was !ot as5ed to r#*eo! the ad%issibi*it of the evide!ce. The doc#%e!ts were d#* %ar5ed d#ri!the heari! of C#* &9, &99, for the co!sideratio! of the a$$e**ate co#rt, whicha*o!e had the $ower to decide. /s. 2!e*o<s ro*e i! the $roceedi!s was to$re$are a re$ort, which she did, c#**i! fro% the doc#%e!ts s#b%itted toher. hi*e it %a be tr#e that the re$ort, whe! ado$ted b the a$$e**ate co#rt,beca%e $art of its decisio!, ?#dicia* $ower *ies, !ot with the officia* who $re$aredthe re$ort, b#t with the co#rt itse*f which wie*ds the $ower of a$$rova* or re?ectio!. 0!der 2%erica! ?#ris$r#de!ce, the r#*e is th#s 6

It #o!ld seen on principle that a coissioner aster or referee appointed &y a co!rt to

aid it in the ad*!dication of a partic!lar case is not a co!rt #hen perforin the f!nctions

assined to hi altho!h the co!rt ay adopt his concl!sions in its decision $ $ $+ It

has for instance &een held that a stat!te ivin the s!pree co!rt of a state the po#er toappoint coissioners thereof #hose d!ty shall &e !nder s!ch r!les and re!lations as

the co!rt ay adopt to assist it in the perforance of its f!nctions and in disposin of

!ndeterined cases &efore it is not !nconstit!tional or open to the o&*ection that the

coissioners are vested #ith *!dicial po#er since the coissioners erely report

facts fo!nd and concl!sions reached and the co!rt retains the po#er to decide #hich isthe only *!dicial po#er+ It has also &een pointed o!t that a chancellor does not &yreferrin a atter to a coissioner deleate his *!dicial f!nction to hi+ The

coissioner is appointed for the p!rpose of assistin the chancellor not to s!pplant or

replace hi and the findins of a coissioner are erely advisory and not &indin on

the co!rt+8@:











G/-" a*so co!te!ds that it was de$rived of d#e $rocess beca#se it =was!ot ive! reaso!ab*e o$$ort#!it to 5!ow a!d %eet the c*ai% of (N-0/) as itsco#!se* was !ot ab*e to cross6ea%i!e the 2%erica! 2cco#!ta!t of (N-0/).(')

The co!te!tio! is witho#t %erit.

"o!trar to G/-"<s c*ai%, it was ive! ever o$$ort#!it to $rese!t itscase. 2t the o#tset, the $arties were as5ed b the a$$e**ate co#rt to s#b%itdoc#%e!ts for acco#!ti!. N-0/ %ade f#** #ti*iLatio! of the %odes of discover,as5i! the a$$e**ate co#rt to s#b$oe!a doc#%e!ts a!d testi%o!ies, a!dre;#esti! ad%issio!s fro% G/-" reardi! doc#%e!ts it @G/-"A had i! its$ossessio!, doc#%e!ts which e%a!ated fro% the cor$oratio! itse*f, a!d either se!t to N-0/ as co%%#!i;#s, s#ch as the 1etter of /r. Vida dated 2$ri* 4,&9': to -astor ie!ve!ido "a$#*e of N-0/ stati! inter alia that for &97',G/-" so*d ,': %e%oria* *ots a!d that d#ri! the first ;#arter of &9': thecor$oratio! so*d ,4&' *ots, tota**i! &:,73:,(9) or doc#%e!ts avai*ab*e to the

e!era* $#b*ic, as i! the -rice 1ists, or fi*ed with over!%e!t offices, s$ecifica**the Sec#rities a!d cha!e "o%%issio! a!d the #rea# of I!ter!a* Reve!#e.

G/-" ca!!ot c*ai% that it was de!ied the for#% to co!fer with N-0/ a!dN-0/<s acco#!ta!t. The a$$e**ate co#rt had arra!ed co!fere!ces for the$arties a!d their acco#!ta!ts to a**ow the% to disc#ss with each other a!d with/s. 2!e*o. ve! /s. 2!e*o, i! her 1etter dated Nove%ber &:, &99 coveri!her seco!d a!d fi!a* re$ort s$o5e of s#ch a co!fere!ce, to wit+

In copliance #ith yo!r instr!ctions in the last conferenceJeetin #ith the partyJ

litiants in "ase "AJ+R+ 'o+ SP 'o+ 04>? held last A!!st 90 ?? the !ndersined

toether #ith the representatives of the 'orth Philippine Cnion 7ission ('PC7) and the,ternal ardens 7eorial Inc+ had a disc!ssion on the cop!tations ade &y each of

the party of the ao!nt d!e to the 'orth Philippine Cnion 7ission #hich #ere s!&itted

to the "o!rt+80:

It was !ot eve! i%$erative that G/-" cross6ea%i!e the acco#!ta!t who$re$ared G/-"<s co%$#tatio!, a!d there was !o de!ia* of d#e $rocess witho#ts#ch cross6ea%i!atio!. This co%$#tatio! was %ere* to aid /s. 2!e*o, whowas to %a5e her ow! i!de$e!de!t co%$#tatio! fro% the doc#%e!ts s#b%itted toher.

G/-" a*so asserts that =s#bsta!tia** if !ot a** records, doc#%e!ts a!d$a$ers s#b%itted b the $rivate res$o!de!t N-0/ to the "o#rt<s 2cco#!ta!twhich eve!t#a** beca%e the basis of the re$ort a!d Reso*#tio! of Ca!#ar &,&99 of the $#b*ic res$o!de!t "o#rt, were !ot e!#i!e a!d !ot $ro$er* ide!tifiedb the $erso!s who were s#$$osed to have eec#ted the sa%e i!c*#di! thea**eed fi!a!cia* state%e!t of ter!a* Garde!s a**eed* iss#ed b the Sec#ritiesa!d cha!e "o%%issio! @S"A.>(&)











Fro% the tra!scri$t of ste!ora$hic !otes of the $roceedi!s i! the a$$e**ateco#rt, we fi!d that G/-" ac;#iesced to the #se of the doc#%e!ts s#b%itted bN-0/, i!c*#di! the fi!a!cia* state%e!ts, eve! active* $artici$ati! i! thedisc#ssio! of the co!te!ts of s#ch doc#%e!ts. G/-"<s %ai! ob?ectio! waso!* o! how the e!tries i! these doc#%e!ts were to be i!ter$reted, for ea%$*e,

o! how $a%e!ts towards the $er$et#a* care f#!d wo#*d be credited.() G/-"did !ot ob?ect eve! whe! co#!se* for N-0/ read i!to the records the co!te!ts of the doc#%e!ts.(3)

It eve! a$$ears that after /s. 2!e*o ca%e #$ with her first re$ort, G/-"<sco#!se* e$ressed that it was =a%e!ab*e to that co%$#tatio!.> (4) I! that re$ort,/s. 2!e*o had stressed that =(s)i!ce the ter!a* Garde!s /e%oria* -ar5, I!c.did !ot s#b%it to the "o#rt a! doc#%e!ts $ertai!i! to the co%$#tatio!s of the4:E share of the North -hi*i$$i!e 0!io! /issio! of the Seve!th Da 2dve!tists,the! we have !o other reco#rse b#t to base the co%$#tatio! o! the avai*ab*efi#res a!d o! the other doc#%e!ts as $rese!ted b the $etitio!er (N-0/).>()

G/-" *ast* co!te!ds that it is !ot *iab*e for i!terest. It c*ai%s that it was ?#stified i! withho*di! $a%e!t as there was sti** the #!reso*ved iss#e of ow!ershi$ over the $ro$ert s#b?ect of the 1a!d Deve*o$%e!t 2ree%e!t of October , &97.()

The ar#%e!t is witho#t %erit. G/-" #!der the aree%e!t had theob*iatio! to re%it %o!th* to N-0/ fort $erce!t @4:EA of its !et rossco**ectio! fro% the deve*o$%e!t of a %e%oria* $ar5 o! $ro$ert ow!ed bN-0/. The sa%e aree%e!t $rovided for the desi!atio! of ade$ositortr#stee ba!5 to act as the de$ositortr#stee for a** f#!ds co**ected b

G/-".(7) There was !o obstac*e, *ea* or otherwise, to the co%$*ia!ce bG/-" of this $rovisio! i! the co!tract, eve! o! the affectatio! that it did !ot5!ow to who% $a%e!t was to be %ade.

ve! disreardi! the aree%e!t, G/-" ca!!ot =s#s$e!d> $a%e!t o! the$retet that it did !ot 5!ow who a%o! the s#b?ect $ro$ert<s c*ai%a!ts was therihtf#* ow!er. It had a re%ed #!der the New "ivi* "ode of the -hi*i$$i!es 6 toive i! co!si!atio! the a%o#!ts d#e, as these fe** d#e.(') "o!si!atio!$rod#ces the effect of $a%e!t.(9)

The ratio!a*e for co!si!atio! is to avoid the $erfor%a!ce of a! ob*iatio!

beco%i! %ore o!ero#s to the debtor b reaso! of ca#ses !ot i%$#tab*e tohi%. (7:) For its fai*#re to co!si! the a%o#!ts d#e, ter!a* Garde!s< ob*iatio! toN-0/ !ecessari* beca%e %ore o!ero#s as it beca%e *iab*e for i!terest o! thea%o#!ts it fai*ed to re%it.

Notab*, G/-" fi*ed a! i!ter$*eader actio!, =the esse!ce of which, asidefro% the disavowa* of i!terest i! the $ro$ert i! *itiatio! o! the $art of the$etitio!er, is the de$osit of the $ro$ert or f#!ds i! co!trovers with the





















co#rt.> Jet fro% the o#tset, G/-" had assai*ed a! co#rt r#*i! orderi! thede$osit with a re$#tab*e ba!5 of the a%o#!ts d#e fro% it #!der the 1a!dDeve*o$%e!t 2ree%e!t. I! G.R. No. 73794,(7&) the "o#rt %ade the fo**owi!disco#rse o! the disavowa* of G/-" of its ob*iatio!s, th#s+

In the case at &ar a caref!l analysis of the records #ill sho# that petitioner adittedaon others in its coplaint in Interpleader that it is still o&liated to pay certain

ao!nts to private respondent< that it clais no interest in s!ch ao!nts d!e and is#illin to pay #hoever is declared entitled to said ao!nts+ S!ch adissions in the

coplaint #ere reaffired in open co!rt &efore the "o!rt of Appeals as stated in the latter

co!rt3s resol!tion dated Septe&er ?> in "+A+ +R+ 'o+ 04>? #hich states/

LThe private respondent (7,7-RIA5) then reaffirs &efore the "o!rt its oriinal

position that it is a disinterested party #ith respect to the property no# the s!&*ect of

the interpleader case+

LIn the liht of the #illinness e$pressly ade &efore the co!rt affirin the coplaint

filed &elo# that the private respondent (7,7-RIA5) #ill pay #hatever is d!e on the

5and .evelopent Areeent to the rihtf!l o#nerMo#ners there is no reason #hy the

ao!nt d!e on s!&*ect areeent has not &een placed in the c!stody of the "o!rt+3

Cnder the circ!stances there appears to &e no pla!si&le reason for petitioner3s

o&*ections to the deposit of the ao!nts in litiation after havin as;ed for the assistance

of the lo#er co!rt &y filin a coplaint for interpleader #here the deposit of aforesaid

ao!nts is not only re1!ired &y the nat!re of the action &!t is a contract!al o&liation ofthe petitioner !nder the 5and .evelopent Prora+

As correctly o&served &y the "o!rt of Appeals the essence of an interpleader aside fro

the disavo#al of interest in the property in litiation on the part of the petitioner is the

deposit of the property or f!nds in controversy #ith the co!rt it is a r!le fo!nded on

*!stice and e1!ity/ Lthat the plaintiff ay not contin!e to &enefit fro the property or

f!nds in litiation d!rin the pendency of the s!it at the e$pense of #hoever #ill

!ltiately &e decided as entitled thereto+3

The case at &ar #as elevated to the "o!rt of Appeals on certiorari #ith prohi&itory and

andatory in*!nction+ Said appellate co!rt fo!nd that ore than t#enty illion pesos are

involved< so that on interest alone for savins or tie deposit #o!ld &e considera&le no#accr!in in favor of the ,ternal ardens+ Findin that s!ch is violative of the very

essence of the coplaint for interpleader as it clearly r!ns aainst the interest of *!stice in

this case the "o!rt of Appeals cannot &e fa!lted for findin that the lo#er co!rt

coitted a rave a&!se of discretion #hich re1!ires correction &y the re1!ireent that a

deposit of said ao!nts sho!ld &e ade to a &an; approved &y the "o!rt+





Petitioner #o!ld no# copo!nd the iss!e &y its o&vio!s t!rna&o!t presently claiin in

its eorand! that there is a novation of contract so that the ao!nts d!e !nder the

5and .evelopent Areeent #ere alleedly e$tin!ished and the re1!ireent to a;e

a deposit of said ao!nts in a depository &an; sho!ld &e held in a&eyance !ntil after the

conflictin clais of o#nership no# on trial &efore Granch "NNII RT"J"aloocan "ity

has finally &een resolved+

All these not#ithstandin the need for the deposit in 1!estion has &een esta&lished notonly in the lo#er co!rts and in the "o!rt of Appeals &!t also in the S!pree "o!rt #here

s!ch deposit #as re1!ired in the resol!tion of =!ly > ?>@ to avoid #astae of f!nds+

ve! d#ri! the $e!de!c of G.R. No. 73794, G/-" was re;#ired tode$osit the accr#i! i!terests with a re$#tab*e co%%ercia* ba!5 =to avoid$ossib*e wastae of f#!ds> whe! the case was ive! d#e co#rse. (7) Jet, G/-"heded i! de$ositi! the a%o#!ts d#e a!d %ade obvio#s atte%$ts to sta

$a%e!t b fi*i! s#!dr %otio!s a!d $*eadi!s.e th#s fi!d that the "o#rt of 2$$ea*s correct* he*d ter!a* Garde!s *iab*e

for i!terest at the rate of twe*ve $erce!t @&EA. The withho*di! of the a%o#!tsd#e #!der the aree%e!t was ta!ta%o#!t to a forbeara!ce of %o!e.(73)

ONSIDERING T&E "OREGOING, the "o#rt Reso*ved to DNJ the$etitio!. The Reso*#tio!s dated Ca!#ar &, &99 a!d 2$ri* &, &99 are

2FFIR/D. The te%$orar restrai!i! order iss#ed b this "o#rt o! Ca!#ar &,&997 is 1IFTD.

SO ORDERED.

DIGEST

ter!a* Garde!s v. "2, North -hi*i$$i!e 0!io! /issio! Diestter!a* Garde!s v. "2, North -hi*i$$i!e 0!io! /issio! Diest

Facts+&. ter!a* Garde!s e!tered i!to a *a!d deve*o$%e!t aree%e!t with $rivateres$o!de!t /issio! wherei! the for%er wo#*d s#bdivide a $ro$ert of the *atter i!to %e%oria* *ots to be so*d to third $arties. F#rther, the $arties areed that the$etitio!er wi** de$osit 4:E of the %o!th* ross co**ectio! i! the !a%e of /issio!.

S#bse;#e!t*, /asi*o states a!d the heirs of Vice!te !car!acio! *aid a c*ai%o! the s#b?ect $ro$ert. This $ro%$ted the $etitio!er to fi*e a! i!ter$*eader s#it toco%$e* the /issio! a!d /asi*o states to *itiate their co!f*icti! c*ai%sbetwee! the%se*ves. O! the other ha!d, the heirs of !car!acio! fi*ed a! actio!for the ;#ieti! of tit*e to the $ro$ert aai!st the $etitio!er a!d the $rivateres$o!de!t.








. The res$o!de!t %oved that the $a%e!ts be de$osited with the co#rt whi*ethe case is o!oi!. The $etitio!er assai*s the decisio! of the co#rt orderi! it tode$osit the a%o#!ts d#e to the /issio! b virt#e of the aree%e!t $revio#s*e!tered i!to.

Iss#e+ hether or !ot de$osit is $ro$er #!der the circ#%sta!ces of this case

R01ING+Jes, as correct* he*d b the "o#rt of 2$$ea*s, the esse!ce of the i!ter$*eader o!the $art of the $etitio!er, aside fro% disavowa* of i!terest i! the $ro$ert bei!*itiated, is the de$osit of the $ro$ert or f#!ds i! co!trovers with the co#rt. Thisr#*e is fo#!ded o! ?#stice a!d e;#it so that the $*ai!tiff wi** !ot be be!efited fro%the $ro$ert or f#!ds i! *itiatio! at the e$e!se of whoever wi** #*ti%ate* bead?#ded as e!tit*ed thereto.

17.eternal garden v. ca

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