G.R. No. 191412 January 17, 2012

LETICIA A. CADENA, Petitioner,

vs.

CIVIL SERVICE COMMISSION, Respondent.

D E C I S I O N

REYES, J.:

Before us is a Petition for Review filed by petitioner Leticia A. Cadena

(Cadena) following the issuance by the Court of Appeals (CA) of its

Decision1 dated June 30, 2009 and Resolution

2 dated January 4, 2010

in the case docketed as CA-G.R. SP No. 103646, entitled "Leticia A.

Cadena v. Civil Service Commission."

The Factual Antecedents

Cadena, then a State Auditing Examiner II, Commission on Audit,

assigned at the National Power Corporation, was charged with grave

misconduct by the Civil Service Commission-National Capital Region

(CSC-NCR) following an incident that occurred during the Career

Service Professional Examination held on June 29, 1997. Records

indicate that while all examinees were instructed at the start of the

examination to clear their desks of things other than their examination

booklets, scratch papers and answer sheets, Cadena kept her Notice of

Assignment. In the course of the examination, the examiner caught

Cadena with the said notice of assignment where some questions from

the examination were reproduced.

In her answer to the formal charge, Cadena averred that she failed to

fully comprehend the instructions to examinees because she arrived

late for the examinations. She did not know that she was prohibited

from keeping her notice of assignment while the examinations were

ongoing. She further alleged that what she copied from the

examination booklet and wrote on the notice of assignment were terms

she encountered for the first time, and that she only intended to look

up in the dictionary the meaning of those words once she arrived

home.

While Cadena manifested her desire to file a position paper during the

investigations, no such pleading was filed by her counsel. A decision

was then rendered by the CSC-NCR based on available records.

The Ruling of the CSC-NCR

The CSC-NCR found Cadena guilty of grave misconduct and

dishonesty. The CSC-NCR rejected her defense that she was not aware

of the instructions given to examinees considering that the test

booklets already contained a prohibition from making copies of the

examination questions. Further, she failed to satisfactorily explain her

reason for writing her answer sheet number and the venue of her

examination on her notice of assignment. The CSC-NCR ruled that her

act "does not only amount to Grave Misconduct but also connotes

untrustworthiness and lack of integrity, a disposition to lie, cheat,

deceive, betray which is tantamount to dishonesty."3 It further

declared:

Further, Item no. 1 of Civil Service Commission Memorandum

Circular No. 8, s. 1990 states that:

"Any act which includes the fraudulent procurement and/or use of

fake/spurious civil service eligibility, the giving of assistance to ensure

the commission or procurement of the same, or any other act which

amounts to violation of the integrity of the Civil Service examinations,

possession of fake Civil Service eligibility and other similar acts shall

be categorized as a grave offense of Dishonesty, Grave Misconduct or

Conduct Prejudicial to the Best Interest of the Service, as the case may

be, and shall be penalized in accordance with the approved schedule of

penalties." 4

The dispositive portion of CSC-NCR's Decision5 dated June 14, 2005

then reads:

WHEREFORE, in view of the foregoing, this Office finds Leticia A.

Cadena guilty of Grave Misconduct and Dishonesty. Cadena is hereby

meted out the penalty of DISMISSAL from the service with the

accessory penalties of forfeiture of retirement benefits, disqualification

from re-employment in the government service and bar from taking

any civil service examination in the future.

SO ORDERED.6

The petitioner's motion for reconsideration was denied by the CSC-

NCR via a decision7 dated September 1, 2006, prompting the filing of

an appeal with the CSC.

The Ruling of the CSC

On March 24, 2008, the CSC, through Commissioner Mary Ann Z.

Fernandez-Mendoza, issued Resolution No. 0804308 dismissing the

petitioner's appeal for having been filed out of time. It emphasized that

the "perfection of an appeal in the manner and within the period laid

down by law is not only mandatory but jurisdictional, and failure to

perfect an appeal as legally required has the effect of rendering final

and executory [the] judgment of the court below and deprives the

appellate court [of] jurisdiction to entertain the appeal."9

Dissatisfied with the CSC's ruling, the petitioner filed with the CA a

petition for review raising the following issues:

1. Whether or not the Commission-NCR erred in denying the

Appeal on its Resolution of March 24, 2008 filed by Petitioner

for being arbitrary and not supported by the evidence on record

and therefore errors of law or irregularities have been

committed prejudicial to the interest of the Petitioner; and

2. Whether or not the failure of her counsel to submit the

position paper could be considered as fraud, accident, mistake

or excusable negligence which would warrant the

reinvestigation of the case to afford Petitioner the chance to

explain her side in the first instance.10

The Ruling of the CA

On June 30, 2009, the CA rendered its decision,11

declaring that the

CSC properly dismissed the appeal from the CSC-NCR's decision

since the same had already become final and executory. On the other

matters raised in the petition, the CA ruled as follows:

Having resolved in the affirmative the issue of the propriety of the

dismissal of petitioner's appeal to the CSC, we no longer find it

necessary to resolve the other issue.12

A motion for reconsideration filed by the petitioner was denied by the

CA via a resolution13

dated January 4, 2010. Hence, this petition.

The Present Petition

The present petition includes a statement that it is appealing from the

resolution of the CA. However, this Court observes that the issues

being raised by the petitioner pertain to the rulings of the CSC-NCR

and CSC rather than of the CA, to wit:

1. Whether or not the Commission-NCR erred in denying the

Appeal on its Resolution of March 24, 2008 filed by Petitioner

for being arbitrary and not supported by the evidence on record

and therefore errors of law or irregularities have been

committed prejudicial to the interest of the Petitioner; and

2. Whether or not the failure of her counsel to submit the

position paper could be considered as fraud, accident, mistake

or excusable negligence which would warrant the

reinvestigation of the case to afford Petitioner the chance to

explain her side in the first instance.14

Further, the petitioner's prayer seeks a reversal or setting aside of the

rulings of the CSC instead of the CA, as it reads:

WHEREFORE, it is respectfully prayed that this Honorable Court

shall set aside and/or reverse the Resolution dated March 24, 2008 by

Commissioner MARY ANN Z. FERNANDEZ[-]MENDOZA and a

new one entered dismissing the above-mentioned Administrative Case

for utter lack of merit or in the alternative, remand the case to the Civil

Service Commission-National Capital Region for further proceedings

where the Petitioner shall be afforded the chance to adduce evidence in

her behalf, in the interest of substantial justice.15

We have earlier denied this petition via a Resolution16

dated October

5, 2010, in view of the petitioner's failure to comply with a lawful

order of the Court when her counsel failed to file a reply as required

under this Court's Resolution17

dated June 29, 2010. The petition's

reinstatement was only allowed following the counsel for the

petitioner's explanation in a motion for reconsideration dated

November 17, 2010 that the belated filing of the reply occurred due to

the fault of their office personnel who inadvertently misplaced a copy

of this Court's resolution requiring the filing of a reply.

This Court's Ruling

We deny the petition.

The present petition does not comply with the requirements of

Rule 45 of the 1997 Rules of Civil Procedure.

At the outset, it should be stressed that the petition is dismissible for

non-compliance with substantial requirements under Rule 45 of the

Rules of Court.

First, we cite that on March 16, 2010, this Court issued a resolution in

relation to the petitioner's failure to include a statement of material

dates in her petition as required under Rule 45, Sections 4 (b) and 5,

the pertinent portions of which read:

Section 4. Contents of the petition. – The petition shall be filed in

eighteen (18) copies, with the original copy intended for the court

being indicated as such by the petitioner, and shall x x x (b) indicate

the material dates showing when notice of the judgment or final order

or resolution subject thereof was received, when a motion for new trial

or reconsideration, if any, was filed and when notice of the denial

thereof was received; x x x.

Section 5. Dismissal or denial of petition. - The failure of the

petitioner to comply with any of the foregoing requirements regarding

the payment of the docket and other lawful fees, deposit for costs,

proof of service of the petition, and the contents of and the documents

which should accompany the petition shall be sufficient ground for the

dismissal thereof.

The Supreme Court may on its own initiative deny the petition on the

ground that the appeal is without merit, or is prosecuted manifestly for

delay, or that the questions raised therein are too unsubstantial to

require consideration.

Given the foregoing, this Court's resolution of March 16, 2010

required compliance from the petitioner and thus reads in part:

Acting on the Petition for Review on Certiorari, the Court Resolved,

without giving due course to the petition, to

x x x

(b) REQUIRE the petitioner to COMPLY, within five (5) days from

notice hereof, with Rule 45, Sections 4 (b) and 5, 1997 Rules of Civil

Procedure, as amended, which provides that the petition shall indicate

the material dates showing when notice of the judgment or final order

or resolution subject thereof was received, when a motion for new trial

or reconsideration, if any, was filed and when notice of the denial

thereof was received.18

A perusal of the case records, however, reveals that despite due notice

of said resolution by the counsel for the petitioner on March 24,

2010,19

no compliance therewith has been filed with this Court. We

reiterate that Rule 45, Section 5 provides that the failure of the

petitioner to comply with any of the contents of and the documents

which should accompany a petition shall be sufficient ground for the

dismissal thereof. Notably, the material dates appear crucial in this

case, given that this petition was filed more than two months after the

promulgation by the CA of its resolution denying the petitioner's

motion for reconsideration in CA-G.R. SP No. 103646. It has to be

sufficiently established that the petition was timely filed within 15

days from the petitioner's notice of the CA's denial of her motion for

reconsideration.

This Court, instead of dismissing the petition outright, granted the

petitioner a reasonable opportunity to correct the deficiency on the

material dates by issuing the March 16, 2010 resolution. Regrettably,

the petitioner continued to defy this lawful order of the Court, thereby

giving us all the more reason to deny the present petition.

In addition to the foregoing, the matters pertained to in the present

petition are not proper subjects of a petition for review on certiorari

under Rule 45. As earlier mentioned, the petitioner assails rulings

made by the CSC instead of the CA. The issues brought before us

pertain to matters that were neither ruled upon nor discussed by the

CA in its June 30, 2009 decision and January 4, 2010 resolution. The

appellate court only discussed the timeliness of the appeal to the CSC.

After ruling that the CSC made no error in dismissing the appeal from

the CSC-NCR, the CA held that it was no longer necessary for it to

resolve the other issues brought before it.

Further, the CA ruling on the validity of the appeal's dismissal was not

even made an issue in this case.1awphi1 In fact, the issues in this

petition are exactly the same issues raised before the CA. This petition

and the inclusion of issues on matters that were solely decided upon by

the CSC then appear to be a scheme resorted to by the petitioner,

merely to avert the adverse effects of the petitioner's and/or counsel's

previous errors or lapses. We emphasize that under Rule 45, Section

120

of the Rules of Court, a petition for review on certiorari is the

remedy that may be resorted to by a party to appeal only a judgment or

final order or resolution of the CA, the Sandiganbayan, the Regional

Trial Court and other courts whenever authorized by law.

With the foregoing infirmities, this Court has sufficient grounds to

deny the present petition, barring the need to further rule on the issues

now brought before us. In any case, we rule that both the CSC and the

CA have correctly held that the rulings of the CSC-NCR had become

final and executory when the petitioner failed to make a timely appeal

before the CSC. As held by the CSC in its decision denying the appeal:

For her failure to perfect an appeal within the reglementary period of

fifteen (15) days from receipt of the adverse decision, herein appellant

lost her right to appeal. Technically, there is nothing more to appeal as

the decision sought to be appealed had already attained finality. It is

well settled that judgments or orders become final and executory by

operation of law and not by judicial declaration. Thus, finality of

judgment becomes an established fact upon the lapse of the

reglementary period of appeal, if no appeal is perfected or motion for

reconsideration or new trial is filed. This jurisprudential rule must be

read together with Section 72 Rule V (B) of the Uniform Rules on

Administrative Cases in the Civil Service (URACCS), which

provides that the prescriptive period to appeal the decision of the

Regional Offices of the Commission is fifteen (15) days from receipt

thereof by the party adversely affected.21

(citation omitted)

Settled is the rule that the right to appeal is not a natural right or a part

of due process, but is merely a statutory privilege that may be

exercised only in the manner prescribed by law. The right is

unavoidably forfeited by the litigant who does not comply with the

manner thus prescribed.22

This Court has, on several occasions, ruled that the emerging trend in

our jurisprudence is to afford every party-litigant the amplest

opportunity for the determination and just determination of his cause

free from the constraints of technicalities.23

However, failure to perfect

an appeal within the prescribed period is not a mere technicality but

jurisdictional, and failure to perfect an appeal renders the judgment

final and executory.24

In addition, the liberal application of rules of

procedure for perfecting appeals is still the exception, and not the rule;

and it is only allowed in exceptional circumstances to better serve the

interest of justice.25

This exceptional situation does not obtain in this

case as in fact, both the rulings of the CSC and CA are supported by

evidence on record. While the petitioner argues that she was denied the

opportunity to fully present her defenses, she was able to give her

answer to the charges, and even moved for a reconsideration of the

decision of the CSC-NCR. Her arguments and defenses were already

reviewed and considered by the agency when it discussed its rulings.

As held by this Court in the case of Autencio v. Manara,26

the essence

of due process in administrative proceedings is simply the opportunity

to explain one's side or to seek a reconsideration of the action or ruling

complained of. Furthermore, the counsel's actions and mistakes on

procedural matters bind the client.27

Where the party has the

opportunity to appeal or seek reconsideration of the action or ruling

complained of, defects in procedural due process may be cured.28

WHEREFORE, considering the foregoing, the instant petition for

review on certiorari is hereby DENIED

G.R. No. 139951 November 23, 2000

RAMON M. VELUZ, petitioner,

vs.

COURT OF APPEALS and RUDECON MANAGEMENT

CORPORATION, respondents.

D E C I S I O N

GONZAGA-REYES, J.:

This Petition for Review on Certiorari seeks the reversal of the

Resolution of the Court of Appeals1 in CA G.R. SP No. 51492 entitled

"Ramon M. Veluz vs. Rudecon Management Corporation" dismissing

the Petition for Certiorari2 filed by herein petitioner, Ramon M.

Veluz, from the Decision of the Regional Trial Court3 , National

Capital Judicial Region, Branch 78, Quezon City which affirmed the

decision of the Metropolitan Trial Court, Branch 41, Quezon City

ordering the herein petitioner to vacate Unit 4-D or Room 404 of

Tempus Place I Condominium located at 21 Matalino Street, Diliman

Quezon City; to pay herein respondent P20,000.00 a month as

reasonable rental for the use of the subject unit until petitioner vacates

the same; to pay the respondent P10,000.00 for and as attorney’s fees

and costs of the suit; and dismissing the petitioner’s counterclaim.

The material facts are as follows:

On September 15, 1997, the respondent Rudecon Management

Corporation (RUDECON) filed an action for unlawful detainer against

the petitioner, Ramon M. Veluz (VELUZ) in the Metropolitan Trial

Court, Branch 41, Quezon City.

On July 7, 1998, the MTC rendered its decision4 in favor of the

plaintiff and ordered VELUZ to vacate the property subject of the

action, as earlier cited.

VELUZ appealed to the RTC, National Capital Judicial Region,

Branch 78, Quezon City. During the pendency of the appeal with the

RTC, Sisenando Singson (SINGSON) through Attorney Manuel N.

Camacho (ATTORNEY CAMACHO), filed a Motion for Intervention

with an attached Answer in Intervention with affirmative defenses and

compulsory counterclaim against RUDECON claiming that he is the

real party in interest being the owner of the property subject of the

ejectment case by virtue of a swapping agreement between him and

Pablo Tolentino (TOLENTINO), the party to whom RUDECON

allegedly sold the said property under an Absolute Deed of Sale, and

that VELUZ is his lessee.5 RUDECON opposed the motion for

intervention and also filed a Motion to Show Cause why intervenor

SINGSON and his counsel should not be cited for contempt for forum

shopping inasmuch as SINGSON earlier filed an action for damages

and reconveyance of the subject property in Civil Case No. Q-98-

35444 which is pending in Branch 79 of said court.6

On November 5, 1998, the motion for intervention was denied on the

ground that in the exercise of its appellate jurisdiction, the RTC can

decide the ejectment case based only on the records and the

memoranda of the parties; that the RTC is not allowed to conduct a

new trial or hearing on the merits; that a motion for intervention is no

longer allowed after rendition of judgment by the trial court; and that

the claim of ownership of the would-be intervenor has been raised by

SINGSON as plaintiff in Civil Case No. Q-98-35444 wherein his

rights can be fully protected.7

On November 6, 1998, the RTC found RUDECON’s Motion to Show

Cause well taken and reprimanded both SINGSON and ATTORNEY

CAMACHO for forum shopping without prejudice to administrative

sanctions against ATTORNEY CAMACHO.8

Meanwhile, RUDECON filed a Motion for Execution pending appeal

and a Second Motion for Execution pending appeal, which were both

granted by the RTC on October 15, 1998.9 The writ of execution

ordered VELUZ and anyone claiming rights under him to vacate the

subject property and restore possession thereof to RUDECON.10

On December 1, 1998, the RTC rendered its decision against VELUZ

affirming in toto the decision of the MTC.11

Motion for reconsideration of the RTC decision was denied12

prompting VELUZ to file a Petition for Certiorari with prayer for

injunctive relief with the Court of Appeals docketed as CA G.R. No.

51492 through his lawyer, ATTORNEY CAMACHO (also

SINGSON’s lawyer) on March 12, 1999.13

On April 15, 1999, the Court of Appeals, without necessarily giving

due course to the petition, required the respondent RUDECON to file

comment within ten (10) days and also allowed the petitioner to file a

reply within five (5) days from receipt of said comment.14

On April 27, 1999, RUDECON filed comment to the petition praying

for its outright dismissal. RUDECON further alleged that the petitioner

and his counsel were guilty of forum shopping since another petition,

CA-G.R SP No. 49648 (a petition for certiorari filed by SINGSON

through his lawyer, ATTORNEY CAMACHO of the decision of the

RTC in Civil Case No. Q-98-35326 and the orders issued by it which

affirmed the order of ejectment issued by the MTC against VELUZ)

was already pending in the Court of Appeals.15

Subsequently, on April

29,1999, RUDECON filed a "MANIFESTATION AND MOTION"16

with "MOTION TO SHOW CAUSE WHY PETITIONER AND HIS

COUNSEL SHOULD NOT BE CITED FOR CONTEMPT AND BE

PENALIZED FOR FORUM-SHOPPING" (CA-G.R. SP No. 51492)17

and "SECOND MOTION TO SHOW CAUSE WHY PETITIONER

AND HIS COUNSEL SHOULD NOT BE CITED FOR CONTEMPT

AND BE PENALIZED FOR FORUM-SHOPPING" (CA-G.R. SP No.

49648)18

. Briefly, the motions alleged that ATTORNEY CAMACHO

failed to inform the Court of Appeals that he filed two Petitions for

Certiorari raising substantially the same facts, issues and relief sought

by substantially the same parties docketed as CA-G.R. SP No. 49648

in favor of his client SINGSON, and CA-G.R. SP No. 51492 in favor

of his other client VELUZ in violation of Supreme Court Circular No.

04-94 dated April 1, 1994 and Section 3, Rule 46 of the 1997 Rules of

Civil Procedure proscribing forum-shopping.

On July 1, 1999, the Court of Appeals rendered its decision now

subject of this present petition dismissing on the ground of forum

shopping herein petitioner’s Petition for Certiorari of the RTC

decision.19

In dismissing the petition, the Court of Appeals ratiocinated

that the allegations of RUDECON in its "Motion to Show Cause Why

Petitioner and His Counsel Should Not Be Cited For Contempt And

Be Penalized For Forum-Shopping" (CA-G.R. SP No. 51492) to the

effect that the petitioners were guilty of forum-shopping remained

unrebutted inasmuch as the petitioner did not file a Reply to the

Comment filed by RUDECON.

Motion for reconsideration was denied20

hence this present petition

where the petitioner raises the following issues:

"(1) Whether or not, there was violation of procedural due process in

the dismissal of the Petition for Review/Certiorari in said CA-G.R. SP

No. 51492 under Rule 42/65 by the Court of Appeals merely because

of herein Petitioner’s failure to file a Comment or Reply to private

Respondent’s ‘Motion to Show Cause’ without having been required

by the Court of Appeals to file the same as usually required of parties

to conform with procedural due process of law.

(2) Whether or not a Petition for Review/Certiorari under Rule 42/65

filed with the Court of Appeals, docketed as CA-G.R. SP No. 51492,

originating from an unlawful detainer case filed against therein

petitioner and thereafter appealed by Petition for Review to the

Regional Trial Court of Quezon City, may be dismissed for Forum

Shopping on the ground that another Petition for Certiorari under Rule

65 has been filed with the Court of Appeals by an indispensable party

(therein petitioner’s lessor), albeit not impleaded in the unlawful

detainer case and whose intervention was denied by the appellate

Regional Trial Court, but nevertheless was the party against whom the

adverse decisions were enforced and implemented."21

In support of his petition, VELUZ argues that he was denied

procedural due process when the Court of Appeals dismissed his

petition for review for failure to file a reply to RUDECON’s comment.

Moreover, the Motion to Show Cause filed by RUDECON was

resolved without giving him the opportunity to be heard on said

motion. VELUZ maintains that his failure to file a reply should not

have been construed by the Court of Appeals as an admission of the

allegation of forum shopping for the allegation of forum shopping is a

newly alleged matter. Under the Rules of Court, any new matter

alleged in an answer is deemed controverted should the opposing party

fail to file a reply.

VELUZ also contends that the claim of RUDECON that he is guilty of

forum shopping is devoid of any legal and factual basis considering

that he is not a party to the petition filed by SINGSON in CA-G.R. No.

49648. He claims that forum shopping exists when the elements of litis

pendentia are present or where a final judgment in one case would

amount to res judicata in the other. Since he is not a party in CA-G.R.

No. 49648, there can neither be litis pendentia or res judicata.

Finally, the petitioner prays that this Court resolve the petition on the

merits inasmuch as the facts of the present case are undisputed and the

pleadings of the parties necessary for the final determination of the

controversy are before this Court.

We find the petition partly meritorious.

First of all, the conclusion of the Court of Appeals that the allegation

made by RUDECON that VELUZ was guilty of forum shopping was

unrebutted since VELUZ failed to file a reply to the comment is

erroneous.

Under Section 10, Rule 6 of the 1997 Rules of Civil Procedure, any

new matter alleged by way of defense in the answer (or comment as in

this case) is deemed controverted should a party fail to file a reply

thereto. Except in cases where the answer alleges the defense of usury

in which case a reply under oath is required otherwise the allegation of

usury is deemed admitted, or is based on an actionable document in

which case a verified reply is necessary otherwise the genuineness and

due execution of said actionable document is generally deemed

admitted, the filing of a reply is merely optional as the new matters

raised in the answer are deemed controverted even without a reply.22

Considering that the allegation that VELUZ was guilty of forum-

shopping is a new matter raised in RUDECON’s comment, such

allegation should have been deemed controverted when the petitioners

did not file a reply thereto and it should not, as ruled by the Court of

Appeals, have been deemed unrebutted.

Secondly, the Court of Appeals also erred in basing its dismissal of

VELUZ’s petition on RUDECON’s Motion to Show Cause and not on

RUDECON’s comment.

RUDECON’s Motion to Show Cause essentially prayed that the

petitioner and his counsel ATTORNEY CAMACHO be ordered to

show cause why they should not be found guilty of direct and indirect

contempt on the ground of forum-shopping. Said motion was not filed

as an answer to the petition for it was a distinct pleading from

RUDECON’s comment which, aside from the petition, should have

been the basis for the Court of Appeal’s order of dismissal pursuant to

Section 4 of Rule 42 of the Rules of Court which provides that:

"SEC. 4. Action on the Petition. – The Court of Appeals may require

the respondent to file a comment on the petition, not a motion to

dismiss, within ten (10) days from notice, or dismiss the petition if it

finds the same to be patently without merit, prosecuted manifestly for

delay, or that the questions raised are too unsubstantial to require

consideration." (emphasis supplied)

In basing its order of dismissal on RUDECON’s motion to show

cause, the Court of Appeals in effect treated the same as a motion to

dismiss in contravention of the tenor of the above section.

We are however not persuaded by the assertion of the petitioner that he

was denied procedural due process.

The petitioner’s claim that the Court of Appeals never required him to

file a reply to the comment is belied by the Resolution of the Court of

Appeals dated April 15, 1999, which states:

"WITHOUT necessarily giving due course to this petition for certiorari

with a prayer for injunctive reliefs (sic), the Court RESOLVES to

require the responent to COMMENT thereon (not to file a Motion To

Dismiss) within ten (10) days from notice hereof, which Comment

may be deemed as an Answer in the event the petition is given due

course.

Petitioner may file a Reply within five (5) days from receipt of the

Comment.

Action on the temporary restraining order is held in abeyance pending

receipt of respondent’s comment on the petition.

SO ORDERED."23

(italics supplied)

The above order is plain and simple and clearly states that the

petitioner was given an opportunity to file a reply to the comment.

As regards the claim of forum shopping, a review of the two petitions

filed with the Court of Appeals shows that there was no forum

shopping. There is forum shopping when, in the two or more cases

pending, there is identity of parties, rights or causes of action and relief

sought.24

Forum shopping exists where the elements of litis pendentia

are present or when a final judgment in one case will amount to res

judicata in the other.25

For litis pendentia to exist, the following

requisites must be present:

1. Identity of parties, or at least such parties as those

representing the same interests in both actions;

2. Identity of rights asserted and reliefs prayed for, the reliefs

being founded on the same facts;

3. Identity with respect to the two preceding particulars in the

two cases, such that any judgment that may be rendered in the

pending case, regardless of which party is successful, would

amount to res judicata in the other case.26

In the present case, the petitioner admits that the facts and

circumstances of the two subject petitions and the causes of action and

relief sought therein are identical.27

However, we agree that there is

neither identity of parties nor an identity of rights asserted. CA-G.R.

No. SP No. 51492 is a petition for certiorari filed by VELUZ while

CA-G.R. SP No. 49648 is a petition for certiorari and prohibition filed

by SINGSON. In his petition, VELUZ asserts his right to possess as

lessee the subject property pursuant to a lease contract entered into by

him and the alleged owner SINGSON. On the other hand, SINGSON,

in his petition, asserts his better right to possess the subject property by

virtue of his ownership thereof arising from an alleged swapping

agreement between him and TOLENTINO to whom RUDECON had

allegedly sold the property. Although both VELUZ and SINGSON

were represented by the same ATTORNEY CAMACHO, it is clear

that VELUZ and SINGSON are asserting different rights.28

Moreover,

a judgment rendered in CA-G.R. No. SP No. 51492 will not amount to

res judicata as against SINGSON who was not a party to the appealed

case in the subject petition, i.e. MTC Civil Case No. 18436 or RTC

Civil Case No. Q-98-35326 (appeal of the MTC decision where

SINGSON’s motion to intervene was denied).

Accordingly, VELUZ cannot be held guilty of forum shopping

inasmuch as the requisites of litis pendentia have not concurred.

On August 25, 2000, RUDECON filed a Manifestation and Motion

where RUDECON claims that VELUZ and ATTORNEY CAMCAHO

again violated the prohibition on forum shopping when they failed to

inform this Court of the pendency of the following actions filed by

them concerning the same alleged facts and circumstances arising

from the present petition:

1. Commission on Bar Discipline Case No. 00-752 entitled

"Pablo Tolentino et. al. vs. Rudegelio D. Tacorda" – a

complaint for disbarment or suspension from the practice of

law filed against Attorney Rudegelio D. Tacorda,

RUDECON’s president;

2. I.S. No. 99-7152 entitled "Sisenando Singson vs. Rudegelio

D. Tacorda" for violation of Art. 316 (1) of the Revised Penal

Code;

3. I.S. No. 99-7171 entitled "Sisenando Singson vs. Rudegelio

D. Tacorda" for violation of Art. 318 of the Revised Penal

Code; and

4. CA-G.R. CV No. 64281 entitled "Sisenando Singson vs.

Rudecon Management Corporation" – the appeal of SINGSON

from the dismissal of his complaint for reconveyance of the

subject property.

Indeed, these cases involve the same facts and circumstances due to

the fact that they arise from the same alleged transactions claimed by

the respective parties. However, the causes of action in each of these

subsequent cases are distinct from the case at hand and are in fact

distinct from each other. Moreover, except for the disbarment

proceedings, it does not appear that VELUZ is a party to any of the

three other cases. Neither does it appear that CAMACHO acted as

counsel in any of them. Consequently there can be no forum shopping

since the requisites of litis pendentia do not obtain.

Finally, we deny the petitioner’s prayer that this Court decide the

substantive issues of the case inasmuch as the Court of Appeals has

not yet passed upon the factual issues raised by the parties.1âwphi1

WHEREFORE, the Resolution of the Court of Appeals dismissing

herein petitioners Petition for Certiorari is hereby REVERSED and

SET ASIDE and the case is remanded to the Court of Appeals for

further proceedings.

G.R. No. 117574 January 2, 1997

CONCRETE AGGREGATES CORPORATION, petitioner, vs. THE HONORABLE COURT OF APPEALS, HON. PRISCILA S. AGANA, Regional Trial Court of Cebu City, Branch 24, and VIVIEN S. SORIGUEZ, respondents.

BELLOSILLO, J.:

Does Rule 26 of the Revised Rules of Court require a party to respond to a Request for Admission of matters raised in his pleadings? Will his failure to place under oath his denials in his response to the request be deemed an admission of the matters sought to be admitted?

Petitioner is a domestic corporation engaged in the business of manufacturing and selling Bituminous Concrete Mix, Ready Mix Concrete and other construction materials. It has several plant sites in the country one of which is the Cebu plant site situated in Tuyan, Naga, Cebu. Private respondent on the other hand is engaged in the business of providing security services to various establishments under the name and style 101 Security and Detective Services.

Sometime in October 1990 petitioner retained the services of private respondent for its Cebu plant site. On 8 November 1991 it terminated the services of private respondent alleging that it was dissatisfied with the latter's services because she failed to prevent and promptly investigate a theft case which occurred in its Cebu plant site.

On 6 October 1992 private respondent Vivien S. Soriguez instituted an action with the Regional Trial Court of Cebu 1 for collection of unpaid fees for her security services rendered to petitioner. She also claimed that the termination of her services was unlawful so that she should be awarded moral damages.

Petitioner contended that its refusal to pay was justified because private respondent was answerable for the losses it incurred arising from the theft attributable to her fault. Petitioner thus claimed that there was legal set-off or compensation regarding the unpaid fees due private respondent and the amount of the stolen articles owned by petitioner.

On 30 August 1993 petitioner sent private respondent a Request for Admission by the latter of her responsibility of the theft that occurred on 5 June 1991 at the Cebu plant site. 2 Thereafter private respondent through counsel filed a Manifestation and Reply to the Request for Admission. 3 It was not under oath.

On 8 October 1993 petitioner filed a Motion for Summary Judgment positing that private respondent impliedly admitted the matters set forth in the Request for Admission by failing to respond under oath as required under Sec. 2, Rule 26, of the Rules of Court. 4 Petitioner contended that the manifestation and reply not being verified was ineffectual and thus should be stricken off the records. Private respondent countered that her reply although not under oath effectively denied the matters set forth in the request.

Public respondents ruled in favor of private respondent holding that the circumstances warranted a relaxation of the rules in the interest of justice. 5 The trial court rationalized that —

While it is desirable that the Rules of Court be faithfully and even meticulously observed, courts should not be so strict about procedural lapses as in this case which do not really impair the proper administration of justice. Considering that the protection of the substantive rights of the parties is paramount over mere technicalities, the court elects to deny defendant's motion for summary judgment.

6

Respondent courts further ruled that a summary judgment was improper because the dispute involved factual issues which could only be resolved in a full-blown hearing. 7

After the trial court denied its motion for reconsideration petitioner elevated the matter to the Court of Appeals in a special civil action for certiorari but the latter likewise denied the petition for lack of merit; hence, the instant petition.

The pivotal issue in this case is the effect of the Request for Admission filed by petitioner and, consequently, whether private

respondent may be considered to have impliedly admitted the matters referred to in the request when she filed a manifestation and reply that was not under oath. 8

We deny the petition.

The Request for Admission of petitioner does not fall under Rule 26 of the Rules of Court. As we held in Po v. Court of Appeals 9 and Briboneria v. Court of Appeals, 10 Rule 26 as a mode of discovery contemplates of interrogatories that would clarify and tend to shed light on the truth or falsity of the allegations in a pleading. That is its primary function. It does not refer to a mere reiteration of what has already been alleged in the pleadings.

A cursory reading of petitioner's Request for Admission clearly shows that it contains the same material averments in his Answer to respondent's Complaint in the trial court. Petitioner merely recopied or reproduced in its Request for Admission its affirmative defenses and counterclaims alleged in its Answer. As we held in Bo v. CA, 11 petitioner's request constitutes an utter redundancy and a useless, pointless process which the respondent should not be subjected to. In the first place, what the petitioner seeks to be admitted by private respondent is the very subject matter of the complaint. In effect, petitioner would want private respondent to deny her allegations in her verified Complaint and admit the allegations in the Answer of petitioner (Manifestation and Reply to Request for Admission). Plainly, this is illogical if not preposterous. Respondent cannot be said to have admitted the averments in the Answer of petitioner just because she failed to have her response to the request placed under oath since these are the very matters she raises in her verified Complaint in the court below. The following allegations specifically contained therein are self-evident —

9. That, in compliance thereto (sic) (referring to the request for investigation), herein plaintiff, through her authorized representative, went at (sic) the place and conducted the necessary investigation and found out that the herein plaintiff was not responsible for those alleged losses simply because of the following, to wit:

a. Those alleged losses like Blower, Oil Filter, transmission and others were taken and brought outside the guarded place by certain Danny Baterna, driver of defendant, as reflected in the Log Book of the plaintiff . . .

12

Clearly, therefore, private respondent need not reply to the Request for Admission because her Complaint itself controverts the matters set forth in the Answer of petitioner which were merely reproduced in the request. In Uy Chao v. De la Rama Steamship 13 we observed that the purpose of the rule governing requests for admission of facts and genuineness of documents is to expedite trial and to relieve parties of the costs of proving facts which will not be disputed on trial and the truth of which can be ascertained by reasonable inquiry.

In the aforesaid cases of Po and Briboneria we held that —

A party should not be compelled to admit matters of fact already admitted by his pleading and concerning which there is no issue, nor should he be required to make a second denial of those already denied in his answer to the complaint.

14

To this we add that a party should not be made to deny matters already averred in his complaint. At this point, it is necessary to emphasize what this Court laid down in the same Po and Briboneria cases —

A request for admission is not intended to merely reproduce or reiterate the allegations of the requesting party's pleading but should set forth relevant evidentiary matters of fact, or documents described in and exhibited with the request, whose purpose is to establish said party's cause of action or defense.

15

Since the answer of private respondent to the request is no longer required in the instant case, it therefore becomes unnecessary to dwell on the issue of the propriety of an answer that is not under oath. Even assuming that a response to the request is needed, private respondent had already substantially complied with the requirement of the law when she specifically denied the material allegations of the petitioner in her

Manifestation and Reply to the Request for Admission. Although not under oath the reply to the request readily showed that the intent of private respondent was to deny the matters set forth in the Request for Admission. That the reply is not under oath is merely a formal and not a substantive defect. This procedural lapse may be dispensed with if the circumstances call for the dispensing of the rule in the interest of justice. While we commend petitioner's zeal in promoting faithful adherence to the rules of procedure we cannot ignore the well-entrenched doctrine that all pleadings should be liberally construed as to do substantial justice. 16

There being genuine issues of fact between the private parties, public respondents correctly denied the motion of petitioner for summary judgment. Where facts pleaded by the parties are disputed or contested proceedings for summary judgment cannot take the place of trial. 17 Trial courts have limited authority to render summary judgments and may do so only when there is clearly no genuine issue as to any material fact. 18 Verily, there is a need to determine by presentation of evidence if respondent is really liable for the stolen articles and for violating its contract for security services with petitioner. Until these issues are determined no legal compensation can take place between the parties. This factual dispute can only be resolved by trying the case on the merits, a process which need not take long to conclude. 19

WHEREFORE, finding no reversible error committed by the respondent Court of Appeals, as well as by the Regional Trial Court of Cebu, the instant petition is DENIED and the records of this case are remanded to the court of origin for further proceedings.

G.R. No. 158370 August 17, 2006

SPOUSES MICHAEL UY & BONITA UY, Petitioners,

vs.

EDUARDO ARIZA, ERLINDA A. ABDON, BENJAMIN ARIZA,

TERESITA A. SIMPORIOS, HEIRS OF MARIANO ARIZA, JR.,

namely: JUANITA L. ARIZA, DENNIS L. ARIZA, ROLDAN L.

ARIZA, & JOVANNI L. ARIZA; and the Heirs of FAUSTO

ARIZA, namely: JESUSA ARIZA, THELMA SOLLANO,

ARTURO ARIZA, ELDINA CONOS, VILMA SABERON, &

REBECCA PADULLO, Respondents.

D E C I S I O N

PUNO, J.:

The facts:

On October 8, 1996, spouses Michael and Bonita Uy, petitioners,

purchased 200 square meters of the parcel of land designated as Lot

No. 3229-C-2-F, covered by Transfer Certificate of Title (TCT) No. T-

20007, from respondents. The contract stipulated that petitioners had

the right of choice to designate which portion of Lot No. 3229-C-2-F

would be the subject of the sale. 1

Petitioners exercised their right to choose within two to three months

from the sale, informing respondents that they have selected and in

fact occupied around 200 square meters of a portion of land. 2

On August 4, 1997, petitioners purchased another 200 square meters of

the same Lot No. 3229-C-2-F, with the same option to choose which

portion. They selected and occupied an adjoining portion to the lot in

their first sale. 3

It appears that the parcels of land petitioners had chosen and occupied

were already titled in the names of the Delgados, namely, Carlos,

Allan and Antonio, Jr. Although originally part of Lot No. 3229-C-2-

F, the two parcels of land were part of some 3,500 square meters that

were purportedly sold by the respondents to the Delgados on July 31,

1985. This deed of sale to the Delgados was annotated on TCT No. T-

20007 (covering Lot No. 3229-C-2-F) on June 10, 1993, and a new

title for the covered area was issued on April 21, 1994, which was

likewise annotated on TCT No. T-20007 on the same date. 4 Thus, at

the time of the first sale by the respondents to petitioners, the two

parcels of land had been cancelled from Lot No. 3229-C-2-F (covered

by TCT No. T-20007), and were already part of Lot No. 3229-C-2-F-1

(covered by TCT No. T-39106). 5

Petitioners were sued for unlawful detainer by the Delgados. In

September 1998, petitioners entered into a compromise agreement

with the Delgados and surrendered possession of the subject parcels of

land. Petitioners compromised the case without giving notice to

respondents. 6

Thereafter, petitioners demanded from respondents that they be

allowed to choose again from Lot No. 3229-C-2-F. When respondents

refused, petitioners filed, on March 12, 1999, a case for specific

performance with delivery of possession of real property and damages. 7 Petitioners anchored their claim for specific performance on the

averment that they "could not exercise [their] right to choose the

portion bought from the parcel of land afore-described because the

portion pointed out by the [petitioners] were already sold and claimed

by third persons…" 8

Respondents filed their answer and by way of special and affirmative

defenses alleged that they had already complied with their obligation

to deliver, as petitioners had already chosen and been in possession of

the parcels of land they chose. 9 Respondents also faulted petitioners

for losing possession of the parcels of land by entering into a

compromise agreement with the Delgados on two grounds: first,

because respondents have allegedly initiated the necessary legal steps

to defend their possessory rights to the disputed land by filing a case

for the declaration of nullity of the title of the Delgados, and second,

because petitioners failed to interpose a third-party complaint to

implead respondents in the unlawful detainer case. 10

The trial court denied respondents’ motion to dismiss based on their

Special and Affirmative Defenses as well as their motion for

reconsideration. 11

They went to the Court of Appeals on an action for

certiorari and prohibition contending that the trial court committed

grave abuse of discretion in holding that:

1. petitioners had a cause of action for specific performance against

respondents;

2. petitioners erroneously selected the parcels of land by some

unfortunate turn of events so that the portions selected were not owned

by respondents but the Delgados; and

3. the parcels of land were owned by the Delgados, a conclusion that

was premature considering that the case for the declaration of nullity

of the Delgados’ title covering the parcels was pending before the trial

court.

The Court of Appeals reversed and set aside the orders of the trial

court. It held that petitioners had no cause of action to file a case of

specific performance against respondents. 12

It ruled that the proper

remedy of the petitioners is an action for enforcement of warranty

against eviction.

Petitioners now come before this Court on a petition for review on the

following issues:

(1) whether the complaint filed in the RTC by petitioners fails to state

a cause of action for specific performance with delivery of possession

of real property and damages against respondents; and

(2) whether the RTC’s denial of the motion to dismiss on lack of cause

of action was the proper subject of certiorari before the Court of

Appeals.

We deny the petition.

We quote with approval the following ruling of the appellate court, viz:

At the outset, it could already be seen that indeed, [petitioners] have no

cause of action against [respondents]. The case for specific

performance which was filed by [petitioners] against [respondents] is

not the proper remedy in this case. Rather, said action was purely an

afterthought on the part of [petitioners] when they were eventually

evicted from the lots they bought from [respondents].

The facts of the case are very clear. [Petitioners] bought from

[respondents] a 200 square meter lot which was part of a bigger parcel

of land covered by TCT No. 20007 registered in the names of

[respondents], and which [petitioners] immediately took possession of.

After a year, [petitioners] again bought from [respondents] and took

possession of the adjacent lot also measuring 200 square meters. Since

the sale, [petitioners] had been in peaceful possession of the lots until

they were evicted from the same by third persons claiming to be the

owners of the said lots. Thus, if [petitioners] have a cause of action

against [respondents], it would be one for the enforcement of warranty

against eviction and not one for specific performance.

The core of [petitioners’] argument to support their action for specific

performance was that [respondents] failed to deliver to them the lots

subject matter of the sale, since what was delivered were not owned by

[respondents] but by third persons. They likewise maintain that they

were not able to exercise their choice on which lot to occupy as agreed

upon by them. We do not find these arguments tenable. The truth of

the matter is that [respondents] were able to deliver the said parcels of

land to [petitioners]. It could not be said that [petitioners were]

deprived of their choice on which parcel of land they were to buy and

occupy. The fact that they even decided to buy the lot adjacent to the

first lot they bought would clearly indicate that the said lots were their

choice. Moreover, [petitioners] had been enjoying possession of the

same until an unlawful detainer case was filed against them by third

persons. After having enjoyed the property for sometime, [petitioners]

cannot now come before the court claiming that [respondents] failed to

deliver the property subject of the sale.

There is no denying also that these lots were originally part of a bigger

parcel of land owned by [respondents] and covered by TCT No.

20007. That third persons armed with a certificate of title in their favor

suddenly surfaced claiming to be the owners of the subject lots does

not automatically render the delivery made by [respondents] to

[petitioners] ineffectual. Stated otherwise, although third persons later

on claimed ownership over the property, it does not mean that

[respondents] failed to deliver the lots subject matter of the sale. It is

also worth mentioning that the claim of these third persons to the

subject lots is being disputed by [respondents] as in fact, they filed an

action for the declaration of nullity of the title of Allan, Carlos and

Antonio Delgado over the subject lots and which up to now is still

pending before the Court of Appeals. This action on the part of

[respondents] would show that they do not recognize the right of these

third persons to the subject lots and that [respondents] still maintain

that they are the lawful owners of the same.

What is before Us is a clear case of eviction. Thus, the action for

specific performance filed by [petitioners] against [respondents] must

necessarily fail. If at all, [petitioners] may file an action for the

enforcement of warranty in case of eviction which every vendor of a

parcel of land is enjoined by law to guarantee as provided under

Article 1548 of the New Civil Code:

Art. 1548. Eviction shall take place whenever by a final judgment

based on a right prior to the sale or an act imputable to the vendor, the

vendee is deprived of the whole or part of the thing purchased.

The vendor shall answer for the eviction even though nothing has been

said in the contract on the subject.

The contracting parties, however, may increase, diminish or suppress

this legal obligation of the vendor.

But even if [petitioners] would file an action for the enforcement of

warranty in case of eviction against [respondents], We are afraid that

the same will not prosper. The records of the case reveal that the

unlawful detainer case filed by third persons against [petitioners],

which led to the ouster of the latter from the subject lots, was decided

by compromise agreement without impleading [respondents] as third-

party defendants. It should be stressed that in order for the case to

prosper, it is a precondition that the seller must have been summoned

in the suit for the eviction of the buyer. This rule is provided under the

provisions of Articles 1558 and 1559 of the New Civil Code, to wit:

Art. 1558. The vendor shall not be obliged to make good the proper

warranty, unless he is summoned in the suit for eviction at the instance

of the vendee.

Art. 1559. The defendant vendee shall ask, within the time fixed in the

Rules of Court for answering the complaint, that the vendor be made a

co-defendant.

Applying the above-quoted provisions of law, the Supreme Court

enumerated the requisites in the enforcement of a vendor’s liability for

eviction, in the case of Maria Luisa De Leon Escaler and Ernesto

Escaler v. Court of Appeals, et al., [G.R. No. L-42636. August 1,

1985.], to wit:

In order that a vendor’s liability for eviction may be enforced, the

following requisites must concur – a) there must be a final judgment;

b) the purchaser has been deprived of the whole or part of the thing

sold; c) said deprivation was by virtue of a right prior to the sale made

by the vendor; and d) the vendor has been summoned and made co-

defendant in the suit for eviction at the instance of the vendee. In the

case at bar, the fourth requisite – that of being summoned in the suit

for eviction (Case No. 4252) at the instance of the vendee – is not

present.

We need only add that petitioners could have filed a third-party

complaint against the respondents when they were sued for eviction by

the

Delgados under Rule 6, Section 11. 13

In Firestone Tire and Rubber

Co. of the Philippines v. Tempongko, 14

we explained the function of a

third-party complaint, viz:

The third-party complaint, is x x x a procedural device whereby a

‘third party’ who is neither a party nor privy to the act or deed

complained of by the plaintiff, may be brought into the case with leave

of court, by the defendant, who acts as third-party plaintiff to enforce

against such third-party defendant a right for contribution, indemnity,

subrogation or any other relief, in respect of the plaintiff’s claim. The

third-party complaint is actually independent of and separate and

distinct from the plaintiff’s complaint. Were it not for this provision of

the Rules of Court, it would have to be filed independently and

separately from the original complaint by the defendant against the

third-party. But the Rules permit defendant to bring in a third-party

defendant or so to speak, to litigate his separate cause of action in

respect of plaintiff’s claim against a third party in the original and

principal case with the object of avoiding circuitry of action and

unnecessary proliferation of lawsuits and of disposing expeditiously in

one litigation the entire subject matter arising from one particular set

of facts. Prior leave of Court is necessary, so that where the allowance

of a third-party complaint would delay the resolution of the original

case, such as when the third-party defendant cannot be located or

where matters extraneous to the issue of possession would

unnecessarily clutter a case of forcible entry, or the effect would be to

introduce a new and separate controversy into the action, the salutary

object of the rule would not be defeated, and the court should in such

cases require the defendant to institute a separate action. x x x.

If petitioners filed the third-party complaint against the respondents,

they could have sought from the respondents "x x x contribution,

indemnity, subrogation or any other relief" in respect of the claim of

the Delgados. The phrase "any other relief" includes a claim of a

vendee for warranty against the vendor. 15

IN VIEW WHEREOF, the petition is denied.

G.R. No. 119321 March 18, 1997

CATALINO F. BAÑEZ and ROMEO P. BUSUEGO, petitioners, vs. COURT OF APPEALS and REPUBLIC PLANTERS BANK, respondents.

BELLOSILLO, J.:

AYALA CORPORATION issued on 23 December 1987 BPI Check No. 707802 for P33,226,685.69 payable to PAL Employees' Savings and Loan Association, Inc. (PESALA). The check with the words "FOR PAYEE'S ACCOUNT ONLY" written on its face was delivered in trust to Catalino Bañez in his capacity as President of PESALA. However, on the same date, Bañez and his co-officers Romeo Busuego and Renato Lim

deposited the check in their joint account with respondent Republic Planters Bank, Cubao Branch, which was not an official depositary bank of PESALA. Later, Bañez, Busuego and Lim withdrew the amount and failed to account for it to PESALA.

On 21 April 1992, aside from a criminal case for estafa against its officers Bañez, Busuego and Lim, PESALA sued Republic Planters Bank (RPB) for the face value of the check and P500,000.00 as damages for allowing the deposit and encashment of the check despite the fact that it was a crossed check payable only to the account of PESALA, to its great prejudice and in violation of banking laws in the country. 1

On 14 March 1994 RPB moved for leave to file a third-party complaint against Catalino Bañez, Romeo Busuego, Renato Lim and Alberto Barican, the latter as manager of RPB, Cubao Branch, alleging that they were solely and exclusively responsible for the loss of the value of the check through their misrepresentation which led the bank to believe that they were authorized to deposit and withdraw the amount. The motion was granted.

Meanwhile on 6 April 1994 PESALA and RPB (by then known as PNB-RB) 2 forged a compromise agreement under which PNB-RB agreed to pay PESALA P20,226,685.00. PESALA, in turn, undertook to assist PNB-RB in prosecuting the third-party defendants for the liability assumed by the bank.

On 13 April 1994 the trial court approved the compromise.

Upon the foregoing amicable settlement, third-party defendant Lim moved to dismiss the third-party complaint on the ground that it could not stand on its own after the termination of the main complaint by compromise since the third-party complaint was but an incident and a continuation of the main case. Third-party defendants Bañez and Busuego, aside from adopting the ground invoked by defendant Lim, likewise moved to dismiss on grounds of lis pendens, forum shopping, lack of jurisdiction and cause of action.

On 14 July 1994 the trial court deferred action on the motion to dismiss anchored on grounds of lis pendens and forum shopping, but denied the motion outright anchored on grounds of lack of jurisdiction and termination of the principal complaint. 3 The motion of third-party defendants to reconsider the order was denied on 27 October 1994 since the compromise between plaintiff PESALA and third-party plaintiff PNB-RB did not operate to automatically dismiss the third-party complaint as the latter was actually independent of, and separate and distinct from, the plaintiff's complaint. 4

On 1 December 1994 petitioners Bañez and Busuego instituted a special civil action for certiorari with the Court of Appeals imputing grave abuse of discretion on the part of the trial court in issuing the Orders of 14 July and 27 October 1994 attaching duplicate original copies thereof. On 14 December 1994 the Special Fifth Division of the Court of Appeals, without necessarily giving due course to the petition, ordered respondents to comment thereon. 5 However, on 31 January 1995, another Resolution 6 was issued by the appellate court, this time through its Special Eleventh Division, dismissing the petition for failure of petitioners to attach certified true copies of the questioned orders as required under Sec. 2, par. (a), Rule 6, of the Revised Internal Rules of the Court of Appeals. The motion for reconsideration was denied. 7 Hence, this petition.

Two issues are presented before us: whether respondent Court of Appeals erred in dismissing the special civil action for certiorari for failure of petitioners to attach certified true copies, as opposed to duplicate originals, of the questioned orders; and whether the earlier dismissal (by virtue of compromise) of the main complaint warrants the automatic dismissal of the third-party complaint filed in consequence thereof.

On the procedural issue, petitioners do not deny their failure to attach certified true copies of the questioned Orders dated 14 July and 27 October 1994. However they contend that the duplicate originals thereof which they attached to their petition constitute sufficient compliance with the requirements of Sec. 2,

par. (a), Rule 6, of the Revised Internal Rules of the Court of Appeals 8 since Revised Circular No. 1-88 issued by the Supreme Court itself allows either a clearly legible duplicate original or certified true copy of the assailed decision, judgment, resolution or order to be attached to the petition. 9 Thus, petitioners posit that Sec. 2, par. (a), Rule 6, of the Revised Internal Rules of the Court of Appeals should not be read in a "myopic" manner but, rather, liberally consistent and in conjunction with SC Revised Circular No. 1-88.

On the other hand, respondent PNB-RB argues that Revised Circular No. 1-88 cannot be successfully invoked by petitioners since it pertains only to requirements for petitions filed with the Supreme Court, not with the Court of Appeals. In the latter case, its Revised Internal Rules, which mandate that certified true copies of the questioned order must be attached to a petition in special civil actions for certiorari, apply.

We had occasion to rule that the submission of a duplicate copy of the questioned order of the trial court (bearing its seal) in a petition for certiorari constitutes substantial compliance with the rule requiring submission of the certified copies of the orders complained of. 10 However, a similar liberal construction cannot be applied in favor of petitioners since courts suspend their own rules or except a case from them only when substantial justice so warrants, as when the merit of a party's cause is apparent and outweighs consideration of non-compliance with certain formal requirements. 11 To reiterate, a similar relaxation of procedural rules is not warranted in the case at bench due to the lack of merit of petitioners' cause.

Petitioners argue that the third-party complaint filed against them by PNB-RB should have been immediately dismissed in view of the prior dismissal of the main complaint filed against PNB-RB by PESALA. Since jurisdiction of the trial court over the main action has been terminated, its jurisdiction over the third-party complaint necessarily ended as well since the latter is but a continuation of, or ancillary to, the main action.

The above contention is devoid of merit. Petitioners liken a third-party complaint to a cross-claim and then, by analogy, apply the ruling in Ruiz Jr. v. Court of Appeals 12 where the Court said that the dismissal of the complaint divested the cross-claimants of whatever appealable interest they might have had before and made the cross-claim itself no longer viable. 13

A third-party complaint is indeed similar to a cross-claim, except only with respect to the persons against whom they are directed. 14 However, the ruling in Ruiz cannot be successfully invoked by petitioners. In Ruiz we declared that the dismissal of the main action rendered the cross-claim no longer viable only because the main action was categorically dismissed for lack of cause of action. Hence, since defendants could no longer be held liable under the main complaint, no reason existed for them anymore to sue their co-party under the cross-claim.

In sharp contrast thereto, the termination of the main action between PESALA and PNB-RB was not due to any finding that it was bereft of any basis. On the contrary, further proceedings were rendered unnecessary only because defendant (third-party plaintiff) PNB-RB, to avoid a protracted litigation, voluntarily admitted liability in the amount of P20,226,685.00. Hence, the termination of the main action between PESALA and PNB-RB could not have rendered lifeless the third-party complaint filed against petitioners, as it did the cross-claim in Ruiz Jr. v. Court of Appeals, since it involved a finding of liability on the part of PNB-RB even if it be by compromise.

Petitioners allege that it would be an injustice to them if they should be made to carry the burden of contribution or indemnity for the liability voluntarily assumed by respondent PNB-RB in the compromise agreement to which they were never parties. But no injustice will result. A continuation of the proceedings with respect to the third-party complaint will not ipso facto subject petitioners, as third-party defendants, to liability as it will only provide the parties with the occasion to litigate their respective claims and defenses. Petitioners' assertion that they are not liable for the obligation voluntarily assumed by PNB-RB

in the compromise is but a defense to resist the third-party complaint which they can properly raise in the course of the trial and prove by whatever evidence they may have on the matter.

WHEREFORE, the petition is DENIED. The questioned Resolutions of the Court of Appeals dated 31 January and 22 February 1995 are AFFIRMED, with costs against petitioners.

G.R. No. 166620 April 20, 2010

ATTY. SYLVIA BANDA, CONSORICIA O. PENSON, RADITO

V. PADRIGANO, JEAN R. DE MESA, LEAH P. DELA CRUZ,

ANDY V. MACASAQUIT, SENEN B. CORDOBA, ALBERT

BRILLANTES, GLORIA BISDA, JOVITA V. CONCEPCION,

TERESITA G. CARVAJAL, ROSANNA T. MALIWANAG,

RICHARD ODERON, CECILIA ESTERNON, BENEDICTO

CABRAL, MA. VICTORIA E. LAROCO, CESAR ANDRA,

FELICISIMO GALACIO, ELSA R. CALMA, FILOMENA A.

GALANG, JEAN PAUL MELEGRITO, CLARO G. SANTIAGO,

JR., EDUARDO FRIAS, REYNALDO O. ANDAL, NEPHTALIE

IMPERIO, RUEL BALAGTAS, VICTOR R. ORTIZ,

FRANCISCO P. REYES, JR., ELISEO M. BALAGOT, JR.,

JOSE C. MONSALVE, JR., ARTURO ADSUARA, F.C.

LADRERO, JR., NELSON PADUA, MARCELA C. SAYAO,

ANGELITO MALAKAS, GLORIA RAMENTO, JULIANA

SUPLEO, MANUEL MENDRIQUE, E. TAYLAN, CARMELA

BOBIS, DANILO VARGAS, ROY-LEO C. PABLO, ALLAN

VILLANUEVA, VICENTE R. VELASCO, JR., IMELDA

ERENO, FLORIZA M. CATIIS, RANIEL R. BASCO, E.

JALIJALI, MARIO C. CARAAN, DOLORES M. AVIADO,

MICHAEL P. LAPLANA, GUILLERMO G. SORIANO, ALICE

E. SOJO, ARTHUR G. NARNE, LETICIA SORIANO,

FEDERICO RAMOS, JR., PETERSON CAAMPUED, RODELIO

L. GOMEZ, ANTONIO D. GARCIA, JR., ANTONIO GALO, A.

SANCHEZ, SOL E. TAMAYO, JOSEPHINE A.M. COCJIN,

DAMIAN QUINTO, JR., EDLYN MARIANO, M.A. MALANUM,

ALFREDO S. ESTRELLA, and JESUS MEL SAYO, Petitioners,

vs.

EDUARDO R. ERMITA, in his capacity as Executive Secretary,

The Director General of the Philippine Information Agency and

The National Treasurer, Respondents.

D E C I S I O N

LEONARDO-DE CASTRO, J.:

The present controversy arose from a Petition for Certiorari and

prohibition challenging the constitutionality of Executive Order No.

378 dated October 25, 2004, issued by President Gloria Macapagal

Arroyo (President Arroyo). Petitioners characterize their action as a

class suit filed on their own behalf and on behalf of all their co-

employees at the National Printing Office (NPO).

The NPO was formed on July 25, 1987, during the term of former

President Corazon C. Aquino (President Aquino), by virtue of

Executive Order No. 2851 which provided, among others, the creation

of the NPO from the merger of the Government Printing Office and

the relevant printing units of the Philippine Information Agency (PIA).

Section 6 of Executive Order No. 285 reads:

SECTION 6. Creation of the National Printing Office. – There is

hereby created a National Printing Office out of the merger of the

Government Printing Office and the relevant printing units of the

Philippine Information Agency. The Office shall have exclusive

printing jurisdiction over the following:

a. Printing, binding and distribution of all standard and

accountable forms of national, provincial, city and municipal

governments, including government corporations;

b. Printing of officials ballots;

c. Printing of public documents such as the Official Gazette,

General Appropriations Act, Philippine Reports, and

development information materials of the Philippine

Information Agency.

The Office may also accept other government printing jobs, including

government publications, aside from those enumerated above, but not

in an exclusive basis.

The details of the organization, powers, functions, authorities, and

related management aspects of the Office shall be provided in the

implementing details which shall be prepared and promulgated in

accordance with Section II of this Executive Order.

The Office shall be attached to the Philippine Information Agency.

On October 25, 2004, President Arroyo issued the herein assailed

Executive Order No. 378, amending Section 6 of Executive Order No.

285 by, inter alia, removing the exclusive jurisdiction of the NPO over

the printing services requirements of government agencies and

instrumentalities. The pertinent portions of Executive Order No. 378,

in turn, provide:

SECTION 1. The NPO shall continue to provide printing services to

government agencies and instrumentalities as mandated by law.

However, it shall no longer enjoy exclusive jurisdiction over the

printing services requirements of the government over standard and

accountable forms. It shall have to compete with the private sector,

except in the printing of election paraphernalia which could be shared

with the Bangko Sentral ng Pilipinas, upon the discretion of the

Commission on Elections consistent with the provisions of the

Election Code of 1987.

SECTION 2. Government agencies/instrumentalities may source

printing services outside NPO provided that:

2.1 The printing services to be provided by the private sector is

superior in quality and at a lower cost than what is offered by

the NPO; and

2.2 The private printing provider is flexible in terms of meeting

the target completion time of the government agency.

SECTION 3. In the exercise of its functions, the amount to be

appropriated for the programs, projects and activities of the NPO in the

General Appropriations Act (GAA) shall be limited to its income

without additional financial support from the government. (Emphases

and underscoring supplied.)

Pursuant to Executive Order No. 378, government agencies and

instrumentalities are allowed to source their printing services from the

private sector through competitive bidding, subject to the condition

that the services offered by the private supplier be of superior quality

and lower in cost compared to what was offered by the NPO.

Executive Order No. 378 also limited NPO’s appropriation in the

General Appropriations Act to its income.

Perceiving Executive Order No. 378 as a threat to their security of

tenure as employees of the NPO, petitioners now challenge its

constitutionality, contending that: (1) it is beyond the executive powers

of President Arroyo to amend or repeal Executive Order No. 285

issued by former President Aquino when the latter still exercised

legislative powers; and (2) Executive Order No. 378 violates

petitioners’ security of tenure, because it paves the way for the gradual

abolition of the NPO.

We dismiss the petition.

Before proceeding to resolve the substantive issues, the Court must

first delve into a procedural matter. Since petitioners instituted this

case as a class suit, the Court, thus, must first determine if the petition

indeed qualifies as one. In Board of Optometry v. Colet,2 we held that

"[c]ourts must exercise utmost caution before allowing a class suit,

which is the exception to the requirement of joinder of all

indispensable parties. For while no difficulty may arise if the decision

secured is favorable to the plaintiffs, a quandary would result if the

decision were otherwise as those who were deemed impleaded by their

self-appointed representatives would certainly claim denial of due

process."

Section 12, Rule 3 of the Rules of Court defines a class suit, as

follows:

Sec. 12. Class suit. – When the subject matter of the controversy is one

of common or general interest to many persons so numerous that it is

impracticable to join all as parties, a number of them which the court

finds to be sufficiently numerous and representative as to fully protect

the interests of all concerned may sue or defend for the benefit of all.

Any party in interest shall have the right to intervene to protect his

individual interest.

From the foregoing definition, the requisites of a class suit are: 1) the

subject matter of controversy is one of common or general interest to

many persons; 2) the parties affected are so numerous that it is

impracticable to bring them all to court; and 3) the parties bringing the

class suit are sufficiently numerous or representative of the class and

can fully protect the interests of all concerned.

In Mathay v. The Consolidated Bank and Trust Company,3 the Court

held that:

An action does not become a class suit merely because it is designated

as such in the pleadings. Whether the suit is or is not a class suit

depends upon the attending facts, and the complaint, or other pleading

initiating the class action should allege the existence of the necessary

facts, to wit, the existence of a subject matter of common interest, and

the existence of a class and the number of persons in the alleged class,

in order that the court might be enabled to determine whether the

members of the class are so numerous as to make it impracticable to

bring them all before the court, to contrast the number appearing on

the record with the number in the class and to determine whether

claimants on record adequately represent the class and the subject

matter of general or common interest. (Emphases ours.)

Here, the petition failed to state the number of NPO employees who

would be affected by the assailed Executive Order and who were

allegedly represented by petitioners. It was the Solicitor General, as

counsel for respondents, who pointed out that there were about 549

employees in the NPO.4 The 67 petitioners undeniably comprised a

small fraction of the NPO employees whom they claimed to represent.

Subsequently, 32 of the original petitioners executed an Affidavit of

Desistance, while one signed a letter denying ever signing the

petition,5 ostensibly reducing the number of petitioners to 34. We note

that counsel for the petitioners challenged the validity of the desistance

or withdrawal of some of the petitioners and insinuated that such

desistance was due to pressure from people "close to the seat of

power."6 Still, even if we were to disregard the affidavit of desistance

filed by some of the petitioners, it is highly doubtful that a sufficient,

representative number of NPO employees have instituted this

purported class suit. A perusal of the petition itself would show that of

the 67 petitioners who signed the Verification/Certification of Non-

Forum Shopping, only 20 petitioners were in fact mentioned in the

jurat as having duly subscribed the petition before the notary public. In

other words, only 20 petitioners effectively instituted the present case.

Indeed, in MVRS Publications, Inc. v. Islamic Da’wah Council of the

Philippines, Inc.,7 we observed that an element of a class suit or

representative suit is the adequacy of representation. In determining

the question of fair and adequate representation of members of a class,

the court must consider (a) whether the interest of the named party is

coextensive with the interest of the other members of the class; (b) the

proportion of those made a party, as it so bears, to the total

membership of the class; and (c) any other factor bearing on the ability

of the named party to speak for the rest of the class.

Previously, we held in Ibañes v. Roman Catholic Church8 that where

the interests of the plaintiffs and the other members of the class they

seek to represent are diametrically opposed, the class suit will not

prosper.

It is worth mentioning that a Manifestation of Desistance,9 to which

the previously mentioned Affidavit of Desistance10

was attached, was

filed by the President of the National Printing Office Workers

Association (NAPOWA). The said manifestation expressed

NAPOWA’s opposition to the filing of the instant petition in any

court. Even if we take into account the contention of petitioners’

counsel that the NAPOWA President had no legal standing to file such

manifestation, the said pleading is a clear indication that there is a

divergence of opinions and views among the members of the class

sought to be represented, and not all are in favor of filing the present

suit. There is here an apparent conflict between petitioners’ interests

and those of the persons whom they claim to represent. Since it cannot

be said that petitioners sufficiently represent the interests of the entire

class, the instant case cannot be properly treated as a class suit.

As to the merits of the case, the petition raises two main grounds to

assail the constitutionality of Executive Order No. 378:

First, it is contended that President Arroyo cannot amend or repeal

Executive Order No. 285 by the mere issuance of another executive

order (Executive Order No. 378). Petitioners maintain that former

President Aquino’s Executive Order No. 285 is a legislative

enactment, as the same was issued while President Aquino still had

legislative powers under the Freedom Constitution;11

thus, only

Congress through legislation can validly amend Executive Order No.

285.

Second, petitioners maintain that the issuance of Executive Order No.

378 would lead to the eventual abolition of the NPO and would violate

the security of tenure of NPO employees.

Anent the first ground raised in the petition, we find the same patently

without merit.

It is a well-settled principle in jurisprudence that the President has the

power to reorganize the offices and agencies in the executive

department in line with the President’s constitutionally granted power

of control over executive offices and by virtue of previous delegation

of the legislative power to reorganize executive offices under existing

statutes.

In Buklod ng Kawaning EIIB v. Zamora,12

the Court pointed out that

Executive Order No. 292 or the Administrative Code of 1987 gives the

President continuing authority to reorganize and redefine the functions

of the Office of the President. Section 31, Chapter 10, Title III, Book

III of the said Code, is explicit:

Sec. 31. Continuing Authority of the President to Reorganize his

Office. – The President, subject to the policy in the Executive Office

and in order to achieve simplicity, economy and efficiency, shall have

continuing authority to reorganize the administrative structure of the

Office of the President. For this purpose, he may take any of the

following actions:

(1) Restructure the internal organization of the Office of the

President Proper, including the immediate Offices, the

President Special Assistants/Advisers System and the Common

Staff Support System, by abolishing, consolidating or merging

units thereof or transferring functions from one unit to another;

(2) Transfer any function under the Office of the President to

any other Department or Agency as well as transfer functions

to the Office of the President from other Departments and

Agencies; and

(3) Transfer any agency under the Office of the President to

any other department or agency as well as transfer agencies to

the Office of the President from other Departments or agencies.

(Emphases ours.)

Interpreting the foregoing provision, we held in Buklod ng Kawaning

EIIB, thus:

But of course, the list of legal basis authorizing the President to

reorganize any department or agency in the executive branch does not

have to end here. We must not lose sight of the very source of the

power – that which constitutes an express grant of power. Under

Section 31, Book III of Executive Order No. 292 (otherwise known as

the Administrative Code of 1987), "the President, subject to the policy

in the Executive Office and in order to achieve simplicity, economy

and efficiency, shall have the continuing authority to reorganize the

administrative structure of the Office of the President." For this

purpose, he may transfer the functions of other Departments or

Agencies to the Office of the President. In Canonizado v. Aguirre [323

SCRA 312 (2000)], we ruled that reorganization "involves the

reduction of personnel, consolidation of offices, or abolition thereof by

reason of economy or redundancy of functions." It takes place when

there is an alteration of the existing structure of government offices or

units therein, including the lines of control, authority and

responsibility between them. The EIIB is a bureau attached to the

Department of Finance. It falls under the Office of the President.

Hence, it is subject to the President’s continuing authority to

reorganize.13

(Emphasis ours.)

It is undisputed that the NPO, as an agency that is part of the Office of

the Press Secretary (which in various times has been an agency

directly attached to the Office of the Press Secretary or as an agency

under the Philippine Information Agency), is part of the Office of the

President.14

Pertinent to the case at bar, Section 31 of the Administrative Code of

1987 quoted above authorizes the President (a) to restructure the

internal organization of the Office of the President Proper, including

the immediate Offices, the President Special Assistants/Advisers

System and the Common Staff Support System, by abolishing,

consolidating or merging units thereof or transferring functions from

one unit to another, and (b) to transfer functions or offices from the

Office of the President to any other Department or Agency in the

Executive Branch, and vice versa.

Concomitant to such power to abolish, merge or consolidate offices in

the Office of the President Proper and to transfer functions/offices not

only among the offices in the Office of President Proper but also the

rest of the Office of the President and the Executive Branch, the

President implicitly has the power to effect less radical or less

substantive changes to the functional and internal structure of the

Office of the President, including the modification of functions of such

executive agencies as the exigencies of the service may require.

In the case at bar, there was neither an abolition of the NPO nor a

removal of any of its functions to be transferred to another agency.

Under the assailed Executive Order No. 378, the NPO remains the

main printing arm of the government for all kinds of government

forms and publications but in the interest of greater economy and

encouraging efficiency and profitability, it must now compete with the

private sector for certain government printing jobs, with the exception

of election paraphernalia which remains the exclusive responsibility of

the NPO, together with the Bangko Sentral ng Pilipinas, as the

Commission on Elections may determine. At most, there was a mere

alteration of the main function of the NPO by limiting the exclusivity

of its printing responsibility to election forms.15

There is a view that the reorganization actions that the President may

take with respect to agencies in the Office of the President are strictly

limited to transfer of functions and offices as seemingly provided in

Section 31 of the Administrative Code of 1987.

However, Section 20, Chapter 7, Title I, Book III of the same Code

significantly provides:

Sec. 20. Residual Powers. – Unless Congress provides otherwise, the

President shall exercise such other powers and functions vested in the

President which are provided for under the laws and which are not

specifically enumerated above, or which are not delegated by the

President in accordance with law. (Emphasis ours.)

Pursuant to Section 20, the power of the President to reorganize the

Executive Branch under Section 31 includes such powers and

functions that may be provided for under other laws. To be sure, an

inclusive and broad interpretation of the President’s power to

reorganize executive offices has been consistently supported by

specific provisions in general appropriations laws.

In the oft-cited Larin v. Executive Secretary,16

the Court likewise

adverted to certain provisions of Republic Act No. 7645, the general

appropriations law for 1993, as among the statutory bases for the

President’s power to reorganize executive agencies, to wit:

Section 48 of R.A. 7645 provides that:

"Sec. 48. Scaling Down and Phase Out of Activities of Agencies

Within the Executive Branch. — The heads of departments, bureaus

and offices and agencies are hereby directed to identify their respective

activities which are no longer essential in the delivery of public

services and which may be scaled down, phased out or abolished,

subject to civil [service] rules and regulations. x x x. Actual scaling

down, phasing out or abolition of the activities shall be effected

pursuant to Circulars or Orders issued for the purpose by the Office of

the President."

Said provision clearly mentions the acts of "scaling down, phasing out

and abolition" of offices only and does not cover the creation of

offices or transfer of functions. Nevertheless, the act of creating and

decentralizing is included in the subsequent provision of Section 62,

which provides that:

"Sec. 62. Unauthorized organizational changes. — Unless otherwise

created by law or directed by the President of the Philippines, no

organizational unit or changes in key positions in any department or

agency shall be authorized in their respective organization structures

and be funded from appropriations by this Act."

The foregoing provision evidently shows that the President is

authorized to effect organizational changes including the creation of

offices in the department or agency concerned.

The contention of petitioner that the two provisions are riders deserves

scant consideration. Well settled is the rule that every law has in its

favor the presumption of constitutionality. Unless and until a specific

provision of the law is declared invalid and unconstitutional, the same

is valid and binding for all intents and purposes.17

(Emphases ours)

Buklod ng Kawaning EIIB v. Zamora,18

where the Court upheld as

valid then President Joseph Estrada’s Executive Order No. 191

"deactivating" the Economic Intelligence and Investigation Bureau

(EIIB) of the Department of Finance, hewed closely to the reasoning in

Larin. The Court, among others, also traced from the General

Appropriations Act19

the President’s authority to effect organizational

changes in the department or agency under the executive structure,

thus:

We adhere to the precedent or ruling in Larin that this provision

recognizes the authority of the President to effect organizational

changes in the department or agency under the executive structure.

Such a ruling further finds support in Section 78 of Republic Act No.

8760. Under this law, the heads of departments, bureaus, offices and

agencies and other entities in the Executive Branch are directed (a) to

conduct a comprehensive review of their respective mandates,

missions, objectives, functions, programs, projects, activities and

systems and procedures; (b) identify activities which are no longer

essential in the delivery of public services and which may be scaled

down, phased-out or abolished; and (c) adopt measures that will result

in the streamlined organization and improved overall performance of

their respective agencies. Section 78 ends up with the mandate that the

actual streamlining and productivity improvement in agency

organization and operation shall be effected pursuant to Circulars or

Orders issued for the purpose by the Office of the President. x x x.20

(Emphasis ours)

Notably, in the present case, the 2003 General Appropriations Act,

which was reenacted in 2004 (the year of the issuance of Executive

Order No. 378), likewise gave the President the authority to effect a

wide variety of organizational changes in any department or agency in

the Executive Branch. Sections 77 and 78 of said Act provides:

Section 77. Organized Changes. – Unless otherwise provided by law

or directed by the President of the Philippines, no changes in key

positions or organizational units in any department or agency shall be

authorized in their respective organizational structures and funded

from appropriations provided by this Act.

Section 78. Institutional Strengthening and Productivity Improvement

in Agency Organization and Operations and Implementation of

Organization/Reorganization Mandated by Law. The Government

shall adopt institutional strengthening and productivity improvement

measures to improve service delivery and enhance productivity in the

government, as directed by the President of the Philippines. The heads

of departments, bureaus, offices, agencies, and other entities of the

Executive Branch shall accordingly conduct a comprehensive review

of their respective mandates, missions, objectives, functions,

programs, projects, activities and systems and procedures; identify

areas where improvements are necessary; and implement

corresponding structural, functional and operational adjustments that

will result in streamlined organization and operations and improved

performance and productivity: PROVIDED, That actual streamlining

and productivity improvements in agency organization and operations,

as authorized by the President of the Philippines for the purpose,

including the utilization of savings generated from such activities,

shall be in accordance with the rules and regulations to be issued by

the DBM, upon consultation with the Presidential Committee on

Effective Governance: PROVIDED, FURTHER, That in the

implementation of organizations/reorganizations, or specific changes

in agency structure, functions and operations as a result of institutional

strengthening or as mandated by law, the appropriation, including the

functions, projects, purposes and activities of agencies concerned may

be realigned as may be necessary: PROVIDED, FINALLY, That any

unexpended balances or savings in appropriations may be made

available for payment of retirement gratuities and separation benefits

to affected personnel, as authorized under existing laws. (Emphases

and underscoring ours.)

Implicitly, the aforequoted provisions in the appropriations law

recognize the power of the President to reorganize even executive

offices already funded by the said appropriations act, including the

power to implement structural, functional, and operational adjustments

in the executive bureaucracy and, in so doing, modify or realign

appropriations of funds as may be necessary under such

reorganization. Thus, insofar as petitioners protest the limitation of the

NPO’s appropriations to its own income under Executive Order No.

378, the same is statutorily authorized by the above provisions.

In the 2003 case of Bagaoisan v. National Tobacco Administration,21

we upheld the "streamlining" of the National Tobacco Administration

through a reduction of its personnel and deemed the same as included

in the power of the President to reorganize executive offices granted

under the laws, notwithstanding that such streamlining neither

involved an abolition nor a transfer of functions of an office. To quote

the relevant portion of that decision:

In the recent case of Rosa Ligaya C. Domingo, et al. vs. Hon. Ronaldo

D. Zamora, in his capacity as the Executive Secretary, et al., this

Court has had occasion to also delve on the President’s power to

reorganize the Office of the President under Section 31(2) and (3) of

Executive Order No. 292 and the power to reorganize the Office of the

President Proper. x x x

x x x x

The first sentence of the law is an express grant to the President of a

continuing authority to reorganize the administrative structure of the

Office of the President. The succeeding numbered paragraphs are not

in the nature of provisos that unduly limit the aim and scope of the

grant to the President of the power to reorganize but are to be viewed

in consonance therewith. Section 31(1) of Executive Order No. 292

specifically refers to the President’s power to restructure the internal

organization of the Office of the President Proper, by abolishing,

consolidating or merging units hereof or transferring functions from

one unit to another, while Section 31(2) and (3) concern executive

offices outside the Office of the President Proper allowing the

President to transfer any function under the Office of the President to

any other Department or Agency and vice-versa, and the transfer of

any agency under the Office of the President to any other department

or agency and vice-versa.

In the present instance, involving neither an abolition nor transfer of

offices, the assailed action is a mere reorganization under the general

provisions of the law consisting mainly of streamlining the NTA in the

interest of simplicity, economy and efficiency. It is an act well within

the authority of the President motivated and carried out, according to

the findings of the appellate court, in good faith, a factual assessment

that this Court could only but accept.22

(Emphases and underscoring

supplied.)

In the more recent case of Tondo Medical Center Employees

Association v. Court of Appeals,23

which involved a structural and

functional reorganization of the Department of Health under an

executive order, we reiterated the principle that the power of the

President to reorganize agencies under the executive department by

executive or administrative order is constitutionally and statutorily

recognized. We held in that case:

This Court has already ruled in a number of cases that the President

may, by executive or administrative order, direct the reorganization of

government entities under the Executive Department. This is also

sanctioned under the Constitution, as well as other statutes.

Section 17, Article VII of the 1987 Constitution, clearly states: "[T]he

president shall have control of all executive departments, bureaus and

offices." Section 31, Book III, Chapter 10 of Executive Order No. 292,

also known as the Administrative Code of 1987 reads:

SEC. 31. Continuing Authority of the President to Reorganize his

Office - The President, subject to the policy in the Executive Office

and in order to achieve simplicity, economy and efficiency, shall have

continuing authority to reorganize the administrative structure of the

Office of the President. For this purpose, he may take any of the

following actions:

x x x x

In Domingo v. Zamora [445 Phil. 7 (2003)], this Court explained the

rationale behind the President’s continuing authority under the

Administrative Code to reorganize the administrative structure of the

Office of the President. The law grants the President the power to

reorganize the Office of the President in recognition of the recurring

need of every President to reorganize his or her office "to achieve

simplicity, economy and efficiency." To remain effective and efficient,

it must be capable of being shaped and reshaped by the President in

the manner the Chief Executive deems fit to carry out presidential

directives and policies.

The Administrative Code provides that the Office of the President

consists of the Office of the President Proper and the agencies under it.

The agencies under the Office of the President are identified in Section

23, Chapter 8, Title II of the Administrative Code:

Sec. 23. The Agencies under the Office of the President.—The

agencies under the Office of the President refer to those offices placed

under the chairmanship of the President, those under the supervision

and control of the President, those under the administrative

supervision of the Office of the President, those attached to it for

policy and program coordination, and those that are not placed by law

or order creating them under any specific department.

x x x x

The power of the President to reorganize the executive department is

likewise recognized in general appropriations laws. x x x.

x x x x

Clearly, Executive Order No. 102 is well within the constitutional

power of the President to issue. The President did not usurp any

legislative prerogative in issuing Executive Order No. 102. It is an

exercise of the President’s constitutional power of control over the

executive department, supported by the provisions of the

Administrative Code, recognized by other statutes, and consistently

affirmed by this Court.24

(Emphases supplied.)

Subsequently, we ruled in Anak Mindanao Party-List Group v.

Executive Secretary25

that:

The Constitution’s express grant of the power of control in the

President justifies an executive action to carry out reorganization

measures under a broad authority of law.

In enacting a statute, the legislature is presumed to have deliberated

with full knowledge of all existing laws and jurisprudence on the

subject. It is thus reasonable to conclude that in passing a statute which

places an agency under the Office of the President, it was in

accordance with existing laws and jurisprudence on the President’s

power to reorganize.

In establishing an executive department, bureau or office, the

legislature necessarily ordains an executive agency’s position in the

scheme of administrative structure. Such determination is primary, but

subject to the President’s continuing authority to reorganize the

administrative structure. As far as bureaus, agencies or offices in the

executive department are concerned, the power of control may justify

the President to deactivate the functions of a particular office. Or a law

may expressly grant the President the broad authority to carry out

reorganization measures. The Administrative Code of 1987 is one such

law.26

The issuance of Executive Order No. 378 by President Arroyo is an

exercise of a delegated legislative power granted by the

aforementioned Section 31, Chapter 10, Title III, Book III of the

Administrative Code of 1987, which provides for the continuing

authority of the President to reorganize the Office of the President, "in

order to achieve simplicity, economy and efficiency." This is a matter

already well-entrenched in jurisprudence. The reorganization of such

an office through executive or administrative order is also recognized

in the Administrative Code of 1987. Sections 2 and 3, Chapter 2, Title

I, Book III of the said Code provide:

Sec. 2. Executive Orders. - Acts of the President providing for rules of

a general or permanent character in implementation or execution of

constitutional or statutory powers shall be promulgated in executive

orders.

Sec. 3. Administrative Orders. - Acts of the President which relate to

particular aspects of governmental operations in pursuance of his

duties as administrative head shall be promulgated in administrative

orders. (Emphases supplied.)

To reiterate, we find nothing objectionable in the provision in

Executive Order No. 378 limiting the appropriation of the NPO to its

own income. Beginning with Larin and in subsequent cases, the Court

has noted certain provisions in the general appropriations laws as

likewise reflecting the power of the President to reorganize executive

offices or agencies even to the extent of modifying and realigning

appropriations for that purpose.

Petitioners’ contention that the issuance of Executive Order No. 378 is

an invalid exercise of legislative power on the part of the President has

no legal leg to stand on.

In all, Executive Order No. 378, which purports to institute necessary

reforms in government in order to improve and upgrade efficiency in

the delivery of public services by redefining the functions of the NPO

and limiting its funding to its own income and to transform it into a

self-reliant agency able to compete with the private sector, is well

within the prerogative of President Arroyo under her continuing

delegated legislative power to reorganize her own office. As pointed

out in the separate concurring opinion of our learned colleague,

Associate Justice Antonio T. Carpio, the objective behind Executive

Order No. 378 is wholly consistent with the state policy contained in

Republic Act No. 9184 or the Government Procurement Reform Act to

encourage competitiveness by extending equal opportunity to private

contracting parties who are eligible and qualified.27

1avvphi1

To be very clear, this delegated legislative power to reorganize

pertains only to the Office of the President and the departments,

offices and agencies of the executive branch and does not include the

Judiciary, the Legislature or the constitutionally-created or mandated

bodies. Moreover, it must be stressed that the exercise by the President

of the power to reorganize the executive department must be in

accordance with the Constitution, relevant laws and prevailing

jurisprudence.

In this regard, we are mindful of the previous pronouncement of this

Court in Dario v. Mison28

that:

Reorganizations in this jurisdiction have been regarded as valid

provided they are pursued in good faith. As a general rule, a

reorganization is carried out in "good faith" if it is for the purpose of

economy or to make bureaucracy more efficient. In that event, no

dismissal (in case of a dismissal) or separation actually occurs because

the position itself ceases to exist. And in that case, security of tenure

would not be a Chinese wall. Be that as it may, if the "abolition,"

which is nothing else but a separation or removal, is done for political

reasons or purposely to defeat security of tenure, or otherwise not in

good faith, no valid "abolition" takes place and whatever "abolition" is

done, is void ab initio. There is an invalid "abolition" as where there is

merely a change of nomenclature of positions, or where claims of

economy are belied by the existence of ample funds. (Emphasis ours.)

Stated alternatively, the presidential power to reorganize agencies and

offices in the executive branch of government is subject to the

condition that such reorganization is carried out in good faith.

If the reorganization is done in good faith, the abolition of positions,

which results in loss of security of tenure of affected government

employees, would be valid. In Buklod ng Kawaning EIIB v. Zamora,29

we even observed that there was no such thing as an absolute right to

hold office. Except those who hold constitutional offices, which

provide for special immunity as regards salary and tenure, no one can

be said to have any vested right to an office or salary.30

This brings us to the second ground raised in the petition – that

Executive Order No. 378, in allowing government agencies to secure

their printing requirements from the private sector and in limiting the

budget of the NPO to its income, will purportedly lead to the gradual

abolition of the NPO and the loss of security of tenure of its present

employees. In other words, petitioners avow that the reorganization of

the NPO under Executive Order No. 378 is tainted with bad faith. The

basic evidentiary rule is that he who asserts a fact or the affirmative of

an issue has the burden of proving it.31

A careful review of the records will show that petitioners utterly failed

to substantiate their claim. They failed to allege, much less prove,

sufficient facts to show that the limitation of the NPO’s budget to its

own income would indeed lead to the abolition of the position, or

removal from office, of any employee. Neither did petitioners present

any shred of proof of their assertion that the changes in the functions

of the NPO were for political considerations that had nothing to do

with improving the efficiency of, or encouraging operational economy

in, the said agency.

In sum, the Court finds that the petition failed to show any

constitutional infirmity or grave abuse of discretion amounting to lack

or excess of jurisdiction in President Arroyo’s issuance of Executive

Order No. 378.

WHEREFORE, the petition is hereby DISMISSED and the prayer for

a Temporary Restraining Order and/or a Writ of Preliminary

Injunction is hereby DENIED. No costs.

G.R. No. 111014 May 31, 1996

LIANA'S SUPERMARKET, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and NATIONAL LABOR UNION, respondents.

BELLOSILLO, J.:p

LIANA's SUPERMARKET, as its name implies, is a departmentized self-service retail market selling foods, convenience goods, and household merchandise with business outlets in Sucat, Parañaque, and Pasig City. Sometime in 1980, 1981 and 1982 it employed as sales ladies, cooks, packers, cashiers, electricians, warehousemen, etc., members of private respondent National Labor Union. However in the course of their employment they were allegedly underpaid and required, among others, to work more than eight (8) hours a day without overtime pay and deprived of legal holiday pay and monthly emergency allowance. Starting late 1982 and early 1983 they aired their grievances to petitioner through Peter Sy, its General Manager, and Rosa Sy, its Consultant, but were only scolded and threatened with outright dismissal. Consequently, they formed a labor union and affiliated it with respondent National Labor Union. Thereafter they demanded from petitioner recognition and compliance with Existing labor laws.

On 30 April 1983 petitioner entered into a three-year contract with Warner Laputt, owner of BAVSPIA International Services, to supply petitioner with laborers.

About November and December 1984 Rosa Sy met with the employees individually and told them to quit their membership

with the union under pain of being suspended, dismissed or criminally prosecuted. When they refused, many were dismissed without any charges and others were given memorandum on concocted offenses and violations.

Meanwhile in March and April 1984 petitioner through Peter Sy and Rosa Sy required the other employees to resign from employment and to accomplish information sheets and/or application forms with BAVSPIA otherwise they would be dismissed and/or not paid their salaries. With some degree of reluctance they complied. Nonetheless, they were allowed to continue working with petitioner under the same terms and conditions of their previous employment.

On 24 March 1984 respondent Union on behalf of its members filed a complaint against petitioner and/or Peter Sy, Rosa Sy, BAVSPIA and Warner Laputt before the Labor Arbiter for underpayment of wages, nonpayment of overtime pay, monthly emergency allowance, legal holiday pay, service incentive leave pay and 13th month pay (NLRC-NCR Case No. 3-1270-84). On 24 May 1984 the complaint was amended since respondent Union manifested through its authorized representative that it was intended as a class suit.

On 28 August 1984 another case was filed, docketed as NLRC-NCR Case No. 8-3043-84, with Elorde Fadilla, Jr., et al., as complainants.

On 22 October 1984 a third case was filed, docketed as NLRC-NCR Case No. 10-3755-84, with Carmelita Reyes, Elizabeth Mahanlud, Danny Sida, Omar Napiri and Edgar Mahusay as individual complainants.

On 12 December 1984 still another case was filed, docketed as NLRC-NCR Case No. 12-4312-84, with Gloria Estoque and Estrellita Bansig as individual complainants.

Subsequently the four (4) cases were consolidated. Respondent National Labor Union submitted two (2) lists of one hundred

thirty-six (136) workers, seventy-three (73) assigned at Sucat and sixty-three (63) at Pasig City. There were eighty-five (85) original complainants in the lists. However Sixteen (16) complainants later filed motions to withdraw with prejudice and five (5) were found to be non-employees of petitioner. On 27 January 1987 three (3) other complainants settled with petitioner and moved to dismiss their complaints. Thus, a total of twenty-four (24) complainants were dropped from the lists thereby reducing the number to sixty-one (61). But twenty-seven (27) more employees submitted their sworn statements thus increasing again the number of complainants to eighty-eight (88).

When petitioner learned of the charges before the Labor Arbiter it demanded the resignation of the employees from the Union and withdrawal of their cases or face criminal charges. It also threatened to withhold their wages and even to dismiss them from their employment. Since they refused to resign petitioner dismissed them. Hence, charges of unfair labor practice and illegal dismissal were added as causes of action in their complaints.

Petitioner contended that there was no unfair labor practice because there was no ongoing union activity before the alleged illegal dismissals; but even if there were, the dismissals were not effected by petitioner as complainants were not its employees but of BAVSPZA. If what were referred to as illegal dismissals were those of complainants who resigned, there can be no unfair labor practice as their resignations were voluntary and their applications with BAVSPIA were of their own volition.

On 6 February 1987, after the consolidated cases were submitted for decision, petitioner filed what was purportedly a compromise agreement between itself and the local chapter of respondent Union. It appeared to have been signed by representatives of petitioner and the President, Vice President and another officer of the local chapter of respondent Union with a prayer that the consolidated cases be dismissed.

BAVSPIA participated during the initial stages of the hearings but later moved to have its name dropped as co-respondent when it noted, after complainants have rested, that the evidence formally offered was directed only against petitioner.

On 28 February 1989 the Labor Arbiter held that (1) petitioner was the employer of complainants with BAVSPIA being engaged in labor-only contracting; (2) complainants were illegally dismissed; (3) Peter Sy and Rosa Sy were not personally liable; and, (4) the charge of unfair labor practice and all labor standards claims were unsubstantiated by evidence. Corollarily, petitioner was ordered to reinstate all the complainants and to pay them backwages and all benefits reckoned from the date of their respective dismissals until actual reinstatement but not to exceed three (3) years, and if reinstatement was no longer feasible the complainants should be granted separation pay equivalent to one-half month salary for every year of service, a fraction of at least six (6) months to be considered as one (1) whole year. 1

On 30 June 1993 public respondent National Labor Relations Commission affirmed the ruling of the Labor Arbiter. 2

The petitioner now asks how many individual complainants are there in these cases, whether seven (7) or eighty-five (85); whether these complainants were illegally dismissed; and, whether a compromise agreement with a motion to dismiss filed by a local chapter of respondent Union may be given legal effect.

Petitioner claims that there are only seven (7) individual complainants in these cases whose names appear in the captions of the decision of the Labor Arbiter. Anent thereto, petitioner argues that Sec. 3, Rule 6, of the Rules of Court clearly provides that the names and residences of the parties plaintiff and defendant must be stated in the complaint; similarly, Sec. 1, Rule III, of the New Rules of Procedure of respondent NLRC states that the full names of all the real parties in interest, whether natural or juridical persons or entities authorized by

law, shall be stated in the caption of the complaint or petition as well as in the decision, award or judgment. Moreover, according to petitioner, these cases do not fall under the term "class suit" as defined in Sec. 12, Rule 3, of the Rules of Court because the parties are not so numerous that it would be impracticable to bring them all before the court. It is further the position of petitioner that BAVSPIA is the true employer of the complainants and the resignations of certain employees were voluntary. Petitioner still further argues that the compromise agreement duly signed by the officers of the local chapter of respondent Union and filed while the case was still pending before the Labor Arbiter is binding on all the complainants.

We disagree with petitioner. This is a "representative suit" as distinguished from "class suit" defined in Sec. 12, Rule 3, of the Rules of Court —

Sec. 12. Class suit. — When the subject matter of the controversy is one of common or general interest to many persons, and the parties are so numerous that it is impracticable to bring them all before the court, one or more may sue or defend for the benefit of all. But in such case the court shall make sure that the parties actually before it are sufficiently numerous and representative so that all interests concerned are fully protected. Any party in interest shall have a right to intervene in protection of his individual interest.

In Re: Request of the Heirs of the Passengers of the Doña Paz to Set Aside the Order Dated January 4, 1988 of Judge B. D. Chingcuangco, 3 the Court had occasion to explain "class suit" —

What is contemplated, as will be noted, is that (a) the subject matter in controversy is of common or general interest to many persons, and (b) those persons are so numerous as to make it impracticable to bring them all before the court . . . What makes the situation a proper case for a class suit is the circumstance that there is only one right or cause of action pertaining or belonging in common to many persons (emphasis supplied), not separately or severally to distinct

individuals . . . . The object of the suit is to obtain relief for or against numerous persons as a group or as an integral entity, and not as separate, distinct individuals whose rights or liabilities are separate from and independent of those affecting the others. . . The other factor that serves to distinguish the rule on class suits . . . is . . . the numerousness of parties involved . . . The rule is that for a class suit to be allowed, it is needful inter alia that the parties be so numerous that it would be impracticable to bring them all before the court.

In the present case, there are multiple rights or causes of action pertaining separately to several, distinct employees who are members of respondent Union. Therefore, the applicable rule is that provided in Sec. 3, Rule 3, of the Rules of Court on "representative parties," which states —

Sec. 3. Representative parties. A trustee of a an express trust, a guardian, executor or administrator or a party authorized by statute (emphasis supplied), may sue or be sued without joining the party for whose benefit the action is presented or defended; but the court may, at any stage of the proceedings, order such beneficiary to be made a party. . .

One of the rights granted by Art. 242 of the Labor Code to a legitimate labor organization, like respondent Union, is to sue and be sued in its registered name. In Liberty Manufacturing Workers Union v. Court of First Instance of Bulacan, 4 citing National Brewery and Allied Industries Labor Union of the Philippines v. San Miguel Brewery, Inc., 5 and Itogon-Suyoc Mines, Inc. v. Sañgilo-Itogon Workers' Union, 6 the Court held that the aforementioned provision authorizes a union to file a "representative suit" for the benefit of its members in the interest of avoiding an otherwise cumbersome procedure of joining all union members in the complaint, even if they number by the hundreds. The Court further rationalized that —

To hold otherwise and compel the 57 union members-employees to file 57 separate cases on their own individual and respective causes of action before the municipal court rather than through the present single collective action filed

by petitioner union on their behalf and for their benefit would be to unduly clog the court dockets and slow down the prompt and expeditious determination of cases by the sheer number, time and volume of paper work that would be involved and required in disposing of 57 identical cases that could be adjudged in a single case such as that filed before the lower court.

What is worse then . . . by such an unrealistic approach, the courts would not keep faith with the Constitutional injunction to extend protection to labor . . .

In another case, Davao Free Workers Front v. Court of Industrial Relations, 7 the Court stated that the detail that the number and names of the striking members of petitioner union were not specified in the decision nor in the complaint is of no consequence. Reiterating the rule in the Liberty case, the Court held that it was the function precisely of a labor union to carry the representation of its members and to file an action for their benefit and behalf without joining them and avoid the cumbersome procedure of joining each and every member as a separate party. Still, in La Carlota Sugar Central v. Court of Industrial Relations, 8 the Court emphasized that it would be an unwarranted impairment of the right to self-organization through formation of labor associations if thereafter such collective entities would be barred from instituting action in their representative capacity.

A "representative suit" is akin to a "class suit" in the limited sense that the phrases found in Sec. 12 of Rule 3, "one or more may sue or defend for the benefit of all," and "the parties actually before it are sufficiently numerous and representative," are similar to the phrase may sue or be sued without joining the party for whose benefit the action is presented or defended" found in Sec. 3 of the same Rule. In other words, both suits are always filed in behalf of another or others. That is why the two terms are sometimes used interchangeably. Apparently respondent Union, the Labor Arbiter and respondent Commission merely denominated the suit, although erroneously, as a "class suit" when, in reality, it is a

"representative suit." Anyway, the issue as to the actual number of complainants in this case was correctly resolved by the Labor Arbiter with this ratiocination —

The very first complaint (No. 3-1270-84) filed in these consolidated cases was captioned National Labor Union for and in behalf of its members as complainants. It was dated March 24, 1984. When the same was amended on May 24, 1984, the same caption for complainants also appeared . . . Consistently with the instruction of said Arbiter as to the number of complainants allegedly prejudiced by the acts of respondents, their counsel submitted two lists (Exhs. A-1 & A-2) containing a total of one hundred thirty-six names. However, said counsel submitted in evidence only around sixty affidavits of complainants, thereby giving credence to the allegation of respondents that not all those listed are actually complaining. Nonetheless and considering that respondents recognized that there are eighty-five complainants (Exhs. 48 & 49) we hold that the instant cases have been filed by the said Union for and in behalf of such number (85) of complainants.

9

Section 1, Rule III, of the NLRC New Rules of Procedure cited by petitioner is simply inapplicable because it was issued on 31 August 1990 or six (6) years after the complaints in these cases were filed in 1984.

The evidence clearly establishes that complainants were employed by petitioner. According to the Labor Arbiter —

As to the issue of which company is the employer of complainants, we hold that it is respondent Liana's. This is so because we find the co-respondent BAVSPIA engaged in labor-only contracting which is prohibited under the Labor Code.

10

Article 106, par. 4, of the Labor Code provides that there is "labor-only contracting" where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such person are

performing activities which are directly related to the principal business of such employer.

In such cases, the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him. The conclusion of the Labor Arbiter was bolstered by the fact that —

. . . even the employees who allegedly resigned from Liana's and applied/accepted by BAVSPIA were also re-assigned to Liana's. These employees were performing jobs which are necessary and desirable in the usual business or trade of Liana's. Even the premises, tools and equipment used by the employees were those of Liana's. And, more important, these employees were under the control and supervision of said respondent Liana's.

11

Likewise, the evidence sufficiently proves that complainants were illegally dismissed by petitioner —

Coming now to the main thrust of these complaints — the issue of illegal dismissal — we find that indeed the complainants were illegally dismissed. Respondents' contention that complainants were dismissed not by them but by BAVSPIA is untenable precisely because the latter was engaged in labor-only contracting. In this connection, respondent Liana's (has) not been able to show that the dismissals of complainants were for a just cause and, if ever, they were accorded due process. In short, said respondent Liana's failed to prove that their (its) dismissals of complainants were justified.

xxx xxx xxx

The alleged resignation of thirty-three other complainants (who later applied to BAVSPIA) cannot be given effect, not because they were forced to do so but in view of our finding that said BAVSPIA was engaged in labor-only contracting. Hence, they could not have been working without any employer. Besides, resigned from Liana's and then apply to BAVSPIA only to be re-assigned later to the former, not to

mention the glaring fact that all such letters of resignations are uniformly worded.

12

Before money claims can be the object of settlement through a union, the individual consent of the employees concerned should first be procured. This is because waiver of money claims is considered a personal right which must be protected by the courts on consideration of public policy. To really give teeth to the constitutional mandate of giving laborers maximum protection and security, they must be protected not only against their employer but also against the leaders of their own labor union. Thus, in General Rubber and Footwear Corporation v. Drilon, 13 citing Kaisahan ng Manggagawa sa La Campana v. Sarmiento, 14 it was held —

Money claims due to laborers cannot be the object of settlement or compromise effected by a union or counsel without the specific individual consent of each laborer concerned. The beneficiaries are the individual complainants themselves. The union to which they belong can only assist them but cannot decide for them . . . .

There is no evidence on record that the compromise agreement was approved by the complainants individually. The document does not bear their signatures except those of the local Union's President, Vice President and another officer. Neither is there evidence to show that the compromise agreement was ever approved by the Labor Arbiter. Clearly then, it cannot bind the complainants.

The grave abuse of discretion imputed to public respondent NLRC does not exist. But the alternative award of separation pay granted by the Labor Arbiter in an amount equivalent to one-half month salary for every year of service must be modified, It has been our consistent ruling that in awarding separation pay to an illegally dismissed employee, in lieu of reinstatement, the amount to be awarded shall be equivalent to one month salary for every year of service. 15 We have no reason to hold otherwise.

WHEREFORE, the resolution of the National Labor Relations Commission dated 30 June 1993 affirming the decision of the Labor Arbiter dated 28 February 1989 is AFFIRMED, subject to the modification that the separation pay granted as an alternative relief shall be equivalent to one-month salary for every year of service, a fraction of at least six (6) months to be considered one (1) whole year.

Costs against petitioner.

G.R. No. 144568 July 3, 2007

GUILLERMA S. SABLAS, joined by her husband, PASCUAL

LUMANAS, Petitioners,

vs.

ESTERLITA S. SABLAS and RODULFO S. SABLAS, Respondents.

D E C I S I O N

CORONA, J.:

This case traces its roots to a complaint for judicial partition, inventory

and accounting filed by respondents Esterlita S. Sablas and Rodulfo S.

Sablas against petitioner spouses Pascual Lumanas and Guillerma S.

Sablas in the Regional Trial Court of Baybay, Leyte, Branch 141 on

October 1, 1999.2

Petitioner spouses were served with summons and a copy of the

complaint on October 6, 1999. On October 21, 1999, they filed a

motion for extension of time requesting an additional period of 15

days, or until November 5, 1999, to file their answer. However, they

were able to file it only on November 8, 1999. While the trial court

observed that the answer was filed out of time, it admitted the pleading

because no motion to declare petitioner spouses in default was filed.3

The following day, November 9, 1999, respondents filed a motion to

declare petitioner spouses in default.4 It was denied by the trial court in

an order dated December 6, 1999.5 Respondents moved for

reconsideration but it was also denied.6 Thereafter, they challenged the

December 6, 1999 order in the Court of Appeals in a petition for

certiorari7 alleging that the admission of the answer by the trial court

was contrary to the rules of procedure and constituted grave abuse of

discretion amounting to lack of jurisdiction.

In a decision dated July 17, 2000,8 the appellate court ruled that the

trial court committed grave abuse of discretion because, pursuant to

Section 3, Rule 9 of the Rules of Court, the trial court had no recourse

but to declare petitioner spouses in default when they failed to file

their answer on or before November 5, 1999. Thus, the Court of

Appeals granted the petition, vacated the December 6, 1999 order and

remanded the case to the trial court for reception of plaintiffs’

evidence.

Aggrieved, petitioner spouses (defendants in the trial court) now assail

the July 17, 2000 decision of the Court of Appeals in this petition for

review on certiorari.9

Petitioner spouses contend that the Court of Appeals decision was not

in accord with the rules of procedure as it misconstrued Section 3,

Rule 9 of the Rules of Court and was in contravention of

jurisprudence.

We agree.

Where There Is No Motion, There

Can Be No Declaration of Default

The elements of a valid declaration of default are:

1. the court has validly acquired jurisdiction over the person of

the defending party either by service of summons or voluntary

appearance;10

2. the defending party failed to file the answer within the time

allowed therefor and

3. a motion to declare the defending party in default has been filed by

the claiming party with notice to the defending party.

An order of default can be made only upon motion of the claiming

party.11

It can be properly issued against the defending party who

failed to file the answer within the prescribed period only if the

claiming party files a motion to that effect with notice to the defending

party.

In this connection, Section 3, Rule 9 of the Rules of Court provides:

SEC. 3. Default: Declaration of. – If the defending party fails to

answer within the time allowed therefor, the court shall, upon motion

of the claiming party with notice to the defending party, and proof of

such failure, declare the defending party in default. x x x. (emphasis

supplied)

Three requirements must be complied with before the court can

declare the defending party in default: (1) the claiming party must file

a motion asking the court to declare the defending party in default; (2)

the defending party must be notified of the motion to declare him in

default and (3) the claiming party must prove that the defending party

has failed to answer within the period provided by the Rules of

Court.12

The rule on default requires the filing of a motion and notice of such

motion to the defending party. It is not enough that the defendant fails

to answer the complaint within the reglementary period.13

The trial

court cannot motu proprio declare a defendant in default14

as the rules

leave it up to the claiming party to protect his or its interests. The trial

court should not under any circumstances act as counsel of the

claiming party.

Where There Is No Declaration of Default, Answer May be

Admitted Even If Filed Out Of Time

It is within the sound discretion of the trial court to permit the

defendant to file his answer and to be heard on the merits even after

the reglementary period for filing the answer expires.15

The Rules of

Court provides for discretion on the part of the trial court not only to

extend the time for filing an answer but also to allow an answer to be

filed after the reglementary period.16

Thus, the appellate court erred when it ruled that the trial court had no

recourse but to declare petitioner spouses in default when they failed

to file their answer on or before November 5, 1999.

The rule is that the defendant’s answer should be admitted where it is

filed before a declaration of default and no prejudice is caused to the

plaintiff.17

Where the answer is filed beyond the reglementary period

but before the defendant is declared in default and there is no showing

that defendant intends to delay the case, the answer should be

admitted.18

1avvphi1

Therefore, the trial court correctly admitted the answer of petitioner

spouses even if it was filed out of time because, at the time of its

filing, they were not yet declared in default nor was a motion to

declare them in default ever filed. Neither was there a showing that

petitioner spouses intended to delay the case.

Where Answer Has Been Filed, There can Be No Declaration of

Default Anymore

Since the trial court already admitted the answer, it was correct in

denying the subsequent motion of respondents to declare petitioner

spouses in default.

In Cathay Pacific Airways, Ltd. v. Hon. Romillo, Jr.,19

the Court ruled

that it was error to declare the defending party in default after the

answer was filed. The Court was in fact even more emphatic in

Indiana Aerospace University v. Commission on Higher Education:20

it was grave abuse of discretion to declare a defending party in default

despite the latter’s filing of an answer.

The policy of the law is to have every litigant’s case tried on the merits

as much as possible. Hence, judgments by default are frowned upon.21

A case is best decided when all contending parties are able to ventilate

their respective claims, present their arguments and adduce evidence in

support thereof. The parties are thus given the chance to be heard fully

and the demands of due process are subserved. Moreover, it is only

amidst such an atmosphere that accurate factual findings and correct

legal conclusions can be reached by the courts.

Accordingly, the petition is hereby GRANTED. The July 17, 2000

decision of the Court of Appeals in CA-G.R. SP No. 57397 is

REVERSED and SET ASIDE and the December 6, 1999 order of the

Regional Trial Court of Baybay, Leyte, Branch 14 is REINSTATED.

The case is REMANDED to the trial court for further proceedings.

G.R. No. 147417 July 8, 2005

SPS. VICTOR & MILAGROS PEREZ and CRISTINA

AGRAVIADOR AVISO, Petitioners,

vs.

ANTONIO HERMANO, Respondent.

D E C I S I O N

CHICO-NAZARIO, J.:

This is a petition for review on certiorari under Rule 45 of the Rules

of Court assailing the Resolution1 of the Court of Appeals dismissing

petitioners’ original action for certiorari under Rule 65 for being filed

out of time. Assailed as well is the Resolution2 dismissing petitioners’

motion for reconsideration.

The pertinent facts of the case are as follows:

On 27 April 1998, petitioners Cristina Agraviador Aviso and spouses

Victor and Milagros Perez filed a civil case for Enforcement of

Contract and Damages with Prayer for the Issuance of a Temporary

Restraining Order (TRO) and/or Preliminary Injunction against Zescon

Land, Inc. and/or its President Zenie Sales-Contreras, Atty. Perlita

Vitan-Ele and against respondent herein Antonio Hermano before the

Regional Trial Court (RTC) of Quezon City, Branch 224.3 On 15 May

1998, respondent (then defendant) Hermano filed his Answer with

Compulsory Counterclaim. On 17 January 2000, respondent Hermano

filed a "Motion with Leave to Dismiss the Complaint or Ordered

Severed for Separate Trial" which was granted by the trial court in an

Order dated 28 February 2000.

This Order was received by petitioners on 21 March 2000. On 23

March 2000, petitioners moved for reconsideration which was denied

by the trial court on 25 May 2000 and received by petitioners on 18

June 2000. On 17 August 2000, petitioners filed an original action for

certiorari before the Court of Appeals imputing grave abuse of

discretion on the part of the trial court in dismissing the complaint

against respondent Hermano.

On 19 October 2000, the Court of Appeals rendered the first assailed

Resolution dismissing the petition for certiorari "for having been filed

beyond the reglementary period pursuant to Section 4, Rule 65 of the

1997 Rules on Civil Procedure, as amended." On 02 March 2001, the

second assailed Resolution was promulgated dismissing petitioners’

motion for reconsideration, the Court of Appeals holding that:

From the time petitioners received the assailed Order on March 21,

2000 and filed their motion for reconsideration, four (4) days had

elapsed. On June 18, 2000, petitioners received the denial of their

motion for reconsideration. When the instant petition was filed on

August 17, 2000, a total of 63 days had elapsed.

A.M. No. 00-2-03-50 further amending Section 4, Rule 65 of the New

Rules on Civil Procedure states that the petition shall be filed not later

than sixty (60) days from notice of the judgment, Order or Resolution

and in case a motion for reconsideration or new trial is timely filed,

whether such motion is required or not, the 60-day period shall be

counted from notice of the denial of said motion.

Viewed from its light, the assailed Orders had already attained finality,

and are now beyond the power of this Court to review.4

Aggrieved by the foregoing ruling, petitioners are now before us

assigning the following –

MANIFEST AND/OR SERIOUS ERROR COMMITTED BY THE

HONORABLE COURT OF APPEALS IN THE COMPUTATION OF

THE PERIOD WITHIN WHICH THE PETITIONERS FILED THEIR

PETITION FOR CERTIORARI BEFORE IT AND

CONSEQUENTLY COMMITTED GRAVE ABUSE OF

DISCRETION IN THE APPRECIATION OF FACTS AND/OR

MISAPPREHENSION OF FACTS, WITH ITS FINDING OF FACT

NOT BEING BORNE BY THE RECORD OR EVIDENCE, AND

THUS ITS CONCLUSION IS ENTIRELY BASELESS.5

According to petitioners, following the amendment introduced by

A.M. No. 00-2-03-SC to Section 4, Rule 65 of the 1997 Rules on Civil

Procedure, their petition was filed on the 60th day, thus, within the

reglementary period. Respondent insists, on the other hand, that the

petition was filed on the 61st day while the Court of Appeals had

declared that the petition was filed on the 63rd day.

We agree in the position taken by petitioners.

Admittedly, at the time petitioners filed their petition for certiorari on

17 August 2000, the rule then prevailing was Section 4, Rule 65 of the

1997 Rules on Civil Procedure, as amended by Circular No. 39-98

effective 01 September 1998, which provides:

Sec. 4. Where petition filed. – The petition shall be filed not later than

sixty (60) days from notice of the judgment, order or resolution sought

to be assailed in the Supreme Court, or if it relates to the acts or

omissions of a lower court or of a corporation, board, officer or person

in the Regional Trial Court exercising jurisdiction over the territorial

area as defined by the Supreme Court. It may also be filed in the Court

of Appeals whether or not the same is in aid of its appellate

jurisdiction, or in the Sandiganbayan if it is in aid of its jurisdiction. If

it involves the acts or omissions of a quasi-judicial agency, and unless

otherwise provided by law or these Rules, the petition shall be filed in

and cognizable only by the Court of Appeals.

If the petitioner had filed a motion for new trial or reconsideration in

due time after notice of said judgment, order, or resolution, the period

herein fixed shall be interrupted. If the motion is denied, the

aggrieved party may file the petition within the remaining period,

but which shall not be less than five (5) days in any event,

reckoned from notice of such denial. No extension of time to file the

petition shall be granted except for the most compelling reason and in

no case to exceed fifteen (15) days. (Emphasis supplied)

However, on 01 September 2000, during the pendency of the case

before the Court of Appeals, Section 4 was amended anew by A.M.

No. 00-2-03-SC6 which now provides:

Sec. 4. When and where petition filed. – The petition shall be filed not

later than sixty (60) days from notice of the judgment, order or

resolution. In case a motion for reconsideration or new trial is

timely filed, whether such motion is required or not, the sixty (60)

day period shall be counted from notice of the denial of said

motion.

The petition shall be filed in the Supreme Court or, if it relates to the

acts or omissions of a lower court or of a corporation, board, officer or

person, in the Regional Trial Court exercising jurisdiction over the

territorial area as defined by the Supreme Court. It may also be filed in

the Court of Appeals whether or not the same is in aid of its appellate

jurisdiction, or in the Sandiganbayan if it is in aid of its appellate

jurisdiction. If it involves the acts or omissions of a quasi-judicial

agency, unless otherwise provided by law or these rules, the petition

shall be filed in and cognizable only by the Court of Appeals.

No extension of time to file the petition shall be granted except for

compelling reason and in no case exceeding fifteen (15) days.

(Emphasis supplied)

Under this amendment, the 60-day period within which to file the

petition starts to run from receipt of notice of the denial of the motion

for reconsideration, if one is filed.7

In Narzoles v. National Labor Relations Commission,8 we described

this latest amendment as curative in nature as it remedied the

confusion brought about by Circular No. 39-98 because, "historically,

i.e., even before the 1997 revision to the Rules of Civil Procedure, a

party had a fresh period from receipt of the order denying the motion

for reconsideration to file a petition for certiorari." Curative statutes,

which are enacted to cure defects in a prior law or to validate legal

proceedings which would otherwise be void for want of conformity

with certain legal requirements, by their very essence, are retroactive.9

And, being a procedural rule, we held in Sps. Ma. Carmen and Victor

Javellana v. Hon. Presiding Judge Benito Legarda10

that "procedural

laws are construed to be applicable to actions pending and

undetermined at the time of their passage, and are deemed retroactive

in that sense and to that extent."

Consequently, petitioners had a fresh period of 60 days from the time

they received the Order of the trial court denying their motion for

reconsideration on 18 June 2000. When they filed their petition with

the Court of Appeals on 17 August 2000, exactly 60 days had elapsed

following the rule that in computing a period, the first day shall be

excluded and the last day included.11

Hence, there can be no doubt that

the petition was filed within the reglementary period for doing so and

it was reversible error on the part of the Court of Appeals in not giving

said petition due course. However, instead of remanding the case to

the Court of Appeals which would only unduly prolong the disposition

of the substantive issue raised, we shall resolve the petition originally

filed therein.

Petitioners brought to the Court of Appeals on petition for certiorari

under Rule 65 the lone issue of:

WHETHER OR NOT THE PUBLIC RESPONDENT [Hon. Emilio L.

Leachon, Jr., Presiding Judge, RTC, Branch 224, Quezon City] HAD

PLAINLY AND MANIFESTLY ACTED WITH GRAVE ABUSE OF

DISCRETION, IN EXCESS OF JURISDICTION, TANTAMOUNT

TO LACK OF JURISDICTION, IN DISMISSING THE

COMPLAINT AS AGAINST RESPONDENT ANTONIO

HERMANO IN CIVIL CASE NO. Q-98-34211.12

Petitioners assert that respondent Hermano should not have been

dismissed from the complaint because: (1) He did not file a motion to

dismiss under Rule 16 of the Rules of Court and, in fact, his "Motion

with Leave to Dismiss the Complaint or Ordered Severed for Separate

Trial" was filed almost two years after he filed his Answer to the

complaint; (2) There was no misjoinder of causes of action in this

case; and (3) There was no misjoinder of parties.

The case filed by petitioners against respondent Hermano and the other

defendants, namely Zescon Land, Inc. and/or its President Zenie Sales-

Contreras and Atty. Perlita Vitan-Ele, was one for "Enforcement of

Contract and Damages with Prayer for the Issuance of a Temporary

Restraining Order (TRO) and/or Preliminary Injunction" docketed as

Civil Case No. Q-98-34211 and raffled to Branch 224.

Petitioners presented three causes of action in their complaint, the first

for enforcement of contract to sell entered into between petitioners and

Zescon Land, Inc., the second for annulment or rescission of two

contracts of mortgage entered into between petitioners and respondent

Hermano and the third for damages against all defendants.

For the first cause of action, petitioners allege that sometime in

November 1997, they entered into a Contract to Sell with Zescon

Land, Inc., through Zenie Sales-Contreras, for the purchase of five (5)

parcels of land in the total amount of Nineteen Million One Hundred

Four Thousand Pesos (P19,104,000.00). As part of their agreement, a

portion of the purchase price would be paid to them as down payment,

another portion to be given to them as cash advance upon the

execution of the contract and another portion to be used by the buyer,

Zescon Land, Inc., to pay for loans earlier contracted by petitioners

which loans were secured by mortgages.

Re-pleading the foregoing in their second cause of action, petitioners

contend that "in a tricky machination and simultaneous with the

execution of the aforesaid Contract to Sell," they were made to sign

other documents, two of which were Mortgage deeds over the same

five properties in favor of respondent Hermano, whom they had never

met. It was allegedly explained to them by Sales-Contreras that the

mortgage contracts would merely serve to facilitate the payment of the

price as agreed upon in their Contract to Sell. Petitioners claim that it

was never their intention to mortgage their property to respondent

Hermano and that they have never received a single centavo from

mortgaging their property to him. Petitioners acknowledge, however,

that respondent Hermano was responsible for discharging their

obligations under the first mortgage and for having the titles over the

subject lands released, albeit not to them but to respondent Hermano.

They seek a TRO against respondent Hermano who had informed

them that he would be foreclosing the subject properties.

In their third cause of action, petitioners pray for damages against all

the defendants alleging that:

Due to the failure and refusal, without any valid justification and

reason, by defendants Zescon and Contreras to comply with their

obligations under the Contract to Sell, including their failure and

refusal to pay the sums stipulated therein, and in misleading and

misrepresenting the plaintiffs into mortgaging their properties to

defendant Antonio Hermano, who in turn had not paid the plaintiffs

the proceeds thereof, putting them in imminent danger of losing the

same, plaintiffs had suffered, and continue to suffer, sleepless nights

….

By reason of defendants Zescon and Contreras’s failure and refusal to

pay the sums stipulated in the Contract to Sell, and of defendant

Antonio Hermano’s not having paid plaintiffs the proceeds of the

mortgage agreements, plaintiffs had been deprived of the beneficial

use of the proceeds and stood to lose, as they continue to lose, by way

of unearned profits at least P1,000,000.00.13

In his Answer with (Compulsory) Counterclaim dated 15 May 1998,

respondent Hermano denied petitioners’ allegations.14

Then, on 19

February 1999, respondent Hermano filed a civil case entitled

"Judicial Foreclosure of Real Estate Mortgage" against petitioner

Aviso docketed as Civil Case No. Q-99-36914 and raffled to Branch

216 of the RTC of Quezon City. On 17 January 2000, respondent

Hermano filed a "Motion With Leave To Dismiss The Complaint

Against Defendant Antonio Hermano, Or Ordered Severed For

Separate Trial" before Branch 224. In said motion, respondent

Hermano argued that there was a mis-joinder of causes of action under

Rule 2, Section 6 of the Rules of Court. To quote respondent

Hermano:

3. In the instant case, the plaintiffs’ action for the Enforcement of

Contract and Damages with Prayer for The Issuance of a Temporary

Restraining Order And/Or Preliminary Injunction against Zescon

Land, Inc., and/or its President Zenie Sales Contreras, may not, under

Rule 2, Section 6 of the 1997 Rules of Civil Procedure, join defendant

Hermano as party defendant to annul and/or rescind the Real Estate

Mortgages of subject properties. There is a misjoinder of parties

defendants under a different transaction or cause of action; that under

the said Rule 2, Section 6, upon motion of defendant Hermano in the

instant case, the complaint against defendant Hermano can be severed

and tried separately; . . . .15

Over petitioners’ opposition to said motion, the same was granted by

the trial court in its Order dated 28 February 2000 on the justification

that:

. . . [D]efendant having filed a special civil action for judicial

foreclosure of mortgage and now pending before RTC Branch 216, he

should be dropped as one of the defendants in this case and whatever

claims plaintiffs may have against defendant Hermano, they can set it

up by way of an answer to said judicial foreclosure.16

And, in an Order dated 25 May 2000, the trial court resolved

petitioners’ motion for reconsideration by dismissing the same, to wit:

After going over the arguments of the parties, the Court believes that

defendant Hermano has nothing to do with the transaction which the

plaintiffs entered into with defendant Zescon Land, Inc. Besides, the

said motion raised matters and defenses previously considered and

passed upon by the Court.17

It is these two Orders that were brought up by petitioners to the Court

of Appeals on petition for Certiorari under Rule 65. The pivotal issue

to be resolved, therefore, is whether or not respondent trial court

committed grave abuse of discretion in dismissing the complaint

against respondent Hermano in Civil Case No. Q-98-34211.

As far as we can glean from the Orders of the trial court, respondent

Hermano was dropped from the complaint on the ground of misjoinder

of causes of action. Petitioners, on the other hand, insist that there was

no misjoinder in this case.

To better understand the present controversy, it is vital to revisit the

rules on joinder of causes of action as exhaustively discussed in

Republic v. Hernandez,18

thus:

By a joinder of actions, or more properly, a joinder of causes of action,

is meant the uniting of two or more demands or rights of action in one

action; the statement of more than one cause of action in a declaration.

It is the union of two or more civil causes of action, each of which

could be made the basis of a separate suit, in the same complaint,

declaration or petition. A plaintiff may under certain circumstances

join several distinct demands, controversies or rights of action in one

declaration, complaint or petition.

As can easily be inferred from the above definitions, a party is

generally not required to join in one suit several distinct causes of

action. The joinder of separate causes of action, where allowable, is

permissive and not mandatory in the absence of a contrary statutory

provision, even though the causes of action arose from the same

factual setting and might under applicable joinder rules be joined.

Modern statutes and rules governing joinders are intended to avoid a

multiplicity of suits and to promote the efficient administration of

justice wherever this may be done without prejudice to the rights of the

litigants. To achieve these ends, they are liberally construed.

While joinder of causes of action is largely left to the option of a party

litigant, Section 5, Rule 2 of our present Rules allows causes of action

to be joined in one complaint conditioned upon the following

requisites: (a) it will not violate the rules on jurisdiction, venue and

joinder of parties; and (b) the causes of action arise out of the same

contract, transaction or relation between the parties, or are for demands

for money or are of the same nature and character.

The objectives of the rule or provision are to avoid a multiplicity of

suits where the same parties and subject matter are to be dealt with by

effecting in one action a complete determination of all matters in

controversy and litigation between the parties involving one subject

matter, and to expedite the disposition of litigation at minimum cost.

The provision should be construed so as to avoid such multiplicity,

where possible, without prejudice to the rights of the litigants. Being

of a remedial nature, the provision should be liberally construed, to the

end that related controversies between the same parties may be

adjudicated at one time; and it should be made effectual as far as

practicable, with the end in view of promoting the efficient

administration of justice.

The statutory intent behind the provisions on joinder of causes of

action is to encourage joinder of actions which could reasonably be

said to involve kindred rights and wrongs, although the courts have not

succeeded in giving a standard definition of the terms used or in

developing a rule of universal application. The dominant idea is to

permit joinder of causes of action, legal or equitable, where there is

some substantial unity between them. While the rule allows a plaintiff

to join as many separate claims as he may have, there should

nevertheless be some unity in the problem presented and a common

question of law and fact involved, subject always to the restriction

thereon regarding jurisdiction, venue and joinder of parties. Unlimited

joinder is not authorized.

Our rule on permissive joinder of causes of action, with the proviso

subjecting it to the correlative rules on jurisdiction, venue and joinder

of parties and requiring a conceptual unity in the problems presented,

effectively disallows unlimited joinder.

Section 6, Rule 2 on misjoinder of causes of action provides:

Sec. 6. Misjoinder of causes of action. - Misjoinder of causes of action

is not a ground for dismissal of an action. A misjoined cause of action

may, on motion of a party or on the initiative of the court, be severed

and proceeded with separately.

There is misjoinder of causes of action when the conditions for joinder

under Section 5, Rule 2 are not met. Section 5 provides:

Sec. 5. Joinder of causes of action. - A party may in one pleading

assert, in the alternative or otherwise, as many causes of action as he

may have against an opposing party, subject to the following

conditions:

(a) The party joining the causes of action shall comply with the rules

on joinder of parties;

(b) The joinder shall not include special civil actions or actions

governed by special rules;

(c) Where the causes of action are between the same parties but pertain

to different venues or jurisdictions, the joinder may be allowed in the

Regional Trial Court provided one of the causes of action falls within

the jurisdiction of said court and the venue lies therein; and

(d) Where the claims in all the causes of action are principally for

recovery of money, the aggregate amount claimed shall be the test of

jurisdiction.

As far as can be gathered from the assailed Orders, it is the first

condition - on joinder of parties - that the trial court deemed to be

lacking. It is well to remember that the joinder of causes of action may

involve the same parties or different parties. If the joinder involves

different parties, as in this case, there must be a question of fact or of

law common to both parties joined, arising out of the same transaction

or series of transaction.19

In herein case, petitioners have adequately alleged in their complaint

that after they had already agreed to enter into a contract to sell with

Zescon Land, Inc., through Sales-Contreras, the latter also gave them

other documents to sign, to wit: A Deed of Absolute Sale over the

same properties but for a lower consideration, two mortgage deeds

over the same properties in favor of respondent Hermano with

accompanying notes and acknowledgment receipts for Ten Million

pesos (P10,000,000) each. Petitioners claim that Zescon Land, Inc.,

through Sales-Contreras, misled them to mortgage their properties

which they had already agreed to sell to the latter.

From the above averments in the complaint, it becomes reasonably

apparent that there are questions of fact and law common to both

Zescon Land, Inc., and respondent Hermano arising from a series of

transaction over the same properties. There is the question of fact, for

example, of whether or not Zescon Land, Inc., indeed misled

petitioners to sign the mortgage deeds in favor of respondent

Hermano. There is also the question of which of the four contracts

were validly entered into by the parties. Note that under Article 2085

of the Civil Code, for a mortgage to be valid, it is imperative that the

mortgagor be the absolute owner of the thing mortgaged. Thus,

respondent Hermano will definitely be affected if it is subsequently

declared that what was entered into by petitioners and Zescon Land,

Inc., was a Contract of Sale (as evidenced by the Deed of Absolute

Sale signed by them) because this would mean that the contracts of

mortgage were void as petitioners were no longer the absolute owners

of the properties mortgaged. Finally, there is also the question of

whether or not Zescon Land, Inc., as represented by Sales-Contreras,

and respondent Hermano committed fraud against petitioners as to

make them liable for damages.

Prescinding from the foregoing, and bearing in mind that the joinder of

causes of action should be liberally construed as to effect in one action

a complete determination of all matters in controversy involving one

subject matter, we hold that the trial court committed grave abuse of

discretion in severing from the complaint petitioners’ cause of action

against respondent Hermano.

WHEREFORE, premises considered, the Resolution of the Court of

Appeals dated 19 October 2000 dismissing petitioners’ petition for

certiorari and its Resolution dated 02 March 2001 denying petitioners’

motion for reconsideration are REVERSED and SET ASIDE. The

petition for certiorari is hereby GRANTED. The Orders of the

Regional Trial Court of Quezon City, Branch 224, dated 28 February

2000 and 25 May 2000 are ANNULLED and SET ASIDE. The RTC

is further ordered to reinstate respondent Antonio Hermano as one of

the defendants in Civil Case No. Q-98-34211. No costs.

G.R. No. 155736. March 31, 2005

SPOUSES DANILO and CRISTINA DECENA, Petitioners,

vs.

SPOUSES PEDRO and VALERIA PIQUERO, Respondents.

R E S O L U T I O N

CALLEJO, SR., J.:

The petitioners, Spouses Danilo and Cristina Decena were the owners

of a parcel of land, with a house constructed thereon, located in

Parañaque, Metro Manila (now Parañaque City) covered by Transfer

Certificate of Title (TCT) No. 134391 issued on February 24, 1998.1

On September 7, 1997, the petitioners and the respondents, the

Spouses Pedro and Valeria Piquero, executed a Memorandum of

Agreement (MOA)2 in which the former sold the property to the latter

for the price of P940,250.00 payable in six (6) installments via

postdated checks. The vendees forthwith took possession of the

property.

It appears in the MOA that the petitioners obliged themselves to

transfer the property to the respondents upon the execution of the

MOA with the condition that if two of the postdated checks would be

dishonored by the drawee bank, the latter would be obliged to

reconvey the property to the petitioners.

On May 17, 1999, the petitioners, then residents of Malolos, Bulacan,

filed a Complaint3 against the respondents with the Regional Trial

Court (RTC) of Malolos, Bulacan, for the annulment of the sale/MOA,

recovery of possession and damages. The petitioners alleged therein

that, they did not transfer the property to and in the names of the

respondents as vendees because the first two checks drawn and issued

by them in payment for the purchase price of the property were

dishonored by the drawee bank, and were not replaced with cash

despite demands therefor.

The petitioners prayed that, after due proceedings, judgment be

rendered in their favor, thus:

a. The sale/Memorandum of Agreement (Annex "A," supra) be

declared null and void, rescinded and with no further force and effect;

b. Defendants, and all persons claiming right under them, be ordered to

immediately vacate the subject property and turnover its possession to

the plaintiffs;

c. Defendants, jointly and severally, be ordered to pay the plaintiffs:

i. P10,000.00 – monthly, starting 01 October 1997 until complete

turnover of the subject property to the plaintiffs, as reasonable

compensation for its continued unlawful use and occupation by the

defendants;

ii. P200,000.00 – moral damages;

iii. P200,000.00 – exemplary damages;

iv. P250,000.00 – attorney’s fees and litigation – related expenses; and

v. the costs of suit.

Other reliefs just and equitable are, likewise, prayed for.4

The petitioners declared in their complaint that the property subject of

the complaint was valued at P6,900,000.00. They appended copies of

the MOA and TCT No. 134391 to their complaint. The case was

eventually raffled to Branch 13 of the RTC of Malolos, Bulacan.

The respondents filed a motion to dismiss the complaint on the ground,

inter alia, of improper venue and lack of jurisdiction over the property

subject matter of the action.

On the first ground, the respondents averred that the principal action of

the petitioners for the rescission of the MOA, and the recovery of the

possession of the property is a real action and not a personal one;

hence, it should have been brought in the RTC of Parañaque City,

where the property subject matter of the action was located, and not in

the RTC of Malolos, Bulacan, where the petitioners resided. The

respondents posited that the said court had no jurisdiction over the

property subject matter of the action because it was located in

Parañaque City.5

In opposition, the petitioners insisted that their action for damages and

attorney’s fees is a personal action and not a real action; hence, it may

be filed in the RTC of Bulacan where they reside. They averred that

while their second cause of action for the recovery of the possession of

the property is a real action, the same may, nevertheless, be joined

with the rest of their causes of action for damages, conformably with

Section 5(c), Rule 2 of the Rules of Court.6

By way of reply, the respondents averred that Section 5(c), Rule 2 of

the Rules of Court applies only when one or more of multiple causes

of action falls within the exclusive jurisdiction of the first level courts,

and the other or others are within the exclusive jurisdiction of the

RTC, and the venue lies therein.

On February 9, 2000, the trial court issued an Order7 denying the

motion for lack of merit. It found merit in the petitioner’s contention

that Section 5(c), Rule 2 was applicable.

Meanwhile, the case was re-raffled to Branch 10 of the RTC of

Malolos, Bulacan. In a Motion8 dated December 20, 2000, the

respondents prayed for the reconsideration of the trial court’s February

9, 2000 Order. On October 16, 2001, the court issued an Order9

granting the motion and ordered the dismissal of the complaint. It

ruled that the principal action of the petitioners was a real action and

should have been filed in the RTC of Parañaque City where the

property subject matter of the complaint was located. However, since

the case was filed in the RTC of Bulacan where the petitioners reside,

which court had no jurisdiction over the subject matter of the action, it

must be dismissed.

Hence, the present recourse.

The petition has no merit.

The sole issue is whether or not venue was properly laid by the

petitioners in the RTC of Malolos, Bulacan. The resolution of this

issue is, in turn, anchored on whether Section 5, Rule 2 of the Rules of

Court invoked by the petitioners is applicable in this case.

Under the said Rule, a party may, in one pleading, assert, in the

alternative or otherwise, as many causes of action as he may have

against an opposing party subject to the conditions therein enumerated,

one of which is Section 5(c) which reads:

Sec. 5. Joinder of causes of action. -- …

…

(c) Where the causes of action are between the same parties but pertain

to different venues or jurisdiction, the joinder may be allowed in the

Regional Trial Court provided one of the causes of action falls within

the jurisdiction of said court and the venue lies therein; …

Explaining the aforequoted condition, Justice Jose Y. Feria declared:

(c) Under the third condition, if one cause of action falls within the

jurisdiction of the Regional Trial Court and the other falls within the

jurisdiction of a Municipal Trial Court, the action should be filed in

the Regional Trial Court. If the causes of action have different venues,

they may be joined in any of the courts of proper venue. Hence, a real

action and a personal action may be joined either in the Regional Trial

Court of the place where the real property is located or where the

parties reside.10

A cause of action is an act or omission of one party in violation of the

legal right of the other which causes the latter injury. The essential

elements of a cause of action are the following: (1) the existence of a

legal right of the plaintiff; (2) a correlative legal duty of the defendant

to respect one’s right; and (3) an act or omission of the defendant in

violation of the plaintiff’s right.11

A cause of action should not be

confused with the remedies or reliefs prayed for. A cause of action is

to be found in the facts alleged in the complaint and not in the prayer

for relief. It is the substance and not the form that is controlling.12

A

party may have two or more causes of action against another party.

A joinder of causes of action is the uniting of two or more demands or

right of action in a complaint. The question of the joinder of causes of

action involves in particular cases a preliminary inquiry as to whether

two or more causes of action are alleged.13

In declaring whether more

than one cause of action is alleged, the main thrust is whether more

than one primary right or subject of controversy is present. Other tests

are whether recovery on one ground would bar recovery on the other,

whether the same evidence would support the other different counts

and whether separate actions could be maintained for separate relief;14

or whether more than one distinct primary right or subject of

controversy is alleged for enforcement or adjudication.15

A cause of action may be single although the plaintiff seeks a variety

of remedies. The mere fact that the plaintiff prays for multiple reliefs

does not indicate that he has stated more than one cause of action. The

prayer may be an aid in interpreting the petition and in determining

whether or not more than one cause of action is pleaded.16

If the

allegations of the complaint show one primary right and one wrong,

only one cause of action is alleged even though other matters are

incidentally involved, and although different acts, methods, elements

of injury, items of claims or theories of recovery are set forth.17

Where

two or more primary rights and wrongs appear, there is a joinder of

causes of action.

After due consideration of the foregoing, we find and so rule that

Section 5(c), Rule 2 of the Rules of Court does not apply. This is so

because the petitioners, as plaintiffs in the court a quo, had only one

cause of action against the respondents, namely, the breach of the

MOA upon the latter’s refusal to pay the first two installments in

payment of the property as agreed upon, and turn over to the

petitioners the possession of the real property, as well as the house

constructed thereon occupied by the respondents. The claim for

damages for reasonable compensation for the respondents’ use and

occupation of the property, in the interim, as well as moral and

exemplary damages suffered by the petitioners on account of the

aforestated breach of contract of the respondents are merely incidental

to the main cause of action, and are not independent or separate causes

of action.18

The action of the petitioners for the rescission of the MOA on account

of the respondents’ breach thereof and the latter’s failure to return the

premises subject of the complaint to the petitioners, and the

respondents’ eviction therefrom is a real action.19

As such, the action

should have been filed in the proper court where the property is

located, namely, in Parañaque City, conformably with Section 1, Rule

4 of the Rules of Court which reads:

SECTION 1. Venue of real actions. — Actions affecting title to or

possession of real property, or interest therein, shall be commenced

and tried in the proper court which has jurisdiction over the area

wherein the real property involved, or a portion thereof, is situated.

Since the petitioners, who were residents of Malolos, Bulacan, filed

their complaint in the said RTC, venue was improperly laid; hence, the

trial court acted conformably with Section 1(c), Rule 16 of the Rules

of Court when it ordered the dismissal of the complaint.

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED

for lack of merit. Costs against the petitioners.