ASSIGNMENT NO.3 - CASE DIGESTS

(1) Castro(2) THOMAS YANG vs THE HONORABLE MARCELINO R. VALDEZ ET. AL., G.R. NO. 73317 August 31, 1989

FACTS:Respondent spouses Ricardo and Milagros Morante filed an action in the RTC Branch 22 of General Santos City to recover possession of two (2) Isuzu Cargo Trucks against Petitioner Thomas Yang and Manuel Yaphuckon.

The trucks were however registered in the name of petitioner Thomas Yangand the same were in the possession of Manuel Yaphuckon.

On January 7, 1985, Judge Valdez issued an order of seizure directing the Provincial Sheriff of South Cotabato to take immediate possession and custody of the vehicles involved.

On January 10, 1985, Yaphuckon filed a motion seeking repossession of the cargo trucks and posted a replevin counter-bond of P560,000.00 which was disapproved on January 18,1985 by the respondent judge.

The respondent spouses amended their complaint on January 13, 1985 by excluding Manuel Yaphuckon as party defendant. The trial court ordered the release and delivery of the cargo trucks to respondent spouses.

On January 25, 1985, petitioner put up a counter-bond in the amount of P560,000.00 which was rejected by the respondent judge for having filed out of time.

ISSUES:

1. Whether respondent judge erred in issuing replevin though the trucks were registered in the name of petitioner?2. Whether petitioners counter-bond filed out of time?

RULING:

The provisional remedy of replevin is in the nature of possessory action and the applicant who seeks immediate possession of the property involved need not be the holder of legal title to the property. It suffices, if at the time he applies for a writ of replevin, he is, in the words of Section 2, Rule 60, entitled to the possession thereof.

Section 2. Rule 60. Affidavit and Bond. The applicant must show by his own affidavit or that of some other person who personally knows the facts:(a) That the applicant is the owner of the property claimed, particularly describing it, or is entitled to the possession thereof;(b) That the property is wrongfully detained by the adverse party, alleging the cause of detention thereof according to the best of his knowledge, information, and belief;(c) That the property has not been distrained or taken for a tax assessment or a fine pursuant to a law, or seized under a writ of execution or preliminary attachment, or otherwise placed under custodial egis, or if so seized, that it is exempt from such seizure or custody; and(d) The actual market value of the property.

After defendant had been duly represented by counsel even at the inception of the service of summons and a copy of the order of replevin on January 7, 1985, defendant Thomas Yang had already been duly served, especially so, when counsel manifested in their comment to the opposition filed by the plaintiffs that Manuel Yaphuckon was duly authorized to represent Thomas Yang.

From then on defendant should have been on guard as to the provision of Section 6. Rule 60, the five (5) days period within which to file the counter-replevin for the approval of the court, counted from the actual taking of the property by the sheriff on January 7, 1985.

(3) Llacuna(4) De Guia(5) SPS. ESTANISLAO vs. EAST WEST BANKINGCORPORATION G.R. No. 178537 February 11, 2008

FACTS:

Sometime in July 1997, petitioners obtained a loan from the respondent in the amount as evidenced by a promissory note and secured by two deeds of chattel mortgage dated July 10, 1997 one covering two dump trucks and a bulldozer to secure the loan amount of P2,375,000.00, and another covering bulldozer and a wheel loader to secure the loan amount of P1,550,000.00. Petitioners defaulted in the amortizations and the entire obligation became due and demandable.

On April 10, 2000, respondent bank filed a suit before the RTC of Antipolo for replevin with damages, praying that the equipment covered by the first deed of chattel mortgage be seized and delivered to it. Subsequently, respondent moved for suspension of the proceedings on account of an earnest attempt to arrive at an amicable settlement of the case. The trial court suspended the proceedings, and during the course of negotiations, a deed of assignment was drafted stating that, the ASSIGNOR isindebted to the ASSIGNEE in the aggregate sum of P7,305,459.52, inclusive of accrued interests and penalties as of August 16, 2000, and in full payment thereof, the ASSIGNOR does hereby ASSIGN, TRANSFER and CONVEY unto the ASSIGNEE those motor vehicles,with all their tools and accessories. That theASSIGNEE hereby accepts the assignment in full payment of the above-mentioned debt.

However, on June 20, 2001, respondent filed a manifestation and motion to admit an amended complaint for the seizure and delivery of two more heavy equipment which are covered under the second deed of chattel mortgage.

Spouses Estanislao, petitioners, sought to dismiss the amended complaint alleging that their previous payments on loan amortizations, the execution of the deed of assignment on August 16, 2000, and respondents acceptance of the three units of heavy equipment, had the effect of full payment or satisfaction of their total outstanding obligation which is a bar on respondent bank from recovering any more amounts from them.

The trial court dismissed the amended complaint for lack of merit on the grounds that the deed of assignment and the petitioners delivery of the heavy equipment effectively extinguished petitioners total loan obligation.

Upon appeal to the CA by the respondent the decision of the RTC was reversed.

Hence, this petition to the SC.

ISSUE:

Whether or not respondent is entitled to replevin on the alleged second chattel mortgage?

HELD:

NO. The appellate court erroneously denominated the replevin suit as a collection case. A reading of the original and amended complaints show that what the respondent initiated was a pure replevin suit, and not a collection case. Recovery of the heavy equipment was the principal aim of the suit; and payment of the total obligation was merely an alternative prayer which respondent sought in the event manual delivery of the heavy equipment could no longer be made.

Replevin, broadly understood, is both a form of principal remedy and a provisional relief. It may refer either to the action itself, i.e., to regain the possession of personal chattels being wrongfully detained from the plaintiff by another, or to the provisional remedy that would allow the plaintiff to retain the thing during the pendency of the action and hold itpendente lite.

The deed of assignment was a perfected agreement which extinguished petitioners total outstanding obligation to the respondent. The deed explicitly provides that the assignor (Spouses Estanislao, petitioners),"in full payment"of its obligation in the amount of P7,305,459.52, shall deliver the three units of heavy equipment to the assignee (East West Bank, respondent), which "accepts the assignmentin full paymentof the above-mentioned debt."This could only mean that should petitioners complete the delivery of the three units of heavy equipment covered by the deed, respondents credit would have been satisfiedin full, and petitioners aggregate indebtedness of P7,305,459.52 would then be considered to have been paidin fullas well.

Since there is no more credit to collect, no principal obligation to speak of, then there is no more second deed of chattel mortgage that may subsist. A chattel mortgage cannot exist as an independent contract since its consideration is the same as that of the principal contract. Being a mere accessory contract, its validity would depend on the validity of the loan secured by it.This being so, the amended complaint for replevin should be dismissed, because the chattel mortgage agreement upon which it is based had been rendered ineffectual.

(6) Solano(7) TEODORO E. LERMA,petitioner,vs. THE HONORABLE COURT OF APPEALS and CONCEPCION DIAZ, G.R. No. L-33352 December 20, 1974FACTS:Petitioner Teodoro Lerma and respondent Concepcion Diaz are husband and wife. They married on May 19, 1951. On August 22, 1969 the petitioner husband filed a complaint for adultery against the respondent wife and a certain Teodoro Ramirez. On November 18, 1969 the respondent wife filed with the lower court, , a complaint against the petitioner husband for legal separation and/or separation of properties, custody of their childrenand support, with an urgent petition for supportpendente litefor her and their youngest son, Gregory, who was then and until now is in her custody. The respondent's complaint for legal separation is based on two grounds: concubinage and attempt against her life.Petitioner husband filed his opposition to the respondent wife's application for supportpendente lite, setting up as defense the adultery charge he had filed against the respondent. Judge Luciano granted the supportpendente lite.Petitioner husband filed with respondent Court of Appeals a petition for certiorari and prohibition with preliminary injunction to annul the aforementioned orders on the ground that they were issued with grave abuse of discretion. The next day the respondent court gave due course to the petition and issued a writ of preliminary injunction to stop Judge Luciano from enforcing said orders. The respondent court set aside the assailed orders and granted the petitioner an opportunity to present evidence before the lower court in support of his defense against the application for support pendente lite. The respondent wife moved to reconsider so set aside its previous decision and rendered another dismissing the petition.ISSUE:(1) Whether adultery is a good defense against the respondent's claim for supportpendente liteRULING: It is suggested that while adultery may be a defense in an action for personal support, that is, support of the wife by the husband from his own funds, it is not a defense when the support is to be taken from the conjugal partnership property.We do not see that the distinction is material in this case. In the first place Article 292 is not in itself the source of the legal right to receive support. It merely states that the support, not only of the spouses but also of the children, shall be taken from the conjugal property during the pendency of the legal separation proceeding. It does not preclude the loss of such right in certain cases. In the second place, the said article contemplates the pendency of a court action and, inferentially at least, aprima facieshowing that the action will prosper. For if the action is shown to be groundless the mere filing thereof will not necessarily set Article 292 in operation. This is also the sense of Section 5 of Rule 61,supra, which requires, among other things, when supportpendente liteis applied for, that the court determine provisionally "the probable outcome of the case."Article 100 of the Civil Code provides that "the legal separation may be claimed only by the innocent spouse, provided there has been no condonation of or consent to the adultery or concubinage ... (and) where both spouses are offenders, a legal separation cannot be claimed by either of them ..."In a provisional sense at least, within the meaning of Rule 61 (Section 5), the probable failure of the respondent's suit for legal separation can be foreseen since she is not an innocent spouse, having been convicted of adultery by the Court of First Instance. It is true that the judgment of conviction is on appeal in the Court of Appeals, but the same undoubtedly satisfies the standard of provisional showing set by the aforesaid Rule. If legal separation cannot be claimed by the guilty spouse in the first place, the fact that an action for that purpose is filed anyway should not be permitted to be used as a means to obtain supportpendente lite, which, without such action, would be denied on the strength of the decisions of this Court recognizing adultery as a good defense. Otherwise, as pointed out by the petitioner, all that an erring spouse has to do to circumvent such defense would be to file a suit for legal separation no matter how groundless.The right to separate support or maintenance, even from the conjugal partnership property, presupposes the existence of a justifiable cause for the spouse claiming such right to live separately. This is implicit in Article 104 of the Civil Code, which states that after the filing of the petition for legal separation the spouses shall be entitled to live separately from each other. A petition in bad faith, such as that filed by one who is himself or herself guilty of an act which constitutes a ground for legal separation at the instance of the other spouse, cannot be considered as within the intendment of the law granting separate support. In fact under Article 303 of the same Code the obligation to give support shall cease "when the recipient, be he a forced heir or not, has committed some act which gives rise to disinheritance;" and under Article 921 one of the causes for disinheriting a spouse is "when the spouse has given cause for legal separation." The loss of the substantive right to support in such a situation is incompatible with any claim for supportpendente lite.What has been said above, of course, is not meant to be a prejudgment of either the legal separation proceeding pending in the lower court or the criminal case for adultery pending in the Court of Appeals. It is to be understood only in the light of Rule 61, Section 5, of the Rules of Court, which specifically governs the subject of support pendente lite.(8) ROSITA VELOSO DE OLAYVAR,Plaintiff-Appellant, v. ARISTOTELES OLAYVAR,Defendant-Appellee.G.R. No. L-8088. November 29, 1955

FACTS:Rosita Veloso De Olayvar instituted an action against Aristoteles Olayvar in the Court of First Instance of Leyte praying that support be given her and her four children coupled with a petition for support pendente lite.But earlier, defendant husband filed a case for legal separation in Cebu between the same parties on the ground of adultery wherein the right of plaintiff to demand support is incidentally involved.

Defendant husband in his answer to the later case (Leyte) set up as special defense about their pending case for legal separation in Cebu.

While the separation case in Cebu is pending, the court deemed it proper to hold in abeyance further action on the case for support for the reason that the case in Cebu "should have priority in order to ascertain the rights of the parties with particular reference to support in favor of the plaintiff." The court however modified later this ruling on the premise that, as the legal separation case might take a long time before it is finally disposed of, it is imperative that the matter of support be given preferential consideration.

After the failed attempt of the defendant to have this ruling reconsidered, he filed a motion to dismiss predicated on the same plea that there is between the same parties a case for legal separation in the Court of First Instance of Cebu invoking in his favor the rule that a complaint may be dismissed where "there is another action pending between the same parties for the same cause." [Rule 8, section 1(d)] And on March 24, 1954, the court entered an order dismissing the case in line with the plea of the defendant. This is the order subject of the present appeal.

ISSUE:Whether the defendants claim that an action for support pendente lite may be dismissed on the ground that "there is another action pending (legal separation) between the same parties for the same cause" tenable.

HELD:YES.The Supreme Court favoured the defendants claim and dismissed the present action. In order that an action may be dismissed on the ground that "there is another action pending between the same parties for the same cause" [Rule 8, section 1 (d)], the following requisites must concur: (1) identity of parties, or at least such as representing the same interests in both actions; (2) identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (3) the identity in the two cases should be such that the judgment that may be rendered in one would, regardless of which party is successful, amount to res adjudicata in the other.

Note that the present action is for support not only of plaintiff but of her children. The action is predicated on the infidelity of defendant who because of his propensity towards other women made him neglectful of his marital duties. The case of legal separation, on the other hand, asserts adultery on the part of plaintiff which is a valid defense against an action for support. Our new Civil Code provides that the obligation to give support shall cease "when the recipient, be he a forced heir or not, has committed some act which gives rise to disinheritance" [Article 303 (4)], and under Article 921 of the same Code, it shall be sufficient cause for disinheritance "when the spouse has given cause for legal separation." It further appears that in the separation case the wife interposed an answer wherein, repudiating the charge of adultery, she demanded that she and her children be given the proper maintenance and support to which they are entitled under the law.

All of the foregoing show that the two cases raise practically the same issues. There is therefore no need of prosecuting them separately and independently for that would amount to duplicity of action. And as it appears that the case of legal separation was instituted earlier than the one for support, it is fair that the latter be dismissed as was correctly done by the lower court.

(9) IDONAH SLADE PERKINS,plaintiff-appellee, vs. EUGENE ARTHUR PERKINS,defendant-appellant. G.R. No. 35787 September 12, 1932FACTS:The parties to this action are husband and wife, married in Manila in 1914, and the wife has entered suit for separate maintenance. The CFI of Manila granted certain amounts for maintenance and P1000 for cost of Litigation. Prior to the resolution of the action for separate maintenance filed by the wife, the court ordered for support in certain items of debts, advances, and living expenses existing at the time of the order fixing the monthly allowance. Such order is now the subject for appeal. Appellee, in her brief, has moved to dismiss the appeal contending that the order is interlocutory. ISSUE:Whether the extent to give support includes payment of certain items debts, advances, and living expenses. RULING:Article 148 of the Civil Code reads in part:The obligation to give support may be enforced whenever the person having a right to claim it requires such assistance for his or her maintenance; such allowance, however, shall only be paid from the date of the filing of the complaint, and the character and the nature of the support is defined in Article 142. The pertinent portion thereof reads:By support is understood all that is necessary for food, shelter, clothing and medical attendance, according to the social standing of the family.In the opinion of the court, some of the items are clearly without the rules laid down in the Code, while others may be partly within the rules. Some, in their entirety, long precede the date of the filing of this suit.While the item known as the Manila Hotel is evidently allowable in part, being for ordinary necessities of life, it covers a period both before and after the filing of the suit. Others, such as the claim for money loaned to the wife, are not within the rule (13 R. C. L., 1209; Ramirez and De Marcaidavs.Redfern, 49 Phil., 849). It is impossible, from the evidence of record, for this court to state how much should be allowed. It is also noted that no allowance has as yet been made for the period from the filing of suit to the date of allowance of temporary maintenance two months thereafter. It is impossible, from the evidence of record, for this court to state how much should be allowed. It is also noted that no allowance has as yet been made for the period from the filing of suit to the date of allowance of temporary maintenance two months thereafter.It being impossible for this court to state the amount that should be allowed, the case must be remanded for further proceedings in accord with the views herein expressed, and it is so ordered. No pronouncement is made regarding costs.

(10) LORENZO MENDOZA,petitioner,vs. GORGONIA PARUNGAO, Honorable EDUARDO GUTIERREZ DAVID, Judge of First Instance of Nueva Ecija,GABRIEL BELMONTE, sheriff ex-officio of Nueva Ecija, andHonorable MANUEL V. MORAN, Vacation Judge of First Instance of the Court of Nueva Ecija,respondents.August 7, 1926G.R. No. 26231FACTS:On August 7, 1925, the Court of First Instance of Nueva Ecija rendered judgment involving respondent Gorgonia Parugao was plaintiff and the herein petitioner Lorenzo Mendoza defendant, declaring the marriage between the two null on account of the return of the first husband of the Parugao, who had been presumed dead after an absence of more than seven years.In the month of October of 1925, Antonio Buenaventura, the first husband of the respondent Gorgonia Parugao, died in the municipality of Cabanatuan Nueva Ecija.Said judgment annulling the marriage being on appeal, on September 14, 1925, the said respondent Gorgonia Parugao brought an action, in the Court of First Instance of Nueva Ecija, against the petitioner Lorenzo Mendoza in which she alleged the existence of certain conjugal property acquired during her marriage with the said petitioner, and asked for a settlement of the same and the sum of P300 as alimony during the pendency of the suit.The herein respondent and defendant in said civil case No. 3962 in answering the complaint on December 14, 1925, denied generally and specifically the facts alleged therein.On November 27, 1925, court directed the defendant Lorenzo Mendoza, during the pendency of the case and from the filing of the complaint, to pay the plaintiff the sum of P50 monthly and in advance by way of support and subsequently issued and execution of the order.On February 8, 1926, the defendant Lorenzo Mendoza filed a motion praying for the reconsideration of said order of November 27, 1925.On March 24, 1926, a writ of execution was issued against the property of the defendant in order to collect the sum of P325 the total amount of the monthly payments due from September 14, 1925.Said writ of execution not having been complied with the Court of First Instance of Nueva Ecija, issued an order citing the defendant Lorenzo Mendoza, together with the herein named defendants to appear and show cause why they should not be punished for contempt for not having complied with said writ of execution.On July 10, 1926, the Court of First Instance of Nueva Ecija issued an order denying the motion of the defendant praying that the writs of attachment of the dates of January 20th and March 23rd of 1926, respectively, be cancelled.In its decision of July 23, 1926, this court affirmed the judgment of the Court of First Instance of Nueva Ecija declaring null and of no effect the marriage contracted by the petitioner Lorenzo Mendoza and the respondent Gorgonia Parugao on February 14, 1916.

ISSUE: Whether respondent Gorgonia Parugao, on September 14, 1925, when she filed her complaint for the liquidation of the conjugal property and alimony, was entitled to support during the pendency of the action.RULING:NO.The right to support between spouses arises from law and is based upon their obligation to mutually help each other created by the matrimonial bond. After the complaint for annulment of marriage has been filed by the wife and admitted she is entitled to support during the pendency of the suit, but once the nullity is decreed, the right ceases, because the mutual obligation created by the marriage is extinguished. The marriage of the respondent with the petitioner having been annulled on August 7, 1925, by virtue of the rule enunciated, she was no longer entitled to support on September 14, 1925, when she filed her complaint for support. The same rule obtains in the United States. This does not mean, however, that she is not entitled to payment in advance of a part of her undetermined share of the conjugal property if, after the liquidation sought by her, there exists such conjugal property. In those states of the United States where the institution of conjugal partnership prevails, it has been held by the courts that the necessary sum may be taken from the community property for the support of the wife.The order CFI of Nueva Ecija of November 27, 1925, may be considered as an order for the payment of P50 monthly as an advance payment on account of such share of the conjugal property as may be found from the liquidation to belong to Gorgonia Parugao. This order, however, being of an interlocutory character and not final, a writ of execution cannot be issued thereon but its unjustified disobedience may constitute contempt of court and, after the proper proceedings prescribed by law in such cases, may be punished as such.

(11) Terlyngrace Rivera vs. Florencio Vargas G.R. No. 165895 June 5, 2009FACTS:

Respondent Florencio Vargas filed a complaint against petitioner and several John Does before the Regional Trial Court (RTC) inTuguegaraoCity, Cagayan, for the recovery of a 150 T/H rock crushing plant located in Sariaya, Quezon. In his complaint and affidavit, Vargas claims ownership of the said equipment, having purchased and imported the same directly from Hyun Dae Trading Co., inSeoul,South Korea.The equipment was allegedly entrusted to petitioners husband, Jan T. Rivera, who died, as caretaker of respondents construction aggregates business in Batangas. According to Vargas, petitioner failed to return the said equipment after her husbands death despite his repeated demands, thus forcing him to resort to court action. The complaint was accompanied by a prayer for the issuance of a writ of replevin and the necessary bond amounting toP2,400,000.00.

Summons was served upon petitioner through her personal secretary at her residence inParaaqueCity. Interestingly, however, the writ of replevin was served upon and signed by a certain Joseph Rejumo, the security guard on duty in petitioners crushing plant in Sariaya, Quezon contrary to the sheriffs return stating that the writ was served upon Rivera.

Rivera filed her answer, manifestation, and motion for the acceptance of petitioners redelivery bond. In her answer, petitioner countered that the rock-crushing plant was ceded in favor of her husband as his share following the dissolution of the partnership formed between Jan Rivera and respondents wife, Iluminada Vargas (Iluminada), while the partnerships second rock-crushing plant in Cagayan was ceded in favor of Iluminada. She further averred that from the time that the partnership was dissolved until Jan Riveras death, it was petitioners husband who exercised ownership over the said equipment without any disturbance from respondent.

The RTC issued an Order disapproving petitioners redelivery bond application for failure to comply with the requirements under Sections 5 and 6 of Rule 60 of the Rules of Court.Without directly saying so, the RTC faulted petitioner for her failure to file the application for redelivery bond within 5 days from the date of seizure as provided in the Rules of Court. Petitioner moved for reconsideration, but the same was also denied.

ISSUE: Whether the RTC committed grave abuse of discretion in denying Riveras counter-bond on the ground that it was filed out of time.

HELD: YES. Petitioner avers that the writ of replevin was served upon the security guard where the rock-crushing plant to be seized was located. The signature of the receiving party indicates that the writ was received by a certain Joseph Rejumo, the guard on duty in a plant in Sariaya, Quezon, where the property to be seized was located, and witnessed by Claudio Palatino, respondents caretaker. The sheriffs return, however, peremptorily states that both the writ of replevin and the summons were served upon Rivera. Nine (9) days after the writ was served on the security guard, petitioner filed an answer to the complaint accompanied by a prayer for the approval of her redelivery bond. The RTC, however, denied the redelivery bond for having been filed beyond the five-day mandatory period prescribed in Sections 5 and 6 of Rule 60. But since the writ was invalidly served, petitioner is correct in contending that there is no reckoning point from which the mandatory five-day period shall commence to run.Replevin is one of the most ancient actions known to law, taking its name from the object of its process. It originated in common law as a remedy against the wrongful exercise of the right of distress for rent and, according to some authorities, could only be maintained in such a case. But by the weight of authority, the remedy is not and never was restricted to cases of wrongful distress in the absence of any statutes relating to the subject, but is a proper remedy for any unlawful taking.Replevied, used in its technical sense, means delivered to the owner, while the words to replevy means to recover possession by an action of replevin.

Broadly understood in this jurisdiction, replevin is both a form of principal remedy and of provisional relief.It may refer either to the action itself,i.e.,to regain the possession of personal chattels being wrongfully detained from the plaintiff by another, or to the provisional remedy that would allow the plaintiff to retain the thing during the pendency of the action and to hold itpendente lite. The action is primarily possessory in nature and generally determines nothing more than the right of possession.

The law presumes that every possessor is a possessor in good faith. He is entitled to be respected and protected in his possession as if he were the true owner thereof until a competent court rules otherwise. Before a final judgment, property cannot be seized unless by virtue of some provision of law. The Rules of Court, under Rule 60, authorizes such seizure in cases of replevin. However, a person seeking a remedy in an action for replevin must follow the course laid down in the statute, since the remedy is penal in nature. When no attempt is made to comply with the provisions of the law relating to seizure in this kind of action, the writ or order allowing the seizure is erroneous and may be set aside on motion by the adverse party. Be it noted, however, that a motion to quash the writ of replevin goes to the technical regularity of procedure, and not to the merits of the case in the principal action.

The process regarding the execution of the writ of replevin in Section 4 of Rule 60 is unambiguous: the sheriff, upon receipt of the writ of replevin and prior to the taking of the property, must serve a copy thereof to the adverse party (petitioner, in this case) together with the application, the affidavit of merit, and the replevin bond. The reasons are simple,i.e.,to provide proper notice to the adverse party that his property is being seized in accordance with the courts order upon application by the other party, and ultimately to allow the adverse party to take the proper remedy consequent thereto.

Service of the writ upon the adverse party is mandatory in line with the constitutional guaranty on procedural due process and as safeguard against unreasonable searches and seizures. If the writ was not served upon the adverse party but was instead merely handed to a person who is neither an agent of the adverse party nor a person authorized to receive court processes on his behalf, the service thereof is erroneous and is, therefore, invalid, running afoul of the statutory and constitutional requirements. The service is likewise invalid if the writ of replevin was served without the required documents.Under these circumstances, no right to seize and to detain the property shall pass, the act of the sheriff being both unlawful and unconstitutional.

The trial court is reminded that not only should the writ or order of replevin comply with all the requirements as to matters of form or contents prescribed by the Rules of Court.The writ must also satisfy proper service in order to be valid and effective:i.e.it should be directed to the officer who is authorized to serve it; and it should be served upon the person who not only has the possession or custody of the property involved but who is also a party or agent of a party to the action. Consequently, a trial court is deemed to have acted without or in excess of its jurisdiction with respect to the ancillary action of replevin if it seizes and detains a personalty on the basis of a writ that was improperly served, such as what happened in this case.At the outset, petitioners proper remedy should have been to file a motion to quash the writ of replevin or a motion to vacate the order of seizure. Nevertheless, petitioners filing of an application for a redelivery bond, while not necessary, did not thereby waive her right to question the improper service. It now becomes imperative for the trial court to restore the parties to their former positions by returning the seized property to petitioner and by discharging the replevin bond filed by respondent. The trial, with respect to the main action, shall continue. Respondent may, however, file a new application for replevin should he choose to do so.

(12) BA FINANCE CORPORATION, petitioner, vs. HON. COURT OF APPEALS and ROBERTO M. REYES, defendant GR No. 102998 July 5, 1996

FACTS:

The spouses Reynaldo and Florencia Manahan executed, on 15 May 1980, a promissory notebinding themselves to pay Carmasters, Inc., the amount of P83,080.00 in thirty-six monthly installments commencing 01 July 1980. To secure payment, the Manahan spouses executed a deed of chattel mortgageover a motor vehicle.

Carmasters later assignedthe promissory note and the chattel mortgage to petitioner BA Finance Corporation with the conformity of the Manahans. When the latter failed to pay the due installments, petitioner sent demand letters. The demands not having been heeded, petitioner, on 02 October 1987, filed a complaint for replevin with damages against the spouses, as well as against a John Doe, praying for the recovery of the vehicle with an alternative prayer for the payment of a sum of money should the vehicle not be returned.

Upon petitioner's motion and the filing of a bond in the amount of P169,161.00 the lower court issued a writ of replevin. The court, however, cautioned petitioner that should summons be not served on the defendants within thirty (30) days from the writ's issuance, the case would be dismissed to failure to prosecute.The warning was based on what the court perceived to be the deplorable practice of some mortgagees of "freezing (the) foreclosure or replevin cases" which they would so "conveniently utilize as a leverage for the collection of unpaid installments on mortgaged chattels."

The service of summons upon the spouses Manahan was caused to be served by petitioner at No. 35 Lantana St., Cubao, Quezon City. The original of the summons had the name and the signature of private respondent Roberto M. Reyes indicating that he received, on 14 October 1987, a copy of the summons and the complaint.

Petitioner, through its Legal Assistant, Danilo E. Solano, issued a certification to the effect that it had received from Orson R. Santiago, the deputy sheriff of the RTC Manila, the Ford Cortina seized from private respondent Roberto M. Reyes, the John Doe referred to in the complaint,in Sorsogon, Sorsogon. On 20 October 1987, the lower court came out with an order of seizure.

Alleging possession in good faith, private respondent filed, on 26 October 1987, a motion for an extension of time within which to file his answer and/or a motion for intervention. The court granted the motion.

A few months later, or on 18 February 1988, the court issued dismissal orderfor failure to prosecute and further ordering the plaintiff to return the property seized with all its accessories to defendant John Doe in the person of Roberto M. Reyes as there is no showing that the principal defendants were served with summons inspite of the lapse of four (4) months.

On 26 February 1988, petitioner filed a notice of dismissal of the case "without prejudice and without pronouncement as to costs, before service of Summons and Answer, under Section 1, Rule 17, of the Rules of Court."It also sought in another motion the withdrawal of the replevin bond. In view of the earlier dismissal of the case (for petitioner's failure to prosecute), the court, on 02 March 1988, merely noted the notice of dismissal and denied the motion to withdraw the replevin bond considering that the writ of replevin had meanwhile been implemented.

On 09 March 1988, private respondent filed a motion praying that petitioner be directed to comply with the court order requiring petitioner to return the vehicle to him. In turn, petitioner filed, on 14 March 1988, a motion for the reconsideration of the orders of 18 February 1988 and 02 March 1988

On 20 April 1988, the court granted petitioner's motion for reconsideration and accordingly recalled the order directing the return of the vehicle to private respondent, set aside the order dismissing the case, directed petitioner "to cause the service of summons together with a copy of the complaint on the principal defendants within five (5) days from receipt" thereof at petitioner's expense, and ordered private respondent to answer the complaint.

A few months later, or on 02 August 1988, petitioner filed a motion to declare private respondent in default. The court granted the motion on that same day and declared private respondent "in default. The court likewise granted petitioner's motion to set the case for the presentation,ex parte, of evidence. Petitioner, thereupon, submitted the promissory note, the deed of chattel mortgage, the deed of assignment, a statement of account in the name of Florencia Manahan and two demand letters.

On 27 February 1989, the trial court rendered a decision dismissing the complaint against the Manahans for failure of petitioner to prosecute the case against them. It also dismissed the case against private respondent for failure of petitioner to show any legal basis for said respondent's liability as Roberto M. Reyes is merely ancillary debtor.

Petitioner appealed to the CA and contended the subject motor vehicle was taken from the possession of said Roberto M. Reyes, a third person with respect to the contract of chattel mortgage between the appellant and the defendants spouses Manahan. The CA disagreed and subsequently, denied petitioner's motion for reconsideration.

ISSUE:Whether a mortgagee can maintain an action for replevin against any possessor of the object of a chattel mortgage even if the latter were not a party to the mortgage.

HELD:

NO. The plaintiff was not able to establish the essential conditions to take possession thereof.

A chattel mortgagee, unlike a pledgee, need not be in, nor entitled to the possession of the property unless and until the mortgagor defaults and the mortgagee thereupon seeks to foreclose thereon. Since the mortgagee's right of possession is conditioned upon the actual fact of default which itself may be controverted, the inclusion of other parties like the debtor or the mortgagor himself, may be required in order to allow a full and conclusive determination of the case. When the mortgagee seeks a replevin in order to effect the eventual foreclosure of the mortgage, it is not only the existence of, but also the mortgagor's default on, the chattel mortgage that, among other things, can properly uphold the right to replevy the property. The burden to establish a valid justification for that action lies with the plaintiff. An adverse possessor, who is not the mortgagor, cannot just be deprived of his possession, let alone be bound by the terms of the chattel mortgage contract, simply because the mortgagee brings up an action for replevin.

Replevin, broadly understood, is both a form of principal remedy and of a provisional relief. It may refer either to the action itself,i.e., to regain the possession of personal chattels being wrongfully detained from the plaintiff by another, or to the provisional remedy that would allow the plaintiff to retain the thing during the pendency of the action and hold itpendente lite.The action is primarily possessory in nature and generally determines nothing more than the right of possession.

Replevin is so usually described as a mixed action, being partlyin remand partlyin personamin reminsofar as the recovery of specific property is concerned, andin personamas regards to damages involved. As an "action in rem," the gist of the replevin action is the right of the plaintiff to obtain possession of specific personal property by reason of his being the owner or of his having a special interest therein.Consequently, the person in possession of the property sought to be replevied isordinarythe proper and only necessary party defendant, and the plaintiff is not required to so join as defendants other persons claiming a right on the property but not in possession thereof. Rule 60 of the Rules of Court allows an application for the immediate possession of the property but the plaintiff must show that he has a good legal basis,i.e., a clear title thereto, for seeking suchinterim possession.

Where theright of the plaintiff to the possession of the specific property is so conceded or evident, the action need only be maintained against him who so possesses the property. There can be no question that persons having a special right of property in the goods the recovery of which is sought; such as a chattel mortgagee, may maintain an action for replevin therefor. Where the mortgage authorizes the mortgagee to take possession of the property on default, he may maintain an action to recover possession of the mortgaged chattels from the mortgagor or from any person in whose hands he may find them.In effect then, the mortgagee, upon the mortgagor's default, is constituted an attorney-in-fact of the mortgagor enabling such mortgagee to act for and in behalf of the owner.Incase the right of possession on the part of the plaintiff, or his authority to claim such possession or that of his principal, is put to great doubt(a contending party might contest the legal bases for plaintiffs cause of action or an adverse and independent claim of ownership or right of possession is raised by that party), it could become essential to have other persons involved and accordingly impleaded for a complete determination and resolution of the controversyIn a suit for replevin, a clear right of possession must be established. A foreclosure under a chattel mortgage may properly be commenced only once there is default on the part of the mortgagor of his obligation secured by the mortgage. The replevin in the instant case has been sought to pave the way for the foreclosure of the object covered by the chattel mortgage. The conditions essential for that foreclosure would be to show, firstly, the existence of the chattel mortgage and, secondly, the default of the mortgagor. These requirements must be established since the validity of the plaintiffs exercise of the right of foreclosure are inevitably dependent thereon. (Servicewide Specialists,Inc.,vs.Court of Appeals,et al., G.R. No. 103301, 08 December 1995,)

(13) SMART COMMUNICATIONS, INC.,petitioner, vs. REGINA M. ASTORGA,respondent. G.R. No. 148132 January 28, 2008FACTS:Regina M. Astorga (Astorga) was employed by respondent Smart Communications, Incorporated (SMART) as District Sales Manager of the Corporate Sales Marketing Group/ Fixed Services Division (CSMG/FSD). Astorga enjoyed additional benefits, one of which is a car plan. SMART launched an organizational realignment to achieve more efficient operations. Part of the reorganization was the outsourcing of the marketing and sales force. Thus, SMART entered into a joint venture agreement with NTT of Japan, and formed SMART-NTT Multimedia, Incorporated (SNMI). Since SNMI was formed to do the sales and marketing work, SMART abolished the CSMG/FSD, Astorgas division.To soften the blow of the realignment, SNMI agreed to absorb the CSMG personnel who would be recommended by SMART. SMART then conducted a performance evaluation of CSMG personnel and those who garnered the highest ratings were favorably recommended to SNMI. Astorga landed last in the performance evaluation, thus, she was not recommended by SMART. SMART, nonetheless, offered her a supervisory position in the Customer Care Department, but she refused the offer because the position carried lower salary rank and rate.Despite the abolition of the CSMG/FSD, Astorga continued reporting for work. SMART issued a memorandum advising Astorga of the termination of her employment on ground of redundancy,The termination of her employment prompted Astorga to file a complaint for illegal dismissal, non-payment of salaries and other benefits with prayer for moral and exemplary damages against SMARTSMART responded that there was valid termination and also sent a letter to Astorga demanding that she pay the current market value of the Honda Civic Sedan which was given to her under the companys car plan program, or to surrender the same to the company for proper disposition.Astorga, however, failed and refused to do either, thus prompting SMART to file a suit for replevin with the Regional Trial Court of Makati (RTC).ISSUE:Whether RTC was correct when it assumed jurisdiction over the action for Replevin filed by SMART.HELD: YES. Replevinis an action whereby the owner or person entitled to repossession of goods or chattels may recover those goods or chattels from one who has wrongfully distrained or taken, or who wrongfully detains such goods or chattels. It is designed to permit one having right to possession to recover property in specie from one who has wrongfully taken or detained the property.The term may refer either to the action itself, for the recovery of personalty, or to the provisional remedy traditionally associated with it, by which possession of the property may be obtained by the plaintiff and retained during the pendency of the action. Contrary to the CAs rationale, the RTC rightfully assumed jurisdiction over the suit and acted well within its discretion in denying Astorgas motion to dismiss. SMARTs demand for payment of the market value of the car or, in the alternative, the surrender of the car, is not a labor, but a civil, dispute. It involves the relationship of debtor and creditor rather than employee-employer relations.As such, the dispute falls within the jurisdiction of the regular courts.InBasaya, Jr. v. Militante,this Court, in upholding the jurisdiction of the RTC over the replevin suit, explained:Replevin is a possessory action, the gist of which is the right of possession in the plaintiff. The primary relief sought therein is the return of the property in specie wrongfully detained by another person. It is an ordinary statutory proceeding to adjudicate rights to the title or possession of personal property. The question of whether or not a party has the right of possession over the property involved and if so, whether or not the adverse party has wrongfully taken and detained said property as to require its return to plaintiff, is outside the pale of competence of a labor tribunal and beyond the field of specialization of Labor Arbiters.

(14) Boholano (supra see no. 11)(15) ROGER V. NAVARRO vs. HON. JOSE L.ESCOBIDOFACTS: Respondent Karen T. Go filed two complaints before the RTC for replevin and/or sum of money with damages against Navarro. In these complaints, Karen Go prayed that the RTC issue writs of replevin for the seizure of two (2) motor vehicles in Navarros possession. In his Answers, Navarro alleged as a special affirmative defense that the two complaints stated no cause of action, since Karen Go was not a party to the Lease Agreements with Option to Purchase (collectively, the lease agreements) the actionable documents on which the complaints were based. RTC dismissed the case but set aside the dismissal on the presumption that Glenn Gos (husband) leasing business is a conjugal property and thus ordered Karen Go to file a motion for the inclusion of Glenn Go as co-plaintiff as per Rule 4, Section 3 of the Rules of Court. Navarro filed a petition for certiorari with the CA. According to Navarro, a complaint which failed to state a cause of action could not be converted into one with a cause of action by mere amendment or supplemental pleading. CA denied petition.ISSUE: Whether or not Karen Go is a real party in interest.RULING: YES. Karen Go is the registered owner of the business name Kargo Enterprises, as the registered owner of Kargo Enterprises, Karen Go is the party who will directly benefit from or be injured by a judgment in this case. Thus, contrary to Navarros contention, Karen Go is the real party-in-interest, and it is legally incorrect to say that her Complaint does not state a cause of action because her name did not appear in the Lease Agreement that her husband signed in behalf of Kargo Enterprises.Glenn and Karen Go are effectively co-owners of Kargo Enterprises and the properties registered under this name; hence, both have an equal right to seek possession of these properties. Therefore, only one of the co-owners, namely the co-owner who filed the suit for the recovery of the co-owned property, is an indispensable party thereto. The other co-owners are not indispensable parties. They are not even necessary parties, for a complete relief can be accorded in the suit even without their participation, since the suit is presumed to have been filed for the benefit of all co-owners.We hold that since Glenn Go is not strictly an indispensable party in the action to recover possession of the leased vehicles, he only needs to be impleaded as a pro-forma party to the suit, based on Section 4, Rule 4 of the Rules, which states:Section 4.Spouses as parties. Husband and wife shall sue or be sued jointly, except as provided by law.Even assuming that Glenn Go is an indispensable party to the action, misjoinder or non-joinder of indispensable parties in a complaint is not a ground for dismissal of action as per Rule 3, Section 11 of the Rules of Court.(16)ADVENT CAPITAL AND FINANCE CORPORATION vs ROLAND YOUNG G.R. No. 183018 August 3, 2011

Facts:The present controversy stemmed from a replevin suit instituted by petitioner Advent against respondent Young to recover the possession of a 1996 Mercedes Benz E230 which is registered in Advents name. Prior to the replevin case, Advent filed for corporate rehabilitation with the rehabilitation court. The court issued an Order (stay order) which states that the enforcement of all claims whether for money or otherwise, and whether such enforcement is by court action or otherwise, against Advent, its guarantors and sureties not solidarily liable with it, is stayed.

Young claimed among others, several employee benefits allegedly due him as Advents former president and chief executive officer. Advent's rehabilitation plan was approved which included in its assets the subject car which remained in Young's possession at the time. The trial court issued a Writ of Seizure directing the Sheriff to seize the subject car from Young. Young filed an Answer alleging that as a former employee of Advent, he had the option to purchase the subject car. The trial court dismissed the replevin case and Young's counterclaim. The CA ruled in favor of Young and directed the returning the car to him.

Issue:WON the CA committed reversible error in directing the return of the seized car to Young

Ruling:The petition is partially meritorious.

We agree with the Court of Appeals in directing the trial court to return the seized car to Young since this is the necessary consequence of the dismissal of the replevin case for failure to prosecute without prejudice. Upon the dismissal of the replevin case for failure to prosecute, the writ of seizure, which is merely ancillary in nature, became functus officio and should have been lifted. There was no adjudication on the merits, which means that there was no determination of the issue who has the better right to possess the subject car. Advent cannot therefore retain possession of the subject car considering that it was not adjudged as the prevailing party entitled to the remedy of replevin.

The dismissal of the replevin case for failure to prosecute results in the restoration of the parties status prior to litigation, as if no complaint was filed at all. To let the writ of seizure stand after the dismissal of the complaint would be adjudging Advent as the prevailing party, when precisely no decision on the merits had been rendered. Accordingly, the parties must be reverted to their status quo ante. Since Young possessed the subject car before the filing of the replevin case, the same must be returned to him, as if no complaint was filed at all.

(17)EUFEMIA ALMEDA vs. BATHALA MARKETING INDUSTRIESFacts: Respondent Bathala Marketing Industries, Inc., as lessee, represented by its president renewed its Contract of Lease with Almeda, as lessor, husband of petitioner Eufemia and father of petitioner Romel Almeda. Under the said contract, Ponciano agreed to lease a portion of the Almeda Compound. The contract of lease stated that in case of extraordinary inflation, the value of Philippine peso at the time of the establishment of the obligation shall be the basis of payment.During the effectivity of the contract, Ponciano died. Thereafter, respondent dealt with petitioners. Petitioners advised respondent that the former shall assess and collect VAT on its monthly rentals. Respondent opposed petitioners' demand and insisted that there was no extraordinary inflation to warrant the application of Article 1250 in light of the pronouncement of this Court in various cases. Respondent refused to pay the VAT and adjusted rentals as demanded by petitioners but continued to pay the stipulated amount set forth in their contract.Respondent instituted an action for declaratory relief for purposes of determining the correct interpretation of conditions of the lease contract to prevent damage and prejudice. Petitioners in turn filed an action for ejectment, rescission and damages against respondent for failure of the latter to vacate the premises after the demand made by the former. Petitioners later moved for the dismissal of the declaratory relief case for being an improper remedy considering that respondent was already in breach of the obligation and that the case would not end the litigation and settle the rights of the parties. The trial court, however, was not persuaded, and consequently, denied the motion.Issue: WON the action for declaratory relief is properHeld: Yes. Declaratory relief is defined as an action by any person interested in a deed, will, contract or other written instrument, executive order or resolution, to determine any question of construction or validity arising from the instrument, executive order or regulation, or statute, and for a declaration of his rights and duties thereunder. After petitioners demanded payment of adjusted rentals and in the months that followed, respondent complied with the terms and conditions set forth in their contract of lease by paying the rentals stipulated therein. Respondent religiously fulfilled its obligations to petitioners even during the pendency of the present suit. There is no showing that respondent committed an act constituting a breach of the subject contract of lease. Thus, respondent is not barred from instituting before the trial court the petition for declaratory relief. Given all these attendant circumstances, the Court is disposed to entertain the instant declaratory relief action instead of dismissing it, notwithstanding the pendency of the ejectment/rescission case before the trial court.With premises considered, the petition is DENIED. The Decision of the CA is affirmed.

(18)G.R. No. 181303 September 17, 2009CARMEN DANAO MALANA, MARIA DANAO ACORDA, EVELYN DANAO, FERMINA DANAO, LETICIA DANAO and LEONORA DANAO, the last two are represented herein by their Attorney-in-Fact, MARIA DANAO ACORDA,Petitioners,vs.BENIGNO TAPPA, JERRY REYNA, SATURNINO CAMBRI and SPOUSES FRANCISCO AND MARIA LIGUTAN,Respondents.CHICO-NAZARIO,J.:FACTS: Petitioners Carmen Danao Malana, et al. alleged to be the owners of a land in Tugegarao which they inherited from Anastacio Danao. During the lifetime of Danao, he allowed Consuelo Pauig to build on and occupy the southern portion of the subject property. Danao and Consuelo agreed that the latter would vacate the said land at any time that Danao and his heirs might need it. Danaos heirs claimed that respondents Benigno Tappa, et al. continued to occupy the subject property even after Consuelos death, building their residences thereon using permanent materials. Danaos heirs also learned that Tappa, et al. were claiming ownership over the subject property. Averring that they already needed it, Danaos heirs demanded that respondents vacate the same. The call was unheeded. Meanwhile, Danaos heirs referred their land dispute to the Lupong Tagapamayapa. During the conciliation proceedings, respondents asserted that they owned the subject property and presented documents ostensibly supporting their claim of ownership. The heirs opposed this, saying that the documents were falsified and highly dubious. This notwithstanding, Tappa, et al. created a cloud upon the heirs title to the property. Thus, the heirs filed a case for Reivindicacion, Quieting of Title, and Damages in the RTC. ISSUE: Whether the judge commit grave abuse of discretion in motu proprio dismissing the complaint for lack of jurisdiction? RULING: No. Petition is dismissed. RTC should remand the records to the MTC. An action for declaratory relief should be filed by a person interested under a deed, a will, a contract or other written instrument, and whose rights are affected by a statute, an executive order, a regulation or an ordinance. The relief sought under this remedy includes the interpretation and determination of the validity of the written instrument and the judicial declaration of the parties rights or duties thereunder. Petitions for declaratory relief are governed by Rule 63. Section 1 states that an action for the reformation of an instrument, to quiet title, and to consolidate ownership in a sale with a right to repurchase may be brought under the RTC. These remedies are considered similar to declaratory relief because they result in the adjudication of the legal rights of the litigants, often without the need of execution. Whereas the Rules of Court uses may, the amended Judicial Reorganization Act uses the word shall in determining jurisdiction. JRA explicitly requires the MTC to exercise exclusive original jurisdiction over all civil actions which involve title to or possession of real property where the assessed value does not exceed P20,000 (OMM) or P50,000 (MM). In this case, the assessed value of the subject property is only P410.00; therefore, the jurisdiction is with the MTC, not the RTC. Further, an action for declaratory relief presupposes that there has been no actual breach of the instruments involved or of rights arising thereunder. The purpose of an action for declaratory relief is to secure an authoritative statement of the rights and obligations of the parties under a statute, deed or contract for their guidance in the enforcement thereof, and not to settle issues arising from an alleged breach thereof. Where the law or contract has already been contravened prior to the filing of an action for declaratory relief, the courts can no longer assume jurisdiction over the action. In the present case, the case for quieting of title was filed after Danao heirs already demanded, and Tappa refused to vacate the subject property. Since the heirs had already been deprived of the possession of their property, the proper remedy for them is the filing of an accion publiciana or an accion reivindicatoria, not a case for declaratory relief. An accion publiciana is a suit for the recovery of possession, filed one year after the occurrence of the cause of action or from the unlawful withholding of possession of the realty. Jurisdiction over such an action would depend on the value of the property involved. Given that the property is only at P410.00, then the MTC, not the RTC, has jurisdiction over an action to recover the same.

(19) Ababa(20) Castro(21)GAMBOA vs TEVES(G.R. NO. 176579 June 28, 2011)

FACTS:

PLDT was granted a franchise to engage in the telecommunications business in 1928 through Act No. 3436. During the Martial Law 26 percent of the outstanding common shares were sold by General Telephone and Electronics Corporation (GTE an American Company) to Philippine Telecommunications Investment Corporation (PTIC), who in turn assigned 111,415 shares os atock of PTIC (46 percent of outstanding capital stock) to Prime Holdings Inc. (PHI). These shares of PTIC were later sequestered by PCGG and adjudged by the court to belong to the Republic.

Fifity four (54) percent shares were sold to Hong Kong-based firm First Pacific, and the remaining 46 percent was sold through public bidding by the Inter-agency Privatization Council, and eventually ended up being bought by First Pacific subsidiary Metro Pacific Assets Holdings Inc. (MPAH) after the corporation exercise its first refusal. The transaction was an indirect sale of 12 million shares or 6.3 percent of the outstanding common shares of PLDT, making First Pacifics common shareholdings of PLDT to 37 percent and the total common shareholdings of foreigners in PLDT to 81.47 percent. Japanese NTT DoCoMo owns 51.56 percent of the other foreign shareholdings/equty.

Petitioner gamboa, alleged that the sale of 111,415 shares to MPAH violates Sec. 11 of Art. XII of the Constitution, which limits foreign ownership of the capital of a public utility to not more than 40 percent.

ISSUE:

Whether petitioners choice of remedy was proper?

RULING:

NO. However, since the threshold and purely legal issue on the definition of the term capital in Section 11, Article XII of the Constitution has far-reaching implications to the national economy, the Court treats the petition for declaratory relief as one for mandamus. It is well settled that this Court may treat a petition for declaratory relief as one for mandamus if the issue involved has far-reaching implications.

(22) Llacuna(23)LUCIANO VELOSO, ABRAHAM CABOCHAN, JOCELYN DAWIS-ASUNCION AND MARLON M. LACSON, PETITIONERS,VS.COMMISSION ON AUDIT, RESPONDENT

FACTS:On December 7, 2000, the City Council of Manila enacted Ordinance No. 8040 entitledAn Ordinance Authorizing the Conferment of Exemplary Public Service Award to Elective Local Officials of Manila Who Have Been Elected for Three (3) Consecutive Terms in the Same Position. Section 2 thereof provides:SEC. 2. The EPSA shall consist of a Plaque of Appreciation,retirement and gratuity pay remuneration equivalent to the actual time served in the position for three (3) consecutive terms, subject to the availability of funds as certified by the City Treasurer. PROVIDED, That [it] shall be accorded to qualified elected City Officials on or before the first day of service in an appropriated public ceremony to be conducted for the purpose. PROVIDED FURTHER, That this Ordinance shall only cover the Position of Mayor, Vice-Mayor and Councilor: PROVIDED FURTHERMORE, That those who were elected for this term and run for higher elective position thereafter, after being elected shall still be eligible for this award for the actual time served: PROVIDED FINALLY That the necessary and incidental expenses needed to implement the provisions of this Ordinance shall be appropriated and be included in the executive budget for the year when any city official will qualify for the Award.[4]

Atty. Gabriel J. Espina (Atty. Espina), Supervising Auditor of the City of Manila, issued Audit Observation Memorandum (AOM) No. 2005-100(05)07(05)[6]with the following observations:1. The initial payment of monetary reward as part of Exemplary Public Service Award (EPSA) amounting to P9,923,257.00 to former councilors of the City Government of Manila who have been elected for three (3) consecutive terms to the same position as authorized by City Ordinance No. 8040 is without legal basis.2. The amount granted as monetary reward is excessive and tantamount to double compensation in contravention to Article 170 (c) of the IRR of RA 7160 which provides that no elective or appointive local official shall receive additional, double or indirect compensation unless specifically authorized by law.3. The appropriations for retirement gratuity to implement EPSA ordinance was classified as Maintenance and Other Operating Expenses instead of Personal Services contrary to Section 7, Volume III of the Manual on the New Government Accounting System (NGAS) for local government units and COA Circular No. 2004-008 dated September 20, 2004 which provide the updated description of accounts under the NGAS.[7]

After evaluation of the AOM, the Director, Legal and Adjudication Office COA issued Notice of disallowance No. 06-010-100-05[8]dated May 24, 2006.The former councilors filed a Motion to Lift the Notice of Disallowance which was favored by the Legal and Adjudication Office, the pertinent portion of the decision:Citing Article 170 of the Implementing Rules and Regulations (IRR) the Legal and Adjudication Office held that the monetary reward given to the former councilors can be one of gratuity and, therefore, cannot be considered as additional, double or indirect compensation. Giving importance to the principle of local autonomy, the LAO-local upheld the power of local government units (LGUs) to grant allowances. More importantly, it emphasized that the Department of Budget and Management (DBM) did not disapprove the appropriation for the EPSA of the City which indicate that the same is valid.[12]Upon review, the COA rendered the assailed Decision No. 2008-088 sustaining Notice of Disallowance No. 06-010-100-05 - The motion for reconsideration was likewise denied. The COA opined that the monetary reward under the EPSA is covered by the term "compensation." Though it recognizes the local autonomy of LGUs, it emphasized the limitations thereof set forth in the Salary Standardization Law (SSL). It explained that the SSL does not authorize the grant of such monetary reward or gratuity. It also stressed the absence of a specific law passed by Congress which ordains the conferment of such monetary reward or gratuity to the former councilors. In response to the question on its jurisdiction to rule on the legality of the disbursement, the COA held that it is vested by the Constitution the power to determine whether government entities comply with laws and regulations in disbursing government funds and to disallow irregular disbursements. ]Petitioners insist that the power and authority of the COA to audit government funds and accounts does not carry with it in all instances the power to disallow a particular disbursement.[20] (CitingGuevara v. Gimenez ) and that that the COA has no discretion or authority to disapprove payments on the ground that the same was unwise or that the amount is unreasonable. The COA's remedy, according to petitioners, is to bring to the attention of the proper administrative officer such expenditures that, in its opinion, are irregular, unnecessary, excessive or extravagantAggrieved, petitioners through special civil action forcertiorarialleging grave abuse of discretion on the part of the COA claiming that The respondent Commission on Audit did not only commit a reversible error but was, in fact, guilty of grave abuse of discretion amounting to lack or excess of jurisdiction when it ruled that the monetary award given under the EPSA partakes of the nature of an additional compensation prohibited under the Salary Standardization Law, and other existing laws, rules and regulations, and not a GRATUITY "voluntarily given in return for a favor or services rendered purely out of generosity of the giver or grantor. Apart from being totally oblivious of the fact that the monetary award given under the EPSA was intended or given in return for the exemplary service rendered by its recipient(s), the respondent COA further committed grave abuse of discretion when it effectively nullified a duly-enacted ordinance which is essentially a judicial function.ISSUE whether the COA committed grave abuse of discretion in affirming the disallowance of P9,923,257.00HELD:It is the general policy of the Court to sustain the decisions of administrative authorities, especially one which is constitutionally-created not only on the basis of the doctrine of separation of powers but also for their presumed expertise in the laws they are entrusted to enforce. Findings of administrative agencies are accorded not only respect but also finality when the decision and order are not tainted with unfairness or arbitrariness that would amount to grave abuse of discretion.[ It is only when the COA has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, that this Court entertains a petition questioning its rulings. There is grave abuse of discretion when there is an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law or to act in contemplation of law as when the judgment rendered is not based on law and evidence but on caprice, whim and despotism In this case, we find no grave abuse of discretion on the part of the COA in issuing the assailed decisions

(24)Brenda L. Nazareth vs. Hon. Reynaldo A. VillarG.R. No. 188635 January 29, 2013

FACTS:No money shall be paid out of the Treasury except in pursuance of an appropriation made by law.A violation of this constitutional edict warrants the disallowance of the payment. However, the refund of the disallowed payment of a benefit granted by law to a covered person, agency or office of the Government may be barred by the good faith of the approving official and of the recipient.

Being assailed by petition for certiorari on the ground of its being issued with grave abuse of discretion amounting to lack or excess of jurisdiction is the decision rendered on June 4, 2009 by the Commission on Audit (COA) in COA Case No. 2009-045 entitled Petition of Ms. Brenda L. Nazareth, Regional Director, Department of Science and Technology, Regional Office No. IX, Zamboanga City, for review of Legal and Adjudication Office (LAO)-National Decision No. 2005-308 dated September 15, 2005 and LAO-National Resolution No. 2006-308A dated May 12, 2006 on disallowances of subsistence, laundry, hazard and other benefits in the total amount of P3,591,130.36, affirming the issuance of notices of disallowance (NDs) by the Audit Team Leader of COA Regional Office No. IX in Zamboanga City against the payment of benefits to covered officials and employees of the Department of Science and Technology (DOST) for calendar year (CY) 2001 out of the savings of the DOST.

The petitioner DOST Regional Director hereby seeks to declare the decision dated June 4, 2009 "null and void," and prays for the lifting of the disallowance of the payment of the benefits for CY2001 for being within the ambit of Republic Act No. 8439 (R.A. No. 8439), otherwise known as the Magna Carta for Scientists, Engineers, Researchers, and other Science and Technology Personnel in the Government (Magna Carta, for short), and on the strength of the Memorandum of Executive Secretary Ronaldo B. Zamora dated April 12, 2000 authorizing the use of the savings for the purpose.

Hence, this special civil action for certiorari, with the petitioner insisting that the COA gravely abused its discretion amounting to lack or excess of jurisdiction in affirming the disallowance of the Magna Carta benefits for CY 2001 despite the provisions of R.A. No. 8439, and in ruling that the Memorandum of April 12, 2000 did not cover the payment of the Magna Carta benefits for CY 2001.

ISSUE:Whether the special civil action for certiorari is meritorious?

HELD:The Court held in the negative. The COA is endowed with sufficient latitude to determine, prevent, and disallow the irregular, unnecessary, excessive, extravagant, or unconscionable expenditures of government funds. It has the power to ascertain whether public funds were utilized for the purposes for which they had been intended by law. The "Constitution has made the COA the guardian of public funds, vesting it with broad powers over all accounts pertaining to government revenue and expenditures and the uses of public funds and property, including the exclusive authority to define the scope of its audit and examination, to establish the techniques and methods for such review, and to promulgate accounting and auditing rules and regulations"

Only when the COA has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, may the Court entertain and grant a petition for certiorari brought to assail its actions. Section 1 of Rule 65, Rules of Court, demands that the petitioner must show that, one, the tribunal, board or officer exercising judicial or quasi-judicial functions acted without or in excess of jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction, and, two, there is neither an appeal nor any plain, speedy and adequate remedy in the ordinary course of law for the purpose of amending or nullifying the proceeding. Inasmuch as the sole office of the writ of certiorari is the correction of errors of jurisdiction, which includes the commission of grave abuse of discretion amounting to lack of jurisdiction, the petitioner should establish that the COA gravely abused its discretion. The abuse of discretion must be grave, which means either that the judicial or quasi-judicial power was exercised in an arbitrary or despotic manner by reason of passion or personal hostility, or that the respondent judge, tribunal or board evaded a positive duty, or virtually refused to perform the duty enjoined or to act in contemplation of law, such as when such judge, tribunal or board exercising judicial or quasi-judicial powers acted in a capricious or whimsical manner as to be equivalent to lack of jurisdiction. Mere abuse of discretion is not enough to warrant the issuance of the writ.

Section 7 of R. A. No. 8439 confers the Magna Carta benefits consisting of additional allowances and benefits to DOST officers and employees, such as honorarium, share in royalties, hazard, subsistence, laundry, and housing and quarter allowances, longevity pay, and medical examination. But the Magna Carta benefits will remain merely paper benefits without the corresponding allocation of funds in the GAA.

As we see it, the COA correctly ruled on the matter at hand. Article VI Section 29 (1) of the 1987 Constitution firmly declares that: "No money shall be paid out of the Treasury except in pursuance of an appropriation made by law." This constitutional edict requires that the GAA be purposeful, deliberate, and precise in its provisions and stipulations. As such, the requirement under Section 20of R.A. No. 8439 that the amounts needed to fund the Magna Carta benefits were to be appropriated by the GAA only meant that such funding must be purposefully, deliberately, and precisely included in the GAA. The funding for the Magna Carta benefits would not materialize as a matter of course simply by fiat of R.A. No. 8439, but must initially be proposed by the officials of the DOST as the concerned agency for submission to and consideration by Congress. That process is what complies with the constitutional edict. R.A. No. 8439 alone could not fund the payment of the benefits because the GAA did not mirror every provision of law that referred to it as the source of funding.

The petitioner dismally failed to discharge her burden.We conclude and declare, therefore, that the COAs assailed decision was issued in steadfast compliance of its duty under the Constitution and in the judicious exercise of its general audit power conferred to it by the Constitution.