Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. L-44050 July 16, 1985

CARMEN SIGUENZA and HELENA SIGUENZA, petitioners, vs.HON. COURT OF APPEALS and SPOUSES PEDRO QUIMBO and LEONADIZA QUIMBO, respondents.

Jose Batiguin and Pedro T. Abella for petitioner.

Hilario G. Davide, Jr. for private respondents.

GUTIERREZ, JR., J.:

This is a petition to review the decision of the Court of Appeals, now Intermediate Appellate Court, which denied the petition for certiorari and mandamus for lack of merit and its resolutions denying the two motions for reconsideration which were subsequently filed.

Apart from the background issue of an allegedly excessive award of damages facing the lower courts, there was the question of whether or not the petitioners' appeal was perfected on time.

The private respondents, spouses Pedro and Leonadiza Quimbo filed a complaint before the Court of First Instance of Cebu against petitioners Carmen and Helena Siguenza together with Bert Osmeña and Associates for breach of contract and payment of damages.

The complaint alleged that the petitioners entered into a contract with the spouses Quimbo for the sale of two lots purportedly owned by Carmen and Helena Siguenza, and which were Identified as Lot Nos. 1 and 2, Block 1, Phase II of the Clarita Village; that the said lots were to be paid in the total amount of P15,200.00 of which the amount of P3,040.00 was to be paid upon the execution of the contract of sale and the balance of P12,160.00 to be paid in monthly installments and that subsequently, however, the spouses Quimbo discovered that as early as 1969, the petitioners had already sold and conveyed the same lots to Irenea D. Maningo and that both are now covered by Transfer Certificates of Titles Nos. T-48546 and T-48547 in the name of the latter. The complaint further alleged that because of this double sale, the spouses Quimbo demanded from the petitioners the return of their downpayment but the latter refused and that as a consequence of the. deceit and mis-representation employed upon them by said petitioners, the spouses were also prevented from constructing their house worth P100,000.00 on the lots which if constructed at the present would cost them three hundred (300%) percent more than the original amount.

In their answer, petitioners admitted the sale of the lots to the spouses but argued that they had nothing to do with the sale as the one responsible was Bert Osmeña and Associates. Petitioners also alleged that the impleading of Carmen Siguenza as a party defendant had no basis because the lots n dispute were originally registered only in the name of Helena Siguenza.

The other defendant, Bert Osmeña and Associates admitted the sale of the lots to Irenea Maningo but countered that such sale was only for the purpose of enabling the latter to obtain a loan from the Government Service and Insurance System. Since the loan did not materialize. the whole transaction collapsed and during the process of reverting the lots back to the subdivision, the spouses Quimbo showed interest and deposited money for the lots although they were fully aware of the status of the said lots. Bert Osmeña and Associates also alleged that after the downpayment no further installments were paid by the spouses. On March 31, 1975. the trial court rendered judgment in favor of the spouses Quimbo, the dispositive portion of which reads:

WHEREFORE, based on all the foregoing considerations, judgment is hereby rendered in favor of the plaintiffs and against the defendants ordering the latter:

To pay, jointly and severally, the plaintiffs P3,040.00, with interest at the legal rate from June 2, 1971 until the same shall have been fully paid; P100,000.00 as compensation for the pecuniary loss plaintiffs suffered for failure to construct their residential house; P5,610.00 as reimbursement for the rentals plaintiffs paid from January 1972 to September 6, 1974; P50,000.00 as moral damages, P25,000.00 as exemplary damages; P5,000.00 as attorney's fees; and the costs.

On April 14, 1975, the petitioners received a copy of the decision. On April 29, 1975, they filed their motion for reconsideration and on May 14, 1975, they filed another motion captioned as "Amended Motion for Reconsideration and/or New Trial." In this latter motion, the petitioners made an enumeration of the findings and conclusions of the lower court which were allegedly not supported by evidence. The petitioners also attached a "Deed of Partition" dated February 25, 1969 for the purpose of showing that petitioner Carmen Siguenza had no more right over the disputed lots at the time of the sale to the spouses Quimbo, and therefore, should not have been made a party defendant in the complaint.

On May 20, 1975, the trial court issued an order denying both the original and amended motions for reconsideration on the ground that the same were "pro forma based as it is on a forgotten evidence a so-called deed of partition supposedly executed in 1969, which was not introduced by defendants Carmen and Helena Siguenza; ..."

The petitioners received the copy of the above order on May 27, 1975. On the same day, they filed their notice of appeal, appeal bond, and motion for extension of time to file the record on appeal.

On May 29, 1975, the spouses Quimbo filed a motion for execution of judgment against the petitioners on the ground that the judgment had become final and executory for failure of the petitioners to perfect their appeal on time. The spouses alleged that since the petitioners' motion for reconsideration was pro forma for not having been accompanied by an affidavit of merit and verification, said motion did not stop the running of the period to perfect the appeal.

On June 30, 1975, the trial court issued the writ of execution prayed for by the spouses Quimbo on the grounds that the motions filed by the petitioners were pro forma as they were based on forgotten evidence, i.e., the deed of partition, and that said motions were not supported by affidavits of merit thus making them fatally defective. The trial court likewise disapproved the petitioners' notice of appeal, appeal bond, and motion for extension to file a record on appeal for having become academic.

On appeal, the Court of Appeals affirmed the trial court's decision. It ruled that:

Even granting, however, that the amended motion for reconsideration and/or new trial is not pro forma, and was filed on time on May 14, 1975, or on the last day of the 30-day period from receipt by petitioners on April 14, 1975 of the decision, petitioners had to perfect their appeal, i.e., to file the notice of appeal, appeal bond and record on appeal on or before May 28, 1975, the last day following their receipt on May 27, 1975 of the order denying their amended motion for reconsideration and/or new trial (Sec. 3, second paragraph, Rule 41, Rules of Court). It is true that petitioners filed their notice of appeal, appeal bond and motion for extension of 20 days within which to file their record on appeal but the period of 20 days as prayed for in their motion for extension would expire on June 16, 1975. Adding, therefore, the remaining one day from May 27 to May 28, 1975, petitioners would have filed their record on appeal on June 17, 1975. But since their record on appeal, thru their manifestation, was filed only on June 30, 1975 or 13 days after June 17, 1975, the same was filed out of time. Again, while it may be true that petitioners filed on June 26, 1975 a manifestation praying that they be allowed to adopt their record on appeal filed by the other defendant therein, Bert Osmeña & Associates, Inc., said manifestation was likewise filed out of time.

On these facts alone, it is needless to pass upon whether or not respondent Court committed an error in holding the motions for reconsideration and/or new trial as pro forma, or in not acting upon the motion for extension to file record on appeal for the reason that we have here considered as granted the extension of 20 days to petitioner but despite this period, their record on appeal was filed out of time. Besides, petitioners have no right to presume that their motion would be granted. Neither can respondent Court be compelled by mandamus to approve the appeal when the same was not perfected within the reglementary period.

In this petition, the petitioners maintain that the appellate court committed grave abuse of discretion in holding that they have lost right to appeal.

We agree.

In the case of Castro v. Court of Appeals (132 SCRA 782), we stressed the importance and real purpose of the remedy of appeal and ruled:

An appeal is an essential part of our judicial system, We have advised the courts to proceed with caution so as not to deprive a party of the right to appeal (National Waterworks and Sewerage Authority v. Municipality of Libmanan, 97 SCRA 138) and instructed that every party-litigant should be afforded the amplest opportunity for the proper and just disposition of his cause, freed from the constraints 4 technicalities (A-One Feeds, Inc. v. Court of Appeals, 100 SCRA 590).

The rules of procedure are not to be applied in a very rigid and technical sense. The rules of procedure are used only to help secure not override substantial justice. (Gregorio v. Court of Appeals (72 SCRA 'L20). Therefore, we ruled in Republic v. Court of Appeals (83 SCRA 453) that a six-day delay in the perfection of the appeal does not warrant its dismissal.And again in Ramos v.Bagasao (96 SCRA 395), this Court held that the delay of four (4) days in filing a notice of appeal and a motion for extension of time to file a record on appeal can be excused on the basis of equity.

We should emphasize, however, that we have allowed the filing of an appeal in some cases where a stringent application of the rules would have denied it, only when to do so would serve the demands of substantial justice and in the exercise cf our equity jurisdiction.

In the case at bar, the petitioners' delay in filing their record on appeal should not be strictly construed as to deprive them of the right to appeal especially since on its face the appeal appears to be impressed with merit.

In the interest of justice and the speedy disposition of cases, we have also deemed it proper to decide this case on the merits as a remand to the lower court for approval of the appeal, its subsequent elevation to the appellate court and probably, another resort to this Court would only entail undue burden on the parties and needless delays only to obtain the same judgment that could very well be laid down through this petition. Furthermore, we have already promulgated a resolution in the related case of Bert Osmeña & Associates v. Court of Appeals (G.R. No. 56545, January 28, 1983, 120 SCRA 395), ordering the petitioners' co-defendants, Bert Osmeña and Associates, to pay the respondents the appropriate amounts due them. A prompt disposition of this present petition would, therefore, enable the private respondents to collect from the petitioners whatever amounts Bert Osmeña and Associates have not yet paid to fully satisfy the liability adjudged against the latter which may be rightly demanded from herein petitioners but not duplicated as this would be unjust enrichment on the part of the respondents.

Resolving now the merits of the case, we find that the orders of the trial court ordering the petitioners to pay the private respondents P100,000.00 for compensatory damages is patently erroneous because no proof whatsoever was presented or could be presented by the private respondents to show that they had actually suffered pecuniary loss in that amount. In fact, the whole amount of P100,000.00 had no basis at all except the respondents' mere allegation that they, absent the malice, bad faith, and

unlawful and deceitful acts of the petitioners, "could have then constructed a residential house worth P100,000.00; that the same residential house cannot now be constructed at that amount, but very likely at more than three hundred percent more; such difference constitutes an actual damage on the part of the plaintiffs (respondents) which are directly logically and naturally caused by the aforesaid acts of defendants (petitioners) for which said defendants are liable."

In the case of Sy v. Court of Appeals (131 SCRA 127), we ruled that an alleged loss of income is not recoverable for being speculative as no receipt or any kind of evidence on the matter was presented to prove it. Likewise, in the case of Seavan Carrier, Inc. v. GTI Sportswear Corp. (132 SCRA 314-315), quoting G.A. Machineries, Inc. v. Yaptinchay (126 SCRA 87), we ruled that for damages under Article 2200 of the Civil Code to be recovered, the best evidence obtainable by the injured party must be presented; and thus, "the bare assertion of the respondent that he lost about P54,000.00 and the accompanying documentary evidence presented to prove the amount lost are inadequate if not speculative."

In the present case, the respondents were not able to prove any actual losses suffered as a result of the petitioners' wrongful acts because they have not even started the construction of their house on the disputed lots. Any alleged pecuniary loss which they claim to have suffered because of the delay in the commencement of construction is purely speculative and cannot be the basis of compensatory damages as provided by law.

As regards the awards of P50,000.00 moral damages and P25,000.00 exemplary damages, we hold that such awards are far too excessive compared to the actual losses sustained by the respondents. They are without bases considering that the spouses had only paid a downpayment in the amount of P3,040.00 and had not yet occupied the property nor introduced improvements thereon at the time they discovered the fraud perpetrated against them by the petitioners.

In the case of San Andres v. Court of Appeals (116 SCRA 81), we ruled:

While, indeed, the amount of moral damages is a matter left largely to the sound discretion of a Court, (Art. 2216, Civil Code) we find that the sums of P30,000.00 and P5,000.00 awarded herein as moral damages and attorney's fees, respectively, by the Court of Appeals, are excessive and should be reduced to more reasonable amounts, considering the attendant facts and circumstances. Moral damages, though incapable of pecuniary estimation, are in the category of an award designed to compensate the claimant for actual injury suffered and not to impose a penalty on the wrong doer. (Malonzo v. Galang, 109 Phil, 16, 20-21, cited in Enervida v. de la Torre, 55 SCRA 339).

The records will show that the injury suffered by the respondents was not serious or gross and, therefore, out of proportion to the amount of damages generously awarded by the trial court, and subsequently affirmed by the appellate court. We note that a total of P 188,650-00 in damages was awarded in a case involving a downpayment of P3,040.00 on a full purchase price of Pl5,200.00 payable in installments.

We thus, hold that the petitioners are liable for the amount of P3,040.00, representing the downpayment made by the private respondents on the lots in dispute, with legal interest from March 25, 1974; and for the amounts of P10,000.00 moral damages, P5,000.00 exemplary damages, and another P5,000.00 as attorney's fees, respectively. Petitioners, however, are not liable for compensatory damages. (See Bert Osmeña and Associates v. Court of Appeals, supra).

WHEREFORE, the decision appealed from is hereby MODIFIED. The petitioners Carmen and Helena Siguenza are ordered to pay the private respondents the amounts of P3,040.00 with legal interest from March 25, 1974; P10,000.00 as moral damages; P5,000.00 as exemplary damages and P5,000.00 as attorney's fees. To avoid duplication of payments resulting in unjust enrichment, the payment of the aforesaid amounts shall be subject to whatever payments the private respondents may have already received in satisfaction of the same liability by virtue of the earlier judgment rendered in G.R. No. L-56545.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. Nos. 79937-38 February 13, 1989

SUN INSURANCE OFFICE, LTD., (SIOL), E.B. PHILIPPS and D.J. WARBY, petitioners, vs.HON. MAXIMIANO C. ASUNCION, Presiding Judge, Branch 104, Regional Trial Court, Quezon City and MANUEL CHUA UY PO TIONG, respondents.

Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles Law Offices for petitioners. Tanjuatco, Oreta, Tanjuatco, Berenguer & Sanvicente Law Offices for private respondent.

 

GANCAYCO, J.:

Again the Court is asked to resolve the issue of whether or not a court acquires jurisdiction over a case when the correct and proper docket fee has not been paid.

On February 28, 1984, petitioner Sun Insurance Office, Ltd. (SIOL for brevity) filed a complaint with the Regional Trial Court of Makati, Metro Manila for the consignation of a premium refund on a fire insurance policy with a prayer for the judicial declaration of its nullity against private respondent Manuel Uy Po Tiong. Private respondent as declared in default for failure to file the required answer within the reglementary period.

On the other hand, on March 28, 1984, private respondent filed a complaint in the Regional Trial Court of Quezon City for the refund of premiums and the issuance of a writ of preliminary attachment which was docketed as Civil Case No. Q-41177, initially against petitioner SIOL, and thereafter including E.B. Philipps and D.J. Warby as additional defendants. The complaint sought, among others, the payment of actual, compensatory, moral, exemplary and liquidated damages, attorney's fees, expenses of litigation and costs of the suit. Although the prayer in the complaint did not quantify the amount of damages sought said amount may be inferred from the body of the complaint to be about Fifty Million Pesos (P50,000,000.00).

Only the amount of P210.00 was paid by private respondent as docket fee which prompted petitioners' counsel to raise his objection. Said objection was disregarded by respondent Judge Jose P. Castro who was then presiding over said case. Upon the order of this Court, the records of said case together with twenty-two other cases assigned to different branches of the Regional Trial Court of Quezon City which were under investigation for under-assessment of docket fees were transmitted to this Court. The Court thereafter returned the said records to the trial court with the directive that they be re-raffled to the other judges in Quezon City, to the exclusion of Judge Castro. Civil Case No. Q-41177 was re-raffled to Branch 104, a sala which was then vacant.

On October 15, 1985, the Court en banc issued a Resolution in Administrative Case No. 85-10-8752-RTC directing the judges in said cases to reassess the docket fees and that in case of deficiency, to order its payment. The Resolution also requires all clerks of court to issue certificates of re-assessment of docket fees. All litigants were likewise required to specify in their pleadings the amount sought to be recovered in their complaints.

On December 16, 1985, Judge Antonio P. Solano, to whose sala Civil Case No. Q-41177 was temporarily assigned, issuedan order to the Clerk of Court instructing him to issue a certificate of assessment of

the docket fee paid by private respondent and, in case of deficiency, to include the same in said certificate.

On January 7, 1984, to forestall a default, a cautionary answer was filed by petitioners. On August 30,1984, an amended complaint was filed by private respondent including the two additional defendants aforestated.

Judge Maximiano C. Asuncion, to whom Civil Case No. Q41177 was thereafter assigned, after his assumption into office on January 16, 1986, issued a Supplemental Order requiring the parties in the case to comment on the Clerk of Court's letter-report signifying her difficulty in complying with the Resolution of this Court of October 15, 1985 since the pleadings filed by private respondent did not indicate the exact amount sought to be recovered. On January 23, 1986, private respondent filed a "Compliance" and a "Re-Amended Complaint" stating therein a claim of "not less than Pl0,000,000. 00 as actual compensatory damages" in the prayer. In the body of the said second amended complaint however, private respondent alleges actual and compensatory damages and attorney's fees in the total amount of about P44,601,623.70.

On January 24, 1986, Judge Asuncion issued another Order admitting the second amended complaint and stating therein that the same constituted proper compliance with the Resolution of this Court and that a copy thereof should be furnished the Clerk of Court for the reassessment of the docket fees. The reassessment by the Clerk of Court based on private respondent's claim of "not less than P10,000,000.00 as actual and compensatory damages" amounted to P39,786.00 as docket fee. This was subsequently paid by private respondent.

Petitioners then filed a petition for certiorari with the Court of Appeals questioning the said order of Judie Asuncion dated January 24, 1986.

On April 24, 1986, private respondent filed a supplemental complaint alleging an additional claim of P20,000,000.00 as d.qmages so the total claim amounts to about P64,601,623.70. On October 16, 1986, or some seven months after filing the supplemental complaint, the private respondent paid the additional docket fee of P80,396.00. 1

On August 13, 1987, the Court of Appeals rendered a decision ruling, among others, as follows:

WHEREFORE, judgment is hereby rendered:

1. Denying due course to the petition in CA-G.R. SP No. 1, 09715 insofar as it seeks annulment of the order

(a) denying petitioners' motion to dismiss the complaint, as amended, and

(b) granting the writ of preliminary attachment, but giving due course to the portion thereof questioning the reassessment of the docketing fee, and requiring the Honorable respondent Court to reassess the docketing fee to be paid by private respondent on the basis of the amount of P25,401,707.00. 2

Hence, the instant petition.

During the pendency of this petition and in conformity with the said judgment of respondent court, private respondent paid the additional docket fee of P62,432.90 on April 28, 1988. 3

The main thrust of the petition is that the Court of Appeals erred in not finding that the lower court did not acquire jurisdiction over Civil Case No. Q-41177 on the ground of nonpayment of the correct and proper docket fee. Petitioners allege that while it may be true that private respondent had paid the amount of P182,824.90 as docket fee as herein-above related, and considering that the total amount sought to be recovered in the amended and supplemental complaint is P64,601,623.70 the docket fee that should be paid by private respondent is P257,810.49, more or less. Not having paid the same,

petitioners contend that the complaint should be dismissed and all incidents arising therefrom should be annulled. In support of their theory, petitioners cite the latest ruling of the Court in Manchester Development Corporation vs. CA, 4 as follows:

The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. An amendment of the complaint or similar pleading will not thereby vest jurisdiction in the Court, much less the payment of the docket fee based on the amounts sought in the amended pleading. The ruling in the Magaspi Case in so far as it is inconsistent with this pronouncement is overturned and reversed.

On the other hand, private respondent claims that the ruling in Manchester cannot apply retroactively to Civil Case No. Q41177 for at the time said civil case was filed in court there was no such Manchester ruling as yet. Further, private respondent avers that what is applicable is the ruling of this Court in Magaspi v. Ramolete, 5 wherein this Court held that the trial court acquired jurisdiction over the case even if the docket fee paid was insufficient.

The contention that Manchester cannot apply retroactively to this case is untenable. Statutes regulating the procedure of the courts will be construed as applicable to actions pending and undetermined at the time of their passage. Procedural laws are retrospective in that sense and to that extent. 6

In Lazaro vs. Endencia and Andres, 7 this Court held that the payment of the full amount of the docket fee is an indispensable step for the perfection of an appeal. In a forcible entry and detainer case before the justice of the peace court of Manaoag, Pangasinan, after notice of a judgment dismissing the case, the plaintiff filed a notice of appeal with said court but he deposited only P8.00 for the docket fee, instead of P16.00 as required, within the reglementary period of appeal of five (5) days after receiving notice of judgment. Plaintiff deposited the additional P8.00 to complete the amount of the docket fee only fourteen (14) days later. On the basis of these facts, this court held that the Court of First Instance did notacquire jurisdiction to hear and determine the appeal as the appeal was not thereby perfected.

In Lee vs. Republic, 8 the petitioner filed a verified declaration of intention to become a Filipino citizen by sending it through registered mail to the Office of the Solicitor General in 1953 but the required filing fee was paid only in 1956, barely 5V2 months prior to the filing of the petition for citizenship. This Court ruled that the declaration was not filed in accordance with the legal requirement that such declaration should be filed at least one year before the filing of the petition for citizenship. Citing Lazaro, this Court concluded that the filing of petitioner's declaration of intention on October 23, 1953 produced no legal effect until the required filing fee was paid on May 23, 1956.

In Malimit vs. Degamo, 9 the same principles enunciated in Lazaro and Lee were applied. It was an original petition for quo warranto contesting the right to office of proclaimed candidates which was mailed, addressed to the clerk of the Court of First Instance, within the one-week period after the proclamation as provided therefor by law. 10 However, the required docket fees were paid only after the expiration of said period. Consequently, this Court held that the date of such payment must be deemed to be the real date of filing of aforesaid petition and not the date when it was mailed.

Again, in Garica vs, Vasquez, 11 this Court reiterated the rule that the docket fee must be paid before a court will act on a petition or complaint. However, we also held that said rule is not applicable when petitioner seeks the probate of several wills of the same decedent as he is not required to file a separate action for each will but instead he may have other wills probated in the same special proceeding then pending before the same court.

Then in Magaspi, 12 this Court reiterated the ruling in Malimit and Lee that a case is deemed filed only upon payment of the docket fee regardless of the actual date of its filing in court. Said case involved a complaint for recovery of ownership and possession of a parcel of land with damages filed in the Court of First Instance of Cebu. Upon the payment of P60.00 for the docket fee and P10.00 for the sheriffs fee, the complaint was docketed as Civil Case No. R-11882. The prayer of the complaint sought that the Transfer Certificate of Title issued in the name of the defendant be declared as null and void. It was also prayed that plaintiff be declared as owner thereof to whom the proper title should be issued, and that defendant be made to pay monthly rentals of P3,500.00 from June 2, 1948 up to the time the

property is delivered to plaintiff, P500,000.00 as moral damages, attorney's fees in the amount of P250,000.00, the costs of the action and exemplary damages in the amount of P500,000.00.

The defendant then filed a motion to compel the plaintiff to pay the correct amount of the docket fee to which an opposition was filed by the plaintiff alleging that the action was for the recovery of a parcel of land so the docket fee must be based on its assessed value and that the amount of P60.00 was the correct docketing fee. The trial court ordered the plaintiff to pay P3,104.00 as filing fee.

The plaintiff then filed a motion to admit the amended complaint to include the Republic as the defendant. In the prayer of the amended complaint the exemplary damages earlier sought was eliminated. The amended prayer merely sought moral damages as the court may determine, attorney's fees of P100,000.00 and the costs of the action. The defendant filed an opposition to the amended complaint. The opposition notwithstanding, the amended complaint was admitted by the trial court. The trial court reiterated its order for the payment of the additional docket fee which plaintiff assailed and then challenged before this Court. Plaintiff alleged that he paid the total docket fee in the amount of P60.00 and that if he has to pay the additional fee it must be based on the amended complaint.

The question posed, therefore, was whether or not the plaintiff may be considered to have filed the case even if the docketing fee paid was not sufficient. In Magaspi, We reiterated the rule that the case was deemed filed only upon the payment of the correct amount for the docket fee regardless of the actual date of the filing of the complaint; that there was an honest difference of opinion as to the correct amount to be paid as docket fee in that as the action appears to be one for the recovery of property the docket fee of P60.00 was correct; and that as the action is also one, for damages, We upheld the assessment of the additional docket fee based on the damages alleged in the amended complaint as against the assessment of the trial court which was based on the damages alleged in the original complaint.

However, as aforecited, this Court overturned Magaspi in Manchester. Manchester involves an action for torts and damages and specific performance with a prayer for the issuance of a temporary restraining order, etc. The prayer in said case is for the issuance of a writ of preliminary prohibitory injunction during the pendency of the action against the defendants' announced forfeiture of the sum of P3 Million paid by the plaintiffs for the property in question, the attachment of such property of defendants that may be sufficient to satisfy any judgment that may be rendered, and, after hearing, the issuance of an order requiring defendants to execute a contract of purchase and sale of the subject property and annul defendants' illegal forfeiture of the money of plaintiff. It was also prayed that the defendants be made to pay the plaintiff jointly and severally, actual, compensatory and exemplary damages as well as 25% of said amounts as may be proved during the trial for attorney's fees. The plaintiff also asked the trial court to declare the tender of payment of the purchase price of plaintiff valid and sufficient for purposes of payment, and to make the injunction permanent. The amount of damages sought is not specified in the prayer although the body of the complaint alleges the total amount of over P78 Millon allegedly suffered by plaintiff.

Upon the filing of the complaint, the plaintiff paid the amount of only P410.00 for the docket fee based on the nature of the action for specific performance where the amount involved is not capable of pecuniary estimation. However, it was obvious from the allegations of the complaint as well as its designation that the action was one for damages and specific performance. Thus, this court held the plaintiff must be assessed the correct docket fee computed against the amount of damages of about P78 Million, although the same was not spelled out in the prayer of the complaint.

Meanwhile, plaintiff through another counsel, with leave of court, filed an amended complaint on September 12, 1985 by the inclusion of another co-plaintiff and eliminating any mention of the amount of damages in the body of the complaint. The prayer in the original complaint was maintained.

On October 15, 1985, this Court ordered the re-assessment of the docket fee in the said case and other cases that were investigated. On November 12, 1985, the trial court directed the plaintiff to rectify the amended complaint by stating the amounts which they were asking for. This plaintiff did as instructed. In the body of the complaint the amount of damages alleged was reduced to

P10,000,000.00 but still no amount of damages was specified in the prayer. Said amended complaint was admitted.

Applying the principle in Magaspi that "the case is deemed filed only upon payment of the docket fee regardless of the actual date of filing in court," this Court held that the trial court did not acquire jurisdiction over the case by payment of only P410.00 for the docket fee. Neither can the amendment of the complaint thereby vest jurisdiction upon the Court. For all legal purposes there was no such original complaint duly filed which could be amended. Consequently, the order admitting the amended complaint and all subsequent proceedings and actions taken by the trial court were declared null and void. 13

The present case, as above discussed, is among the several cases of under-assessment of docket fee which were investigated by this Court together with Manchester. The facts and circumstances of this case are similar to Manchester. In the body of the original complaint, the total amount of damages sought amounted to about P50 Million. In the prayer, the amount of damages asked for was not stated. The action was for the refund of the premium and the issuance of the writ of preliminary attachment with damages. The amount of only P210.00 was paid for the docket fee. On January 23, 1986, private respondent filed an amended complaint wherein in the prayer it is asked that he be awarded no less than P10,000,000.00 as actual and exemplary damages but in the body of the complaint the amount of his pecuniary claim is approximately P44,601,623.70. Said amended complaint was admitted and the private respondent was reassessed the additional docket fee of P39,786.00 based on his prayer of not less than P10,000,000.00 in damages, which he paid.

On April 24, 1986, private respondent filed a supplemental complaint alleging an additional claim of P20,000,000.00 in damages so that his total claim is approximately P64,601,620.70. On October 16, 1986, private respondent paid an additional docket fee of P80,396.00. After the promulgation of the decision of the respondent court on August 31, 1987 wherein private respondent was ordered to be reassessed for additional docket fee, and during the pendency of this petition, and after the promulgation of Manchester, on April 28, 1988, private respondent paid an additional docket fee of P62,132.92. Although private respondent appears to have paid a total amount of P182,824.90 for the docket fee considering the total amount of his claim in the amended and supplemental complaint amounting to about P64,601,620.70, petitioner insists that private respondent must pay a docket fee of P257,810.49.

The principle in Manchester could very well be applied in the present case. The pattern and the intent to defraud the government of the docket fee due it is obvious not only in the filing of the original complaint but also in the filing of the second amended complaint.

However, in Manchester, petitioner did not pay any additional docket fee until] the case was decided by this Court on May 7, 1987. Thus, in Manchester, due to the fraud committed on the government, this Court held that the court a quo did not acquire jurisdiction over the case and that the amended complaint could not have been admitted inasmuch as the original complaint was null and void.

In the present case, a more liberal interpretation of the rules is called for considering that, unlike Manchester, private respondent demonstrated his willingness to abide by the rules by paying the additional docket fees as required. The promulgation of the decision in Manchester must have had that sobering influence on private respondent who thus paid the additional docket fee as ordered by the respondent court. It triggered his change of stance by manifesting his willingness to pay such additional docket fee as may be ordered.

Nevertheless, petitioners contend that the docket fee that was paid is still insufficient considering the total amount of the claim. This is a matter which the clerk of court of the lower court and/or his duly authorized docket clerk or clerk in-charge should determine and, thereafter, if any amount is found due, he must require the private respondent to pay the same.

Thus, the Court rules as follows:

1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period.

2. The same rule applies to permissive counterclaims, third party claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period.

3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified the same has been left for determination by the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the additional fee.

WHEREFORE, the petition is DISMISSED for lack of merit. The Clerk of Court of the court a quo is hereby instructed to reassess and determine the additional filing fee that should be paid by private respondent considering the total amount of the claim sought in the original complaint and the supplemental complaint as may be gleaned from the allegations and the prayer thereof and to require private respondent to pay the deficiency, if any, without pronouncement as to costs.

SO ORDERED.

Fernan (C.J), Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Padilla, Bidin, Sarmiento, Cortes, Griño-Aquino, Medialdea and Regalado, JJ., concur.

[G.R. No. 120587. January 20, 2004]

MILAGROS M. BARCO, as the Natural Guardian and Guardian Ad Litem of MARY JOY ANN GUSTILO, petitioner, vs. COURT OF APPEALS (SPECIAL SIXTEENTH DIVISION), REGIONAL TRIAL COURT (BR. 133-MAKATI), NCJR; THE LOCAL CIVIL REGISTRAR OF MAKATI; and NADINA G. MARAVILLA, respondents.

D E C I S I O N

TINGA, J.:

The story behind the present petition is a portrait of dysfunction. The familial situation of the parties is complicated, to say the least. The judicial conferment of the status of illegitimacy on a daughter who is by law legitimate has created a tangled braid of various legal doctrines that, like the Gordian knot of yore, is in this case ultimately unbound through one fell swoop of the sword.

On 24 December 1970, private respondent Nadina Maravilla (“Nadina”) married Francisco Maravilla (“Francisco”). By February of 1977, the spouses had opted to live separately,1[1] and in February of the following year they obtained an ecclesiastical annulment of marriage issued by the Catholic Diocese of Bacolod City.2[2] On 9 June 1978, Nadina gave birth to a daughter named June Salvacion (“June”) in Makati, Metro Manila. June’s birth certificate listed Francisco Maravilla as the father, and Maravilla as the child’s surname.3[3] Nadina signed the birth certificate shortly after it was accomplished.

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Despite the notation in June’s birth certificate, Nadina subsequently claimed that all along, the real father of her child was Armando Gustilo (“Gustilo”), a former Congressman with whom she maintained a relationship. At the time of June’s birth, Gustilo was married to one Consuelo Caraycong, who would later perish in the MV Don Juan naval accident of 1981.4[4] On 21 August 1982, Nadina and Gustilo were married in the United States.5[5] This marriage took place two and a half years before Nadina’s marriage to Francisco was alleged to have been annulled in the Philippines. On 12 March 1985, Nadina apparently was able to obtain a judicial declaration annulling her marriage to Francisco.6[6]

On 17 March 1983, Nadina filed in her own name a Petition for Correction of Entries in the Certificate of Birth of her daughter June with the Regional Trial Court (“RTC”) of Makati.7[7] Therein, she alleged that she had been living separately from her lawful spouse Francisco since February of 1977, and that Gustilo was the real father of June.8[8] She claimed that she did not allow Francisco to have any sexual congress with her within the first 20 days of the three hundred days preceding the birth of June.9[9] She prayed that the Local Civil Registrar of Makati be directed to correct the birth certificate of June to the effect that the latter’s full name be made “June Salvacion C. Gustilo,” and that the name of her father be changed from “Francisco Maravilla” to “Armando Gustilo.” Notably, Francisco affixed his signature to the Petition signifying his conformity thereto.10[10]

On 20 March 1983. Gustilo filed a “Constancia,” wherein he acknowledged June as his daughter with Nadina, and that he was posing no objection to Nadina’s petition.11[11]

The Petition was docketed as SP Proc. No. M-130. On 26 July 1983, the RTC, in accordance with Rule 108 of the Rules of Court, issued an Order setting the case for hearing and directing that a copy of the order be published once a week for three consecutive weeks in a newspaper of general circulation. On 7 September 1983, Nadina filed an Amended Petition,12[12] this time impleading Francisco and Gustilo as respondents. Correspondingly, the RTC amended the Order on 22 September 1983 to reflect the additional impleaded parties.13[13]

The Office of the Solicitor General filed a Motion to Dismiss the petition on the ground that the RTC “had no jurisdiction over the subject matter and/or the nature of th[e] suit.”14[14] They cited various jurisprudence holding that only innocuous or clerical errors may be corrected under a Rule 108 petition for correction of entries, and that the Petition seeks changes “are substantial and controversial in character which directly affect the filiation and legitimacy of petitioner’s daughter.”15[15] On 23

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February 1984, the Motion to Dismiss was denied by the RTC, which also subsequently denied a Motion for Reconsideration thereto filed by the Solicitor General.

On 7 January 1985, the RTC issued an Order (“RTC Order”) granting the petition and ordering the requested corrections to be effected. The RTC considered the claim of Nadina that she had relied completely on her uncle William R. Veto16[16] to facilitate the preparation of June’s birth certificate, that it was through his inadvertence that the mistaken entries were made, and that she was in intense physical discomfort when she had affixed her signature to the birth certificate containing the incorrect entries.17[17] The RTC also noted that Francisco had signified his conformity to the action by signing the original petition, and that Gustilo had manifested through a Constancia dated 20 March 1983 that he was acknowledging June as his daughter and expressing no objection to the petition.18[18]

Gustilo died in 19 December 1986.19[19] Two estate proceedings arose from his death, one lodged in Makati,20[20] the other in Harris County, Texas.21[21] Among the participants in both estate proceedings was Jose Vicente Gustilo (“Jose Vicente”), allegedly a biological child of Gustilo.22[22] On 5 March 1993, he filed with the Court of Appeals a Petition23[23] seeking the annulment of the RTC Order of 7 January 1985 which had effected changes in the civil status of June. Jose Vicente amended his Petition in July of 1993 to implead Nadina as an indispensable party.24[24] In her Comment, Nadina countered that Jose Vicente had not sufficiently proven that he was a child of Armando, and there was neither extrinsic fraud or lack of jurisdiction that would justify the annulment of the RTC Order.25[25] Nadina also pointed out that the Makati intestate court had approved a compromise agreement wherein the parties had agreed that the only heirs of the decedent Armando are “the surviving spouse, Nadina G. Gustilo, the daughter, June Salvacion G. Gustilo, the son, Jose Vicente Gustilo III, and another daughter, Mary Joy Ann Gustilo.”26[26] However, this compromise agreement was subsequently voided on petition by Jose Vicente to the Court of Appeals, on the ground that the Civil Code prohibited compromise as to the civil status of persons.27[27]

After the Court of Appeals commenced hearings on the petition, petitioner Milagros Barco (“Barco”), on 11 January 1994, filed in her capacity as the natural guardian and/or guardian ad litem of her

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daughter, Mary Joy Ann Gustilo (“Mary Joy”), a Motion for Intervention with a Complaint-in-Intervention attached thereto.28[28] Barco alleged that Mary Joy had a legal interest in the annulment of the RTC Order as she was likewise fathered by Gustilo. In her Complaint-in-Intervention, Barco claimed that she and Gustilo had maintained a relationship since 1967, and to them was born Mary Joy in 1977.29

[29] Barco also alleged that she actually moved in with Gustilo after the death of the latter’s wife in 1980, and maintained her affair with Gustilo until 1983, when she was purportedly supplanted by Nadina as Gustilo’s common-law companion after Gustilo had become gravely ill.30[30]

After the parties had filed their respective memoranda, the Court of Appeals rendered a Decision on 13 March 1995, dismissing both the Petition and the Complaint-in-Intervention.31[31] The appellate court held that neither Jose Vicente nor Barco were able to establish the existence of lack of jurisdiction and extrinsic fraud, the two grounds that would justify the annulment of a final judgment.32[32] It ruled that while Jose Vicente and Barco had not been made parties in the Petition for Correction, the subsequent notice and publication of the Order setting the case for hearing served as constructive notice to all parties who might have an interest to participate in the case. The publication of the Order conferred upon the RTC the jurisdiction to try and decide the case.33[33] It also found no merit in Jose Vicente’s claim that he learned of the RTC Order only in November of 1992, pointing out that as early as 1987, he filed a pleading with the intestate court alleging that June’s birth certificate had been amended to record the name of her true father.34[34]

Only the intervenor Barco filed a Motion for Reconsideration35[35] of the Court of Appeals’ Decision, which the appellate court denied on 16 May 1995.36[36] Thus, Barco filed the present Petition for Review on Certiorari seeking the reversal of the Court of Appeals’ Decision and the annulment of the 1985 RTC Order.

Before this Court, Barco assails that RTC Order on the ground of lack of jurisdiction. That was the same ground she invoked in the Court of Appeals. Specifically, she raises the following issues:

1) Barco should have been made a party to the Nadina’s petition and the failure to implead her deprived the RTC of jurisdiction;

2) This RTC could not have entertained Nadina’s petition, since the Court’s ruling in a long line of cases, beginning with Republic v. Valencia,37[37] that a petition for correction of entries in the civil register is not limited to innocuous or clerical mistakes, applies only to citizenship cases;

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3) The petition for correction was filed out of time, as Article 263 of the Civil Code of 1950 sets a prescriptive period for impugning the legitimacy of a child which is one year from the recording of birth in the Civil Registry, if the husband should be in the same place, or in a proper case, any of his heirs;

4) Nadina’s petition should have been treated as a petition for change of name, which can only be filed by the person whose name is sought to be changed;

5) The RTC Order contravenes the legal presumption that children born during the pendency of a marriage are legitimate and the rule that legitimate children cannot adopt the surname of a person who is not their father; and

6) The RTC should have excluded as hearsay the Constancia allegedly signed by Gustilo and that the surrounding circumstances under which it was issued gave reason to doubt its authenticity and credibility.

Interestingly, the questions that Barco raised would tickle the fancies of erudite civilists yearning for a challenge. However, the ultimate resolution of this case hinges on whether the de rigueur requirements of the extraordinary remedy of annulment of judgment have been satisfied.

First, a brief revisit of the action to annul judgment.

The recourse is equitable in character, allowed only in exceptional cases, as where there is no available or other adequate remedy. Annulment of judgments is a remedy long authorized and sanctioned in our jurisdiction.38[38] As far back as 1918, this Court in Banco Español-Filipino v. Palanca39[39] recognized the availability of a direct attack of a final judgment on the ground that it is void for want of jurisdiction. In Reyes v. Datu40[40] we held that the validity of a final judgment or order of the court may be attacked only by a direct action or proceeding or by motion in another case on the ground of lack of jurisdiction.

Yet, it was only in the 1997 Rules of Civil Procedure that for the first time the procedure for the annulment of judgments or final orders and resolutions in civil cases of regional trial courts, through a petition before the Court of Appeals, was formally provided. Rule 47 thereof under which the procedure was integrated incorporates settled jurisprudence on annulment of judgment.

Statutory basis for the remedy was laid way back in 1980, with the enactment of The Judiciary Reorganization Act of 1980.41[41] Section 9 thereof vests in the Court of Appeals exclusive original jurisdiction over actions for annulment of judgments of the lower courts.

Section 2, Rule 47 of the 1997 Rules of Civil Procedure explicitly provides only two grounds for annulment of judgment, namely: extrinsic fraud and lack of jurisdiction. This express limitation is significant since previous jurisprudence recognized other grounds as well.42[42] The underlying reason is traceable to the notion that annulling final judgments goes against the grain of finality of judgment. Litigation must end and terminate sometime and somewhere, and it is essential to an effective administration of justice that once a judgment has become final the issue or cause involved therein should be laid to rest. The basic rule of finality of judgment is grounded on the fundamental principle of public policy and sound practice that at the risk of occasional error, the judgment of courts and the

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award of quasi-judicial agencies must become final at some definite date fixed by law.43[43] Even if the rule on annulment of judgment is grounded on equity, the relief is of an extraordinary character, and not as readily available as the remedies obtaining to a judgment that is not yet final.

There are two aspects of jurisdiction which are vital for disposition of this case - jurisdiction over the nature of the action or subject matter, and jurisdiction over the parties.44[44] Barco claims that the RTC failed to satisfy both aspects of jurisdiction. She opines that the RTC did not acquire jurisdiction over the parties due to the failure to implead her as a party to the petition for correction. On the other hand, the remaining issues that she raises as errors put into question whether the RTC had jurisdiction over the subject matter of Nadina’s petition.

We shall first tackle the question of whether the RTC had acquired jurisdiction over Barco and all other indispensable parties to the petition for correction.

The essential requisite for allowing substantial corrections of entries in the civil registry is that the true facts be established in an appropriate adversarial proceeding. This is embodied in Section 3, Rule 108 of the Rules of Court, which states:

Section 3. Parties – When cancellation or correction of an entry in the civil register is sought, the civil registrar and all persons who have or claim any interest which would be affected thereby shall be made parties to the proceeding.

The Court of Appeals held that jurisdiction over the parties was properly acquired through the notice by publication effected in conformity with Section 4 of Rule 108. Barco assails this holding and claims that the failure to implead her as a party to the petition for correction deprived the RTC of jurisdiction.

Undoubtedly, Barco is among the parties referred to in Section 3 of Rule 108. Her interest was affected by the petition for correction, as any judicial determination that June was the daughter of Armando would affect her ward’s share in the estate of her father. It cannot be established whether Nadina knew of Mary Joy’s existence at the time she filed the petition for correction. Indeed, doubt may always be cast as to whether a petitioner under Rule 108 would know of all the parties whose interests may be affected by the granting of a petition. For example, a petitioner cannot be presumed to be aware of all the legitimate or illegitimate offsprings of his/her spouse or paramour. The fact that Nadina amended her petition to implead Francisco and Gustilo indicates earnest effort on her part to comply with Section 3 as quoted above.

Yet, even though Barco was not impleaded in the petition, the Court of Appeals correctly pointed out that the defect was cured by compliance with Section 4, Rule 108, which requires notice by publication, thus:

Section 4. Upon the filing of the petition, the court shall, by order, fix the time and place for the hearing of the same, and cause reasonable notice thereof to be given to the persons named in the petition. The court shall also cause the order to be published once a week for three (3) consecutive weeks in a newspaper of general circulation in the province.

The purpose precisely of Section 4, Rule 108 is to bind the whole world to the subsequent judgment on the petition. The sweep of the decision would cover even parties who should have been impleaded under Section 3, Rule 108, but were inadvertently left out. The Court of Appeals correctly noted:

The publication being ordered was in compliance with, and borne out by the Order of January 7, 1985. The actual publication of the September 22, 1983 Order, conferred jurisdiction upon the respondent court to try and decide the case. While “nobody appeared to oppose the instant petition” during the December 6, 1984 hearing, that did not divest the court from its jurisdiction over the case and of its

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authority to continue trying the case. For, the rule is well-settled, that jurisdiction, once acquired continues until termination of the case.45[45]

Verily, a petition for correction is an action in rem, an action against a thing and not against a person.46

[46] The decision on the petition binds not only the parties thereto47[47] but the whole world.48[48] An in rem proceeding is validated essentially through publication.49[49] Publication is notice to the whole world that the proceeding has for its object to bar indefinitely all who might be minded to make an objection of any sort against the right sought to be established.50[50] It is the publication of such notice that brings in the whole world as a party in the case and vests the court with jurisdiction to hear and decide it.51[51]

Since the RTC properly acquired jurisdiction over the parties, what remains for determination is whether it had acquired jurisdiction over Nadina’s cause of action. It should be emphasized that jurisdiction over the nature of the action or the subject matter is conferred by law. This Court’s recent holding in Durisol Philippines, Inc. v. Court of Appeals52[52] is instructive in this regard:

[I]t should be stressed that in a petition for annulment of judgment based on lack of jurisdiction, petitioner must show not merely an abuse of jurisdictional discretion but an absolute lack of jurisdiction. Lack of jurisdiction means absence of or no jurisdiction, that is, the court should not have taken cognizance of the petition because the law does not vest it with jurisdiction over the subject matter.53[53]

The question of whether a court has jurisdiction over the subject matter can be answered simply by determining if on the basis of the complaint or petition the court has, under the law, the power to hear and decide the case. Barco’s remaining arguments are to be tested against this standard.

One of Barco’s striking assertions is that the general rule still is that the jurisdiction of the court in the correction of entries in the civil register is limited to innocuous or clerical mistakes, as what she insinuates as the apparent contrary holding in Republic v. Valencia54[54] applies only to citizenship cases.

Since the promulgation of the Valencia ruling in 1986 the Court has repeatedly ruled that even substantial errors in a civil registry may be corrected through a petition filed under Rule 108, with the true facts established and the parties aggrieved by the error availing themselves of the appropriate adversarial proceeding. Barco, by seeking to limit the application of the Valencia doctrine to citizenship

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cases, is flogging a dead horse. This argument was debunked in subsequent cases,55[55] notably the recent case of Lee v. Court of Appeals.56[56] The exhaustive disquisition therein of Justice Sabino de Leon should preclude any further arguments on the scope of Rule 108.

The Court in Lee acknowledged that there existed a line of decided cases, some of them decided after Valencia, stating that Rule 108 cannot be used to effect substantial corrections in entries of the civil register.57[57] The doctrine was traced back to the 1954 case of Ty Kong Tin v. Republic,58[58] the rationale of which the Court reevaluated in Lee:

We venture to say now that the above pronouncements proceed from a wrong premise, that is, the interpretation that Article 412 pertains only to clerical errors of a harmless or innocuous nature, effectively excluding from its domain, and the scope of its implementing rule, substantial changes that may affect nationality, status, filiation and the like. Why the limited scope of Article 412? Unfortunately, Ty Kong Tin does not satisfactorily answer this question except to opine that the procedure contemplated in Article 412 is summary in nature and cannot, therefore, cover cases involving controversial issues. Subsequent cases have merely echoed the Ty Kong Tin doctrine without, however, shedding light on the matter.

The flaw in Ty Kong Tin lies in its theory that Article 412 contemplates a summary procedure.

First of all, Article 412 is a substantive law that provides as follows:

“No entry in a civil register shall be changed or corrected, without a judicial order.”

It does not provide for a specific procedure of law to be followed except to say that the corrections or changes must be effected by judicial order. As such, it cannot be gleaned therefrom that the procedure contemplated for obtaining such judicial order is summary in nature.

Secondly, it is important to note that Article 412 uses both the terms “corrected” and “changed.” In its ordinary sense, to correct means “to make or set right;” “to remove the faults or errors from” while to change means “to replace something with something else of the same kind or with something that serves as a substitute”. The provision neither qualifies as to the kind of entry to be changed or corrected nor does it distinguish on the basis of the effect that the correction or change may have. Hence, it is proper to conclude that all entries in the civil register may be changed or corrected under Article 412. What are the entries in the civil register? We need not go further than Articles 407 and 408 of the same title to find the answer.

“Art. 407. Acts, events and judicial decrees concerning the civil status of persons shall be recorded in the civil register.”

“Art. 408. The following shall be entered in the civil register:

(1) Births; (2) marriages; (3) deaths; (4) legal separations; (5) annulments of marriage; (6) judgments declaring marriages void from the beginning; (7) legitimations; (8) adoptions; (9) acknowledgments of natural children; (10) naturalization; (11) loss, or (12) recovery of citizenship; (13) civil interdiction; (14) judicial determination of filiation; (15) voluntary emancipation of a minor; and (16) changes of name.”

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It is beyond doubt that the specific matters covered by the preceding provisions include not only status but also nationality. Therefore, the Ty Kong Tin pronouncement that Article 412 does not contemplate matters that may affect civil status, nationality or citizenship is erroneous. This interpretation has the effect of isolating Article 412 from the rest of the articles in Title XVI, Book I of the New Civil Code, in clear contravention of the rule of statutory construction that a statute must always be construed as a whole such that the particular meaning to be attached to any word or phrase is ascertained from the context and the nature of the subject treated.59[59]

Lee also points out that Republic Act No. 9048, enacted in 2001, has effectively changed the nature of a proceeding under Rule 108. Under this new law, “clerical or typographical errors and change of first name or nickname” may now be corrected or changed by the concerned city or municipal registrar or consul general, without need of any judicial order. The obvious effect is to remove from the ambit of Rule 108 the correction or changing of such errors in entries of the civil register. Hence, what is left for the scope of operation of Rule 108 are substantial changes and corrections in entries of the civil register.60[60]

It may be very well said that Republic Act No. 9048 is Congress’s response to the confusion wrought by the failure to delineate as to what exactly is that so-called summary procedure for changes or corrections of a harmless or innocuous nature as distinguished from that appropriate adversary proceeding for changes or corrections of a substantial kind. For we must admit that though we have constantly referred to an appropriate adversary proceeding, we have failed to categorically state just what that procedure is. Republic Act No. 9048 now embodies that summary procedure while Rule 108 is that appropriate adversary proceeding. xxx61[61]

Republic Act No. 9048 may not find application in this case, yet it is clearly another indicium of how entrenched the Valencia ruling is today. With the enactment of the law, the legislature acknowledged the potency of the ruling. To repeat, substantial corrections to the civil status of persons recorded in the civil registry may be effected through the filing of a petition under Rule 108. Any further attempt to limit the scope of application of Rule 108 runs against the wall of judicial precedent cemented by legislative affirmation.

Next, Barco argues that the petition for correction had prescribed under the Civil Code; and that the petition for correction should be treated as a petition for change of name which can only be filed by the person whose name is sought to be changed. These arguments can be decided jointly. They both are not well taken as they cannot allude to a lack of jurisdiction that would render the RTC Order subject to annulment.

Assuming arguendo that Nadina’s petition for correction had prescribed and/or that the action seeking the change of name can only be filed by the party whose name is sought to be changed, this does not alter the reality that under the law the Makati RTC had jurisdiction over the subject matter of the petition for correction. The Judiciary Reorganization Act of 1980, the applicable law at the time, clearly conferred on the Makati RTC exclusive original jurisdiction in all civil actions in which the subject of the litigation is incapable of pecuniary estimation.62[62] In complementation of grant of jurisdiction, Section 1 of Rule 108 provides that the verified petition to the cancellation or correction of any entry relating thereto should be filed with the Court of First Instance (now Regional Trial Court) of the province where the corresponding civil registry is located.

Prescription and lack of capacity to bring action cannot be ignored by a court of law in properly resolving an action, to the extent that a finding that any of these grounds exist will be sufficient to

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cause the dismissal of the action.63[63] Yet, the existence of these grounds does not oust the court from its power to decide the case. Jurisdiction cannot be acquired through, waived, enlarged or diminished by any act or omission of the parties.64[64] Contrariwise, lack of capacity to sue and prescriptions as grounds for dismissal of an action may generally be rendered unavailing, if not raised within the proper period.65[65]

It thus follows that assuming that the petition for correction had prescribed, or that Nadina lacked the capacity to file the action which led to the change of her daughter’s name, the fact that the RTC granted the Order despite the existence of these two grounds only characterizes the decision as erroneous. An erroneous judgment is one though rendered according to the course and practice of the court is contrary to law.66[66] It is not a void judgment.67[67]

As for Barco’s remaining arguments, they similarly fail, as the worst they could establish is that the RTC Order is an erroneous judgment.

Barco correctly notes, however, that the RTC erred in directing that the name of Nadina’s daughter be changed from “June Salvacion Maravilla” to “June Salvacion Gustilo.” Following the trial court’s determination that Gustilo was the father of June, but prescinding from the conclusive presumption of legitimacy for the nonce assuming it could be done, the child would obviously be illegitimate. The applicable laws mandate that June, as an illegitimate child, should bear the surname of her mother, and not the father. 68[68] From another perspective, the RTC’s error in ordering the change of name is merely an error in the exercise of jurisdiction which neither affects the court’s jurisdiction over Nadina’s petition nor constitutes a ground for the annulment of a final judgment. As the seminal case of Herrera v. Barretto69[69] explains:

xxx Jurisdiction should therefore be distinguished from the exercise of jurisdiction. The authority to decide a cause at all, and not the decision rendered therein, is what makes up jurisdiction. Where there is jurisdiction of the person and subject matter xxx the decision of all other questions arising in the case is but an exercise of that jurisdiction.70[70]

In the same vein, it is of no moment that the RTC Order contravenes the legal presumption accorded June of being the legitimate child of Francisco and Nadina.71[71] A review of the records does indicate the insufficiency of the evidence offered to defeat the presumption, against which the only evidence admissible is the physical impossibility of the husband’s having access to his wife within the first one hundred and twenty days of the three hundred which preceded the birth of the child.72[72] It seems that the RTC relied primarily on the testimony of Nadina in adjudging that Gustilo, and not Francisco,

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was the father of June. Yet, Article 256 of the Civil Code renders ineffectual any pronouncement against legitimacy made by the mother.73[73] The testimony proffered by the mother has no probative value as regards June’s paternity. The RTC’s cognizance of Gustilo’s Constancia might likewise be subject to critical scrutiny.74[74] But the Court is now precluded from reviewing the RTC’s appreciation of the evidence, however erroneous it may be, because the Order is already final. The RTC’s possible misappreciation of evidence is again at most, an error in the exercise of jurisdiction, which is different from lack of jurisdiction. These purported errors do not extend to the competence of the RTC to decide the matter and as such does not constitute a valid ground to annul the final order.

The law sanctions the annulment of certain judgments which, though final, are ultimately void. Annulment of judgment is an equitable principle not because it allows a party-litigant another opportunity to reopen a judgment that has long lapsed into finality but because it enables him to be discharged from the burden of being bound to a judgment that is an absolute nullity to begin with. The inevitable conclusion is that the RTC Order, despite its apparent flaws, is not null and void, and thus cannot be annulled. Consequently, the Court of Appeals committed no reversible error in issuing the assailed decision.

This Court has been constrained in the past to leave erroneous decisions as they were.75[75] Our fealty to justice in its pristine form – the upholding of “right” over “wrong” – is equipoised with our adherence to due process, and the rules that emanate from that principle. The Court takes great care in drafting rules of procedure so that the axioms that govern the legal battleground may live up to Justice Frankfurter’s approximation of due process as “the embodiment of the sporting idea of fair play.”76[76] Due process dictates that litigants be afforded a reasonable opportunity to attack erroneous judgments and be shielded from the adverse effects of void judgments. Due process likewise demands that a party, after trekking the long road of litigation should be permitted to enjoy the fruits of an auspicious final judgment. Absent any convincing demonstration that the RTC Order is patently null and void, there is no reason under law and jurisprudence to upset it, given the reality that it has long become final.

WHEREFORE, the above premises considered, the Petition is hereby dismissed for lack of merit. Costs against petitioner.

SO ORDERED.

[G.R. No. 131286. March 18, 2004]

JOSE LAM, petitioner, vs. ADRIANA CHUA, respondent.

D E C I S I O N

AUSTRIA-MARTINEZ, J.:

Before the Court is a petition for review on certiorari assailing the Decision77[1] dated June 11, 1997 and the Resolution dated October 27, 1997 of the Court of Appeals in CA-G.R. CV. No. 51107, entitled, “Adriana Chua, Petitioner-Appellee vs. Jose Lam, Respondent-Appellant.”

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The case commenced on March 11, 1994 upon the filing of a petition for declaration of nullity of marriage by Adriana Chua against Jose Lam in the Regional Trial Court of Pasay City (Branch 109). Adriana alleged in the petition that: she and Jose were married on January 13, 1984; out of said marriage, they begot one son, John Paul Chua Lam; Jose was psychologically incapacitated to comply with the essential marital obligations of marriage but said incapacity was not then apparent; such psychological incapacity of Jose became manifest only after the celebration of the marriage when he frequently failed to go home, indulged in womanizing and irresponsible activities, such as, mismanaging the conjugal partnership of gains; in order to save what was left of the conjugal properties, she was forced to agree with Jose on the dissolution of their conjugal partnership of gains and the separation of present and future properties; said agreement was approved by the Regional Trial Court of Makati City (Branch 149) in a Decision dated February 28, 1994; they had long been separated in bed and board; they have agreed that the custody of their child will be with her, subject to visitation rights of Jose. Adriana prayed that the marriage between her and Jose be declared null and void but she failed to claim and pray for the support of their child, John Paul.

Summons was duly served on Jose Lam on March 22, 1994. Despite the lapse of fifteen days after service of summons, no responsive pleading was filed by him. Hence, the trial court issued an Order dated April 13, 1994, directing Asst. City Prosecutor Bonifacio Barrera to conduct an investigation for determination whether or not there was collusion between the parties and to submit his report thereon. On April 28, 1994, Asst. City Prosecutor Barrera filed his Report stating that “there seems to be no collusion between the parties”.78[2]

The trial court then set the case for hearing. The lone witness was Adriana herself. She testified that her marriage with Jose was arranged by her parents in the traditional Chinese way; that her married life was abnormal because Jose very seldom came home, never worked for a living and instead kept asking for money from her to buy his sports cars; that she was also the one spending for all the expenses of their only child, John Paul.79[3] After her testimony, counsel for Adriana formally offered the documentary evidence. No evidence was presented regarding the amount of support needed by John Paul or the capacity of Jose to give support.

On June 23, 1994, Adriana filed an Urgent Motion to Re-Open80[4] on the ground that she was able to secure additional new evidence which were significant, material and indispensable. On July 6, 1994, the trial court granted the motion to re-open the case and held a hearing for the reception of additional evidence. The Pasay RTC admitted into evidence the Marriage Contract dated May 25, 1977 between Jose and one Celia Santiago, and another Marriage Contract dated May 6, 1982 between Jose and one Evan Lock,81[5] showing that Jose had been married twice before he married Adriana in 1984.

On August 4, 1994, the Pasay RTC rendered its Decision82[6] the dispositive portion of which reads as follows:

IN VIEW OF ALL THE FOREGOING, the Court hereby declares the marriage between petitioner Adriana Chua and respondent Jose Lam null and void for being bigamous by nature. The Local Civil Registrar of Quezon City and the Office of the Civil Registrar General are hereby ordered to cancel the marriage between Adriana Chua and Jose Lam celebrated on January 13, 1984 by Hon. Guillermo L. Loja of the Metropolitan Trial Court, Quezon City.

Likewise, respondent Jose Lam is hereby ordered to give a monthly support to his son John Paul Chua Lam in the amount of P20,000.00.

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SO ORDERED.83[7]

On November 3, 1994, Jose filed a Motion for Reconsideration84[8] thereof but only insofar as the decision awarded monthly support to his son in the amount of P20,000.00. He argued that there was already a provision for support of the child as embodied in the decision85[9] dated February 28, 1994 of the Makati RTC wherein he and Adriana agreed to contribute P250,000.00 each to a common fund for the benefit of the child, to wit:

8. Nothing herein shall diminish the rights and obligations of both parties with respect to their son. In the best interest of the child, the Second Party shall retain care and custody, subject to visitation rights by the First Party to be exercised through mutual arrangements.

9. It is hereby agreed by the First Party and the Second Party that the First Party and the Second Party shall initially contribute P250,000.00 each to a common fund, to be increased as required, to be used solely and exclusively for the benefit of their son. Said common fund shall be managed and administered by the Second Party, subject to periodic accounting, until the son reaches majority age.86

[10]

Jose further alleged in his motion that his contribution to the common fund had even amounted to P500,000.00.

On August 22, 1995, the Pasay RTC issued an Order denying Jose Lam’s motion for reconsideration ruling that the compromise agreement entered into by the parties and approved by the Makati RTC before the marriage was declared null and void ab initio by the Pasay RTC, is of no moment and cannot limit and/or affect the support ordered by the latter court.

Jose then appealed the Pasay RTC’s decision to the Court of Appeals, assigning only a single error of the trial court:

THE LOWER COURT SERIOUSLY ERRED IN ORDERING APPELLANT TO GIVE A MONTHLY SUPPORT OF P20,000.00 TO HIS SON BECAUSE THIS WOULD, IN EFFECT, REQUIRE APPELLANT TO PAY TWICE THE MONTHLY SUPPORT FOR HIS CHILD. BESIDES, THE LOWER COURT HAS DULY ADMITTED THE FACT THAT THERE WAS A DECISION ISSUED BY ANOTHER COURT REQUIRING APPELLANT TO CONTRIBUTE THE AMOUNT OF P250,000.00 AS THE LATTER’S SHARE IN THE COMMON FUND FOR SUPPORT OF THE CHILD, SUBJECT TO PERIODIC ACCOUNTING AND TO BE MANAGED BY APPELLEE.87[11]

On June 11, 1997, the Court of Appeals promulgated its decision affirming the Pasay RTC’s decision in all respects. Jose filed a motion for reconsideration of the Decision but in a Resolution dated October 27, 1997, the Court of Appeals denied the same.

Hence, Jose filed the present petition for review on certiorari under Rule 45 of the Rules of Court, likewise raising a single error of the appellate court, to wit:

THE HONORABLE COURT OF APPEALS ERRED IN DECIDING LEGAL QUESTIONS OF SUBSTANCE NOT IN ACCORDANCE WITH LAW AND JURISPRUDENCE IN FINDING THAT THE TRIAL COURT’S RULING THAT THE COMPROMISE AGREEMENT BETWEEN PETITIONER AND RESPONDENT WHERE THEY BOUND

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87

THEMSELVES TO CONTRIBUTE THE AMOUNT OF TWO HUNDRED FIFTY THOUSAND PESOS (P250,000.00) TO A COMMON FUND FOR THE BENEFIT OF THEIR CHILD DOES NOT BAR THE TRIAL COURT IN ANNULMENT CASE TO AGAIN AWARD SUPPORT IN FAVOR OF THE CHILD.

The Pasay RTC and the Court of Appeals are both correct insofar as they ruled that the amount of support is by no means permanent. In Advincula vs. Advincula,88[12] we held that another action for support could be filed again by the same plaintiff notwithstanding the fact that the previous case for support filed against the same defendant was dismissed. We further held in said case that:

. . . Judgment for support does not become final. The right to support is of such nature that its allowance is essentially provisional; for during the entire period that a needy party is entitled to support, his or her alimony may be modified or altered, in accordance with his increased or decreased needs, and with the means of the giver. It cannot be regarded as subject to final determination.89[13]

Thus, there is no merit to the claim of Jose that the compromise agreement between him and Adriana, as approved by the Makati RTC and embodied in its decision dated February 28, 1994 in the case for voluntary dissolution of conjugal partnership of gains, is a bar to any further award of support in favor of their child John Paul. The provision for a common fund for the benefit of their child John Paul, as embodied in the compromise agreement between herein parties which had been approved by the Makati RTC, cannot be considered final and res judicata since any judgment for support is always subject to modification, depending upon the needs of the child and the capabilities of the parents to give support.

Having settled the issue on the authority of the trial court to award support for the child in an action for declaration of nullity of marriage of the child’s parents, this Court will now discuss the propriety of the proceedings conducted by the Pasay RTC and the decision it rendered, as affirmed by the Court of Appeals.

The Court notes four circumstances that taint the regularity of the proceedings and the decision rendered by the trial court.

First, the only ground alleged in the petition for declaration of nullity of marriage filed by Adriana with the Pasay RTC is the psychological incapacity of Jose without any prayer for the support of her child. Adriana presented, formally offered her evidence in support of the petition and submitted the case for decision as of May 12, 1994.90[14] But on a motion to re-open filed by her on June 23, 1994, the trial court set the case for reception of evidence on July 6, 1994 and subsequently allowed Adriana to present evidence of two previous marriages contracted by Jose with other women to prove that the marriage between Adriana and Jose was null and void for being bigamous. It is only at the July 6, 1994 hearing that respondent Adriana first claimed support for John Paul when she testified in open court.

The petition of Adriana was, in effect, substantially changed by the admission of the additional evidence. The ground relied on for nullity of the marriage was changed from the psychological incapacity of Jose to that of existence of previous marriages of Jose with two different women with an additional claim for support of the child. Such substantial changes were not reflected in the petition filed with the trial court, as no formal amendment was ever made by Adriana except the insertion of the handwritten phrase “And for respondent to support the child of petitioner in an amount this Honorable Court may deem just and reasonable”91[15] found at the ultimate paragraph of the petition, as allowed by the Pasay RTC. There is nothing on record to show that petitioner Jose was notified of the substantial changes in the petition of Adriana.

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Second, the Pasay RTC did not give Jose an opportunity to be present on July 6, 1994 for the presentation of evidence by Adriana and to refute the same. Although copy of the motion filed on June 23, 1994 with a notice of hearing on June 27, 1994 was sent to Jose, the record does not show that he received the notice in due time; neither does the record show that he was notified of the subsequent hearing held on July 6, 1994 where Adriana presented the marriage certificates and claimed for the support of their child sans the presence of Jose.

Third, the records do not show that petitioner was sent a copy of the Order dated July 6, 1994 wherein the trial court granted the Urgent Motion to Re-Open of respondent Adriana and forthwith allowed her to present her evidence to prove that petitioner herein contracted previous marriages with different women.

Fourth, the evidence presented by respondent regarding her claim for support for John Paul is glaringly insufficient and cannot be made a valid basis upon which the Pasay RTC could have determined the monthly amount of P20,000.00 for the support to be given to John Paul by petitioner Jose.

A party who has been declared in default is entitled to service of substantially amended or supplemental pleadings.92[16] Considering that in cases of declaration of nullity of marriage or annulment of marriage, there can be no default pursuant to Section 6, Rule 18 of the Revised Rules of Court93[17] in relation to Article 48 of the Family Code,94[18] it is with more reason that petitioner should likewise be entitled to notice of all proceedings.

Furthermore, the lower courts are reminded of the ruling of the Court in Asian Transmission Corporation vs. Canlubang Sugar Estates,95[19] to wit:

It is also a general principle of law that a court cannot set itself in motion, nor has it power to decide questions except as presented by the parties in their pleadings. Anything that is decided beyond them is coram non-judice and void. Therefore where a court enters a judgment or awards relief beyond the prayer of the complaint or the scope of its allegations the excessive relief is not merely irregular but is void for want of jurisdiction, and is open to collateral attack.

The appellate court also ruled that a judgment of a court upon a subject within its general jurisdiction, but which is not brought before it by any statement or claim of the parties, and is foreign to the issues submitted for its determination, is a nullity. (Emphasis supplied)

Pursuant to the foregoing principle, it is a serious error for the trial court to have rendered judgment on issues not presented in the pleadings as it was beyond its jurisdiction to do so. The amendment of the petition to reflect the new issues and claims against Jose was, therefore, indispensable so as to authorize the court to act on the issue of whether the marriage of Jose and Adriana was bigamous and the determination of the amount that should have been awarded for the support of John Paul. When the trial court rendered judgment beyond the allegations contained in the copy of the petition served upon Jose, the Pasay RTC had acted in excess of its jurisdiction and deprived petitioner Lam of due process.

Insofar as the declaration of nullity of the marriage between Adriana and Jose for being bigamous is concerned, the decision rendered by the Pasay RTC could be declared as invalid for having been issued beyond its jurisdiction. Nonetheless, considering that Jose, did not assail the declaration of nullity of his marriage with Adriana in his motion for reconsideration which he filed with the Pasay RTC. In the petitions he filed in the Court of Appeals and with us, he likewise did not raise the issue of

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jurisdiction of the Pasay RTC to receive evidence and render judgment on his previous marriages with other woman which were not alleged in the petition filed by Adriana. Petitioner Jose is estopped from questioning the declaration of nullity of his marriage with Adriana and therefore, the Court will not undo the judgment of the Pasay RTC declaring the marriage of Adriana and Jose null and void for being bigamous. It is an axiomatic rule that while a jurisdictional question may be raised at any time, this, however, admits of an exception where estoppel has supervened.96[20]

Consequently, the Court will only resolve the lone issue raised by Jose in the present petition for review on certiorari which is the award of support for his child, John Paul.

The Pasay RTC should have been aware that in determining the amount of support to be awarded, such amount should be in proportion to the resources or means of the giver and the necessities of the recipient, pursuant to Articles 194, 201 and 202 of the Family Code, to wit:

Art. 194. Support comprises everything indispensable for sustenance, dwelling, clothing, medical attendance, education and transportation, in keeping with the financial capacity of the family.

The education of the person entitled to be supported referred to in the preceding paragraph shall include his schooling or training for some profession, trade or vocation, even beyond the age of majority. Transportation shall include expenses in going to and from school, or to and from place of work.

Art. 201. The amount of support, in the cases referred to in Articles 19597[21] and 196,98[22] shall be in proportion to the resources or means of the giver and to the necessities of the recipient.

Art. 202. Support in the cases referred to in the preceding article shall be reduced or increased proportionately, according to the reduction or increase of the necessities of the recipient and the resources or means of the person obliged to furnish the same.

It is incumbent upon the trial court to base its award of support on the evidence presented before it. The evidence must prove the capacity or resources of both parents who are jointly obliged to support their children as provided for under Article 195 of the Family Code; and the monthly expenses incurred for the sustenance, dwelling, clothing, medical attendance, education and transportation of the child.

In this case, the only evidence presented by respondent Adriana regarding her claim for support of the child is her testimony, which is quoted below in verbatim:

Atty. Lorbes:

Q - After discovering that your husband had contracted two valid marriages prior to your marriage, how do you feel about it?

A - I felt it is unfair to my life.

Q - Considering the bigamous marriage contract by your husband with you, what do you want to request to the Honorable Court?

A - I want to request the Court that the respondent be ordered to support my little boy.

Court:

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Q - How much support do you want?

A - P20,000.00 to P25,000.00

Q - Is there a prayer for support?

Atty. Lorbes:

A - None, Your Honor.

Court:

Get the original copy of the complaint, add and sign it for the support of the boy.

A - Yes, Your Honor.99[23]

Evidently, such testimony does not establish the amount needed by the child nor the amount that the parents are reasonably able to give.

We take note of the Compromise Agreement, approved by and embodied in the decision of the Makati RTC, portions of which read as follows:

8. Nothing herein shall diminish the rights and obligations of both parties with respect to their son. In the best interest of the child, the Second Party shall retain care and custody, subject to visitation rights by the First Party to be exercised through mutual arrangements.

9. It is hereby agreed by the First Party and the Second Party that the First Party and the Second Party shall initially contribute P250,000.00 each to a common fund, to be increased as required, to be used solely and exclusively for the benefit of their son. Said common fund shall be managed and administered by the Second Party, subject to periodic accounting, until the son reaches majority age.

WHEREFORE, finding the aforequoted agreement to be in order, and not being contrary to law, morals or public policy, the same is hereby APPROVED. Accordingly, the conjugal partnership of gains existing between the said spouses is dissolved and a decree of complete separation is established in accordance with the provisions of Chapter 6 of the Family Code of the Philippines. The parties are hereby enjoined to faithfully comply with the conditions of their Agreement as embodied in this petition and the same shall, as between the parties, be deemed to be a decision and/or award in the matters treated in the aforesaid settlement.

Let a copy of this petition as well as the foregoing Decision be recorded in the proper local civil registries and registries of property at the expense of the herein petitioners pursuant to Article 139 of the Family Code.

SO ORDERED.

GIVEN this 28th day of February, 1994 at Makati, Metro Manila.100[24]

The matter of support is a question that may be raised and threshed out before the Makati RTC as it was the court that approved the Compromise Agreement, or before the Pasay RTC where the petition for declaration of nullity or annulment of marriage is filed. In the interest of orderly administration of justice, the Court deems it proper that the issue on support should be resolved by the Pasay RTC where the claim for support of the child was initiated by Adriana.

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The trial court’s action of merely ordering in open court during the July 6, 1994 hearing that a prayer for support be written and inserted in the petition filed by respondent Adriana does not constitute proper amendment and notice upon petitioner Jose. Consequently, herein petitioner Jose was deprived of due process when the trial court proceeded to hear the case on a motion to re-open and render judgment without giving Jose the requisite notice and the opportunity to refute the new claim against him.

Verily, the manner by which the trial court arrived at the amount of support awarded to John Paul was whimsical, arbitrary and without any basis.

Such being the case, the Court has no other recourse but to reverse the decision of the Court of Appeals and Pasay RTC insofar as the award of support is concerned and order the remand of the case to Pasay RTC for further proceedings as to the issue regarding support.

WHEREFORE, the petition for review on certiorari is GRANTED. The Decision and Resolution of the Court of Appeals in CA-G.R. CV. No. 51107, dated June 11, 1997 and October 27, 1997, dismissing the appeal and denying the motion for reconsideration, respectively, are hereby SET ASIDE but only insofar as the award of support in favor of John Paul Chua Lam is concerned. The Decision dated August 4, 1994 and the Order of the Regional Trial Court of Pasay City (Branch 109), dated August 22, 1995, are REVERSED and SET ASIDE for being null and void, likewise only insofar as the matter on support is concerned.

Let the records of Civil Case No. 94-0331 be remanded to the Regional Trial Court of Pasay City (Branch 109) which is DIRECTED to reopen the trial of Civil Case No. 94-0331 with respect to the claim of Adriana Chua against Jose Lam for the support of John Paul Chua Lam and conduct hearings for further reception of evidence for the proper determination of the proper amount of support to be awarded to the child John Paul Chua Lam.

SO ORDERED.

Quisumbing, (Acting Chairman), Callejo, Sr., and Tinga, JJ., concur.

THIRD DIVISION

 

 

ATTY. VIRGILIO R. GARCIA,

Petitioner,

 

 

- versus -

 

 

EASTERN TELECOMMUNICATIONS PHILIPPINES, INC. and ATTY. SALVADOR C. HIZON,

  G.R. No. 173115

 

 

 

 

 

 

 

Respondents.

 

x - - - - - - - - - - - - - - - - - - - - - - x

 

EASTERN TELECOMMUNICATIONS PHILIPPINES, INC. and ATTY. SALVADOR C. HIZON,

Petitioners,

 

 

 

- versus –

 

 

 

ATTY. VIRGILIO R. GARCIA,

Respondent.

 

 

 

 

 

 

G.R. Nos. 173163-64

 

Present:

YNARES-SANTIAGO, J.,

Chairperson.

AUSTRIA-MARTINEZ,

CHICO-NAZARIO,

NACHURA, and

PERALTA, JJ.

 

Promulgated:

 

April 16, 2009

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

 

 

 

 

 

 

 

 

D E C I S I O N

 

 

CHICO-NAZARIO, J.:

 

 

Assailed before Us via consolidated petitions for certiorari under Rule 45 of the Rules of Court

is the Decision101[1] of the Court of Appeals in CA-G.R. SP No. 88887 and No. 89066 dated 24 March

2006, which dismissed the petitions for certiorari questioning the Decision102[2] of the National Labor

Relations Commission (NLRC) dated 21 March 2003, docketed as NLRC NCR CA No. 028901-01. The

NLRC reversed the decision of the Labor Arbiter dated 30 September 2002, finding the preventive

suspension and dismissal of Atty. Virgilio R. Garcia illegal, and dismissed the case for lack of

jurisdiction.

 

The facts are not disputed.

 

Atty. Virgilio R. Garcia was the Vice President and Head of Business Support Services and

Human Resource Departments of the Eastern Telecommunications Philippines, Inc. (ETPI).

 

ETPI is a corporation duly organized and existing under the laws of the Republic of the

Philippines.

 

Atty. Salvador C. Hizon is the President/Chief Executive Officer of ETPI.

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102

On 16 January 2000, Atty. Garcia was placed under preventive suspension based on three

complaints for sexual harassment filed by Atty. Maria Larrie Alinsunurin, former manager of ETPI’s

Office of the Legal Counsel; Ms. Emma Valeros-Cruz, Assistant Vice President of ETPI and former

secretary of Atty. Garcia; and Dr. Mercedita M. Macalintal, medical retainer/company physician of ETPI.

In response to the complaints, the Human Resources Department constituted a Committee on

Decorum to investigate the complaints. By reason of said complaints, Atty. Garcia was placed in

preventive suspension. The committee conducted an investigation where Atty. Garcia was given

copies of affidavits of the witnesses against him and a chance to defend himself and to submit

affidavits of his witnesses. The Committee submitted a report which recommended his dismissal.103[3]

In a letter dated 14 April 2000, Atty. Hizon advised Atty. Garcia that his employment with ETPI was, per

recommendation of the Committee, terminated effective 16 April 2000.

 

A complaint-affidavit for illegal dismissal with prayer for full backwages104[4] and recovery of

moral and exemplary damages was filed on 11 July 2000 by Atty. Virgilio R. Garcia against ETPI and

Atty. Salvador C. Hizon.105[5] The case, docketed as NLRC NCR-30-07-02787-00, was assigned to Labor

Arbiter Patricio P. Libo-on. The parties submitted their respective position papers,106[6] reply position

papers107[7] and rejoinders.108[8] Per agreement of the parties, ETPI and Atty. Hizon filed a sur-

rejoinder on 6 March 2001.109[9] Atty. Garcia manifested that he was no longer submitting a sur-

rejoinder and was submitting the case for resolution.

On 15 April 2001, Atty. Garcia filed a Motion to Inhibit, praying that Labor Arbiter Libo-on

inhibit himself from further proceeding with the case, on the ground that he was a fraternity brother of

Atty. Hizon.110[10] Atty. Garcia thereafter filed a second Motion to Inhibit111[11] on 10 May 2001. ETPI

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and Atty. Hizon opposed said motion, arguing that the reason on which it was grounded was not one of

those provided by law.112[12] In an Order dated 13 June 2001, said motions were denied.113[13] Atty.

Garcia appealed said order before the NLRC via a Memorandum on Appeal dated 4 July 2001,114[14] to

which ETPI and Atty. Hizon filed an Answer.115[15]

 

The NLRC, in its decision dated 20 December 2001, set aside the order of Labor Arbiter Libo-on

and ordered the re-raffling of the case.116[16] ETPI and Atty. Hizon moved for the

reconsideration117[17] of the decision, but the same was denied.118[18] Consequently, the case was re-

raffled to Labor Arbiter Ramon Valentin C. Reyes.119[19]

 

The parties were directed to submit their respective memoranda.120[20] Atty. Garcia filed his

memorandum121[21] on 9 July 2002 while ETPI and Atty. Hizon submitted their memorandum122[22] on

22 July 2002. On 16 August 2002, with leave of court, ETPI and Atty. Hizon filed a Reply Memorandum,

raising for the first time the issue of lack of jurisdiction.

 

In his decision dated 30 September 2002, Labor Arbiter Reyes found the preventive

suspension and subsequent dismissal of Atty. Garcia illegal. The dispositive portion of the decision

reads:

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122

 

WHEREFORE, premises all considered, judgment is hereby rendered, finding the preventive suspension and the dismissal illegal and ordering the respondents to:

 1. Reinstate complainant to his former position without loss of seniority rights and other benefits appurtenant to the position that complainant received prior to the illegal dismissal;

 

2. Pay complainant his backwages which for purpose of appeal is computed to the amount of P4,200,000.00 (P150,000 x 28);

 

3. Pay complainant Moral damages in the amount of P1,000,000.00 and Exemplary damages in the amount of P500,000.00.123[23]  

On 14 November 2002, Atty. Garcia filed an Ex-Parte Motion for the Issuance of a Writ of

Execution.124[24] On 20 November 2002, Labor Arbiter Reyes issued a Writ of Execution insofar as the

reinstatement aspect of the decision was concerned.125[25] ETPI and Atty. Hizon filed a Very Urgent

Motion to Lift/Quash Writ of Execution on 28 November 2002.126[26] Per Sheriff’s Return on the Writ of

Execution, said writ remained unsatisfied because ETPI and Atty. Hizon refused to reinstate Atty.

Garcia to his former position.127[27]

 

On 29 November 2002, Atty. Garcia filed an Ex-Parte Motion for the Issuance of an Alias Writ of

Execution praying that said writ be issued ordering the sheriff to enforce the decision by garnishing the

amount of P450,000.00 representing his monthly salaries for two months and 13 th month pay from any

of ETPI’s bank accounts.128[28] Atty. Garcia manifested that he was no longer filing any responsive

pleading to the Very Urgent Motion to Lift/Quash Writ of Execution because the Labor Arbiter lost

jurisdiction over the case when an appeal had been perfected.129[29] In an Order dated 10 December

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124

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129

2002, Labor Arbiter Reyes denied the Very Urgent Motion to Lift/Quash Writ of Execution, explaining

that it still had jurisdiction over the reinstatement aspect of the decision, notwithstanding the appeal

taken, and that the grounds relied upon for the lifting or quashing of the writ were not valid grounds.130

[30] Labor Arbiter Reyes subsequently issued a 1st Alias Writ of Execution dated 11 December 2002

ordering the sheriff to proceed to the premises of ETPI to reinstate Atty. Garcia and/or garnish the

amounts prayed for.131[31] Per Sheriff’s Return dated 17 January 2003, the 1st Alias Writ of Execution

was satisfied with the amount of P450,000.00 being released for proper disposition to Atty. Garcia.132

[32]

 

ETPI and Atty. Hizon appealed the decision to the NLRC, filing a Notice of Appeal and

Memorandum of Appeal,133[33] which appeal was opposed by Atty. Garcia.134[34] The appeal was

docketed as NLRC NCR CA Case No. 028901-01. ETPI and Atty. Hizon filed a Supplemental Appeal

Memorandum dated 23 January 2003 (With Very Urgent Motion for Issuance of Temporary Restraining

Order).135[35] In a Manifestation ad Cautelam dated 28 January 2003, without waiving their right to

continue to question the jurisdiction of the Labor Arbiter, they informed the Labor Arbiter that they had

filed a Supplemental Appeal Memorandum before the NLRC and asked that all processes relating to

the implementation of the reinstatement order be held in abeyance so as not to render moot the

reliefs prayed for in said Supplemental Appeal Memorandum.136[36] They likewise filed on 31 January

2003 a Very Urgent Motion to Lift/Quash Order of Garnishment ad Cautelam, praying that the notice of

garnishment on ETPI’s bank account with Metrobank, Dela Costa Branch, or with other banks with

which ETPI maintained an account and which received said notice of garnishment be immediately

lifted/quashed.137[37] On 12 February 2003, Atty. Garcia filed his Opposition to said Supplemental

Appeal Memorandum.138[38]

 

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134

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138

On 3 February 2003, Atty. Garcia filed an Ex-Parte Motion for the Issuance of a 2nd Alias Writ of

Execution.139[39] In an Order dated 5 February 2003, Labor Arbiter Reyes lifted the notice of

garnishment on ETPI’s bank account with Metrobank, Dela Costa Branch.140[40] On 10 February 2003,

Labor Arbiter Reyes issued a 2nd Writ of Execution.141[41]

 

In a Manifestation ad Cautelam142[42] dated 10 February 2003, ETPI and Atty. Hizon said that

they filed with the NLRC on 7 February 2003 an Urgent Petition (for Preliminary Injunction With

Issuance of Temporary Restraining Order)143[43] which prayed, inter alia, for the issuance of a

temporary restraining order to restrain the execution pending appeal of the order of reinstatement and

to enjoin the Labor Arbiter from issuing writs of execution or other processes implementing the

decision dated 30 September 2002. They added that they also filed on 7 February 2003 a Notice to

Withdraw144[44] their Supplemental Appeal Memorandum dated 23 January 2003.

 

ETPI and Atty. Hizon, without waiving their right to continue to question the jurisdiction of the

Labor Arbiter over the case, filed on 18 February 2003 a Motion to Inhibit, seeking the inhibition of

Labor Arbiter Reyes for allegedly evident partiality in favor of the complainant in issuing writs of

execution in connection with the order of reinstatement contained in his decision dated 30 September

2002, despite the pendency of an Urgent Petition (for Preliminary Injunction With Prayer for the

Issuance of Temporary Restraining Order) with the NLRC, which sought the restraining of the execution

pending appeal of the order of reinstatement.145[45] The petition for injunction was docketed as NLRC

NCR IC No. 0001193-02. Atty. Garcia filed an opposition,146[46] to which ETPI and Atty. Hizon filed a

139

140

141

142

143

144

145

146

reply.147[47] Said motion to inhibit was subsequently granted by Labor Arbiter Reyes.148[48] The case

was re-raffled to Labor Arbiter Elias H. Salinas.149[49]

 

In an Order dated 26 February 2003, the NLRC, in NLRC NCR IC No. 0001193-02, issued a

temporary restraining order (TRO) enjoining Labor Arbiter Reyes from executing pending appeal the

order of reinstatement contained in his decision dated 30 September 2002, and from issuing similar

writs of execution pending resolution of the petition for preliminary injunction. It directed ETPI and

Atty. Hizon to post a bond in the amount of P30,000.00 to answer for any damage which Atty. Garcia

may suffer by reason of the issuance of the TRO.150[50]

On 21 March 2003, the NLRC rendered its decision in NLRC NCR CA Case No. 028901-01

reversing the decision of Labor Arbiter Reyes and dismissing the case for lack of jurisdiction.

The decretal portion of the decision reads:

 

WHEREFORE, the decision appealed from is REVERSED, and the instant case DISMISSED for lack of jurisdiction.151[51]  

The Commission ruled that the dismissal of Atty. Garcia, being ETPI’s Vice President, partook of

the nature of an intra-corporate dispute cognizable by Regional Trial Courts and not by Labor Arbiters.

It added that ETPI and Atty. Hizon were not barred by estoppel from challenging the jurisdiction of the

Labor Arbiter over the instant case.

 

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148

149

150

151

Atty. Garcia moved for the reconsideration152[52] of the decision, which ETPI and Atty. Hizon

opposed.153[53] In a resolution dated 16 December 2003, the motion for reconsideration was denied

for lack of merit.154[54]

 

On 26 March 2003, Atty. Garcia filed a Motion to Inhibit, requesting Associate Commissioner

Angelita A. Gacutan to inhibit herself from further participating in the deliberation and resolution of the

case for manifest bias and partiality in favor of ETPI and Atty. Hizon. The motion was later

withdrawn.155[55]

 

On 3 April 2003, the NLRC made permanent the TRO it issued pursuant to its ruling in NLRC

NCR CA Case No. 028901-01, that since the Labor Arbiter had no jurisdiction over the case, the

decision of the Labor Arbiter dated 30 September 2002 was void.156[56]

On 6 March 2004, the resolution dated 16 December 2003 became final and executory.

Consequently, on 14 June 2004, an entry of judgment was made recording said resolution in the Book

of Entries of Judgments.157[57]

 

On 18 June 2004, ETPI and Atty. Hizon filed a Motion to Discharge and/or Release the Appeal

Bond158[58] in the amount of P5,700,000.00 that they had posted. 159[59]

 

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On 9 July 2004, Atty. Garcia filed a Motion to Set Aside Finality of Judgment With Opposition to

Motion to Discharge Appeal Bond,160[60] claiming that he did not receive the resolution dated 16

December 2003 of the NLRC, the same having been sent to his former address at 9 Isidora St., Don

Antonio Heights, Diliman, Quezon City, and not to his new address at 4 Pele St., Filinvest 2, Batasan

Hills, Quezon City, where he had been receiving all pleadings, Resolutions, Orders and Decisions

pertaining to the instant case since April 2001. On 19 July 2004, ETPI and Atty. Hizon filed their

opposition thereto. On 23 August 2004, the NLRC, admitting that it missent the resolution dated 16

December 2003 denying Atty. Garcia’s motion for reconsideration, issued an order granting the

motion. It recalled and set aside the Entry of Judgment dated 14 June 2004 and denied the Motion to

Discharge and/or Release the Appeal Bond.161[61]

 

In its Motion for Reconsideration dated 17 September 2004, ETPI and Atty. Hizon argued that

the NLRC correctly sent the resolution of 16 December 2003 to counsel’s allegedly old address,

considering that same was counsel’s address of record, there being no formal notice filed with the

NLRC informing it of a change of address. They contended that the aforesaid resolution had become

final and executory, and that Atty. Garcia should bear the consequences of his inequitable conduct

and/or gross negligence.162[62] On 10 January 2005, the NLRC denied the motion for

reconsideration.163[63]

 

On 14 March 2005, Atty. Garcia appealed to the Court of Appeals via a Petition for Certiorari. It

prayed that the Decision dated 21 March 2003 and resolution dated 16 December 2003 of the NLRC be

annulled and set aside, and that the decision of the Labor Arbiter dated 30 September 2002 be

reinstated.164[64] The appeal was docketed as CA-G.R. SP No. 88887.

 

On 28 March 2005, ETPI and Atty. Hizon likewise filed a Petition for Certiorari asking that the

Orders dated 23 August 2004 and 10 January 2005 of the NLRC be set aside; that its resolution dated

16 December 2003 be declared final and executory; and that the NLRC be directed to discharge and/or

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release Supersedeas Bond No. JCL (15) 00823 SICI Bond No. 75069 dated 18 November 2002 posted

by them.165[65] The appeal was docketed as CA-G.R. SP No. 89066.

 

Upon motion of Atty. Garcia, the two petitions for certiorari were consolidated.166[66]

 

On 24 March 2006, the assailed decision of the Court of Appeals was rendered, the dispositive

portion reading:

 

UPON THE VIEW WE TAKE OF THIS CASE, THUS, the consolidated petitions are hereby DISMISSED for lack of merit. Without costs in both instances.167[67]

  

The appellate court, on ETPI and Atty. Hizon’s argument that Atty. Garcia’s petition for

certiorari was filed out of time, ruled that the NLRC did not commit grave abuse of discretion in

liberally applying the rules regarding changes in the address of counsel. It likewise ruled that Atty.

Garcia, being the Vice President for Business Support Services and Human Resource Departments of

ETPI, was a corporate officer at the time he was removed. Being a corporate officer, his removal was a

corporate act and/or an intra-corporate controversy, the jurisdiction of which rested with the Securities

and Exchange Commission (now with the Regional Trial Court), and not the Labor Arbiter and the

NLRC. It added that ETPI and Atty. Hizon were not estopped from questioning the jurisdiction of the

Labor Arbiter before the NLRC on appeal, inasmuch as said issue was seasonably raised by ETPI and

Atty. Hizon in their reply memorandum before the Labor Arbiter.

On 18 April 2006, Atty. Garcia filed his Motion for Reconsideration.168[68] On 20 April 2006,

ETPI and Atty. Hizon filed a Motion for Partial Reconsideration.169[69] The parties filed their respective

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comments thereon.170[70] On 14 June 2006, the Court of Appeals denied the motions for

reconsideration.171[71]

 

Atty. Garcia is now before us via a Petition for Review, which he filed on 3 August 2006.172[72]

The petition was docketed as G.R. No. 173115. On 8 August 2006, he filed an Amended Petition for

Review.173[73] He prays that the decision of the NLRC dated 21 March 2003 and its resolution dated

16 December 2003, and the decision of the Court of Appeals dated 24 March 2006 and its resolution

dated 14 June 2006, be reconsidered and set aside and that the decision of the Labor Arbiter dated 30

September 2002 be affirmed and reinstated.

 

ETPI and Atty. Hizon are also before us by way of a Petition for Certiorari.174[74] The petition

which was filed on 6 July 2006 was docketed as G.R. Nos. 173163-64.

 

In our resolution dated 30 August 2006, G.R. Nos. 173163-64 were consolidated with G.R. No.

173115, and the parties were required to comment on the petitions within ten days from notice. 175[75]

Atty. Garcia filed his comment on 13 November 2006,176[76] while ETPI and Atty. Hizon filed theirs on

29 November 2006.177[77]

 

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On 15 January 2007, we noted the comments filed by the parties and required them to file

their Replies to said comments.178[78] ETPI and Atty. Hizon179[79] filed their Reply on 26 February

2007, with Atty. Garcia filing his on 2 March 2007.180[80]

 

On 26 March 2007, we gave due course to the petitions and required the parties to submit the

respective memoranda within 30 days from notice.181[81] Atty. Garcia submitted his

Memorandum182[82] on 12 June 2007 and ETPI and Atty. Hizon filed theirs on 13 July 2007.183[83] With

leave of court, ETPI and Atty. Hizon filed a reply memorandum.184[84]

 

Atty. Garcia raises the lone issue:

 

WHETHER THE QUESTION OF LEGALITY OR ILLEGALITY OF THE REMOVAL OR TERMINATION OF EMPLOYMENT OF AN OFFICER OF A CORPORATION IS AN INTRA-CORPORATE CONTROVERSY THAT FALLS UNDER THE ORIGINAL EXCLUSIVE JURISDICTION OF THE REGIONAL TRIAL COURTS?185[85]   

ETPI and Atty. Hizon argue that the Court of Appeals, in ruling that the NLRC did not commit

grave abuse of discretion amounting to lack or excess of jurisdiction in issuing its order dated 23

August 2004 and its resolution dated 10 January 2005, committed grave reversible error and decided

questions of substance in a way not in accordance with law and applicable decisions of the Honorable

Court, and departed from the accepted and usual course of judicial proceedings, necessitating the

Honorable Court’s exercise of its power of supervision.

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I

THE RESOLUTION DATED 16 DECEMBER 2003 ISSUED BY THE NATIONAL LABOR RELATIONS COMMISSION (SECOND DIVISION) HAS ALREADY BECOME FINAL AND EXECUTORY AND HAS VESTED UPON PETITIONERS ETPI, ET AL. A RIGHT RECOGNIZED AND PROTECTED UNDER THE LAW CONSIDERING THAT: A.         RESPONDENT’S COPY OF SAID RESOLUTION WAS PROPERLY SENT TO HIS

ADDRESS OF RECORD, AT THE LATEST ON 15 JANUARY 2004, IN ACCORDANCE WITH WELL ESTABLISHED JURISPRUDENCE. HENCE, RESPONDENT GARCIA HAD ONLY UNTIL 15 MARCH 2004 WITHIN WHICH TO FILE HIS PETITION FOR CERTIORARI WITH THE COURT OF APPEALS. RESPONDENT GARCIA FAILED TO FILE HIS PETITION FOR CERTIORARI BY SAID DATE.

 B.          NOTWITHSTANDING THE FOREGOING, RESPONDENT GARCIA HAD ACTUAL

NOTICE OF THE ISSUANCE OF THE SAME AS OF 24 JUNE 2004. HENCE RESPONDENT GARCIA HAD ONLY UNTIL 23 AUGUST 2004 WITHIN WHICH TO FILE HIS PETITION FOR CERTIORARI WITH THE COURT OF APPEALS. RESPONDENT GARCIA FAILED TO FILE HIS PETITION FOR CERTIORARI BY SAID DATE.

 

C.          EVEN IF THE DATE OF RECEIPT IS RECKONED FROM 15 SEPTEMBER 2005, THE DATE RESPONDENT GARCIA ADMITTED IN HIS PETITION FOR CERTIORARI TO BE THE DATE OF HIS RECEIPT OF THE COPY OF THE RESOLUTION DATED 16 DECEMBER 2003 AT HIS ALLEGED NEW ADDRESS, RESPONDENT GARCIA HAD ONLY UNTIL 15 NOVEMBER 2005 TO FILE HIS PETITION FOR CERTIORARI DATED 11 MARCH 2005. RESPONDENT GARCIA FAILED TO FILE HIS PETITION FOR CERTIORARI BY SAID DATE.

 

II 

THE COURT OF APPEALS ERRED IN AFFIRMING THE NLRC’S LIBERAL APPLICATION OF RULES CONSIDERING THAT A LIBERAL APPLICATION OF RULES CANNOT BE USED TO DEPRIVE A RIGHT THAT HAS ALREADY IPSO FACTO VESTED ON PETITIONERS ETPI, ET AL. 

III 

THE COURT OF APPEALS ERRED IN RULING THAT THE NLRC DID NOT COMMIT GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN ISSUING ITS ORDER DATED 23 AUGUST 2004 AND RESOLUTION DATED 10 JANUARY 2005 CONSIDERING THAT RESPONDENT GARCIA MAY NOT ASSAIL THE FINALITY OF RESOLUTION DATED 16 DECEMBER 2003 THROUGH A MERE MOTION. 

IV 

THE COURT OF APPEALS ERRED IN FAILING TO RULE ON PETITIONERS’ COUNTER-MOTION TO CITE RESPONDENT GARCIA IN CONTEMPT OF COURT DESPITE ITS PREVIOUS RESOLUTION DATED 30 MAY 2005 STATING THAT IT SHALL ADDRESS THE SAME IN THE DECISION ON THE MERITS OF THE CASE.186[86]   

186

The issue raised by Atty. Garcia – whether the termination or removal of an officer of a

corporation is an intra-corporate controversy that falls under the original exclusive jurisdiction of the

regional trial courts – is not novel. The Supreme Court, in a long line of cases, has decreed that a

corporate officer’s dismissal or removal is always a corporate act and/or an intra-corporate

controversy, over which the Securities and Exchange Commission [SEC] (now the Regional Trial

Court)187[87] has original and exclusive jurisdiction.188[88]

 

We have ruled that an intra-corporate controversy is one which pertains to any of the following

relationships: (1) between the corporation, partnership or association and the public; (2) between the

corporation, partnership or association and the State insofar as the former’s franchise, permit or

license to operate is concerned; (3) between the corporation, partnership or association and its

stockholders, partners, members or officers; and (4) among the stockholders, partners or associates

themselves.189[89] In Lozon v. National Labor Relations Commission,190[90] we declared that

Presidential Decree No. 902-A confers on the SEC original and exclusive jurisdiction to hear and decide

controversies and cases involving intra-corporate and partnership relations between or among the

corporation, officers and stockholders and partners, including their elections or appointments x x x.

Before a dismissal or removal could properly fall within the jurisdiction of the SEC, it has to be

first established that the person removed or dismissed was a corporate officer.191[91] “Corporate

officers” in the context of Presidential Decree No. 902-A192[92] are those officers of the corporation

who are given that character by the Corporation Code or by the corporation’s by-laws.193[93] There are

three specific officers whom a corporation must have under Section 25 of the Corporation Code.194[94]

These are the president, secretary and the treasurer. The number of officers is not limited to these

three. A corporation may have such other officers as may be provided for by its by-laws like, but not

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limited to, the vice-president, cashier, auditor or general manager. The number of corporate officers is

thus limited by law and by the corporation’s by-laws.

In the case before us, the by-laws of ETPI provide:

 

ARTICLE V 

Officers 

Section 1. Number. – The officers of the Company shall be a Chairman of the Board, a President, one or more Vice-Presidents, a Treasurer, a Secretary, an Assistant Secretary, and such other officers as may be from time to time be elected or appointed by the Board of Directors. One person may hold any two compatible offices.195[95]  

Atty. Garcia tries to deny he is an officer of ETPI. Not being a corporate officer, he argues that

the Labor Arbiter has jurisdiction over the case. One of the corporate officers provided for in the by-

laws of ETPI is the Vice-President. It can be gathered from Atty. Garcia’s complaint-affidavit that he

was Vice President for Business Support Services and Human Resource Departments of ETPI when his

employment was terminated effective 16 April 2000. It is therefore clear from the by-laws and from

Atty. Garcia himself that he is a corporate officer. One who is included in the by-laws of a corporation

in its roster of corporate officers is an officer of said corporation and not a mere employee.196[96]

Being a corporate officer, his removal is deemed to be an intra-corporate dispute cognizable by the

SEC and not by the Labor Arbiter.

 

We agree with both the NLRC and the Court of Appeals that Atty. Garcia’s ouster as Vice-

President, who is a corporate officer of ETPI, partakes of the nature of an intra-corporate controversy,

jurisdiction over which is vested in the SEC (now the RTC). The Labor Arbiter thus erred in assuming

jurisdiction over the case filed by Atty. Garcia, because he had no jurisdiction over the subject matter

of the controversy.

 

Having ruled which body has jurisdiction over the instant case, we find it unnecessary, due to

mootness, to further discuss and rule on the issues raised by ETPI and Atty. Hizon regarding the NLRC

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order dated 23 August 2004 granting Atty. Garcia’s Motion to Set Aside Finality of Judgment with

Opposition to Motion to Discharge Appeal Bond, and its resolution dated 10 January 2005 denying their

motion for reconsideration thereon. The decision of the Labor Arbiter, who had jurisdiction over the

case, was properly dismissed by the NLRC. Consequently, Supersedeas Bond No. JCL (15) 00823 SICI

Bond No. 75069 dated 18 November 2002, posted by ETPI as a requirement for the filing of an appeal

before the NLRC, is ordered discharged.

 

WHEREFORE, premises considered, the petition for certiorari of Atty. Garcia in G.R. No.

173115 is hereby DENIED. The petition for review on certiorari of ETPI and Atty. Hizon in G.R. Nos.

173163-64 is PARTIALLY GRANTED insofar as the discharge of Supersedeas Bond No. JCL (15) 00823

SICI Bond No. 75069 dated 18 November 2002 is concerned. This ruling is without prejudice to Atty.

Garcia’s taking recourse to and seeking relief through the appropriate remedy in the proper forum.

 

SO ORDERED.

 

 

 

 

  MINITA V. CHICO-NAZARIO

Associate Justice

 

 

 

 

 

 

 

WE CONCUR:

 

 

 

CONSUELO YNARES-SANTIAGO

Associate Justice

Chairperson

 

 

 

MA. ALICIA AUSTRIA-MARTINEZ ANTONIO EDUARDO B. NACHURA

Associate Justice Associate Justice

 

 

 

DIOSDADO M. PERALTA

Associate Justice

 

 

ATTESTATION

 

I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

 

 

 

CONSUELO YNARES-SANTIAGO

Associate Justice

Chairperson, Third Division

 

 

 

CERTIFICATION

 

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

 

 

 

REYNATO S. PUNO

Chief Justice