J.A.B. Bulao & Associates

BEATRIZ SIOK PING TANG VS. SUBIC BAY DISTRIBUTION, INC. (G.R. NO. 162575, 15 DECEMBER 2010, PERALTA, J.)

SUBJECTS: CERTIORARI; REJOINDER OF PARTIES. (BRIEF TITLE: TANG VS. SBDI)

DIGEST

TANG PURCHASED PETROLEUM PRODUCTS FROM SUBIC BAY DISTRIBUTION OR SBDI. TANG PURSUANT TO AGREEMENT OBTAINED UNDERTAKINGS FROM BANKS WHO OBLIGATED THEMSELVES TO PAY SBDI SHOULD TANG FAIL TO PAY FOR THE PURCHASES. TANG DID NOT PAY. TANG THEN FILED CASE AT RTC WITH PRAYER FOR TRO AND INJUNCTION AGAINST BANK TO ANNUL THE UNDERTAKINGS FOR BEING OPPRESSIVE, EXORBITANT AND ANOMALOUS IN VIEW OF THE HIGH INTERESTS TANG WILL PAY. RTC GRANTED TRO AND LATER THE INJUNCTION. SBDI FILED AT CA CERTIORARI PETITION. CA LIFTED THE INJUNCTION. TANG THUS APPEALED CA DECISION ON GROUND THAT SBDI DID NOT JOIN THE BANKS AS RESPONDENT AND THAT SBDI FAILED TO FILE FIRST A MOTION FOR RECON AT RTC BEFORE FILING CERTIORARI AT CA.

SUPREME COURT RULED THAT CA IS CORRECT. BY ISSUING INJUNCTION RTC AS IF RULED ALREADY ON THE MERITS OF THE CASE. THE BANKS ARE NOT INDISPENSABLE PARTIES BECAUSE THEY BOUND THEMSELVES AT THE BEGINNING TO ABIDE BY WHATEVER THE COURT WOULD DECIDE. FILING OF A MOTION FOR RECONSIDERATION IS NOT WITHOUT EXCEPTIONS. ONE EXCEPTION IS WHEN THE ISSUES RAISED IN THE CERTIORARI PROCEEDINGS WERE ALREADY RAISED AND FULLY TAKEN UP IN THE RTC AS IN THIS CASE.

DOCTRINES

WHO ARE INDISPENSABLE PARTIES?

In Arcelona v. Court of Appeals,^[1][11] we stated the nature of indispensable party, thus:

An indispensable party is a party who has such an interest in the controversy or subject matter that a final adjudication cannot be made, in his absence, without injuring or affecting that interest, a party who has not only an interest in the subject matter of the controversy, but also has an interest of such nature that a final decree cannot be made without affecting his interest or leaving the controversy in such a condition that its final determination may be wholly inconsistent with equity and good conscience. It has also been considered that an indispensable party is a person in whose absence there cannot be a determination between the parties already before the court which is effective, complete, or equitable. Further, an indispensable party is one who must be included in an action before it may properly go forward.

                   A person is not an indispensable party, however, if his interest in the controversy or subject matter is separable from the interest of the other parties, so that it will not necessarily be directly or injuriously affected by a decree which does complete justice between them. Also, a person is not an indispensable party if his presence would merely permit complete relief between him and those already parties to the action, or if he has no interest in the subject matter of the action. It is not a sufficient reason to declare a person to be an indispensable party that his presence will avoid multiple litigation.^[2][12]

WHY ARE THE BANKS IN THIS CASE NOT INDISPENSABLE PARTIES?

        Applying the foregoing, we find that the banks are not indispensable parties in the petition for certiorari which respondent filed in the CA assailing the RTC Order dated December 17, 2002. In fact, several circumstances would show that the banks are not parties interested in the matter of the issuance of the writ of preliminary injunction, whether in the RTC or in the CA.

        First. During the hearing of petitioner’s prayer for the issuance of a TRO, the RTC, in open court, elicited from the lawyer-representatives of the four banks their position in the event of the issuance of the TRO, and all these representatives invariably replied that they will abide and/or submit to the sound judgment of the court.^[3][13]

        Second. When the RTC issued its Order dated December 17, 2002 granting the issuance of the writ of preliminary injunction, the banks could have challenged the same if they believe that they were aggrieved by such issuance. However, they did not, and such actuations were in consonance with their earlier position that they would submit to the sound judgment of the RTC.

        Third. When respondent filed with the CA the petition for certiorari with prayer for the issuance of a TRO and writ of preliminary injunction, and a TRO was subsequently issued, copies of the resolution were also sent^[4][14] to the banks, although not impleaded, yet the latter took no action to question their non-inclusion in the petition.  Notably, the SBC filed an Urgent Motion for Clarification^[5][15] on whether or not the issuance of the TRO has the effect of restraining the bank from complying with the writ of preliminary injunction issued by the RTC or nullifying /rendering ineffectual the said writ.  In fact, SBC even stated that the motion was filed for no other purpose, except to seek proper guidance on the issue at hand so that whatever action or position it may take with respect to the CA resolution will be consistent with its term and purposes.

        Fourth. When the CA rendered its assailed Decision nullifying the injunction issued by the RTC, and copies of the decision were furnished these banks, not one of these banks ever filed any pleading to assail their non-inclusion in the certiorari proceedings.

        Indeed, the banks have no interest in the issuance of the injunction, but only the petitioner.  The banks’ interests as defendants in the petition for declaration of nullity of their bank undertakings filed against them by petitioner in the RTC are separable from the interests of petitioner for the issuance of the injunctive relief.

CERTIORARI IS A SPECIAL CIVIL ACTION. THE RESPONDENTS ARE THE JUDGE, TRIBUNAL, BOARD OR OFFICE AND THE PARTY INTERESTED IN THE OUTCOME, IN THIS CASE PETITIONER TANG. THE BANKS ARE NOT INTERESTED AND THEREFORE SHOULD NOT BE JOINED.

        Moreover, certiorari, as a special civil action, is an original action invoking the original jurisdiction of a court to annul or modify the proceedings of a tribunal, board or officer exercising judicial or quasi-judicial functions.^[6][16]  It is an original and independent action that is not part of the trial or the proceedings on the complaint filed before the trial court.^[7][17]  Section 5, Rule 65 of the Rules of Court provides:

Section 5. Respondents and costs in certain cases. – When the petition filed relates to the acts or omissions of a judge, court, quasi-judicial agency, tribunal, corporation, board, officer or person, the petitioner shall join, as private respondent or respondents with such public respondent or respondents. the person or persons interested in sustaining the proceedings in the court; and it shall be the duty of such private respondents to appear and defend, both in his or their own behalf and in behalf of the public respondent or respondents affected by the proceedings, and the costs awarded in such proceedings in favor of the petitioner shall be against the private respondents only, and not against the judge, court, quasi-judicial agency, tribunal, corporation, board, officer or person impleaded as public respondent or respondents.

          x x x x

        Clearly, in filing the petition for certiorari, respondent should join as party defendant with the court or judge, the person interested in sustaining the proceedings in the court, and it shall be the duty of such person to appear and defend, both in his own behalf and in behalf of the court or judge affected by the proceedings.  In this case, there is no doubt that it is only the petitioner who is the person interested in sustaining the proceedings in court since she was the one who sought for the issuance of the writ of preliminary injunction to enjoin the banks from releasing funds to respondent.  As earlier discussed, the banks are not parties interested in the subject matter of the petition. Thus, it is only petitioner who should be joined as party defendant with the judge and who should defend the judge’s issuance of injunction.

        Notably, the dispositive portion of the assailed CA Decision declared the annulment of the Order dated December 17, 2002 and lifted the writ of preliminary injunction issued by the RTC.  The decision was directed against the order of the judge.  There was no order for the banks to release the funds subject of their undertakings/letter of credit although such order to lift the injunction would ultimately result to the release of funds to respondent.

THE RULE IS THAT A MOTION FOR RECON IS A CONDITION SINE QUA NON FOR FILING CERTIORARI. BUT THERE ARE EXCEPTIONS

        Petitioner contends that respondent filed its petition for certiorari in the CA without a prior motion for reconsideration, thus, constitutes a fatal infirmity.

        We do not agree.

          Concededly, the settled rule is that a motion for reconsideration is a condition sine qua non for the filing of a petition for certiorari.^[8][18]  Its purpose is to grant an opportunity for the court to correct any actual or perceived error attributed to it by the re-examination of the legal and factual circumstances of the case.^[9][19]  The rule is, however, circumscribed by well-defined exceptions, such as (a) where the order is a patent nullity, as where the court a quo had no jurisdiction; (b) where the questions raised in the certiorari proceeding have been duly raised and passed upon by the lower court, or are the same as those raised and passed upon in the lower court; (c)  where there is an urgent necessity for the resolution of the question and any further delay would prejudice the interests of the Government or of the petitioner or the subject matter of the action is perishable; (d) where, under the circumstances, a motion for reconsideration would be useless; (e) where petitioner was deprived of due process and there is extreme urgency for relief; (f) where, in a criminal case, relief from an order of arrest is urgent and the granting of such relief by the trial court is improbable; (g) where the proceedings in the lower court are a nullity for lack of due process; (h) where the proceedings were ex parte, or in which the petitioner had no opportunity to object; and (i) where the issue raised is one purely of law or where public interest is involved.^[10][20]

        Respondent explained their omission of filing a motion for reconsideration before resorting to a petition for certiorari based on exceptions (b), (c) and (i).  The CA brushed aside the filing of the motion for reconsideration based on the ground that the questions raised in the certiorari proceedings have been duly raised and passed upon by the lower court, or are the same as those raised and passed upon in the lower court.  We agree.

        Respondent had filed its position paper in the RTC stating the reasons why the injunction prayed for by petitioner should not be granted.  However, the RTC granted the injunction. Respondent filed a petition for certiorari with the CA and presented the same arguments which were already passed upon by the RTC.  The RTC already had the opportunity to consider and rule on the question of the propriety or impropriety of the issuance of the injunction.  We found no reversible error committed by the CA for relaxing the rule since respondent’s case falls within the exceptions.

x  – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – x

                        DECISION

PERALTA, J.:

          Before us is a petition for review on certiorari filed by petitioner Beatriz Siok Ping Tang seeking to annul and set aside the Decision^[1][1] dated October 17, 2003 and the Resolution^[2][2] dated March 5, 2004 of the Court of Appeals (CA)  in CA-G.R. SP No. 74629.

          The antecedent facts are as follows:

                        Petitioner is doing business under the name and style of Able Transport. Respondent Subic Bay Distribution, Inc. (SBDI) entered in two Distributorship Agreements with petitioner and Able Transport in April 2002. Under the Agreements, respondent, as seller, will sell, deliver or procure to be delivered petroleum products, and petitioner, as distributor, will purchase, receive and pay for its purchases from respondent. The two Agreements had a period of one year, commencing on October 2001 to October 2002, which shall continue on an annual basis unless terminated by either party upon thirty days written notice to the other prior to the expiration of the original term or any extension thereof.

                   Section 6.3 of the Distributorship Agreement provides that respondent may require petitioner to put up securities, real or personal, or to furnish respondent a performance bond issued by a bonding company chosen by the latter to secure and answer for petitioner’s outstanding account, and or faithful performance of her obligations as contained or arising out of the Agreement. Thus, petitioner applied for and was granted a credit line by the United Coconut Planters Bank (UCPB), International Exchange Bank (IEBank), and Security Bank Corporation (SBC). Petitioner also applied with the Asia United Bank (AUB) an irrevocable domestic standby letter of credit in favor of respondent. All these banks separately executed several undertakings setting the terms and conditions governing the drawing of money by respondent from these banks.

                   Petitioner allegedly failed to pay her obligations to respondent despite demand, thus, respondent tried to withdraw from these bank undertakings.

            Petitioner then filed with the Regional Trial Court (RTC) of Quezon City separate petitions^[3][3] against the banks for declaration of nullity of the several bank undertakings and domestic letter of credit which they issued  with the application for the issuance of a temporary restraining order (TRO) and writ of preliminary injunction. The cases were later consolidated and were assigned to Branch 101. Petitioner asked for the annulment of the bank undertakings/letter of credit which she signed on the ground  that the prevailing market rate at the time of  respondent’s intended drawings with which petitioner will be charged of as interests and penalties is oppressive, exorbitant, unreasonable and unconscionable rendering it against public morals and policy; and that  to make her automatically liable for millions of pesos on the bank undertakings, these banks merely required  the submission of a mere certification from the company (respondent) that the customer (petitioner) has not paid its account (and its statement of account of the client) without first verifying the truthfulness of the alleged petitioner’s total liability to the drawer thereon.  Therefore, such contracts are  oppressive, unreasonable  and unconscionable as they would result in her obtaining several millions of liability.

          On November 28, 2002, a hearing was conducted for the issuance of the TRO and the writ of preliminary injunction wherein the petitioner and the bank representatives were present. On query of the respondent Judge Normandie Pizarro (Judge Pizarro)  to the bank representatives with regard to the eventual issuance of the TRO, the latter all replied that they will abide by the sound judgment of the court. The court then issued an Order^[4][4] granting the TRO and requiring petitioner to implead respondent as an indispensable party and for the latter to submit its position paper on the matter of the issuance of the injunction.  Petitioner and respondent submitted their respective position papers.

          On December 17, 2002, the RTC rendered an Order,^[5][5] the dispositive portion of which reads:

             ACCORDINGLY, let a Writ of Preliminary Injunction be issued restraining and enjoining herein Respondent UCPB, IEB, SB and AUB from releasing any funds to SBDI, pursuant to the Bank Undertakings and/or Domestic Standby Letter of Credit until further orders from this Court. Consequently, Petitioner is hereby DIRECTED to post a bond in the amount of  TEN MILLION PESOS (P10,000,000.00), to answer for whatever damages respondent banks and SBDI may suffer should this Court finally decide that petitioner was not entitled thereto.  ^[6][6]     

            The RTC found that both respondent and petitioner have reasons for the enforcement or non-enforcement of the bank undertakings, however, as to whether said reasons were justifiable or not, in view of the attending circumstances, the RTC said that these can only be determined after a full blown trial.  It ruled that the outright denial of petitioner’s prayer for the issuance of injunction, even if the evidence warranted the reasonable probability that real injury will occur if the relief for shall not be granted in favor of petitioner, will not serve the ends of justice.

            Respondent filed with the CA a petition for certiorari with prayer for the issuance of  a TRO and writ of preliminary injunction against respondent Judge Pizarro and petitioner. Subsequently, petitioner filed her Comment and respondent filed its Reply. 

          On  July 4, 2003, the CA issued a Resolution^[7][7] granting the TRO prayed for by respondent after finding that it was apparent that respondent has a legal right under the bank undertakings issued by UCPB, SBC, and IEBank; and that until those undertakings were nullified, respondent’s rights under the same should be maintained.

          On July 11, 2003, the CA issued a Supplemental Resolution^[8][8] wherein the Domestic Standby Letter of Credit issued by AUB was ordered included among the bank undertakings, to which respondent has a legal right.

            On October 17, 2003, the CA rendered its assailed Decision, the decretal portion of which reads:

          WHEREFORE, the petition is hereby GRANTED. The Order dated December 17, 2002 is hereby ANNULLED AND SET ASIDE. The writ of preliminary injunction issued by the lower court is hereby LIFTED.^[9][9]

                   In so ruling, the CA said that the grant or denial of an injunction rests on the sound discretion of the RTC which should not be intervened, except in clear cases of abuse.  Nonetheless, the CA continued that the RTC should avoid issuing a writ of preliminary injunction which would, in effect, dispose of the main case without trial.  It found that petitioner was questioning the validity of the bank undertakings and letter of credit for being oppressive, unreasonable and unconscionable.  However, as provided under the law, private transactions are presumed to be fair and regular and that a person takes ordinary care of his concerns.  The CA ruled that the RTC’s issuance of the injunction, which was premised on the abovementioned justification, would be a virtual acceptance of petitioner’s claim, thus, already a prejudgment of the main case.  It also said that contracts are presumed valid until they are voided by a court of justice, thus, until such time that petitioner has presented sufficient evidence to rebut such presumption, her legal right to the writ is doubtful.

                   As to petitioner’s claim of respondent’s non-filing of a motion for reconsideration before resorting to a petition for certiorari, the CA said that it is not a rigid rule, as jurisprudence had said, that when a definite question has been properly raised, argued and submitted in the RTC and the latter had decided the question, a motion for reconsideration is no longer necessary before filing a petition for certiorari. The court found that both parties had fully presented their sides on the issuance of the writ of preliminary injunction and that the RTC had squarely resolved the issues presented by both parties.  Thus, respondent could not be faulted for not filing a motion for reconsideration.

          In a Resolution dated March 5, 2004, petitioner’s motion for reconsideration was denied.

          Hence, this petition, wherein petitioner raises the following assignment of errors:

          I. THE HONORABLE COURT OF APPEALS A QUO COMMITTED A SERIOUS AND REVERSIBLE ERROR IN GIVING DUE COURSE AND GRANTING THE PETITION FOR CERTIORARI FILED BY PRIVATE RESPONDENT SBDI, DESPITE THE FACT THAT THE ORIGINAL PARTIES IN THE TRIAL COURT, WHO ARE EQUALLY MANDATED BY THE QUESTIONED ORDER OF THE TRIAL COURT, NAMELY; UCPB, IEBANK, SBC AND AUB, AS DEFENDANTS IN THE MAIN CASE, WERE NOT IMPLEADED AS INDISPENSABLE PARTIES IN THE PETITION.

            II. THE HONORABLE COURT OF APPEALS A QUO COMMITTED A SERIOUS AND REVERSIBLE ERROR IN GIVING DUE COURSE AND GRANTING PRIVATE RESPONDENT SBDI’S PETITION WHEN THE LATTER ADMITTEDLY FAILED TO FILE A PRIOR MOTION FOR RECONSIDERATION BEFORE THE TRIAL COURT, MORESO WHEN INDISPENSABLE PARTIES WERE NOT IMPLEADED WHICH SHOULD HAVE RENDERED THE COURT OF APPEALS IN WANT OF JURISDICTION TO ACT.^[10][10]

          Petitioner claims that the CA decision is void for want of  authority of the CA to act on the petition as the banks should have been impleaded for being indispensable parties, since they are the original party respondents in the RTC;  that the filing with the CA of  respondent’s petition for certiorari emanated from the RTC Order wherein the banks were the ones against whom the questioned Order was issued; that the banks are the ones who stand to release hundred millions of pesos  which respondent sought to draw from the questioned bank undertakings and domestic standby letter of credit through the certiorari proceedings, thus, they should be given an opportunity to be heard.  Petitioner claims that even the CA recognized the banks’ substantial interest over the subject matter of the case when, despite not being impleaded as parties in the petition filed by respondent, the CA also notified the banks of its decision.

          Petitioner argues that a petition for certiorari filed without a  prior motion for reconsideration is a premature action and such omission constitutes a fatal infirmity; that respondent explained its omission only when petitioner already brought the same to the attention of the CA, thus, a mere afterthought and an attempt to cure the fatal defects of its petition.

          In its Comment, respondent contends that the banks which issued the bank undertakings and letter of credit are not indispensable parties in the petition for certiorari filed in the CA.  Respondent argues that while the RTC preliminarily resolved the issue of whether or not petitioner was entitled to an injunctive relief, and the enforcement of any decision granting such would necessarily involve the banks, the resolution of the issue regarding the injunction does not require the banks’ participation. This is so because on one hand the entitlement or non-entitlement to an injunction is a matter squarely between petitioner and respondent, the latter being the party that is ultimately enjoined from benefiting from the banks’ undertakings. On the other hand, respondent contends that the issue resolved by the CA was whether or not the RTC gravely abused its discretion in granting the injunctive relief to respondent; that while the enforcement of any decision enjoining the implementation of the injunction issued by the RTC would affect the banks, the resolution of whether there is grave abuse of discretion committed by the RTC does not require the banks’ participation.

          Respondent claims that while as a rule, a motion for reconsideration is required before filing a petition for certiorari, the rule admits of exceptions, which are, among others: (1) when the issues raised in the certiorari proceedings have been duly raised and passed upon by the RTC or are the same as those raised and passed upon in the RTC; (2) there is an urgent necessity and time is of the essence for the resolution of the issues raised and any further delay would prejudice the interests of the petitioner; and (3) the issue raised is one purely of law, which are present in respondent’s case.

          In her Reply, petitioner claims that the decree that will compel and order the banks to release any funds to respondent pending the resolution of her petition in the RTC will have an injurious effect upon her rights and interest.  She reiterates her arguments in her petition.

          Respondent filed a Rejoinder saying that it is misleading for petitioner to allege that the decree sought by respondent before the CA is directed against the banks; that even the dispositive portion of the CA decision did not include any express directive to the banks; that there was nothing in the CA decision which compelled and ordered the banks to release funds in favor of respondent as the CA decision merely annulled the RTC Order and lifted the writ of preliminary injunction.  Respondent contends that the banks are not persons interested in sustaining the RTC decision as this was obvious from the separate answers they filed in the RTC wherein they uniformly maintained that the bank undertakings/letter of credit are not oppressive, unreasonable and unconscionable. Respondent avers that petitioner is the only person interested in upholding the injunction issued by the RTC, since it will enable her to prevent the banks from releasing funds to respondent. Respondent insists that petitioner’s petition before the RTC and the instant petition have caused and continues to cause respondent grave and irreparable damage.

          Both parties were then required to file their respective memoranda, in which they complied.

          Petitioner’s insistence that the banks are indispensable parties, thus, should have been impleaded in the petition for certiorari filed by respondent in the CA, is not persuasive.

          In Arcelona v. Court of Appeals,^[11][11] we stated the nature of indispensable party, thus:

An indispensable party is a party who has such an interest in the controversy or subject matter that a final adjudication cannot be made, in his absence, without injuring or affecting that interest, a party who has not only an interest in the subject matter of the controversy, but also has an interest of such nature that a final decree cannot be made without affecting his interest or leaving the controversy in such a condition that its final determination may be wholly inconsistent with equity and good conscience. It has also been considered that an indispensable party is a person in whose absence there cannot be a determination between the parties already before the court which is effective, complete, or equitable. Further, an indispensable party is one who must be included in an action before it may properly go forward.

                        A person is not an indispensable party, however, if his interest in the controversy or subject matter is separable from the interest of the other parties, so that it will not necessarily be directly or injuriously affected by a decree which does complete justice between them. Also, a person is not an indispensable party if his presence would merely permit complete relief between him and those already parties to the action, or if he has no interest in the subject matter of the action. It is not a sufficient reason to declare a person to be an indispensable party that his presence will avoid multiple litigation.^[12][12]

          Applying the foregoing, we find that the banks are not indispensable parties in the petition for certiorari which respondent filed in the CA assailing the RTC Order dated December 17, 2002. In fact, several circumstances would show that the banks are not parties interested in the matter of the issuance of the writ of preliminary injunction, whether in the RTC or in the CA.

          First. During the hearing of petitioner’s prayer for the issuance of a TRO, the RTC, in open court, elicited from the lawyer-representatives of the four banks their position in the event of the issuance of the TRO, and all these representatives invariably replied that they will abide and/or submit to the sound judgment of the court.^[13][13]

          Second. When the RTC issued its Order dated December 17, 2002 granting the issuance of the writ of preliminary injunction, the banks could have challenged the same if they believe that they were aggrieved by such issuance. However, they did not, and such actuations were in consonance with their earlier position that they would submit to the sound judgment of the RTC.

          Third. When respondent filed with the CA the petition for certiorari with prayer for the issuance of a TRO and writ of preliminary injunction, and a TRO was subsequently issued, copies of the resolution were also sent^[14][14] to the banks, although not impleaded, yet the latter took no action to question their non-inclusion in the petition.  Notably, the SBC filed an Urgent Motion for Clarification^[15][15] on whether or not the issuance of the TRO has the effect of restraining the bank from complying with the writ of preliminary injunction issued by the RTC or nullifying /rendering ineffectual the said writ.  In fact, SBC even stated that the motion was filed for no other purpose, except to seek proper guidance on the issue at hand so that whatever action or position it may take with respect to the CA resolution will be consistent with its term and purposes.

          Fourth. When the CA rendered its assailed Decision nullifying the injunction issued by the RTC, and copies of the decision were furnished these banks, not one of these banks ever filed any pleading to assail their non-inclusion in the certiorari proceedings.

          Indeed, the banks have no interest in the issuance of the injunction, but only the petitioner.  The banks’ interests as defendants in the petition for declaration of nullity of their bank undertakings filed against them by petitioner in the RTC are separable from the interests of petitioner for the issuance of the injunctive relief.

          Moreover, certiorari, as a special civil action, is an original action invoking the original jurisdiction of a court to annul or modify the proceedings of a tribunal, board or officer exercising judicial or quasi-judicial functions.^[16][16]  It is an original and independent action that is not part of the trial or the proceedings on the complaint filed before the trial court.^[17][17]  Section 5, Rule 65 of the Rules of Court provides:

Section 5. Respondents and costs in certain cases. – When the petition filed relates to the acts or omissions of a judge, court, quasi-judicial agency, tribunal, corporation, board, officer or person, the petitioner shall join, as private respondent or respondents with such public respondent or respondents. the person or persons interested in sustaining the proceedings in the court; and it shall be the duty of such private respondents to appear and defend, both in his or their own behalf and in behalf of the public respondent or respondents affected by the proceedings, and the costs awarded in such proceedings in favor of the petitioner shall be against the private respondents only, and not against the judge, court, quasi-judicial agency, tribunal, corporation, board, officer or person impleaded as public respondent or respondents.

            x x x x

          Clearly, in filing the petition for certiorari, respondent should join as party defendant with the court or judge, the person interested in sustaining the proceedings in the court, and it shall be the duty of such person to appear and defend, both in his own behalf and in behalf of the court or judge affected by the proceedings.  In this case, there is no doubt that it is only the petitioner who is the person interested in sustaining the proceedings in court since she was the one who sought for the issuance of the writ of preliminary injunction to enjoin the banks from releasing funds to respondent.  As earlier discussed, the banks are not parties interested in the subject matter of the petition. Thus, it is only petitioner who should be joined as party defendant with the judge and who should defend the judge’s issuance of injunction.

          Notably, the dispositive portion of the assailed CA Decision declared the annulment of the Order dated December 17, 2002 and lifted the writ of preliminary injunction issued by the RTC.  The decision was directed against the order of the judge.  There was no order for the banks to release the funds subject of their undertakings/letter of credit although such order to lift the injunction would ultimately result to the release of funds to respondent.

          Petitioner contends that respondent filed its petition for certiorari in the CA without a prior motion for reconsideration, thus, constitutes a fatal infirmity.

          We do not agree.

            Concededly, the settled rule is that a motion for reconsideration is a condition sine qua non for the filing of a petition for certiorari.^[18][18]  Its purpose is to grant an opportunity for the court to correct any actual or perceived error attributed to it by the re-examination of the legal and factual circumstances of the case.^[19][19]  The rule is, however, circumscribed by well-defined exceptions, such as (a) where the order is a patent nullity, as where the court a quo had no jurisdiction; (b) where the questions raised in the certiorari proceeding have been duly raised and passed upon by the lower court, or are the same as those raised and passed upon in the lower court; (c)  where there is an urgent necessity for the resolution of the question and any further delay would prejudice the interests of the Government or of the petitioner or the subject matter of the action is perishable; (d) where, under the circumstances, a motion for reconsideration would be useless; (e) where petitioner was deprived of due process and there is extreme urgency for relief; (f) where, in a criminal case, relief from an order of arrest is urgent and the granting of such relief by the trial court is improbable; (g) where the proceedings in the lower court are a nullity for lack of due process; (h) where the proceedings were ex parte, or in which the petitioner had no opportunity to object; and (i) where the issue raised is one purely of law or where public interest is involved.^[20][20]

          Respondent explained their omission of filing a motion for reconsideration before resorting to a petition for certiorari based on exceptions (b), (c) and (i).  The CA brushed aside the filing of the motion for reconsideration based on the ground that the questions raised in the certiorari proceedings have been duly raised and passed upon by the lower court, or are the same as those raised and passed upon in the lower court.  We agree.

          Respondent had filed its position paper in the RTC stating the reasons why the injunction prayed for by petitioner should not be granted.  However, the RTC granted the injunction. Respondent filed a petition for certiorari with the CA and presented the same arguments which were already passed upon by the RTC.  The RTC already had the opportunity to consider and rule on the question of the propriety or impropriety of the issuance of the injunction.  We found no reversible error committed by the CA for relaxing the rule since respondent’s case falls within the exceptions.

Petitioner’s reliance on Philippine National Construction Corporation v. National Labor Relations Commission,^[21][21] where we required the filing of a motion for reconsideration before the filing of a petition for certiorari notwithstanding petitioner’s invocation of the recognized exception, i.e., the same questions raised before the public respondent were to be raised before us, is not applicable.  In said case, we ruled that petitioner failed to convince us that his case falls under the recognized exceptions as the basis was only petitioner’s bare allegation.  In this case before us, the CA found, and to which we agree, that both parties have fully presented their respective arguments in the RTC on petitioner’s prayer for the issuance of the writ of preliminary injunction, and that respondent’s argument that petitioner is not entitled to the injunctive relief had been squarely resolved  by the RTC.

            WHEREFORE, the petition is DENIED. The Decision dated   October 17, 2003 and the Resolution dated March 5, 2004 of the Court of Appeals, in CA-G.R. SP No. 74629, are hereby AFFIRMED.

                   SO ORDERED.

DIOSDADO M. PERALTA

                                                                             Associate Justice

WE CONCUR:

ANTONIO T. CARPIO

Associate Justice

Chairperson

ANTONIO EDUARDO B. NACHURA                 ROBERTO A. ABAD                                               Associate Justice                                       Associate Justice

JOSE CATRAL MENDOZA

Associate Justice

ATTESTATION

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

                                                ANTONIO T. CARPIO

                                                  Associate Justice

                                                Second Division, Chairperson

CERTIFICATION

          Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

                                                                   RENATO C. CORONA

                                                                             Chief Justice 

RAMON B. BRITO SR. VS. SEVERINO D. DIANALA, VIOLETA DIANALA SALES, JOVITA DIANALA DEQUINTO, ROSITA DIANALA, CONCHITA DIANALA and JOEL DEQUINTO (G.R. NO. 171717, 15 DECEMBER 2010,  PERALTA, J.)

x  – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – x

D E CI S I O N

PERALTA, J.

          Before the Court is a petition for review on certiorari seeking to annul and set aside the Decision^[1][1] dated January 12, 2005 and Resolution^[2][2] dated February 13, 2006 of the Court of Appeals (CA) in CA-G.R. CV No. 70009. The assailed Decision set aside the Joint Orders^[3][3] dated June 29, 2000 of the Regional Trial Court (RTC) of Negros Occidental, Branch 60, Cadiz City, while the questioned Resolution denied petitioner’s Motion for Reconsideration.

          The factual and procedural antecedents of the case are as follows:

          Subject of the present petition is a parcel of land located at Barrio Sicaba, Cadiz City, Negros Occidental.   The said tract of land is a portion of Lot No. 1536-B, formerly known as Lot No. 591-B, originally owned by a certain Esteban Dichimo and his wife, Eufemia Dianala, both of whom are already deceased.

          On September 27, 1976, Margarita Dichimo, assisted by her husband, Ramon Brito, Sr., together with Bienvenido Dichimo, Francisco Dichimo, Edito Dichimo, Maria Dichimo, Herminia Dichimo, assisted by her husband, Angelino Mission, Leonora Dechimo, assisted by her husband, Igmedio Mission, Felicito, and Merlinda Dechimo, assisted by her husband, Fausto Dolleno,  filed a Complaint for Recovery of Possession and Damages with the then Court of First Instance (now Regional Trial Court) of Negros Occidental,  against a certain Jose Maria Golez.  The case was docketed as Civil Case No. 12887.

          Petitioner’s wife, Margarita, together with Bienvenido and Francisco, alleged that they are the heirs of a certain Vicente Dichimo, while Edito, Maria, Herminia, Leonora, Felicito and Merlinda claimed to be the heirs of one Eusebio Dichimo; that Vicente and Eusebio are the only heirs of Esteban and Eufemia; that Esteban and Eufemia died intestate and upon their death Vicente and Eusebio, as compulsory heirs, inherited Lot No. 1536-B; that, in turn, Vicente and Eusebio, and their respective spouses, also died intestate leaving their pro indiviso shares of Lot No. 1536-B as part of the inheritance of the complainants in Civil Case No. 12887.

          On July 29, 1983, herein respondents filed an Answer-in-Intervention claiming that prior to his marriage to Eufemia, Esteban was married to a certain Francisca Dumalagan; that Esteban and Francisca bore five children, all of whom are already deceased; that herein respondents are the heirs of Esteban and Francisca’s children; that they are in open, actual, public and uninterrupted possession of a portion of Lot No. 1536-B for more than 30 years; that their legal interests over the subject lot prevails over those of petitioner and his co-heirs; that, in fact, petitioner and his co-heirs have already disposed of their shares in the said property a long time ago.

          On November 26, 1986, the trial court issued an Order dismissing without prejudice respondents’ Answer-in-Intervention for their failure to secure the services of a counsel despite ample opportunity given them.

          Civil Case No. 12887 then went to trial.

          Subsequently, the parties in Civil Case No. 12887 agreed to enter into a Compromise Agreement wherein Lot No. 1536-B was divided between Jose Maria Golez, on one hand, and the heirs of Vicente, namely: Margarita, Bienvenido, and Francisco, on the other.   It was stated in the said agreement that the heirs of Eusebio had sold their share in the said lot to the mother of Golez. Thus, on September 9, 1998, the Regional Trial Court (RTC) of Bacolod City, Branch 45 rendered a decision approving the said Compromise Agreement.

          Thereafter, TCT No. T-12561 was issued by the Register of Deeds of Cadiz City in the name of Margarita, Bienvenido and Francisco.

          On January 18, 1999, herein petitioner and his co-heirs filed another  Complaint for Recovery of Possession and Damages, this time against herein respondents. The case, filed with the RTC of Cadiz City, Branch 60, was docketed as Civil Case No. 548-C.  Herein respondents, on the other hand, filed with the same court, on August 18, 1999, a Complaint for Reconveyance and Damages against petitioner and his co-heirs. The case was docketed as Civil Case No. 588-C.

          The parties filed their respective Motions to Dismiss. Thereafter, the cases were consolidated.

          On June 29, 2000, the RTC issued Joint Orders, disposing as follows:

                        WHEREFORE, in view of the foregoing, this Court hereby orders the following:

1.                 The Motion to Dismiss Civil Case No. 548-C is hereby GRANTED and Civil Case No. 548[-C] is hereby ordered DISMISSED for violation of the rule on forum shopping;

                        2. The Motion to Dismiss Civil Case No. 588-C is likewise hereby GRANTED and the Complaint dated August 13, 1999 is hereby DISMISSED for want of jurisdiction.

                        3. All counterclaims in both cases, Civil Case No. 548-C and 588-C are likewise ordered DISMISSED.

                        SO ORDERED.^[4][4]

          The parties filed their respective motions for reconsideration, but both were denied by the RTC in an Order dated October 5, 2000.

          Herein respondents then appealed the case to the CA praying that the portion of the RTC Joint Orders dismissing Civil Case No. 588-C be declared null and void and that the case be decided on the merits.

          On January 12, 2005, the CA rendered judgment disposing as follows:

                        WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us GRANTING the appeal filed in this case and SETTING ASIDE, as we hereby set aside, the Joint Order[s] dated June 29, 2000 of the RTC of Cadiz City, Branch 60, dismissing Civil Case No. 588-C. Further, let the entire records of this case be remanded to the court a quo for the trial and hearing on the merits of Civil Case No. 588-C.

                        SO ORDERED.^[5][5]

          Petitioner filed a Motion for Reconsideration, but the CA denied it in a Resolution dated February 13, 2006.

          Hence, the instant petition with the following assigned errors:

I.              THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED THAT THE LOWER COURT HAS THE JURISDICTION TO HEAR THE RECONVEYANCE CASE OF THE HEREIN PLAINTIFFS-APPELLANTS BEFORE THE  REGIONAL TRIAL COURT OF NEGROS OCCIDENTAL, BRANCH 60, CADIZ CITY.

II.           THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT THE AMENDMENT OF THE DECISION IN CIVIL CASE NO. 12887 IS NOT TANTAMOUNT TO ANNULMENT OF THE SAID DECISION. THE HONORABLE COURT IS WITHOUT JURISDICTION TO TAKE COGNIZANCE OF THIS CASE.^[6][6]

          In his first assigned error, petitioner claims that the CA erred in holding that respondents are not parties in Civil Case No. 12887 contending that, since their Answer-in-Intervention was admitted, respondents should be considered parties in the said case. Petitioner also avers that, being parties in Civil Case No. 12887, respondents are bound by the judgment rendered therein.

          The Court is not persuaded.

          It is true that the filing of motions seeking affirmative relief, such as, to admit answer, for additional time to file answer, for reconsideration of a default judgment, and to lift order of default with motion for reconsideration, are considered voluntary submission to the jurisdiction of the court.^[7][7] In the present case, when respondents filed their Answer-in-Intervention they submitted themselves to the jurisdiction of the court and the court, in turn, acquired jurisdiction over their persons. Respondents, thus, became parties to the action. Subsequently, however, respondents’ Answer-in-Intervention was dismissed without prejudice. From then on, they ceased to be parties in the case so much so that they did not have the opportunity to present evidence to support their claims, much less participate in the compromise agreement entered into by and between herein petitioner and his co-heirs on one hand and the defendant in Civil Case No. 12887 on the other. Stated differently, when their Answer-in-Intervention was dismissed, herein respondents lost their standing in court and, consequently, became strangers to Civil Case No. 12887. It is basic that no man shall be affected by any proceeding to which he is a stranger, and strangers to a case are not bound by judgment rendered by the court.^[8][8] Thus, being strangers to Civil Case No. 12887, respondents are not bound by the judgment rendered therein.

          Neither does the Court concur with petitioner’s argument that respondents are barred by prescription for having filed their complaint for reconveyance only after more than eight years from the discovery of the fraud allegedly committed by petitioner and his co-heirs, arguing that under the law an action for reconveyance of real property resulting from fraud prescribes in four years, which period is reckoned from the discovery of the fraud.

          In their complaint for reconveyance and damages, respondents alleged that petitioner and his co-heirs acquired the subject property by means of fraud.

          Article 1456 of the Civil Code provides that a person acquiring property through fraud becomes, by operation of law, a trustee of an implied trust for the benefit of the real owner of the property. An action for reconveyance based on an implied trust prescribes in ten years, the reckoning point of which is the date of registration of the deed or the date of issuance of the certificate of title over the property.^[9][9] Thus, in Caro v. Court of Appeals,^[10][10] this Court held as follows:

                        x x x The case of Liwalug Amerol, et al. v. Molok Bagumbaran, G.R. No. L-33261, September 30, 1987,154 SCRA 396, illuminated what used to be a gray area on the prescriptive period for an action to reconvey the title to real property and, corollarily, its point of reference:

x x x It must be remembered that before August 30, 1950, the date of the effectivity of the new Civil Code, the old Code of Civil Procedure (Act No. 190) governed prescription. It provided:

SEC. 43. Other civil actions; how limited.- Civil actions other than for the recovery of real property can only be brought within the following periods after the right of action accrues:

x x x                           x x x                              x x x

3.                 Within four years: xxx An action for relief on the ground of fraud, but the right of action in such case shall not be deemed to have accrued until the discovery of the fraud;

x x x                          x x x                                x x x

            In contrast, under the present Civil Code, we find that just as an implied or constructive trust is an offspring of the law (Art. 1456, Civil Code), so is the corresponding obligation to reconvey the property and the title thereto in favor of the true owner. In this context, and vis-a-vis prescription, Article 1144 of the Civil Code is applicable.

            Article 1144. The following actions must be brought within ten years from the time the right of action accrues:

(1)              Upon a written contract;

(2)              Upon an obligation created by law;

(3)              Upon a judgment.

x x x     x x x     x x x. (Italics supplied.)

            An action for reconveyance based on an implied or constructive trust must perforce prescribe in ten years and not otherwise. A long line of decisions of this Court, and of very recent vintage at that, illustrates this rule. Undoubtedly, it is now well settled that an action for reconveyance based on an implied or constructive trust prescribes in ten years from the issuance of the Torrens title over the property. The only discordant note, it seems, is Balbin vs. Medalla, which states that the prescriptive period for a reconveyance action is four years. However, this variance can be explained by the erroneous reliance on Gerona vs. de Guzman. But in Gerona, the fraud was discovered on June 25, 1948, hence Section 43(3) of Act No. 190, was applied, the new Civil Code not coming into effect until August 30, 1950 as mentioned earlier. It must be stressed, at this juncture, that article 1144 and article 1456, are new provisions. They have no counterparts in the old Civil Code or in the old Code of Civil Procedure, the latter being then resorted to as legal basis of the four-year prescriptive period for an action for reconveyance of title of real property acquired under false pretenses.

                        An action for reconveyance has its basis in Section 53, paragraph 3 of Presidential Decree No. 1529, which provides:

            In all cases of registration procured by fraud, the owner may pursue all his legal and equitable remedies against the parties to such fraud without prejudice, however, to the rights of any innocent holder of the decree of registration on the original petition or application, x x x.

                        This provision should be read in conjunction with Article 1456 of the Civil Code, x x x

                                    x x x x                           

            The law thereby creates the obligation of the trustee to reconvey the property and the title thereto in favor of the true owner. Correlating Section 53, paragraph 3 of Presidential Decree No. 1529 and Article 1456 of the Civil Code with Article 1144(2) of the Civil Code, supra, the prescriptive period for the reconveyance of fraudulently registered real property is ten (10) years reckoned from the date of the issuance of the certificate of title. x x x^[11][11]

          In the instant case, TCT No. T-12561 was obtained by petitioner and his co-heirs on September 28, 1990, while respondents filed their complaint for reconveyance on August 18, 1999. Hence, it is clear that the ten-year prescriptive period has not yet expired.

          The Court, likewise, does not agree with petitioner’s contention that respondents are guilty of laches and are already estopped from questioning the decision of the RTC in Civil Case No. 12887 on the ground that they slept on their rights and allowed the said decision to become final.

          In the first place, respondents cannot be faulted for not appealing the decision of the RTC in Civil Case No. 12887 simply because they are no longer parties to the case and, as such, have no personality to assail the said judgment.

          Secondly, respondents’ act of filing their action for reconveyance within the ten-year prescriptive period does not constitute an unreasonable delay in asserting their right. The Court has ruled that, unless reasons of inequitable proportions are adduced, a delay within the prescriptive period is sanctioned by law and is not considered to be a delay that would bar relief.^[12][12] Laches is recourse in equity.^[13][13] Equity, however, is applied only in the absence, never in contravention, of statutory law.^[14][14]

            Moreover, the prescriptive period applies only if there is an actual need to reconvey the property as when the plaintiff is not in possession thereof.^[15][15] Otherwise, if the plaintiff is in possession of the property, prescription does not commence to run against him.^[16][16] Thus, when an action for reconveyance is nonetheless filed, it would be in the nature of a suit for quieting of title, an action that is imprescriptible.^[17][17] The reason for this is that one who is in actual possession of a piece of land claiming to be the owner thereof may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right, the rationale for the rule being, that his undisturbed possession provides him a continuing right to seek the aid of a court of equity to ascertain and determine the nature of the adverse claim of a third party and its effect on his own title, which right can be claimed only by the one who is in possession.^[18][18]

          In the present case, there is no dispute that respondents are in possession of the subject property as evidenced by the fact that petitioner and his co-heirs filed a separate action against respondents for recovery of possession thereof. Thus, owing to respondents’ possession of the disputed property, it follows that their complaint for reconveyance is, in fact, imprescriptible. As such, with more reason should respondents not be held guilty of laches as the said doctrine, which is one in equity, cannot be set up to resist the enforcement of an imprescriptible legal right.

          In his second assignment of error, petitioner argues that the objective of respondents in filing Civil Case No. 588-C with the RTC of Cadiz City was to have the decision of the RTC of Bacolod City in Civil Case No. 12887 amended, which is tantamount to having the same annulled. Petitioner avers that the RTC of Cadiz City has no jurisdiction to act on Civil Case No. 588-C, because it cannot annul the decision of the RTC of Bacolod City which is a co-equal court.

          The Court does not agree.

          The action filed by respondents with the RTC of Cadiz City is for reconveyance and damages. They are not seeking the amendment nor the annulment of the Decision of the RTC of Bacolod City in Civil Case No. 12887. They are simply after the recovery of what they claim as their rightful share in the subject lot as heirs of Esteban Dichimo.

          As earlier discussed, respondents’ Answer-in-Intervention was dismissed by the RTC of Bacolod City without prejudice. This leaves them with no other option  but  to institute a separate action for the protection and enforcement of their rights and interests. It will be the height of inequity to declare herein petitioner and his co-heirs as exclusive owners of the disputed lot without giving respondents the opportunity to prove their claims that they have legal interest over the subject parcel of land, that it forms part of the estate of their deceased predecessor and that they are in open, and uninterrupted possession of the same for more than 30 years. Much more, it would be tantamount to a violation of the constitutional guarantee that no person shall be deprived of property without due process of law.^[19][19]

          WHEREFORE, the instant petition is DENIED. The assailed Decision dated January 12, 2005 and Resolution dated February 13, 2006 of the Court of Appeals in CA-G.R. CV No. 70009 are AFFIRMED.

          SO ORDERED.

     DIOSDADO M. PERALTA

Associate Justice

WE CONCUR:

ANTONIO T. CARPIO

Associate Justice

Chairperson

ANTONIO EDUARDO B. NACHURA              ROBERTO A. ABAD

                   Associate Justice                                     Associate Justice

JOSE CATRAL MENDOZA

Associate Justice

ATTESTATION

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

                                                      ANTONIO T. CARPIO

    Associate Justice

    Second Division, Chairperson

CERTIFICATION

          Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

                                                                   RENATO C. CORONA

                                                                             Chief Justice

PEOPLE OF THE PHILIPPINES VS. EFREN DITONA y MONTEFALCON,BERNARD FERNANDEZ AND ERNESTO EMNAS, ACCUSED AND EFREN DITONA Y MONTEFALCON, APPELLANT (G.R. NO. 189841, 15 DECEMBER 2010, J. ABAD)

x —————————————————————- x

DECISION

ABAD, J.:

This case is about the need for the prosecution to show proof that the integrity of seized prohibited drugs has been preserved from the moment of seizure to the moment they are presented in court.

The Facts and the Case

The prosecution evidence shows that the Drug Enforcement Group of the Olongapo City Police had received reports of rampant selling of illegal drugs at Compound 7-9^th Street, Barangay Ilalim, Olongapo City.

On July 19, 2002, within the election period, the police conducted a buy-bust operation at the place.  SPO1 Alfredo Flores, acting as a poseur-buyer, and an informer met the accused Efren M. Ditona in front of the latter’s house.  SPO1 Flores gave Ditona the marked money consisting of two P100 bills in exchange for one plastic sachet of shabu.

At a signal, PO3 Norberto Ventura and PO2 Allan Delos Reyes rushed towards the gate of the compound to make the apprehension but, before they could reach SPO1 Flores and Ditona, the latter noticed their movement and ran into his house.  The officers arrested him there and four others who were then sniffing shabu and preparing aluminum tin foils.

The police frisked them and found the marked money on Ditona’s person together with transparent plastic sachets containing what appeared to be shabu substance and one cal. 22 magnum revolver with six live ammunitions.  They confiscated the marked money, the suspected shabu substance in sachets, the gun, and the ammunitions.^[1][1]  Upon laboratory examination, the substance proved positive for methamphetamine hydrochloride or shabu.^[2][2]

The City Prosecutor of Olangapo City filed four separate informations against Ditona before the Regional Trial Court (RTC) of Olongapo City for selling and possessing illegal drugs^[3][3] in Criminal Cases 436-2002^[4][4] and 437-2002;^[5][5] violation of the Omnibus Election Code^[6][6] in Criminal Case 438-2002;^[7][7] and illegal possession of firearms^[8][8] in Criminal Case 466-2002.^[9][9]  The RTC tried all four cases jointly.

On July 11, 2007 the RTC^[10][10] found Ditona guilty of all the charges and sentenced him to suffer the penalty of life imprisonment (reclusion perpetua) in Criminal Case 436-2002; imprisonment from 12 years and one day to 20 years in Criminal Case 437-2002; imprisonment from one year to six years in Criminal Case 438-2002; and imprisonment from four years, two months, and one day to six years of prision correccional and a fine of P15,000.00 in Criminal Case 466-2002.  Ditona’s denial, said the RTC, cannot prevail over the police officers’ positive declarations considering that the latter did not have any motive to concoct a false charge against him and presumably performed their official duties regularly.

On appeal, the Court of Appeals (CA)^[11][11] affirmed the conviction for the crimes relating to the prohibited drugs but modified the RTC ruling with respect to the other charges after observing that it erred in convicting Ditona separately for illegal possession of firearms and violation of the Omnibus Election Code.

The Issue Presented

The sole issue for resolution is whether or not the prosecution was able to establish beyond reasonable doubt Ditona’s guilt for illegal possession and sale of shabu.

The Court’s Ruling

To successfully prosecute an accused for selling illegal drugs, the prosecution has to prove: (1) the identities of the buyer and the seller, the object, and the consideration; and (2) the delivery of the thing sold and the payment for it.^[12][12]  On the other hand, for an accused to be convicted of possession of illegal drugs, the prosecution is required to prove that: (1) the accused was in possession of prohibited drug; (2) such possession is not authorized by law; and (3) the accused freely and consciously possessed the prohibited drug.^[13][13]

In both instances, the State has to prove as well the corpus delicti, the body of the crime.^[14][14]  It must be shown that the suspected substance the police officers seized from the accused is the same thing presented in court during the trial.  Thus, the chain of custody rule is essential to ensure that doubts regarding the identity of the evidence are removed through the monitoring and tracking of the movements of the seized drugs from the accused, to the police, to the forensic chemist, and finally to the court.^[15][15]  The witnesses should be able to describe these movements to ensure that there had been no change in the condition of the item and that no one who did not belong in the chain had access to the same.^[16][16]

Here, the prosecution dismally failed to prove the corpus delicti since there were substantial gaps in the chain of custody of the seized drugs which raised doubts on the authenticity of the evidence presented in court.

To begin with, SPO1 Flores, PO3 Ventura, and PO2 Delos Reyes executed a Joint Affidavit,^[17][17] which formed part of their direct testimonies, in which they narrated the details of the buy-bust operation.  Yet, they did not say how they handled the seized drugs from the time they frisked Ditona until they brought him to the police station.  They also omitted these important points in their testimonies on direct and cross-examination.

PO2 Delos Reyes testified on the details of the seized drugs, the gun, and the ammunitions taken from the persons in the house but he did not specify what things he confiscated from Ditona.  PO3 Ventura, on the other hand, merely testified that he issued a receipt for the things the police seized, thus:^[18][18]

PROSECUTOR:

As regards the shabu, we will maintain it to be collectively marked as Exhibit “B.”  Now…will you tell us briefly your participation in this police operation?

A:         I was tasked as back-up together with PO3 [sic] Allan Delos Reyes. It was SPO1 Alfredo Flores who acted as poseur-buyer.

Q:        After the consummation, Alfredo Flores gave his pre-arranged signal and when Ditona saw it, and sensed the presence the other members of the team he tried to ran inside his house and that’s the time we gave chase upon which we saw another person inside the sala?

A:         Yes Sir.

Q:        By the way, what was the lighting condition when this incident transpired?

A:         From the light post, it is well-lighted…near the house at No. 7-9^th St.

Q:        In connection with this drug operation, do you recall having prepared a receipt of evidence or property seized?

A:         Yes Sir.

Q:        If you see this again, will you be able to recognize it?

A:         Yes Sir.

Q:        I am showing to you a document which we request to be marked as Exhibit “L,” please go over this and tell if this is the receipt of property seized you are referring to?

A:         Yes Sir, this is it.

Q:        Can you identify the signatures indicated below?

A:         This is Alfredo Flores, this is my signature and this is Allan Delos Reyes’ signature.

Finally, SPO1 Flores testified only that he was the one who bought the shabu from Ditona, thus:^[19][19]

Q:        You said you were able to buy shabu on July 19, 2002, from whom were you able to buy shabu?

A:         From Efren Ditona, Sir.

Q:        Will you tell the Court the quantity of shabu you were able to purchase?

A:         One sachet of shabu containing 0.2 grams.

Q:        If you see the stuff you were able to buy, will you be able to recognize this?

ATTY. COLOMA:

            We stipulate that the witness can identify the stuff.

Quite clearly, the prosecution failed to establish the required chain of custody of the prohibited drugs through the testimonies of the police officers.  While the RTC noted that SPO1 Flores and PO3 Ventura placed their initials, “AF” and “NV,” on the seized drugs, they did not identify the markings as theirs during their direct testimonies nor did they testify when and where they made such markings.  Moreover, they failed to show how the seized drugs reached the laboratory technician who examined it and how the same were stored pending turnover to the court.^[20][20]

Indeed, there is no room to apply the presumption of regularity in the police officers’ performance of official duty.  While the testimonies of the police officers who apprehended the accused are generally accorded full faith and credit because of the presumption that they have performed their duties regularly, such presumption is effectively destroyed where the performance of their duties is tainted with failure to comply with the prescribed procedure and guidelines.^[21][21]

The drug enforcement agencies of the government and the prosecution should put their acts together to ensure that the guilty are punished and the innocent absolved.  Poor handling and preservation of the integrity of evidence show lack of professionalism and waste the time that the courts could use for hearing and adjudicating other cases.  Prosecutors ought not to file drugs cases in court unless the law enforcement agencies are able to show documented compliance with every requirement of Section 21 of Republic Act 9165, the Comprehensive Dangerous Drugs Act of 2002.  Likewise prosecutors ought to have a checklist of the questions they should ask their witnesses in drugs cases that would elicit the required proof. 

WHEREFORE, the Court GRANTS the petition and MODIFIES the assailed Decision of the Court of Appeals in CA-G.R. CR-HC 03095 dated July 31, 2009 in that accused-appellant Efren Ditona y Montefalcon is ACQUITTED with respect to the crimes charged in Criminal Cases 436-2002, 437-2002, and 466-2002.  The Court, however, AFFIRMS the finding of the Court of Appeals of his guilt beyond reasonable doubt with respect to the charge of violation of Section 261(q) in relation to Section 264 of the Omnibus Election Code in Criminal Case 438-02 and the corresponding penalty of imprisonment from one (1) year to six (6) years meted out to him.

SO ORDERED.

ROBERTO A. ABAD

                                                              Associate Justice

WE CONCUR:

ANTONIO T. CARPIO

Associate Justice

ANTONIO EDUARDO B. NACHURA    MARTIN S. VILLARAMA, JR.

                  Associate Justice                                     Associate Justice

JOSE CATRAL MENDOZA

Associate Justice

ATTESTATION

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

                                                      ANTONIO T. CARPIO

                                                   Associate Justice

                                Chairperson, Second Division                  

CERTIFICATION

          Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

                                                             RENATO C. CORONA

                                                            Chief Justice