J.A.B. Bulao & Associates

CASE 2011-0169: DAVID LU VS. PATERNO LU YM, SR., PATERNO LU YM, JR., VICTOR LU YM, JOHN LU YM, KELLY LU YM, AND LUDO & LUYM DEVELOPMENT CORPORATION (G.R. NO. 153690); PATERNO LU YM, SR., PATERNO LU YM, JR., VICTOR LU YM, JOHN LU YM, KELLY LU YM, AND LUDO & LUYM DEVELOPMENT CORPORATION VS. DAVID LU (G.R. NO. 157381); JOHN LU YM AND LUDO & LUYM DEVELOPMENT CORPORATION VS. THE HONORABLE COURT OF APPEALS OF CEBU CITY(FORMER TWENTIETH DIVISION), DAVID LU, ROSA GO, SILVANO LUDO & CL CORPORATION (G.R. NO. 170889) ( 15 FEBRUARY 2011, CARPIO MORALES, J.) SUBJECTS: NULLITY OF SHARE ISSUANCE; ESTOPPEL; RARE CASE WHEN PETITION  IS GRANTED BY SC, THEN DISMISSED, THEN GRANTED AGAIN. (BRIEF TITLE: LU VS. LU YM ET AL).

EN BANC

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R E S O L U T I O N

CARPIO MORALES, J.:

          By Decision of August 26, 2008, the Court^[1] unanimously disposed of the three present petitions as follows:

            WHEREFORE, premises considered, the petitions in G.R. Nos. 153690 and 157381 are DENIED for being moot and academic; while the petition in G.R. No. 170889 is DISMISSED for lack of merit.  Consequently, the Status Quo Order dated January 23, 2006 is hereby LIFTED.

            The Court of Appeals is DIRECTED to proceed with CA-G.R. CV No. 81163 and to resolve the same with dispatch. 

            SO ORDERED[,]^[2]          

which Decision was, on motion for reconsideration, the Court voting 4-1,^[3] reversed by Resolution of August 4, 2009, the dispositive portion of which reads:

          WHEREFORE, in view of the foregoing, the Motion for Reconsideration filed by John Lu Ym and Ludo & LuYm Development Corporation is GRANTED.  The Decision of this Court dated August 26, 2008 is RECONSIDERED and SET ASIDE.  The Complaint in SRC Case No. 021-CEB, now on appeal with the Court of Appeals in CA-G.R. CV No. 81163, is DISMISSED.  

            All interlocutory matters challenged in these consolidated petitions are DENIED for being moot and academic.

            SO ORDERED.^[4]

          David Lu’s Motion for Reconsideration and Motion to Refer Resolution to the Court En Banc was denied by minute Resolution of September 23, 2009.

          Following his receipt on October 19, 2009 of the minute Resolution, David Lu personally filed on October 30, 2009 a Second Motion for Reconsideration and Motion to Refer Resolution to the Court En Banc.  On even date, he filed through registered mail an “Amended Second Motion for Reconsideration and Motion to Refer Resolution to the Court En Banc.”  And on November 3, 2009, he filed a “Motion for Leave to File [a] Motion for Clarification[, and the] Second Motion for Reconsideration and Motion to Refer Resolution to the Court En Banc.”  He later also filed a “Supplement to Second Motion for Reconsideration with Motion to Dismiss” dated January 6, 2010.

          John Lu Ym and Ludo & Luym Development Corporation (LLDC), meanwhile, filed with leave a Motion^[5] for the Issuance of an Entry of Judgment of February 2, 2010, which merited an Opposition from David Lu.  

          In compliance with the Court’s Resolution of January 11, 2010, Kelly Lu Ym, Victor Lu Ym and Paterno Lu Ym, Jr. filed a Comment/Opposition of March 20, 2010, while John Lu Ym and LLDC filed a Consolidated Comment of March 25, 2010, a Supplement thereto of April 20, 2010, and a Manifestation of May 24, 2010.     

          The present cases were later referred to the Court en banc by Resolution of October 20, 2010.

Brief Statement of the Antecedents

          The three consolidated cases stemmed from the complaint for “Declaration of Nullity of Share Issue, Receivership and Dissolution” filed on August 14, 2000 before the Regional Trial Court (RTC) of Cebu City by David Lu, et al. against Paterno Lu Ym, Sr. and sons (Lu Ym father and sons) and LLDC.

          By Decision of March 1, 2004, Branch 12 of the RTC ruled in favor of David et al. by annulling the issuance of the shares of stock subscribed and paid by Lu Ym father and sons at less than par value, and ordering the dissolution and asset liquidation of LLDC.  The appeal of the trial court’s Decision remains pending with the appellate court in CA-G.R. CV No. 81163.  

          Several incidents arising from the complaint reached the Court through the present three petitions.

          In G.R. No. 153690 wherein David, et al. assailed the appellate court’s resolutions dismissing their complaint for its incomplete signatory in the certificate of non-forum shopping and consequently annulling the placing of the subject corporation under receivership pendente lite, the Court, by Decision of August 26, 2008, found the issue to have been mooted by the admission by the trial court of David et al.’s Amended Complaint, filed by them pursuant to the trial court’s order to conform to the requirements of the Interim Rules of Procedure Governing Intra-Corporate Controversies. 

Since an amended pleading supersedes the pleading that it amends, the original complaint of David, et al. was deemed withdrawn from the records. 

The Court noted in G.R. No. 153690 that both parties admitted the mootness of the issue and that the trial court had already rendered a decision on the merits of the case.  It added that the Amended Complaint stands since Lu Ym father and sons availed of an improper mode (via an Urgent Motion filed with this Court) to assail the admission of the Amended Complaint.

          In G.R. No. 157381 wherein Lu Ym father and sons challenged the appellate court’s resolution restraining the trial court from proceeding with their motion to lift the receivership order which was filed during the pendency of G.R. No. 153690, the Court, by Decision of August 26, 2008 resolved that the issue was mooted by the amendment of the complaint and by the trial court’s decision on the merits.  The motion having been filed ancillary to the main action, which main action was already decided on the merits by the trial court, the Court held that there was nothing more to enjoin.        

          G.R. No. 170889 involved the denial by the appellate court of Lu Ym father and sons’ application in CA-G.R. CV No. 81163 for a writ of preliminary injunction.  By August 26, 2008 Decision, the Court dismissed the petition after finding no merit on their argument – which they raised for the first time in their motion for reconsideration before the appellate court – of lack of jurisdiction for non-payment of the correct RTC docket fees.

          As reflected early on, the Court, in a turnaround, by Resolution of August 4, 2009, reconsidered its position on the matter of docket fees.  It ruled that the trial court did not acquire jurisdiction over the case for David Lu, et al.’s failure to pay the correct docket fees, hence, all interlocutory matters and incidents subject of the present petitions must consequently be denied.

Taking Cognizance of the Present Incidents

          The Internal Rules of the Supreme Court (IRSC) states that the Court en banc shall act on the following matters and cases:

(a) cases in which the constitutionality or validity of any treaty, international or executive agreement, law, executive order, presidential decree, proclamation, order, instruction, ordinance, or regulation is in question;

(b) criminal cases in which the appealed decision imposes the death penalty or reclusion perpetua;

(c) cases raising novel questions of law;

(d) cases affecting ambassadors, other public ministers, and consuls;

(e) cases involving decisions, resolutions, and orders of the Civil Service Commission, the Commission on Elections, and the Commission on Audit;

(f) cases where the penalty recommended or imposed is the dismissal of a judge, the disbarment of a lawyer, the suspension of any of them for a period of more than one year, or a fine exceeding forty thousand pesos;

(g) cases covered by the preceding paragraph and involving the reinstatement in the judiciary of a dismissed judge, the reinstatement of a lawyer in the roll of attorneys, or the lifting of a judge’s suspension or a lawyer’s suspension from the practice of law;

(h) cases involving the discipline of a Member of the Court, or a Presiding Justice, or any Associate Justice of the collegial appellate court;

(i) cases where a doctrine or principle laid down by the Court en banc or by a Division my be modified or reversed;

(j) cases involving conflicting decisions of two or more divisions;

(k) cases where three votes in a Division cannot be obtained;

(l) Division cases where the subject matter has a huge financial impact on businesses or affects the welfare of a community;

(m) Subject to Section 11 (b) of this rule, other division cases that, in the opinion of at least three Members of the Division who are voting and present, are appropriate for transfer to the Court en banc;

(n) cases that the Court en banc deems of sufficient importance to merit its attention; and

(o) all matters involving policy decisions in the administrative supervision of all courts and their personnel.^[6]  (underscoring supplied)

          The enumeration is an amalgamation of SC Circular No. 2-89 (February 7, 1989), as amended by En Banc Resolution ofNovember 18, 1993, and the amplifications introduced by Resolution of January 18, 2000 in A.M. No. 99-12-08-SC with respect to administrative cases and matters.

The present cases fall under at least three types of cases for consideration by the Court En Banc.  At least three members of the Court’s Second Division (to which the present cases were transferred,^[7] they being assigned to a Member thereof) found, by Resolution of October 20, 2010, that the cases were appropriate for referral-transfer to the Court En Banc which subsequently accepted^[8] the referral in view of the sufficiently important reason to resolve all doubts on the validity of the challenged resolutions as they appear to modify or reverse doctrines or principles of law.   

In Firestone Ceramics v. Court of Appeals,^[9] the Court treated the consolidated cases as En Banc cases and set the therein petitioners’ motion  for oral argument, after finding that the cases were of sufficient importance to merit the Court En Banc’s attention.  It ruled that the Court’s action is a legitimate and valid exercise of its residual power.^[10]

In Limketkai Sons Milling, Inc. v. Court of Appeals, the Court conceded that it is not infallible.  Should any error of judgment be perceived, it does not blindly adhere to such error, and the parties adversely affected thereby are not precluded from seeking relief therefrom, by way of a motion for reconsideration.  In this jurisdiction, rectification of an error, more than anything else, is of paramount importance.   

x x x x

It bears stressing that where, as in the present case, the Court En Banc entertains a case for its resolution and disposition, it does so without implying that the Division of origin is incapable of rendering objective and fair justice.  The action of the Court simply means that the nature of the cases calls for en banc attention and consideration.  Neither can it be concluded that the Court has taken undue advantage of sheer voting strength. It was merely guided by the well-studied finding and sustainable opinion of the majority of its actual membership– that, indeed, subject cases are of sufficient importance meriting the action and decision of the whole Court.  It is, of course, beyond cavil that all the members of this highest Court of the land are always embued with the noblest of intentions in interpreting and applying the germane provisions of law, jurisprudence, rules and Resolutions of the Court– to the end that public interest be duly safeguarded and rule of law be observed.^[11]

It is argued that the assailed Resolutions in the present cases have already become final,^[12] since a second motion for reconsideration is prohibited except for extraordinarily persuasive reasons and only upon express leave first obtained;^[13] and that once a judgment attains finality, it thereby becomes immutable and unalterable, however unjust the result of error may appear.

The contention, however, misses an important point.  The doctrine of immutability of decisions applies only to final and executory decisions.  Since the present cases may involve a modification or reversal of a Court-ordained doctrine or principle, the judgment rendered by the Special Third Division may be considered unconstitutional, hence, it can never become final.  It finds mooring in the deliberations of the framers of the Constitution: 

On proposed Section 3(4), Commissioner Natividad asked what the effect would be of a decision that violates the proviso that “no doctrine or principle of law laid down by the court in a decision rendered en banc or in division may be modified or reversed except by the court en banc.”  The answer given was that such a decision would be invalid.  Following up, Father Bernas asked whether the decision, if not challenged, could become final and binding at least on the parties.  Romulo answered that, since such a decision would be in excess of jurisdiction, the decision on the case could be reopened anytime.^[14] (emphasis and underscoring supplied)          

A decision rendered by a Division of this Court in violation of this constitutional provision would be in excess of jurisdiction and, therefore, invalid.^[15]  Any entry of judgment may thus be said to be “inefficacious”^[16] since the decision is void for being unconstitutional.

While it is true that the Court en banc exercises no appellate jurisdiction over its Divisions, Justice Minerva Gonzaga-Reyes opined in Firestone and concededly recognized that “[t]he only constraint is that any doctrine or principle of law laid down by the Court, either rendered en banc or in division, may be overturned or reversed only by the Court sitting en banc.”^[17]

That a judgment must become final at some definite point at the risk of occasional error cannot be appreciated in a case that embroils not only a general allegation of “occasional error” but also a serious accusation of a violation of the Constitution, viz., that doctrines or principles of law were modified or reversed by the Court’s Special Third Division August 4, 2009 Resolution.

The law allows a determination at first impression that a doctrine or principle laid down by the court en banc or in divisionmay be modified or reversed in a case which would warrant a referral to the Court En Banc.  The use of the word “may” instead of “shall” connotes probability, not certainty, of modification or reversal of a doctrine, as may be deemed by the Court. Ultimately, it is the entire Court which shall decide on the acceptance of the referral and, if so, “to reconcile any seeming conflict, to reverse or modify an earlier decision, and to declare the Court’s doctrine.”^[18]

The Court has the power and prerogative to suspend its own rules and to exempt a case from their operation if and when justice requires it,^[19] as in the present circumstance where movant filed a motion for leave after the prompt submission of a second motion for reconsideration but, nonetheless, still within 15 days from receipt of the last assailed resolution.

          Well-entrenched doctrines or principles of law that went astray need to be steered back to their proper course.  Specifically, as David Lu correctly points out, it is necessary to reconcile and declare the legal doctrines regarding actions that are incapable of pecuniary estimation, application of estoppel by laches in raising an objection of lack of jurisdiction, and whether bad faith can be deduced from the erroneous annotation of lis pendens.       

          Upon a considered, thorough reexamination, the Court grants David Lu’s Motion for Reconsideration.  The assailed Resolutions of August 4, 2009 and September 23, 2009, which turn turtle settled doctrines, must be overturned. The Court thus reinstates the August 26, 2008 Decision wherein a three-tiered approach was utilized to analyze the issue on docket fees:

            In the instant case, however, we cannot grant the dismissal prayed for because of the following reasons:  First, the case instituted before the RTC is one incapable of pecuniary estimation.  Hence, the correct docket fees were paid.  Second, John and LLDC are estopped from questioning the jurisdiction of the trial court because of their active participation in the proceedings below, and because the issue of payment of insufficient docket fees had been belatedly raised before the Court of Appeals, i.e., only in their motion for reconsideration.  Lastly, assuming that the docket fees paid were truly inadequate, the mistake was committed by the Clerk of Court who assessed the same and not imputable to David; and as to the deficiency, if any, the same may instead be considered a lien on the judgment that may thereafter be rendered.^[20](italics in the original; emphasis and underscoring supplied)

The Value of the Subject Matter Cannot be Estimated

          On the claim that the complaint had for its objective the nullification of the issuance of 600,000 shares of stock of LLDC, the real value of which based on underlying real estate values, as alleged in the complaint, stands at P1,087,055,105, the Court’s assailed August 4, 2009 Resolution found:  

            Upon deeper reflection, we find that the movants’ [Lu Ym father & sons] claim has merit.  The 600,000 shares of stock were, indeed, properties in litigation.  They were the subject matter of the complaint, and the relief prayed for entailed the nullification of the transfer thereof and their return to LLDC.  David, et al., are minority shareholders of the corporation who claim to have been prejudiced by the sale of the shares of stock to the Lu Ym father and sons.  Thus, to the extent of the damage or injury they allegedly have suffered from this sale of the shares of stock,the action they filed can be characterized as one capable of pecuniary estimation.  The shares of stock have a definite value, which was declared by plaintiffs [David Lu, et al.] themselves in their complaint.  Accordingly, the docket fees should have been computed based on this amount.  This is clear from the following version of Rule 141, Section 7, which was in effect at the time the complaint was filed[.]^[21]  (emphasis and underscoring supplied)

The said Resolution added that the value of the 600,000 shares of stock, which are the properties in litigation, should be the basis for the computation of the filing fees.  It bears noting, however, that David, et al. are not claiming to own these shares.  They do not claim to be the owners thereof entitled to be the transferees of the shares of stock.  The mention of the real value of the shares of stock, over which David, et al. do not, it bears emphasis, interpose a claim of right to recovery, is merely narrative or descriptive in order to emphasize the inequitable price at which the transfer was effected. 

          The assailed August 4, 2009 Resolution also stated that “to the extent of the damage or injury [David, et al.] allegedly have suffered from this sale,” the action “can be characterized as one capable of pecuniary estimation.”  The Resolution does not, however, explore the value of the extent of the damage or injury.  Could it be the pro rata decrease (e.g., from 20% to 15%) of the percentage shareholding of David, et al. vis-à-vis to the whole?

          Whatever property, real or personal, that would be distributed to the stockholders would be a mere consequence of the main action.  In the end, in the event LLDC is dissolved, David, et al. would not be getting the value of the 600,000 shares, but only the value of their minority number of shares, which are theirs to begin with.

          The complaint filed by David, et al. is one for declaration of nullity of share issuance.  The main relief prayed for both in the original complaint and the amended complaint is the same, that is, to declare null and void the issuance of 600,000 unsubscribed and unissued shares to Lu Ym father and sons, et al. for a price of 1/18 of their real value, for being inequitable, having been done in breach of director’s fiduciary’s duty to stockholders, in violation of the minority stockholders’ rights, and with unjust enrichment. 

          As judiciously discussed in the Court’s August 26, 2008 Decision, the test in determining whether the subject matter of an action is incapable of pecuniary estimation is by ascertaining the nature of the principal action or remedy sought.  It explained: 

            x x x To be sure, the annulment of the shares, the dissolution of the corporation and the appointment of receivers/management committee are actions which do not consist in the recovery of a sum of money.  If, in the end, a sum of money or real property would be recovered, it would simply be the consequence of such principal action.  Therefore, the case before the RTC was incapable of pecuniary estimation.^[22] (italics in the original, emphasis and underscoring supplied)

          Actions which the Court has recognized as being incapable of pecuniary estimation include legality of conveyances.  In a case involving annulment of contract, the Court found it to be one which cannot be estimated:

            Petitioners argue that an action for annulment or rescission of a contract of sale of real property is a real action and, therefore, the amount of the docket fees to be paid by private respondent should be based either on the assessed value of the property, subject matter of the action, or its estimated value as alleged in the complaint, pursuant to the last paragraph of §7(b) of Rule 141, as amended by the Resolution of the Court dated September 12, 1990.  Since private respondents alleged that the land, in which they claimed an interest as heirs, had been sold for P4,378,000.00 to petitioners, this amount should be considered the estimated value of the land for the purpose of determining the docket fees.

            On the other hand, private respondents counter that an action for annulment or rescission of a contract of sale of real property is incapable of pecuniary estimation and, so, the docket fees should be the fixed amount of P400.00 in Rule 141, §7(b)(1).  In support of their argument, they cite the cases of Lapitan v. Scandia, Inc. and Bautista v. Lim.  In Lapitan this Court, in an opinion by Justice J.B.L. Reyes, held:  

            A review of the jurisprudence of this Court indicates that in determining whether an action is one the subject matter of which is not capable of pecuniary estimation, this Court has adopted the criterion of first ascertaining the nature of the principal action or remedy sought. If it is primarily for the recovery of a sum of money, the claim is considered capable of pecuniary estimation, and whether jurisdiction is in the municipal courts or in the courts of first instance would depend on the amount of the claim. However, where thebasic issue is something other than the right to recover a sum of money, or where the money claim is purely incidental to, or a consequence of, the principal relief sought, like in suits  to have the defendant perform his part of the contract (specific performance) and in actions for support, or for annulment of a judgment or to foreclose a mortgage, this Court has considered such actions as cases where the subject of the litigation may not be estimated in terms of money, and are cognizable exclusively by courts of first instance. The rationale of the rule is plainly that the second class cases, besides the determination of damages, demand an inquiry into other factors which the law has deemed to be more within the competence of courts of first instance, which were the lowest courts of record at the time that the first organic laws of the Judiciary were enacted allocating jurisdiction (Act 136 of the Philippine Commission of June 11, 1901).

            Actions for specific performance of contracts have been expressly pronounced to be exclusively cognizable by courts of first instance: De Jesus vs. Judge Garcia, L-26816, February 28, 1967; Manufacturer’s Distributors, Inc. vs. Yu Siu Liong, L-21285,April 29, 1966.  And no cogent reason appears, and none is here advanced by the parties, why an action for rescission (or resolution) should be differently treated, a “rescission” being a counterpart, so to speak, of “specific performance”.  In both cases, the court would certainly have to undertake an investigation into facts that would justify one act or the other. No award for damages may be had in an action for rescission without first conducting an inquiry into matters which would justify the setting aside of a contract, in the same manner that courts of first instance would have to make findings of fact and law in actions not capable of pecuniary estimation expressly held to be so by this Court, arising from issues like those raised in Arroz v. Alojado, et al., L-22153, March 31, 1967 (the legality or illegality of the conveyance sought for and the determination of the validity of the money deposit made); De Ursua v. Pelayo, L-13285, April 18, 1950 (validity of a judgment); Bunayog v. Tunas, L-12707, December 23, 1959 (validity of a mortgage); Baito v. Sarmiento, L-13105, August 25, 1960 (the relations of the parties, the right to support created by the relation, etc., in actions for support), De Rivera, et al. v. Halili, L-15159, September 30, 1963 (the validity or nullity of documents upon which claims are predicated).  Issues of the same nature may be raised by a party against whom an action for rescission has been brought, or by the plaintiff himself.  It is, therefore, difficult to see why a prayer for damages in an action for rescission should be taken as the basis for concluding such action as one capable of pecuniary estimation — a prayer which must be included in the main action if plaintiff is to be compensated for what he may have suffered as a result of the breach committed by defendant, and not later on precluded from recovering damages by the rule against splitting a cause of action and discouraging multiplicity of suits.^[23] (emphasis and underscoring supplied)

          IN FINE, the Court holds that David Lu, et al.’s complaint is one incapable of pecuniary estimation, hence, the correct docket fees were paid.   The Court thus proceeds to tackle the arguments on estoppel and lien, mindful that the succeeding discussions rest merely on a contrary assumption, viz., that there was deficient payment.  

Estoppel Has Set In

          Assuming arguendo that the docket fees were insufficiently paid, the doctrine of estoppel already applies. 

          The assailed August 4, 2009 Resolution cited Vargas v. Caminas^[24] on the non-applicability of the Tijam doctrine where the issue of jurisdiction was, in fact, raised before the trial court rendered its decision.   Thus the Resolution explained:

            Next, the Lu Ym father and sons filed a motion for the lifting of the receivership order, which the trial court had issued in the interim.  David, et al., brought the matter up to the CA even before the trial court could resolve the motion.  Thereafter, David, at al., filed their Motion to Admit Complaint to Conform to the Interim Rules Governing Intra-Corporate Controversies.  It was at this point that the Lu Ym father and sons raised the question of the amount of filing fees paid.  They also raised this point again in the CA when they appealed the trial court’s decision in the case below.

            We find that, in the circumstances, the Lu Ym father and sons are not estopped from challenging the jurisdiction of the trial court.  Theyraised the insufficiency of the docket fees before the trial court rendered judgment and continuously maintained their position even on appeal to the CA.  Although the manner of challenge was erroneous – they should have addressed this issue directly to the trial court instead of the OCA – they should not be deemed to have waived their right to assail the jurisdiction of the trial court.^[25]  (emphasis and underscoring supplied)

          Lu Ym father and sons did not raise the issue before the trial court.  The narration of facts in the Court’s original decision shows that Lu Ym father and sons merely inquired from the Clerk of Court on the amount of paid docket fees on January 23, 2004. They thereafter still “speculat[ed] on the fortune of litigation.”^[26]  Thirty-seven days later or on March 1, 2004 the trial court rendered its decision adverse to them. 

          Meanwhile, Lu Ym father and sons attempted to verify the matter of docket fees from the Office of the Court Administrator (OCA).  In their Application for the issuance a writ of preliminary injunction filed with the Court of Appeals, they still failed to question the amount of docket fees paid by David Lu, et al.  It was only in their Motion for Reconsideration of the denial by the appellate court of their application for injunctive writ that they raised such issue.

          Lu Ym father and sons’ further inquiry from the OCA cannot redeem them.  A mere inquiry from an improper office at that, could not, by any stretch, be considered as an act of having raised the jurisdictional question prior to the rendition of the trial court’s decision.  In one case, it was held:

            Here it is beyond dispute that respondents paid the full amount of docket fees as assessed by the Clerk of Court of the Regional Trial Court of Malolos, Bulacan, Branch 17, where they filed the complaint. If petitioners believed that the assessment was incorrect, they should have questioned it before the trial court. Instead, petitioners belatedly question the alleged underpayment of docket fees through this petition, attempting to support their position with the opinion and certification of the Clerk of Court of another judicial region. Needless to state, such certification has no bearing on the instant case.^[27] (italics in the original; emphasis and underscoring in the original)

The inequity resulting from the abrogation of the whole proceedings at this late stage when the decision subsequently rendered was adverse to the father and sons is precisely the evil being avoided by the equitable principle of estoppel.

No Intent to Defraud the Government

          Assuming arguendo that the docket fees paid were insufficient, there is no proof of bad faith to warrant a dismissal of the complaint, hence, the following doctrine applies:

x x x In Sun Insurance Office, Ltd., (SIOL) v. Asuncion, this Court ruled that the filing of the complaint or appropriate initiatory pleading and the payment of the prescribed docket fee vest a trial court with jurisdiction over the subject matter or nature of the action.  If the amount of docket fees paid is insufficient considering the amount of the claim, the clerk of court of the lower court involved or his duly authorized deputy has the responsibility of making a deficiency assessment.  The party filing the case will be required to pay the deficiency, but jurisdiction is not automatically lost.^[28]  (underscoring supplied)

          The assailed Resolution of August 4, 2009 held, however, that the above-quoted doctrine does not apply since there was intent to defraud the government, citing one attendant circumstance– the annotation of notices of lis pendens on real properties owned by LLDC.  It deduced:

            From the foregoing, it is clear that a notice of lis pendens is availed of mainly in real actions.  Hence, when David, et al., sought the annotation of notices of lis pendens on the titles of LLDC, they acknowledged that the complaint they had filed affected a title to or a right to possession of real properties.  At the very least, they must have been fully aware that the docket fees would be based on the value of the realties involved.  Their silence or inaction to point this out to the Clerk of Court who computed their docket fees, therefore, becomes highly suspect, and thus, sufficient for this Court to conclude that they have crossed beyond the threshold of good faith and into the area of fraud.  Clearly, there was an effort to defraud the government in avoiding to pay the correct docket fees. Consequently, the trial court did not acquire jurisdiction over the case.^[29]

          All findings of fraud should begin the exposition with the presumption of good faith.  The inquiry is not whether there was good faith on the part of David, et al., but whether there was bad faith on their part.

          The erroneous annotation of a notice of lis pendens does not negate good faith.  The overzealousness of a party in protecting pendente lite his perceived interest, inchoate or otherwise, in the corporation’s properties from depletion or dissipation, should not be lightly equated to bad faith.

          That notices of lis pendens were erroneously annotated on the titles does not have the effect of changing the nature of the action.  The aggrieved party is not left without a remedy, for they can move to cancel the annotations.  The assailed August 4, 2009 Resolution, however, deemed such act as an acknowledgement that the case they filed was a real action, concerning as it indirectly does the corporate realties, the titles of which were allegedly annotated.  This conclusion does not help much in ascertaining the filing fees because the value of these real properties and the value of the 600,000 shares of stock are different.

          Further, good faith can be gathered from the series of amendments on the provisions on filing fees, that the Court was even prompted to make a clarification. 

          When David Lu, et al. filed the Complaint on August 14, 2000 or five days after the effectivity of the Securities Regulation Code or Republic Act No. 8799,^[30] the then Section 7 of Rule 141 was the applicable provision, without any restricted reference to paragraphs (a) and (b) 1 & 3 or paragraph (a) alone.   Said section then provided:

SEC. 7. Clerks of Regional Trial Courts. –  

(a) For filing an action or a permissive counterclaim or money claim against an estate not based on judgment, or for filing with leave of court a third-party, fourth-party, etc. complaint, or a complaint in intervention, and for all clerical services in the same, if the total sum claimed, exclusive of interest, or the stated value of the property in litigation, is: 

                        x x x x

            (b) For filing:        

In a real action, the assessed value of the property, or if there is none, the estimated value thereof shall be alleged by the claimant and shall be the basis in computing the fees.

x x x x^[31] (emphasis supplied)

          The Court, by Resolution of September 4, 2001 in A. M. No. 00-8-10-SC,^[32] clarified the matter of legal fees to be collected in cases formerly cognizable by the Securities and Exchange Commission following their transfer to the RTC.

            Clarification has been sought on the legal fees to be collected and the period of appeal applicable in cases formerly cognizable by the Securities and Exchange Commission.  It appears that the Interim Rules of Procedure on Corporate Rehabilitation and the Interim Rules of Procedure for Intra-Corporate Controversies do not provide the basis for the assessment of filing fees and the period of appeal in cases transferred from the Securities and Exchange Commission to particular Regional Trial Courts.

            The nature of the above mentioned cases should first be ascertained. Section 3(a), Rule 1 of the 1997 Rules of Civil Procedure defines civil action as one by which a party sues another for the enforcement or protection of a right, or the prevention or redress of a wrong.  It further states that a civil action may either be ordinary or special, both being governed by the rules for ordinary civil actions subject to the special rules prescribed for special civil actions. Section 3(c) of the same Rule, defines a special proceeding as a remedy by which a party seeks to establish a status, a right, or a particular fact.

            Applying these definitions, the cases covered by the Interim Rules for Intra-Corporate Controversies should be considered as ordinary civil actions. These cases either seek the recovery of damages/property or specific performance of an act against a party for the violation or protection of a right.  These cases are:

(1) Devices or schemes employed by, or any act of, the board of directors, business associates, officers or partners, amounting to fraud or misrepresentation which may be detrimental to the interest of the public and/or of the stockholders, partners, or members of any corporation, partnership, or association;

(2) Controversies arising out of intra-corporate, partnership, or association relations, between and among stockholders, members or associates; and between, any or all of them and the corporation, partnership, or association of which they are stockholders, members or associates, respectively;

(3) Controversies in the election or appointment of directors, trustees, officers, or managers of corporations, partnerships, or associations;

(4) Derivative suits; and

(5) Inspection of corporate books.

            On the other hand, a petition for rehabilitation, the procedure for which is provided in the Interim Rules of Procedure on Corporate Recovery, should be considered as a special proceeding.  It is one that seeks to establish the status of a party or a particular fact.  As provided in section 1, Rule 4 of the Interim Rules on Corporate Recovery, the status or fact sought to be established is the inability of the corporate debtor to pay its debts when they fall due so that a rehabilitation plan, containing the formula for the successful recovery of the corporation, may be approved in the end.  It does not seek a relief from an injury caused by another party.

            Section 7 of Rule 141 (Legal Fees) of the Revised Rules of Court lays the amount of filing fees to be assessed for actions or proceedings filed with the Regional Trial Court. Section 7(a) and (b) apply to ordinary civil actions while 7(d) and (g) apply to special proceedings.

            In fine, the basis for computing the filing fees in intra-corporate cases shall be section 7(a) and (b) l & 3 of Rule 141. For petitions for rehabilitation, section 7(d) shall be applied. (emphasis and underscoring supplied)

          The new Section 21(k) of Rule 141 of the Rules of Court, as amended by A.M. No. 04-2-04-SC^[33] (July 20, 2004),expressly provides that “[f]or petitions for insolvency or other cases involving intra-corporate controversies, the fees prescribed under Section 7(a) shall apply.”  Notatu dignum is that paragraph (b) 1 & 3 of Section 7 thereof was omitted from the reference. Said paragraph^[34] refers to docket fees for filing “[a]ctions where the value of the subject matter cannot be estimated” and “all other actions not involving property.” 

          By referring the computation of such docket fees to paragraph (a) only, it denotes that an intra-corporate controversy always involves a property in litigation, the value of which is always the basis for computing the applicable filing fees.  The latest amendments seem to imply that there can be no case of intra-corporate controversy where the value of the subject matter cannot be estimated.  Even one for a mere inspection of corporate books.

          If the complaint were filed today, one could safely find refuge in the express phraseology of Section 21 (k) of Rule 141 that paragraph (a) alone applies.

          In the present case, however, the original Complaint was filed on August 14, 2000 during which time Section 7, without qualification, was the applicable provision.  Even the Amended Complaint was filed on March 31, 2003 during which time the applicable rule expressed that paragraphs (a) and (b) l & 3 shall be the basis for computing the filing fees in intra-corporate cases, recognizing that there could be an intra-corporate controversy where the value of the subject matter cannot be estimated, such as an action for inspection of corporate books.  The immediate illustration  shows that no mistake can even be attributed to the RTC clerk of court in the assessment of the docket fees.

          Finally, assuming there was deficiency in paying the docket fees and assuming further that there was a mistake in computation, the deficiency may be considered a lien on the judgment that may be rendered, there being no established intent to defraud the government.

          WHEREFORE, the assailed Resolutions of August 4, 2009 and September 23, 2009 are REVERSED and SET ASIDE. The Court’s Decision of August 26, 2008 is REINSTATED.

          The Court of Appeals is DIRECTED to resume the proceedings and resolve the remaining issues with utmost dispatch in CA-G.R. CV No. 81163.

SO ORDERED.

                                       CONCHITA CARPIO MORALES

                                                     Associate Justice       

WE CONCUR:

RENATO C. CORONA

Chief Justice

 MARIA LOURDES P. A. SERENO

Associate Justice

CERTIFICATION

          Pursuant to Section 13, Article VIII of the Constitution, I hereby certify that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Court.

                                                   RENATO C. CORONA

                                                            Chief Justice

^[1]               Third Division: Ynares-Santiago (chairperson), Carpio Morales (additional member), Chico-Nazario, Nachura (ponente), and Reyes, JJ.

^[2]               Lu v. Lu Ym, Sr., G.R. No. 153690, August 26, 2008, 563 SCRA 254, 280-281.

^[3]               Special Third Division: Ynares-Santiago (chairperson), Carpio Morales (dissenting), Chico-Nazario, Velasco, Jr. (additional member), Nachura (ponente), JJ.

^[4]               Lu v. Lu Ym, Sr., G.R. No. 153690, August 4, 2009, 595 SCRA 79, 95.

^[5]               With Supplement of February 25, 2010.

^[6]               A.M. No. 10-4-20-SC (May 4, 2010), Rule 2, Sec. 3.

^[7]               Internal Resolution of June 15, 2010. 

^[8]               IRSC, Rule 2, Sec. 11(b). 

^[9]               G.R. No. 127022, June 28, 2000, 334 SCRA 465.

^[10]             Id. at 473.

^[11]             Id. at 473-474; vide People v. Ebio, G.R. No. 147750, September 29, 2004, 439 SCRA 421, where the Court, on motion for reconsideration raising a question of quorum, recalled a Decision rendered en banc and resubmitted the case to the Court en banc for re-deliberation.

^[12]             Unlike Firestone which involved a timely motion for reconsideration.  Likewise differentiated from Firestone is the Sumilao case, Fortich v. Corona (G.R. No. 131457). In the latter case, however, before the “matter” of the motion for reconsideration was brought to the Banc en consulta, it had already been voted upon by the Second Division with a vote of 2-2, a stalemate constituting a denial of the motion.

^[13]             Rollo (G.R. No. 170889), pp. 1481 & 1507 et seq., citing Ortigas and Company Limited Partnership v. Velasco, G.R. No. 109645, March 4, 1996, 254 SCRA 234, as reiterated inSystra Philippines, Inc. v. Commissioner of Internal Revenue, G.R. No. 176290, September 21, 2007, 533 SCRA 776.

^[14]             Bernas, THE INTENT OF THE 1986 CONSTITUTION WRITERS, (1995), p. 517.   

^[15]             Group Commander, Intelligence and Security Group, Philippine Army v. Dr. Malvar, 438 Phil. 252, 279 (2002).

^[16]             Manila Electric Company v. Barlis, G.R. No. 114231, June 29, 2004, 433 SCRA 11, 29 where a third motion for reconsideration was acted upon favorably after recalling the entry of judgment. Vide also Tan Tiac Ching v.Cosico, A.M. No. CA-02-33, July 31, 2002, 385 SCRA 509, 517, stating that “[t]he recall of entries of judgments, albeit rare, is not novelty,” citing Muñoz v. Court of Appeals (G.R. No. 125451, January 20, 2000, 322 SCRA 741).  For instances when the Court relaxed the rule on finality of judgments, videBarnes v. Padilla, G.R. No. 160753, September 30, 2004, 439 SCRA 675, 686-687.

^[17]             Firestone Ceramics v. Court of Appeals, supra at 478.

^[18]             Vir-jen Shipping and Marine Services, Inc. v. NLRC, Nos. L-58011-12, November 18, 1983, 125 SCRA 577, 585.

^[19]             Destileria Limtuaco & Co, Inc. v. IAC, No. L-74369, January 29, 1988, 157 SCRA 706.

^[20]             Supra note 2 at 274.

^[21]             Supra note 4 at 88-89.

^[22]             Supra note 2 at 275-276.

^[23]             De Leon v. CA, 350 Phil. 535, 540-542 (1998).

^[24]             G.R. Nos. 137869 & 137940, June 12, 2008, 554 SCRA 303.

^[25]             Supra note 4 at 94.

^[26]             Supra note 2 at 277.

^[27]             Rivera v. del Rosario, 464 Phil. 783, 797 (2004).

^[28]             Ibid.

^[29]             Supra note 4 at 92.

^[30]             The statute was issued on July 19, 2000 and took effect on August 9, 2000, pursuant to its Sec. 78; vide International Broadcasting Corporation v. Jalandoon, G.R. No. 148152, November 18, 2005, 475 SCRA 446.

^[31]             Vide A.M. No. 00-2-01-SC (March 1, 2000).

^[32]             Effective October 1, 2001.

^[33]             The amendments took effect on August 16, 2004.

^[34]             Sub-paragraphs (1) and (3) remain unchanged except for the increase in the amounts of fees.

CASE 2011-0067: METROPOLITAN MANILA DEVELOPMENT AUTHORITY, DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES, DEPARTMENT OF EDUCATION, CULTURE AND SPORTS,^[1] DEPARTMENT OF HEALTH, DEPARTMENT OF AGRICULTURE, DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS, DEPARTMENT OF BUDGET AND MANAGEMENT, PHILIPPINE COAST GUARD, PHILIPPINE NATIONAL POLICE MARITIME GROUP, AND DEPARTMENT OF THE INTERIOR AND LOCALGOVERNMENT VS. CONCERNED RESIDENTS OFMANILA BAY, REPRESENTED ANDJOINED BY DIVINA V. ILAS, SABINIANO ALBARRACIN, MANUEL SANTOS, JR., DINAH DELA PEÑA, PAUL DENNIS QUINTERO, MA. VICTORIA LLENOS, DONNA CALOZA, FATIMA QUITAIN, VENICE SEGARRA, FRITZIE TANGKIA, SARAH JOELLE LINTAG, HANNIBAL AUGUSTUS BOBIS, FELIMON SANTIAGUEL, AND JAIME AGUSTIN R. OPOSA (G.R. NOS. 171947-48, 15 FEBRUARY 2011, VELASCO, JR., J.)

Republic of the Philippines

SUPREME COURT

Manila

EN BANC

x————————————————————————————–x

R E S O L U T I O N

VELASCO, JR., J.:

          On December 18, 2008, this Court rendered a Decision in G.R. Nos. 171947-48 ordering petitioners to clean up, rehabilitate and preserve Manila Bay in their different capacities. The fallo reads:

            WHEREFORE, the petition is DENIED. The September 28, 2005 Decision of the CA in CA-G.R. CV No. 76528 and SP No. 74944 and the September 13, 2002 Decision of the RTC in Civil Case No. 1851-99 are AFFIRMED but with MODIFICATIONS in view of subsequent developments or supervening events in the case. The fallo of the RTC Decision shall now read:

WHEREFORE, judgment is hereby rendered ordering the abovenamed defendant-government agencies to clean up, rehabilitate, and preserve Manila Bay, and restore and maintain its waters to SB level (Class B sea waters per Water Classification Tables under DENR Administrative Order No. 34 [1990]) to make them fit for swimming, skin-diving, and other forms of contact recreation.

In particular:

(1) Pursuant to Sec. 4 of EO 192, assigning the DENR as the primary agency responsible for the conservation, management, development, and proper use of the country’s environment and natural resources, and Sec. 19 of RA 9275, designating the DENR as the primary government agency responsible for its enforcement and implementation, the DENR is directed to fully implement its Operational Plan for the Manila Bay Coastal Strategy for the rehabilitation, restoration, and conservation of the Manila Bay at the earliest possible time.  It is ordered to call regular coordination meetings with concerned government departments and agencies to ensure the successful implementation of the aforesaid plan of action in accordance with its indicated completion schedules.

(2) Pursuant to Title XII (Local Government) of the Administrative Code of 1987 and Sec. 25 of the Local Government Code of 1991, the DILG, in exercising the President’s power of general supervision and its duty to promulgate guidelines in establishing waste management programs under Sec. 43 of the Philippine Environment Code (PD 1152), shall direct all LGUs in Metro Manila, Rizal, Laguna, Cavite, Bulacan, Pampanga, and Bataan to inspect all factories, commercial establishments, and private homes along the banks of the major river systems in their respective areas of jurisdiction, such as but not limited to the Pasig-Marikina-San Juan Rivers, the NCR (Parañaque-Zapote, Las Piñas) Rivers, the Navotas-Malabon-Tullahan-Tenejeros Rivers, the Meycauayan-Marilao-Obando (Bulacan) Rivers, the Talisay (Bataan) River, the Imus (Cavite) River, the Laguna De Bay, and other minor rivers and waterways that eventually discharge water into the Manila Bay; and the lands abutting the bay, to determine whether they have wastewater treatment facilities or hygienic septic tanks as prescribed by existing laws, ordinances, and rules and regulations. If none be found, these LGUs shall be ordered to require non-complying establishments and homes to set up said facilities or septic tanks within a reasonable time to prevent industrial wastes, sewage water, and human wastes from flowing into these rivers, waterways, esteros, and the Manila Bay, under pain of closure or imposition of fines and other sanctions.

(3) As mandated by Sec. 8 of RA 9275, the MWSS is directed to provide, install, operate, and maintain the necessary adequate waste water treatment facilities in Metro Manila, Rizal, and Cavite where needed at the earliest possible time.

(4) Pursuant to RA 9275, the LWUA, through the local water districts and in coordination with the DENR, is ordered to provide, install, operate, and maintain sewerage and sanitation facilities and the efficient and safe collection, treatment, and disposal of sewage in the provinces of Laguna, Cavite, Bulacan, Pampanga, and Bataan where needed at the earliest possible time.

(5) Pursuant to Sec. 65 of RA 8550, the DA, through the BFAR, is ordered to improve and restore the marine life of the Manila Bay.  It is also directed to assist the LGUs in Metro Manila, Rizal, Cavite, Laguna, Bulacan, Pampanga, and Bataan in developing, using recognized methods, the fisheries and aquatic resources in the Manila Bay.

(6) The PCG, pursuant to Secs. 4 and 6 of PD 979, and the PNP Maritime Group, in accordance with Sec. 124 of RA 8550, in coordination with each other, shall apprehend violators of PD 979, RA 8550, and other existing laws and regulations designed to prevent marine pollution in the Manila Bay.

(7) Pursuant to Secs. 2 and 6-c of EO 513 and the International Convention for the Prevention of Pollution from Ships, the PPA is ordered to immediately adopt such measures to prevent the discharge and dumping of solid and liquid wastes and other ship-generated wastes into theManila Bay waters from vessels docked at ports and apprehend the violators.

(8) The MMDA, as the lead agency and implementor of programs and projects for flood control projects and drainage services in Metro Manila, in coordination with the DPWH, DILG, affected LGUs, PNP Maritime Group, Housing and Urban Development Coordinating Council (HUDCC), and other agencies, shall dismantle and remove all structures, constructions, and other encroachments established or built in violation of RA 7279, and other applicable laws along the Pasig-Marikina-San Juan Rivers, the NCR (Parañaque-Zapote, Las Piñas) Rivers, the Navotas-Malabon-Tullahan-Tenejeros Rivers, and connecting waterways and esteros in Metro Manila.  The DPWH, as the principal implementor of programs and projects for flood control services in the rest of the country more particularly in Bulacan, Bataan, Pampanga, Cavite, and Laguna, in coordination with the DILG, affected LGUs, PNP Maritime Group, HUDCC, and other concerned government agencies, shall remove and demolish all structures, constructions, and other encroachments built in breach of RA 7279 and other applicable laws along the Meycauayan-Marilao-Obando (Bulacan) Rivers, the Talisay (Bataan) River, the Imus (Cavite) River, the Laguna De Bay, and other rivers, connecting waterways, and esteros that discharge wastewater into the Manila Bay.

In addition, the MMDA is ordered to establish, operate, and maintain a sanitary landfill, as prescribed by RA 9003, within a period of one (1) year from finality of this Decision.  On matters within its territorial jurisdiction and in connection with the discharge of its duties on the maintenance of sanitary landfills and like undertakings, it is also ordered to cause the apprehension and filing of the appropriate criminal cases against violators of the respective penal provisions of RA 9003, Sec. 27 of RA 9275 (the Clean Water Act), and other existing laws on pollution.

(9) The DOH shall, as directed by Art. 76 of PD 1067 and Sec. 8 of RA 9275, within one (1) year from finality of this Decision, determine if all licensed septic and sludge companies have the proper facilities for the treatment and disposal of fecal sludge and sewage coming from septic tanks. The DOH shall give the companies, if found to be non-complying, a reasonable time within which to set up the necessary facilities under pain of cancellation of its environmental sanitation clearance.

(10) Pursuant to Sec. 53 of PD 1152, Sec. 118 of RA 8550, and Sec. 56 of RA 9003, the DepEd shall integrate lessons on pollution prevention, waste management, environmental protection, and like subjects in the school curricula of all levels to inculcate in the minds and hearts of students and, through them, their parents and friends, the importance of their duty toward achieving and maintaining a balanced and healthful ecosystem in the Manila Bay and the entire Philippine archipelago.

(11) The DBM shall consider incorporating an adequate budget in the General Appropriations Act of 2010 and succeeding years to cover the expenses relating to the cleanup, restoration, and preservation of the water quality of the Manila Bay, in line with the country’s development objective to attain economic growth in a manner consistent with the protection, preservation, and revival of our marine waters.

(12) The heads of petitioners-agencies MMDA, DENR, DepEd, DOH, DA, DPWH, DBM, PCG, PNP Maritime Group, DILG, and also of MWSS, LWUA, and PPA, in line with the principle of “continuing mandamus,” shall, from finality of this Decision, each submit to the Court a quarterly progressive report of the activities undertaken in accordance with this Decision.

                        SO ORDERED.

The government agencies did not file any motion for reconsideration and the Decision became final in January 2009.

The case is now in the execution phase of the final and executory December 18, 2008 Decision.  The Manila Bay Advisory Committee was created to receive and evaluate the quarterly progressive reports on the activities undertaken by the agencies in accordance with said decision and to monitor the execution phase.

In the absence of specific completion periods, the Committee recommended that time frames be set for the agencies to perform their assigned tasks.  This may be viewed as an encroachment over the powers and functions of the Executive Branch headed by the President of the Philippines.

This view is misplaced.

The issuance of subsequent resolutions by the Court is simply an exercise of judicial power under Art. VIII of the Constitution, because the execution of the Decision is but an integral part of the adjudicative function of the Court.  None of the agencies ever questioned the power of the Court to implement the December 18, 2008 Decision nor has any of them raised the alleged encroachment by the Court over executive functions.

While additional activities are required of the agencies like submission of plans of action, data or status reports, these directives are but part and parcel of the execution stage of a final decision under Rule 39 of the Rules of Court.  Section 47 of Rule 39 reads:

Section 47.  Effect of judgments or final orders.––The effect of a judgment or final order rendered by a court of the Philippines, having jurisdiction to pronounce the judgment or final order, may be as follows:

            x x x x

(c)        In any other litigation between the same parties of their successors in interest, that only is deemed to have been adjudged in a former judgment or final order which appears upon its face to have been so adjudged, or which was actually and necessarily included therein or necessary thereto. (Emphasis supplied.)

          It is clear that the final judgment includes not only what appears upon its face to have been so adjudged but also those matters “actually and necessarily included therein or necessary thereto.”  Certainly, any activity that is needed to fully implement a final judgment is necessarily encompassed by said judgment.

Moreover, the submission of periodic reports is sanctioned by Secs. 7 and 8, Rule 8 of the Rules of Procedure for Environmental cases:

Sec. 7.  Judgment.––If warranted, the court shall grant the privilege of the writ of continuing mandamus requiring respondent to perform an act or series of acts until the judgment is fully satisfied and to grant such other reliefs as may be warranted resulting from the wrongful or illegal acts of the respondent. The court shall require the respondent to submit periodic reports detailing the progress and execution of the judgment, and the court may, by itself or through a commissioner or the appropriate government agency, evaluate and monitor compliance.  The petitioner may submit its comments or observations on the execution of the judgment.

            Sec. 8.  Return of the writ.––The periodic reports submitted by the respondent detailing compliance with the judgment shall be contained in partial returns of the writ.  Upon full satisfaction of the judgment, a final return of the writ shall be made to the court by the respondent.  If the court finds that the judgment has been fully implemented, the satisfaction of judgment shall be entered in the court docket. (Emphasis supplied.)

          With the final and executory judgment in MMDA, the writ of continuing mandamus issued in MMDA means that until petitioner-agencies have shown full compliance with the Court’s orders, the Court exercises continuing jurisdiction over them until full execution of the judgment.

          There being no encroachment over executive functions to speak of, We shall now proceed to the recommendation of the Manila Bay Advisory Committee.

          Several problems were encountered by the Manila Bay Advisory Committee.^[2] An evaluation of the quarterly progressive reports has shown that (1) there are voluminous quarterly progressive reports that are being submitted; (2) petitioner-agencies do not have a uniform manner of reporting their cleanup, rehabilitation and preservation activities; (3) as yet no definite deadlines have been set by petitioner DENR as to petitioner-agencies’ timeframe for their respective duties; (4) as of June 2010 there has been a change in leadership in both the national and local levels; and (5) some agencies have encountered difficulties in complying with the Court’s directives.

          In order to implement the afore-quoted Decision, certain directives have to be issued by the Court to address the said concerns. 

Acting on the recommendation of the Manila Bay Advisory Committee, the Court hereby resolves to ORDER the following:

(1)     The Department of Environment and Natural Resources (DENR), as lead agency in the Philippine Clean Water Act of 2004, shall submit to the Court on or before June 30, 2011 the updated Operational Plan for the Manila Bay Coastal Strategy.

The DENR is ordered to submit summarized data on the overall quality of Manila Bay waters for all four quarters of 2010 on or before June 30, 2011.

The DENR is further ordered to submit the names and addresses of persons and companies in Metro Manila, Rizal, Laguna,Cavite, Bulacan, Pampanga and Bataan that generate toxic and hazardous waste on or before September 30, 2011.

(2)     On or before June 30, 2011, the Department of the Interior and Local Government (DILG) shall order the Mayors of all cities in Metro Manila; the Governors of Rizal, Laguna, Cavite, Bulacan, Pampanga and Bataan; and the Mayors of all the cities and towns in said provinces to inspect all factories, commercial establishments and private homes along the banks of the major river systems––such as but not limited to the Pasig-Marikina-San Juan Rivers, the National Capital Region (Paranaque-Zapote, Las Pinas) Rivers, the Navotas-Malabon-Tullahan-Tenejeros Rivers, the Meycauayan-Marilao-Obando (Bulacan) Rivers, the Talisay (Bataan) River, the Imus (Cavite) River, and the Laguna De Bay––and other minor rivers and waterways within their jurisdiction that eventually discharge water into the Manila Bay and the lands abutting it, to determine if they have wastewater treatment facilities and/or hygienic septic tanks, as prescribed by existing laws, ordinances, rules and regulations.  Said local government unit (LGU) officials are given up to September 30, 2011 to finish the inspection of said establishments and houses.

In case of non-compliance, the LGU officials shall take appropriate action to ensure compliance by non-complying factories, commercial establishments and private homes with said law, rules and regulations requiring the construction or installment of wastewater treatment facilities or hygienic septic tanks.

The aforementioned governors and mayors shall submit to the DILG on or before December 31, 2011 their respective compliance reports which will contain the names and addresses or offices of the owners of all the non-complying factories, commercial establishments and private homes, copy furnished the concerned environmental agency, be it the local DENR office or the Laguna Lake Development Authority.

The DILG is required to submit a five-year plan of action that will contain measures intended to ensure compliance of all non-complying factories, commercial establishments, and private homes.

On or before June 30, 2011, the DILG and the mayors of all cities in Metro Manila shall consider providing land for the wastewater facilities of the Metropolitan Waterworks and Sewerage System (MWSS) or its concessionaires (Maynilad and Manila Water, Inc.) within their respective jurisdictions.

(3)     The MWSS shall submit to the Court on or before June 30, 2011 the list of areas in Metro Manila, Rizal and Cavite that do not have the necessary wastewater treatment facilities. Within the same period, the concessionaires of the MWSS shall submit their plans and projects for the construction of wastewater treatment facilities in all the aforesaid areas and the completion period for said facilities, which shall not go beyond 2037.

On or before June 30, 2011, the MWSS is further required to have its two concessionaires submit a report on the amount collected as sewerage fees in their respective areas of operation as of December 31, 2010.

(4)     The Local Water Utilities Administration is ordered to submit on or before September 30, 2011 its plan to provide, install, operate and maintain sewerage and sanitation facilities in said cities and towns and the completion period for said works, which shall be fully implemented by December 31, 2020.

(5)     The Department of Agriculture (DA), through the Bureau of Fisheries and Aquatic Resources, shall submit to the Court on or before June 30, 2011 a report on areas in Manila Bay where marine life has to be restored or improved and the assistance it has extended to the LGUs in Metro Manila, Rizal, Cavite, Laguna, Bulacan, Pampanga and Bataan in developing the fisheries and aquatic resources in Manila Bay.  The report shall contain monitoring data on the marine life in said areas. Within the same period, it shall submit its five-year plan to restore and improve the marine life in Manila Bay, its future activities to assist the aforementioned LGUs for that purpose, and the completion period for said undertakings.

The DA shall submit to the Court on or before September 30, 2011 the baseline data as of September 30, 2010 on the pollution loading into the Manila Bay system from agricultural and livestock sources.

(6)     The Philippine Ports Authority (PPA) shall incorporate in its quarterly reports the list of violators it has apprehended and the status of their cases. The PPA is further ordered to include in its report the names, make and capacity of the ships that dock in PPA ports.  The PPA shall submit to the Court on or before June 30, 2011 the measures it intends to undertake to implement its compliance with paragraph 7 of the dispositive portion of the MMDA Decision and the completion dates of such measures.

The PPA should include in its report the activities of its concessionaire that collects and disposes of the solid and liquid wastes and other ship-generated wastes, which shall state the names, make and capacity of the ships serviced by it since August 2003 up to the present date, the dates the ships docked at PPA ports, the number of days the ship was at sea with the corresponding number of passengers and crew per trip, the volume of solid, liquid and other wastes collected from said ships, the treatment undertaken and the disposal site for said wastes.

(7)     The Philippine National Police (PNP) Maritime Group shall submit on or before June 30, 2011 its five-year plan of action on the measures and activities it intends to undertake to apprehend the violators of Republic Act No. (RA) 8550 or thePhilippine Fisheries Code of 1998 and other pertinent laws, ordinances and regulations to prevent marine pollution in Manila Bayand to ensure the successful prosecution of violators.

The Philippine Coast Guard shall likewise submit on or before June 30, 2011 its five-year plan of action on the measures and activities they intend to undertake to apprehend the violators of Presidential Decree No. 979 or the Marine Pollution Decree of 1976 and RA 9993 or the Philippine Coast Guard Law of 2009 and other pertinent laws and regulations to prevent marine pollution in Manila Bay and to ensure the successful prosecution of violators.

(8)     The Metropolitan Manila Development Authority (MMDA) shall submit to the Court on or before June 30, 2011 the names and addresses of the informal settlers in Metro Manila who, as of December 31, 2010, own and occupy houses, structures, constructions and other encroachments established or built along the Pasig-Marikina-San Juan Rivers, the NCR (Parañaque-Zapote, Las Piñas) Rivers, the Navotas-Malabon-Tullahan-Tenejeros Rivers, and connecting waterways and esteros, in violation of RA 7279 and other applicable laws.  On or before June 30, 2011, the MMDA shall submit its plan for the removal of said informal settlers and the demolition of the aforesaid houses, structures, constructions and encroachments, as well as the completion dates for said activities, which shall be fully implemented not later than December 31, 2015.

The MMDA is ordered to submit a status report, within thirty (30) days from receipt of this Resolution, on the establishment of a sanitary landfill facility for Metro Manila in compliance with the standards under RA 9003 or the Ecological Solid Waste Management Act.

On or before June 30, 2011, the MMDA shall submit a report of the location of open and controlled dumps in Metro Manila whose operations are illegal after February 21, 2006,^[3] pursuant to Secs. 36 and 37 of RA 9003, and its plan for the closure of these open and controlled dumps to be accomplished not later than December 31, 2012.  Also, on or before June 30, 2011, the DENR Secretary, as Chairperson of the National Solid Waste Management Commission (NSWMC), shall submit a report on the location of all open and controlled dumps in Rizal, Cavite, Laguna, Bulacan, Pampanga and Bataan.

On or before June 30, 2011, the DENR Secretary, in his capacity as NSWMC Chairperson, shall submit a report on whether or not the following landfills strictly comply with Secs. 41 and 42 of RA 9003 on the establishment and operation of sanitary landfills, to wit:

National Capital Region

1.     Navotas SLF (PhilEco), Brgy. Tanza (New Site), Navotas City

2.     Payatas Controlled Dumpsite, Barangay Payatas, Quezon City

Region III

3.     Sitio Coral, Brgy. Matictic, Norzagaray, Bulacan

4.     Sitio Tiakad, Brgy. San Mateo, Norzagaray, Bulacan

5.     Brgy. Minuyan, San Jose del Monte City, Bulacan

6.     Brgy. Mapalad, Santa Rosa, Nueva Ecija

7.     Sub-zone Kalangitan, Clark Capas, Tarlac Special

Economic Zone

Region IV-A

8.     Kalayaan (Longos), Laguna

9.     Brgy. Sto. Nino, San Pablo City, Laguna

10.            Brgy. San Antonio (Pilotage SLF), San Pedro, Laguna

11.            Morong, Rizal

12.            Sitio Lukutan, Brgy. San Isidro, Rodriguez (Montalban), Rizal (ISWIMS)

13.            Brgy. Pintong Bukawe, San Mateo, Rizal (SMSLFDC)

On or before June 30, 2011, the MMDA and the seventeen (17) LGUs in Metro Manila are ordered to jointly submit a report on the average amount of garbage collected monthly per district in all the cities in Metro Manila from January 2009 up to December 31, 2010 vis-à-vis the average amount of garbage disposed monthly in landfills and dumpsites.  In its quarterly report for the last quarter of 2010 and thereafter, MMDA shall report on the apprehensions for violations of the penal provisions of RA 9003, RA 9275 and other laws on pollution for the said period.

On or before June 30, 2011, the DPWH and the LGUs in Rizal, Laguna, Cavite, Bulacan, Pampanga, and Bataan shall submit the names and addresses of the informal settlers in their respective areas who, as of September 30, 2010, own or occupy houses, structures, constructions, and other encroachments built along the Meycauayan-Marilao-Obando (Bulacan) Rivers, the Talisay (Bataan) River, the Imus (Cavite) River, the Laguna de Bay, and other rivers, connecting waterways and esteros that discharge wastewater into the Manila Bay, in breach of RA 7279 and other applicable laws.  On or before June 30, 2011, the DPWH and the aforesaid LGUs shall jointly submit their plan for the removal of said informal settlers and the demolition of the aforesaid structures, constructions and encroachments, as well as the completion dates for such activities which shall be implemented not later than December 31, 2012.

(9)     The Department of Health (DOH) shall submit to the Court on or before June 30, 2011 the names and addresses of the owners of septic and sludge companies including those that do not have the proper facilities for the treatment and disposal of fecal sludge and sewage coming from septic tanks.

The DOH shall implement rules and regulations on Environmental Sanitation Clearances and shall require companies to procure a license to operate from the DOH.

The DOH and DENR-Environmental Management Bureau shall develop a toxic and hazardous waste management system by June 30, 2011 which will implement segregation of hospital/toxic/hazardous wastes and prevent mixing with municipal solid waste.

On or before June 30, 2011, the DOH shall submit a plan of action to ensure that the said companies have proper disposal facilities and the completion dates of compliance.

(10)   The Department of Education (DepEd) shall submit to the Court on or before May 31, 2011 a report on the specific subjects on pollution prevention, waste management, environmental protection, environmental laws and the like that it has integrated into the school curricula in all levels for the school year 2011-2012.

On or before June 30, 2011, the DepEd shall also submit its plan of action to ensure compliance of all the schools under its supervision with respect to the integration of the aforementioned subjects in the school curricula which shall be fully implemented by June 30, 2012.

(11)   All the agencies are required to submit their quarterly reports electronically using the forms below. The agencies may add other key performance indicators that they have identified.

SO ORDERED.

   PRESBITERO J. VELASCO, JR.                                Associate Justice

WE CONCUR:

RENATO C. CORONA

Chief Justice

              ANTONIO T. CARPIO            CONCHITA CARPIO MORALES                       

                           Associate Justice                                  Associate Justice

  ANTONIO EDUARDO B. NACHURA       TERESITA J. LEONARDO-DE CASTRO   

                        Associate Justice                                                 Associate Justice

     ARTURO D. BRION                              DIOSDADO M. PERALTA

          Associate Justice                                           Associate Justice

   LUCAS P. BERSAMIN                      MARIANO C. DEL CASTILLO

          Associate Justice                                            Associate Justice

               ROBERTO A. ABAD                           MARTIN S. VILLARAMA, JR.

                   Associate Justice                                             Associate Justice

JOSE PORTUGAL PEREZ                  JOSE CATRAL MENDOZA 

Associate Justice                                   Associate Justice

MARIA LOURDES P. A. SERENO

Associate Justice

C E R T I F I C A T I O N

                Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Court.

                                                                   RENATO C. CORONA

Chief Justice

                ^[1] Now the Department of Education (DepEd).

^[2]  On February 10, 2009, the Court En Banc approved a resolution creating an Advisory Committee “that will verify the reports of the government agencies tasked to clean up the Manila Bay.” It is composed of two members of the Court and three technical experts:

Hon. Presbitero J. Velasco, Jr.

Chairperson and ponente of MMDA vs. Concerned Residents of Manila

Hon. Jose Midas P. Marquez

Court Administrator

Vice-Chairperson

Members/Technical Experts:

Dr. Gil S. Jacinto

Former Director, UP Marine Science Institute

Dr. Elisea G. Gozun

Chair of Earth Day Network and Former DENR Secretary

Dr. Antonio G.M. La Viña

Former DENR Undersecretary

Dean of the Ateneo School of Government

^[3] Our Decision in Metropolitan Manila Development Authority v. Concerned Residents of Manila Bay, G.R. Nos. 171947-48, December 18, 2008, 574 SCRA 661, 690, states: “RA 9003 took effect on February 15, 2001 and the adverted grace period of five (5) years [in Sec. 37 of RA 9003] which ended on February 21, 2006 has come and gone, but no single sanitary landfill which strictly complies with the prescribed standards under RA 9003 has yet been set up.” (Emphasis supplied.)

CASE 2011-0066: INSURANCE OF THE PHILIPPINE ISLANDS CORPORATION VS. SPOUSES VIDAL S. GREGORIO AND JULITA GREGORIO (G.R. NO. 174104, 14 FEBRUARY 2011, PERALTA, J.) SUBJECTS: LACHES; PRESCRIPTION; ACTION FOR DAMAGES ON GROUND OF FRAUD. (BRIEF TITLE: IPIC VS. SPOUSES GREGORIO)

Republic of the Philippines

Supreme Court

Manila

SECOND DIVISION

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

DECISION

PERALTA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking the reversal and nullification of the Decision¹ of the Court of Appeals (CA), dated June 14, 2006 and its Resolution² dated August 10, 2006 in CA-G.R. CV No. 82303. The assailed CA Decision reversed the Decision³ of the Regional Trial Court (RTC) of Morong, Rizal, Branch 79, in Civil Case No. 748-M in favor of herein petitioner, while the questioned CA Resolution denied petitioner’s motion for reconsideration.

The pertinent antecedent facts of the case, as summarized by the CA, are as follows:

On January 10, 1968, the spouses Vidal Gregorio and Julita Gregorio [herein respondents] obtained a loan from the Insurance of the Philippine Islands Corporation [herein petitioner] (formerly known as Pyramid Insurance Co., Inc.) in the sum of P2,200.00, payable on or before January 10, 1969, with interest thereon at the rate of 12% per annum. By way of security for the said loan, [respondents] executed a Real Estate Mortgage in favor of [petitioner] over a parcel of land known as Lot 6186 of the Morong Cadastre, then covered by Tax Declaration No. 7899 issued by the Municipal Assessor’s Office of Morong, Rizal.

On February 14, 1968, [respondents] again obtained another loan from [petitioner] in the sum of P2,000.00, payable on or before February 14, 1969, with 12% interest per annum. Another Real Estate Mortgage, covering a parcel of land known as Lot No. 6190 of the Morong Cadastre under Tax Declaration No. 10518, was executed by [respondents] in favor of [petitioner].

On April 10, 1968, [respondents] obtained, for the third time, another loan from [petitioner] in the amount of P4,500.00 payable on or before April 10, 1969 with 12% interest per annum. As a security for the loan, [respondents] again executed a Real Estate Mortgage, this time covering two parcels of land: Lot 3499 under Tax Declaration No. 10631-Rizal and a lot situated in Brgy. Kay Kuliat under Tax Declaration No. 3918.

[Respondents] failed to pay their loans, as a result of which the [mortgaged] properties were extrajudicially foreclosed. The extrajudicial foreclosure sale was conducted on December 11, 1969 where [petitioner] was the highest bidder. Since [respondents] failed to redeem the property, [petitioner] consolidated its ownership over the properties. The corresponding Tax Declarations were thereafter issued in the name of [petitioner].⁴

On February 20, 1996, petitioner filed a Complaint⁵ for damages against respondents alleging that in 1995, when it was in the process of gathering documents for the purpose of filing an application for the registration and confirmation of its title over the foreclosed properties, it discovered that the said lots were already registered in the names of third persons and transfer certificates of title (TCT) were issued to them.

Claiming that respondents acted in a fraudulent and malevolent manner in enticing it to grant their loan applications by misrepresenting ownership of the subject properties, petitioner prayed for the grant of actual and exemplary damages as well as attorney’s fees and litigation expenses.

In their Amended Answer,⁶ respondents contended that their obligations in favor of petitioner were all settled by the foreclosure of the properties given as security therefor. In the alternative, respondents argue that petitioner’s cause of action and right of action are already barred by prescription and laches.

In its Decision dated February 23, 2004, the RTC of Morong, Rizal, ruled in favor of petitioner, the dispositive portion of which reads:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and as against the defendants, directing the latter to pay the plaintiff, jointly and severally, as follows:

a. Actual damages in the amount of P1,000,000.00, representing the fair market value of the real properties subject matter of this suit;

b. For defendants’ deceit and bad faith, exemplary damage in the sum of P300,000.00;

c. Attorney’s fees and litigation expenses in the amount of P200,000.00; and

d. Costs of suit.

SO ORDERED.⁷

Aggrieved, respondents appealed the judgment of the trial court to the CA.

On June 14, 2006, the CA rendered a Decision reversing and setting aside the decision of the RTC and dismissing the complaint of petitioner. It ruled that petitioner’s action for damages is barred by prescription and laches.

Petitioner filed a Motion for Reconsideration but the CA denied it in its Resolution of August 10, 2006.

Hence, the instant petition.

Petitioner’s main contention is that the CA erred in ruling that petitioner’s right to any relief under the law has already prescribed or is barred by laches. Petitioner argues that the prescriptive period of its action for damages should be counted from 1995, which it alleges to be the time that it discovered the fraud committed by respondents against it.

On the other hand, the CA ruled that petitioner’s right of action prescribed four years after the subject properties were registered with the Register of Deeds of Morong, Rizal and TCTs were subsequently issued in the names of third persons in the years 1970, 1973 and 1989.

The Court finds the petition meritorious.

Petitioner filed an action for damages on the ground of fraud committed against it by respondents. Under the provisions of Article 1146 of the Civil Code, actions upon an injury to the rights of the plaintiff or upon a quasi-delict must be instituted within four years from the time the cause of action accrued.⁸

The Court finds no error in the ruling of the CA that petitioner’s cause of action accrued at the time it discovered the alleged fraud committed by respondents. It is at this point that the four-year prescriptive period should be counted. However, the Court does not agree with the CA in its ruling that the discovery of the fraud should be reckoned from the time of registration of the titles covering the subject properties.

The Court notes that what has been given by respondents to petitioner as evidence of their ownership of the subject properties at the time that they mortgaged the same are not certificates of title but tax declarations, in the guise that the said properties are unregistered. On the basis of the tax declarations alone and by reason of respondent’s misrepresentations, petitioner could not have been reasonably expected to acquire knowledge of the fact that the said properties were already titled. As a consequence, petitioner may not be charged with any knowledge of any subsequent entry of an encumbrance which may have been annotated on the said titles, much less any change of ownership of the properties covered thereby. As such, the Court agrees with petitioner that the reckoning period for prescription of petitioner’s action should be from the time of actual discovery of the fraud in 1995. Hence, petitioner’s suit for damages, filed on February 20, 1996, is well within the four-year prescriptive period.

Neither may the principle of laches apply in the present case.

The essence of laches or “stale demands” is the failure or neglect for an unreasonable and unexplained length of time to do that which, by exercising due diligence, could or should have been done earlier, thus, giving rise to a presumption that the party entitled to assert it either has abandoned or declined to assert it.⁹ It is not concerned with mere lapse of time; the fact of delay, standing alone, being insufficient to constitute laches.¹⁰

In addition, it is a rule of equity and applied not to penalize neglect or sleeping on one’s rights, but rather to avoid recognizing a right when to do so would result in a clearly unfair situation.¹¹ There is no absolute rule as to what constitutes laches or staleness of demand; each case is to be determined according to its particular circumstances.¹² Ultimately, the question of laches is addressed to the sound discretion of the court and, being an equitable doctrine, its application is controlled by equitable considerations.¹³ It cannot be used to defeat justice or perpetrate fraud and injustice.¹⁴ It is the better rule that courts, under the principle of equity, will not be guided or bound strictly by the statute of limitations or the doctrine of laches when to be so, a manifest wrong or injustice would result.¹⁵

It is significant to point out at this juncture that the overriding consideration in the instant case is that petitioner was deprived of the subject properties which it should have rightly owned were it not for the fraud committed by respondents. Hence, it would be the height of injustice if respondents would be allowed to go scot-free simply because petitioner relied in good faith on the former’s false representations. Besides, as earlier discussed, even in the exercise of due diligence, petitioner could not have been expected to immediately discover respondents’ fraudulent scheme.

WHEREFORE, the instant petition is GRANTED. The Decision and Resolution, dated June 14, 2006 and August 10, 2006, respectively, of the Court of Appeals in CA-G.R. CV No. 82303, are REVERSED and SET ASIDE. The Decision of the Regional Trial Court of Morong, Rizal, Branch 79, dated February 23, 2004 in Civil Case No. 748-M, is REINSTATED.

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

1Penned by Associate Justice Renato C. Dacudao, with Associate Justices Hakim S. Abdulwahid and Monina Arevalo-Zenarosa, concurring; rollo, pp. 28-40.2Id. at 42.3Rollo, pp. 187-194.4Id. at 29-30.5Records, pp. 1-12.6Id. at 77-82.7Id. at 553-554.8Philippine Long Distance Telephone Company v. Dulay, 254 Phil. 30, 36 (1989).9Heirs of Emilio Santioque v. Heirs of Emilio Calma, G.R. No. 160832, October 27, 2006, 505 SCRA 665, 684-685.10GF Equity, Inc. v. Valenzona, G.R. No. 156841, June 30, 2005, 462 SCRA 466, 480.11Bicol Agro-Industrial Producers Cooperative, Inc. (BAPCI) v. Obias, G.R. No. 172077, October 9, 2009, 603 SCRA 173, 196; Bogo-Medellin Milling Co., Inc. v. Court of Appeals, 455 Phil. 285, 303 (2003).12Department of Education, Division of Albay v. Oñate, G.R. No. 161758, June 8, 2007, 524 SCRA 200, 216-217.13Placewell International Services Corporation v. Camote, G.R. No. 169973, June 26, 2006, 492 SCRA 761, 769.14LICOMCEN, Inc. v. Foundation Specialists, Inc., G.R. Nos. 167022 and 169678, August 31, 2007, 531 SCRA 705, 725; Amoroso v. Alegre, Jr., G.R. No. 142766, June 15, 2007, 524 SCRA 641, 656; Galicia v. Manliquez Vda. de Mindo, G.R. No. 155785, April 13, 2007, 521 SCRA 85, 96.15Benatiro v. Heirs of Evaristo Cuyos, G.R. No. 161220, July 30, 2008, 560 SCRA 478, 503.