Appeals Cases

7/27/2019 Appeals Cases

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G.R. No. 141524 September 14, 2005

DOMINGO NEYPES, LUZ FAUSTINO, ROGELIO FAUSTINO, LOLITO VICTORIANO, JACOB OBANIA AND DOMINGO CABACUNGAN, Petitioners,vs.HON. COURT OF APPEALS, HEIRS OF BERNARDO DEL MUNDO, namely: FE,CORAZON, JOSEFA, SALVADOR and CARMEN, all surnamed DEL MUNDO,LAND BANK OF THE PHILIPPINES AND HON. ANTONIO N. ROSALES,Presiding Judge, Branch 43, Regional Trial Court, Roxas, OrientalMindoro,Respondent.

D E C I S I O N

CORONA, J .:

Petitioners Domingo Neypes, Luz Faustino, Rogelio Faustino, Lolito Victoriano, JacobObania and Domingo Cabacungan filed an action for annulment of judgment andtitles of land and/or reconveyance and/or reversion with preliminary injunction beforethe Regional Trial Court, Branch 43, of Roxas, Oriental Mindoro, against the Bureauof Forest Development, Bureau of Lands, Land Bank of the Philippines and the heirsof Bernardo del Mundo, namely, Fe, Corazon, Josefa, Salvador and Carmen.

In the course of the proceedings, the parties (both petitioners and respondents) filedvarious motions with the trial court. Among these were: (1) the motion filed bypetitioners to declare the respondent heirs, the Bureau of Lands and the Bureau ofForest Development in default and (2) the motions to dismiss filed by the respondentheirs and the Land Bank of the Philippines, respectively.

In an order dated May 16, 1997, the trial court, presided by public respondent Judge Antonio N. Rosales, resolved the foregoing motions as follows: (1) the petitioners’motion to declare respondents Bureau of Lands and Bureau of Forest Development indefault was granted for their failure to file an answer, but denied as against therespondent heirs of del Mundo because the substituted service of summons on them

was improper; (2) the Land Bank’s motion to dismiss for lack of cause of action wasdenied because there were hypothetical admissions and matters that could bedetermined only after trial, and (3) the motion to dismiss filed by respondent heirs ofdel Mundo, based on prescription, was also denied because there were factualmatters that could be determined only after trial.1

The respondent heirs filed a motion for reconsideration of the order denying theirmotion to dismiss on the ground that the trial court could very well resolve the issueof prescription from the bare allegations of the complaint itself without waiting forthe trial proper.

In an order2 dated February 12, 1998, the trial court dismissed petitioners’ complaint

on the ground that the action had already prescribed. Petitioners allegedly received acopy of the order of dismissal on March 3, 1998 and, on the 15th day thereafter or

on March 18, 1998, filed a motion for reconsideration. On July 1, 1998, the trial courtissued another order dismissing the motion for reconsideration 3 which petitionersreceived on July 22, 1998. Five days later, on July 27, 1998, petitioners filed a noticeof appeal4 and paid the appeal fees on August 3, 1998.

On August 4, 1998, the court a quo denied the notice of appeal, holding that it wasfiled eight days late.5 This was received by petitioners on July 31, 1998. Petitionersfiled a motion for reconsideration but this too was denied in an order datedSeptember 3, 1998.6

Via a petition for certiorari and mandamus under Rule 65 of the 1997 Rules of CivilProcedure, petitioners assailed the dismissal of the notice of appeal before the Courtof Appeals.

In the appellate court, petitioners claimed that they had seasonably filed their noticeof appeal. They argued that the 15-day reglementary period to appeal started to runonly on July 22, 1998 since this was the day they received the final order of the trialcourt denying their motion for reconsideration. When they filed their notice of appealon July 27, 1998, only five days had elapsed and they were well within thereglementary period for appeal.7

On September 16, 1999, the Court of Appeals (CA) dismissed the petition. It ruledthat the 15-day period to appeal should have been reckoned from March 3, 1998 orthe day they received the February 12, 1998 order dismissing their complaint.

According to the appellate court, the order was the "final order" appealable underthe Rules. It held further:

Perforce the petitioners’ tardy appeal was correctly dismissed for the (P)erfection ofan appeal within the reglementary period and in the manner prescribed by law is

jurisdictional and non-compliance with such legal requirement is fatal and effectivelyrenders the judgment final and executory.8

Petitioners filed a motion for reconsideration of the aforementioned decision. This

was denied by the Court of Appeals on January 6, 2000.

In this present petition for review under Rule 45 of the Rules, petitioners ascribe thefollowing errors allegedly committed by the appellate court:

I

THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE PETITIONERS’PETITION FOR CERTIORARI AND MANDAMUS AND IN AFFIRMING THE ORDER OFTHE HON. JUDGE ANTONIO N. ROSALES WHICH DISMISSED THE PETITIONERS’ APPEAL IN CIVIL CASE NO. C-36 OF THE REGIONAL TRIAL COURT, BRANCH 43,

ROXAS, ORIENTAL MINDORO, EVEN AFTER THE PETITIONERS HAD PAID THE

APPEAL DOCKET FEES.



II

THE HONORABLE COURT OF APPEALS LIKEWISE ERRED IN RULING AND AFFIRMING THE DECISION OR ORDER OF THE RESPONDENT HON. ANTONIO M.ROSALES THAT PETITIONERS’ APPEAL WAS FILED OUT OF TIME WHENPETITIONERS RECEIVED THE LAST OR FINAL ORDER OF THE COURT ON JULY 22,1998 AND FILED THEIR NOTICE OF APPEAL ON JULY 27, 1998 AND PAID THE

APPEAL DOCKET FEE ON AUGUST 3, 1998.

III

THE HONORABLE COURT OF APPEALS FURTHER ERRED IN RULING THAT THEWORDS "FINAL ORDER" IN SECTION 3, RULE 41, OF THE 1997 RULES OF CIVILPROCEDURE WILL REFER TO THE [FIRST] ORDER OF RESPONDENT JUDGE HON.

ANTONIO M. MORALES DATED FEBRUARY 12, 1998 INSTEAD OF THE LAST ANDFINAL ORDER DATED JULY 1, 1998 COPY OF WHICH WAS RECEIVED BYPETITIONERS THROUGH COUNSEL ON JULY 22, 1998.

IV.

THE HONORABLE COURT OF APPEALS FINALLY ERRED IN FINDING THAT THEDECISION IN THE CASE OF DENSO, INC. V. IAC, 148 SCRA 280, IS APPLICABLE INTHE INSTANT CASE THEREBY IGNORING THE PECULIAR FACTS ANDCIRCUMSTANCES OF THIS CASE AND THE FACT THAT THE SAID DECISION WASRENDERED PRIOR TO THE ENACTMENT OF THE 1997 RULES OF CIVILPROCEDURE.9

The foregoing issues essentially revolve around the period within which petitionersshould have filed their notice of appeal.

First and foremost, the right to appeal is neither a natural right nor a part of dueprocess. It is merely a statutory privilege and may be exercised only in the mannerand in accordance with the provisions of law. Thus, one who seeks to avail of theright to appeal must comply with the requirements of the Rules. Failure to do sooften leads to the loss of the right to appeal.10 The period to appeal is fixed by bothstatute and procedural rules. BP 129,11as amended, provides:

Sec. 39. Appeals. – The period for appeal from final orders, resolutions, awards, judgments, or decisions of any court in all these cases shall be fifteen (15) dayscounted from the notice of the final order, resolution, award, judgment, or decisionappealed from. Provided, however, that in habeas corpus cases, the period forappeal shall be (48) forty-eight hours from the notice of judgment appealed from. xx x

Rule 41, Section 3 of the 1997 Rules of Civil Procedure states:

SEC. 3. Period of ordinary appeal. ! The appeal shall be taken within fifteen(15) days from the notice of the judgment or final order appealed from .Where a record on appeal is required, the appellant shall file a notice of appeal and arecord on appeal within thirty (30) days from the notice of judgment or final order.

The period to appeal shall be interrupted by a timely motion for new trial orreconsideration. No motion for extension of time to file a motion for new trial orreconsideration shall be allowed. (emphasis supplied)

Based on the foregoing, an appeal should be taken within 15 days from the notice of judgment or final order appealed from. A final judgment or order is one that finallydisposes of a case, leaving nothing more for the court to do with respect to it. It isan adjudication on the merits which, considering the evidence presented at the trial,declares categorically what the rights and obligations of the parties are; or it may bean order or judgment that dismisses an action.12

As already mentioned, petitioners argue that the order of July 1, 1998 denying theirmotion for reconsideration should be construed as the "final order," not the February12, 1998 order which dismissed their complaint. Since they received their copy of thedenial of their motion for reconsideration only on July 22, 1998, the 15-dayreglementary period to appeal had not yet lapsed when they filed their notice of

appeal on July 27, 1998.

What therefore should be deemed as the "final order," receipt of which triggers thestart of the 15-day reglementary period to appeal " the February 12, 1998 orderdismissing the complaint or the July 1, 1998 order dismissing the MR?

In the recent case of Quelnan v. VHF Philippines, Inc.,13 the trial court declaredpetitioner Quelnan non-suited and accordingly dismissed his complaint. Upon receiptof the order of dismissal, he filed an omnibus motion to set it aside. When theomnibus motion was filed, 12 days of the 15-day period to appeal the order hadlapsed. He later on received another order, this time dismissing his omnibus motion.He then filed his notice of appeal. But this was likewise dismissed ! for having been

filed out of time.

The court a quo ruled that petitioner should have appealed within 15 days after thedismissal of his complaint since this was the final order that was appealable underthe Rules. We reversed the trial court and declared that it was the denial of themotion for reconsideration of an order of dismissal of a complaint which constitutedthefinal order as it was what ended the issues raised there.

This pronouncement was reiterated in the more recent case of Apuyan v. Haldemanet al.14 where we again considered the order denying petitioner Apuyan’s motion forreconsideration as the final order which finally disposed of the issues involved in thecase.



Based on the aforementioned cases, we sustain petitioners’ view that the order datedJuly 1, 1998 denying their motion for reconsideration was the finalorder contemplated in the Rules.

We now come to the next question: if July 1, 1998 was the start of the 15-dayreglementary period to appeal, did petitioners in fact file their notice of appeal ontime?

Under Rule 41, Section 3, petitioners had 15 days from notice of judgment or finalorder to appeal the decision of the trial court. On the 15th day of the original appealperiod (March 18, 1998), petitioners did not file a notice of appeal but instead optedto file a motion for reconsideration. According to the trial court, the MR onlyinterrupted the running of the 15-day appeal period.15 It ruled that petitioners,having filed their MR on the last day of the 15-day reglementary period to appeal,had only one (1) day left to file the notice of appeal upon receipt of the notice ofdenial of their MR. Petitioners, however, argue that they were entitled under theRules to a fresh period of 15 days from receipt of the "final order" or the orderdismissing their motion for reconsideration .

In Quelnan and Apuyan , both petitioners filed a motion for reconsideration of thedecision of the trial court. We ruled there that they only had the remaining time of

the 15-day appeal period to file the notice of appeal. We consistently applied thisrule in similar cases,16 premised on the long-settled doctrine that the perfection of anappeal in the manner and within the period permitted by law is not only mandatorybut also jurisdictional.17 The rule is also founded on deep-seated considerations ofpublic policy and sound practice that, at risk of occasional error, the judgments andawards of courts must become final at some definite time fixed by law.18

Prior to the passage of BP 129, Rule 41, Section 3 of the 1964 Revised Rules of Courtread:

Sec. 3. How appeal is taken. — Appeal maybe taken by serving upon theadverse party and filing with the trial court within thirty (30) days from

notice of order or judgment, a notice of appeal, an appeal bond, and arecord on appeal. The time during which a motion to set aside the judgment ororder or for new trial has been pending shall be deducted, unless such motion fails tosatisfy the requirements of Rule 37.

But where such motion has been filed during office hours of the last day of theperiod herein provided, the appeal must be perfected within the day following that inwhich the party appealing received notice of the denial of said motion. 19 (emphasissupplied)

According to the foregoing prov ision, the appeal period previously consisted of 30days. BP 129, however, reduced this appeal period to 15 days. In the deliberations of

the Committee on Judicial Reorganization

20

that drafted BP 129, the raison d’etre behind the amendment was to shorten the period of appeal 21 and enhance the

efficiency and dispensation of justice. We have since required strict observance ofthis reglementary period of appeal. Seldom have we condoned late filing of notices ofappeal,22 and only in very exceptional instances to better serve the ends of justice.

In National Waterworks and Sewerage Authority and Authority v. Municipality ofLibmanan ,23 however, we declared that appeal is an essential part of our judicialsystem and the rules of procedure should not be applied rigidly. This Court has onoccasion advised the lower courts to be cautious about not depriving a party of theright to appeal and that every party litigant should be afforded the amplest

opportunity for the proper and just disposition of his cause, free from the constraintof technicalities.

In de la Rosa v. Court of Appeals ,24 we stated that, as a rule, periods which requirelitigants to do certain acts must be followed unless, under exceptional circumstances,a delay in the filing of an appeal may be excused on grounds of substantial justice.There, we condoned the delay incurred by the appealing party due to strongconsiderations of fairness and justice.

In setting aside technical infirmities and thereby giving due course to tardy appeals,we have not been oblivious to or unmindful of the extraordinary situations that meritliberal application of the Rules. In those situations where technicalities were

dispensed with, our decisions were not meant to undermine the force and effectivityof the periods set by law. But we hasten to add that in those rare cases whereprocedural rules were not stringently applied, there always existed a clear need toprevent the commission of a grave injustice. Our judicial system and the courts havealways tried to maintain a healthy balance between the strict enforcement ofprocedural laws and the guarantee that every litigant be given the full opportunityfor the just and proper disposition of his cause.25

The Supreme Court may promulgate procedural rules in all courts.26 It has the soleprerogative to amend, repeal or even establish new rules for a more simplified andinexpensive process, and the speedy disposition of cases. In the rules governingappeals to it and to the Court of Appeals, particularly Rules 42, 27 4328 and 45,29 the

Court allows extensions of time, based on justifiable and compelling reasons, forparties to file their appeals. These extensions may consist of 15 days or more.

To standardize the appeal periods provided in the Rules and to afford litigants fairopportunity to appeal their cases, the Court deems it practical to allow a fresh periodof 15 days within which to file the notice of appeal in the Regional Trial Court,counted from receipt of the order dismissing a motion for a new trial or motion forreconsideration. 30

Henceforth, this "fresh period rule" shall also apply to Rule 40 governing appealsfrom the Municipal Trial Courts to the Regional Trial Courts; Rule 42 on petitions forreview from the Regional Trial Courts to the Court of Appeals; Rule 43 on appealsfrom quasi-judicial agencies31 to the Court of Appeals and Rule 45 governing appealsby certiorari to the Supreme Court.32 The new rule aims to regiment or make the



appeal period uniform, to be counted from receipt of the order denying the motionfor new trial, motion for reconsideration (whether full or partial) or any final order orresolution.

We thus hold that petitioners seasonably filed their notice of appeal within the freshperiod of 15 days, counted from July 22, 1998 (the date of receipt of notice denyingtheir motion for reconsideration). This pronouncement is not inconsistent with Rule41, Section 3 of the Rules which states that the appeal shall be taken within 15 daysfrom notice of judgment or final order appealed from. The use of the disjunctive

word "or" signifies disassociation and independence of one thing from another. Itshould, as a rule, be construed in the sense in which it ordinarily implies. 33 Hence,the use of "or" in the above provision supposes that the notice of appeal may be filedwithin 15 days from the notice of judgment or within 15 days from notice of the"final order," which we already determined to refer to the July 1, 1998 order denyingthe motion for a new trial or reconsideration.

Neither does this new rule run counter to the spirit of Section 39 of BP 129 whichshortened the appeal period from 30 days to 15 days to hasten the disposition ofcases. The original period of appeal (in this case March 3-18, 1998) remains and therequirement for strict compliance still applies. The fresh period of 15 days becomessignificant only when a party opts to file a motion for new trial or motion for

reconsideration . In this manner, the trial court which rendered the assailed decisionis given another opportunity to review the case and, in the process, minimize and/orrectify any error of judgment. While we aim to resolve cases with dispatch and tohave judgments of courts become final at some definite time, we likewise aspire todeliver justice fairly.

In this case, the new period of 15 days eradicates the confusion as to when the 15-day appeal period should be counted – from receipt of notice of judgment (March 3,1998) or from receipt of notice of "final order" appealed from (July 22, 1998).

To recapitulate, a party litigant may either file his notice of appeal within 15 daysfrom receipt of the Regional Trial Court’s decision or file it within 15 days from

receipt of the order (the "final order") denying his motion for new trial or motion forreconsideration. Obviously, the new 15-day period may be availed of only if eithermotion is filed; otherwise, the decision becomes final and executory after the lapseof the original appeal period provided in Rule 41, Section 3.

Petitioners here filed their notice of appeal on July 27, 1998 or five days from receiptof the order denying their motion for reconsideration on July 22, 1998. Hence, thenotice of appeal was well within the fresh appeal period of 15 days, as alreadydiscussed.34

We deem it unnecessary to discuss the applicability of Denso (Philippines), Inc. v.IAC 35 since the Court of Appeals never even referred to it in its assailed decision.

WHEREFORE, the petition is hereby GRANTED and the assailed decision of theCourt of Appeals REVERSEDand SET ASIDE. Accordingly, let the records of thiscase be remanded to the Court of Appeals for further proceedings.

No costs.

SO ORDERED.



G.R. No. L-61042 April 15, 1987

HECTOR L. ONG, petitioner,vs.MARILYN TATING AND ROBERT TATING, ET AL., respondents.

NARVASA, J.:

The issue in this case concerns the jurisdiction of an inferior Court to take cognizanceof a motion impugning the sheriff's authority to execute a final judgment in anejectment case — which commands payment of rentals in arrears — againstpersonalty claimed as theirs by persons formerly residing in the leased premisestogether with the evicted defendant-lessee.

An action of desahucio was instituted in the City Court of Quezon City by petitionerOng against his lessee, Evangeline Roces. 1 This in time culminated in a judgmentby the Court of First Instance (Branch XVIII) 2 disposing of the case as follows:

WHEREFORE, premises considered, the judgment of the City Court is setaside and in lieu thereof judgment is rendered ordering defendant

Evangeline Roces and all persons claiming under her to vacate plaintiff'spremises located at 169-D, Tolentino St., San Francisco del Monte, QuezonCity; to pay rentals in arrears in the sum of P10,920.00 as of September1978 and P260.00 a month from October 1978 until the premises arevacated with interest at 12% per annum; P1,000.00 as attomey's fees andthe costs. 3

The decision became final and executory, no appeal having been taken therefrom;and in due course, the records of the case were remanded to the City Court.

On Ong's application, the City Court directed execution of the judgment. Accordingly,the sheriff cleared the premises of its occupants, which included Anacleto Tating(Evangeline's stepfather and lawyer), Marilyn Tating (Anacleto's wife), and RobertTating. 4

The sheriff also levied on certain chattels found in the place: a "Citizen" stereo set; a"Sanyo" television set; a "Frigidaire" refrigerator; and a "Hitachi" electric desk fan.Marilyn and Robert Tating sought to retrieve these appliances from the sheriff,alleging that the articles belonged to them and not to the lessee, EvangelineRoces.5 To this end, Robert filed with the sheriff a "Third Party Claim" datedSeptember 13, 1979 as regards the "Citizen" stereo set; and Marilyn, a similar claimwith respect to the other chattels. 6 When these proved unavailing, they filed withthe City Court Identical applications dated September 17, 1979, entitled "UrgentMotion for Suspension of Sheriff Sale and for Release of Properties Wrongfully LeviedUpon on Execution," in which they set out their respective titles to the goods and

prayed that the execution sale thereof scheduled on September 19, 1979 be abated

and that, after hearing, said goods be released to them as the true and lawfulowners thereof. 7

To neutralize the Tatings' moves, and so that the execution sale might proceed asscheduled, Ong posted two (2) surety bonds 8 to indemnify the sheriff for anyliability for damages. 9 But by Order dated September 19, 1979 the City Courtrestrained the sale and set the Tatings' motions for hearing. 10

What Ong did was to present an "Omnibus Opposition, etc. " dated October 2,1979, 11 contending that the Tatings' motions should have been filed with the Courtof First Instance since it was the latter's decision which was being executed; andthat, in any event, the Tatings' remedy was "to file an action for damages againstthe indemnity bonds after the auction sale. " He also theorized that —

* * Atty. Tating, and the third party claimants having stayed in the premisesand having enjoyed the same should be required to pay the back rentals,attorney's fees and sheriff's and legal expenses (and should not) escape byavoiding paying any amount as stated in the judgment. * * 12

Ong later filed a "Motion to Inhibit" dated January 9, 1980, which the City Courtdenied by Order dated January 23, 1980. The Court also directed Ong's counsel toexplain certain apparently contumacious statements in the motion. The Order readsas follows:

O R D E R

Considering the Motion to Inhibit filed by the plaintiff, dated January 9,1980, and the Manifestation filed by the third party claimants, MarilynTating and Robert Tating, dated January 16, 1980, this Court finds themotion without merit and hereby resolves to deny it.

Furthermore, Atty. Manuel E. Yuzon, counsel for the plaintiff, is herebyordered to explain in writing within ten (10) days from notice hereof why heshould not be cited for indirect contempt of court for stating in his Motion toInhibit that if this Court 'proceeds to hear and resolve the third-party claims,it is foregone conclusion that the third-party claimants will surely win andthe plaintiff will lose,' thereby casting aspersions on the integrity of thisCourt and degrading the administration of justice.

In the meantime, let the continuation of the hearing of the motion forsuspension of sheriff's sale etc. be set for February 11, 1980, at 9:00 o'clockin the morning.

SO ORDERED. 13



Ong promptly initiated proceedings to negate this Order. He filed with the Court ofFirst Instance on February 7, 1980 a petition for certiorari and prohibition, withapplication for preliminary injunction. 14 Acting thereon, the Court (Branch IX)promulgated an Order dated April 2, 1980 directing the maintenance of the statusquo and commanding that the City Court refrain "from hearing and deciding the thirdparty claims and the urgent motion for suspension of Sheriff's Sale, etc. until theresolution of the injunction * *. 15 It afterwards rendered a decision, datedDecember 15, 1981, 16 pertinently reading as follows:

The issue in this petition boils down to this should the third-party claims beheard and decided by the lower court.

While it is true that the respondents Marilyn and Robert Tating were notparties in the ejectment case because the lease was between the petitionerand Evangeline Roces, they stayed with her and the decision of theappellate court covered them as it ordered "Evangeline Roces and allpersons claiming under her to vacate plaintiff's premises" ... Besides, theprocedure followed by said private respondents in vindicating their rightsover the four (4) levied appliances is not the one sanctioned by law for theyshould have filed a separate and independent action making parties thedeputy sheriff and the petitioner and making them responsible for the

execution (Santos et al., vs. Hon. Mojica, L-19618, Feb. 28, 1964).

WHEREUPON, premises considered, the petitioner Hector L. Ong is entitledto relief. The decision of Branch XVIII of the CFI Quezon City which is finaland executory, stands.

The preliminary injunction issued on April 2, 1980 is hereby orderedpermanent. 17

The Tatings appealed to the Court of Appeals by "a petition for review filed * * onMarch 1, 1982. 18 In its decision, promulgated on June 23, 1982, after dueproceedings, 19 the Court of Appeals expressed puzzlement why the matter of the

execution and related incidents were passed upon by the lower court, when the onlyissue was the correctness of the City Judge's refusal to inhibit, himself. 20 Itdismissed the petition, and sent the case back to the City Court for furtherproceedings." Said the Court:

It is a puzzle to Us why the hearing went out of bounds. Instead ofdetermining merely the propriety of the order of denial of the motion toinhibit, the parties and the Court of First Instance * * went into the meritsof the propriety of the execution of the decision of the City Court, theauction sale of the appliances claimed by the Tatings, the levy,the thirdparty claim,the indemnity bond, and the motion to suspend the sale and thefilling of the sheriffs bond matters which are properly only to be treated in aseparate proceeding.

From the records,We see that if at all the matter of execution of thedecision ** (etc.) were mentioned,it was merely to give a background tothe motion to inhibit Judge Laquio, Jr. from proceeding to take furtherparticipation in the incident of the execution ** and the incident stemmingtherefrom.

The propriety of the denial of the motion to inhibit was lost in the maze ofthe irrelevant facts and incidents taken during the hearing of this case inthe court below.

A thorough review of the dec ision of the Court of First Instance * * BranchIX, in this certiorari case shows that the Presiding Judge * * erroneouslytreated the pleadings before it in Civil Case No. 29245. Thus, We areconstrained to set the same aside and remand the case to the City Courtpresided over by Judge Laquio, Jr. for further proceedings. Principally, Werule the denial of the motion for Judge Laquio, Jr. to inhibit himself from theejectment case No. 28309, Quezon City Court, was well taken. The petitionassailing the order of denial which is the main issue in Civil Case No. 29245is without merit. * * 21

Ong is now before this Court, praying for the reversal of the decision of the Court of

Appeals, and the perpetual inhibition of the City Judge "from further hearing anddeciding the (Tatings') third-party claims." 22

It will not do to dismiss the petition as the IAC did by declaring that the only issueinvolved is the propriety of the City Judge's denial of the motion for his inhibition,and pronouncing the denial to be correct. Not only is such a limitation of the issuesdisputed by Ong, but the resolution of the single point would leave unansweredseveral other nagging questions. The opportunity to resolve those questions havingbeen presented, the Court will do precisely that, to the end that the controversy maybe expeditiously laid to rest,

Three theories are advocated by Ong, namely:

1. From the decision of the Court of First Instance (Branch IX) on his petition forcertiorari and prohibition, the Tatings' remedy was appeal (by writ of error), not apetition for review, to the Court of Appeals.

2. The City Court lost jurisdiction to hear and determine the Tatings' third-partyclaims upon the filing by him (Ong) of the bonds prescribed by Section 17, Rule 39,the purpose of which is precisely to hold the sheriff free from liability for damages forproceeding with the execution sale despite said third- party claims.

3. Corollarily, the Tatings' remedy was to file a separate suit to recover against saidbonds posted by Ong, whatever damages might be suffered by them by reason of

the effectuation of the execution sale.23



Ong is correct in arguing that the mode of appeal to the Court of Appeals available tothe Tatings from the adverse judgment of the CFI in the action of certiorari andprohibition instituted by him, was not by "petition for review" under Section 22 ofB.P. Blg., 129 24 but an ordinary appeal (by writ of error) under Rule 41, Rules ofCourt and Section 39, of B.P. Blg. 129 (also, Section 20 of the Interim Rules) A"petition for review" is the correct mode of appeal from a judgment rendered by aCFI (RTC) in the exercise of appellate jurisdiction i.e., when it decides a caseappealed to it from the inferior court. In such a case, the appeal is not a matter ofright, its acceptance being discretionary on the Court of Appeals, which "may give it

due course only when the petition shows prima facie that the lower court hascommitted an error of fact or law that will warrant a reversal or modification of thedecision or judgment sought to be reviewed." On the other hand, when a CFI (RTC)adjudicates a case in the exercise of its original jurisdiction, the correct mode ofelevating the judgment to the Court of Appeals is by ordinary appeal, or appeal bywrit of error, involving merely the filing of a notice of appeal except only if the appealis taken in special proceedings and other cases wherein multiple appeals are allowedunder the law, in which event the filing of a record on appeal is additionallyrequired. 25 Of course, when the appeal would involve purely questions of law or anyof the other cases (except criminal cases as stated hereunder) specified in Section5(2), Article X of the Constitution, 26 it should be taken to the Supreme Courtby petition for review on certiorari in accordance with Rules 42 and 45 of the Rulesof Court. 27However, in criminal cases in which the penalty imposed is death or life

imprisonment, the appeal to the Supreme Court is by ordinary appeal on bothquestions of fact and law. In cases where the death penalty is imposed, there is anautomatic review by the Supreme Court. (Sec. 3 of the 1985 Rules on CriminalProcedure)

The mode by which the Tatings thus brought up to the Court of Appeals the adverse judgment of the CFI — i.e. , by petition for review — was erroneous. Th is aspect ofthe case apparently escaped the Appellate Court's attention; it did not treat of it atall. This is however of no moment. The need of finally resolve this case makes thisdefect inconsequential. In any event, the defect has been waived, no issueconcerning it having been raised in the proceedings before the Court of Appeals. 28

Ong's second contention — that the posting by him of a bond to indemnify thesheriff for damages for proceeding with an execution sale despite the existence ofthird-party claims on the property levied on (pursuant to Section 17, Rule 39) causedthe Trial Court to lose jurisdiction to deal with the third-party claimants' plea for reliefagainst what they deemed to be an act of trespass by the sheriff is incorrect.

Certain it is that the Trial Court has plenary jurisdiction over the proceedings for theenforcement of its judgments. It has undeniable competence to act on motions forexecution (whether execution be a matter of right or discretionary upon the Court),issue and quash writs, determine if property is exempt from execution, or fix thevalue of property claimed by third persons so that a bond equal to such value maybe posted by a judgment creditor to indemnify the sheriff against liability fordamages, resolve questions involving redemption, examine the judgment debtor andhis debtors, and otherwise perform such other acts as may be necessary or incidental

to the carrying out of its decisions. It may and should exercise control andsupervision over the sheriff and other court officers and employees taking part in theexecution proceedings, and correct them in the event that they should err in thedischarge of their functions.

Now, it is axiomatic that money judgments are enforceable only against propertyunquestionably belonging to the judgment debtor. One man's goods shall not be soldfor another man's debts, as the saying goes. 29Therefore, the sheriff acts properlyonly when he subjects to execution property undeniably belonging to the judgment

debtor. But to the extent that he levies on assets of a third person, in which the judgment debtor has no interest, to that extent he acts as a trespasser, and to thatextent he is amenable to control and correction by the Court. 30

When the sheriff thus seizes property of a third person in which the judgment debtorholds no right or interest, and so incurs in error, the supervisory power of the Courtwhich has authorized execution may be invoked by the third person. Upon dueapplication by the third person, and after summary hearing, the Court may commandthat the property be released from the mistaken levy and restored to the rightfulowner or possessor. What the Court can do in these instances however is limited to adetermination of whether the sheriff has acted rightly or wrongly in the performanceof his duties in the execution of the judgment, more specifically, if he has indeed

taken hold of property not belonging to the judgment debtor. The Court does notand cannot pass upon the question of title to the property, with any character offinality. It can treat of that matter only in so far as may be necessary to decide if theSheriff has acted correctly or not. 31 The Court can require the sheriff to restore theproperty to the claimant's possession if warranted by the evidence. If the claimant'sproofs do not however persuade the Court of his title or right of possession thereof,the claim will of course be denied.

This remedy is not that of intervention, which is dealt with in Rule 12 of the Rules ofCourt, and may be availed of only before or during trial, not thereafter, and certainlynot when judgment is executory. It is rather simply an invocation of the Court'spower of supervision and control over the actuations of its officers and employees tothe end that it be assured that these conform to the law. 32

Independently of the recourse just indicated, and even before or without availmentthereof, the person who claims that his property has been wrongfully seized byresort to the remedy known as terceria set out in Section 17, Rule 39 of the Rules ofCourt, viz:

SEC. 17. Proceedings where property claimed by third person. — If propertylevied on be claimed by any other person than the judgment debtor or hisagent, and such person make an affidavit of his title thereto or right to thepossession thereof, stating the grounds of such right or title, and serve thesame upon the officer making the levy, and a copy thereof upon the

judgment creditor, the of ficer shag not be bound to keep the property,

unless such judgment creditor or his agent, on demand of the officer,indemnify the officer against such claim by a bond in a sum not greater



than the value of the property levied on. In case of disagreement as to suchvalue, the same shall be determined by the court issuing the writ ofexecution.

The officer is not liable for damages, for the taking or keeping of theproperty, to any third-party claimant unless a claim is made by the latterand unless an action for damages is brought by him against the officerwithin one hundred twenty (120) days from the date of the filing of thebond. But nothing herein contained shall prevent such claimant or any third

person from vindicating his claim to the property by any proper action.

xxx xxx xxx

The remedies just mentioned are without prejudice to "any proper action" that athird-party claimant may deem suitable, to vindicate "his claim to the property." Sucha "proper action," in the context of Section 17 of Rule 39, has been held to refer toan action distinct and separate from that in which the judgment is being enforced.

Such a "proper action" is, quite obviously, entirely distinct from the explicitlydescribed in Section 17 of Rule 39, i.e., "an action for damages ** brought (by athird-party claimant) against the officer within one hundred twenty (120) days from

the date of the filing of the bond ** for the taking or keeping of the property"subject of theterceria. Quite obviously, too, this "proper action" would have for itsobject the recovery of the possession of the property seized by the sheriff, as well asdamages resulting from the allegedly wrongful seizure and detention thereof despitethe third-party claim; and it may be brought against the sheriff, of course, and suchother parties as may be alleged to have wrongful with the sheriff in the supposedlywrongful execution proceedings, such as the judgment creditor himself. And such a"proper action," as above pointed out, is and should be an entirety separate anddistinct action from that in which execution has issued, if instituted by a stranger tothe latter suit.33

** (C)onstruing Section 17 of Rule 39 of the Revised Rules of Court, the

rights of third-party claimant over certain properties levied upon by thesheriff to satisfy the judgment should not be decided in the action wherethe third- party claims have been presented, but in the separate actioninstituted by the claimants.

This is evident from the very nature of the proceedings. In HeraldPublishing, supra. We intimated that the levy by the sheriff of a property byvirtue of a writ of attachment may be considered as made under authorityof the court only when the property levied upon unquestionably belongs tothe defendant. If he attaches properties other than those of the defendant,he acts beyond the acts of his authority. Otherwise stated, the court issuinga writ of execution is supposed to enforce its authority only over propertiesof the judgment debtor, and should a third party appear to claim the

property levied upon by the sheriff, the procedure laid down by the Rules isthat such claim should be the subject of a separate and independent action.

As we explained in the Quebral case (Quebral v. Garduno , 67 Phil., 316),since the third-party claimant is not one of the parties to the action, shecould not strictly speaking, appeal from the order denying her claim, butshould file a separate reivindicatory action against the execution creditor orthe purchaser of her property after the sale at public auction, or a complaintfor damages against the bond filed by the judgment creditor in favor of the

sheriff.

We reiterated this in Potenciano v. Dineros, et al. (97 Phil. 196; AgriculturalCredit Administration v. Lasam 28 SCRA 1098) when We ruled that "suchreivindicatory action is reserved to the third-party claimant by Section 15 ofRule 39 despite disapproval of his claim by the court itself (Planas v.Madriga 94 Phil. 754, Lara v. Bayona, G.R. No. L-7920, decided May 10,1955)." This rule is dictated by reasons -of convenience, as "intervention ismore likely to inject confusion into the issues between the parties in thecase *** with which the third-party claimant has nothing to do and therebyretard instead of facilitate the prompt dispatch of the controversy which isthe underlying objective of the rules of pleading and practice" ( Herald

Publishing, supra, p. 101). Besides, intervention may not be permitted aftertrial has been concluded and a final judgment rendered in the case. 34

In such separate action, the court may issue a writ of preliminary injunction againstthe sheriff enjoining him from proceeding with the execution sale. 34-A

Upon the other hand, if the claim of impropriety on the part of the sheriff in theexecution proceedings is made by a party to the action, not a stranger thereto, anyrelief therefrom may be applied for with, and obtained from, only the executingcourt; and this is true even if a new party has been impleaded in the Suit. 35

In any case, Ong's claim that the filing of the judgment creditor's bond operated to

divest the Court of jurisdiction to control and supervise the conduct of the executionsale must be rejected. That bond had absolutely no effect on the Court's jurisdiction.It was merely "equivalent to the personal interference of the indemnitor and hisbondsmen in the course of the proceeding by directing or requesting the sheriff tohold and sell the goods as if they were the property of the defendants in attachment.In doing this they (the indemnitor and his bondsmen) assume the direction andcontrol of the sheriff's future action so far as it constitutes a trespass; and theybecome to that extent the principals and he their agent in the transaction. Thismakes them responsible for the continuance of the wrongful possession and for thesale and conversion of the goods; in other words, for all the real damages whichplaintiff sustains (Love Joy vs. Murray, 70 U.S. 129). 36

Ong's third theory — that the Tatings' remedy in the event of the denial of their

application for relief by the Trial Court is a separate action for recovery of possession



of the goods by them claimed plus damages for wrongful detention — is correct andshould be sustained, in line with the doctrine in Bayer, supra, 37 and the other caseswhich followed it. 38

As regards the matter of the inhibition of the City Court Judge, the inc ident has beencorrectly determined by the Court of Appeals. No proper ground exists to disqualifyHis Honor from continuing to act in Civil Case No. 28309.

One last issue remains, and that is, whether the Tatings, who were living withEvangeline Roces in the premises lease by the latter from Ong, are hable for thepayment of rentals in arrears jointly or solidarily with said Evangeline Roces. Theyare not. They were never impleaded as parties and never served with summons inthe suit for ejectment initiated by Ong against Evangeline Roces. The Court thereforenever acquired jurisdiction over them. And while the judgment against EvangelineRoces, in so far as it decrees her ouster from the leased premises, may be enforcednot only against her but also against "any person or persons claiming under"her 39that judgment, in so far as it directs payment of money by way of arrearagesin rents, is not binding on the Tatings and definitely not enforceable against them.

WHEREFORE, the petition is dismissed for lack of merit. The case shall be remandedto the Metropolitan Trial Court at Quezon City which shall forthwith resolve the

Tatings' pending motions in Civil Case No. 28309, consistently with the principlesherein set forth. Costs against petitioner.

SO ORDERED.

Yap (Chairman), Melencio-Herrera, Cruz, Feliciano, Gancayco and Sarmiento, JJ.,concur.



G.R. No. L-25140 July 15, 1980

UNIVERSAL MOTORS CORPORATION, plaintiff-appellant,vs.MARIANO D. VELASCO, ET AL., defendants-appellees.

ABAD SANTOS, J.:

This is an appeal on a question of law from a decision of the Court of First Instanceof Manila. Since the appeal was perfected in 1965 before the enactment of R.A. No.5440 which took effect on September 7, 1968, a record on appeal was submitted.The plaintiff-appellant filed a brief but defendants-appellees having failed to file theirbrief within the reglementary period the case was submitted for decision withouttheir brief.

The uncontroverted facts are:

Mariano T. Velasco bought from Universal Motors C tion a Mercedes-Benz truck oninstallment basis. To the balance of the purchase price of P35,243.68 he executed apromissory note and executed a chattel mortgage over the truck. He defaulted in his

payments and as a consequence the Vendor asked him to surrender the truck inaccordance will the term and conditions of the chattel mortgage contract. lie failedand refused to surrender the truck whereupon the vendor instituted an action in thecourt a quo to recover the truck preparatory to foreclosure of the chattel mortgage.

As an alternative, in case the truck could not be recovered, the plaintiff asked for thepayment, among other things, of its vs in the sum of P23,763.09 plus legal interest.By virtue of a writ of replevin issued by said court, the seller was able to re-possessthe truck.

Going back to the action which was commenced on December 29, 1964, thedefendants failed to answer the complaint within the reglementary period and weredeclare in default. On April 26, 1965, defendant Velasco filed a motion to lift thedefault order which was granted. He did not, however, file an answer. In lieu thereof

the parties, on June 15, 1965, submitted the following:

STIPULATION OF FACTS

COME NOW the parties in the above-entitled case, through their respectivecounsel and before this Honorable Court respectfully stipulate:

1. That defendant was, at the time of the filing of the complaint indebted toplaintiff in the principal sum of P23,763.09, which amount is covered by apromissory note secured by a Chattel Mo (Annex 'A' of the complaint) on amotor vehicle described in paragraph 2 of the complaint

2. That notwithstanding defendant being in default of this aforesaidmentioned sum and notwithstanding demands made by plain tiff onDecember 11, 1964, defendant failed to surrender the chattel described inparagraph 2 of the complaint thereby preventing plaintiff from f on thesame;

3. That plaintiff is entitled to the possession of the chattel bed in paragraph2 of the complaint and was constrained to institute the t action for recoveryof possession as a preliminary stop to forced.

4. That in the se and execution of the writ of seizure issued in this cage andin g the possession of the vehicle subjected of the complaint plaintiff theoccured the following expenses:

a) Premium on replevin bond P971.47

b) Sheriff's expenses 300.00

c) Costs of suit 132.00

d) Mechanic's lien paid by plaintiff in defendant defendant's behalf to G.Cruz Truck Body Builder & Welding Shop 3,000.00 P 4,403.47

5. That on May 21, 1965, plaintiff received from the Workmen's InsuranceCompany, Inc., the sum of P1,870.99 in full settlement of the damagessustained by the truck subject matter hereof when it figured in an accidenton December 5, 1964, totally immobile the motor vehicle

6. That subsequent to said event, defect failed to deliver the truck mquestion despite demands made by plaintiff,

7. That the following stipulation is found in paragraph 14 of the Chattel

Mortgage (Annex 'A') of the complaint the genuineness and due executionof which is hereby admitted by the defendant:

14. That in case of non-compliance or violation; or default by themortgagor, and forced or any other legal remedy is undertaken by themortgagee to compel pa of compensation in the concept of attorney's feesand cost payment of his obligation the mortgagee shall be entitled to areasonable election in a sum equal to twenty five percent (25%) of the totalamount of the indebtedness then outstanding and unpaid by the mortgagor,but in no case less than Fifty Pesos (P50.00) as well as payment of thepremium on the rep bond and was of suit in case of court action, whichamounts said agree to pay and for such payment a first Em is hereby infavor of the mortgagee upon the property mortgaged.



8. That the following stipulation is also found in paragraph 10 of the ChattelMortgage (Annex 'A' of the complaint):

10. The mortgagor further agrees that in cm non-compliance with, orviolation of, any of the of the mortgage, and/or in case of default in thepayment of the principle municipal sum or any part thereof or interest asand when the mm shad become due and payable, the mo property shall bedelivered on demand to the mortgagee in Manila of all charges, and shouldbe mortgage fail or refuse to deliver peacefully the said Property as above

stated, the mortgagee and/or its representative or the S is hereby given fulland irevocable power and authority to take possession of the said property,wherever it may be found and have the same brought in the City of Manilathe HEREBY RATIFYING AND CONFIRMING all that said mortgagee and/orits representative and/or the Sheriff shall lawfully do or cause to be doneunder and by virtue of these presents and the expenses of locating andbringing property to the City of Manila shall the account of the mortgegeeand shall form part of the sum by this mortgage ...

9. That plaintiff waives the attorney's fees herein stipulated, but not thereasonable amount that may be adjudged by this Honorable Court, thepremium of the replevin bond, sheriff's expenses, costs of suit and the

mechanic's lien mentioned in paragraph 4 herein.

10. That plaintiff admits that it is not entitled to deficiency judgment on theprincipal sum of P23,763.09 once it has foreclosed on the mortgage, butonly to a reasonable amount of attorney's fees and those amountsmentioned in paragraph 4 herein, less the amount of P1,870.99 paid by theinsurance company.

Acting on the stipulation, the court a quo rendered a decision part of which reads asfollows:

The only issue is whether the plaintiff is entitled to recover the expenses

mentioned in paragraph 4 and attorney's fees. It undoubtedly has a right torepayment for the premium on the replevin bond it filed, the sheriff's fees,costs of this suit, and a reasonable sum as attorney's fees. These areexpenses rendered necessary by the defendant's refusal to surrendervoluntarily possession of the vehicle, in violation of his agreement with theplaintiff. But the mechanic's lien the plaintiff satisfied is not recoverable inthis action. Nothing is said about it in the complaint and it is not one of thereliefs sought therein.

It must be understood, however, that all sums adjudged in the plaintiff'sfavor may be enforced only against the proceeds of the vehicle mortgagedin accordance with the settled rule that in an proceedings for foreclosure ofmortgages executed on chattels which have been sold on the installment

plan, the mortgagee is limited to the property included in the

mortgage. Macondray & Co. vs. Tan , 38, O.G. 2606; Macondray & Co. vs.Ruiz, 38, O.G. 2168; and Bachrach Motor Co. vs. Milan , 61 Phil. 409.

WHEREFORE, judgment is hereby rendered declaring that the plaintiff isentitled to the possession of the vehicle described in the complaint andordering the defendant Mariano Velasco to pay the plaintiff P1,403.47 aswell as the additional sum of P1,500.00 as attorney's fees to be satisfied outof the proceeds of the sale vehicle.

The plaintiff filed a motion requesting that the Court "reconsider its decision datedJune 28, 1965, by requiring the defendant to pay plaintiff directly the sums ofP1,403.47 and P500.00 instead of o the satisfaction of the same from the p of theauction sale." When the motion was domed the plaintiff appealed as aforementionedassuming only one , namely "The lower court erred in that the sums adjudged infavor of the plaintiff are to be satisfied only vehicle.

In stipulating that the sums adjudged P971.41, premium on replevin bond, P300.00,sheriff's P132.00, costs of the suit total P1,403.47; and P500.00, attorney's fees —the lower court relied on the provisions of Article 1484 of the Civil Code which insofaras relevant reads as follows:

Art 1484. In a contract of sale of property the price of which is payable into, the vs may any of the followingxxx xxx xxx(3) Foreclose the chattel mortgage on the thing sold if one has beenconstituted, should the vendee's failure to pay cover two or moreinstallment In this case, he shag have no further action against thepurchase to recover any unpaid of the balance of the price Any agreementto the contrary shall be void.

The third paragraph of Art. 1484 is inapplicable to the cam at bar. First, as theplaintiff has correctly pointed out the action instituted in the court a quo was notforeclosure at the chattel/mortgage but for the replevin; and second, the amounts

adjudged in favor of the plaintiff were not part of the unpaid balance of the price" orin the concept of a deficiency judgment but were for expenses of the suit.

WHEREFORE, the judgment appealed from is modified by ordering the defendant-appellee Mariano D. Velasco to pay the amount adjudged m favor of the plaintiff-appellant of having the same satisfied out of the proceeds of the auction sale on themotor vehicle the defendant-appellee.

SO ORDERED. Concepcion, Jr., and De Castro, JJ., concur.

BARREDO, J ., (Chairman), concurring:

I concur. I just want to make it clear that I consider an action for recovery ofpossession with replevin as a provisional remedy preparatory to foreclosure



(extrajudicial) is not an action for collection much less for foreclosure. The pointmight be material in other cases.

AQUINO, J., concurring:

I concur. The action filed by the mortagagee was a collection suit ith replevin as aprovisional remedy. The action was not judicial foreclosure of the mortagage.Repossession of the truck by means of replevin was a preliminary step to extra-

judicial foreclosure.

The extrajudicial foreclosure would be conducted in accordance with section 14 of Act No. 1508 which indicates how the proceeds of the sale should be disposed of.

The expenses of the foreclosure proceeding would be deducted from the proceeds ofthe sale. Those expenses are distinct from the bond premium, etc. and attorney'sfees totalling P1,903.47 adjudged in the replevin suit which should be paid directlyby Mariano D. Velasco, the mortagagee.

But, of course, as stipulated in paragraphs 10 and 14 of deed of chattel mortagage,they could also be deducted from the proceeds of the extrajudicial sale in the case

Velasco failed to pay the same as adjudged herein.



G.R. No. 74833 January 21, 1991

THOMAS C. CHEESMAN, petitioner,vs.INTERMEDIATE APPELLATE COURT and ESTELITA PADILLA, respondents.

Estanislao L. Cesa, Jr. for petitioner.

Benjamin I. Fernandez for private respondent.

NARVASA, J.:p

This appeal concerns the attempt by an American citizen (petitioner ThomasCheesman) to annul — for lack of consent on his part — the sale by his Filipino wife(Criselda) of a residential lot and building to Estelita Padilla, also a Filipino.

Thomas Cheesman and Criselda P. Cheesman were married on December 4, 1970but have been separated since February 15,1981. 1

On June 4, 1974, a "Deed of Sale and Transfer of Possessory Rights" was executed

by Armando Altares conveying a parcel of unregistered land and the house thereon(at No. 7 Neptune Street, Gordon Heights, Olongapo City) in favor of "Criselda P.Cheesman, of legal age, Filipino citizen, married to Thomas Cheesman, and residingat Lot No. 1, Blk. 8, Filtration Road, Sta. Rita, Olongapo City . . ." 2 ThomasCheesman, although aware of the deed, did not object to the transfer being madeonly to his wife. 3

Thereafter—and again with the knowledge of Thomas Cheesman and also withoutany protest by him—tax declarations for the property purchased were issued in thename only of Criselda Cheesman and Criselda assumed exclusive management andadministration of said property, leasing it to tenants. 4 On July 1, 1981, CriseldaCheesman sold the property to Estelita M. Padilla, without the knowledge or consent

of Thomas Cheesman.

5

The deed described Criselda as being" . . . of legal age,married to an American citizen,. . ." 6

Thirty days later, or on July 31, 1981, Thomas Cheesman brought suit in the Court ofFirst Instance at Olongapo City against his wife, Criselda, and Estelita Padilla, prayingfor the annulment of the sale on the ground that the transaction had been executedwithout his knowledge and consent. 7 An answer was filed in the names of bothdefendants, alleging that (1) the property sold was paraphernal, having beenpurchased by Criselda with funds exclusively belonging to her ("her own separatemoney"); (2) Thomas Cheesman, being an American, was disqualified to have anyinterest or right of ownership in the land; and (3) Estelita Padilla was a buyer in goodfaith. 8

During the pre-trial conference, the parties agreed upon certain facts which weresubsequently set out in a pre-trial Order dated October 22, 1981, 9 as follows:

1. Both parties recognize the existence of the Deed of Sale over theresidential house located at No. 7 Granada St., Gordon Heights, OlongapoCity, which was acquired from Armando Altares on June 4, 1974 and sold bydefendant Criselda Cheesman to Estelita Padilla on July 12, 1981; and

2. That the transaction regarding the transfer of their property took placeduring the existence of their marriage as the couple were married onDecember 4, 1970 and the questioned property was acquired sometime onJune 4,1974.

The action resulted in a judgment dated June 24, 1982, 10 declaring void ab initio thesale executed by Criselda Cheesman in favor of Estelita M. Padilla, and ordering thedelivery of the property to Thomas Cheesman as administrator of the conjugalpartnership property, and the payment to him of P5,000.00 as attorney's fees andexpenses of litigation. 11

The judgment was however set aside as regards Estelita Padilla on a petition forrelief filed by the latter, grounded on "fraud, mistake and/or excusable negligence"

which had seriously impaired her right to present her case adequately. 12 "After thepetition for relief from judgment was given due course," according to petitioner, "anew judge presided over the case." 13

Estelita Padilla filed a supplemental pleading on December 20, 1982 as her ownanswer to the complaint, and a motion for summary judgment on May 17, 1983.

Although there was initial opposition by Thomas Cheesman to the motion, the partiesultimately agreed on the rendition by the court of a summary judgment afterentering into a stipulation of facts, at the hearing of the motion on June 21, 1983,the stipulation being of the following tenor:14

(1) that the property in question was bought during the existence of the

marriage between the plaintiff and the defendant Criselda P. Cheesman;

(2) that the property bought during the marriage was registered in thename of Criselda Cheesman and that the Deed of Sale and Transfer ofPossessory Rights executed by the former owner-vendor Armando Altares infavor of Criselda Cheesman made no mention of the plaintiff;

(3) that the property, subject of the proceedings, was sold by defendantCriselda Cheesman in favor of the other defendant Estelita M. Padilla,without the written consent of the plaintiff.

Obviously upon the theory that no genuine issue existed any longer and there was

hence no need of a trial, the parties having in fact submitted, as also stipulated, theirrespective memoranda each praying for a favorable verdict, the Trial



Court 15 rendered a "Summary Judgment" dated August 3, 1982 declaring "the saleexecuted by . . . Criselda Cheesman in favor of . . . Estelita Padilla to be valid,"dismissing Thomas Cheesman's complaint and ordering him "to immediately turnover the possession of the house and lot subject of . . . (the) case to . . . EstelitaPadilla . . ." 16

The Trial Court found that —

1) the evidence on record satisfactorily overcame the disputablepresumption in Article 160 of the Civil Code—that all property of themarriage belongs to the conjugal partnership "unless it be proved that itpertains exclusively to the husband or to the wife"—and that the immovablein question was in truth Criselda's paraphernal property;

2) that moreover, said legal presumption in Article 160 could not apply"inasmuch as the husband-plaintiff is an American citizen and thereforedisqualified under the Constitution to acquire and own real properties; and

3) that the exercise by Criselda of exclusive acts of dominion with theknowledge of her husband "had led . . . Estelita Padilla to believe that theproperties were the exclusive properties of Criselda Cheesman and on the

faith of such a belief she bought the properties from her and for value," andtherefore, Thomas Cheesman was, under Article 1473 of the Civil Code,estopped to impugn the transfer to Estelita Padilla.

Thomas Cheesman appealed to the Intermediate Appellate Court. There he assailedthe Trial Court acts (1) of granting Estelita Padilla's petition for relief, and itsresolution of matters not subject of said petition; (2) of declaring valid the sale toEstelita Padilla despite the lack of consent thereto by him, and the presumption ofthe conjugal character of the property in question pursuant to Article 160 of the CivilCode; (3) of disregarding the judgment of June 24, 1982 which, not having been setaside as against Criselda Cheesman, continued to be binding on her; and (4) ofmaking findings of fact not supported by evidence. All of these contentions were

found to be without merit by the Appellate Tribunal which, on January 7, 1986,promulgated a decision (erroneously denominated, "Report") 17 affirming the"Summary Judgment complained of," "having found no reversible error" therein.

Once more, Thomas Cheesman availed of the remedy of appeal, this time to thisCourt. Here, he argues that it was reversible error for the Intermediate AppellateCourt —

1) to find that the presumption that the property in question is conjugal inaccordance with Article 160 had been satisfactorily overcome by Estelita Padilla; 18

2) to rule that Estelita Padilla was a purchaser of said property in good faith, it

appearing:

a) that the deed by which the property was conveyed to Criselda Cheesmandescribed her as "married to Thomas C. Cheesman," as well as the deed bywhich the property was later conveyed to Estelita Padilla by CriseldaCheesman also described her as "married to an American citizen," and bothsaid descriptions had thus "placed Estelita on knowledge of the conjugalnature of the property;" and

b) that furthermore, Estelita had admitted to stating in the deed by whichshe acquired the property a price much lower than that actually paid "in

order to avoid payment of more obligation to the government;" 19

3) to decline to declare that the evidence did not warrant the grant of EstelitaPadilla's petition for relief on the ground of "fraud, mistake and/or excusablenegligence;" 20

4) to hold that Thomas Cheesman had waived his objection to Estelita's petition forrelief by failing to appeal from the order granting the same;

5) to accord to Estelita Padilla a relief other than that she had specifically prayed forin her petition for relief, ie ., "the restoration of the purchase price which Estelitaallegedly paid to Criselda;" 21 and

6) to fail to declare that Thomas Cheesman's citizenship is not a bar to his action torecover the lot and house for the conjugal partnership. 22

Such conclusions as that (1) fraud, mistake or excusable negligence existed in thepremises justifying relief to Estelita Padilla under Rule 38 of the Rules of Court, or (2)that Criselda Cheesman had used money she had brought into her marriage toThomas Cheesman to purchase the lot and house in question, or (3) that EstelitaPadilla believed in good faith that Criselda Cheesman was the exclusive owner of theproperty that she (Estelita) intended to and did in fact buy—derived from theevidence adduced by the parties, the facts set out in the pleadings or otherwiseappearing on record—are conclusions or findings of fact. As distinguished from a

question of law—which exists "when the doubt or difference arises as to what thelaw is on a certain state of facts" — "there is a question of fact when the doubt ordifference arises as to the truth or the falsehood of alleged facts;" 23 or when the"query necessarily invites calibration of the whole evidence considering mainly thecredibility of witnesses, existence and relevancy of specific surroundingcircumstances, their relation; to each other and to the whole and the probabilities ofthe situation." 24

Now, it is axiomatic that only questions of law, distinctly set forth, may be raised in apetition for the review oncertiorari of a decision of the Court of Appeals presented tothis Court. 25 As everyone knows or ought to know, the appellate jurisdiction of thisCourt is limited to reviewing errors of law, accepting as conclusive the factualfindings of the lower court upon its own assessment of the evidence. 26 The creationof the Court of Appeals was precisely intended to take away from the Supreme Court



the work of examining the evidence, and confine its task to the determination ofquestions which do not call for the reading and study of transcripts containing thetestimony of witnesses. 27 The rule of conclusiveness of the factual findings orconclusions of the Court of Appeals is, to be sure, subject to certainexceptions, 28 none of which however obtains in the case at bar.

It is noteworthy that both the Trial Court and the Intermediate Appellate Courtreached the same conclusions on the three (3) factual matters above set forth, afterassessment of the evidence and determination of the probative value thereof. Both

Courts found that the facts on record adequately proved fraud, mistake or excusablenegligence by which Estelita Padilla's rights had been substantially impaired; that thefunds used by Criselda Cheesman was money she had earned and saved prior to hermarriage to Thomas Cheesman, and that Estelita Padilla did believe in good faith thatCriselda Cheesman was the sole owner of the property in question. Consequently,these determinations of fact will not be here disturbed, this Court having been citedto no reason for doing so.

These considerations dispose of the first three (3) points that petitioner Cheesmanseeks to make in his appeal. They also make unnecessary an extended discussion ofthe other issues raised by him. As to them, it should suffice to restate certainfundamental propositions.

An order of a Court of First Instance (now Regional Trial Court) granting a petitionfor relief under Rule 38 is interlocutory and is not appealable. Hence, the failure ofthe party who opposed the petition to appeal from said order, or his participation inthe proceedings subsequently had, cannot be construed as a waiver of his objectionto the petition for relief so as to preclude his raising the same question on appealfrom the judgment on the merits of the main case. Such a party need not repeat hisobjections to the petition for relief, or perform any act thereafter (e.g., take formalexception) in order to preserve his right to question the same eventually, on appeal,it being sufficient for this purpose that he has made of record "the action which hedesires the court to take or his objection to the action of the court and his groundstherefor." 29

Again, the prayer in a petition for relief from judgment under Rule 38 is notnecessarily the same prayer in the petitioner's complaint, answer or other basicpleading. This should be obvious. Equally obvious is that once a petition for relief isgranted and the judgment subject thereof set aside, and further proceedings arethereafter had, the Court in its judgment on the merits may properly grant the reliefsought in the petitioner's basic pleadings, although different from that stated in hispetition for relief.

Finally, the fundamental law prohibits the sale to aliens of residential land. Section14, Article XIV of the 1973 Constitution ordains that, "Save in cases of hereditarysuccession, no private land shall be transferred or conveyed except to individuals,corporations, or associations qualified to acquire or hold lands of the public

domain ."30

Petitioner Thomas Cheesman was, of course, charged with knowledge ofthis prohibition. Thus, assuming that it was his intention that the lot in question be

purchased by him and his wife, he acquired no right whatever over the property byvirtue of that purchase; and in attempting to acquire a right or interest in land,vicariously and clandestinely, he knowingly violated the Constitution; the sale as tohim was null and void. 31 In any event, he had and has no capacity or personality toquestion the subsequent sale of the same property by his wife on the theory that inso doing he is merely exercising the prerogative of a husband in respect of conjugalproperty. To sustain such a theory would permit indirect controversion of theconstitutional prohibition. If the property were to be declared conjugal, this wouldaccord to the alien husband a not insubstantial interest and right over land, as he

would then have a decisive vote as to its transfer or disposition. This is a right thatthe Constitution does not permit him to have.

As already observed, the finding that his wife had used her own money to purchasethe property cannot, and will not, at this stage of the proceedings be reviewed andoverturned. But even if it were a fact that said wife had used conjugal funds to makethe acquisition, the considerations just set out militate, on high constitutionalgrounds, against his recovering and holding the property so acquired or any partthereof. And whether in such an event, he may recover from his wife any share ofthe money used for the purchase or charge her with unauthorized disposition orexpenditure of conjugal funds is not now inquired into; that would be, in thepremises, a purely academic exercise. An equally decisive consideration is thatEstelita Padilla is a purchaser in good faith, both the Trial Court and the Appellate

Court having found that Cheesman's own conduct had led her to believe the propertyto be exclusive property of the latter's wife, freely disposable by her without hisconsent or intervention. An innocent buyer for value, she is entitled to the protectionof the law in her purchase, particularly as against Cheesman, who would assertrights to the property denied him by both letter and spirit of the Constitution itself.

WHEREFORE, the appealed decision is AFFIRMED, with costs against petitioner.

SO ORDERED.

Cruz, Gancayco, Griño-Aquino and Medialdea, JJ., concur.



G.R. No. L-45114 October 26, 1987

APOLONIO SUMBINCO, petitioner,vs.COURT OF APPEALS, et al., respondents.

No. L-45192 October 26, 1987

JEPTE DEMERIN et al., petitioners,vs.COURT OF APPEALS, et al., respondents.

NARVASA, J.:

Jepte Demerin Rogelio Argel, Demetrio Jongco and Alfonso Demerin filed with theCourt of Agrarian Relations a complaint against Apolonio Sumbingco, seeking theirreinstatement as tenants on the latter two (2) haciendas and the payment to them ofdamages for their ouster therefrom. According to them, prior to the purchase bySumbingco of the haciendas in question from Ricardo Nolan, they were alreadytenants of the latter, planting the areas occupied by them 'with rice: that even afterSumbingco acquired the land they continued as tenants thereon by permission ofSumbingco's administrator; that Sumibingco caused the planting of their landholdingsto citrus little by little, thus progressively depriving them of possession thereof untilthe time came when their landholdings were completely planted to citrus and theywere effectively, divested of any area to cultivate: that in view thereof, they askedSumbingco to compensate them for the loss of their tenacy rights but although theformer promised to do so, he never did; that instead, in 1964, Sumbingco told themto vacate their landholdings.

The court of Agrarian Relations dismissed their complaint. It declined to givecredence to the evidence proferred by them to substantiate their claim of beingSumbingco's tenants, declaring that evidence to be both implausible and tainted bymaterial trial inconsistencies.

On appeal, however, the court of Appeals reversed the judgment of the Court of Agrarian Relation. It ruled that in the light of the admission that Jepte Demerio andhis co-plaintiffs were tenants in at least one of the haciendas prior to the sale toSumbingco, it was difficult to believe the latter's protestation that he had never seenthem; at the very least, Sumbingco's overseer should have apprised him of theirpresence on the land; hence, it was safe to assume that Demerin and hiscompanions continued as tenants on the land under the new owner. The AppellateCourt accordingly ordered the payment to Demerin, et al. of damages by Sumbingcobut not their reinstatement on the ground that the landholdings had already beencompletely planted to citrus.

Both Sumbingco and the Demerin group have taken an appeal by certiorari to thisCourt, the former's being docketed as G.R. No. 45114 and the latter's, G.R. No.45192.

It is axiomatic that appeals from the Court of Appeals are not a matter of right but ofsound judicial discretion on the part of this Court, and will be granted only whenthere are special and important reasons therefor. 1 In other words, appeals from theCourt of Appeals are not entertained as a matter of routine; they may be rejectedout of hand in the exercise of this Court's sound judicial discretion. The prescribed

mode of appeal is by certiorari , 2 limited only to issues or questions of law whichmust be distinctly set forth in the petition for review on certiorari . 3 The findings offact of the Appellate Court are conclusive even on this Court, subject only to a fewwell defined exceptions (none of which is present in the instant case). 4 It isincumbent on the appellant to make out a sufficiently strong demonstration ofserious error on the part of the Court of Appeals, and adduced special and importantreasons to justlfy the exercise by this Court of its discretionary appellate

jurisdiction, 5 failing in which this Court will decline to wield its invoked power ofreview and will dismiss the appeal on the ground that it is without merit, or isprosecuted manifestly for delay or the questions raised are too unsubstantial torequire consideration. 6

A thoroughgoing review of the record discloses that contrary to this Court's firstimpression, which initially led it to give due course to both petitions in its case, thereis no special and important reason to justify this Court's exercise of its appellate

jurisdiction. The issues raised are principally factual, and such of those issues as maybe characterized as legal are not sufficiently weighty or substantial to warrantconsideration and review.

WHERFFORE, the petitions in G.R. No. 45114 and G.R. No. 45192 are DENIED, andthe decision of the Court of Appeals sought to be thereby reviewed is affirmed. Thisdecision is immediately, executory, and no motion for extension of time to file amotion for reconsideration will be entertained.

Teehankee, C.J., Cruz, Paras * and Gancayco, JJ., concur.



G.R. No. 111837 October 24, 1995

NEW YORK MARINE MANAGERS, INC., petitioner,vs.COURT OF APPEALS and VLASONS SHIPPPING INC., respondents.

BELLOSILLO, J.:

NEW YORK MARINE MANAGERS, INC., a foreign corporation organized under thelaws of the United States, seeks in this special civil action for certiorari under Rule 65of the Rules of Court 1 the annulment of the decision of the Court of Appeals whichreversed the ruling of the trial court denying the motion to dismiss of privaterespondent Vlasons Shipping Company, Inc.

On 25 July 1990 American Natural Soda Ash Corporation (ANSAC) loaded in Portland,U.S.A., a shipment of soda ash on board the vessel "MS Abu Hanna " for delivery toManila. The supplier/shipper insured the shipment with petitioner. Upon arrival inManila the shipment was unloaded and transferred to the vessel "MV Biyayang Ginto "owned by private respondent. Since the shipment allegedly sustained wettage,hardening and contamination, it was rejected as total loss by the consignees. Whenthe supplier sought to recover the value of the cargo loss from petitioner the latter

paid the claim in the amount of US$58,323.96.

On 20 November 1991 petitioner as subrogee filed with the Regional Trial Court ofManila a complaint for damages against private respondent alleging among othersthat —

. . . 1.01. Plaintiff is a non-life foreign insurance corporation organizedunder the laws of the State of New York with offices at 123 William Street,New York, N.Y. 10038 and engaged in an isolated transaction in this case;defendant is a local domestic corporation organized under Philippine lawwith offices at Zobel Street, Isla de Provisor, Paco, Metro Manila where itmay be served with summons and other court processes . . . . 2

On 24 January 1992 private respondent filed a motion to dismiss the complaintalleging that: (a) The complaint was filed by counsel who had no authority to sue forplaintiff; (b) The complaint stated no cause of action or without a cause of action as(a) there was no privity of contract between plaintiff and defendant; (b) the riskswhich allegedly caused damages on the goods were not covered by the insuranceissued by plaintiff, and (c) the charter agreement between the consignee,

ALCHEMCO PHILIPPINES, INC., and private respondent absolved the latter from allkinds of claim whatsoever; (3) The claim of plaintiff was already extinguished,waived, abandoned and/or had prescribed; and, (4) Plaintiff had no legal capacity tosue.

On 5 February 1992 petitioner opposed the motion to dismiss. On 10 April 1992 thetrial court denied the motion. On 18 August 1992 the motion to reconsider the denial

was also denied. The trial court ruled that since petitioner alleged in its complaintthat it was suing on an isolated transaction the qualifying circumstance of plaintiff'scapacity to sue as an essential element has been properly pleaded. The trial courtalso held that the grounds relied upon by private respondent in its motion to dismisswere matters of defense.

On 28 September 1992 private respondent filed a petition for certiorari andprohibition with the Court of Appeals alleging that the trial court gravely abused itsdiscretion in issuing the orders of 10 April 1992 and 18 August 1992 which amounted

to lack or excess of jurisdiction.

On 29 July 1993 the appellate court granted the petition after finding the assailedorders to be patently erroneous. 3 While it found the allegation in the complaint thatplaintiff was a non-life foreign insurance corporation engaged in an isolatedtransaction to be a sufficient averment, it nevertheless held the complaint to befatally defective for failure to allege the duly authorized representative or residentagent of petitioner in the Philippines. Thus it enjoined the trial court from furtherproceeding except to dismiss the case with prejudice.

This petition alleges that the Court of Appeals acted whimsically, capriciously andarbitrarily amounting to lack or excess of jurisdiction in deciding that petitioner's

complaint was fatally defective for failing to allege its duly authorized representativeor resident agent in the Philippines. Petitioner argues that there is no law,substantive or procedural, that requires a foreign corporation engaged only in anisolated transaction to appoint a duly authorized representative or a resident agent inthe Philippines before it can sue locally.

The proper remedy available to petitioner from a decision of the Court of Appeals is apetition for review oncertiorari under Rule 45 of the Rules of Court, not a petitionfor certiorari under Rule 65 of the Rules of Court. Mere errors of judgment cannot bethe proper subject of a special civil action for certiorari . Where the issue or questioninvolved affects the wisdom or legal soundness of the decision — not the jurisdictionof the court to render said decision — the same is beyond the province of a specialcivil action for certiorari . Erroneous findings and conclusions do not render theappellate court vulnerable to the corrective writ of certiorari . For where the court has

jurisdiction over the case, even if its findings are not correct, they would, at most,constitute errors of law and not abuse of discretion correctible by certiorari . 4

But even if we treat the instant petition as one for review on certiorari the samemust still fail. The issue on whether a foreign corporation can seek the aid ofPhilippine courts for relief recoils to the basic question of whether it is doing businessin the Philippines or has merely entered into an isolated transaction. This Court hasheld in a long line of cases that a foreign corporation not engaged in business in thePhilippines may exercise the right to file an action in Philippine courts for an isolatedtransaction. 5 However, in Commissioner of Customs v. K.M.K. Gani et a1., 6 citing

Atlantic Mutual Insurance Company v. Cebu Stevedoring, Inc., 7 we ruled that to say

merely that a foreign corporation not doing business in the Philippines does not needa license in order to sue in our courts does not completely resolve the issue. When



the allegations in the complaint have a bearing on the plaintiff's capacity to sue andmerely state that the plaintiff is a foreign corporation existing under the laws of theUnited States, such averment conjures two alternative possibilities: either thecorporation is engaged in business in the Philippines, or it is not so engaged. In thefirst, the corporation must have been duly licensed in order to maintain the suit; inthe second, and the transaction sued upon is singular and isolated, no such license isrequired. In either case, compliance with the requirement of license, or the fact thatthe suing corporation is exempt therefrom, as the case may be, cannot be inferredfrom the mere fact that the party suing is a foreign corporation. The qualifying

circumstance being an essential part of the plaintiff's capacity to sue must beaffirmatively pleaded. Hence, the ultimate fact that a foreign corporation is not doingbusiness in the Philippines must first be disclosed for it to be allowed to sue inPhilippine courts under the isolated transaction rule. 8 Failing in this requirement, thecomplaint filed by petitioner with the trial court, it must be said, fails to show its legalcapacity to sue.

Moreover, petitioner's complaint is fatally defective for failing to allege its dulyauthorized representative or resident agent in this jurisdiction. The pleadings filed bycounsel for petitioner do not suffice. True, a lawyer is generally presumed to beproperly authorized to represent any cause in which he appears, and no writtenpower of attorney is required to authorize him to appear in court for his client. Butthis presumption is disputable. Where said authority has been challenged or attacked

by the adverse party the lawyer is required to show proof of such authority orrepresentation in order to bind his client. The requirement of the production ofauthority is essential because the client will be bound by his acquiescence resultingfrom his knowledge that he was being represented by said attorney. 9 In the instantcase, the extent of authority of counsel for petitioner has been expressly andcontinuously assailed but he has failed to show competent proof that he was indeedduly authorized to represent petitioner.

WHEREFORE, the petition is DENIED. The assailed decision of the Court of Appealsdated 29 July 1993 is AFFIRMED. Costs against petitioner.

SO ORDERED.

Padilla, Davide, Jr., Kapunan and Hermosisima, Jr., JJ., concur.



G.R. No. 117499 February 9, 1996

SPOUSES VICTOR WARLITO V. YBAÑEZ and VIRGINIA A. YBAÑEZ,represented by their attorney-in-fact, FORTUNATO V. YBAÑEZ, petitioners,vs.COURT OF APPEALS, REGIONAL TRIAL COURT OF RIZAL, BR. NO. 154;METROPOLITAN TRIAL COURT OF PASIG, BR. NO. 72; and SPOUSES

AVELINO P. IFURUNG and VIRGINIA F. IFURUNG, respondents.

D E C I S I O N

FRANCISCO, J .:

This is the factual background.

In December 1984, petitioners spouses Victor Warlito V. Ybañez and Virginia A. Ybañez, as vendors, entered into a Deed of Sale With Assumption of Mortgage andWith Right of Purchase over a mortgaged 400 sq. m. parcel of land in favor of privaterespondents spouses Avelino P. Ifurung and Virginia F. Ifurung, as vendees. Thedeed of sale has, among others, the following salient terms: (1) private respondentsshall pay the sum of P118,000.00 to the petitioners and assume the obligationsunder the Deed of Mortgage of the subject property with the Development Bank ofthe Philippines (DBP); (2) petitioners shall have the right to repurchase the propertywithin three months from the date of the sale; (3) failure on the part of petitioners torepurchase within the agreed period will cause the transfer of the property to privaterespondents without reservation, and petitioners will vacate the subject property andsurrender possession thereof in favor of private respondents. 1 To enable the privaterespondents to pay the monthly amortizations to the DBP, petitioners executed apower of attorney for the purpose, which was subsequently revoked by them.2

The agreed three-month period expired without petitioners exercising their right torepurchase the subject property. Private respondents, through counsel, demandedthat petitioners surrender the possession of the subject property and vacate the

premises in accordance with the deed of sale, only to be unheeded. Thus, in 1992,private respondents filed an ejectment suit against petitioners before theMetropolitan Trial Court (MTC) docketed as Civil Case No. 2751. Summons wereissued and served by substituted service "thru Engr. and Mrs. Nomer Ybañez(brother of Mr. Victor Warlito V. Ybañez [sic ]".3 As a result of petitioners' failure tofile an answer, the MTC, in accordance with Section 6 of the Revised Rules onSummary Procedure, motu propio rendered judgment in favor of private respondentsordering petitioners "to deliver possession and vacate the premises in question [and]to pay . . . the amount[s] of P5,000.00 for and as attorney's fees, . . . P309,000.00as reasonable rent at P3,000.00 per month starting March, 1984 until September1992, . . . [and] to pay the costs." 4

Petitioners appealed before the Regional Trial Court (RTC) of Pasig, Branch 154,docketed as SCA No. 253, and premised the same on the alleged lack of valid service

of summons over their persons. They asserted that service of summons to Engr. andMrs. Nomer Ybanez is improper and invalid since petitioners, as early as 1988, haveleft for abroad, although it is uncontroverted that the latter spouses (Engr. and Mrs.Nomer Ybanez) were found residing at petitioners' last known address. The appealdid not prosper. Finding the substituted service of summons proper and valid, theRTC affirmed the MTC decision, but modified the amount of reasonable rentals to"P3,000.00 a month beginning September 13, 1991 with legal interest of 6% perannum until defendants [petitioners herein] actually vacate thepremises."5 Petitioners thereafter filed a notice of appeal signifying their intention to

appeal the judgment to the Court of Appeals which was denied due course by theRTC on the ground that it is not the proper remedy 6 - the correct recourse being thefiling of a petition for review.7 On March 31, 1993, petitioners filed a motion for newtrial before the RTC. In an Order dated March 11, 1994, the RTC denied the motionfor having been filed beyond the reglementary period, among others.8 With thedenial of private respondents' motion and the decision having attained finality, theRTC in SCA No. 253 issued a writ of execution dated March 22, 1994, andsubsequently caused the entry of the judgment through an Order dated September1, 1994.

In a bid to nullify the deed of sale, petitioners commenced an action for Cancellationof Deed of Sale With Assumption of Mortgage and With Right of Repurchase WithDamages, before RTC Branch 156, docketed as Civil Case No. 64437. 9 On September

16, 1994, RTC Branch 156 dismissed for lack of merit petitioners' complaint forcancellation of the deed of sale. This dismissal is now pending appeal before theCourt of Appeals.

Apparently, in a desperate move, on May 2, 1994, petitioners filed another action - apetition for annulment of judgment of the RTC in SCA No. 253 before respondentCourt of Appeals, 10 now the subject of this petition. Petitioners assailed the validityof the substituted service of summons over their persons in the MTC ejectment case,an issue well settled in their appeal before the RTC. Likewise, petitioners attackedthe RTC jurisdiction to modify and affirm on appeal the MTC decision and furthercontended that "private respondents obtained the judgment by default against thepetitioners by means of extrinsic fraud." 11 Respondent court reversed the RTC in so

far as the validity of the substituted service of summons is concerned and ruled thatthere was an improper substituted service of summons upon petitioners. However,respondent court stressed that the RTC's decision is not void since, by asking foraffirmative relief through their appeal and motion for new trial before the RTC,petitioners were effectively barred from questioning the validity of the substitutedservice of summons, as well as the RTC's jurisdiction over their persons. On the issueof extrinsic fraud, respondent court ruled that there was no extrinsic fraud to warrantthe annulment of the MTC and RTC judgments. Dissatisfied, but without filing amotion for reconsideration for no apparent reason, petitioners filed the instantpetition stressing that "[t]his is a petition for certiorari , both under Rule 65 and Rule45, Rules of Court" 12 raising substantially the following issues: (1) whether or notthe substituted service of summons over the persons of the petitioners in theejectment case was valid to vest the MTC jurisdiction over their persons, and (2)

whether or not the judgments of the MTC in the ejectment suit and of the RTC onappeal were obtained by means of extrinsic fraud to warrant their nullification 13.



At the outset, we note that petitioners immediately filed this petition without evenfiling a motion for reconsideration of the assailed decision thereby deprivingrespondent court of the opportunity to correct at the first instance an error which itmay have committed. We see no cogent reason and none was persuasivelypresented to excuse petitioners from their failure to file a motion for reconsideration.

Also glaring is the ambivalent, if not irresolute, posture taken by the petitioners bycategorizing this petition to be "both under Rule 65 and Rule 45, Rules of Court" 14 inan attempt, apparently, to evade the dismissal of the petition based on a wrongmode of appeal in accordance with Circular No. 2-90 issued on March 9, 1990. The

court cannot tolerate this practice much less the seeming ignorance of the law onappeals. This petition cannot be subsumed simultaneously under Rule 45 and Rule65 of the Rules of Court, and neither may petitioners delegate upon the court thetask of determining under which rule the petition should fall. Under Circular No. 2-90,wrong or inappropriate mode of appeal, as in this case, merits an outright dismissal.In fact, paragraph 4 (e) of the circular specifically warns litigants' counsels byproviding the following:

Duty of counsel . - It is therefore incumbent upon every attorney who wouldseek review of a judgment or order promulgated against his client to makesure of the nature of the errors he proposes to assign, whether these be offact or law; then upon such basis to ascertain carefully which Court hasappellate jurisdiction; and finally, to follow scrupulously the requisites for

appeal prescribed by law, ever aware that any error or imprecision incompliance may well be fatal to his client's cause.

The disposition of this case could have stopped here without further ado, butnevertheless we will briefly deal with the assigned issues for while the respondentcourt correctly dismissed the action for annulment of judgment, its reversal of theRTC ruling on the issue of substituted service of summons is misplaced.

On the first issue, we feel that respondent court acted inadvertently when it set asidethe RTC ruling relative to the validity of the substituted service of summons over thepersons of the petitioners in the MTC level. We must not lose sight of the fact thatwhat was filed before respondent court is an action to annul the RTC judgment and

not a petition for review. Annulment of judgment may either be based on the groundthat a judgment is void for want of jurisdiction 15 or that the judgment was obtainedby extrinsic fraud. 16 There is nothing in the records that could cogently show thatthe RTC lacked jurisdiction. Chiefly, Section 22 of B.P. Blg. 129, otherwise known asthe Judiciary Reorganization Act of 1980, vests upon the RTC the exercise of an"appellate jurisdiction over all cases decided by the Metropolitan Trial Courts,Municipal Trial Courts, and Municipal Circuit Trial Courts in their respective territorial

jurisdictions." 17 Clearly then, when the RTC took cognizance of petitioners' appealfrom the adverse decision of the MTC in the ejectment suit, it (RTC) wasunquestionably exercising its appellate jurisdiction as mandated by law. Perforce, itsdecision may not be annulled on the basis of lack of jurisdiction as it has, beyondcavil, jurisdiction to decide the appeal.

Corollarily, it is inappropriate for respondent court to reverse the RTC ruling thatthere was proper and valid substituted service of summons over the persons of thepetitioners. Petitioners properly assigned this issue and, in fact, it was exhaustivelyargued in their appeal, albeit without success. They subsequently failed toseasonably question the soundness of the RTC ruling before respondent court via apetition for review. As it stands, therefore, the ruling of the RTC that substitutedservice of summons was validly effected has long acquired finality. Raising this longsettled issue in the annulment case could very well be petitioners' device andtechnique to acquire a fresh opportunity to assail this ruling, a chance they already

lost because of their failure to seasonably file a petition for review. This scheme ishighly irregular and may as well constitute misuse of court processes. 18 In addition,it stultifies and renders asunder the principle, well embedded in our jurisprudence,that a judgment properly rendered by a court vested with jurisdiction, like the RTC,and which has acquired finality becomes immutable and unalterable, hence, may nolonger be modified in any respect except only to correct clerical errors ormistakes. 19 Judgments of courts become final at some definite time fixed by law andthat parties, like the petitioners, should not be permitted to litigate the same issue/sover again.

Moreover, a party cannot, by varying the form of action, or adopting a differentmethod of presenting his case, escape the effect of a valid judgment. Section 49 (b)and (c), Rule 39 of the Rules of Court states:

Sec. 49. Effect of judgments . - The effect of a judgment or final orderrendered by a court or judge of the Philippines, having jurisdiction topronounce the judgment or order, may be as follows.

xxx xxx xxx

(b) In other cases the judgment or order is, with respect to the matterdirectly adjudged or as to any other matter that could have been raised inrelation thereto, conclusive between the parties and their successors ininterest by title subsequent to the commencement of the action or specialproceeding, litigating for the same thing and under the same title and in the

same capacity;

(c) In any other litigation between the same parties or their successors ininterest, that only is deemed to have been adjudged in a former judgmentwhich appears upon its face to have been so adjudged, or which wasactually and necessarily included therein or necessary thereto.

These provisions embody the same rule that once a judgment has become final andexecutory, the issues therein should be laid to rest. Paragraph (b) is referred to as"bar by former judgment". It is a concept in which the term res judicata is morecommonly and generally used and has the following concurring requisites, namely:(1) the former judgment or order must be final; (2) it must be a judgment or order

on the merits, that is, it was rendered after a consideration of the evidence or



stipulations submitted by the parties at the trial of the case; (3) it must have beenrendered by a court having jurisdiction over the subject matter and the parties; (4)there must be, between the first and second actions, identity of parties, of subjectmatter and of cause of action.

Paragraph (c) is the less familiar concept or less terminological usage of res judicataknown as "conclusiveness of judgment". This concept, which applies in this case,refers to a situation where the judgment in the prior action operates as an estoppelonly as to the matters actually determined or necessarily included therein. Otherwise

stated, "conclusiveness of judgment" precludes relitigation of a particular fact orissue in another action between the same parties on a different claim or cause ofaction. 20 With the validity of the substituted service of summons having been settledin the RTC and having long acquired finality, petitioners are now precluded torelitigate the same issue. Litigation must have and always has an end. If not, judicialfunction will lose its relevance.

With respect to the second issue, we agree with respondent court's succinctdisposition that the MTC judgment was not obtained by extrinsic fraud to warrantannulment. Respondent court amply explained extrinsic fraud and applied the samein this wise:

The kind of fraud that justifies the annulment of a judgment is extrinsicfraud. This refers to some act or conduct of the prevailing party which hasprevented the aggrieved party from having a trial or presenting his case tothe court, or was used to procure judgment without a fair submission of thecontroversy. Extrinsic fraud refers to acts outside the trial. It must bedistinguished from intrinsic fraud which refers to acts of a party at a trialwhich prevented a fair and just determination of the case and which could;have been litigated and determined at the trial or adjudication of the case.Examples of intrinsic fraud are falsification and false testimony.

The petitioners argued that the private respondents committed extrinsicfraud when they did not inform the trial court that they (privaterespondents) have not assumed the mortgage of the property in question.

Applying the definition stated earlier, the fraud supposed to have beencommitted does not amount to extrinsic fraud. The omission was donewithin the trial or the litigation process, particularly in the complaint forejectment filed before the Metropolitan Trial Court. If such omission werefraudulent, it would have constituted intrinsic fraud which could have beendetermined in the adjudication of the case. As such, even if it were proven,the supposed fraud does not justify the annulment of the judgment. 21

Similarly, the RTC decision in SCA No. 253 was not attended by extrinsic fraud. Wefind nothing, either act or conduct on the part of private respondents, that may haveprevented petitioners from presenting their case to the court. Indeed, the record isbereft of any iota of evidence that could show the contrary.

WHEREFORE, save for some modifications in respondent court's findings which,nonetheless, did not alter the final outcome of the case, the petition is herebyDISMISSED.

SO ORDERED.

Narvasa, C.J., Davide, Jr., Melo and Panganiban, JJ., concur.

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