Purpose of discovery

BERNARDO MERCADER VS. DBPG.R. NO. 130699 (2000)

Facts: In its Pre-Trial Order, the RTC limited the issues to be resolved in the case to three issues. Thereafter, the plaintiff, P, filed a supplemental pleading that dealt with a new issue involving a lease-purchase option. D opposed the supplemental pleading

Issue: Whether the issue involving the lease-purchase option was properly raised in the pleadings

Held: Yes. Said issue was raised in the supplemental pleading subsequently filed by P. As a supplemental pleading, it served to aver supervening facts which were then not ripe for judicial relief when the original pleading was filed. As such, it was meant to supply deficiencies in aid of the original pleading, and not to dispense with the latter.

BERNARDO MERCADER VS. DBPG.R. NO. 130699 (2000)

Facts: During the trial, the counsel of D participated in the direct and cross-examination of witnesses whose testimonies included an issue not among those appearing in the Pre-Trial Order. The RTC ruled on the said issue. D questions the RTC’s inclusion of the said issue in its ruling.

Issue: Whether the said issue should be decided by the RTC

Held: Yes. D is estopped from questioning the RTC’s inclusion of said issue by its participation in the direct and cross-examination of witnesses whose testimonies included said topic.

BERNARDO MERCADER VS. DBPG.R. NO. 130699 (2000)

Facts: During the trial, P offered evidence on an issue not alleged in the pleadings. D objected to the introduction of such evidence.

Issue: Whether the RTC may admit the evidence

Held: Yes. When evidence is offered on a matter not alleged in the pleadings, the court may admit it even against the objection of the adverse party, where the latter fails to satisfy the court that the admission of the evidence would prejudice him in maintaining his defense upon the merits, and the court may grant him a continuance to enable him to meet the new situation created by the evidence. Of course, the court, before allowing the evidence, as a matter of formality, should allow an amendment of the pleading.

[G.R. No. 130699. May 12, 2000.]

SPOUSES BERNARDO MERCADER and FLORINA M. MERCADER, and DR. JUAN Y. MADERAZO,Petitioners, v. DEVELOPMENT BANK OF THE PHILIPPINES (CEBU BRANCH), GELACIO, FELIPE, OSMUNDO all surnamed MANREAL, and RUFINA MANREAL VDA. DE ABALO, Respondents.

D E C I S I O N

DAVIDE, JR., C.J.:

In this petition for review, petitioners spouses Florina Maderazo-Mercader and Bernardo Mercader (hereafter MERCADERs) and Juan Y. Mederazo impugn the Court of Appeals’ 5 February 1997 decision in CA-GR-CV No. 21846 1 ordering them to deliver the possession of Lot No. 2985 to the Development Bank of the Philippines, Cebu Branch (hereafter DBP) without right of reimbursements for the improvements introduced thereon, and the 13 August 1997 resolution denying the motion for reconsideration. Said decision and resolution reversed and set aside the 6 September 1988 decision 2 of the Regional Trial Court of Cebu, Branch 15, in Civil Case No. R-18521. 3 

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Civil Case No. R-18521 was for specific performance filed on 28 September 1979. In their complaint, 4 the MERCADERs alleged that:chanrobles.com : virtuallawlibrary

(1) In 1966, Juan Maderazo applied for a loan at the DBP secured by interior Lots Nos. 2993 and 2994 (Talisay-Minglanilla estate);

(2) The DPB required Maderazo to construct a five (5) - meter wide road right of way over the adjoining Lot No. 2985;

(3) The DBP approved Maderazo’s loan application upon his submission of a copy of the lease contract for a right of way over the adjoining Lot No. 2985;

(4) The lease contract for the right of way was for a twenty-year period commencing on 20 October 1966 which Maderazo executed with the spouses Gelacio and Vicenta Manreal, then the registered owners of Lot No. 2985;

(5) Maderazo expended P10,000 for the construction of the five (5) - meter right of way;

(6) This lease contract was however not registered for Gelacio Manreal’s failure, "for one reason or another," to deliver the Certificate of Title (TCT) of Lot No. 2985 to Maderazo;

(7) About nine years later or on 6 January 1976, Maderazo’s children, the spouses Florina Maderazo-Mercader and Bernardo Mercader executed a contract of lease with the Manreals for a period of twenty years and four months over the remaining portion of Lot No. 2985;

(8) Despite repeated requests for the delivery of the TCT of Lot No. 2985 for the purpose of annotating the lease contract, the Manreals, "for one reason or another," failed to do so; however, the Manreals assured the Mercaders "not to worry since nothing will go wrong" ;

(9) Believing in the Manreals’ assurances, Bernardo Mercader intensively cultivated Lot No. 2985, "planted in good faith 600 calamansi fruit trees, fenced the lot with barbed wires, constructed canals and drainage, spent wages for several farm workers and introduced several improvements including a vegetable garden — all

in the sum of not less that P25,000" ;

(10) The MERCADERs subsequently discovered that the reason why the Manreals failed to deliver the TCT of Lot No. 2985 [now registered in the names of spouses Felipe and Florentina Manreal, children of Gelacio and Vicenta Manreal] was because they offered said lot including the improvements introduced by the former thereon as "collateral" for a P150,000 deep-sea fishing loan with the DBP;

(11) That despite the lack of registration and/or annotation of the respective interests of the MERCADERs on the TCT over Lot No. 2985, the DBP knew and should know of their existence considering the several ocular inspection and investigation conducted over the property; the DBP’s actual knowledge of these unregistered interests has the effect of registration. 5 

Since the Manreals defaulted in the payment of their obligation to the DBP, and that the latter had taken steps to foreclose Lot No. 2985 including all the improvements thereon, the MERCADERs prayed among others, for the DBP to "respect their interests by excluding these from the foreclosure proceedings, or if the foreclosure takes place, declare the same null and void or in the alternative, order the DBP to reimburse them the cost of the improvements and loss of expected income amounting to P210,000 for the duration of the unexpired term of their respective contracts." The MERCADERs also prayed for the annotation of their interests in the TCT of Lot No. 2985.chanrobles virtuallawlibrary

In their answer, the Manreals only admitted the existence of the two unregistered contracts of lease and the calamansi trees planted on Lot No. 2985. They then denied any knowledge or information sufficient to form a belief on the other allegations of the MERCADERs. They then claimed that Felipe Manreal informed Juan Maderazo of the intention to offer as security Lot No. 2985 for the deep sea-fishing loan with the DBP. They also justified their inability to present to the MERCADERs the TCT over Lot No. 2985 on the fact that at the time the latter were soliciting the title’s delivery, it was still in the hands of the lawyer who was preparing the Extrajudicial Settlement and Partition of the Estate left by the deceased Vicenta Manreal. The Manreals then prayed for the dismissal of the complaint for being utterly groundless. 6 

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In its answer, the DBP admitted:chanrob1es virtual 1aw library

(1) the loan of spouses Juan and Juana Maderazo; and

(2) the deep-sea fishing loan of spouses Felipe and Florentina Manreal which was secured among others, by a first mortgage over Lot No. 2985 evidenced by a TCT already registered in their names, free from any lien or encumbrance.

It denied any knowledge or information of: (1) any flaw or infirmity in the TCT over Lot No. 2985; (2) any interest in Lot No. 2985 other than and adverse to the spouses Felipe and Florentina Manreal as registered owners and mortgagors; and (3) the existence of the lease contract for right of way over a portion of Lot No. 2985 because it was not registered and that the spouses Gelacio and Vicenta Manreal were not the ones who mortgaged said Lot No. 2985 to the DBP but their children, the spouses Felipe and Florentina Manreal.

The DBP maintained that the alleged unregistered interests of the MERCADERs did not and could not bind the DBP per Art. 1648 of the Civil Code 7 and Section 64 of Act 496. 8 It then prayed for the dismissal of the complaint for being premature and for lack of cause of action as it never dealt with Gelacio Manreal and there was as yet no foreclosure. Besides, the DBP was a mortgagee in good faith. 9 

In the meantime or on 26 November 1979, Lot No. 2985 was sold, among the other mortgaged lots, on public auction to the DBP as the highest bidder. 10 

During the pre-trial stage, the trial court acknowledged the possibility of a compromise agreement, gave time to the parties to study their proposals and counter-proposals and ordered the documents pertinent thereto deemed parts of the record of the case. 11 Orders were further issued "giving the parties more time to continue with their negotiations and re-setting the hearing of the case." 12 Several communications were thereafter exchanged, to wit:chanrobles.com.ph:red

(1) a letter dated 24 June 1981 wherein the MERCADERs proposed that Maderazo’s contract of lease for right of way be registered, and

respect be accorded to the contract of lease the MERCADERs executed with the Manreals, or as an alternative allow the MERCADERs to purchase Lot No. 2985 on installment basis at the price of P6.00 per square meter; 13 

(2) a letter dated 22 July 1982 wherein the DBP through its Manager (Mr. Manuel Roa) offered the MERCADERs three options by which they could amicably settle subject to the approval of the Board of Governors of the Bank to wit: 14 

a. First Option — Sale

P96,200.00 — Purchase price

19,200.00 — Down payment

77,000.00 — Balance payable in 10 years at 15% interest per annum

1, 242.28 — Monthly amortization

b. Second Option — Lease-Purchase 

P132,598.84 — Consideration

1,105.00 — Monthly lease-purchase for 10 years

c. Third Option —Lease

P14,430.00 — Equivalent to 15% annual interest of P96,200

1,202.50 — Monthly lease

(3) a letter dated 18 November 1982 whereby the MERCADERs chose option 2 (lease-purchase); 15 

(4) a letter dated 23 November 1982 whereby the MERCADERs informed the DBP’s Manager that they were "depositing P3,315.00 with the bank" pursuant to said Manager’s proposal that a three-month advance payment should be deposited while the MERCADERs await the final decision of the bank on the proposed settlement. 16 

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The DBP issued an official receipt for the payment of P3,315 as "earnest money, deposit to purchase lot 2985." 17 

With this development, on 9 December 1982, the trial court directed the parties to submit "their compromise agreement which required the approval of the Board of Governors." 18 

The DBP and the MERCADERs thereafter again exchanged a series of correspondences. In his 13 January 1983 letter to the DBP (through Mr. Ruben Carpio), Bernardo Mercader requested for a grace period in the payment of the amortization for the lease-purchase option. 19 In response, the DBP wrote a letter dated 19 January 1983 informing Bernardo Mercader that it had already "prepared [its] recommendation to the head office, . . . rejected the request for a grace period but informed [him] to respond soon or visit the bank for a possible conference." 20 Bernardo Mercader replied through a letter dated 5 October 1983 reiterating his accord to the lease-purchase option but suggesting this time that the amortization be paid on a quarterly basis. 21 In its 29 February 1984 letter, the DBP "noted" Mercader’s suggestion as "counter-proposals or counter-offers which [it find un]acceptable and made dimmer the realization of [their] mutual desire for an early amicable settlement." The DBP reasoned that "the original conditions packaged in [its] proposal [were] no longer applicable" considering that the market value of the property increased. 22 

With this, the trial court ordered the termination of the pre-trial and set the case for hearing in its 18 September 1995 order, thus:chanrob1es virtual 1aw library

As manifested by the plaintiffs, they have alread[y] agreed with the defendant bank that they will pay the property at P132,598 payable in ten (10) years in quarterly basis. However, the counsel of defendant manifested that it was only a proposal. The plaintiff spouses requested for a longer period of fifteen (15) years which the bank did not agree.chanrobles.com : red

The only issue[s] to be resolved in this case are as follows:chanrob1es virtual 1aw library

1. Whether the plaintiff [are] entitled to specific performance of said

agreement;

2. Whether the defendant bank can be compelled to recognize the lease contract entered into between the spouses plaintiff Bernardo Mercader and Gelacio Manreal; and

3. Whether the foreclosure proceedings of the contract between the defendant bank is null and void.

The pre-trial in this case is already closed and terminated. 23 

On 7 November 1985, the MERCADERs filed a Supplemental Pleading insisting the consummation of the lease-purchase option with the payment of the earnest money. 24 The DBP filed its Opposition to the Supplemental Pleading.25cralaw:red

Trial proceeded with the parties presenting evidence tending to establish their respective allegations. On 29 May 1987, the trial court ordered the Manreals dropped from the case. The MERCADERs offered no objection.

In its decision of 6 September 1988, the trial court reiterated the three issues ascertained in the pre-trial order and resolved all of them in favor of the MERCADERs. On the first issue, the trial court found that the "DBP had unnecessarily and unjustifiably made . . . [Bernardo] Mercader understand that his second option [lease-purchase] would be more or less approved, except that the approval will come from Manila." 26 Anent the second issue, the trial court also believed "quite firmly" that the "DBP could not have escaped having a foreknowledge of the existence of the prior unrecorded lease" as the "possession and cultivation of Bernardo Mercader . . . [was] a matter of open, notorious and public knowledge in the area." In resolving the third issue, the court first acknowledged that it is a "court of equity and not merely a court of law" and the "DBP is not authorized to keep real propert[y] longer than ten years or so;" then the court "required [the] DBP to set aside the area affected by the prior unregistered lease, known to [it], when [it] accepted the mortgage." 27 It then decreed as follows:chanrob1es virtual 1aw library

WHEREFORE, finding the preponderance of evidence to be in favor of plaintiffs, judgment is hereby rendered as follows:chanrob1es

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virtual 1aw library

1) ordering the defendant DBP and its successors-in-interest to respect and preserve the Contracts of Lease between the Manreals and the Mercaders until December 31, 1994;

2) ordering the DBP to exclude from the foreclosure proceedings the rights of the plaintiffs as covered by the Contract of Lease;

3) requiring the defendant DBP to cause the annotation of the Contracts of Lease of plaintiffs on TCT No. T-40396 of . . . Lot No. 2985 . . . and amend Entry No. 4980-V-14-D-B, by excluding the improvements of Mercader as guarantee or collateral for defendant Felipe Manreal’s deep-sea fishing loan;chanrobles.com : red

4) ordering the DBP to execute the deed of sale subject to the approval of the Manila Office of the DBP as to the mode of payment, there being no agreement thereon;

5) requiring the defendant DBP to pay attorney’s fees of P5,000, for making it necessary for the plaintiffs to litigate, in order to protect their rights to the Lease Contract with the Manreals and to compel DBP to act on the proposals of Mercader as promised by DBP. 28 

On appeal, the Court of Appeals found that the trial court erred in treating the lease-purchase option as a controversial issue considering that it was "outside the parties’ pleadings." But invoking the Supreme Court’s decision in Castro v. Court of Appeals 29 in that "the improvements introduced [into the mortgaged property] are to be considered so incorporated [in the mortgage] only if so owned by the mortgagor," the Court of Appeals declared that the improvements introduced on Lot No. 2985 had been improperly included in the foreclosure sale since they were not owned by the mortgagors. But since the improvements were already included in the foreclosure sale and the MERCADERs continued the possession and collection of income from the lot, the Court of Appeals, as already earlier adverted to, reversed and set aside the appealed judgment. It entered a new one declaring that the MERCADERs were not entitled to any compensation from the DBP. It also ordered the MERCADERs to immediately turn over the possession of Lot No. 2985 to the DBP. 30 

In this petition for review, the MERCADERs assert that in issuing the challenged decision, the Court of Appeals contravened Section 4, Rule 20 and Section 5, Rule 10 of the Rules of Court by holding that the trial court should not have taken cognizance of the lease-purchase option as a controversial issue since it was not raised in the pleadings. They maintain that the trial court correctly took cognizance of the lease-purchase option because it was part and parcel of the pre-trial stages, the determination of which will prevent future litigation thereon. They also pray that in the event of a favorable judgment, this Court should refer the case back to the Court of Appeals for a determination of whether the trial court erred in finding that the lease-purchase option was already consummated.

For its part, the DBP contends that the MERCADERs raise questions of facts which are not reviewable on appeal and that it had opposed and objected to in and at all stages of the trial, all attempts by the MERCADERs to introduce evidence on the lease-purchase option.chanrobles virtua| |aw |ibrary

This Court agrees with the MERCADERs and finds that the Court of Appeals erred in disregarding as material the lease-purchase option on the ground that it was not raised in the pleadings. If the Court of Appeals adverts to the lack of reference to the lease-purchase option in the initiatory pleadings, this can be simply explained by the fact that the trial court only took cognizance thereof when it became an integral component of the pre-trial proceedings. That is why the lease-purchase option was included firstly, in the pre-trial order as one of the issues to be resolved at trial and secondly, in the supplemental pleading subsequently filed by the MERCADERs on 7 November 1985. 31 As a supplemental pleading, it served to aver supervening facts which were then not ripe for judicial relief when the original pleading was filed. As such, it was meant to supply deficiencies in aid of the original pleading, and not to dispense with the latter. 32 Hence, it was patently erroneous for the Court of Appeals to pronounce that the lease-purchase option was not raised in the pleadings. The DBP was even quite aware and knowledgeable of the supplemental pleading because it filed an opposition thereto. 33 

The records however reveal that the trial court did not promptly rule on the motion to admit the supplemental pleading. And during trial, the trial court also failed to rule on the prompt objection interposed by the

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DBP’s counsel to the MERCADERs’ introduction of evidence relative to said lease-purchase option. But undisputed is the trial court’s eventual admission in open court of the MERCADERs’ supplemental pleading, thus:chanrob1es virtual 1aw library

ATTY. GARLITOS

Probably, I did not make myself quite clear, Your honor. What I mean is during the pre-trial stage the parties were encourage to negotiate for a settlement. So they made an offer to DBP and DBP gave them an option.

COURT

Those three options and chose the second one.

ATTY. GARLITOS

We interposed an objection on this option, Your Honor, because any evidence which will be presented or which transpired during the pre-trial is objectionable. So we interposed an objection to prevent the witness from testifying on transactions which were referred to while the parties were negotiating during the pre-trial stage.

ATTY. MERCADER

I wish to correct counsel. Records will show that there was no objection on what transpired during the pre-trial. As a matter of fact the pre-trial order is very material to the case. There is a pre-trial that such an offer and three options made by DBP, and that plaintiff selected the second option and that he deposited earnest money with the bank.chanroblesvirtuallawlibrary

COURT

In other words there is no supplemental complaint.

ATTY. GARLITOS

It is good that they brought that out because we had an opposition and this is what I am referring to.

COURT

What is your opposition, the price agreed upon?

ATTY. GARLITOS

We objected to the filing of the supplemental complaint and to all evidence presented in regard to that supplemental complaint.chanroblesvirtual|awlibrary

COURT

It’s too late now for you to make an objection. This supplemental pleading has been admitted by the court. That has become final.

ATTY. GARLITOS.

There is no showing that it has been admitted by the court.

COURT

It has been admitted by the court. 34 (Emphasis supplied)

The records also show that not only did the DBP’s counsel began to rigorously cross-examine Bernardo Mercader on the lease-purchase option, he also subjected his witness Mr. Ruben Carpio, then Chief of the Collection Department, DBP to an intensive direct examination covering said subject matter. 35 He also offered as evidence the DBP’s letter indicating the three options to the MERCADERs as Exhibit "1" and the lease-purchase option contained therein as Exhibit "1-A." 36 

The DBP is undoubtedly estopped from questioning the trial court’s inclusion of the lease-purchase option as a controversial issue. This action of the trial court finds anchor on Section 4, Rule 20 of the Rules of Court which reads:chanrob1es virtual 1aw library

SECTION 4. Record of pre-trial results. — After the pre-trial the court shall make an order which recites the action taken at the conference, the amendments allowed to the pleadings, and the agreements made

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by the parties as to any of the matters considered. Such order shall limit the issues for trial to those not disposed of by admissions or agreements of counsel and when entered controls the subsequent course of the action, unless modified before trial to prevent manifest injustice.chanrobles virtual lawlibrary

Indeed, the pre-trial is primarily intended to make certain that all issues necessary to the disposition of a case are properly raised. The purpose is to obviate the element of surprise, hence, the parties are expected to disclose at the pre-trial conference all issues of law and fact which they intend to raise at the trial, except such as may involve privileged or impeaching matter. 37 In the case at bar, the pre-trial order included as integral to the complete adjudication of the case the issue of whether the MERCADERs can demand specific performance from the DBP relative to the lease-purchase option. Thus, the element of surprise that the provision on pre-trial attempts to preclude was satisfied. The surprise factor was further eliminated, as already earlier mentioned and merely to reiterate here, with the DBP’s (1) motion to oppose the supplemental pleading, (2) objection to the introduction of evidence connected thereto, (3) later information from the trial court of its definitive ruling admitting the supplemental pleading, (4) own introduction of evidence related thereto, and finally, by its (5) intensive participation in the direct and cross-examination of witnesses whose testimonies included said topic. In any case, the filing and consequent admission of the supplemental pleading by the trial court validated the issues embraced in the pre-trial order.chanrobles.com.ph:red

Assuming arguendo that the MERCADERs failed to file the supplemental pleading, evidence relative to the lease-purchase option may be legitimately admitted by the trial court in conformity with Section 5, Rule 10 of the Rules of Court which states:chanrob1es virtual 1aw library

SECTION 5. Amendment to conform to or authorize presentation of evidence. — When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects, as if they had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgment; but failure so to amend does not affect the result of the trial of these issues. If

evidence is objected to at the trial on the ground that it is not within the issues made by the pleadings, the court may allow the pleadings to be amended and shall do so freely when the presentation of the merits of the action will be subserved thereby and the objecting party fails to satisfy the court that the admission of such evidence would prejudice him in maintaining his action or defense upon the merits. The court may grant a continuance to enable the objecting party to meet such evidence. (Emphasis supplied)

This provision envisions two scenarios — first, when evidence is introduced on an issue not alleged in the pleadings and no objection was interjected and second, when evidence is offered again, on an issue not alleged in the pleadings but this time an objection was interpolated. We are concerned with the second scenario. In Co Tiamco v. Diaz, the Court held that "when evidence is offered on a matter not alleged in the pleadings, the court may admit it even against the objection of the adverse party, where the latter fails to satisfy the court that the admission of the evidence would prejudice him in maintaining his defense upon the merits, and the court may grant him a continuance to enable him to meet the new situation created by the evidence. Of course, the court, before allowing the evidence, as a matter of formality, should allow an amendment of the pleading, . . . And, furthermore, where the failure to order an amendment does not appear to have caused surprise or prejudice to the objecting party, it may be allowed as a harmless error. Well-known is the rule that departures from procedure may be forgiven where they do not appear to have impaired the substantial rights of the parties." 38chanrobles virtuallawlibrary

More recently, in Bank of America v. American Realty Corporation 39 citing Talisay-Silay Milling Co., Inc. v. Asociacion de Agricultores de Talisay-Silay, Inc., 40 the Court reinforces the Co Tiamco ruling on the application of Section 5, Rule 10 of the Rules of Court in this wise:chanrobles.com : law library

The failure of a party to amend a pleading to conform to the evidence adduced during trial does not preclude adjudication by the court on the basis of such evidence which may embody new issues not raised in the pleadings. . . . Although, the pleading may not have been amended to conform to the evidence submitted during trial, judgment may nonetheless be rendered, not simply on the basis of the issues

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alleged but also on the issues discussed and the assertions of fact proved in the course of the trial. The court may treat the pleading as if it had been amended to conform to the evidence, although it had not been actually amended. . . .Clearly, a court may rule and render judgment on the basis of the evidence before it even though the relevant pleading had not been previously amended, so long as no surprise or prejudice is thereby caused to the adverse party. Put a little differently, so long as the basic requirements of fair play had been met, as where the litigants were given full opportunity to support their respective contentions and to object to or refute each other’s evidence, the court may validly treat the pleadings as if they had been amended to conform to the evidence and proceed to adjudicate on the basis of all the evidence before it.

As already enunciated, the DBP was not and would not be prejudiced by the incorporation of the lease-purchase option as one of the controverted issues. Moreover, it had been afforded ample opportunity to refute and object to the evidence germane thereto, thus, the rudiments of fair play had been properly observed.

Since we agree with the MERCADERs’ contention that the Court of Appeals contravened Section 4, Rule 20 and Section 5, Rule 10 of the Rules of Court in promulgating the questioned decision, we have to grant their prayer to refer the matter back to said court for a determination of the question of whether the lease-purchase option was already consummated and for a complete ascertainment of the rights and obligations of the parties.chanrobles.com.ph : red

WHEREFORE, IN VIEW OF ALL THE FOREGOING, the instant petition is GRANTED DUE COURSE and the 5 February 1997 judgment and 13 August 1995 resolution of the Court of Appeals in CA-GR-CV No. 21846 are hereby SET ASIDE. The case is REFERRED BACK to the Court of Appeals for a determination of whether the lease-purchase option was consummated with the end view of ascertaining the rights and obligations of the parties.chanroblesvirtual|awlibrary

Privileged Documents

Air Philippines vs Pennswell Inc.Facts:Petitioner is a domestic corporation engaged in the business of air transportation services. While,respondent was organized to engage in the business of manufacturing and selling industrial chemicals,solvents, and special lubricants. In particular, petitioner alleged that it was defrauded by respondent for itsprevious sale. Petitioner seeks to convince this Court that it has a right to obtain the chemical compositionand ingredients of respondent’s products to conduct a comparative analysis of its productsIssue: Can chemical components of Pennswell products be accessed pursuant to RA 7394, 8203,6969 and right to information under Sec. 7, Art III?Held: No.Jurisprudence has consistently acknowledged the private character of trade secrets. There is a privilegenot to disclose one’s trade secrets. Foremost, this Court has declared that trade secrets and bankingtransactions are among the recognized restrictions to the right of the people to information as embodiedin the Constitution.Air Philippines vs Pennswell Inc.Facts:Petitioner is a domestic corporation engaged in the business of air transportation services. While,respondent was organized to engage in the business of manufacturing and selling industrial chemicals,solvents, and special lubricants. In particular, petitioner alleged that it was defrauded by respondent for itsprevious sale. Petitioner seeks to convince this Court that it has a right to obtain the chemical compositionand ingredients of respondent’s products to conduct a comparative analysis of its productsIssue: Can chemical components of Pennswell products be accessed pursuant to RA 7394, 8203,6969 and right to information under Sec. 7, Art III?Held: No.

8

Jurisprudence has consistently acknowledged the private character of trade secrets. There is a privilegenot to disclose one’s trade secrets. Foremost, this Court has declared that trade secrets and bankingtransactions are among the recognized restrictions to the right of the people to information as embodiedin the Constitution.Air Philippines vs Pennswell Inc.Facts:Petitioner is a domestic corporation engaged in the business of air transportation services. While,respondent was organized to engage in the business of manufacturing and selling industrial chemicals,solvents, and special lubricants. In particular, petitioner alleged that it was defrauded by respondent for itsprevious sale. Petitioner seeks to convince this Court that it has a right to obtain the chemical compositionand ingredients of respondent’s products to conduct a comparative analysis of its productsIssue: Can chemical components of Pennswell products be accessed pursuant to RA 7394, 8203,6969 and right to information under Sec. 7, Art III?Held: No.Jurisprudence has consistently acknowledged the private character of trade secrets. There is a privilegenot to disclose one’s trade secrets. Foremost, this Court has declared that trade secrets and bankingtransactions are among the recognized restrictions to the right of the people to information as embodiedin the Constitution.Air Philippines vs Pennswell Inc.Facts:Petitioner is a domestic corporation engaged in the business of air transportation services. While,respondent was organized to engage in the business of manufacturing and selling industrial chemicals,solvents, and special lubricants. In particular, petitioner alleged that it was defrauded by respondent for itsprevious sale. Petitioner seeks to convince this Court that it has a right to obtain the chemical composition

and ingredients of respondent’s products to conduct a comparative analysis of its productsIssue: Can chemical components of Pennswell products be accessed pursuant to RA 7394, 8203,6969 and right to information under Sec. 7, Art III?Held: No.Jurisprudence has consistently acknowledged the private character of trade secrets. There is a privilegenot to disclose one’s trade secrets. Foremost, this Court has declared that trade secrets and bankingtransactions are among the recognized restrictions to the right of the people to information as embodiedin the Constitution.Air Philippines vs Pennswell Inc.Facts:Petitioner is a domestic corporation engaged in the business of air transportation services. While,respondent was organized to engage in the business of manufacturing and selling industrial chemicals,solvents, and special lubricants. In particular, petitioner alleged that it was defrauded by respondent for itsprevious sale. Petitioner seeks to convince this Court that it has a right to obtain the chemical compositionand ingredients of respondent’s products to conduct a comparative analysis of its productsIssue: Can chemical components of Pennswell products be accessed pursuant to RA 7394, 8203,6969 and right to information under Sec. 7, Art III?Facts:Petitioner is a domestic corporation engaged in the business of air transportation services. While,respondent was organized to engage in the business of manufacturing and selling industrial chemicals,solvents, and special lubricants. In particular, petitioner alleged that it was defrauded by respondent for itsprevious sale. Petitioner seeks to convince this Court that it has a right to obtain the chemical compositionand ingredients of respondent’s products to conduct a comparative analysis of its productsIssue: Can chemical components of Pennswell products be accessed pursuant to RA 7394, 8203,

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6969 and right to information under Sec. 7, Art III?Facts:Petitioner is a domestic corporation engaged in the business of air transportation services. While,respondent was organized to engage in the business of manufacturing and selling industrial chemicals,solvents, and special lubricants. In particular, petitioner alleged that it was defrauded by respondent for itsprevious sale. Petitioner seeks to convince this Court that it has a right to obtain the chemical compositionand ingredients of respondent’s products to conduct a comparative analysis of its productsFacts:Petitioner is a domestic corporation engaged in the business of air transportation services. While,respondent was organized to engage in the business of manufacturing and selling industrial chemicals,solvents, and special lubricants.Facts:Petitioner is a domestic corporation engaged in the business of air transportation servicesAir Philippines vs Pennswell Inc.

Facts:Petitioner is a domestic corporation engaged in the business of air transportation services. While, respondent was organized to engage in the business of manufacturing and selling industrial chemicals, solvents, and special lubricants. In particular, petitioner alleged that it was defrauded by respondent for its previous sale. Petitioner seeks to convince this Court that it has a right to obtain the chemical composition and ingredients of respondent’s products to conduct a comparative analysis of its products

Issue: Can chemical components of Pennswell products be accessed pursuant to RA 7394, 8203, 6969 and right to information under Sec. 7, Art III?

Held: No.Jurisprudence has consistently acknowledged the private character of trade secrets. There is a privilege not to disclose one’s trade secrets. Foremost, this Court has declared that trade secrets and banking

transactions are among the recognized restrictions to the right of the people to information as embodied in the Constitution.

Petitioner cannot rely on Section 77 of Republic Act 7394, or the Consumer Act of the Philippines, in order to compel respondent to reveal the chemical components of its products. While it is true that all consumer products domestically sold, whether manufactured locally or imported, shall indicate their general make or active ingredients in their respective labels of packaging, the law does not apply to respondent. Respondent’s specialized lubricants are not consumer products. Its products are not intended for personal, family, household or agricultural purposes. Rather, they are for industrial use, specifically for the use of aircraft propellers and engines. 

Petitioner’s argument that Republic Act No. 8203, or the Special Law on Counterfeit Drugs, requires the disclosure of the active ingredients of a drug is also on faulty ground. Respondent’s products are outside the scope of the cited law. They do not come within the purview of a drug which, as defined therein, refers to any chemical compound or biological substance, other than food, that is intended for use in the treatment, prevention or diagnosis of disease in man or animals. Again, such are not the characteristics of respondent’s products.

Republic Act No. 6969, or the Toxic Substances and Hazardous and Nuclear Wastes Control Act of 1990, also contains a provision that limits the right of the public to have access to records, reports or information concerning chemical substances and mixtures including safety data submitted and data on emission or discharge into the environment, if the matter is confidential such that it would divulge trade secrets, production or sales figures; or methods, production or processes unique to such manufacturer, processor or distributor; or would otherwise tend to affect adversely the competitive position of such manufacturer, processor or distributor.

Trade secrets should receive greater protection from discovery, because they derive economic value from being generally unknown and not readily ascertainable by the public.Facts:Petitioner Air Philippines Corporation is a domestic corporation engaged in the business of air transportation services.  On the other hand, respondent Pennswell, Inc. was organized to engage in the

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business of manufacturing and selling industrial chemicals, solvents, and special lubricants.Respondent delivered and sold to petitioner sundry goods in trade. Under the contracts, petitioner’s total outstanding obligation amounted to P449,864.98 with interest at 14% per annum until the amount would be fully paid.  For failure of the petitioner to comply with its obligation under said contracts, respondent filed a Complaint for a Sum of Money on 28 April 2000 with the RTC.In its Answer, petitioner alleged that it was defrauded in the amount of P592,000.00 by respondent for its previous sale of four items. Petitioner asserted that it was deceived by respondent which merely altered the names and labels of such goods. Petitioner asseverated that had respondent been forthright about the identical character of the products, it would not have purchased the items complained of.Moreover, petitioner alleged that when the purported fraud was discovered, a conference was held between petitioner and respondent on 13 January 2000, whereby the parties agreed that respondent would return to petitioner the amount it previously paid.  However, petitioner was surprised when it received a letter from the respondent, demanding payment of the amount of P449,864.94, which later became the subject of respondent’s Complaint for Collection of a Sum of Money against petitioner.During the pendency of the trial, petitioner filed a Motion to Compel respondent to give a detailed list of the ingredients and chemical components of the following products. The RTC rendered an Order granting the petitioner’s motion.Respondent sought reconsideration of the foregoing Order, contending that it cannot be compelled to disclose the chemical components sought because the matter is confidential.  It argued that what petitioner endeavored to inquire upon constituted a trade secret which respondent cannot be forced to divulge.The RTC gave credence to respondent’s reasoning, and reversed itself. Alleging grave abuse of discretion on the part of the RTC, petitioner filed a Petition for Certiorari under Rule 65 of the Rules of Court with the Court of Appeals, which denied the Petition and affirmed the Order dated 30 June 2004 of the RTC. Petitioner’s Motion for Reconsideration was denied. Unyielding, petitioner brought the instant Petition before SC.Issue:W/N CA erred in upholding RTC decision denying petitioner’s motion to subject respondent’s products to compulsory disclosure.

Held:No. The products are covered by the exception of trade secrets being divulged in compulsory disclosure.  The Court affirms the ruling of the Court of Appeals which upheld the finding of the RTC that there is substantial basis for respondent to seek protection of the law for its proprietary rights over the detailed chemical composition of its products.The Supreme Court has declared that trade secrets and banking transactions are among the recognized restrictions to the right of the people to information as embodied in the Constitution. SC said that the drafters of the Constitution also unequivocally affirmed that, aside from national security matters and intelligence information, trade or industrial secrets (pursuant to the Intellectual Property Code and other related laws) as well as banking transactions (pursuant to the Secrecy of Bank Deposits Act), are also exempted from compulsory disclosure.A trade secret is defined as a plan or process, tool, mechanism or compound known only to its owner and those of his employees to whom it is necessary to confide it. The definition also extends to a secret formula or process not patented, but known only to certain individuals using it in compounding some article of trade having a commercial value. American jurisprudence has utilized the following factors to determine if an information is a trade secret, to wit:(1) the extent to which the information is known outside of the employer’s business;(2) the extent to which the information is known by employees and others involved in the business;(3) the extent of measures taken by the employer to guard the secrecy of the information;(4) the value of the information to the employer and to competitors;(5) the amount of effort or money expended by the company in developing the information; and(6) the extent to which the information could be easily or readily obtained through an independent source.Rule 27 sets an unequivocal proviso that the documents, papers, books, accounts, letters, photographs, objects or tangible things that may be produced and inspected should not be privileged. The documents must not be privileged against disclosure. On the ground of public policy, the rules providing for production and inspection of books and papers do not authorize the production or inspection of privileged matter; that is, books and papers which, because of their

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confidential and privileged character, could not be received in evidence. Such a condition is in addition to the requisite that the items be specifically described, and must constitute or contain evidence material to any matter involved in the action and which are in the party’s possession, custody or control.In the case at bar, petitioner cannot rely on Section 77of Republic Act 7394, or the Consumer Act of the Philippines, in order to compel respondent to reveal the chemical components of its products.  While it is true that all consumer products domestically sold, whether manufactured locally or imported, shall indicate their general make or active ingredients in their respective labels of packaging, the law does not apply to respondent.  Respondent’s specialized lubricants — namely, Contact Grease, Connector Grease, Thixohtropic Grease, Di-Electric Strength Protective Coating, Dry Lubricant and Anti-Seize Compound — are not consumer products.What is clear from the factual findings of the RTC and the Court of Appeals is that the chemical formulation of respondent’s products is not known to the general public and is unique only to it.  Both courts uniformly ruled that these ingredients are not within the knowledge of the public.  Since such factual findings are generally not reviewable by this Court, it is not duty-bound to analyze and weigh all over again the evidence already considered in the proceedings below.The revelation of respondent’s trade secrets serves no better purpose to the disposition of the main case pending with the RTC, which is on the collection of a sum of money.  As can be gleaned from the facts, petitioner received respondent’s goods in trade in the normal course of business.  To be sure, there are defenses under the laws of contracts and sales available to petitioner.  On the other hand, the greater interest of justice ought to favor respondent as the holder of trade secrets. Weighing the conflicting interests between the parties, SC rules in favor of the greater interest of respondent.  Trade secrets should receive greater protection from discovery, because they derive economic value from being generally unknown and not readily ascertainable by the public.

Forms and contents (Sec. 3, Rule 21)

UNIVERSAL RUBBER PRODUCTS, INC.,                           Petitioner,G. R. No. L-30266

June 29, 1984-versus- 

HON. COURT OF APPEALS, CONVERSE RUBBER CORPORATION, EDWARDSON MANUFACTURING CO., INC.chanrobles virtual law library and HON. PEDRO C. NAVARRO,                       Respondents.   

R E S O L U  T I O NGUERRERO, J.:

This Petition for Review concerns a "subpoena duces tecum" which was issued by the trial court against the Treasurer of the herein petitioner, the propriety of which was upheld by the defunct Court of Appeals [now Intermediate Appellate Court].The facts of this case as stated in the decision of the then Court of Appeals are as follows:Records disclose that the two respondent corporations herein sued the present petitioner before the Court of First Instance of Rizal for unfair competition with damages and attorney's fees. In due time, herein petitioner, who was the defendant in that court suit, answered the complaint and joined issues with the plaintiffs therein, forthwith respondent Judge, to whom that lawsuit was assigned, proceeded with the trial thereof. After they have presented about nine witnesses and various pieces of documentary evidence, herein private respondents made a request to the respondent Judge to issue a subpoena duces tecum against the treasurer of herein petitioner. Acting favorably on that request, said respondent Judge issued a subpoena duces tecum on February 13, 1968, directing the treasurer of the present petitioner to bring with him to the lower court on February 26, 1968 and March 8, 1968 at 2:30 p.m. ", all sales invoices, sales books and ledgers wherein are recorded the sales of Plymouth Star Player rubber shoes from the time the corporation started manufacturing and selling said shoes up to the present.cralawOn March 4, 1968, petitioner filed a motion in the court below praying that thesubpoena duces tecum dated February 13, 1968 be quashed on the grounds that: [1] the said subpoena is both unreasonable and

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oppressive as the books and documents called for are numerous and voluminous; [2] there is no good cause shown for the issuance thereof; and [3] the books and documents are not relevant to the case pending below. The private respondents herein opposed that motion of the petitioner. Acting on the said motion and on the opposition thereto, respondent Judge issued the first controverted order on May 6, 1968, denying the motion to quash the subpoena duces tecum.On May 15, 1968, herein petitioner filed in the court a quo a motion for reconsideration seeking the said court to reconsider its order denying the motion to quash the subpoena duces tecum. This, too, was opposed by the private respondents. Acting on this motion, as well as on the opposition thereto, respondent Judge issued the second controverted order on June 28, 1968, denying the motion for reconsideration. Consequently, on August 6, 1968, petitioner Universal Rubber Products, Inc. filed its present petition for certiorari with preliminary injunction, alleging that in so denying its motion to quash the subpoena duces tecum and its subsequent motion for reconsideration, respondent Judge acted with grave abuse of discretion amounting to an excess of jurisdiction. [1]Pending the resolution of the appealed case, the Court of Appeals issued on September 25, 1968 a temporary restraining order directing the respondent Judge of the trial court to refrain from implementing his order dated May 6, 1968 in Civil Case No. 9686. [2]On November 12, 1968, the respondent Court rendered its Decision denying the petition for certiorari filed by petitioner for lack of merit. The dispositive portion of the said Decision reads: [3]WHEREFORE, for lack of merit, the present petition for certiorari with preliminary injunction is hereby denied and the temporary restraining order issued by this Court on September 25, 1968 is now lifted, with costs against the petitioner.SO ORDERED.

Petitioner argues three errors to support his Petition, to wit: [4]I.chanrobles virtual law libraryThe respondent Court erred when it found the fact of the petition and its annexes as not demonstrating clear abuse of discretion by respondent Judge.chanrobles virtual law libraryII.chanrobles virtual law libraryThe respondent Court erred when it refused to sustain the contention of petitioner that the issuance by the respondent judge of

thesubpoena duces tecum was an arbitrary exercise of judicial power.chanrobles virtual law libraryIII.chanrobles virtual law libraryThe respondent Court erred when it did not consider the subpoena duces tecum issued by the respondent Judge as a fishing bill when it refused to order its quashal.chanrobles virtual law library

The issues summarized, We are called upon to answer whether the issuance of the "subpoena duces tecum" is proper in a suit for unfair competition.cralawPrivate respondent claims the affirmative because [1] the subpoena duces tecum in question specifically designates the books and documents that should be produced in court and they are 4 sales invoices, sales books and ledgers where are recorded the sales of Plymouth Star Player Rubber Shoes from the time the corporation started manufacturing and selling shoes [that is from April 1, 1963] up to the present; and [2] the relevancy of the books subject to the controverted subpoena duces tecum cannot be seriously denied because if and when herein respondent corporations are ultimately adjudged to be entitled to recover compensatory damages from the petitioner, there would be no factual basis for the amount of such damages unless those books and documents are laid open for the court's scrutiny.cralawOn the other hand, petitioner submits a contrary opinion and insists that the question of liability of petitioner should be determined first before discovery by means of a subpoena duces tecum is allowed; that respondent Converse is a foreign corporation not licensed to do business in the Philippines and that Edwardson is merely its licensee; that respondent Converse has no goodwill to speak of and that it has no registrable right over its own names; that the questioned subpoena duces tecum issued by respondent judge was merely a "Fishing Bill."In the meantime, while this present petition remains pending before this Court, petitioner manifested on April 2, 1977 [5] that their establishment was totally burned together with all the records which is sought to be produced in court by the questioned "subpoena duces tecum" on May 3, 1970. In effect, it renders the present petition moot and academic. However, the legal principles arising from the issues deserve Our discussion and resolution.cralawAs a general rule, on obtaining an injunction for infringement of a trademark, complainant is entitled to an accounting and recovery of defendant's profits on the goods sold under that mark, as incident to,

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and a part of, his property right, and this rule applies in cases of unfair competition.  In such case, the infringer or unfair trader is required in equity to account for and yield up his gains on a principle analogous to that which charges as trustee with the profits acquired by the wrongful use of the property of the cestui que trust, and defendant's profits are regarded as an equitable measure of the compensation plaintiff should receive for the past harm suffered by him. [6]Well-settled is Our jurisprudence that, in order to entitle a party to the issuance of a "subpoena duces tecum ", it must appear, by clear and unequivocal proof, that the book or document sought to be produced contains evidence relevant and material to the issue before the court, and that the precise book, paper or document containing such evidence has been so designated or described that it may be identified. [7]   A "subpoena duces tecum" once issued by the court, may be quashed upon motion if the issuance thereof is unreasonable and oppressive or the relevancy of the books, documents or things does not appear, or if the persons in whose behalf the subpoena is issued fails to advance the reasonable cost of production thereof. [8]In the instant case, in determining whether the books subject to the subpoena duces tecum are relevant and reasonable in relation to the complaint of private respondent for unfair competition, We have to examine Republic Act No. 166, which provides: 

Chapter V. Rights and Remediesxxx   xxx   xxxSec. 23. Actions, and damages and injunction for infringement. -  Any person entitled to the exclusive use of a registered mark or trade name may recover damages in a civil action from any person who infringes his rights and the measure of the damages suffered shall be either the reasonable profit which the complaining party would have made, had the defendant not infringed his said rights, or the profit which the defendant actually made out of the infringment management, or in the event such measure of damages cannot be readily ascertained with reasonable certainty, then the court may award as damages a reasonable percentage based upon the amount of gross sales of the defendant of the value of the services in connection with which the mark or trade name was used in the infringement of the rights of the complaining party. In cases where actual intent to mislead the public or to defraud the complaining party shall be shown in the discretion of the court, the damages may be doubled.

The complaining party, upon proper showing may also be granted injunction.

In recovering the loss suffered by the aggrieved party due to unfair competition," Sec. 23 of R. A. 166 [9] grants the complainant three options within which to ascertain the amount of damages recoverable, either [1] the reasonable profit which the complaining party would have made, had the defendant not infringed his said rights; or [2] the profit which the defendant actually made out of the infringement; or [3] the court may award as damages a reasonable percentage based upon the amount of gross sales of the defendant or the value of the services in connection with which the mark or tradename was issued in the infringement of the rights of the complaining party.In giving life to this remedial statute, We must uphold the order of the court a quo denying the motion of the petitioner to quash the "subpoena duces tecum" previously issued against the petitioner.  In a suit for unfair competition, it is only through the issuance of the questioned "subpoena duces tecum" that the complaining party is afforded his full rights of redress.cralawThe argument that the petitioner should first be found guilty unfair competition before an accounting for purposes of ascertaining the amount of damages recoverable can proceed, stands without meritThe complaint for unfair competition is basically a suit for "injunction and damages." [10] Injunction, for the purpose of enjoining the unlawful competitor from proceeding further with the unlawful competition, and damages, in order to allow the aggrieved party to recover the damage he has suffered by virtue of the said unlawful competition. Hence, the election of the complainant [private respondent herein] for the accounting of petitioner's [defendant below] gross sales as damages per R. A. 166, appears most relevant. For Us, to determine the amount of damages allowable after the final determination of the unfair competition case would not only render nugatory the rights of complainant under Sec. 23 of R. A. 166, but would be a repetitious process causing only unnecessary delay.cralawThe sufficiency in the description of the books sought to be produced in court by the questioned "subpoena duces tecum" is not disputed in this case, hence, We hold that the same has passed the test of sufficient description.cralawPetitioner also assails that private respondent is a foreign corporation not licensed to do business in the Philippines and that respondent

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Edwardson is merely its licensee; that respondent Converse has no goodwill to speak of and that it has no registrable right over its own name. We have already answered this issue squarely in Our decision of the case of Converse Rubber Corporation vs. Jacinto Rubber & Plastic Co., Inc., [11] where We explained:The disability of a foreign corporation from suing in the Philippines is limited to suits to enforce any legal of contract rights arising from, or growing out, of any business which it has transacted in the Philippine Islands. On the other hand, where the purpose of the suit is "to protect its reputation, its corporate name, its goodwill, whenever that reputation, corporate name or goodwill have, through the natural development of its trade, established themselves", an unlicensed foreign corporation may sue in the Philippines. So interpreted by the Supreme Court, it is clear that Section 29 of the Corporation Law does not disqualify plaintiff-appellee Converse Rubber, which does not have a branch office in any part of the Philippines and is not "doing business" in the Philippines, from filing and prosecuting this action for unfair competition.

As We said earlier, the establishment of the petitioner burned down together with all the records sought to be produced by the questioned "subpoena duces tecum," hence, this case has become moot and academic. We have no recourse but to dismiss the same.WHEREFORE, the instant petition is dismissed for becoming moot and academic. No costs.cralawSO ORDERED.cralaw

[G.R. NO. 158275 : June 28, 2005]DOMINGO ROCO, Petitioner, v. HON. EDWARD B. CONTRERAS, PEOPLE OF THE PHILIPPINES and CAL'S POULTRY SUPPLY CORPORATION, Respondents.D E C I S I O NGARCIA, J.:Assailed and sought to be set aside in this appeal by way of a Petition for Review on Certiorari under Rule 45 of the Rules of Court are the following issuances of the Court of Appeals in CA-G.R. SP No. 66038, to wit:1. Decision dated 20 August 2002,1 dismissing the appeal filed by herein petitioner Domingo Roco contra the 18 October 2000 resolution of the Regional Trial Court (RTC) at Roxas City, denying

due course to and dismissing his petition for certiorari in SP Case No. 7489; andcralawlibrary2. Resolution dated 12 May 2003,2 denying petitioner's motion for reconsideration.The material facts are not at all disputed:Petitioner Domingo Roco was engaged in the business of buying and selling dressed chicken. Sometime in 1993, he purchased his supply of dressed chicken from private respondent Cal's Poultry Supply Corporation (Cal's Corporation, for short), a domestic corporation controlled and managed by one Danilo Yap. As payment for his purchases, petitioner drew five (5) checks payable to Cal's Corporation against his account with the Philippine Commercial and Industrial Bank (PCIB), which checks bear the following particulars:

Check No. Date Amount

004502 26 April 1993 P329,931.40

004503 4 May 1993 P319,314.40

004507 19 May 1993 P380,560.20

004511 26 May 1993 P258,660.20

004523 22 May 1993 P141,738.55.

Cal's Corporation deposited the above checks in its account with PCIB but the bank dishonored them for having been drawn against a closed account. Thereafter, Cal's Corporation filed criminal complaints against petitioner for violation of Batas Pambasa Blg. 22 (BP 22), otherwise known as the Bouncing Checks Law.After preliminary investigation, five (5) informations for violation of BP 22 were filed against petitioner before the Municipal Trial Court in Cities (MTCC), Roxas City, thereat docketed as Crim. Cases No. 94-2172-12 to 94-2176-12, all of which were raffled to Branch 2 of said court.Meanwhile, and even before trial could commence, petitioner filed with the Bureau of Internal Revenue (BIR) at Iloilo City a denunciation letter against Cal's Corporation for the latter's alleged violation of Section 258 in relation to Section 263 of the National Internal Revenue Code in that it failed to issue commercial invoices on its sales of merchandise. Upon BIR's investigation, it was found that Cal's Corporation's sales on account were unavoidable, hence, the

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corporation had to defer the issuance of "Sales Invoices" until the purchases of its customers were paid in full. With respect to the sales invoices of petitioner, the investigation disclosed that the same could not, as yet, be issued by the corporation precisely because the checks drawn and issued by him in payment of his purchases were dishonored by PCIB for the reason that the checks were drawn against a closed account. Accordingly, the BIR found noprima facia evidence of tax evasion against Cal's Corporation.3Thereupon, trial of the criminal cases proceeded. After the prosecution rested, the MTCC declared the cases submitted for decision on account of petitioner's failure to adduce evidence in his behalf. Later, the same court rendered a judgment of conviction against petitioner.Therefrom, petitioner went on appeal to the Regional Trial Court, contending that he was unlawfully deprived of his right to due process when the MTCC rendered judgment against him without affording him of the right to present his evidence. Agreeing with the petitioner, the RTC vacated the MTCC decision and remanded the cases to it for the reception of petitioner's evidence.On 11 March 1999, during the pendency of the remanded cases, petitioner filed with the MTCC a"Request for Issuance of Subpoena Ad Testificandum and Subpoena Duces Tecum", requiring Vivian Deocampo or Danilo Yap, both of Cal's Corporation or their duly authorized representatives, to appear and testify in court on 19 May 1999 and to bring with them certain documents, records and books of accounts for the years 1993-1999, to wit:a) Sales Journal for the year 1993;b) Accounts Receivable Journal for the year 1993;c) Sales Ledger for the year 1993;d) Accounts Receivable Ledger for the year 1993 (in its absence, Accounts Receivable Ledger for the years 1994, 1995, 1996, 1997, 1998 or 1999);e) Audited Income Statement for the years 1993, 1994, 1995, 1996, 1997, 1998 and Income Statements as of February 1999;f) Audited Balance Sheet for the years 1993, 1994, 1995, 1996, 1997, 1998 and Balance Sheet as of February 1999; andcralawlibraryg) Income Tax Returns for the years 1993, 1994, 1995, 1996 and 1997.The prosecution did not object to this request.When the cases were called on 19 May 1999, the MTCC, then presided by Acting Judge Geomer C. Delfin, issued an order granting

petitioner's aforementioned request and accordingly directed the issuance of the desired subpoenas.During the trial of 14 July 1999, the private prosecutor manifested that it was improper for the trial court to have directed the issuance of the requested subpoenas, to which the petitioner countered by saying that Judge Delfin's order of 19 May 1999 had become final and hence, immutable. Nonetheless, the trial court issued an order allowing the prosecution to file its comment or opposition to petitioner's request for the issuance of subpoenas.The prosecution did file its opposition, thereunder arguing that:a) Vivian Deocampo, who previously testified for Lota Briones-Roco in Criminal Cases Nos. 94-2177-12 to 94-2182-12 before Branch 1 of the MTC, had earlier attested to the fact that the following documents, records and books of accounts for 1993 sought by petitioner were already burned:1. Audited Income Statement for the years 1993, 1994, 1995, 1996, 1997, 1998 and Income Statement as of February 1999;2. Audited Balance Sheet for the years 1993, 1994, 1995, 1996, 1997, 1998 and Balance Sheet as of February 1999; andcralawlibrary3. Income Tax Returns for the years 1993, 1994, 1995, 1996 and 1997.b) the Sales Ledger for the year 1993 cannot be produced because Cal's Corporation did not maintain such ledger; andcralawlibraryc) the account Receivable Ledger for the periods from 1993, the Income Statement for 1993 and the Balance Sheet as of February 1999, cannot also be produced because Cal's Corporation recently computerized its accounting records and was still in the process of completing the same.For its part, the corporation itself maintained that the production of the above-mentioned documents was inappropriate because they are immaterial and irrelevant to the crimes for which the petitioner was being prosecuted.In a resolution dated 19 October 1999, the MTCC, this time thru its regular Presiding Judge, Judge Edward B. Contreras, denied petitioner's request on the following grounds: (a) the requested documents, book ledgers and other records were immaterial in resolving the issues posed before the court; and (b) the issuance of the subpoenas will only unduly delay the hearing of the criminal cases.His motion for reconsideration of the denial resolution having been similarly denied by Judge Contreras, petitioner then went to the RTC

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on a petition for certiorari with plea for the issuance of a writ of preliminary injunction and/or temporary restraining order, imputing grave abuse of discretion on the part of Judge Contreras, which petition was docketed in the RTC as SP Case No. V-7489.In a resolution dated 18 October 2000, the RTC denied due course to and dismissed the petition for petitioner's failure to show that Judge Contreras committed grave abuse of discretion amounting to excess or lack of jurisdiction. A motion for reconsideration was thereafter filed by petitioner, but it, too, was likewise denied.Undaunted, petitioner went on appeal via certiorari to the Court of Appeals in CA-G.R. SP No. 66038.As stated at the outset hereof, the Court of Appeals, in a decision dated 20 August 2002,4 dismissed the petition and accordingly affirmed the impugned resolutions of the RTC. With his motion for reconsideration having been denied by the same court in its resolution of 12 May 2003,5 petitioner is now with us via the present recourse on his submissions that -I.XXX THE DENIAL OF THE REQUEST FOR THE ISSUANCE OF SUBPOENA AD TESTIFICANDUM AND SUBPOENA DUCES TECUM IS VIOLATIVE OF THE CONSTITUTIONAL RIGHT OF THE ACCUSED AS ENSHRINED IN ART. III, SEC. 14 (2) OF THE CONSTITUTION; andII.XXX THERE MUST BE A BALANCING OF INTEREST BETWEEN THE RIGH [sic] OF AN ACCUSED TO PROVE HIS INNOCENCE AND THE RIGHT OF A COMPLAINANT TO THE SPEEDY DISPOSITION OF HIS CASE.As we see it, the pivotal issue is whether or not the three (3) courts below committed reversible error in denying petitioner's request for the issuance of subpoena ad testificandum and subpoena duces tecum in connection with the five (5) criminal cases for violation of BP 22 filed against him and now pending trial before the MTCC.We rule in the negative.A subpoena is a process directed to a person requiring him to attend and to testify at the hearing or trial of an action or at any investigation conducted under the laws of the Philippines, or for the taking of his deposition.6In this jurisdiction, there are two (2) kinds of subpoena, to wit: subpoena ad testificandum and subpoena duces tecum. The first is used to compel a person to testify, while the second is used to compel

the production of books, records, things or documents therein specified. As characterized in H.C. Liebenow v. The Philippine Vegetable Oil Company:7The subpoena duces tecum is, in all respects, like the ordinary subpoena ad testificandum with the exception that it concludes with an injunction that the witness shall bring with him and produce at the examination the books, documents, or things described in the subpoena.Well-settled is the rule that before a subpoena duces tecum may issue, the court must first be satisfied that the following requisites are present: (1) the books, documents or other things requested must appear prima facie relevant to the issue subject of the controversy (test of relevancy); and (2) such books must be reasonably described by the parties to be readily identified (test of definiteness). Again, to quote from H.C. Liebenow:8In determining whether the production of the documents described in a subpoena duces tecum should be enforced by the court, it is proper to consider, first, whether the subpoena calls for the production of specific documents, or rather for specific proof, and secondly, whether that proof is prima facie sufficiently relevant to justify enforcing its production. A general inquisitorial examination of all the books, papers, and documents of an adversary, conducted with a view to ascertain whether something of value may not show up, will not be enforced. (Emphasis supplied)Ï‚rαlαωlιbrαrÿFurther, in Universal Rubber Products, Inc. v. CA, et al.,9 we held:Well-settled is Our jurisprudence that, in order to entitle a party to the issuance of a 'subpoena duces tecum,' it must appear, by clear and unequivocal proof, that the book or document sought to be produced contains evidence relevant and material to the issue before the court, and that the precise book, paper or document containing such evidence has been so designated or described that it may be identified. (Emphasis supplied)Ï‚rαlαωlιbrαrÿGoing by established precedents, it thus behooves the petitioner to first prove, to the satisfaction of the court, the relevancy and the definiteness of the books and documents he seeks to be brought before it.Admittedly, the books and documents that petitioner requested to be subpoenaed are designated and described in his request with definiteness and readily identifiable. The test of definiteness, therefore, is satisfied in this case.

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It is, however, in the matter of relevancy of those books and documents to the pending criminal cases that petitioner miserably failed to discharge his burden.In the recent case of Aguirre v. People of the Philippines,10 the Court reiterated the following discussions regarding violations of BP 22:xxx what the law punishes is the issuance of a bouncing check not the purpose for which it was issued nor the terms and conditions relating to its issuance. The mere act of issuing a worthless check is malum prohibitum. (Cruz v. Court of Appeals, 233 SCRA 301). All the elements, therefore, of the violation of Batas Pambansa Blg. 22 are all present in the instant criminal cases and for which the accused is solely liable, to wit: [a] the making, drawing and issuance of any check to apply to account or for value; [2] the knowledge of the maker, drawer or issuer that at the time of issue he does not have sufficient funds in or credit with the drawee bank for the payment of such check in full upon its presentment; and [3] subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit or dishonor for the same reason had not the drawer, without any valid cause, ordered the bank to stop payment.(Navarro v. Court of Appeals, 234 SCRA 639).We stress that the gravamen of the offense under BP 22 is the act of making or issuing a worthless check or a check that is dishonored upon its presentment for payment.11 The offense is already consummated from the very moment a person issues a worthless check, albeit payment of the value of the check, either by the drawer or by the drawee bank, within five (5) banking days from notice of dishonor given to the drawer is a complete defense because the prima faciepresumption that the drawer had knowledge of the insufficiency of his funds or credit at the time of the issuance of the check and on its presentment for payment is thereby rebutted by such payment.12Here, petitioner would want it appear that the books and documents subject of his request for subpoenaduces tecum are indispensable, or, at least, relevant to prove his innocence. The Court disagrees.Based on the records below and as correctly pointed out by the Court of Appeals, petitioner had been issued by Cal's Corporation with temporary receipts in the form of yellow pad slips of paper evidencing his payments, which pad slips had been validated by the corporation itself. Clear it is, then, that the production of the books and documents requested by petitioner are not indispensable to prove his defense of payment. In the words of the appellate court:

The Petitioner admitted, when he testified in the Regional Trial Court, that he had been issued temporary receipts in the form of yellow pad slips of paper, by the Private Respondent, for his payments which were all validated by the Private Respondent (Exhibits '8' and 'F' and their submarkings). Even if the temporary receipts issued by the Private Respondent may not have been the official receipts for Petitioner's payments, the same are as efficacious and binding on the Private Respondent as official receipts issued by the latter.We do not find any justifiable reason, and petitioner has not shown any, why this Court must have to disbelieve the factual findings of the appellate court. In short, the issuance of a subpoena duces tecum or ad testificandum to compel the attendance of Vivian Deocampo or Danilo Yap of Cal's Corporation or their duly authorized representatives, to testify and bring with them the records and documents desired by the petitioner, would serve no purpose but to further delay the proceedings in the pending criminal cases.Besides, the irrelevancy of such books and documents would appear on their very face thereof, what the fact that the requested Audited Income Statements, Audited Balance Sheets, Income Tax Returns, etc. pertained to the years 1994 to 1999 which could not have reflected petitioner's alleged payment because the subject transaction happened in 1993. Again, we quote from the assailed decision of the Court of Appeals:The checks subject of the criminal indictments against the Petitioner were drawn and dated in 1993. The Petitioner has not demonstrated the justification, for the production of the books/records for 1994, and onwards, up to 1999. Especially so, when the "Informations" against the Petitioner, for violations of BP 22, were filed, with the Trial Court, as early as 1994.We are inclined to believe, along with that court, that petitioner was just embarking on a "fishing expedition" to derail "the placid flow of trial".With the above, it becomes evident to this Court that petitioner's request for the production of books and documents referred to in his request are nakedly calculated to merely lengthen the proceedings in the subject criminal cases, if not to fish for evidence. The Court deeply deplores petitioner's tactics and will never allow the same.WHEREFORE, the instant petition is DENIED and the challenged decision and resolution of the Court of Appeals AFFIRMED.Costs against petitioner.

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Nature of Trial

G.R. No. L-17427             July 31, 1962RODRIGO ACOSTA, petitioner, vs.PEOPLE OF THE PHILIPPINES, respondent.Rodrigo Acosta for and in his own behalf as petitioner.Office of the Solicitor General for respondent.CONCEPCION, J.:Appeal by certiorari, taken by Rodrigo Acosta, from a decision of the Court of Appeals remanding this case to the court of origin for retrial and the rendition of judgment in accordance with the evidence that the parties may then present.It appears that on January 2, 1951, an information for malversation of public funds thru reckless negligence was filed, with the Court of First Instance of Bukidnon, against petitioner Rodrigo Acosta, for having allegedly made, as Provincial Treasurer of Bukidnon, "irregular and excessive purchases of supplies, materials, equipment and printed forms from private dealers for the use of the province", and against Leonardo Avila, for having, as Provincial Auditor of the same province, "passed in audit the corresponding vouchers covering the payments for such purchases." Subsequently, the information was amended to include as defendants three (3) private dealers, namely, C. Silvestre, E. M. Haravata and Victoriano C. Arias, who had allegedly been able to collect payment upon said purchases. Still later, however, the prosecution filed a second amended information excluding said dealers from the charge.The trial under this second amended information, in connection with which Acosta and Avila had entered a plea of not guilty, began on June 19, 1952 and ended on July 28, of the same year. However, the trial Judge, Hon. Jose P. Veluz, retired from the service without having decided the case. His successor in office, Hon. Vicente Abad Santos, Judge, "found the transcript of 482 pages prepared by stenographer Celestino Suarez" replete with "omissions and also inaccuracies which had been indicated by means of marginal notes on the pages mentioned in" an "order of September 25, 1957." Judge Abad Santos directed, therefore, said stenographer "to re-transcribe his notes and to submit the "new transcript as well as the first transcript" not later than forty days after receipt of a copy of said order". But, "instead of re-transcribing his notes . . ., Mr. Suarez merely made corrections in handwriting and inserted some

supplemental transcripts in the original transcripts". Upon reading those supplemental typed transcripts, particularly the portion covering the cross-examination of witness Pedro Palafox by defense counsel Cipriano Asada, Judge Abad Santos noticed, however, that it was still "full of inaccuracies". Accordingly, he ordered the stenographer to read his notes in his (Judge Abad Santos) chamber, in order that the necessary corrections could be made on the transcript. Upon going over said notes, it appeared that said portion "consisted of eleven pages although the transcript thereof was spread to eight pages only". Hence, Suarez was ordered to further transcribe what had thus been omitted. What is more, in order that he could decide the case with a "clear conscience", Judge Abad Santos bade Suarez to stay in his (Judge Abad Santos') office in order to read his (Suarez) notes from the beginning, with stenographer Montes checking the transcript already made. Although he did not immediately reveal his objection thereto, Suarez later refused to work in said office stating that "it made him dizzy to come up and" that "besides he was going to resign or retire" and then asked to be allowed to do his work in the first floor of the court house. Instead of granting his request, Judge Abad Santos recommended to the Department of Justice, in order to avoid further delay in the disposition of the case, (a) that any application for retirement or resignation that may be submitted by Suarez be denied; and (b) that payment of his salary be suspended until otherwise recommended, after compliance with the order that he should work in the office of the Judge, provided that the result of his work is satisfactory. Eventually, the transcript of the stenographic notes, certified to be "true and correct", consisted of 658 pages as compared to only 482 pages found by Judge Abad Santos on September 9, 1957.Meanwhile, Judge Abad Santos had resigned leaving the case undecided. He was succeeded in office by Hon. Abudio Arrieta, Judge, who, on October 27, 1958, rendered a decision convicting the defendants as charged and sentencing each to an indeterminate penalty ranging from eleven (11) years, six (6) months and twenty (20) days ofprision mayor to sixteen (16) years, five (5) months and eleven (11) days of reclusion temporal, to pay a fine of P28,808.86, representing one-half of the total sum allegedly misappropriated, as well as to jointly and severally indemnify the province of Bukidnon in the sum of P62,955.06, without subsidiary imprisonment in case of insolvency, to perpetual disqualification and to pay the costs.

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Both defendants appealed from this decision to the Court of Appeals and urged the same to acquit them upon the ground, among others, that said decision was based on incomplete and tampered transcript, upon which a conviction beyond reasonable doubt could not be predicated. Acosta, moreover, claimed that his constitutional right to a speedy trial had been violated. On July 2, 1960, the Court of Appeals rendered its decision, from which we quote:. . . on the basis of available transcript, (which originally contains 482 pages and when retranscribed and corrected it consists of 658 pages), indicating that irregularities in taking the notes and in transcription thereof were committed, we can not see our way clear to pronounce either were conviction or acquittal in this case. Indeed, the evidence in this case is not quite accurate or reliable for the reasons already underscored earlier. Since the crime with which the accused were charged carries a stiff penalty and that it is one that should be fully prosecuted for being highly undesirable, if not immoral, we prefer to subordinate acquittal or conviction to time. Stated otherwise, we are of the opinion that the ends of justice, both to the government and to the accused, would be better served if further proceedings will take place in order that this case could be decided satisfactorily once and for all.From the "corrected" transcript, we gathered that counsel for accused Leonardo Avila in the court below incurred certain inconsistencies, to wit:(1) Your Honor please, without renouncing or waiving our rights to present evidence for the defense of the accused Leonardo Avila, . . . we move for the dismissal of this case on two grounds:x x x           x x x           x x x(2) As regards the accused Avila, Your Honor, we waive our right to present evidence on his defense and we submit the case for decision with the evidence presented by the Fiscal, and we beg to allow us to withdraw — insofar as the accused Avila is concerned — we beg to leave the courtroom.(3) We do not ask for a separate trial, Your Honor, in order to obviate duplicity of questions, but now we will ask for a separate defense.(4) And that is within the lookout of the defense, Your Honor, and we reiterate our motion to leave this Honorable Court to allow us to leave the courtroom, and consider our case closed. (t.s.n., pp. 545, 554, & 558.)On appeal, counsel for appellant Leonardo Avila filed a motion for new trial, because of the aforequoted statements and of the

erroneous and incomplete transcript of the trial stenographer. The motion was, however, denied (Rec. 3rd Div., Feb. 12, 1959). Appellate Courts have that broad power to order new trial without specifying the grounds thereof in order to avoid a miscarriage of justice. The grounds upon which courts of first instance may grant a new trial are limited (Pls. see Sec. 5, Rule 117, Rules of Court), but appellate courts, under Section 14, Rule 120 are authorized to remand a case to a court of first instance for new trial or retrial, without specifying, and, hence, without limiting, the grounds upon which the action may be predicated. And pursuant to Section 11, Rule 120, of the Rules of Court, an appellate court may . . . remand a case to a court of first instance for new trial or retrial . . . .WHEREFORE, the record of this case is ordered remanded to the court of origin for retrial and another judgment be rendered in accordance with the evidence that the parties concerned may desire to present.Acosta sought a reconsideration of this decision, which was denied. Hence, his present appeal by certiorari.Petitioner maintains that the Court of Appeals erred in ordering a retrial, instead of acquitting him, not only because he had been deprived of the constitutional right to a speedy trial, but, also, because a retrial would be impractical, oppressive and expensive, apart from amounting to a denial of justice, for a principal witness for the defense, one Justiniano B. Castillo, had allegedly died on December 24, 1957, and his other witnesses may no longer be available.It should be noted that the original information in this case was filed on January 2, 1951 and that the trial of the reception of the evidence for both parties commenced on June 19, 1952 and was finished on July 18 of the same year. Petitioner does not contend that there has been any undue delay in this part of the proceedings. His alleged deprivation of the right to a speedy trial is anchored on the fact that the decision of the lower court was rendered over six (6) years later. In this connection, the Court of Appeals aptly observed:. . . True enough that judgment was pronounced after almost six years. But "the constitutional right to a public and speedy trial does not extend to the act of pronouncement of sentenced" (Reed vs. State, 147 Ind., N. E., 135, 136). It has been said that "trial and judgment are two different stages of a judicial proceeding: the former is provided for in Rule 115, and the latter is covered by Rule 116, of the Rule of Court. (Talabon v. Iloilo Prov. Warden, 78 Phil., 600). And "the period of the trial terminates when the judgment begins"

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(Felismino vs. Gloria, 47 Phil., 967). Therefore, and since the accused did not avail themselves of the writ of mandamus to compel the trial judge or his successor to pronounce the corresponding judgement, it may be said in the light of the ruling laid down in the case of Talabon vs. Iloilo Prov. Warden, infra, that they had waived their right to a speedy trial.Indeed:No general principle fixes the exact time within which a trial must be had to satisfy the requirement of a speedy trial. The right to a speedy trial is necessarily relative; it is consistent with delays, and whether such a trial is afforded must be determined in the light of the circumstances of each particular case as a matter of judicial discretion. It is generally said that a speedy trial is one had as soon after indictment as the prosecution can with reasonable diligence prepare for it, regard being had to the terms of court, a trial conducted according to fixed rules, regulations and proceedings of law, free from vexations, capricious, and oppressive delays. One accused of crime is not entitled to a trial immediately on his arrest or accusation, he must wait a regular term of the court until an indictment is found and presented if the case is one wherein the trial is on indictment, and until the prosecution has had reasonable time to prepare for the trial. (22 C.J.S., 715-716.)Under constitutional provision securing to accused "the right to a public trial", or a "speedy trial", is has been held that the formal declaration of sentence is no part of the trial. (24 C.J.S., 16.)Moreover, the delay in the rendition of the decision of the court of first instance was due to circumstances beyond the control of the judges who presided the same. Judge Veluz, who received the evidence, was automatically retired owing to his age. Judge Abad Santos, who succeeded him, could not decide the case because he found the transcript to be inaccurate and he had to make disciplinary measures in order to compel stenographer Suarez to retranscribe his notes. By the time this was done, Judge Abad Santos was no longer in the service. Hence, his successor Judge Arrieta was the one who rendered the decision of the lower court.Upon the other hand, we cannot, in the exercise of our jurisdiction on appeal by certiorari, absolve the petitioner of the crime charged against him, for there are no findings of fact in the decision of the Court of Appeals upon which this Court could base a judgement of acquittal. Moreover, the opinion of the Court of Appeals to the effect that the transcript of the stenographic notes taken during the trial of

this case in the court of first instance does not reflect faithfully what transpired during said trial is, apart from being shared by petitioner herein, conclusive upon us. Under these circumstances, we should not interfere in the exercise of discretion by the Court of Appeals. In the language of Corpus Juris:Under a statute which provides that a person restrained of his liberty is entitled to certiorari to inquire into the cause of his imprisonment, certiorari does not lie to review a determination in a criminal case where relator was discharged from custody under a bail bond. The reason for such a rule is that the relator, therefore, was not restrained of his liberty. The imprisonment or restraint in his liberty within the meaning of this section, is an actual physical restraint by which the liberty of the individuals is in some way interferred with. A person cannot be said to be restrained in his liberty when he can do what and go where he pleases. The mere fact his bail has authority to surrender him to custody at any time is not a restrained in his liberty. . . . If the relation should be surrendered by his bail, and thus be actually in custody, he would be entitled to have the cause of his detention reviewed; but until there is an actual restraint of his liberty, he is not entitled to either of these writs (certiorari or habeas corpus) . . . . (17 Corpus Juris, pp. 18-19.)We are not unaware of the possible disadvantages to which petitioner might be placed in the event of a retrial, but we are not in a position now to determine the facts of such disadvantages. In fact, the very petitioner has not particularized the evidence which not be available to him at a retrial, aside from the circumstances that the prosecution may then be similarly handicapped. In any event, when the retrial takes place, petitioner may point out what evidence he can no longer present and why, and the Court should then considered the effect thereof upon the question of guilt or innocence of petitioner herein.WHEREFORE, the decision of the Court of Appeals is hereby affirmed, and the case remanded to the Court of First Instance of Bukidnon for further proceedings in compliance therewith. It is so ordered.Bengzon, C.J., Padilla, Paredes, Dizon, Regala and Makalintal, JJ., concur.Bautista Angelo, J., took no part.Reyes, J.B.L., J., is on leave.

Trial and hearing, distinguished.

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G.R. No. L-35701 September 19, 1973ARTURO H. TROCIO, petitioner-appellant, vs. JORGE LABAYO, Undersecretary of Finance; SIXTO B. TADEO, Assistant Provincial Treasurer of Misamis Oriental; and ABELARDO SUBIDO, Commissioner of Civil Service, Respondents-Appellees.Adaza, Along and Adaza for petitioner-appellant.Office of the Solicitor General Antonio P. Barredo, Assistant Solicitor General Pacifico P. de Castro and Solicitor Pedro A. Ramirez for respondents-appellees.FERNANDO, J.:The novel question in this case certified to us by the Court of Appeals is whether or not a party is denied his constitutional right to procedural due process if in the notice of the hearing the suit filed by him, it was not specified that the purpose thereof was for a pre-trial. There is no instrinsic difficulty posed by such a query. The answer would appear to be rather obvious. Such a purely formal objection is hardly impressed with any element indicative of that absence of fairness which is indispensable for an attack on a due process ground to succeed. The failure of the lower court then to use language more explicit in character does not lend itself to such a reproach. The order of dismissal for failure of petitioner Arturo H. Trocio, now appellant, to prosecute, is affirmed.chanroblesvirtualawlibrarychanrobles virtual law libraryThere is no dispute as to what transpired. On August 11, 1964, petitioner filed in the Court of First Instance of Misamis Oriental a petition for certiorari and prohibition with preliminary injunction against respondents' 1 to set aside decision of respondent Abelardo Subido dismissing him from the position of Municipal Treasurer of Mambajao, Camiguin, which is being enforced by the other respondents on the ground of its nullity. It was his contention that the charges against him for neglect of duty, grave misconduct and oppression in office were not duly proved, there being a denial of a motion for postponement on his part, thus infecting the proceedings with grave infirmity. There was, on August 15, 1964, a written opposition to the issuance of a writ of preliminary injunction, and on August 27, 1964, an answer to such petition wherein it was stressed that petitioner had been granted by the investigating officer six postponements of the hearing of the case to afford him a chance to engage the services of counsel. Then came on September 10, 1964, a notice to the parties that the case had been set for hearing on October 14 of that year, a copy thereof being served on petitioner's counsel. Upon that case being called on that

date, there was a motion on the part of petitioner's counsel to set the case for pre-trial. The provincial fiscal who represented the respondents informed the Court that he was ready for the pre-trial but, if no amicable agreement was reached, the trial proper should be conducted, as his witnesses had come all the way from Manila and expenses in the amount of about P400.00 had been incurred by the government. Counsel for petitioner was adamant, however, insisting that the notice of hearing as such was null and void. When the Court inquired as to where the petitioner was, counsel answered that he was in Cebu City, upon his own advice, on the assumption that a hearing on the merits could not be held. From the standpoint of the court, this step taken by petitioner smacked of a dilatory tactic, as evidenced by its being raised only on that morning, notwithstanding the fact that notice was sent as far back as September 10, 1964 and that at any rate, petitioner not being present, a pre-trial could not anyway be held. Moreover, the notification as worded did not preclude a pre-trial, which incidentally was not at all necessary as the question posed was legal. Hence the order of dismissal, based on what for the lower court, under the circumstances, was a lack of interest to prosecute the case.chanroblesvirtualawlibrarychanrobles virtual law libraryThe matter was elevated to the Court of Appeals on the ground that there was a denial of procedural due process as the notice of the hearing without the specification that it should be for pre-trial deprived the accused of a procedural right and infected the proceedings with unfairness. As the question raised was purely legal, the case, as noted at the outset, was elevated to us.chanroblesvirtualawlibrarychanrobles virtual law libraryThere is no legal justification then, as already made clear, for us to give our seal of approval to the contention vigorously pressed by petitioner that there was a denial of procedural due process. In reaching such a conclusion, we were aided considerably by the thorough brief submitted by the then Solicitor General, now Associate Justice, Antonio P. Barredo and the then Assistant Solicitor General, now judge, Pacifico de Castro, the persuasive quality of which was enhanced not only by the plausibility of the assertions made with support from authoritative doctrines, but also by the failure of petitioner to file a reply brief.chanroblesvirtualawlibrarychanrobles virtual law library1. No merit attaches to the contention of petitioner that the notice as to the hearing scheduled for October 14 should specify that it was for

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a pre-trial. A hearing as known to the law is not confined to a trial but embraces the several stages of litigation. It does not preclude pre-trial. Outside of the American cases cited 2 by respondents, mention can be made of authorities in this jurisdiction that speak to the same effect. A hearing "does not necessarily mean presentation of evidence." 3 It could cover the determination of whether an accused is entitled to bail 4 or the submission for the court's determination of a motion to dismiss, 5 or any motion for that matter. 6 It does not admit of doubt then, considering furthermore what did transpire, that such a purely technical objection on the part of petitioner raised at the last moment should not be taken too seriously. Much less does it lay any basis for an asserted denial of procedural due process.chanroblesvirtualawlibrarychanrobles virtual law library2. There is an additional reinforcement to the correctness of the challenged order of dismissal, when the nature of a pre-trial is taken into consideration. 7 As set forth in an opinion penned by Justice Castro, speaking for the Court, in Permanent Concrete Products, Inc. v. Teodoro: 8 " "One of the objectives of pre-trial procedure is to take trial of cases out of the realm of surprise and maneuvering." Pre-trial is primarily intended to make certain that all issues necessary to the disposition of a cause are properly raised. Thus, to obviate the element of surprise, parties are expected to disclose at a pre-trial conference all issues of law and fact which they intend to raise at the trial, except such as may involve privilege or impeaching matter." 9 The lower court therefore acted in accordance with law and sound reason when it noted that the facts being undisputed and the legal issue likewise being clear, pre-trial, under the circumstances, would not be a necessity even on the assumption that the belated insistence of its observance by petitioner was motivated in entire good faith.chanroblesvirtualawlibrarychanrobles virtual law libraryThe suspicion entertained by the lower court as to its being resorted to as a dilatory tactic by petitioner was not without basis. He had more than a month, from September 9 to October 14, 1966, to seek clarification of the nature of the scheduled hearing. What was even more revealing as to his lack of good faith was his absence on the day of hearing. What was the lower court to make of such tell-tale conduct? Did it not indicate lack of interest to prosecute? There was nothing then, that did smack of arbitrariness in its ruling as it did. There was no affront to the sense of justice and of fair play which is essential for an assault on any actuation of governmental agency predicated on a denial of due process succeed. Instead of this futile

insistence on a pre-trial, which would serve no useful purpose, petitioner could have impressed on the court the legal support for his stand that the order of dismissal by respondent Commissioner of Civil Service was devoid of legality. He did nothing of the kind. Under the undeniable facts of record, the lower court certainly could have decreed the dismissal without any legitimate fear that its order suffers from the constitutional infirmity of failure to accord respect to the due process safeguard. 10chanrobles virtual law libraryWHEREFORE, the order of the lower court of October 14, 1964 dismissing the petition is affirmed. With costs against petitioner.Makalintal, Actg. C.J., Zaldivar, Castro, Teehankee, Antonio and Esguerra, JJ., concur.chanroblesvirtualawlibrarychanrobles virtual law libraryBarredo, J., took no part.chanroblesvirtualawlibrarychanrobles virtual law libraryMakasiar, J., is on leave.

When case ready for trial

January 22, 1952G.R. No. L-3788MARCIANO PRINCIPE, plaintiff-appellee, vs.ANTONIO ERIA, defendant-appellant.LEONCIO MANINGAS, third party defendant.Pedro Ynsua and Cenon Arcaza for appellee.Francisco O. Omaña for appellant.Montemayor, J.:This is an appeal from an order of the Court of First Instance of Quezon denying appellant's petition for relief from an order declaring him in default and denying his petition for new trial.The facts involved in the appeal are not disputed. Plaintiff-appellee Marciano Principe filed an action against Antonio Eria to collect a sum of money plus interest based on a promissory note or document signed by Eria and his son-in-law, Leoncio Maningas, supposed to embody a joint and several obligation and in which the signers undertook to pay a certain amount with interest and where the two stated that anyone of them may be made to pay the whole amount. On April 12, 1948, after service of summons, defendant Eria petitioned the court to have his co-signer of the promissory note, Leoncio Maningas, included as a party defendant. Upon objection of

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the plaintiff, the trial court on April 15, 1948, denied said petition for inclusion of Maningas as party defendant on the ground that according to the promissory note on which the complaint is based, defendant Eria may be sued alone, and that full relief to the plaintiff could be obtained without inclusion of Maningas as party-defendant. On May 27, l948, defendant Eria filed an amended answer which was admitted by order of the court dated June 24, 1948.On November 19, 1949, the Clerk of the Court issued a notice setting the case for hearing on December 13, 1949. On December 3, 1949, defendant Eria filed a petition for leave to file a third party complaint against his co-signer of the promissory note, Leoncio Maningas, at the same time filing said third party complaint against Maningas. On December 7, 1949, and because plaintiff Principe did not object to the petition, the trial court granted it and admitted the third party complaint, at the same time giving third party defendant Maningas the reglementary period within which to answer the same.In spite of the admission of the third party complaint and the giving of notice to third party defendant Maningas to answer within the time prescribed by law, and before third party defendant could answer the third party complaint, on December 13, 1949, the date on which the case was originally set for trial, and in the absence of defendant Eria and his counsel, the case was tried and the plaintiff was allowed to present his evidence.On December 16, 1949, defendant Eria's counsel filed a pleading entitled "Manifestation" wherein he stated that on that date he learned that he (Eria) had been declared in default, and that would petition the court for relief from said order, and on December 29, 1949, he filed his petition for relief and new trial accompanying the same with his affidavits of merits. The basis of his petition for relief is that he believed that with the admission of the third party complaint and the giving to third party defendant Maningas the reglementary period within which to answer, the said party complaint automatically cancelled the original date of hearing on December 13, 1949, and so neither he nor his client Eria appeared in Court on that date. Upon objection of the plaintiff, this petition for relief and new trial was denied by order of January 23, 1950. A petition for reconsideration of the order of denial was likewise denied by order of February 20, l950. In his appeal, appellant Eria claims that the trial court erred in proceeding with the trial of the case on December 13, 1949, without his presence and that of his counsel, and not granting the petition for relief.

Appellee counters with the contention that contrary to the rules of court, appellant in his petition for relief and affidavit accompanying the same, did not specifically state the defense which he would put up should he be granted a new trial. We believe, however, that the more important question involved in the present appeal is the legality and propriety of the act of the trial court in proceeding with the trial of the case before third party defendant Maningas had filed his answer. As a matter of fact, Maningas filed his answer to the third party complaint only on January 9, 1950, almost a month after the case was tried.That defendant Eria had a right to file his third party complaint against Leoncio Maningas who signed the promissory note with him, cannot be denied. Rule 12, Section 1 of the rules of court gives him that right. Said section 1 reads as follows:SECTION 1. Claim against one not a party to an action. — When a defendant claims to be entitled against a person not a party to the action, hereinafter called the third-party defendant, to contribution, indemnity, subrogation or any other relief, in respect of the plaintiff's claim, he may file, with leave of court, against such person pleading which shall state the nature of his claim and shall be called the third-party complaint.As already stated, his third party complaint was admitted by the trial court without objection on the part of the plaintiff. Now, was trial court authorized to try the case before the third party defendant had filed his answer? Evidently not. The reason is that the case was not yet ready for trial. Rule 31, Section 1, of the Rules of Court, provides:SECTION 1. When issue joined. — Upon the filling of the last pleading, the case shall be included in the trial calendar of the court.Under said section, Chief Justice Moran makes the following comment:The case may be said to be ready for trial and, therefore, should be included in the trial calendar when the issue is joined. And the issue is joined when all the parties have pleaded their respective theories and the terms of the dispute are plain before the court. (Moran's Comments on the Rules of Court, Vol. I third edition, p. 573.)As we have already stated, on December 13, 1949, the case was not ready for trial for the simple reason that the third party defendant Maningas had not yet filed his answer. True, a trial court may under Rule 32, Section 2 of the Rules of Court, in furtherance of convenience or to avoid prejudice, order a seperate trial of any claim, cross-claim, counterclaim, or third-party claim, or of any seperate issue or issues. But on December 13, 1949, when the case was tried,

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the issues had not yet been joined; all possible claims, cross-claims or counterclaims had not yet been filed. Consequently, the trial court could not have validly ordered a seperate trial because it did not know nor was it in a position to know if the third party defendant Maningas had any claim, cross-claim or counterclaim against either the plaintiff Principe or the defendant Eria, or both. In other words, the trial was altogether premature. It is reasonable to suspect that the trial court had forgotten or completely overlooked the third party complaint against Maningas and the fact that his answer to it was still pending submission.In view of all the foregoing, we find and hold that the trial held on December l3, l949, when the case was not yet ready for trial was premature and unauthorized; that appellant Eria had a right to believe that the admission of his third party complaint and the granting of the reglementary period to third party defendant Maningas to answer, automatically cancelled the hearing originally set on December 13, 1949, and that consequently, he (Eria) should not be penalized for not attending said hearing. The orders denying his petition for relief, and his petition for reconsideration are hereby set aside, and the case is hereby ordered returned to the trial court for a re-hearing after all the parties have been duly notified thereof. No pronouncements as to costs. So ordered.

Adjournments and postponements (Sec. 2, Rule 30) . Limitation on the authority to adjourn[G.R. No. 123997. January 20, 1999.]

REPUBLIC OF THE PHILIPPINES, Petitioner, v. SANDIGANBAYAN and BRIG. GEN. PEDRO R. BALBANERO, Respondents.

D E C I S I O N

BELLOSILLO, J.:

This case emphasizes with great force the awesome responsibility of counsel to represent a client’s cause with due diligence and zeal which necessarily excludes improvident and unreasonable requests for postponement of hearings that only serve to impede the speedy and inexpensive administration of justice.chanrobles law library

The Republic of the Philippines, in this special civil action for certiorari, mandamus and prohibition, assails the Order of the Sandiganbayan, First Division, dated 19 October 1995, in "Republic of the Philippines v. Brig. Gen. Pedro Balbanero," Civil Case No. 0053, denying petitioner’s oral motion for postponement of the 19 and 20 October 1995 hearings and requiring it instead to submit a written offer of evidence, as well as the Resolution of 3 January 1996 denying reconsideration thereof. Petitioner therefore prays that it be allowed to present documentary and testimonial evidence in a formal trial and that public respondent be prevented from conducting further proceedings pursuant to its questioned Orders.

Civil Case No. 0053 is an action for forfeiture under RA No. 1379 1 instituted on 14 October 1988 by the Republic of the Philippines against retired Brig. Gen. Pedro R. Balbanero alleging that the latter acquired funds, real properties and other assets amounting to P10.5 million manifestly out of proportion to his total salary and emoluments as an Army Officer and as income from business and other legitimately acquired properties.

On 22 March 1989 private respondent filed his answer with counterclaim to which the Republic filed a reply with motion to dismiss counterclaim. After the submission by private respondent of documentary evidence and in view of the manifestation of Solicitor Felipe Magat, Colonel Ernesto Punzalan and Captain Samuel Padilla of the AFP Anti-Graft Board representing the Government that P8.4 million of the alleged over P10 million unexplained wealth had been clarified, the Sandiganbayan in its Order dated 19 February 1990 required private respondent to prove the legal source of the remaining "P1.3 million." The parties were required to meet to resolve the matter before trial. On the basis of a "Complete Report" dated 2 August 1990 submitted by Capt. Padilla, the amount of respondent’s wealth deemed to be still unexplained dwindled to P165,043.00. Thus the OSG in behalf of petitioner asked that a decision be rendered forfeiting the amount in its favor.

To prove the legal source of the remaining P165,043.00, private respondent submitted a document titled "Real Estate Mortgage Loan" purporting to show that the amount was the purchase price he received for real estate sold to Ms. Iluminada S. Salvador Et. Al. when

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he failed to pay his mortgage indebtedness. In his Manifestation and Motion dated 7 December 1990 private respondent moved that the complaint against him be dismissed on the ground that he had explained to the government’s satisfaction the legal source of all his alleged unexplained wealth.chanroblesvirtuallawlibrary

In its answer to the foregoing Manifestation and Motion the Presidential Commission on Good Government (PCGG) denied that private respondent had satisfactorily explained the legitimate source of his wealth and added that the "Complete Report" submitted by the AFP Anti-Graft Board was without its approval, hence, did not bind the Republic.

On 28 June 1991, without resolving private respondent’s Manifestation and Motion of 7 December 1990, public respondent Sandiganbayan allowed the Republic to present oral and documentary evidence to support its complaint for forfeiture.

On 7 June 1994 private respondent moved that petitioner be bound by the Solicitor General’s previous admission that only P165,043.00 had not been satisfactorily explained, hence, the remaining issue to be resolved by the Sandiganbayan should be limited to the amount. But Sandiganbayan denied the motion. Hence, on 3 May 1995 private respondent elevated the matter to this Court by way of a petition forcertiorari, prohibition and mandamus in "Pedro R. Balbanero v. the Hon. Sandiganbayan and the Republic of the Philippines," docketed as G.R. No. 119633.

In view of the pendency of his petition, private respondent moved that the hearings on 18, 19 and 20 October 1995 be canceled and that no further schedule be set. Public respondent denied the cancellation unless a restraining order was issued by this Court in G.R. No. 119633, citing petitioner’s readiness to present on the scheduled hearings Major Samuel Padilla (earlier referred to as Captain Padilla) who purportedly conducted the audit examination of the accounts of private Respondent.

Upon urgent motion dated 5 October 1995 the Sandiganbayan granted private respondent’s request for cancellation of the 18 October 1995 hearing on the allegation that his counsel was scheduled to attend an election case before the RTC of Gapan,

Nueva Ecija, but stressing that the cancellation was without prejudice to the settings on 19 and 20 October 1995. 2chanroblesvirtuallawlibrary

On 19 October 1995 Associate Solicitor Rodolfo Tagapan, Jr., and Assistant Solicitor General Cesario del Rosario manifested during the hearing that they had been relieved from the case and that ASG Romeo C. de la Cruz and Solicitor Karl B. Miranda had been designated in their stead. However, since the latter two were in the United Arab Emirates attending to the case of convicted Filipina overseas contract worker Sarah Balabagan, Associate Solicitor Tagapan asked that the hearing be reset, to which the Sandiganbayan reacted adversely with its now assailed Order of 19 October 1995 which we quote hereunder for a better appreciation of the factual milieu —

When this case was called for hearing respondent appeared while the petitioner Republic appeared through Associate Solicitor Rodolfo Tagapan together with Atty. Cresencio Jaso of the PCGG. Associate Solicitor Tagapan informed the Court that he had been relieved from this case and in his stead Solicitor Karl B. Miranda had been designated but that Solicitor Miranda was in Abu Dhabi on official mission, while Atty. Jaso informed this Court that this was his first appearance and was, therefore, not ready to be of assistance. Additionally, no witness had appeared allegedly upon advice of Associate Solicitor Tagapan precisely because of this (sic) re-assignments relying on the postponement to be granted by this Court.

Solicitor Rodolfo Reodica had been appearing until suddenly at the hearing on May 10, 1995 Associate Solicitor Tagapan appeared and had expressed his unreadiness to proceed at that time. The petition for postponement was granted over the objection of the respondent, notwithstanding the pendency of a petition for certiorari, prohibition and mandamus already filed by the respondent to dispute a prior denial of his motion to dismiss by reason of the petitioner’s earlier repeated failure to proceed said petition now docketed as G.R. No. 119633. On September 22, 1995, Associate Solicitor Tagapan informed the Court that he would be ready to present Major Samuel Padilla on October 18, 19 and 20, 1995. Today, the Court is faced with the situation as above stated.

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This case had been pending not only for a very long time but despite many false starts from the petitioner. While indeed the Court has reacted negatively to the difficult situations created by the assignment of young Solicitors such as Solicitor Reodica now Solicitor Tagapan on short notice, the Court can not accept a rotation of young and inexperienced Solicitors who are uninformed of the details of this case by reason of their assignment on short notice as reasons for postponing this case on top of their informal complaints of lack of cooperation from or coordination with the PCGG much less can the Court accept the last minute substitutions of Solicitors with others who are not in this country.

In view hereof, the petitioner is given ten (10) days from today within which to formally offer whatever evidence exist (sic) on record with the respondent being given a like period to comment thereon and to state his disposition on this matter with respect to the presentation of his own evidence.

The setting for tomorrow is necessarily cancelled under the circumstances.

Petitioner moved that this Order be reconsidered and that it be allowed to present evidence in a formal trial. The motion was denied by public respondent in its assailed Resolution of 3 January 1996 thus —

The ‘MOTION FOR RECONSIDERATION’ dated 7 December 1995 of the Plaintiff is Denied.chanroblesvirtuallawlibrary

It is true that this Court expressed its impatience and disapproval over the practice of the Office of the Solicitor General of passing on, actually ‘dumping’ of certain cases such as these to a succession of young inexperienced lawyers on short notice. This, however, is not cured by transferring a long standing case to probably experienced lawyers who are not available and on short notice.

The point of this Court’s impatience on the transferring of cases to inexperienced lawyers on short notice is that cases are unduly delayed and, perhaps, prejudiced by the inexperienced; in fact, more than anything, the practice has demonstrated an apparent low regard of Solicitors and Assistant Solicitors General for many ‘PCGG cases.’ 

Assigning this case, which has suffered long and innumerable postponements attributable to plaintiff, to lawyers of the Office of the Solicitor General who are not even in the country at the time of the setting neither responds to the problem nor demonstrates appropriate concern for the case.

The petitioner is given fifteen (15) days to submit its written offer of evidence after which the case of the plaintiff will be deemed submitted, with or without the offer.

Hence, this special civil action for certiorari, prohibition and mandamus.

The OSG contends that the Sandiganbayan gravely abused its discretion when it deprived the Republic of its right to present evidence in a full-blown hearing amounting to a violation of its right to due process. Counsel contends that the reasons given for the requested resettings of the 19 and 20 October 1995 hearings were meritorious grounds which were not intended to delay the case nor violate private respondent’s right to a speedy trial. The OSG further contends that public respondent should not have taken against the Republic the fact that Major Samuel Padilla was indisposed on the day of the hearing as it was a circumstance beyond its control while the re-assignment of the case to Solicitor Miranda and Atty. Jaso was effected only in response to public respondent’s plaintive about the assignment of the case to young and untrained solicitors.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph

On 17 April 1996 we required respondents to file their respective comments on the petition without granting the TRO sought by petitioner. Private respondent’s Comment and petitioner’s Reply thereto were noted on 8 July 1996 and 4 February 1998, respectively. On 6 July 1998 we considered this case submitted for decision without public respondent’s comment when it failed to file the required pleading for more than two (2) years from the time it was first required to do so and despite our Resolution of 4 February 1998 reiterating our Resolution of 17 April 1996.

Plainly stated, the issue before us is whether public respondent Sandiganbayan committed grave abuse of discretion in denying the

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Republic’s oral motion for postponement of the 19 and 20 October 1995 hearings and in requiring it to just formally offer its evidence within fifteen (15) days from notice.

It is well-settled that motions for continuance or deferment of hearings are granted only upon meritorious grounds 3 and that the grant or denial thereof is addressed to the sound discretion of the court 4 the exercise of which will not be disturbed except on a showing of a patent and grave abuse of discretion.

Petitioner failed to show such patent and grave abuse of discretion on the part of public respondent in denying its oral motion for postponement. Records show that the 18, 19 and 20 October hearings were scheduled some five (5) months earlier, or on 10 May 1995, for several reasons among which was to give Associate Solicitor Tagapan of the OSG, who appeared for the first time vice Solicitor Reodica, an opportunity to study the case. 5 In addition, on 13 October 1995 when public respondent Sandiganbayan canceled the 18 October hearing, it cautioned the parties that such cancellation was without prejudice to the settings on 19 and 20 October 1995. 6 

However, on 19 October 1995, Solicitor Tagapan appeared only to manifest that he had just been relieved from the case and that other solicitors were assigned to take over but unfortunately they were not then available. The OSG explains that the re-assignment was effected in response to public respondent’s complaint about the assignment of many PCGG cases to young and inexperienced solicitors. But a careful reading of the questioned Order of 19 October 1995 shows that public respondent objected not so much on the assignment of the case to young and inexperienced solicitors but that such re-assignment was done on short notice and very close to the date of scheduled hearings. The excuse given by the OSG completely failed to justify why the re-assignment had to be done so near to the scheduled hearing of 19 October 1995 and, worse, to solicitors who were not even present.chanroblesvirtual|awlibrary

Furthermore, it has not been shown that some other urgent circumstance prompted the re-assignment to justify the OSG’s non-compliance with the requisites of motions in general set out in Rule 15 7 of the Rules of Court 8 Sec. 2 of which provides that" [a]ll motions shall be in writing except motions for continuance made in the

presence of the adverse party, or those made in the course of a hearing or trial." A motion for postponement should not be filed at the last hour 9 and that judges are cautioned against granting improvident postponements. 10 Thus when the reason adduced in support of a motion for postponement was not unavoidable or could have been foreseen but was presented only on the day of the trial although there was no apparent reason why it could not have been presented earlier, thus avoiding inconvenience to the adverse party, it is proper for the court to deny postponement. 11 

What exacerbates the case for the OSG is the fact that it appeared in the 19 October 1995 hearing without its promised witness, apparently expecting that public respondent would just benevolently grant its precipitate oral motion for postponement. While the OSG now claims that Major Padilla was "indisposed" for which reason he was not presented, public respondent’s factual conclusion to which this Court is bound in a certiorari proceeding is that no witness appeared allegedly upon advice of Associate Solicitor Tagapan relying on the postponement to be granted by public respondent precisely because of the reassignment of solicitors. 12 

The rule that a party asking for postponement has absolutely no right to assume that its motion would be granted, especially on less than three (3) days’ notice, and must be in court prepared on the day of the hearing 13 applies with greater force in this case where the OSG had in fact more reason not to presume a grant of its motion for postponement considering that Major (formerly Captain) Samuel Padilla had already been previously warned by public respondent thus —

Capt. Samuel Padilla is given five (5) days from receipt hereof to show why he should not be held disciplinarily accountable for his failure to appear . . . when he knew as a matter of fact that this case wherein he appears to be the principal government witness has been pending since 1988 and that his testimony was suspended as far back as February 15, 1990, precisely by reason of the unorganized state of evidence of the petitioner at the time so that all of the proceedings thereafter had been precisely to clarify and organize whatever evidence the parties might have thereon. It is a cause of great wonder to the Court what urgent meeting could have befallen Capt. Padilla resulting to his failure to appear in Court today.

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14chanroblesvirtuallawlibrary

Under the circumstances, it cannot rightly be said that the OSG was not guilty of inexcusable carelessness, presumptuousness, indifference to and neglect of duty in assuming that public respondent would grant its oral motion for postponement, coming to court unprepared and without a witness. Hence public respondent was well within its authority to deny the Republic’s oral motion for postponement of the hearings set on 19 and 20 October 1995 and require it, instead, to just formally offer its evidence within fifteen (15) days from notice. Petitioner is not guilty of abuse of discretion, much less grave, nor can it be charged by petitioner with denial of due process. 15 

WHEREFORE, the instant petition for certiorari, prohibition and mandamus is DENIED. The questioned Order of public respondent Sandiganbayan dated 19 October 1995 denying the oral motion of petitioner Republic of the Philippines for the postponement of the 19 and 20 October 1995 hearings as well as the Resolution dated 3 January 1996 denying petitioner’s motion for reconsideration, is AFFIRMED.

Postponement on the grounds of absences of evidence; Requisites (Sec. 3, Rule 30)

G.R. No. 173815 : November 24, 2010MILWAUKEE INDUSTRIES CORPORATION, Petitioner, v. COURT OF TAX APPEALS and COMMISSIONER OF INTERNAL REVENUE, Respondents.D E C I S I O NMENDOZA, J.:This resolves the petition for certiorari cralaw1 under Rule 65 of the 1997 Rules of Civil Procedure filed by petitioner Milwaukee Industries Corporation (Milwaukee) assailing the February 27, 2006 Verbal Order and the June 1, 2006 Resolutioncralaw2 of the Court of Tax Appeals (CTA), in CTA Case No. 6202 entitled 'Milwaukee Industries Corporation v. Commissioner of Internal Revenue.'The FactsIn a Letter of Authority,cralaw3 dated July 17, 1998, public respondent Commissioner of Internal Revenue (CIR) notified Milwaukee of its

intent to examine their books of account and other accounting records for all internal revenue taxes for 1997 and other unverified prior years.Milwaukee complied with the directive and submitted its documents to CIR.Thereafter, CIR issued three undated assessment noticescralaw4 together with a demand letter and explanation of the deficiency tax assessments. Milwaukee allegedly owed a total of P173,063,711.58 corresponding to the deficiencies on income tax, expanded withholding and value-added taxes for the 1997 taxable year. The table shows the supposed deficiency taxes due against Milwaukee:cralaw5

Basic Tax Interest Compromise Penalty

Total

Deficiency Income Tax ST-Income-97-0093-2000

P43,114,980.66

P20,264,040.91

P25,000.00 P63,404,021.57

Deficiency expanded withholding tax ST-EWT-97-0092-2000

19,438.95 9,284.23 1,000.00 29,723.18

Deficiency value-added tax ST-VAT-97-0091-2000

72,108,530.81 37,496,436.02 25,000.00 109,629,966.83

TOTALS P15,242,950.42

P57,796,761.16

P51,000.00 P173,063,711.58

In a lettercralaw6 dated February 21, 2000, Milwaukee protested the assessments.Due to CIR's inaction regarding its protest, on November 20, 2000, Milwaukee filed a petition for review before the CTA.cralaw7 This was docketed as CTA Case No. 6202.After Milwaukee had presented its evidence-in-chief, CIR offered the testimony of Ms. Edralin Silario(Silario), the group supervisor of the

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BIR examiners, who conducted the examination of Milwaukee's books. She testified on the Final Report she prepared for the BIR and explained the grounds for the disallowance of the deductions being claimed by Milwaukee on the following: (1) foreign exchange losses classified as miscellaneous expenses; and (2) interest and bank charges paid in 1997.Subsequently, Milwaukee manifested its intention to present documentary rebuttal evidence.cralaw8 By its Order of July 11, 2005, the CTA permitted Milwaukee to present rebuttal evidence starting September 5, 2005.cralaw9 Milwaukee, however, moved for resetting on the scheduled hearings, particularly on September 5, 2005 and October 26, 2005.cralaw10On January 16, 2006, Milwaukee was able to partially present its rebuttal evidence in a commissioner's hearing.cralaw11 The CTA scheduled another hearing on February 27, 2006.On February 27, 2006, during the scheduled hearing, the CIR waived its right to cross-examine Milwaukee's witness.cralaw12 The CTA then asked Milwaukee to continue its presentation of rebuttal evidence. Not prepared, Milwaukee moved for the postponement of the pre-marking and presentation of its rebuttal evidence relative to the deductibility of some interests and bank charges from its corporate income tax for the year 1997 amounting to P18,128,498.26.Immediately, the CTA issued a verbal order denying Milwaukee's motion to be allowed additional commissioner's hearing for further presentation of its rebuttal evidence. The CTA likewise gave Milwaukee ten (10) days within which to submit its Formal Offer of Rebuttal Evidence.cralaw13Consequently, Milwaukee moved for reconsideration of the CTA's verbal order. Milwaukee likewise moved to toll the running of the period for filing its formal offer of rebuttal evidence.cralaw14In its June 1, 2006 Resolution, the CTA denied Milwaukee's motion for reconsideration but allowed its motion to suspend the period for filing of formal offer of rebuttal evidence.cralaw15 Specifically, the CTA stated:chanrobles virtual law libraryThis Court agrees with the respondent. The Court, upon motion, allowed petitioner to present rebuttal evidence. However, it was petitioner who asked for several postponements of trial and commissioner's hearing, which lead the Court to issue final warnings on October 26, 2005, January 16, 2006 and January 31, 2006.It is worth stressing that the objective of the procedural rules is to secure a just, speedy and inexpensive disposition of every action to

the benefit of all litigants. The Court will not countenance further delay of the proceedings. Thus, the Court hereby RESOLVES to DENY Petitioner's Motion for Reconsideration for lack of merit.However, finding petitioner's Motion to Toll Running of the Period for Filing Formal Offer of Rebuttal Evidence to be in order, the Court hereby RESOLVES to GRANT the same.WHEREFORE, petitioner is ordered to submit its Formal Offer of Rebuttal Evidence within the remaining period prescribed by this Court upon receipt of this Resolution. Respondent is given a period of 10 days to file his Comment thereto. Thereafter, petitioner's Formal Offer of Rebuttal Evidence shall be deemed submitted for resolution.SO ORDERED.cralaw16On June 21, 2006, Milwaukee filed its Formal Offer of Rebuttal Evidence (ex Abundanti ad Cautelam) before the CTA.cralaw17Aggrieved by the denial of its motion for reconsideration of the verbal order, Milwaukee filed this petition.In its Memorandum,cralaw18 Milwaukee submits the followingISSUESWHETHER OR NOT RESPONDENT CTA COMMITTED GRAVE ABUSE OF DISCRETION (AMOUNTING TO LACK OR EXCESS OF JURISDICTION) IN DENYING PETITIONER'S MOTION TO BE ALLOWED TO PRESENT REBUTTAL EVIDENCE, AND ITS SUBSEQUENT MOTION FOR RECONSIDERATION THEREON:A. Whether or not petitioner unduly delayed the case;B. Whether or not petitioner was denied due process by not being allowed to present its rebuttal evidence in relation to its disallowed interest and bank charges for the year 1997; and chanrobles virtual law libraryC. Whether or not petitioner's proffered evidence, if allowed and admitted, would have sufficiently substantiated its claims for deductibility of the disallowed interest and bank charges.cralaw19Milwaukee explained that it 'sought postponement of the 27 February 2006 hearing, but only because the same was originally scheduled for respondent CIR's cross-examination of Milwaukee's witness. Unexpectedly, on that very same hearing date, counsel for respondent CIR suddenly manifested that he was waiving cross-examination. Understandably, Milwaukee was constrained to request for postponement of said hearing, not because it intended to delay the proceedings, but because the evidence it intended to present, while already available, was yet to be collated and sorted out for a more orderly presentation.'cralaw20

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Milwaukee claimed that the denial of its motions deprived it of its right to have the case be decided on the merits. It wrote: 'Without said countervailing evidence, the adjudication of the issue of deductibility of certain interest and bank charges will [be] seriously impaired, because it will not be based on substantial evidence or on the entire facts.'cralaw21The Court finds no merit in the petition.In order for a petition for certiorari to succeed, the following requisites must concur, namely: (a) that the writ is directed against a tribunal, a board, or any officer exercising judicial or quasi-judicial functions; (b) such tribunal, board, or officer has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction; and (c) there is no appeal, or any plain, speedy and adequate remedy in the ordinary course of law.cralaw22 Without jurisdiction denotes that the tribunal, board, or officer acted with absolute lack of authority. There is excess of jurisdiction when the public respondent exceeds its power or acts without any statutory authority. Grave abuse of discretionconnotes such capricious and whimsical exercise of judgment as to be equivalent to lack or excess of jurisdiction; otherwise stated, power is exercised in an arbitrary or despotic manner by reason of passion, prejudice, or personal hostility; and such exercise is so patent or so gross as to amount to an evasion of a positive duty or to a virtual refusal either to perform the duty enjoined or to act at all in contemplation of law.cralaw23'As a rule, the grant or denial of a motion for postponement is addressed to the sound discretion of the court which should always be predicated on the consideration that more than the mere convenience of the courts or of the parties, the ends of justice and fairness should be served thereby.'cralaw24 Furthermore, this discretion must be exercised intelligently.cralaw25In this case, the Court is of the view that the CTA gave enough opportunity for Milwaukee to present its rebuttal evidence. Records reveal that when Milwaukee requested for resetting on September 5, 2005 and October 26, 2005, its motions were granted by the CTA. As a matter of fact, by January 16, 2006, Milwaukee was already able to partially present its rebuttal evidence. Thus, when the CTA called on Milwaukee to continue its presentation of rebuttal evidence on February 27, 2006, it should have been prepared to do so. It cannot be said that the CTA arbitrarily denied Milwaukee's supposed simple request of resetting because it had already given the latter several months to prepare and gather its rebuttal evidence.

Milwaukee tried to reason out that if only the CIR gave an advance notice that it would be waiving its right to cross-examine its witness, then it could have 'rushed the collation and sorting of its rebuttal documentary exhibits.'cralaw26The Court, however, is not persuaded.As stated earlier, Milwaukee was given more than ample time to collate and gather its evidence. It should have been prepared for the continuance of the trial. True, the incident on said date was for the cross-examination of Milwaukee's witness but it could be short; it could be lengthy. Milwaukee should have prepared for any eventuality. It is discretionary on the part of the court to allow a piece-meal presentation of evidence. If it decides not to allow it, it cannot be considered an abuse of discretion. 'As defined, discretion is a faculty of a court or an official by which he may decide a question either way, and still be right.'cralaw27Accordingly, Milwaukee's right to due process was not transgressed. The Court has consistently reminded litigants that due process is simply an opportunity to be heard.cralaw28 The requirement of due process is satisfactorily met as long as the parties are given the opportunity to present their side. In the case at bar, Milwaukee was precisely given the right and the opportunity to present its side. It was able to present its evidence-in-chief and had its opportunity to present rebuttal evidence. chan virtual library.WHEREFORE, the petition is DENIED.SO ORDERED.Order of Trials maybe Changed

[G.R. No. L-29742. March 29, 1972.]

VICENTE YU, Plaintiff-Appellant, v. EMILIO MAPAYO, Defendant-Appellee.

Leonor S. Lozano for plaintiff and appellant

Gregorio A. Palabrica for defendant and appellee.

SYLLABUS

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1. REMEDIAL LAW; DISMISSAL FOR FAILURE TO PROSECUTE; NOT PROPER WHERE ALLEGATIONS IN COMPLAINT ADMITTED IN ANSWER. — Where the answer admits defendant’s obligation as stated in the complaint, albeit special defenses are pleaded, plaintiff has every right to insist that it is for defendant to come forward with evidence in support of his special defenses. Defendant not having supported his special defenses, the dismissal of the case for failure to prosecute on the part of counsel for the plaintiff was manifestly untenable and contrary to law.

2. ID.; ID.; ID.; SECTION 2 RULE 129, REVISED RULES OF COURT SUPPORTS PLAINTIFF’S REFUSAL TO PRESENT EVIDENCE. — Plaintiffs counsel refused to comply with the order of the trial court requiring plaintiff to present his evidence. Instead of calling his witnesses, he moved the court to present them after the defendant had presented their evidence. Such a stand is supported by Section 2 of the Revised Rule of Court 129.

3. ID.; ID.; ID.; RULES OF JUDICIAL ETHICS VIOLATED BY JUDGE IN CASE AT BAR. — While this appeal is not a complaint against the presiding judge, We cannot refrain from observing that the trial judge’s despotic and outrageous insistence that plaintiff should present proof in support of allegations that were not denied but admitted by the adverse party was totally unwarranted, and was made worse by the trial judge’s continual interrupting of the explanations of counsel, in violation of the rules of judicial ethics.

D E C I S I O N

REYES, J.B.L., J.:

Appeal from an order of the Court of First Instance of Davao City, Branch II (Judge Alfredo I. Gonzalez presiding), rendered in its Civil Case No. 4018, dismissing plaintiff’s action for lack of prosecution.

The case originally started in the City Court of Davao, Branch II, where appellant therein had filed suit to recover from defendant Emilio Mapayo the sum of P2,800, representing the unpaid balance of the

purchase price of a Gray Marine Engine sold by the plaintiff to the defendant, plus attorney’s fees. The answer admitted the transaction and the balance due but contended that by reason of hidden defects of the article sold, the defendant had been forced to spend P2,800 for repairs and labor, wherefore plaintiff had agreed to waive the balance due on the price of the engine, and counterclaimed for damages and attorneys’ fees. The City Court, after trial, disallowed the defenses and ordered the defendant to pay plaintiff P2,500.00 and costs (Record on Appeal, pages 9-16).

Defendant Mapayo appealed to the Court of First Instance, filing an answer therein that was a virtual reproduction of his original defenses in the City Court. When, after several continuances, the case was called for hearing on 13 March 1968, the defendant, as well as his counsel, failed to appear and the court scheduled the case for hearing ex parte on the same day. The Court ordered plaintiff to present his evidence, and from the unchallenged stenographic notes quoted in appellant’s brief, pages 11-14 (Transcript, pages 4-7), the following transpired:jgc:chanrobles.com.ph

"ATTY. LOZANO:chanrob1es virtual 1aw library

If your Honor please, before I present my witness I should like to present the issue because all the allegations of the complaint are admitted and I am going to specify by the answer, your Honor. (Italics supplied)

COURT:chanrob1es virtual 1aw library

The issue is void on the hidden defect.

ATTY. LOZANO:chanrob1es virtual 1aw library

That is why, if your Honor please, the point if your Honor please, is I do not have to prove that there is a gasoline engine that was taken by the defendant from the plaintiff for an agreed amount of P6,800.00 because the allegation in paragraph 1, No. 2 and No. 3, is admitted in the answer.

In other words, if your Honor please, the promissory note in the amount of P2,800.00 . . . (interrupted by court).

32

COURT:chanrob1es virtual 1aw library

Wait a minute, are you going to present evidence or not?

ATTY. LOZANO:chanrob1es virtual 1aw library

Will you please give me a chance, if your Honor please, because my purpose is, it will turn out that it will be the defendant to present evidence to prove that there is hidden defect. He admitted the allegation, he admitted that there is a balance of P2,800.00; it is not paid by him but at the same time he said that there is a hidden defect.

In other words, if your Honor please, it should be the defendant to present the evidence . . . (interrupted by court).

COURT:chanrob1es virtual 1aw library

Are you going to present evidence, substantial, oral, or not? Answer the question of the Court.

ATTY. LOZANO:chanrob1es virtual 1aw library

If your Honor please, on the complaint, on the allegation of the complaint, all are admitted by the defendant . . . (interrupted by court.

COURT:chanrob1es virtual 1aw library

The attorney does not answer the question of the Court.

Answer the question, are you going to present evidence OR NOT AND SUBMIT THE CASE ON THE PLEADINGS. (Capitals supplied)

ATTY. LOZANO:chanrob1es virtual 1aw library

Would you please allow me, your Honor, because in the answer of the defendant . . . (interrupted by court)

COURT:chanrob1es virtual 1aw library

I do not need discussion; I want you to answer the question of the

Court.

ATTY. LOZANO:chanrob1es virtual 1aw library

I am not going to present my evidence yet because at this moment I am submitting my evidence on the pleading until after the defendant will present evidence and I reserve my right to present rebuttal evidence. (Italics supplied)

COURT:chanrob1es virtual 1aw library

Make it of record that the attorney refuses to present evidence either oral or documentary when required by the Court.

ATTY. LOZANO:chanrob1es virtual 1aw library

Motion for reconsideration, if your Honor please, that is not what I said, if your Honor please, I manifested that it should be the defendant to prove first, to present evidence and we reserve our right to present rebuttal evidence, if your Honor please (Italics supplied).

COURT:chanrob1es virtual 1aw library

All right, denied.

Submit the case for the consideration of the Court.’" 

The court then issued an order on the same day in the following terms (Record on Appeal, page 24):jgc:chanrobles.com.ph

"O R D E R

Make it of record that the attorney for the plaintiff refuses to present evidence, either oral or documentary, when required by the Court.

Submit the case for the consideration of the Court.

SO ORDERED."cralaw virtua1aw library

A motion for reconsideration having been filed by counsel for plaintiff, it was denied by the court by an order of 21 March, and the case was

33

dismissed for lack of prosecution (Record on Appeal, pages 34-35), the trial judge reasoning that —

"When the case is called for trial on 19 March 1968, defendant’s counsel asked again for another postponement of the trial on the ground that defendant and his witnesses were not able to come for lack of transportation, notwithstanding a stern warning by the Court, per its order of 9 March 1968 that it would not entertain further motion for continuation of trial. Counsel for the plaintiff vehemently objected to such motion and insisted in presenting his evidence which the Court grants inspite of another civil case and one miscellaneous case which were ready for hearing at the same time.

"Court ordered the plaintiff to present his evidence. Plaintiff’s counsel refused to comply with said order Instead of calling his witnesses, he moved the Court to present them after the defendant had presented their evidence. The court asked said counsel twice whether he would present his evidence for the plaintiff, but said counsel refused to do so and stacked to his demand that he would introduce his witnesses only in rebuttal. This is dictation to the Court to disregard its lawful command and a violation of the order of trial provided in the Rules of Court.

"This is an appealed case from the Municipal Court elevated to this Court on 18 May 1963 and from that time several postponement were granted at the instance of the parties which cause delay and is detrimental to the interest of justice.

"IN VIEW WHEREOF, let this case be dismissed for failure to prosecute on the part of counsel for the plaintiff without pronouncement as to costs.

"Finding defendant’s counterclaim not meritorious, same is also dismissed.

"SO ORDERED."cralaw virtua1aw library

Further motions to reconsider having proved futile, the plaintiff appealed.

We find, for Plaintiff-Appellant. Since the answer admitted defendant’s

obligation as stated in the complaint, albeit special defenses were pleaded, plaintiff had every right to insist that it was for defendant to come forward with evidence in support of his special defenses. Section 2 of Revised Rule of Court 129 plainly supports appellant:jgc:chanrobles.com.ph

"Sec. 2. Judicial admissions. — Admissions made by the parties in the pleadings, or in the course of the trial or other proceedings do not require proof and can not be contradicted unless previously shown to have been made through palpable mistake."cralaw virtua1aw library

While this appeal is not a complaint against the presiding judge, We can not refrain from observing that the trial judge’s despotic and outrageous insistence that plaintiff should present proof in support of allegations that were not denied but admitted by the adverse party was totally unwarranted, and was made worse by the trial judge’s continual interrupting of the explanations of counsel, in violation of the rules of Judicial Ethics.

Defendant not having supported his special defenses, the dismissal of the case was manifestly untenable and contrary to law.

WHEREFORE, the appealed order of dismissal is hereby revoked and set aside, and the court below is directed to enter judgment in favor of plaintiff and against the defendant for the sum of P2,800.00, plus attorney’s fees which this Court considers just and reasonable (Civil Code, Article 2208, paragraph 11) . Costs against Defendant-Appellee.

Let a copy of this decision be furnished the Honorable, the Secretary of Justice, for his information and action.

Concepcion, C.J., Makalintal, Castro, Fernando, Teehankee, Barredo, Villamor and Makasiar, JJ., concur.

Zaldivar, J., did not take part.

Three ways of Consolidation

34

[G.R. No. 45642. September 25, 1937.]

FRANCISCO SALAZAR, Petitioner, v. THE COURT OF FIRST INSTANCE OF LAGUNA and SABINA RIVERA, Respondents. 

Crispin Oben for Petitioner. 

Estanislao A. Fernandez for respondent Rivera. 

No appearance for other Respondent. 

SYLLABUS1. WILLS; PROBATE; JURISDICTION. — A Court of First Instance acquires jurisdiction to probate a will when it is shown by evidence before it: (1) That a person has died leaving a will; (2) in the case of a resident of this country, that he died in the province where the court exercises territorial jurisdiction; (3) in the case of a nonresident, that he has left a estate in the province where the court is situated and (4) that the testament or last will of the deceased has been delivered to the court and is in the possession thereof. 

2. ID.; ID.; ID.; SECOND WILL; FEES OF CLERK OF COURT. — According to the facts alleged and admitted by the parties, it is evident that the court has acquired jurisdiction to probate the second will, presented by the respondent, in view of the presence of all the jurisdictional facts above-stated. The respondent’s counter-petition should, in this case, be considered as a petition for the probate of the second will, the original of which was filed by her on July 20, 1937. The payment of the fees of e clerk of court for all services to be rendered by him in connection with the probate of the second will and for the successive proceedings to be conducted and orders to be issued, in accordance with section 788, as amended, is not jurisdictional in the sense that its omission does not deprive the court of its authority to proceed with the probate of a will, as expressly provided for by section 630. It is the inevitable duty of the court, when a will is presented to it, to appoint hearing for its allowance and to cause notices thereof to be given by publication. The duty imposed by said section is imperative and noncompliance therewith would be a mockery at the law and at the last will of the testator. 

3. ID.; ID.; ID.; ID. — Section 785 (a) of the Code of the Civil

Procedure, as amended recently by Act No. 3250, permits the remission or postponement of the payment of the clerk’s fees in cases of poverty, at the discretion of the court, and if this were done in one case and the payment of the fees for filing the application were jurisdictional, as claimed, then the court, in admitting the will to probate and in allowing it, would have acted entirely without jurisdiction. Finally, it should be taken into consideration that the court, in this case, did not exempt the respondent from paying the fees in question but merely failed to make provision therefor. 

4. ID.; ID.; ID.; CONSOLIDATION OF SPECIAL PROCEEDINGS. — When the court ordered that the second will be set for hearing, that publication be made thereof and that said will be heard in the same proceeding jointly with the first will, it merely ordered the consolidation of the two applications and the two hearings on the probate of both wills, instead of conducting separate hearings, undoubtedly because it understood that the form so chosen was the most convenient for the parties and their attorneys. There are three ways of consolidating actions or special proceedings where the questions at issue and the parties in interest are the same. The first consists in recasting the cases already instituted, conducting only one hearing and rendering only one decision; the second takes place when the existing cases are consolidated, only one hearing held and only one decision rendered; and the third takes place when, without recasting or consolidating the cases, the principal one is hear, the hearing on the others being suspended until judgment has been rendered in the first case. 

5. ID.; ID.; ID.; ID. — The court, in the exercise of its sound discretion, may adopt any of these three forms of consolidation whenever in its opinion the proceeding is beneficial to and convenient for the parties. The power so exercised is discretionary. In the case under consideration, the court acquired jurisdiction from the moment the counter-petition was presented and the second will came to its possession and under its control and, consequently, it likewise had full discretion to order, as it did, the probate thereof in the proceeding already instituted for the purpose of rendering later only one decision. The consolidation so ordered was the form most convenient for and beneficial to the parties as well as to the court, because if the first will were opposed on the ground that it was revoked by the second will, the best evidence of revocation would be the second will, and once

35

the publications are made, if the second will was executed with the formalities prescribed by law, the court could order the probate thereof, without the necessity of multiplying the proceedings.

D E C I S I O N

IMPERIAL, J.:

The petitioner instituted special proceeding No. 3109 in the Court of First Instance of Laguna and, in the petition filed by him, prayed for the probate of the will allegedly made on May 13, 1924, by his deceased mother Damiana Capistrano, who died in the municipality of Pagsanjan, Laguna, on December 21, 1936. The petition was opposed by the respondent Sabina Rivera, who filed a pleading entitled "Opposition and Counter-Petition." In her pleading the respondent, after opposing the probate of said will for the reasons stated therein, prayed for the probate of the will of the deceased allegedly made on May 11, 1930, copy of which was attached thereto, and for the issuance, to that effect, of the order setting the hearing thereof and directing such publications as required by law. The court denied the motion for publication and ordered the respondent to institute another proceeding and apply separately for the probate of the alleged will. The respondent filed a motion for reconsideration and the court, on March 31, 1937, issued an order setting aside the former one and directing that the will presented by the respondent be set for hearing, that the publications required by law be made and that said will be heard jointly will the will presented by the petitioner in the same proceeding instituted by the latter. Sometime later, the court ordered that the expenses for the publications made in the newspapers be defrayed by the Respondent. The petitioner filed two motions for reconsideration which were denied and, finally, instituted thiscertiorari proceeding. In order that the hearing and publications ordered by the court may be carried out, the respondent, on July 20, 1937, deposited P24 and filed the original of the will the probate of which had been sought by her. 

I. The petitioner raises only one question of law, to wit: that the court acquired no jurisdiction to take cognizance of the counter- petition for

the probate of the second will, or to set the same for hearing and to order, as it did, the publications to be made and the hearing of said will to be held in the same proceeding jointly with the first will, on the ground that the respondent had not previously filed her pleading nor paid the fees of the clerk of court fixed by section 788 of the Code of Civil Procedure, as amended by Act No. 3395. The pertinent part of said section, as amended, reads as follows:jgc:chanrobles.com.ph

"SEC. 788. Fees of clerks of Court of First Instance. — Fees shall be assessed in accordance with the following schedule:chanrob1es virtual 1aw libraryx       x       x

"(g) For all clerical services in the allowance of wills, granting letters of administration, appointment of guardians, trustees, settlement of the accounts of executors, administrators, guardians, trustees, and recording final and interlocutory orders, judgments, and decrees therein, filing all inventories and appraisements, and for all other work as clerk pertaining to any one estate, fees payable out of the estate shall be collected in accordance with the value of the property involved in each proceeding, as follows:"x       x       x

The jurisdiction of the Courts of First Instance in probate matters is determined in the following sections of the above-cited Code:jgc:chanrobles.com.ph

"SEC. 599. Jurisdiction. — Courts of First Instance shall have jurisdiction in all matters relating to the settlement of estates and probate of wills of deceased persons, the appointment and removal of guardians and trustees, and the powers, duties, and rights of guardians and wards, trustees, and cestuis que trust. This jurisdiction shall be called probate jurisdiction. 

"SEC. 600. Where resident’s estate settled. — If an inhabitant of the Philippine Islands dies, whether a citizen or alien, his will shall be proved, or letters of administration granted, and his estate settled, in the Court of First Instance in the province in which he resided at the time of his death. 

36

"SEC. 601. Where nonresident’s estate settled. — If a person resided out of the Philippine Islands at the time of his death, his will shall be allowed and recorded, and letters testamentary or of administration shall be granted in the Court of First Instance of any province in which he had estate."cralaw virtua1aw libraryx       x       x

"SEC. 626. Custodian of will to deliver. — The person who has the custody of a will shall, within thirty days after he knows of the death of the testator, deliver the will into the court which has jurisdiction, or to the executor named in the will. 

"SEC. 627. Executor to present will and accept or refuse trust. — A person named as executor in a will, shall within thirty days after he knows of the death of the testator, or within thirty days after he knows that he is named executor, if he obtained such knowledge after knowing of the death of the testator, present such will to the court which has jurisdiction, unless the will has been otherwise returned to said court, and shall, within such period, signify to the court his acceptance of the trust, or make known in writing his refusal to accept it."cralaw virtua1aw libraryx       x       x

"SEC. 630. Court to appoint hearing on will. — When a will is delivered to a court having jurisdiction of the same, the court shall appoint a time and place when all concerned may appear to contest the allowance of the will, and shall cause public notice thereof to be given by publication in such newspaper or newspapers as the court directs of general circulation in the province, three weeks successively, previous to the time appointed, and no will shall be allowed until such notice has been given. At the hearing all testimony shall be taken under oath, reduced to writing and signed by the witnesses."cralaw virtua1aw library

Under the foregoing provisions, a Court of First Instance acquires jurisdiction to probate a will when it is shown by evidence before it: (1) That a person has died leaving a will; (2) in the case of a resident of this country, that he died in the province where the court exercises

territorial jurisdiction; (3) in the case of a nonresident, that he has left a estate in the province where the court is situated, and (4) that the testament or last will of the deceased has been delivered to the court and is in the possession thereof. 

The law is silent as to the specific manner of bringing the jurisdictional allegations before the court, but practice and jurisprudence have established that they should be made in the form of an application and filed with the original of the will attached thereto. It has been the practice in some courts to permit attachment of a mere copy of the will to the application, without prejudice to producing the original thereof at the hearing or when the court so requires. This precaution has been adopted by some attorneys to forestall its disappearance, which has taken place in certain cases. 

According to the facts alleged and admitted by the parties, it is evident that the court has acquired jurisdiction to probate the second will, in view of the presence of all the jurisdictional facts above- stated. The respondent’s counter-petition should, in this case, be considered as a petition for the probate of the second will, the original of which was filed by her on July 20, 1937. 

II. The payment of the fees of the clerk of court for all services to be rendered by him in connection with the probate of the second will and for the successive proceedings to be conducted and orders to be issued, in accordance with section 788, as amended, is not jurisdictional in the sense that its omission does not deprive the court of its authority to proceed with the probate of a will, as expressly provided for by section 630. It is the inevitable duty of the court, when a will is presented to it, to appoint hearing for its allowance and to cause notices thereof to be given by publication. The duty imposed by said section is imperative and noncompliance therewith would be a mockery at the law and at the last will of the testator. Section 785 (a) of the Code of Civil Procedure, as amended recently by Act No. 3250, permits the remission or postponement of the payment of the clerk’s fees in cases of poverty, at the discretion of the court, and if this were done in one case and the payment of the fees for filing the application were jurisdictional, as claimed, then the court, in admitting the will to probate and in allowing it, would have acted entirely without jurisdiction. Finally, it should be taken into consideration that the court, in this case, did not exempt the respondents from paying the fees in

37

question but merely failed to make provision thereof. 

III. When the court ordered that the second will be set for hearing, that publication be made thereof and that said will be heard in the same proceeding jointly with the first will, it merely ordered the consolidation of the two applications and the two hearings on the probate of both wills, instead of conduction separate hearings, undoubtedly because it understood that the form so chosen was the most convenient for the parties and their attorneys. 

There are three ways of consolidating actions or special proceedings where the questions at issue and the parties in interest are the same. The first consists in recasting the cases already instituted, conducting only one hearing and rendering only one decision; the second takes place when the existing cases are consolidated, only one hearing held and only one decisions rendered: and the third takes place when, without recasting or consolidating the cases, the principal one is heard, the hearing on the others being suspended until judgment has been rendered in the first case. The court, in the exercise of its sound discretion, may adopt any of these three forms of consolidation whenever in its opinion the proceeding is beneficial to and convenient for the parties. The power so exercised is discretionary. In the case under consideration, the court acquired jurisdiction from the moment the counter-petition was presented and the second will came to its possession and under its control and, consequently, it likewise had full discretion to order, as it did, the probate thereof in the proceeding already instituted for the purpose of rendering later only one decision. It should furthermore be taken into consideration that the consolidation so ordered was the form most convenient for the beneficial to the parties as well as to the court, because if the first will were opposed on the ground that it was revoked by the second will, the best evidence of the revocation would be said second will and once the publications are made, f the second will was executed with the formalities prescribed by law, the court could order the probate thereof, without the necessity of multiplying the proceedings. 

The decisions inserted hereinbelow are in support of the consolidation of special proceedings in the cases where more than one will of a deceased person has been presented:jgc:chanrobles.com.ph

"The question involved in the two cases is, which, if either, of the

instruments presented for probate is the last will of Margaret Roulett. The trial of one case would not necessarily determine the other, as a verdict in one for the caveat would not establish the instrument propounded in the other, and a verdict in Roulett’s case, finding that the paper offered by him was the last will of Margaret Roulett, would not be binding upon Mulherin, because he is not a party to Roulett’s proceeding. We are, therefore, of the opinion, in view of the complications that might arise from separate trials and the facility with which the whole matter may be determined by consolidating the cases, that the trial judge might, in his discretion, pass an order directing that the two cases be consolidated and heard together, and in this manner have all the issues disposed of by a judgment binding and conclusive upon all the parties before the court. In such trial the person who filed the first application in the court of ordinary would be entitled to open and conclude." (Roulett v. Mulherin, 100 Ga., 594.) 

"In probate proceedings it was a proper course to try the validity of two alleged wills, the latest of which had been lost or destroyed at the same time, and evidence as to the revoking clause in the lost will was admissible, but its effect on the earlier will must be determined in view of the admissibility of the latter will to probate as a will." (In re Thompson’s Estate, 198 Pac., 795.) 

"Where two wills are offered for probate and applications consolidated, submission of both for determination as to whether one, or if not that the other, is true will, held not erroneous." (Lillard v. Tolliver, 285 S. W., 576.) 

"Where two will are offered for probate and applications consolidated, submission of both for determination as to whether one, or if not that the other, is true will, held not erroneous." (Lillard v. Tolliver, 285 S. W., 576.) 

"Where two instruments are propounded by different parties as wills, and several applications are made for probate, they will be consolidated and tried together as one proceeding." (In re Potter’s Will, 155 N. Y. S., 939.) 

"The question of consolidation is discretionary with the court. In both of the above-entitled proceedings, the parties are identical. No issues have been tried in either proceeding. It therefore would be an

38

unnecessary expense to both the parties in interest and the county, and an unnecessary delay in the determination of both proceedings, not to consolidate them. I am therefore of the opinion that a seasonable demand was made for a jury trial of the issues raised by the objections filed to the probate of the will dated May 8, 1912, and that the proceedings should be consolidated, and also that the issues raised in said proceedings can be more speedily and conveniently tried before the acting surrogate and a jury." (In re Potter’s Will, 158 N. Y. S., 1001.) 

"Where separate scripts are propounded for probate as the last will and testament of an alleged testator, the probate proceedings in a proper case may be consolidated for trial." (In re Martin’s Will, 141 N. Y. S., 784.) 

"Consolidation of proceedings. — At common law the court could order all testamentary papers to be produced in court in a proceeding to probate any one of them, and now, under the statutory procedure in effect in the various jurisdictions, the validity of two or more papers claimed to be the last will and testament of deceased may be tried at the same time, or a consolidation of separate proceedings to probate or contest various testamentary papers purported to be by the same testator may be made. A motion for such a consolidation, however, is addressed t the surrogate presiding at the trial and should be made when the trial of the probate proceeding comes on for the hearing and not prior thereto, or before the surrogate sitting for the dispatch of chambers business." (68 C. J., 1038, 1039, sec. 830.) 

"The court may, in its discretion, consolidate proceedings instituted by different persons for the purpose of having different instruments each probated as the last will and testament of decedent. Separate contests of a will and codicil, or of two will, each claimed to be the last will of testator, may be consolidated by the court and heard together." (Page on Wills, page 375, paragraph 323.) 

It is the conclusion of this court, therefore, that the respondent court did not act in excess of its sound discretion in issuing the order of March 31, 1937, and for the foregoing reasons, the remedy applied for is hereby denied, with costs to the petitioner. So ordered. 

Avanceña, C.J., Villa-Real, Abad Santos, Diaz, Laurel and

Concepcion, JJ., concur. 

RESOLUTION

October 13, 1937. 

IMPERIAL, J.:

The attorney for the petitioner seeks permission to file a second motion for reconsideration already attached to his petition. With the motion for reconsideration before it, this court will now take up the same for decision on its merits. 

It is alleged that the interpretation of paragraph (g) of section 788 of the Code of Civil Procedure, as amended by section 1 of Act No. 3395, was one of the questions raised by the petition for certiorari, but that both in the decision and in the resolution of the motion for reconsideration this court has neither given nor interpreted the meaning and scope of the phrase "in each proceeding" appearing at the end of the legal provision in question. 

On page 2 of the decision, this court stated that the only question of law raised by the petition was whether or not the court had acquired jurisdiction when it provided in its orders that the counter-petition and the second will be heard in the proceeding already instituted at the initiative of the petitioner and that the expenses of publication of the hearing be defrayed by the Respondent. This court then said: "The petitioner raises only one question of law, to wit: that the court acquired no jurisdiction to take cognizance of the counter-petition for the probate of the second will, or to set the same for hearing and to order, as it did, the publications to be made and the hearing of said will to be held in the same proceeding jointly with the first will, on the ground that the respondent had not previously filed her pleading nor paid the fees of the clerk of court fixed by section 788 of the Code of Civil Procedure, as amended by Act No. 3395."cralaw virtua1aw library

In connection with the fees of the clerk of court prescribed by section 788 (g) of the Code of Civil Procedure, as amended, the court, on pages 6 and 7 of the decision, said: "The payment of the fees of the

39

clerk of curt for all services to be rendered by him in connection with the probate of the second will and for the successive proceedings to be conducted and orders to be issued, in accordance with section 788, as amended, is not jurisdictional in the sense that its omission does not deprive the court of its authority to proceed with the probate of a will, as expressly provided for by section 630. It is the inevitable duty of the court, when a will is presented to it, to appoint hearing for its allowance and to cause notices thereof to be given by publication. The duty imposed by said section is imperative and noncompliance therewith would be a mockery at the law and at the last will of the testator. Section 785 (a) of the Code of Civil Procedure, as amended recently by Act No. 3250, permits the remission or postponement of the payment of the clerk’s fees in cases of poverty, at the discretion of the court, and if this were done in one case and the payment of the fees for filing the application were jurisdictional, as claimed, then the court, in admitting the will to probate and in allowing it, would have acted entirely without jurisdiction. Finally, it should be taken into consideration that the court, in this case, did not exempt the respondents from paying the fees in question but merely failed to make provision therefor."cralaw virtua1aw library

It having been decided that the payment of said fees is not jurisdictional, this court, in fact, determined the principal and only question of law raised by the petition and there was no necessity of interpreting said legal provision for the purpose of laying down another unnecessary conclusion. 

In the second motion for reconsideration, however, the attorney for the petitioner asks this court to interpret expressly the phrase "in each proceeding" to determine whether or not the respondent was and is obliged to pay said clerk’s fees. If the interpretation asked for is to determine whether or not the respondent was and is obliged to pay said clerk’s fees. If the interpretation asked for is to determine the question of jurisdiction, that is, whether or not the court acquired jurisdiction in issuing its orders appealed from, it has already been done and it was said that the payment of said fees is not jurisdictional. If the interpretation sought to be obtained is for the purpose of having this court decide now whether the respondent should, or should not, pay the clerk’s fees, then this court holds that such pronouncement is unnecessary and improper for the following reasons: (1) Because to decide whether or not the petition is meritorious, there is no necessity

of determining whether or not the respondent is obliged to pay the clerk’s fees, and (2) because it behooves the lower court to decided this question in the first instance and it is improper for this appellate court to exercise the functions belonging to the former. 

In view of the foregoing, the second motion for reconsideration is denied. 

Avanceña, C.J., Villa-Real, Abad Santos, Diaz, Laurel and Concepcion, JJ., concur.

G.R. No. 45642           September 25, 1937FRANCISCO SALAZAR, petitioner, vs.THE COURT OF FIRST INSTANCE OF LAGUNA and SABINA RIVERA, respondents.Crispin Oben for petitioner.Estanislao A. Fernandez for respondent Rivera.IMPERIAL, J.:The petitioner instituted special proceeding No. 3109 in the court of First Instance of Laguna and, in the petition filed by him, prayed for the probate of the will allegedly made on May 13, 1924, by his deceased mother Damiana Capistrano, who died in the municipality of Pagsanjan, Laguna, on December 21, 1936. The petition was opposed by the respondent Sabina Rivera, who filed a pleading entitled "Opposition and Counter-Petition." In her pleading the respondent, after opposing the probate of said will for the reasons stated therein, prayed for the probate of the will of the deceased alleged made on May 11, 1930, copy of which was attached thereto, and for the issuance, to that effect, of the order setting the hearing thereof and directing such publications as required by law. The court denied the motion for publication and ordered the respondent to institute another proceeding and apply separately for the probate of the alleged will. The respondent filed a motion for reconsideration and the court, on March 31, 19937, issued an order setting aside the former one and directing that the will presented by the respondent be set for hearing, that the publications required by law be made and that said will be heard jointly with the will presented by the petitioner in the same proceeding instituted by the latter. Sometime later, the court ordered that the expenses for the publications made in the

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newspapers be defrayed by the respondent. The petitioner filed two motions for reconsideration which were denied and, finally, instituted this certiorari proceeding. In order that the hearing and publications ordered by the court may be carried out, the respondent, on July 20, 1937, deposited P24 and filed the original of the will the probate of which had been sought by her.I. The petitioner raises only one question of law, to wit: that the court acquired no jurisdiction to take cognizance of the counter-petition for the probate of the second will, or to set the same for hearing of said will to be held in the same proceeding jointly with the first will, on the ground that the respondent had not previously filed her pleading nor paid the fees of the clerk of court fixed by section 788 of the Code of Civil Procedure, as amended by Act No. 3395. The pertinent part of said section, as amended, reads as follows:SEC. 788. Fees of clerks of Court of First Instance. — Fees shall assessed in accordance with the following schedule:xxx           xxx           xxx(g) For all clerical services in the allowance of wills, granting letters of administration, appointment of guardians, trustees, settlement of the accounts of executors, administrators, guardians, trustees, and recording final and interlocutory orders, judgment, and decrees therein, filing all inventories and appraisements, and for all other work as clerk pertaining to any one estate, fees payable out of the estate shall be collected in accordance with the value of the property involved in each proceeding, as follows:xxx           xxx           xxxThe jurisdiction of the Courts of First Instance in probate matters is determined in the following sections of the above-cited Code:SEC. 599. Jurisdiction. — Courts of First Instance shall have jurisdiction in all matters relating to the settlement of estate and probate of wills of deceased persons, the appointment and removal of guardians and trustees, and the powers, duties, and rights of guardians and wards, trustees, and cestuis que trust. This jurisdiction shall be called probate jurisdicton.SEC. 600. Where resident's estate settled. — If an inhabitant of the Philippine Islands dies, whether a citizen or alien, his will shall be proved, or letters of administration granted, and his estate settled, in the Court of First Instance in the province in which he resided at the time of his death.SEC. 601. Where nonresident's estate settled. — If a person resided out of the Philippine Islands at the time of his death, his will shall be

allowed and recorded, and letters testamentary or of administration shall be granted in the Court of First Instance of any province in which he had estate.xxx           xxx           xxxSEC. 626. Custodian of will to deliver. — The person who has the custody of a will shall, within thirty days after he knows of the death of the testator, deliver the will into the court which has jurisdiction, or to the executor named in the will.SEC. 627. Executor to present will and accept or refuse trust. — A person named as executor in a will, shall within thirty days after he knows of the death of the testator, or within thirty days after he knows that he is named executor, if he obtained such knowledge after knowing of the death of the testator, present such will to the court which has jurisdiction, unless the will has been otherwise returned to said court, and shall, within such period, signify to the court his acceptance of the trust, or make known in writing his refusal to accept it.xxx           xxx           xxxSEC. 630. Court to appoint hearing on will. — When a will is delivered to a court having jurisdiction of the same, the court shall appoint a time and place when all concerned may appear to contest the allowance of the will, and shall cause public notice thereof to be given by publication in such newspapers as the court directs general circulation in the province, three weeks successively, previous to the time appointed, and no will shall be allowed until such notice has been given. At the hearing all testimony shall be taken under oath, reduced to writing and signed by the witnesses.Under the foregoing provisions, a Court of First Instance acquires jurisdiction to probate a will when it is shown by evidence before it: (1) That a person has died leaving a will; (2) in the case of a resident of this country, that he died in the province where the court exercises territorial jurisdiction; (3) in the case of a nonresident, that he has left a estate in the province where the court is situated, and (4) that the testament or last will of the deceased has been delivered to the court and is in the possession thereof.The law is silent as to the specific manner of bringing the jurisdictional allegations before the court but practice and jurisprudence have established that they should be made in the form of an application and filed with the original of the will attached thereto. It has been the practice in some courts to permit attachment of a mere copy of the will to the application, without prejudice to producing the original thereof at

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the hearing or when the court so requires. This precaution has been adapted by some attorneys to forestall its disappearance, which has taken place in certain cases.According to the facts alleged and admitted by the parties, it is evident that the court has acquired jurisdiction to probate the second will, in view of the presence of all the jurisdictional facts above-stated. The respondent's counter-petition should, in this case, be considered as a petition for the probate of the second will, the original of which was filed by her on July 20, 1937.II. The payment of the fees of the clerk of court for all services to be rendered by him in connection with the probate of the second will and for the successive proceedings to be conducted and others to be issued, in accordance with section 788, as amended, is not jurisdiction in the sense that its omission does not deprive the court of its authority to proceed with the probate of a will, as expressly provided for by section 630. It is the inevitable duty of the court, when a will is presented to it, to appoint hearing for its allowance and to cause notice thereof to be given by publication. The duty imposed by said section is imperative and noncompliance therewith would be a mockery at the law and at last will of the testator. Section 785 (a) of the Code of Civil Procedure, as amended recently by Act No. 3250, permits the remission or postponement of the payment of the clerk's fees in cases of poverty, at the discretion of the court, and if this were done in one case and the payment of the fees for filing the application were jurisdictional, is claimed, then the court, in admitting the will to probate and in allowing it, would have acted entirely without jurisdiction. Finally, it should be taken into consideration that the court, in this case, did not exempt the respondents from paying the fees in question but merely failed to make provision therefor.III. When the court ordered that the second will be set for hearing that publication be made thereof and that said will be heard in the same proceeding jointly with the first will, it merely ordered the consolidation of the two applications and the two hearing on the probate of both wills, instead of conducting separate hearing, undoubtedly because it understood that the form so chosen was the most convenient for the parties and their attorneys.There are three ways of consolidation action or special proceedings where the questions at issue and the parties in interest are the same. The first consists in recasting the cases already instituted, conducting only one hearing and rendering only one decision; the second takes place when the existing cases are consolidated, only one hearing held

and only one decision rendered; and the third takes place when, without recasting or consolidating the cases, the principal one is heard, the hearing on the others being suspended until judgment has been rendered in the first case. The court, in the exercise of its sound discretion, may adopt any of these three forms of consolidation whenever in its opinion the proceeding is beneficial to and convenient for the parties. The power so exercised is discretionary. In the case under consideration, the court acquired jurisdiction from the moment the counter-petition was presented and the second will came to its possession and under its control and, consequently, it likewise had full discretion to order, as it did, the probate thereof in the proceeding already instituted for the purpose of rendering later only one decision. It should furthermore be taken into consideration that the consolidation so ordered was the form most convenient for and beneficial to the parties as well as to the court because if the first will were opposed on the ground that it was revoked by the second will, the best evidence of the revocation would be said second will and once the publications are made, if the second will was executed with the formalities prescribed by law, the court could order the probate thereof, without the necessity of multiplying the proceedings.The decisions inserted hereinbelow are in support of the consolidation of special proceedings in the cases where more than one will of a deceased person has been presented:The question involved in the two cases is, which, if either, of the instruments presented for probate is the last will of Margaret Roulett. The trial of one case would not necessarily determine the other, as a verdict in one for the caveat would not establish the instrument propounded in the other, and a verdict in Roulett's case, finding that the paper offered by him was the last will of Margaret Roulett, would not be binding upon Mulherin, because he is not a party to Roulett's proceeding. We are, therefore, of the opinion, in view of the complications that might arise from separate trials and the facility with which the whole matter may be determined by consolidating the cases, that the trial judge might, in his discretion, pass an order directing that the two cases be consolidated and heard together, and in this manner have all the issues disposed of by a judgment binding and conclusive upon all the parties before the court. In such trial the person who filed the first application in the court of ordinary would be entitled to open and conclude. (Roulett vs Mulherin, 100 Ga., 594.)In probate proceeding it was a proper course to try the validity of two alleged wills, the latest of which had been lost or destroyed at the

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same time, and evidence as to the revoking clause in the lost will was admissible, but its effect on the earlier will must be determined in view of the admissibility of the latter will to probate as a will. (In re Thompson's Estate, 1987 Pac., 795.).Where two wills are offered for probate and applications consolidated, submission of both for determination as to whether one, or if not that the other, is true will, held not erroneous. (Lillard vs Tolliver, 285 S. W., 576.).Where two instruments are propounded by different parties as wills, and several application are made for probate, they will be consolidated and tried together as one proceeding. (In re Potter's Will, 155 N. Y. S., 939.).The question of consolidation is discretionary with the court. In both of the above-entitled proceedings, the parties are identical. No issues have been tried in either proceeding. It therefore would be an unnecessary expense to both the parties in interest and the country, and an unnecessary delay in the determination of both proceedings, not to consolidate them. I am therefore of the opinion that a seasonable demand was made for a jury trial of the issues raised by the objections filed to the probate of the will dated May 8, 1912, and that the proceedings should be consolidated, and also that the issues raised in said proceedings can be more speedily and conveniently tried before the acting surrogate and a jury. (In re Potter's Will, 158 N.Y., 1001.)Where separate scripts are propounded for probate as the last will and testament of an alleged testator, the probate proceedings in a proper case may be consolidated for trial. (In re Martin's Will, 141 N. Y. S., 784.)Consolidation of proceedings. — At common law the court could order all testamentary papers to be produced in court in a proceeding to probate any one of them, and now, under the statutory procedure in effect in the various jurisdiction, the validity of two or more papers claimed to be the last will and testament of deceased may be tried at the same time, or a consolidation of separate proceedings to probate or contest various testamentary papers purported to be by the same testator may be made. A motion for such a consolidation, however, is addressed to the surrogate presiding at the trial and should be made when the trial of the probate proceeding comes on for the hearing and not prior thereto, or before the surrogate sitting for the dispatch of chambers business. (68 C. J., 1038. 1039, sec. 830.).

The court may, in its discretion, consolidate proceedings instituted by different persons for the purpose of having different instrument each probated as the last will and testament of decedent. Separate contests of a will and a codicil, or of two wills, each claimed to be the last will of testator, may be consolidated by the court and heard together. (Page on Wills, Page 375, paragraph 323.)It is the conclusion of this court, therefore, that the respondent court did not act in excess of its sound discretion in issuing the other of March 31, 1937, and for the foregoing reasons, the remedy applied for is hereby denied, with costs to the petitioner. So ordered.Avanceña, C.J., Villa-Real, Abad Santos, Diaz, Laurel and Concepcion, JJ., concur.

R E S O L U T I O NOctober 13, 1937IMPERIAL, J.:The attorney for the petitioner seeks permission to file a second motion for reconsideration already attached to his petition. With the motion for reconsideration before it this court will now take up the same for decision on its merits.It is alleged that the interpretation of paragraph (g) of section 788 of the Code of Civil Procedure, as amended by section 1 of Act No. 3395, was one of the questions raised by the petition for certiorari, but that both in the decision and in the resolution of the motion for reconsideration this court has neither given nor interpreted the meaning and scope of the phrase "in each proceeding" appearing at the end of the legal provision in question.On page 2 of the decision, this court stated that the only question of law raised by the petition was whether or not the court had acquired jurisdiction when it provided in its orders that the counter-petition and the second will be heard in the proceeding already instituted at the initiative of the petitioner and that the expenses of publication of the hearing be defrayed by the respondent. This court then said: "The petitioner raises only one question of law, to writ: that the court acquired no jurisdiction to take cognizance of the counter-petition for the probate of the second will, or to set the same for hearing and to order, as it did, the publications to be made and the hearing of said will to be held in the same proceeding jointly with the first will, on the ground that the respondent had not previously filed her pleading nor paid the fees of the clerk of court amended by Act No. 3395."

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In connection with the fees of the clerk of court prescribed by section 788 (g) of the Code of Civil Procedure, as amended, this court, on pages 6 and 7 of the decision, said: "The payment of the fees of the clerk of court for all services to be rendered by him in connection with the probate of the second will and for the successive proceedings to be conducted and orders to be issued, in accordance with section 788, as amended, is not jurisdictional in the sense that its omission does not deprive the court of its authority to proceed with the probate of a will, as expressly provided for by section 630. It is the inevitable duty of the court, when a will is presented to it, to appoint hearing for its allowance and to cause notices the to, be given by publication. The duty imposed said section is imperative and noncompliance therewith would be a mockery at the law and at the last will of the Section 785 (a) of the Code of Civil Procedure, as amended recently by Act No. 3250, permits the remission or postponement of the payment of the clerk's fees in case of poverty, at the discretion of the court, and if this were done in one case and the payment of the fees for filing the application were jurisdiction, as claimed, then the court, in admitting the will to probate and in allowing it, would have acted entirely without jurisdiction. Finally, it should be taken into consideration that the court, in this case, did not exempt the respondents from paying the fees in question but merely failed to make provision therefor."It having been decided that the payment of said fees is not jurisdictional, this court, in fact, determined the principal and only question of law raised by the petition and there was no necessity of interpreting said legal provision for the purpose of laying another unnecessary conclusion.In the second motion for reconsideration, however, the attorney for the petitioner asks this court to interpret expressly the phrase "in each proceeding" to determine whether or not the respondent was and is obtained to pay said clerk's fees. If the interpretation asked for is to determine the question of jurisdiction, that is, whether or not the court acquired jurisdiction in issuing its orders appealed from, it has already been done and it was said that the payment of said fees is not jurisdictional. If the interpretation sought to be obtained is for the purpose of having this court decide now whether the respondent should, or should not, pay the clerk's fees, then this court holds that such pronouncement is unnecessary and improper for the following reasons: (1) Because to decide whether or not the petition is meritorious, there is no necessity of determining whether or not the respondent is obliged to pay the clerk's fees, and (2) because it

behooves the lower court to decide this question in the first instance and it is improper for this appellate court to exercise the function belonging to the former.In view of the foregoing the second motion for reconsideration is denied.Avanceña, C.J., Villa-Real, Abad Santos, Diaz, Laurel and Concepcion, JJ., concur.

[G.R. No. L-41667. April 30, 1976.]

DELTA MOTOR SALES CORPORATION, Petitioner, v. HON. JUDGE IGNACIO MANGOSING, Branch XXIV, Court of First Instance of Manila, THE CITY SHERIFF OF MANILA, and JOSE LUIS PAMINTUAN, Respondents.

Bonoan, Santos, Lazo & Associates for Petitioner.

Villareal, Matic & Associates for respondent Jose Luis Pamintuan.

SYNOPSISFor failure to file its answer, petitioner was declared in default and a default judgment was rendered a petition to lift the order of default, to set aside the judgment and for new trial, alleging that they employee who accepted the service summons, was not the corporate secretary but a secretary in the Corporation’s personnel department and that service upon her was a mistake. The Supreme Court held that the trial court did not acquire jurisdiction over petitioner because it was not properly served with summons. The service of summons on the secretary of the personnel department who is not among the persons mentioned in Section 13, of Rule 14, was sufficient.

SYLLABUS

1. CIVIL PROCEDURE; JURISDICTION; SUMMONS; SERVICE UPON PRIVATE DOMESTIC CORPORATION. — For the purpose of receiving service of summons and being bound by it, a corporation is identified with its agent or officer who under the rule is designated to accept service of process. The corporate power to receive and act on such service so far as to make it known to the corporation, is thus vested in such officer or agent; and where a particular method of serving process is pointed out by a statute, that method must be

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followed, and the rule is especially exacting in reference to corporations. 

2. ID.; ID.; ID.; DESIGNATION OF OFFICER UPON WHOM SERVICE MAY BE MADE EXCLUDES OTHERS. — When the statute designates a particular officer to whom the process may be delivered and with whom it may be left, as service upon the corporation, no other officer or person can be substituted in his place. The designation of one officer upon whom service may be made excludes all others.

3. ID.; ID.; ID.; STRICT COMPLIANCE WITH MODE OF SERVICE NECESSARY TO CONFER JURISDICTION OF COURT OVER A CORPORATION. — A strict compliance with the mode of service is necessary to confer jurisdiction of the court over a corporation. The officer upon whom service is made must be the one who is named in they statute; otherwise the service is insufficient. The purpose is to render it reasonably certain that the corporation will receive prompt and proper notice in an action against it or to insure that the summons be served on a representative so integrated with the corporation that such person will know what to do with the legal papers served on him.

4. ID.; ID.; ID.; CONSTRUCTION AND INTERPRETATION. — The liberal construction rule cannot be invoked and utilized as substitute for the plain legal requirements as to the manner in which summons should be served on a domestic corporation.

5. ID.; ID.; ID.; SERVICE SUMMONS ON PERSONS NOT MENTIONED IN THE RULES IS INSUFFICIENT. — The court does not acquire jurisdiction over defendant corporation where it is not properly served with summons. Service of summons on a secretary of the corporation’s personnel department, who is not among the persons mentioned in Section 13 of Rule 14, is insufficient. It does not bind the corporation.

6. ID.; ID.; ID.; JURISDICTION, HOW ACQUIRED. — Court acquires jurisdiction over the person of a party defendant and of the subject matter of the action of the virtue of the service summons in the manner required by law. Where there is no service of summons or a voluntary general appearance by the defendant the court acquires no jurisdiction to pronounce a judgment in the cause.

D E C I S I O N

AQUINO, J.:

Delta Motor Sales Corporation (Delta Motor for short) in this special civil action of certiorari seeks to annul certain orders of the Court of First Instance of Manila denying its motion to set aside the order of default and the judgment by default in Civil Case No. 97373 and granting the motion for execution of Jose Luis Pamintuan. The facts are as follows:chanrob1es virtual 1aw library

On April 16, 1975 Pamintuan sued Delta Motor for the recovery of the sum of P58,000 as damages and attorney’s fees. The basis of the action was that Delta Motor, as the seller of an allegedly defective Toyota car to Pamintuan for the sum of P33,950, failed to fulfill its warranty obligation by not properly repairing the car.

The summons for Delta Motor was served on April 9 on its employee, Dionisia G. Miranda, who acknowledged its receipt by signing on the lower portion of the original summons.

Delta Motor did not answer the complaint within the reglementary period which expired on May 4. On May 27 Pamintuan filed a motion to declare Delta Motor in default. A copy of the motion was furnished Delta Motor. The Manila court granted the motion in its order of June 3.

In its decision dated June 16, 1975 the lower court found that Pamintuan bought from Delta Motor on June 20, 1974 a Toyota car; that the leaks emanating from its windshield, doors and windows were not stopped by Delta Motor, and that in consequence of its breach of warranty Delta Motor should pay Pamintuan P45,000 as damages.

That decision was served on Delta Motor on June 27. On July 21, its lawyers filed a petition to lift the order of default, to set aside the judgment and for new trial. Delta Motor alleged that Dionisia G. Miranda, who accepted the service of summons, was not the

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corporate secretary but the secretary of Alberto Ramos of the personnel department who was on sick leave and that service upon her was a mistake; that Pamintuan is still indebted to Delta Motor for the unpaid balance of the price in the sum of P25,000; that the entity liable for breach of warranty was Toyota Motor Sales Company, and that Delta Motor has good defenses to the action.

The motion was supported by the affidavit of Dionisia G. Miranda who alleged that, as there was no instruction from the sheriff that the summons and complaint should be delivered to the officers of Delta Motor, she just kept the same "for reference" to her immediate superior, Ramos, who, however, seldom went to office. Geldino S. Santos, the administrative officer of Delta Motor, in his affidavit, also attached to the motion, confirmed that Dionisia G. Miranda was Ramos’ secretary.

The lower court denied the motion in its order of July 29 on the ground that Dionisia G. Miranda was a person of suitable age and discretion who could receive summons for another person, as contemplated in section 8, Rule 14 of the Revised Rules of Court, and that although Delta Motor’s legal department was served on May 27 with a copy of the motion to declare it in default, it did not oppose the motion.

The order of denial was received by Delta Motor’s counsel on August 4. It filed a motion for reconsideration at ten minutes before five o’clock in the afternoon of the thirtieth day, August 8. The lower court denied it in its order of August 25. That order of denial was received by Delta Motor’s counsel on September 4.

On the following day, September 5, Delta Motor deposited P120 as appeal bond and filed a notice of appeal and record on appeal.

Pamintuan countered with a motion for execution. He contended that the judgment was already final because Delta Motor’s motion for reconsideration was filed after four-thirty in the afternoon of the thirtieth day or after the close of office hours.

The Manila court in its order of October 13 refused to give due course to Delta Motor’s appeal and granted Pamintuan’s motion for execution. The instant petition was filed on October 20, 1975. The sheriff levied upon a Toyota mini-bus and a car to satisfy the judgment

for damages against Delta Motor.

Pamintuan in his comment on the petition revealed that on May 27, 1975, when Delta Motor was furnished with a copy of the motion to declare it in default, it sued Pamintuan in the Court of First Instance of Rizal, Pasig Branch XIII for the rescission of the sale and the recovery of the car (Civil Case No. 21303). A writ of replevin was issued in that case. A deputy sheriff of Rizal seized from Pamintuan the Toyota car on June 6, 1975.

Pamintuan filed a motion to dismiss Delta Motor’s complaint in the Pasig court on the ground of the pendency in the Manila court of Civil Case No. 97373 involving the same Toyota car. Delta Motor opposed it. It was denied.

Pamintuan filed in the Court of Appeals a petition for certiorari in order to set aside the Pasig court’s order denying his motion to dismiss (Pamintuan v. Revilla, CA-G.R No. SP-04743). The Court of Appeals in its decision dated February 16, 1976 denied the petition. It held that the Rizal court did not commit any grave abuse of discretion in not dismissing Delta Motor’s action.

The issue in this case is whether Delta Motor was properly served with summons or whether the Manila court had jurisdiction to render the judgment by default against it and to execute that judgment.

Rule 14 of the Revised Rules of Court provides:jgc:chanrobles.com.ph

"SEC. 13. Service upon private domestic corporation or partnership. — If the defendant is a corporation organized under the laws of the Philippines or a partnership duly registered, service may be made on the president, manager, secretary, cashier, agent, or any of its directors."cralaw virtua1aw library

For the purpose of receiving service of summons and being bound by it, a corporation is identified with its agent or officer who under the rule is designated to accept service of process. "The corporate power to receive and act on such service, so far as to make it known to the corporation, is thus vested in such officer or agent." (Lafayette Insurance Co. v. French, 15 L. Ed. 451, 453).

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As noted by the Federal Supreme Court, "the cases are numerous which decide that where a particular method of serving process is pointed out by statute, that method must be followed, and the rule is especially exacting in reference to corporations" (Amy v. City of Watertown, 32 L. Ed. 946). .

The Amy case cited the ruling in Watertown v. Robinson, 69 Wis. 230 that the particular mode of service indicated in the statute should be followed because ita lex scripta est. "There is no chance to speculate whether some other mode will not answer as well. This has been too often held by this court to require further citations. When the statute designates a particular officer to whom the process may be delivered and with whom it may be left, as service upon the corporation, no other officer or person can be substituted in his place. The designation of one particular officer upon whom service may be made excludes all others." (Page 952).

A strict compliance with the mode of service is necessary to confer jurisdiction of the court over a corporation. The officer upon whom service is made must be one who is named in the statute; otherwise the service is insufficient. So, where the statute requires that in the case of a domestic corporation summons should be served on "the president or head of the corporation, secretary, treasurer, cashier or managing agent thereof", service of summons on the secretary’s wife did not confer jurisdiction over the corporation in the foreclosure proceeding against it. Hence, the decree of foreclosure and the deficiency judgment were void and should be vacated. (Reader v. District Court, 94 Pacific 2nd 858).

The purpose is to render it reasonably certain that the corporation will receive prompt and proper notice in an action against it or to insure that the summons be served on a representative so integrated with the corporation that such person will know what to do with the legal papers served on him. In other words, "to bring home to the corporation notice of the filing of the action." (35A C.J.S. 288 citing Jenkins v. Lykes Bros. S.S. Co., 48 F. Supp. 848; McCarthy v. Langston, D.C. Fla., 23 F.R.D. 249).

The liberal construction rule cannot be invoked and utilized as a substitute for the plain legal requirements as to the manner in which

summons should be served on a domestic corporation (U.S. v. Mollenhauer Laboratories, Inc., 267 Fed. Rep. 2nd 260).

In the instant case the Manila court did not acquire jurisdiction over Delta Motor because it was not properly served with summons. The service of summons on Dionisia G. Miranda, who is not among the persons mentioned in section 13 of Rule 14, was insufficient. It did not bind the Delta Motor.

"Courts acquire jurisdiction over the person of a party defendant and of the subject-matter of the action by virtue of the service of summons in the manner required by law. Where there is no service of summons or a voluntary general appearance by the defendant, the court acquires no jurisdiction to pronounce a judgment in the cause." (Syllabi, Salmon and Pacific Commercial Co. v. Tan Cueco, 36 Phil. 556).

Consequently, the order of default, the judgment by default and the execution in Civil Case No. 97373 are void and should be set aside.

It appears that Civil Case No. 21303 filed by Delta Motor against Pamintuan in the Pasig court, which is in effect a counter-claim to the Manila case, deals with the same sale of the Toyota car which is involved in Civil Case No. 97373 of the Manila court.

In the interest of justice and to avoid conflicting decisions, the trial of the two cases should be consolidated. The Pasig case should be transferred to Branch XXIV of the Court of First Instance of Manila where Civil Case No. 97373 is assigned. Apparently, Delta Motor filed its replevin case in Pasig because it was stipulated in the invoice covering the sale that any action thereunder may be instituted in any competent court of Rizal.

WHEREFORE, the order of default, judgment by default and the other proceedings in Civil Case No. 97373 are set aside. The lower court is directed to admit the answer of Delta Motor.

Respondent Pamintuan may likewise file his answer in Civil Case No. 21303. The record of that case should be transferred to the Court of First Instance of Manila as indicated above.

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If the parties do not come to any amicable settlement during the pre-trial of the two cases, then further proceedings may be had for the adjudication of the said cases. No costs.

SO ORDERED.

Concepcion, Jr., concur.

Fernando, C.J., in the result.

[G.R. No. L-64250. September 30, 1983.]

SUPERLINES TRANSPORTATION CO., INC. and ERLITO LORCA, Petitioners, v. HON. LUIS L. VICTOR, Judge Presiding over Branch XVI of the Regional Trial Court of Cavite, TIMOTEA T. MORALDE, CAYETANO T. MORALDE, JR., ALEXANDER T. MORALDE, EMMANUEL T. MORALDE, and JOCELYN MORALDE ABELLANA, Respondents.

Benito P. Fabio for Plaintiff-Appellee.

Michael Moralde for Private Respondents.

SYLLABUS

1. REMEDIAL LAW; ACTIONS; JUDICIAL ECONOMY AND ADMINISTRATION AS WELL AS CONVENIENCE OF THE PARTIES; CONSIDERATIONS FOR CONSOLIDATION OF CASES IN THE CASE AT BAR. — There is, however, a more pragmatic solution to the cotroversy at bar; and that is to consolidate the Gumaca case with the Cavite case. Considerations of judicial economy and administration, as well as the convenience of the parties for which the rules on procedure and venue were formulated, dictate that it is the Cavite court, rather than the Gumaca court, which serves as the more suitable forum for the determination of the rights and obligations of the parties concerned. As observed by both the trial and appellate courts, to require private respondents who are all residents of Kawit, Cavite, to litigate their claims in the Quezon Court would unnecessarily expose them to considerable expenses. On the other

hand, no like prejudice would befall the defendants transportation companies if they were required to plead their causes in Cavite, for such change of venue would not expose them to expenses which are not already liable to incur in connection with the Gumaca case.

2. ID.; PURPOSE AND OBJECT OF PROCEDURE. — The whole purpose and object of procedure is to make the powers of the court fully and completely available for justice. The most perfect procedure that can be devised is that which gives opportunity for the most complete and perfect exercise of the powers of the court within the limitations set by natural justice. It is that one which, in other words, gives the most perfect opportunity for the powers of the count to transmute themselves into concrete acts of justice between the parties before it. The purpose of such a procedure is not to restrict the jurisdiction of the court over the subject matter, but to give it effective facility in righteous action. The purpose of procedure is not to thwart justice. Its proper aim is to facilitate the application of justice to the rival claims of contending parties. It was created not to hinder and delay but to facilitate and promote the administration of justice. It does not constitute the thing itself which courts are always striving to secure to litigants. It is designed as the means best adapted to obtain that thing. In other words, it is a means to an end. It is the means by which the powers of the court are made effective in just judgments. When it loses the character of the one and takes on that of the other the administration of justice becomes incomplete and unsatisfactory and lays itself open to grave criticism." (Manila Railroad Co. v. Attorney-General, 20 Phil. 523)

D E C I S I O N

ESCOLIN, J.:

A petition for certiorari to set aside the decision of the Intermediate Appellate Court in CA-G.R. No. SP-00708 entitled "Superlines Transportation Co., Inc., Et. Al. versus Hon. Luis L. Victor, Et Al.," which affirmed the orders dated March 28 and April 27, 1983 of herein respondent Judge Luis L. Victor in Civil Case No. N-4338 of the Regional Trial Court of Cavite, entitled "Timotea T. Moralde, Et. Al.

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versus Pantranco South Express, Inc., Et. Al."cralaw virtua1aw library

On December 19, 1982, Bus No. 3008 of the Pantranco South Express, Inc., Pantranco for short, driven by Rogelio Dillomas, collided with Bus No. 331 of the Superlines Transportation Co., Inc., Superlines for short, then driven by Erlito Lorca along the highway at Lumilang, Calauag, Quezon, resulting in the instantaneous death of Cayetano P. Moralde, Sr., a passenger in the Pantranco bus.cralawnad

On January 4, 1983, Superlines instituted an action for damages before the then Court of First Instance of Quezon, Gumaca Branch, against Pantranco and Rogelio Dillomas, driver of said Pantranco Bus No. 3008. In its complaint, docketed as Civil Case No. 1671-G, Superlines alleged that the recklessness and negligence of the Pantranco bus driver was the proximate cause of the accident and that there was want of diligence on the part of Pantranco in the selection and supervision of its driver.

On February 11, 1983, private respondents Timotea T. Moralde, widow of the deceased Cayetano P. Moralde, Sr., and her children, Cayetano, Jr., Alexander, Ramon, Emmanuel, all surnamed Moralde, and Jocelyn M. Abellana, filed a complaint for damages, docketed as Civil Case No. N-4338 of the Regional Trial Court of Cavite City, against Superlines and its driver, Erlito Lorca, as well as Pantranco and its driver, Rogelio Dillomas. The cause of action pleaded against Superlines was based on quasi-delict, while that against Pantranco, on culpa-contractual.

On February 28, 1983, herein petitioners Superlines and its driver Erlito Lorca filed a motion to dismiss in Civil Case No. N-4338 on the ground of pendency of another action, obviously referring to Civil Case No. 1671-G pending before the Regional Trial Court of Quezon, Gumaca Branch.

Finding that the two cases (Civil Cases No. 1671-G and No. N-4338) involved different parties as well as different causes of action, respondent Judge Luis Victor denied the motion to dismiss in the challenged order of March 28, 1983. Superlines moved for a reconsideration, but the same was denied on April 27, 1983.

Dissatisfied, Superlines filed with the Intermediate Appellate Court a petition for certiorari and prohibition with preliminary injunction, which petition, however, was denied due course. Hence, this present recourse.

It is suggested by petitioners that private respondents Moraldes should pursue their claim for damages by intervening in the Gumaca action, pursuant to Sec. 2, Rule 12 of the Rules of Court and in the light of Municipality of Hagonoy v. Secretary of Agriculture and Natural Resources [73 SCRA 507] and Orellano v. Alvestir [76 SCRA 536]. It is contended that since the right of private respondents to claim damages is founded on the same facts involved in the Gumaca action, any judgment rendered therein will amount to res judicata in the Cavite case, for whatever adjudication is made in the former case between Pantranco and Superlines as regards either of the parties’ culpability would set said issue at rest. Furthermore, such intervention would prevent multiplicity of suits and avoid confusion that may arise should the trial courts render conflicting decisions.chanroblesvirtualawlibrary

Petitioners’ stand is consistent with our ruling in the case of Marapao v. Mendoza, 119 SCRA 97, where We held that:jgc:chanrobles.com.ph

"While respondent Castillo has not been impleaded in the Bohol case, she has similar interests as Hotel de Mercedes, the defendant therein which is her employer. Petitioner and private respondent both claim damages based on the same incident. A decision, whether in favor of petitioner or private respondent in the Bohol case would amount to res judicata in the Cebu case. Damages in favor of one party would preclude damages in favor of the other.

"There is an additional reason for dismissal and that is, to avoid multiplicity of suits. (Ago Timber Co. v. Hon. Ruiz, Et Al., 21 SCRA 138 (1967); Erlanger v. Villamor, 98 Phil. 1003 (1956); Teodoro, Jr. v. Mirasol, 99 Phil. 150 (1956).

"To protect the interests of respondent employee, she may intervene as a party in the Bohol case and file a counterclaim for damages against petitioner."cralaw virtua1aw library

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There is, however, a more pragmatic solution to the controversy at bar; and that is to consolidate the Gumaca case with the Cavite case. Considerations of judicial economy and administration, as well as the convenience of the parties for which the rules on procedure and venue were formulated, dictate that it is the Cavite court, rather than the Gumaca court, which serves as the more suitable forum for the determination of the rights and obligations of the parties concerned.

As observed by both the trial and appellate courts, to require private respondents who are all residents of Kawit, Cavite, to litigate their claims in the Quezon Court would unnecessarily expose them to considerable expenses. On the other hand, no like prejudice would befall the defendants transportation companies if they were required to plead their causes in Cavite, for such change of venue would not expose them to expenses which they are not already liable to incur in connection with the Gumaca case. The objection interposed by Superlines that it has its offices in Atimonan, Quezon, should not detract from the overall convenience afforded by the consolidation of cases in the Cavite Court. For apart from the fact that petitioner and its driver are represented by the same counsel with offices located in Manila, defendants transportation companies can readily avail of their facilities for conveying their witnesses to the place of trial.chanrobles virtual lawlibrary

The ordered consolidation of cases, to our mind, crystallizes into reality the thinking of our predecessors that:jgc:chanrobles.com.ph

". . . The whole purpose and object of procedure is to make the powers of the court fully and completely available for justice. The most perfect procedure that can be devised is that which gives opportunity for the most complete and perfect exercise of the powers of the court within the limitations set by natural justice. It is that one which, in other words, gives the most perfect opportunity for the powers of the court to transmute themselves into concrete acts of justice between the parties before it. The purpose of such a procedure is not to restrict the jurisdiction of the court over the subject matter, but to give it effective facility in righteous action. It may be said in passing that the most salient objection which can be urged against procedure today is that it so restricts the exercise of the court’s powers by technicalities that part of its authority effective for justice between the parties is many times an inconsiderable portion of the whole. The purpose of

procedure is not to thwart justice. Its proper aim is to facilitate the application of justice to the rival claims of contending parties. It was created not to hinder and delay but to facilitate and promote the administration of justice. It does not constitute the thing itself which courts are always striving to secure to litigants. It is designed as the means best adapted to obtain that thing. In other words, it is a means to an end. It is the means by which the powers of the court are made effective in just judgments. When it loses the character of the one and takes on that of the other the administration of justice becomes incomplete and unsatisfactory and lays itself open to grave criticism." (Manila Railroad Co. v. Attorney-General, 20 Phil. 523)

WHEREFORE, the instant petition is hereby denied. Civil Case No. 1671-G of the Regional Trial Court of Quezon is hereby ordered consolidated with Civil Case No. N-4338 pending before the Regional Trial Court of Cavite. The Regional Trial Court of Quezon, Gumaca Branch, is directed to transfer, without unnecessary delay, the records of Civil Case No. 1671-G to the Regional Court of Cavite, Branch XVI.

SO ORDERED.

Makasiar (Chairman), Aquino, Guerrero, Abad Santos and Relova, JJ., concur.

G.R. No. 190462 : November 17, 2010STEEL CORPORATION OF THE PHILIPPINES, Petitioner, v. EQUITABLE PCI BANK, INC., (now known as BDO UNIBANK, INC.), Respondent.

G.R. No. 190538 : November 17, 2010DEG – DEUTSCHE INVESTITIONS-UND ENTWICKLUNGSGESELLSCHAFT MBH,Petitioner, v. EQUITABLE PCI BANK, INC., (now known as BDO UNIBANK, INC.) and STEEL CORPORATION OF THE PHILIPPINES, Respondents.D E C I S I O NVELASCO, JR., J.:Before us are two Petitions for Review on Certiorari under Rule 45, docketed as G.R. Nos. 190462 and 190538, assailing the July 3, 2008 Decision[1] and December 3, 2009 Resolution[2] of the Court of Appeals (CA) in CA-G.R. SP No. 101881, entitled Equitable PCI

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Bank, Inc. (now known as Banco de Oro-EPCI, Inc.) v. Steel Corporation of the Philippines. The CA set aside the Decision[3] dated December 3, 2007 of the Regional Trial Court (RTC) acting as a Rehabilitation Court, and, in effect, the CA (1) set aside the Rehabilitation Court’s Decision approving the Rehabilitation Plan; and (2) terminated the corporate rehabilitation of Steel Corporation of the Philippines (SCP). craWe consolidated G.R. No. 190462 with G.R. No. 190538 as they involve identical parties, arose from the same facts, and assail the same CA Decision dated July 3, 2008.[4]cralawThe FactsSCP is a domestic corporation incorporated and registered with the Securities and Exchange Commission on October 3, 1994. It is engaged in the manufacturing and distribution of cold-rolled and galvanized steel sheets and coils.During its operations, SCP encountered and suffered from financial difficulties and temporary illiquidity, aggravated by the 1997 Asian Financial Crisis. And shortage in working capital and reduced operating capacity compounded its problem. As a result, SCP was unable to service its principal payments for its liabilities.In its Interim Financial Statement as of December 31, 2005, SCP’s total assets amounted to PhP 10,996,551,123, while its liabilities amounted to PhP 8,365,079,864.Accordingly, on September 11, 2006, Equitable PCI Bank, Inc., now known as Banco de Oro-EPCI, Inc. (BDO-EPCIB), which accounted for 27.45% of the total liabilities of SCP, filed a creditor-initiated petition––to place the SCP under corporate rehabilitation pursuant to the provisions of Section 1, Rule 4 of the Interim Rules of Procedure on Corporate Rehabilitation––entitled In the Matter of the Petition to have Steel Corporation of the Philippines Placed under Corporate Rehabilitation with Prayer for the Approval of the Proposed Rehabilitation Plan. BDO-EPCIB included its proposed rehabilitation plan in the said petition.Finding the petition to be sufficient in form and substance, the Rehabilitation Court issued an Order dated September 12, 2006, directing, among others, the stay of enforcement of all claims, whether for money or otherwise and whether such enforcement is by court action or otherwise, against SCP, its guarantors, and sureties not solidarily liable with it. The Rehabilitation Court likewise appointed Atty. Santiago T. Gabionza, Jr. as the Rehabilitation Receiver for SCP.

SCP did not oppose the petition but instead filed its own counter rehabilitation plan and submitted it for the consideration of the Rehabilitation Court. Other creditors filed their respective comments on the petition.On November 23, 2006, the Rehabilitation Court issued an Order, giving due course to the petition and directing Atty. Gabionza to evaluate the rehabilitation plan proposed by BDO-EPCIB and the proposals of the other participating creditors, and to submit his recommendations. The Rehabilitation Court also directed Atty. Gabionza to consider SCP’s counter rehabilitation plan in drafting his recommended rehabilitation plan.In a Compliance dated March 6, 2007, Atty. Gabionza submitted his recommended rehabilitation plan. The said plan contained the salient features of the rehabilitation plans separately submitted by SCP and BDO-EPCIB, as well as his own comments. The plan was summarized by the Rehabilitation Court as follows:chanroblesvirtuallawlibraryThus, after considering the comments of the other participating creditors and evaluating the proposals of SCP and the Petitioner, Atty. Gabionza recommended the following terms and conditions for rehabilitation plan, to wit:chanroblesvirtuallawlibrary1. Fresh equity infusion of P3.5 Billion, out of which P3 Billion shall be used for debt reduction, and the balance of P500 Million as additional working capital.2. The P3 Billion allocated for debt repayment shall first service the secured credits and excess thereafter will be applied to clean creditors and suppliers.3. The remaining short term and long term debt balances after debt reduction will be restructured over a period of 12 years inclusive of a 2 year grace period on principal payments. There shall be 20 equal semi-annual payments of principal to commence at the end of the grace period.4. Interest rates for the restructure debt shall be 8% per annum fixed for the duration of the loan and shall be payable quarterly in arrears. No grace period on interest payments.5. To protect existing clean creditors, SCP may not secure additional secured credits which will utilize the excess assets values after the P3.0 Billion debt reduction.6. Any excess cash after the annual (normal) CAPEX and debt service requirements shall be distributed as follows: 70% debt repayment and 30% to be retained by the Company.

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7. All existing suppliers credits (subject to final validation) shall have 2 options:chanroblesvirtuallawlibrarya. To be paid quarterly over a period of 5 years without interest, orb. To continuously supply the company on the pay-re-avail (Deliver same amount paid) basis.8. All loans, supplier’s credit and other SCP liabilities are subject to final verification once the recommended rehabilitation plan is approved.The rehabilitation plan recommended by Atty. Gabionza has three (3) phases in the implementation of the proposed P3.5 Billion fresh equity infusion, thus:chanroblesvirtuallawlibraryPhase 1SCP’s articles of incorporation and by laws shall be amended to accommodate the additional equity of P3.5 Billion. The present stockholders of SCP shall be given sixty (60) days from approval of the plan to keep their stockholdings SCP by raising/sourcing the P3.5 Billion fresh equity required.Phase 2In the event the present stockholders fail to raise the P3.5 Billion fresh equity needed to keep their stockholdings and save their company, Atty. Gabionza shall offer to acceptable investors, through negotiated sale or bidding, 67% of SCP for the P3.5 Billion fresh equity required.Phase 3Should Phase 1 and 2 fail, there shall be a debt to equity conversion in the required amount of P3.5 Billion.[5]cralawAlthough not required by the rules, several consultative meetings were thereafter conducted by the Rehabilitation Court between and among the parties to discuss a viable rehabilitation plan for SCP that is acceptable to all.In compliance with the directives of the Rehabilitation Court to consider all the inputs and observations made by the parties during the consultative meetings and to make the necessary modification in his recommendations on the submitted rehabilitation plans, Atty. Gabionza submitted a Modified Rehabilitation Plan as incorporated in his compliance dated June 27, 2007. The modifications made were:chanroblesvirtuallawlibraryPhase 1 of the Recommended Rehabilitation Plan is retained under the Modified Rehabilitation Plan. Phase 2, however, is amended to the effect that in the event the present stockholders fail to raise the P3.5 Billion fresh equity needed to keep their stockholdings and save their company, the same existing stockholders of SCP shall be

afforded a period of 60 days from the expiration of the period provided in Phase 1 to offer for sale to an acceptable investor at least 67% stockholdings in SCP for an amount not less than P3.5 Billion.Under Phase 3 thereof, there shall be a debt to equity conversion in the required amount of P3.5 Billion should Phase 1 and 2 fail. The adjusted book value of SCP under its 2005 Audited Financial Statements is pegged at P1.129 Billion. Accordingly, P1.1.29 Billion of the existing debt will initially be converted into common shares achieving an ownership structure where both existing stockholders and the bank creditors will equally own SCP at 50% each. The balance of P2.371 Billion will then be converted into non-interest bearing convertible notes.[6]cralawOn June 21, 2007, BDO-EPCIB, joined by creditors DEG, Planters Development Bank, China Banking Corporation, Asiatrust Development Bank and GE Money Bank, Inc., altogether holding more than 50% of SCP’s total liabilities, filed their Joint Manifestation and Motion declaring their conformity with and support to Atty. Gabionza’s Recommended Rehabilitation Plan.On July 30, 2007, SCP submitted its 2006 Audited Financial Statements in a Compliance with Motion. Atty. Gabionza was ordered by the Rehabilitation Court to study the financial statements and to submit a report on their effects on the Modified Rehabilitation Plan.The parties then submitted their respective comments on the Modified Rehabilitation Plan and Atty. Gabionza’s report on the effects of the 2006 Audited Financial Statements. Likewise, SCP submitted its Updated Counter Rehabilitation Plan, attached to its Ad Abundante Cautelam Motion to Admit Debtor SCP’s Updated Counter Rehabilitation Plan, which was subsequently admitted by the Rehabilitation Court.On December 3, 2007, the RTC promulgated a Decision approving the Modified Rehabilitation Plan. The dispositive portion reads:chanroblesvirtuallawlibraryWHEREFORE, premises considered, the present petition is given due course. The parties are mandated to comply strictly with the provisions of the approved rehabilitation plan.The Rehabilitation Receiver is hereby directed to provide this Court with periodic reports on the implementation of the approved Rehabilitation Plan.The provisions of the approved Rehabilitation Plan shall be binding on all persons and parties affected by it, whether or not such persons or parties have participated in the present proceedings.

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The concerned parties are further directed to submit to this Court their respective nominees for the Management Committee not later than 60 days before the expiration of the period for the application of Phases 1 and 2 of the foregoing rehabilitation plan. In case no nominee is submitted by any party, this Court shall directly designate the corresponding members thereof.SO ORDERED.[7]cralawTherefrom, several creditors went to the CA via separate Petitions for Review onCertiorari, to wit: (1) SCP’s petition dated January 9, 2008, docketed as CA-G.R. SP No. 101732 and entitled Steel Corporation of the Philippines v. Equitable PCI Bank, Inc.; (2) DEG’s petition dated January 6, 2008, docketed as CA-G.R. SP No. 101880 and entitled DEG – Deutsche Investitions-und Entwicklungsgesselschaft mbH v. Steel Corporation of the Philippines; (3) BDO-EPCIB’s petition dated January 8, 2008, docketed as CA-G.R. SP No. 101881 and entitled Equitable PCI Bank, Inc. v. Steel Corporation of the Philippines; and (4) Investments 2234 Philippines Fund I, Inc.’s (IPFI’s) petition dated January 10, 2008, docketed as CA-G.R. SP No. 101913 and entitled Investments 2234 Philippines Fund I (SPV-AMC), Inc. v. Equitable PCI Bank, Inc.The petitions of SCP and IPFI were eventually consolidated under CA-G.R. SP No. 101732. However, the CA denied BDO-EPCIB’s motion to consolidate with CA-G.R. SP No. 101732.[8] As to CA-G.R. SP No. 101881, the Court takes judicial notice of the fact that it has also been consolidated with CA-G.R. SP No. 101732 in a Resolution issued by the CA dated March 22, 2010.On July 3, 2008, the CA issued the assailed decision in CA-G.R. SP No. 101881, ordering the termination of the rehabilitation proceedings. The dispositive portion reads:chanroblesvirtuallawlibraryWHEREFORE, premises considered, the Decision dated December 3, 2007 of the RTC, Branch II, Batangas City, in SP No. 06-7993 is hereby SET ASIDE, and another one is hereby entered declaring the rehabilitation proceedings TERMINATED, pursuant to Section 27, Rule 4 of the Interim Rules of Procedure on Corporate Rehabilitation.SO ORDERED.[9]cralawSCP then filed a Supplemental Petition for Review dated July 21, 2008 in CA-G.R. SP No. 101732, praying, among others, for the approval of its Revised Updated Counter Rehabilitation Plan.From the July 3, 2008 CA Decision, DEG, SCP, Landmark Glory Limited, and Liquigaz Philippines Corporation interposed separate

motions for reconsideration. However, on December 3, 2009, the CA denied all motions for reconsiderations.Hence, these separate recourses are before us.The IssuesIn G.R. No. 190462, SCP raised the following arguments in support of its amended petition:chanroblesvirtuallawlibraryI.The [CA] erred – when it did, it denied the petitioner its rights to both procedural and substantive due process – when –(a) It did not follow its own internal rules of procedure and thereafter justified its error on the bases of misleading and false statements;(b) It granted a relief which none of the parties sought for, nor were heard, nor given the opportunity to be heard, thereon, and(c) It substituted its judgment for that of the rehabilitation court, usurping in the process the exclusive authority reposed in the said court.II.The [CA] erred – and when it did, it acted in a manner at war with orderly procedure – when it declared the termination of the proceedings without passing upon nor giving the petitioner a chance to be heard on the updated alternative rehabilitation plan submitted by it.III.The [CA] erred – and when it did, it failed to perform its duties and obligations as a court – when it found, and thereafter declared termination of the rehabilitation proceedings because the case had become litigious and did not try to allow the parties to adjust their differences so that rehabilitation of the petitioner could go on.[10]cralawIn G.R. No. 190538, DEG submits as follows:chanroblesvirtuallawlibraryI.The [CA] had no jurisdiction or authority to terminate the rehabilitation proceedings.II.Assuming, arguendo, that the [CA] had the authority to terminate the rehabilitation proceedings, such termination was premature.[11]cralawThe issues raised before the Court can be summarized into two:chanroblesvirtuallawlibrary(1) Whether or not the CA erred in refusing to consolidate the cases pending before it; and

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(2) Whether or not the CA erred in granting a relief that was not prayed for by the parties, i.e., the termination of the rehabilitation proceedings.Consolidation of Cases is ProperPetitioner SCP argues that the CA deviated from its own Internal Rules when it failed to consolidate the four (4) appeals arising from the same decision of the rehabilitation court. In fact, it points out to the fact that CA-G.R. SP No. 101913 had already been consolidated with its own appeal in CA-G.R. SP No. 101732. However, SCP says that the failure by the CA to consolidate the remaining two appeals, namely CA-G.R. SP Nos. 101880 and 101881, with its own appeal indicates not only a deviation from the rules but also a disobedience to their plain language and obvious intent.On the other hand, BDO-EPCIB refutes SCP’s arguments by saying that the consolidation of cases is only discretionary, not mandatory, upon the court.The Court agrees with SCP.Consolidation of actions is expressly authorized under Sec. 1, Rule 31 of the Rules of Court:chanroblesvirtuallawlibrarySection 1. Consolidation. – When actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated; and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay.Likewise, Rule 3, Sec. 3 of the 2002 Internal Rules of the CA[12] adopts the same rule:chanroblesvirtuallawlibrarySec. 3. Consolidation of Cases. – When related cases are assigned to different Justices, they may be consolidated and assigned to one Justice.(a) At the instance of a party with notice to the other party; or at the instance of the Justice to whom the case is assigned, and with the conformity of the Justice to whom the cases shall be consolidated, upon notice to the parties, consolidation may be allowed when the cases involve the same parties and/or related questions of fact and/or law.(b) Consolidated cases shall pertain to the Justice –(1) To whom the case with the lowest docket number is assigned, if they are of the same kind;

(2) To whom the criminal case with the lowest number is assigned, if two or more of the cases are criminal and the others are civil or special;(3) To whom the criminal case is assigned and the other are civil or special; and(4) To whom the civil case is assigned, or to whom the civil case with the lowest docket number is assigned, if the cases involved are civil and special.(c) Notice of the consolidation and replacement shall be given to the Raffle Staff and the Judicial Records Division.It is a time-honored principle that when two or more cases involve the same parties and affect closely related subject matters, they must be consolidated and jointly tried, in order to serve the best interests of the parties and to settle expeditiously the issues involved.[13] In other words, consolidation is proper wherever the subject matter involved and relief demanded in the different suits make it expedient for the court to determine all of the issues involved and adjudicate the rights of the parties by hearing the suits together.[14]cralawThe purpose of this rule is to avoid multiplicity of suits, guard against oppression and abuse, prevent delays, clear congested dockets, and simplify the work of the trial court. In short, consolidation aims to attain justice with the least expense and vexation to the parties-litigants.[15] It contributes to the swift dispensation of justice, and is in accord with the aim of affording the parties a just, speedy, and inexpensive determination of their cases before the courts. Further, it results in the avoidance of the possibility of conflicting decisions being rendered by the courts in two or more cases, which would otherwise require a single judgment.[16]cralawIn the instant case, all four (4) cases involve identical parties, subject matter, and issues. In fact, all four (4) arose from the same decision rendered by the Rehabilitation Court. As such, it became imperative upon the CA to consolidate the cases. Even though consolidation of actions is addressed to the sound discretion of the court and normally, its action in consolidating will not be disturbed in the absence of manifest abuse of discretion,[17] in this instance, we find that the CA gravely erred in failing to order the consolidation of the cases.By refusing to consolidate the cases, the CA, in effect, dispensed a form of piecemeal judgment that has veritably resulted in the multiplicity of suits. Such action is not regarded with favor, because consolidation should always be ordered whenever it is possible.Relief Is Limited Only to Issues Raised

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SCP further contends that the CA denied it its right to procedural and substantive due process, because it granted a relief entirely different from those sought for by the parties and on which they were neither heard nor given the opportunity to be heard.Respondent BDO-EPCIB, on the other hand, maintains that the CA has the power to grant such other appropriate relief as may be consistent with the allegations and proofs when a prayer for general relief is added to the demand of specific relief.[18]cralawSCP’s contention deserves merit.Sec. 8, Rule 51 of the 1997 Rules of Civil Procedure expressly provides:chanroblesvirtuallawlibrarySEC. 8. Questions that may be decided. – No error which does not affect the jurisdiction over the subject matter or the validity of the judgment appealed from or the proceedings therein will be considered unless stated in the assignment of errors, or closely related to or dependent on an assigned error and properly argued in the brief, save as the court pass upon plain errors and clerical errors.Essentially, the general rule provides that an assignment of error is essential to appellate review and only those assigned will be considered,[19] save for the following exceptions: (1) grounds not assigned as errors but affecting jurisdiction over the subject matter; (2) matters not assigned as errors on appeal but are evidently plain or clerical errors within the contemplation of the law; (3) matters not assigned as errors on appeal but consideration of which is necessary in arriving at a just decision and complete resolution of the case or to serve the interest of justice or to avoid dispensing piecemeal justice; (4) matters not specifically assigned as errors on appeal but raised in the trial court and are matters of record having some bearing on the issue submitted which the parties failed to raise or which the lower court ignored; (5) matters not assigned as errors on appeal but closely related to an error assigned; and (6) matters not assigned as errors on appeal but which the determination of a question properly assigned is dependent.[20] None of these exceptions exists in this case.Notably, the prayer portion of the BDO-EPCIB petition in CA-G.R. SP No. 101881 only sought for the following reliefs:chanroblesvirtuallawlibraryWHEREFORE, it is respectfully prayed of the Honorable Court that the Decision dated 03 December 2007 of the Court a quo, or the approved Rehabilitation Plan, be MODIFIED accordingly, thus:chanroblesvirtuallawlibrary

1. Under its Phase 1, the articles of incorporation and by laws of SCP be accordingly amended to accommodate the additional equity of Php3.0 Billion.2. Under Phase 2, the present stockholders and/or the Rehabilitation Receiver shall offer for sale to acceptable investors SCP’s stocks, through negotiated sale or bidding for an amount not less than Php3.0 Billion, which is equivalent to approximately 64% of SCP; and3. Under Phase 3, there shall be an immediate conversion of debt to common shares in the required amount of Php3.0 Billion, which is equivalent to approximately 64% of SCP, pursuant to the terms and conditions of the Recommended Rehabilitation Plan.Other reliefs, just and equitable under the premises, are likewise prayed for.[21]cralawIt is very plain in the language of the prayers of BDO-EPCIB that it only requested the CA to modify the existing rehabilitation plan. It never sought the termination of the rehabilitation proceedings. Thus, given the factual backdrop of the case, it was inappropriate for the CA, motu proprio, to terminate the proceedings. The appellate court should have proceeded to resolve BDO-EPCIB’s appeal on its merits instead of terminating the proceedings, a result that has no ground in its pleadings in the CA.In Abedes v. Court of Appeals, this Court emphasized the difference of appeals in criminal cases and in civil cases by saying, “Issues not raised in the pleadings, as opposed to ordinary appeal of criminal cases where the whole case is opened for review, are deemed waived or abandoned.”[22] Essentially, to warrant consideration on appeal, there must be discussion of the error assigned, else, the error will be deemed abandoned or waived.[23]cralawThis Court even went further in Development Bank of the Philippines v. Teston, in which it held that it is improper to enter an order which exceeds the scope of the relief sought by the pleadings, to wit:chanroblesvirtuallawlibraryThe Court of Appeals erred in ordering DBP to return to respondent “the P1,000,000.00” alleged down payment, a matter not raised in respondent’s Petition for Review before it. In Jose Clavano, Inc. v. Housing and Land Use Regulatory Board, this Court held:chanroblesvirtuallawlibrary“x  x  x It is elementary that a judgment must conform to, and be supported by, both the pleadings and the evidence, and must be in accordance with the theory of the action on which the pleadings are

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framed and the case was tried. The judgment must be secundum allegata et probate.” (Italics in original.)Due process considerations justify this requirement. It is improper to enter an order which exceeds the scope of relief sought by the pleadings, absent notice which affords the opportunity to be heard with respect to the proposed relief. The fundamental purpose of the requirement that allegations of a complaint must provide the measure of recovery is to prevent surprise to the defendant.[24] (Emphasis supplied.)Thus, this Court cannot sustain the ruling of the CA insofar as it granted a relief not prayed for by the BDO-EPCIB.WHEREFORE, the petition in G.R. No. 190462 is PARTIALLY GRANTED and the petition in G.R. No. 190538 is GRANTED. The July 3, 2008 Decision and December 3, 2009 Resolution of the CA in CA-G.R. SP No. 101881 are REVERSED and SET ASIDE.Further, the Court hereby REMANDS these cases to the CA for consolidation with CA-G.R. SP No. 101732. Likewise, CA-G.R. SP No. 101880 is also ordered to be consolidated with CA-G.R. SP No. 101732.

Consolidation of Civil and Criminal cases; allowed (Sec. 2 (a) Rule 111 of 1985 Criminal Procedure)

[G.R. No. L-41115. September 11, 1982.]

REPUBLIC OF THE PHILIPPINES and CITY OF CAGAYAN DE ORO, Petitioners, v. THE COURT OF APPEALS, BENEDICTA MACABALE SALCEDO, ISIDRO S. BACULIO, EMMANUEL AKUT, IRENEO ORLINO, LUCY P. GASTON, ROSARIO JAVIER, HONESTO N. SALCEDO, RUPERTA AGUILOR, GORGONIA BRIONES, FRANCISCO Q. BELTRAN, ERIBERTO CAMBA, GENOVEVA C. SAN JUAN, FEDERICO P. PICAR, EUGENIA GARCIA, THE LAND REGISTRATION COMMISSION, and THE REGISTER OF DEEDS OF MISAMIS ORIENTAL, Respondents.

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