DIGEST/CHARLES ADRIANNE GILAGA. RAPHAEL C. FONTANILLA VS THE COMMISSIONER PROPER, COMMISSION ON AUDIT

RULE 64/G.R. No. 209714 RAPHAEL C. FONTANILLA, Petitioner, vs. THE COMMISSIONER PROPER, COMMISSION ON AUDIT, Respondent. 2016

G.R. No. 209714                                                                          June 21, 2016 

 

Facts:

            Dr. Fontanilla is the Schools Division Superintendent of the Department of Education (DepEd) in South Cotobato. Under his supervision was Ms. Luna V. Falcis, the Division's designated Special Disbursing Officer (Clerk II). Falcis had the duty, among others, to encash checks for the DepEd's expenses and activities.

            Falcis, together with a co-worker, went to the Land Bank of the Philippines, Koronadal City Branch, to encash a check for Php 313,024.50. After completing the transaction, they took a public utility tricycle in going back to their office. On their way, three men blocked their path and at gunpoint grabbed the envelope containing the money. The robbers then sped away in a motorcycle.

Falcis reported the incident to the police. After the robbery was reported to the COA Resident Auditor of the DepEd South Cotabato Division, Falcis filed with the COA Audit Team Leader (ATL) a request for relief from money accountability (request for relief).    

            The ATL investigated the incident and found that Falcis failed to exert extra care and due diligence in handling the encashment; she did not request a security escort and the use of a government vehicle. The ATL forwarded its findings to the Regional Legal and Adjudication Office (COA Regional Office) for further study. 

The COA Regional Office concurred with the ATL findings and elevated Falcis's request for relief to the Adjudication and Settlement Board (ASE) of the COA National Office, for final disposition. 

The ASB denied Falcis's request for relief based on the finding that she had been negligent, thus, liable for the amount of money lost. 

The ASB cited Section 105 (2) of Presidential Decree No. 1445 or the Government Auditing Code of the Philippines (Audit Code), which states:

Section 105. Measure of liability of accountable officers.

(2) Every officer accountable for government funds shall be liable for all losses resulting from the unlawful deposit, use, or application thereof and for all losses attributable to negligence in the keeping of the funds.

The ASB also ruled that Dr. Fontanilla is jointly and solidarily liable with Falcis under Section 104 of the Audit Code which makes the head of the agency accountable because he did not exert the required diligence

Falcis moved for the reconsideration of the ruling. Dr. Fontanilla, on the other hand, moved for intervention, exclusion, and reconsideration.

The COA treated Dr. Fontanilla's motion for intervention, exclusion, and reconsideration as an appeal from the ASB's decision. The COA held that Dr. Fontanilla had not been denied administrative due process. On the issue of negligence, the COA held that Dr. Fontanilla failed to observe the diligence of a good father of a family. He is presumed to be knowledgeable of the transactions made by his subordinates. COA denied the appeal.

Dr. Fontanilla now assails the COA decision on the sole ground that he has been denied due process. He explains that in the entire length of the proceedings, he was not given the opportunity to explain his side.

From the ASB decision, he filed his motion for intervention (to allow him to participate in the proceedings), for exclusion (to forestall the imposition of liability until he is allowed to defend himself), and for reconsideration (of the ASB - COA decisions for denial of due process).

 

ISSUES:

1. Did Dr. Fontanilla avail of the wrong remedy? If so, is there basis to liberally apply the Rules of Court?

2. Was Dr. Fontanilla denied due process?

 

Ruling:

YES. Dr. Fontanilla availed the wrong remedy.

Dr. Fontanilla did not use the correct remedy when he filed an appeal by certiorari under Rule 45 of the Rules of Court.

Article IX-A, Section 7 of the Constitution provides that decisions, orders, or rulings of the COA may be brought to this Court on certiorari by the aggrieved party. This is echoed by Section 2, Rule 64, of the Rules of Court, which states that a judgment or final order or resolution of the COA may be brought by the aggrieved party to this Court on certiorari under Rule 65.

Based on these rules, the SC could have dismissed the petition outright. The gravity, however, of Dr. Fontanilla's claim of violation of his right to due process compelled the SC to examine the merit of his petition; the Court itself would compound the violation of Dr. Fontanilla's right to due process if indeed such violation took place and the SC would brush it aside because of a technical procedural reason. Under the scales of justice, technical procedural rules pale in comparison and are outweighed by substantive violations affecting the bill of rights.

The SC stress that the Constitution and the Rules of Court limit the permissible scope of inquiry in Rules 64 and 65 certiorari petitions only to errors of jurisdiction or grave abuse of discretion. Hence, unless tainted with grave abuse of discretion, the COA's simple errors of judgment cannot be reviewed even by this Court.

 

The COA gravely abused its discretion when it denied Dr.Fontanilla of due process.

Dr. Fontanilla maintains that his right to due process was violated. The COA counters that his motion for intervention, exclusion, and reconsideration effectively cured the defect in the proceedings.

While we have ruled in the past that the filing of a motion for reconsideration cures the defect in procedural due process because the process of reconsideration is itself an opportunity to be heard, this ruling does not embody an absolute rule that applies in all circumstances. The mere filing of a motion for reconsideration cannot cure the due process defect, especially if the motion was filed precisely to raise the issue of violation of the right to due process and the lack of opportunity to be heard on the merits remained.

In the present case, not only did the COA deny Dr. Fontanilla's plea to be heard, it proceeded to confirm his liability on reconsideration without hearing his possible defense or defenses.

Petition is Granted and set aside.

DIGEST/KAY MARIE BOLANDO/REPUBLIC OF THE PHILIPPINES V. BISAYA LAND TRANSPORTATION CO. GR. NO.L-31490

REPUBLIC OF THE PHILIPPINES 

VS. 

BISAYA LAND TRANSPORTATION CO., INC.

FACTS:

The Bisaya Land Transporation Company is a corporation organized on or about June 10,1935 under Act No. 1459, otherwise known as the Corporation Law, for the principal purpose of engaging in the business of land and water transportation, having its domicile and principal place of business in Cebu City.

The instant case began when the Republic of the Philippines, through Solicitor General Edilberto Barot, filed a petition for quo warranto in the CFI of Manila for the dissolution of the Bisaya Land Transportation Company.

The petition alleges that respondent corporation, through its co-respondents named therein, acting in their official capacity as officers and controlling stockholders of the said corporation, by conspiring and confabulating together and with the aid of their associates, agents and confederates had violated and continues to violate, offended and continues to offend the provisions of the Corporation law and other statutes of the Philippines by having committed and continuing to commit acts amounting to a forfeiture of the respondent corporation's franchise, rights and privileges and, through various means, misused and continues to misuse, abused and continues to abuse the terms of its franchise, palpably in contravention of the law and public policy.

Respondents (except Miguel Cuenco) filed a motion to dismiss the petition for quo warranto on the grounds of lack of cause of action, prescription, and the failure of the Solicitor General to secure the court's permission, as required in Section 4 of Rule 66 of the Rules of Court. The motion to dismiss was denied on June 27, 1959.

The petition, herein provided, is an appeal from from the "Resolution" of the Court of First Instance of Manila, dated April 3, 1968, granting the petition of the Republic of the Philippines to dismiss (1) the petition for quo warranto it filed against the respondent Bisaya Land Transportation Inc., and its Board of Directors; and (2) the cross-claim filed by respondent Miguel Cuenco against his co-respondents.

Respondents (except Miguel Cuenco) filed a motion to dismiss the cross-claim of Miguel Cuenco on the ground, among others, that the claims subject of the cross-claim could not be pleaded by respondent Miguel Cuenco since they did not arise out of the transactions or occurrences that were the subject-matter of the original petition for quo warranto which does not assert any claim against respondent directors or any one of them, which would thus entitle respondent Miguel Cuenco to claim indemnity from the others.

Respondent corporation filed a motion for judgment on consent on the ground that the said corporation did not admit having committed any act requiring its forcible dissolution, but alleged, as a reason for the filing of said motion, that the pendency of the petition of quo warranto had prejudiced the corporation in its business, as well as its innocent stockholders, and that its business interests required that immediate relief be given to the corporation and to its thousands of stockholders.

Petitioner Republic, on the other hand, filed a manifestation stating that the motion for judgment on consent being in accordance with the petition for quo warranto, the matter of the implementation of the dissolution of respondent corporation be submitted to the discretion of the lower court. The motion to withdraw judgment on consent was denied by the lower court.

On October 20, 1996, then, Solicitor General Barredo, filed a motion for dismissal of the quo warranto proceedings, to which motion respondent Miguel Cuenco filed his opposition. 

On April 3, 1968, the court a quo issued a resolution granting petitioner's motion for the dismissal of the action for quo warranto, and dismissing respondent Miguel Cuenco's cross-claim. Hence, this petition.

ISSUE:

Whether or not the lower court erred in holding that the Solicitor General was vested with absolute and unlimited power to discontinue the State's litigation and accordingly to have the quo warranto petition dismissed, if and when in his opinion this should be done and in not holding instead that the Solicitor General's motion for dismissal of the petition is devoid of any merit, and indeed must be denied.

RULING:

The Court ruled, that meeting squarely the issue of whether or not the Solicitor General is vested with absolute and unlimited power to discontinue the State's litigation and accordingly, to have the quo warranto petition dismissed, if and when in his opinion this should be done, the general rule seems to be that the plaintiff may do so with the approval of the court, subject to well-defined exceptions (such as, where the answer sets up a countrclaim which cannot stand independently of the main action).

The Solicitor General himself asserts that the only purpose of his motion for the dismissal of this quo warranto is to take the State out of unnecessary court litigation, so that the dismissal of the case would result in the disposition solely of this quo warranto by and between petition Republic of the Philippines and the respondents named therein. Other interested parties who might feel aggrieved, therefore, would not be without their remedies since they can still maintain whatever claims they may have against each other. 

It has been held that relief by dissolution will be awarded only where no other adequate remedy is available and is not available where the rights of the stockholders can be, or are, protected in some other way.

The right of the plaintiff to dismiss an action with the consent of the court is universally recognized with certain well-defined exceptions. If the plaintiff discovers that the action which he commenced was brought for purposes of enforcing a right or a benefit, the advisability or necessity of which he later discovers no longer exists, or that the result of the action would be different from what he had intended, then he should be permitted to withdraw his action, subject to the approval of the court.

Litigation should be discouraged and not encouraged. Courts should not require parties to litigate when they no longer desire so to do. Courts, in granting permission to dismiss an action, of course, should always take into consideration the effect which said dismissal would have upon the rights of the defendant. 

Thus, in State vs. Finch: "As a rule, the attorney-general has the power, both under the common law and by statute, to make any disposition of the State's litigation that he deems for its best interest".

In a jurisprudence it provides that the authority of the Solicitor General to commence the action involved herein (Rule 66, Sec.3), he therefore, also has, before submission, the right to terminate the same where he deems it best for the interest of the State.

DIGEST/NORIZA JEAN DAGA/SANTIAGO C. DIVINAGRACIA VS. CONSOLIDATED BROADCASTING SYSTEM, INC. AND PEOPLE'S BROADCASTING SERVICE, INC.

SANTIAGO C. DIVINAGRACIA, PETITIONER,

VS.

CONSOLIDATED BROADCASTING SYSTEM, INC. AND PEOPLE'S BROADCASTING SERVICE, INC., RESPONDENTS.

G.R. No. 162272, April 07, 2009

Facts:

            Respondents Consolidated Broadcasting System, Inc. (CBS) and People's Broadcasting Service, Inc. (PBS) were incorporated in 1961 and 1965, respectively. Both are involved in the operation of radio broadcasting services in the Philippines, they being the grantees of legislative franchises. 

            After the enactment of R.A. No. 7477 and R.A. No. 7582, which contains a common provision predicated on the "constitutional mandate to democratize ownership of public utilities, “the NTC issued four (4) Provisional Authorities to PBS and six (6) Provisional Authorities to CBS, allowing them to install, operate and maintain various AM and FM broadcast stations in various locations throughout the nation.

            Petitioner Santiago Divinagracia filed two complaints with the NTC lodged against PBS and CBS.  He alleged that he was "the actual and beneficial owner of Twelve percent (12%) of the shares of stock" of PBS and CBS separately, and that despite the provisions in R.A. No. 7477 and R.A. No. 7582 mandating the public offering of at least 30% of the common stocks of PBS and CBS, both entities had failed to make such offering. 

            NTC issued a consolidated decision dismissing both complaints ruling that the complaints actually constituted collateral attacks on the legislative franchises of PBS and CBS since the sole issue for determination was whether the franchisees had violated the mandate to democratize ownership in their respective legislative franchises. The NTC ruled that it was not competent to render a ruling on that issue, the same being more properly the subject of an action for quo warranto to be commenced by the Solicitor General in the name of the Republic of the Philippines, pursuant to Rule 66 of the Rules of Court.

            After the NTC had denied Divinagracia's motion for reconsideration, he filed a petition for review under Rule 43 of the Rules of Court with the Court of Appeals. The CA rendered a decision upholding the NTC. The appellate court agreed with the earlier conclusion that the complaints were indeed a collateral attack on the legislative franchises of CBS and PBS and that a quo warranto action was the proper mode to thresh out the issues raised in the complaints.  Hence, this petition.

 

Issue:

            Whether or not NTC has the power to cancel Provisional Authorities and Certificates of Public Convenience (CPC) it issued to legislative franchise- holders.

 

Ruling:

             Broadcast and television stations are required to obtain a legislative franchise, a requirement imposed by the Radio Control Act and affirmed by the ruling in Associated Broadcasting. After securing their legislative franchises, stations are required to obtain CPCs from the NTC before they can operate their radio or television broadcasting systems. Such requirement while traceable also to the Radio Control Act, currently finds its basis in E.O. No. 546, the law establishing the NTC.  NTC is vested with the power to issue CPCs to broadcast stations, it is not expressly vested with the power to cancel such CPCs, or otherwise empowered to prevent broadcast stations with duly issued franchises and CPCs from operating radio or television stations.

            The special civil action of quo warranto is a prerogative writ by which the Government can call upon any person to show by what warrant he holds a public office or exercises a public franchise.  It is settled that "the determination of the right to the exercise of a franchise, or whether the right to enjoy such privilege has been forfeited by non-user, is more properly the subject of the prerogative writ of quo warranto, the right to assert which, as a rule, belongs to the State `upon complaint or otherwise,' the reason being that the abuse of a franchise is a public wrong and not a private injury." A forfeiture of a franchise will have to be declared in a direct proceeding for the purpose brought by the State because a franchise is granted by law and its unlawful exercise is primarily a concern of Government.  Quo warranto is specifically available as a remedy if it is thought that a government corporation has offended against its corporate charter or misused its franchise.

            The authority of the franchisee to engage in broadcast operations is derived in the legislative mandate. To cancel the provisional authority or the CPC is, in effect, to cancel the franchise or otherwise prevent its exercise. By law, the NTC is incapacitated to frustrate such mandate by unduly withholding or canceling the provisional authority or the CPC for reasons other than the orderly administration of the frequencies in the radio spectrum.

            The licensing authority of the NTC is not on equal footing with the franchising authority of the State through Congress. The issuance of licenses by the NTC implements the legislative franchises established by Congress, in the same manner that the executive branch implements the laws of Congress rather than creates its own laws. And similar to the inability of the executive branch to prevent the implementation of laws by Congress, the NTC cannot, without clear and proper delegation by Congress, prevent the exercise of a legislative franchise by withholding or canceling the licenses of the franchisee.

DIGEST/NORIZA JEAN DAGA/SHERWIN T. GATCHALIAN VS. OFFICE OF THE OMBUDSMAN AND FIELD INVESTIGATION OFFICE OF THE OFFICE OF THE OMBUDSMAN

 SHERWIN T. GATCHALIAN, PETITIONER,

VS.

OFFICE OF THE OMBUDSMAN AND FIELD INVESTIGATION OFFICE OF THE OFFICE OF THE OMBUDSMAN, RESPONDENTS. 

G.R. No. 229288, August 01, 2018

 

Facts:

            Six different criminal complaints were filed by the Field Investigation Office (FIO) of the Office of the Ombudsman, Cesar V. Purisima, and Rustico Tutol against several individuals, including petitioner Sherwin T. Gatchalian. 

In a joint resolution the Ombudsman found probable cause to indict Gatchalian.  The respondents in the Ombudsman cases, including Gatchalian, filed separate motions for reconsideration of the Joint Resolution. However, on April 4, 2016, the Ombudsman issued a Joint Order denying the motions for reconsideration. Aggrieved, Gatchalian filed with the CA a Petition for Certiorari under Rule 65 of the Rules of Court, and sought to annul the Joint Resolution and the Joint Order of the Ombudsman for having been issued with grave abuse of discretion.  The CA dismissed the petition for lack of jurisdiction

 

Issue:

Whether the CA erred in dismissing Gatchalian's Petition for Certiorari under Rule 65 for its alleged lack of jurisdiction over the said case.

 

Ruling:

            In dismissing petitioners' petition for lack of jurisdiction, the Court of Appeals cited the case of Fabian vs. Desierto. The appellate court correctly ruled that its jurisdiction extends only to decisions of the Office of the Ombudsman in administrative cases. In the Fabian case, it was ruled that appeals from decisions of the Office of the Ombudsman in administrative disciplinary cases should be taken to the Court of Appeals under Rule 43 of the 1997 Rules of Civil Procedure. It bears stressing that when the Supreme Court declared Section 27 of Republic Act No. 6770 as unconstitutional, it categorically stated that said provision is involved only whenever an appeal by certiorari under Rule 45 is taken from a decision in an administrative disciplinary action. It cannot be taken into account where an original action for certiorari under Rule 65 is resorted to as a remedy for judicial review, such as from an incident in a criminal action.  The present petition should have been filed with the SC.

            In Golangco vs. Fung the Court voided a decision of the CA which directed the Ombudsman to withdraw an Information already filed by it with a Regional Trial Court (RTC). The Court in Golangco reasoned that the Court of Appeals has jurisdiction over orders, directives and decisions of the Office of the Ombudsman in administrative disciplinary cases only. It cannot, therefore, review the orders, directives or decisions of the Office of the Ombudsman in criminal or non-administrative cases."  With regard to orders, directives, or decisions of the Ombudsman in criminal or non-administrative cases, the Court, in Tirol, Jr. v. Del Rosario, held that the remedy for the same is to file a petition for certiorari under Rule 65 of the Rules of Court.

            In Kuizon v. Desierto and Mendoza-Arce v. Office of the Ombudsman, the court held that the Supreme Court has jurisdiction over petitions for certiorari questioning resolutions or orders of the Ombudsman in criminal cases. For administrative cases, however, it was declared in the case of Dagan v. Office of the Ombudsman (Visavas) that the petition should be filed with the Court of Appeals in observance of the doctrine of hierarchy of courts. The Dagan ruling homogenized the procedural rule with respect to administrative cases falling within the jurisdiction of the Ombudsman — first enunciated in Fabian v. Desierto — that is, all remedies involving the orders, directives, or decisions of the Ombudsman in administrative cases, whether by an appeal under Rule 43 or a petition for certiorari under Rule 65, must be filed with the Court of Appeals.

The Ombudsman's determination of probable cause may only be assailed through certiorari proceedings to the Supreme Court on the ground that such determination is tainted with grave abuse of discretion.

DIGEST/NORIZA JEAN DAGA/FORTUNE LIFE INSURANCE COMPANY, INC. vs. COA PROPER; COA REGIONAL OFFICE NO. VI-WESTERN VISAYAS; AUDIT GROUP LGS-B, PROVINCE OF ANTIQUE; AND PROVINCIAL GOVERNMENT OF ANTIQUE

 FORTUNE LIFE INSURANCE COMPANY, INC., Petitioner,

vs.

COMMISSION ON AUDIT (COA) PROPER; COA REGIONAL OFFICE NO. VI-WESTERN VISAYAS; AUDIT GROUP LGS-B, PROVINCE OF ANTIQUE; AND PROVINCIAL GOVERNMENT OF ANTIQUE, Respondents.

G.R. No. 213525               January 27, 2015

 Facts:

            Respondent Provincial Government of Antique (LGU) and the petitioner executed a memorandum of agreement concerning the life insurance coverage of qualified barangay secretaries, treasurers and tanod, the former obligating ₱4,393,593.60 for the premium payment, and subsequently submitting the corresponding disbursement voucher to COA Antique for pre-audit. The latter office disallowed the payment for lack of legal basis under Republic Act No. 7160 (Local Government Code). Respondent LGU appealed but its appeal was denied.

Consequently, the petitioner filed its petition for money claim in the COA. On November 15, 2012, the COA issued its decision denying the petition, holding that under Section 447 and Section 458 of the Local Government Code only municipal or city governments are expressly vested with the power to secure group insurance coverage for barangay workers; and noting the LGU’s failure to comply with the requirement of publication under Section 21 of Republic Act No. 9184 (Government Procurement Reform Act).

The petitioner received a copy of the COA decision on December 14, 2012 and filed its motion for reconsideration on January 14, 2013. However, the COA denied the motion, the denial being received by the petitioner on July 14, 2014.

Hence, the petitioner filed the petition for certiorari on August 12, 2014, but the petition for certiorari was dismissed as earlier stated through the resolution promulgated on August 19,2014 for (a) the late filing of the petition; (b) the non-submission of the proof of service and verified declaration; and (c) the failure to show grave abuse of discretion on the part of the respondents.

 

Issues:

1.      Whether or not petitioner complied with the rule on proof of service.

2.      Whether or not “Fresh Period Rule” under Neypes applied to petition for certiorari under Rule 64 of the Rules of Court.

3.      Whether or not petition for certiorari is proper.

 

Ruling:

1.      The petitioner claims that the affidavit of service attached to the petition for certiorari complied with the requirement on proof of service.  The claim is unwarranted. The petitioner obviously ignores that Section 13, Rule 13 of the Rules of Court concerns two types of proof of service which requires that if the service is done by registered mail, proof of service shall consist of the affidavit of the person effecting the mailing and the registry receipt, both of which must be appended to the paper being served. A compliance with the rule is mandatory, such that there is no proof of service if either or both are not submitted.   

Here, the petition for certiorari only carried the affidavit of service executed by one Marcelino T. Pascua, Jr., who declared that he had served copies of the petition by registered mail attached to the appropriate spaces found on pages 64-65 of the petition." The petition only bore, however, the cut print-outs of what appeared to be the registry receipt numbers of the registered matters, not the registry receipts themselves. The rule requires to be appended the registry receipts, not their reproductions. Hence, the cut print-outs did not substantially comply with the rule.

2.          The reglementary periods under Rule 42 and Rule 64 are different. In the former, the aggrieved party is allowed 15 days to file the petition for review from receipt of the assailed decision or final order, or from receipt of the denial of a motion for new trial or reconsideration. In the latter, the petition is filed within 30 days from notice of the judgment or final order or resolution sought to be reviewed. The filing of a motion for new trial or reconsideration, if allowed under the procedural rules of the Commission concerned, interrupts the period; hence, should the motion be denied, the aggrieved party may file the petition within the remaining period, which shall not be less than 5 days in any event, reckoned from the notice of denial.
     The petitioner filed its motion for reconsideration on January 14, 2013, which was 31 days after receiving the assailed decision of the COA on December 14, 2012. Pursuant to Section 3 of Rule 64, it had only five days from receipt of the denial of its motion for reconsideration to file the petition. Considering that it received the notice of the denial on July 14, 2014, it had only until July19, 2014 to file the petition. However, it filed the petition on August 13, 2014, which was 25 days too late.

 

3.          The petitioner insists on having fully shown that the COA committed grave abuse of discretion. Grave abuse of discretion implies such capricious and whimsical exercise of judgment as to be equivalent to lack or excess of jurisdiction; in other words, 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.

A close look indicates that the petition for certiorari did not sufficiently disclose how the COA committed grave abuse of its discretion. The supposed delays taken by the COA in deciding the appeal were neither arbitrary nor whimsical on its part. The mere terseness of the denial of the motion for reconsideration was not a factor in demonstrating an abuse of discretion. And it was the COA’s adjudication that had any value and decisiveness on the issues by virtue of their being the Constitutionally officials entrusted with the authority for that purpose.

It is equally relevant to note that the COA denied the money claim of the petitioner for the further reason of lack of sufficient publication as required by the Government Procurement Act. In that light, the COA acted well within its authority in denying the petitioner’s claim.

DIGEST/JAN CARLO A. TISO/ SEBASTIAN SARMIENTO, ET AL., petitioners-appellees, vs. HON. ELEUTERIO CAPAPAS

 

G.R. No. L-15509             March 31, 1962

SEBASTIAN SARMIENTO, ET AL., petitioners-appellees,
vs.
HON. ELEUTERIO CAPAPAS, as Commissioner of Customs, et al., respondents-appellants,
GREGORIO GAMULO, ET AL., intervenors-appellees.

FACTS: On June 9, 1958 the petitioners filed a motion to be permitted to file new petition for declaratory relief, in substitution of the petition for prohibition with preliminary injunction. The principal allegations of the amended petition are as follows: .

That on May 1 to 6, 1958, shipments of 666 hogsheads of Virginia Type Leaf Tobacco, worth $314,675.62 were imported by the Philippine Tobacco Flue-Curing and Redrying Corporation under the Barter Permit No. BT-1380 (SP) issued on January 21, 1958; .

That on May 8, 1958, the Collector of Internal Revenue issued an authority to release the said imported goods, which authority was addressed to his co-respondents Hon. Eleuterio Capapas, as Commissioner of Customs and/or Hon. Isidro Angangco as incumbent Collector for the Port of Manila, declaring that said 666 hogsheads of tobacco were imported under the Barter Permit No. BT-1380 (SP) dated January 21, 1958 by the No-Dollar Import Office; .

That on May 13, 1958 the administrator of ACCFA addressed a communication to the Commissioner of Customs, Manila, stating that he had no objection to the release of the imported Virginia leaf tobacco or the release of said 666 hogsheads of tobacco; .

That the said shipments of 666 hogsheads of tobacco form part of several other shipments of Virginia Type Leaf Tobacco, which are due to arrive at the Port of Manila under the same Barter Permit No. BT-1380 (SP) which tobacco will aggregate in value to the sum of $4,900,000.00; .

That the Barter Permit No. BT-1380 (SP) issued by the No-Dollar Import Office on January 21, 1958, in favor of the Philippine Tobacco Flue-Curing and Redrying Corporation, was issued in violation of the provisions of existing laws, particularly Republic Act Nos. 1194 and 1410; .

That the certificates issued by the ACCFA and/or the Bureau of Internal Revenue were false because we have surplusage of indigenous production of Virginia type leaf tobacco in the Philippines, which is sufficient to maintain the manufacture of tobacco production; .

That the importations in question are not actually covered by any Central Bank license whatsoever; .

That as early as January, 1958, petitioners had already protested with the Secretary of Commerce and Industry against the issuance of barter permits for such kind of tobacco; .

That the Commissioner of Customs and the Collector of Customs for Manila are in possession, custody and control of any and all documents pertaining to the importations made under the aforesaid Barter Permit No. BT-1380 (SP); .

That the Commissioner of Customs and the Collector of Customs threaten to release the whole or part of said shipment to the Philippine Tobacco Flue-Curing and Redrying Corporation, some 60 hogsheads having been already released in violation of existing laws, more specifically Republic Act Nos. 1194 and 1410.1äwphï1.ñët

ISSUES:

1. Whether an action for declaratory relief was proper.

HELD:

NO.

If an action for declaratory relief were to be allowed in this case, after a breach of the statute, the decision of the court in the action for declaratory relief would prejudge the action for violation of the barter law.

The institution of an action for declaratory relief after a breach of contract or statute, is objectionable on various grounds, among which is that it violates the rule on multiplicity of suits. If the case at bar were allowed for a declaratory relief, the judgment therein notwithstanding, another action would still lie against the importer respondent for violation of the barter law. So, instead of one case only before the courts in which all issues would be decided, two cases will be allowed, one being the present action for declaratory relief and a subsequent one for the confiscation of the importations as a consequence of the breach of the barter law.

The impropriety of allowing an action for declaratory relief, after a breach of the law, can be seen in the very decision of the court itself, which is now subject of the appeal. Whereas the case at bar was purported to bring about a simple declaration of the rights of the parties to the action, the judgment goes further than said declaration and decrees that the importation by the respondent corporation violates the law, and further directs that legal importation be confiscated under the provisions the law (Section 1 (c), R.A. No. 1194.) This confiscation directed by the court lies clearly beyond the scope and nature of an action for declaratory relief, as the judgment of confiscation goes beyond the issues expressly raised, and to that extent it is null and void.

That the proper remedy under the circumstances was an action for injunction, and not one for declaratory relief, is evident from the fact that the original petition was for injunction; petitioner herein only changed the nature of the action into one for declaratory relief when, as they explain, they found out that they did not have funds for the writ of preliminary injunction..

As a final reason for dismissing the present action, we have the undeniable fact that as of this date (March 1962) the permit had expired two years before (its life extended to January 21, 1960 only), and all the shipments under the permit had already been delivered to the consignee and used in the manufacture of tobacco. The petitioner did not secure a writ of preliminary injunction, as this remedy is not proper in an action for declaratory relief; as a result, aside from the complete violation of the barter law, the importations have already been completely used up in the manufacture of tobacco during the pendency of these proceedings.

Under the circumstances and at present, of what use will a declaration of the rights of the parties under the barter law be? In fact as of the date of this decision the issues have become moot and academic and the court can do no other than declare the action to be so and of no practical use or value.

FOR THE FOREGOING CONSIDERATIONS, judgment appealed from is set aside and the action for declaratory relief dismissed. Without costs.

 

 

 

DIGESt/JAN CARLO A. TISO/Republic of the Philippines vs. Hon. Mangotara (2010)G.R. No. 170375 | 2010-07-0

Republic vs. Mangotara (2010)G.R. No. 170375 | 2010-07-07

 

Subject: Filing of consolidated petitions under both Rules 45 and 65; Hierarchy of courts; The proper parties in the expropriation proceedings; Forum shopping; Expropriation vis-à-vis reversion; Petitions for review under Rule 45; Jurisdiction vis-à-vis exercise of jurisdiction; Ordinary civil action for reconveyance vis-à-vis special proceeding forquieting of title; “Title” in quieting of title; Prescription; The requirements of posting a supersedeas bond and depositing rent to stay execution; Preliminary injunction to stay execution of RTC judgment against defendant in an ejectment case; Cause of action for reversion; Res judicata.

 

 

THE PRECEDING CASES

All the petitions have for their common genesis the two cases discussed below:

The 1914 Cacho Case

(Cacho v. Government of the United States)

 

Facts:

The late Doña Demetria Cacho applied for the registration of two parcels of land, both located in Iligan City. Lot 1, the smaller parcel, was purchased from Gabriel Salzos, who in turn bought it from Datto Darondon and his wife Alanga, evidenced by a deed of sale in favor of Salzos signed solely by Alanga, on behalf of Datto Darondon. Doña Demetria purportedly purchased Lot 2, the larger parcel, from Datto Bunglay. Datto Bunglay claimed to have inherited Lot 2 from his uncle, Datto Anandog, who died without issue.

 

Only the Government opposed the registration on the ground that the properties formed part of a military

reservation.

 

Held:

1. As to Lot 1: The deed held by Doña Demetria is executed only by Alanga, a Moro and wife of Datto Darondon, which is not permitted either by the Moro laws or the Civil Code of the Philippines at the time. At the time of application for registration, Datto Darondon is still alive, and thus he must present a deed renouncing all his rights in the small parcel of land in favor of the applicant, Doña Demetria, before registration can be admitted.

 

2. As to Lot 2: The Court found that Datto Bunglay did not have title to the parcel of land as nephew of Datto Anandog, according to the Civil Code and the "Luwaran Code" of the Moros, which states that the brothers and sisters of a deceased Moro inherit his property to the exclusion of the more distant relatives. However, since Datto Anandog's sister, Alanga, appeared as a witness for the applicant Doña Demetria without having made any claim to the land, she was deemed to have ratified the sale made by her nephew.

 

3.   Only Lot 2 was granted to Doña Demetria for registration, and the Court also ordered a new survey of the property excluding all the land not cultivated by Datto Anandog (the "southern part").

 

 

 

 

THE PETITIONS AT BAR

 

The case involves seven consolidated Petitions for Review on Certiorari and a Petition for Certiorari under Rules 45 and 65 of the Rules of Court, respectively, arising from actions for quieting of title, expropriation, ejectment, and reversion, which all involve the same parcels of land.

Expropriation Case

(G.R. No. 170375)

Republic vs. Hon. Mangotara, MCFC, and PNB

Facts:

The Complaint for Expropriation was originally filed by the Iron and Steel Authority (ISA), now the NSC, against Maria Cristina Fertilizer Corporation (MCFC), and the latter’s mortgagee, the Philippine National Bank (PNB).

President Ferdinand E. Marcos issued Presidential Proclamation No. 2239, reserving in favor of ISA a parcel of land in Iligan City. MCFC occupied certain portions of this parcel of land. When negotiations with MCFC failed, ISA was compelled to file a Complaint for Expropriation.

The Republic was allowed by the Supreme Court to substitute for ISA when the latter's statutory existence expired (ISA case), following so the RTC ordered the substitution. The Republic then filed a Motion for Leave to file a Supplemental Complaint seeking to implead Teofilo Cacho and Demetria Vidal and their respective successors-in-interest, Landtrade Realty Corporation (LANDTRADE) and Azimuth International Development Corporation (AZIMUTH), alleging that Lots 1 and 2 involved in the 1997 Cacho case encroached and overlapped the parcel of land subject of expropriation. The Motion was denied due to the Republic's failure to file a Motion for Execution in the substitution case. The RTC called its Order for substitution an "honest mistake".

 

MCFC then filed a Motion to Dismiss the expropriation case for: (1) failure of the Republic to implead indispensable parties because MCFC insisted it was not the owner of the parcels of land sought to be expropriated; and (2) forum shopping considering the institution by the Republic of an action for the reversion of the same parcels subject of the instant case for expropriation.Judge Mangotara dismissed the case, stating that Cacho vs. U.S. was conclusive on the question of ownership of the properties. MCFC as the only defendant was thus not the proper party defendant. The Republic was also held guilty of forum-shopping for not disclosing the action for reversion.

 

The Republic filed with this Court the consolidated Petition for Review on Certiorari and Petition for Certiorari under Rules 45 and 65 of the Rules of Court, respectively, docketed as G.R. No. 170375.

 

Held:

Filing of consolidated petitions under both Rules 45 and 65

1. The Republic filed a pleading with the caption Consolidated Petitions for Review on Certiorari (Under Rule 45) and Certiorari (Under Rule 65) of the Rules of Court. (See MWSS vs. Court of Appeals)

2. The distinction of the two modes of appeal is clear. (See Nunez vs. GSIS Family Bank) The most apparent is that errors of jurisdiction are best reviewed in a special civil action for certiorari under Rule 65 while errors

of judgment can only be corrected by appeal in a petition for review under Rule 45.

3. The Republic availed itself of the wrong mode of appeal by filing Consolidated Petitions for Review under Rule 45 and for Certiorari under Rule 65, when these are two separate remedies that are mutually exclusive and neither alternative nor successive. Nevertheless, the Court treated the Consolidated Petitions as a Petition for Review on Certiorari under Rule 45 and the allegations therein as errors of judgment.

 

Hierarchy of courts

4. The direct filing of the instant Petition with this Court did not violate the doctrine of hierarchy of

courts. According to Rule 41, Section 2(c) of the Rules of Court, a decision or order of the RTC may be

appealed to the Supreme Court by petition for review on certiorari under Rule 45, provided that such

petition raises only questions of law.

5. A question of law exists when the doubt or controversy concerns the correct application of law or jurisprudence to a certain set of facts; or when the issue does not call for an examination of the probative value of the evidence presented, the truth or falsehood of facts being admitted. A question of fact exists when the doubt or difference arises as to the truth or falsehood of facts or when the query invites calibration of the whole evidence considering mainly the credibility of the witnesses, the existence and relevancy of specific surrounding circumstances, as well as their relation to each other and to the whole, and the probability of the situation.

6. The Petition of the Republic raises pure questions of law, i.e., whether the expropriation case should have been dismissed for failure to implead indispensable parties and for forum shopping. Thus, the direct resort by the Republic to this Court is proper.

The proper parties in the expropriation proceedings

7. The right of the Republic to be substituted for ISA as plaintiff is affirmed. The failure of the Republic to actually file a motion for execution does not render the substitution void. A writ of execution requires the sheriff or other proper officer to whom it is directed to enforce the terms of the writ. The Order of the RTC should be deemed as voluntary compliance with a final and executory judgment of this Court, already rendering a motion for and issuance of a writ of execution superfluous.

8. No substantive right was violated by the voluntary compliance by the RTC with the directive in the ISA case even without a motion for execution having been filed. To the contrary, the RTC merely enforced the judicially determined right of the Republic to the substitution.

9. Defendants in an expropriation case are not limited to the owners of the property to be expropriated, and just compensation is not due to the property owner alone.(See De Knecht vs. Court of Appeals) At the time of the Complaint for Expropriation, possessory/occupancy rights of MCFC over the properties sought to be expropriated were undisputed. As such, it MCFC can be named the defendant in the expropriation case.

10. The RTC also erred when it dismissed the case for having been filed only against MCFC, and not against the owners. Dismissal is not the remedy for misjoinder or non-joinder of parties, even for indispensable parties.  Only when there is refusal to implead such indispensable party despite the order of the court should the case be dismissed. (See Vda. De Manguerra vs. Risos)

11. An indispensable party is a party-in-interest without whom no final determination can be had of an action. The owner of the property is not necessarily an indispensable party in an expropriation case. When the property already appears to belong to the Republic, there is no sense in the Republic instituting expropriation proceedings against itself. It can still, however, file a complaint for expropriation against the private persons occupying the property. In such an expropriation case, the owner of the property is not an indispensable party.

12. Presidential Proclamation No. 2239 explicitly states that the parcels of land reserved to NSC are part of the public domain, hence, owned by the Republic. Letter of Instructions No. 1277 recognized only the occupancy rights of MCFC and directed NSC to institute expropriation proceedings to determine the just compensation for said occupancy rights. Therefore, the owner of the property is not an indispensable party in the original Complaint for Expropriation.