Yu vs. Magpayo [G.R. No. L-29742.

March 29, 1972] PARTIES: Plaintiff-appellant Defendant-appellee FACTS: Preliminary Appellant filed a complaint in the City Court of Davao to recover from defendant Mapayo the sum of P2, 800, which represented an unpaid balance of the purchase price of an engine (Gray Marine), sold to defendant. The defendant admitted the said transaction in his answer but he alleged that the engine had hidden defects causing him to spend the same amount for the 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. Procedural history City Court-disallowed the defenses and ordered the defendant to pay plaintiff P2, 500.00 and costs. In CFI Defendant appealed and filed an answer that was a virtual reproduction of his original defenses in the City Court. 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 but it failed to do so. The plaintiff's counsel refused to comply and 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 stick to his demand that he would introduce his witnesses only in rebuttal . This prompted the court to dismiss the case on ground of failure of the plaintiff to prosecute, hence this appeal. MRs-Denied Hence the petition. ISSUE: : : Vicente Yu Emilio Mapayao W/N CFI validly dismissed the case for failure to prosecute. HELD: NO RULE: Section 2 of Revised Rule of Court 129 plainly supports appellant: 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 cannot be contradicted unless previously shown to have been made through palpable mistake. APPLICATION: The court held that the dismissal in untenable and contrary to law. The defendant was not able to support his special defences. The answer admitted defendant's obligation as stated in the complaint, and pleaded special defences hence the plaintiff had every right to insist that it was for the defendant to come forward with evidence in support of his special defences. Judicial admissions do not require proof. DISPOSITIVE PORTION: 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. Topic: Consolidation ACTIVE WOOD PRODUCTS CO., INC. vs.CA G.R. No. 86603. February 5, 1990 FACTS: Respondent Judge Legaspi is the presiding judge of Branch XX where Civil Case No. 6518-M is pending. LRC Case No. P-39-84 is pending in Branch XIV presided over by Judge Felipe N. Villajuan, Jr. Active Wood constituted a mortgage in favor of State Investment to secure indebtedness. It was foreclosed and the lands auctioned off to State Investment as the highest bidder. The certificate of sale issued to State Investment was registered in 1983. State Investment initiated LRC Case No. P-39-84 which was assigned to Branch XIV. It filed a petition for the issuance of a writ of possession pending redemption of the lands by Active Wood. Judge Villajuan of Branch XIV granted the writ upon filing of a bond.

On the other hand, in view of the foreclosure, Active Wood filed Civil Case No. 6518-M, Branch XX. Respondent Judge Legaspi declared as null and void the foreclosure and State Investment's certificate of sale. SC set aside the order of Branch XX a quo that had earlier declared null and void the foreclosure and State Investment's certificate of sale. Subsequently, Active Wood filed a motion in LRC Case No. P-39-84 pending in Judge Villajuan's Branch XIV for the consolidation of said case with Civil Case No. 6518-M pending in respondent Judge's Branch XX. Moreover, Active Wood filed a motion in said LRC Case No. P-39-84 to dismiss and or suspend the proceedings of that case until Branch XX resolved the issue of validity of the mortgage raised in Civil Case No. 6518-M. Acting on Active Wood's motions, Judge Villajuan of Branch XIV, held in abeyance resolution of State Investment's petition for the Writ of Possession and directed that said LRC Case No. P-39-84 pending in his branch be consolidated with Civil Case No. 6518M pending in respondent Judge's branch provided the latter would not object. State Investment argues that the aforequoted provision of the rules mention only actions, which means an ordinary suit in a court of justice by which one party prosecutes another for the enforcement or protection of a right, or the prevention or redress of a wrong. Civil Case No. 6518-M is such an action. On the other hand, LRC Case No. P-39-84 involving the Petition for a Writ of Possession is an ex-parte proceedings and does not require notice to be given to the other parties. The two, action and proceedings, being different, cannot be consolidated. The respondent Judge issued the assailed order returning the LRC Case No. P-39-84 to Branch XIV obviously signifying his objection to the proposed consolidation of that case with the case pending in his branch. ISSUE: W/N the two cases can be validly consolidated? HELD: YES Section 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 unneccessary costs or delay. The rationale for consolidation is to have all cases, which are intimately related, acted upon by one branch of the court to avoid the possibility of conflicting decisions being rendered that will not serve the orderly administration of justice. It is true that a petition for a writ of possession is made ex-parte to facilitate proceedings, being founded on a presumed right of ownership. Be that as it may, when this presumed right of ownership is contested and made the basis of another action,

then the proceedings for writ of possession would also become seemingly groundless. The entire case must be litigated and if need be as in the case at bar, must be consolidated with a related case so as to thresh out thoroughly all related issues. Thus in the case at bar, this technical difference between an action and a proceeding becomes insignificant and consolidation becomes a logical conclusion. The consolidation of cases becomes mandatory because it involves the same parties and the same subject matter which is the same parcel of land. Such consolidation is desirable to avoid confusion and unnecessary costs and expenses with the multiplicity of suits. Thus the rules do not distinguish between cases filed before the same branch or judge and those that are pending in different branches, or before different judges of the same court, in order that consolidation may be proper, as long as the cases involve the resolution of questions of law or facts in common with each other. The respondent court has, indeed, committed a reversible error. Consolidation of these two cases in Branch XX, in which the earlier case filed now pends, is more promotive of their expeditious and less expensive determination as well as the orderly administration of justice than if they were to remain in the two branches of the same court.

G.R. No. L-60601 December 29, 1983 CESAR NEPOMUCENO, LEON ARCILLAS and RUBEN AVENIDO, petitioners, vs. THE HON. COMMISSION ON ELECTIONS and OSCAR LASERNA, respondents. TOPIC: CONSOLIDATION; Effect of Denial or Grant of Demurrer to Evidence DOCTRINE: Rule on Demurrer of Evidence authorizes a judgment on the merits of the case without the defendant having to submit evidence on his part as the relief sought. The demurrer, therefore, is an aid or instruments for the expeditious termination of an action, similar to a motion to dismiss, which the court or tribunal may either grant or deny. However, a denial of the demurrer is not a final judgment, but merely interlocutory in character as it does not finally dispose of the case, the defendant having yet the

right to present his evidence, as provided for under Section 1 of Rule 35. FACTS: Petitioners Cesar Nepomuceno, Leon Arcillas and Ruben Avenido were the official candidates of the Nacionalista Party in the 1980 local elections for the positions of mayor, vicemayor and member of the Sangguniang Bayan, respectively, of Sta. Rosa, Laguna. On January 14, 1980, private respondent Oscar Laserna filed a petition before the COMELEC, docketed as PDC Case No. 65, to disqualify petitioners on the ground of turncoatism. On January 25, 1980, the COMELEC issued Resolution No. 8484, granting said petition, thereby denying due course to petitioners' certificates of candidacy. Alleging denial of due process, petitioners assailed said resolution in a petition for certiorari and prohibition with prayer for a temporary restraining order filed with this Court. [G.R. Nos. 52427 and 52506]. SC issued a restraining order enjoining the COMELEC from enforcing Resolution No. 8484, by reason wherefore petitioners were allowed to be voted for in the elections of January 30, 1980. It appears that in said elections, petitioners won and were Proclaimed winners in their respective positions. The COMELEC accordingly set PDC Case No. 65 for hearing on the merits. However, on July 17, 1980, petitioners filed a motion to dismiss the said case, alleging that it being a pre-election case, the same should be dismissed, without

prejudice to the filing of appropriate quo warrants proceedings pursuant to Section 189 of the 1978 Election Code. Having obtained an unfavorable ruling from the COMELEC, petitioners filed another petition with this Court, docketed as G.R. No. 54633, assailing the COMELEC's resolution which denied their motion to dismiss. SC dismissed the said petition. Likewise, denying the motion for reconsideration of the other Resolution. Thereafter, the Comelec proceeded to hear PDC Case No. 65, with petitioners' manifestation 'That "They do not waive their right to question the jurisdiction of the Comelec" having been placed on record. Rejoinders and memoranda were filed by the parties, and on March 31, 1982, the Comelec issued the following order denying the demurrer to evidence. RESPONDENTS BY COUNSEL individually filed demurrers to the evidence, to which the petitioner did not lose time to oppose. The demurrers should be DENIED. Petitioners' motions for reconsideration of the above order were likewise derived. On April 15, 1982, petitioners filed with the Comelec another Motion to Dismiss, which was denied in an order dated April 16, 1982.

ISSUES: 1. THAT THE COMELEC COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO AN ACT IN EXCESS OF OR WITHOUT JURISDICTION IN REFUSING TO RESOLVE PETITIONERS' DEMURER TO EVIDENCE BY WAY OF A JUDGMENT WHEREIN IT SHOULD STATE THE FACTS AND THE LAW ON WHICH THE IS RESOLUTION IS BASED.

2. THAT THE RESPONDENT COMMITTED GRAVE ABUSE OF' DISCRETION, AMOUNTING TO LACK OF JURISDICTION. IN DENYING PETITIONERS' MOTION TO DISMISS. 3. THAT THE RESPONDENT COMELEC COMMITTED GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK OF JURISDICTION, IN PROMULGATING THE RESOLUTION OF APRIL 16, 1982 THROUGH THE ACT OF ONLY ONE MEMBER OF A DIVISION. RULING: Petitioners are obviously misled by the title of Rule 35 of the Rules of Court, "Judgment on Demurer to Evidence."

G.R. No. L-33695

May 15, 1989

MANUFACTURER'S BANK & TRUST CO., petitioner, vs. DIVERSIFIED INDUSTRIES, INC., and ALFONSO TAN, respondents TOPIC: Denial in Answer May Not Amount to Tender of Issue DOCTRINE: Where amendment is not a matter of right, a bare assertion of a desire to amend the pleading because certain matters had not been therein alleged, or the submission of an amended one, without more, is obviously not sufficient. It is needful to state to the Court some reasonable ground justifying its exercise of discretion to allow amendment. The denials in the amended answer are cut from the same bolt as those in the original answer. They are sham denials, consisting of an avowed lack of knowledge of facts which could not but be clearly known to the defendants or ought to be or could quite easily have been known by them. Amendment in the circumstances was clearly subject to said Court's discretion the exercise of which cannot be faulted; and the defendants' original answer in truth tendered no issue, or otherwise admitted the allegations of the complaint material and necessary to a valid decision.

It is thus apparent that the requirement of Section 1 of Rule 36 would only apply if the demurrer is granted, for in this event, there would in fact be an adjudication on the merits of the case, leaving nothing more to be done, except perhaps to interpose an appeal. The challenged order being merely an interlocutory order and not a final judgment or decision, no abuse of discretion was committed by respondent Comelec in its failure to state the facts and the law on which its order denying petitioners' demurrer to evidence is based. Their insistence on raising said issue over and over again is an obvious dilatory tactic intended to frustrate this Court's directive to respondent COMELEC to have the case heard and terminated as expeditiously as possible. Clearly, the said resolution is merely interlocutory, and being such, the Presiding Commissioner of the Division is competent to sign said resolution alone.

FACTS: Manufacturers Bank & Trust Co. filed a complaint with the Court of First Instance of Manila for the recovery of a sum of money against Diversified Industries, Inc. and Alfonso Tan. The complaint alleged: o Defendants were granted a loan in the form of an agreement for credit in current account in the sum of ONE HUNDRED TWENTY-FIVE THOUSAND PESOS (P125,000.00) with interest at the rate of 10% per annum computed upon average daily balances. That the loan became due and pay able on February 26, 1965, but the defendants failed and refused to liquidate their obligations, leaving an outstanding balance of P100,119.21 as of June 25, 1965;

WHEREFORE, the petitioner is hereby denied. Costs against petitioners.

Manufacturers Bank moved for judgment on the pleadings. It adverted to the defendants' admissions of the parties' personal circumstances and "the fact that the defendants were granted a loan in the form of an Agreement for Credit in Current Account in the sum of P125,000.00 with interest at the rate of 10% per annum computed upon average daily balances, a copy of which agreement has been attached as Annex A of the complaint." The defendants, Diversified Industries and Tan, filed an opposition to the bank's motion for judgment on the pleadings. They alleged that neither the amounts drawn against the overdraft account nor the current balance due from them, were within the knowledge either of Alfonso Tan because he was a mere "guarantor" or even of Diversified Industries because its account officer had long since resigned, and moreover, they could not be expected to know the attorney's fees that Manufacturers Bank had undertaken to pay to its attorney. They also theorized that since there was no allegation that they had in fact made drawings against the overdraft account, no obligation to pay a sum of money had been pleaded and therefore, the complaint failed to state a cause of action. On the same date the defendants filed a motion for leave to amend their answer, and the amended answer itself. Their motion alleged that their original pleading had failed to embody their true plea respecting every material allegation of the complaint and had failed to set forth their affirmative defenses. The Court denied the defendants' motion for leave to amend their answer and rendered judgment on the pleadings. It opined that the original answer failed to tender any issue, the defendants' asserted lack of knowledge or information regarding matters principally and necessarily within their knowledge could not be considered a specific denial.

dismissing the complaint for failure to state a cause of action; and (3) rendering judgment on the pleadings. RULING: Of no little significance is the fact that the motion to amend the answer was presented only after two (2) years had lapsed from the date of its filing, and only after the plaintiff had drawn attention to its patent and grave imperfections and moved for judgment on the pleadings. o Equally noteworthy is that defendants never challenged the authenticity of their letter to the bank dated October 18, 1966, advising that they had made, thru an Atty. Colayco, payment on their account and requesting that they be allowed to pay their obligation by installments at the rate of P20,000.00 every six (6) months. These facts, considered conjointly with the admissions expressly made in the pleadings and those reasonably inferable therefrom, dictate a verdict in favor of the plaintiff bank.

Under the circumstances obtaining in this case, the amendment of the answer in substantial aspects was not a matter of right, but lay in the discretion of the Court. Their motion merely declared that they had failed to include certain allegations and defenses in their original answer, but gave no explanation for their failure to do so at the time they drew up that pleading or within a reasonable time thereafter, and why they had not essayed such amendment until after two (2) years and only after their receipt of plaintiff bank's motion for judgment on the pleadings which cited certain serious defects of their answer. The absence of such an explanation, and the implicit admission of liability. Their disclaimer of knowledge of the amount of their outstanding balance is implausible, but even if true, cannot be deemed a proper denial because concerning something they could very easily have learned or verified had they wished to. Their disclaimer of knowledge of the amount of the fee undertaken to be paid by the Manufacturers Bank to its attorneys is immaterial because not prayed for in the complaint, the claim being in fact for attorney's fees equivalent to 10% of the total amount due, as expressly stipulated in the contract. And the averment that their obligation was not yet due

ISSUE: Manufacturers Bank faults the Trial Court for (1) not specifying the defendants' liability to it to be joint and several; and (2) requiring payment by defendants of interest only at the legal rate instead of that stipulated in their agreement. On the other hand, Diversified Industries and Alfonso Tan ascribe the following errors to the Court a quo: (1) refusing to admit their amended answer; (2) not

because plaintiff bank had extended the term of payment is also specious, being contrary to the defendants' written request to the bank that they be allowed to repay their loan in stated installments. WHEREFORE, the judgment of the Trial Court is AFFIRMED WITH THE MODIFICATION that the liability to Manufacturers Bank & Trust Co. of Diversified Industries, Inc. and Alfonso Tan is pronounced to be joint and several, and the interest payable on their obligation is fixed at 10% per annum of the total amount due, in accordance with the Agreement of Credit on Current Account, with costs against the latter. G.R. No. 74766 December 21, 1987 DOMINGO VERGARA, SR., petitioner, vs. HON. JOSE T. SUELTO Presiding Judge of the Municipal Trial Court in Davao City, Branch IV, MANOLITO GUINOO ROMEO MONTEBON and PORFERIO CABASE respondents. NARVASA, J.: DOCTRINE: Even if the Answer does tender issues and therefore a judgment on the pleadings is not proper a summary judgment may still be rendered on the plaintiff's motion if he can show that the issues tendered are not genuine, sham, fictitious, contrived, set up in bad faith, or patently unsubstantial. FACTS: Vergara commenced in the MTC an action for illegal detainer against the private respondents. He is the owner of a commercial building consisting of 3 sections separately occupied by the private respondents as lessees. The respondents defaulted in the payment of their rentals for many months and so Vergara sent demand letters, notice of termination of lease and notice to vacate. In a letter, private respondents committed to leave the premises but asked for an extension of 3 months to enable them to find a new space. However, in another letter to Vergara, they acknowledged the latter's ownership and their status as lessees, but refused to vacate the premises because the lot on which the building stands, though titled in Vergara's name, was part of a tract of land which had been ordered reverted to the public domain by the RTC in a decision rendered in Civil Case No. 16192. Furthermore, private respondents Answer: o Denied Vergara's ownership of the building and claimed that their lease contract with Vergara were null and void. o Denied that they initially paid rentals and claimed that they had been "occupying the premises in the concept of an owner." PETITIONERS CONTENTION: They were not parties to Civil Case No. 16192 and could not be bound by the judgment and in any event, the action is an ejectment suit and the said case has no

relevant. Vergara filed a Motion for Summary Judgment. Private respondents opposed the motion and filed a MTD. Arguing that a genuine issue exists which "cannot be resolved by mere resort to summary judgment," that issue having arisen from defendants' controversion of Vergara's claim "of possession and ownership over the commercial building and the land on which the same is constructed." The respondent Judge resolved the matter in two separate orders: o FIRST: Denied the private respondents' MTD on the ground that ownership has not been seriously denied by defendants and the case is an Unlawful Detainer action. o SECOND: Denied Vergara's motion for summary judgment because it appears from the answer that the material allegations of facts in the complaint constituting plaintiff's cause of action are specifically denied and that the private respondents put up affirmative defenses. There should be a trial of the case upon its merits. RESPONDENT JUDGES BASIS: In the Unlawful Detainer action, the material averments of facts constituting plaintiff's cause of action have been specifically denied in accordance with 10, Rule 8 of the ROC. PRIVATE RESPONDENTS CONTENTION: Their denials of Vergaras assertions are not mere general denials but "definitely tendered a genuine issue," "which cannot be resolved by resort to mere summary judgment." ISSUE: Even if the Answer does tender issues (and therefore a judgment on the pleadings is not proper), may a summary judgment still be rendered on the plaintiff's motion? YES RULING: The essential question is not whether the answer does controvert the material allegations of the complaint but whether that controversion is in good faith. The fundamental issue is not whether the answer does tender valid issues as by setting forth specific denials and/or affirmative defenses, but whether the issues thus tendered are genuine, or fictitious, sham, characterized by bad faith. JUDGMENT ON THE PLEADINGS: Rule 19, 1 provides that where an answer "fails to tender an issue or otherwise admits the material allegation of the adverse party's pleading, the court may, on motion of that party, direct judgment on such pleading." The answer would fail to tender an issue if it doesnt comply with the requirements for a specific denial (Rule 8, 10). If an Answer does in fact specifically deny the material averments of the complaint and/or asserts affirmative defenses, a judgment on the pleadings would naturally not be proper. SUMMARY JUDGMENT: However, even if the Answer does tender issues and a judgment on the pleadings is not proper, a summary judgment may

still be rendered on the plaintiff's motion if he can show that "except as to the amount of damages, there is no genuine issue as to any material fact," the issues thus tendered are not genuine, sham, fictitious, contrived, set up in bad faith, patently unsubstantial. The determination may be made by the Court on the basis of the pleadings, depositions, admissions and affidavits that the movant may submit, as well as those which the defendant may present. On its face, the private respondents' Answer appears to tender issues. It dealt with each of the material allegations of the complaint and has set up affirmative defenses. However, the issues thus tendered are sham and not genuine. Their disavowal of the plaintiff's ownership of the building cannot be genuine because they have been occupying the premises for years, as evidenced by written contracts and have been paying rentals, for which respondents were issued official receipts. Moreover, their Answer contains their admission that Vergara has title over the land on which the building stands. The affirmative defense, in which they assert title over the land is also sham and an absurdity. The Court sustained Vergaras contention that the parties were not bound by said judgment and that the claim is irrelevant to the ejectment suit. Moreover, they are estopped to dispute the plaintiff's title. "The tenant is not permitted to deny the title of his landlord at the time of the commencement of the relation of landlord and tenant between them." No genuine issue having been tendered by the defendants, judgment should be directed as a matter of right in the plaintiff's favor. To require a trial notwithstanding the pertinent allegations of the pleadings and the other facts indubitably appearing on record would be a waste of time and an injustice to plaintiff. Diman vs. Alumbres [G.R. No. 131466. November 27, 1998] PARTIES: Petitioners : Cristina Diman, Clarissa Diman, George Diman, Felipe Diman and Florina Diman Respondents : Hon, Florentino M. Alumbres of RTC Las Pias, Heirs of Veronica V. Moreno Lacalle, represented by Jose Moreno Lacalle FACTS: Preliminary A complaint for "Quieting of Title and Damages" was filed by the Heirs of Veronica V.Moreno Lacalle (represented by Jose Moreno Lacalle) against petitioners. Lacalle heirs claimed that:

a) their mother, the late, was the owner of a "parcel of land situated at Brgy. Pulang Lupa Uno, Las Pias. b) Veronica Lacalle had acquired the land in 1959 by virtue of a deed of absolute sale, and retained as caretakers the persons she found in occupancy of the lot at the time of the sale, namely: Julian Nario and his wife, Adelaida Legaspi, with arrangement to share the agricultural fruits" until the former would have need of the property; c) the caretakers of the lot were served with a notice for them to vacate the land and an alias writ of demolition (dated June 7, 1994) issued by the MTC in Civil Case No. 2619 -- a case for "ejectment with damages" filed by the Dimans against the Narios, judgment in which, commanding the Narios' ouster, had supposedly been affirmed by the Makati Regional Trial Court; d) neither the deceased Veronica nor any of her heirs had been made parties to said ejectment action; e) the complaint for ejectment contains false assertions, and had caused them injury for which the Dimans should be made to pay damages. In their answer with counterclaim dated February 2, 1995, the Dimans alleged that: a) they are the registered and absolute owners of the land registered in their names under TCT), and have no knowledge of the land claimed by the Lacalle Heirs; b) they are entitled to eject from their land the Nario Spouses, who were falsely claiming to be their lessees; c) if the Heirs' theory is that the land in their title, No. 273301, is the same as that covered by the Dimans' titles, then said title No. 2733101 is spurious because: (1) no less than three official agencies -- (i) the Office of the Registrar of Deeds for Rizal and Regional Registrar for Region IV, (ii) the Registrar of Deeds of Pasay City, and (iii) the Pangasiwaan Pangtalaan ng Lupain (Land Registration Authority) -- have certified to the absence of any entry in their records concerning TCT No. 273301 covering land with an area of 22,379 square meters in the name of Veronica Vda. De Moreno Lacalle; (2) Decree No. N-11601 explicitly cited as basis by TCT No. 273301 refers to land in Mauban, Quezon Province, according to the records of the Land Registration Authority; and GLRO Record No. 14978 also expressly mentioned as basis for TCT No. 273301, refers to a registration

case heard in Pangasinan; and d) they are entitled to damages counterclaim.

on

their

The Dimans then submitted a "MOTION FOR SUMMARRY JUDGMENT" dated drewing attention to the Heirs' failure to file any Pre-Trial Brief, and the several instances when the Heirs failed to appear at scheduled hearings resulting in the dismissal of their complaint, which was however later reinstated. The Heirs' counsel filed a two-page opposition asserting inter alia that: In order for defendants (Dimans) to successfully pray for judgment on the pleadings, they have to clearly alleged in their permissive counterclaim their cause of action and if the answer of the plaintiffs (Heirs) to such kind of counterclaim admit (sic) it or the answer to the counterclaim is a sham, that is the time for the defendants to move for a judgment summarily. ** ** (D)efendants have no cause of action for praying for summary judgment. It is the plaintiffs who will pray for that and not the defendants." Procedural history TC CA denied motion for summary judgment Affirmed TCs decision. MR-denied

Clearly, the grounds relied on by the Judge are proper for the denial of a motion for judgment on the pleadings -- as to which the essential question, as already remarked, is: are there issues arising from or generated by the pleadings? -- but not as regards a motion for summary judgment -- as to which the crucial question is: issues having been raised by the pleadings, are those issues genuine, or sham or fictitious, as shown by affidavits, depositions or admissions accompanying the application therefor? It is the law which determines when a summary judgment is proper. It declares that although the pleadings on their face appear to raise issues of fact -e.g., there are denials of, or a conflict in, factual allegations -- if it is shown by admissions, depositions or affidavits, that those issues are sham, fictitious, or not genuine, or, in the language of the Rules, that " except as to the amount of damages, there is no genuine issue as to any material fact and that the moving party is entiled to a judgment as a matter of law , the Court shall render a summary judgment for the plaintiff or the defendant as the case may be. Parenthetically, the existence or appearance of ostensible issues in the pleadings, on the one hand, and their sham or fictitious character, on the other, are what distinguish a proper case for a summary judgment from one for a judgment on the pleadings under Rule 19 of the 1964 Rules. In the latter case, there is no ostensible issue at all, but the absence of any because of the failure of the defending party's answer to raise an issue. On the other hand, in the case of a summary judgment, issues apparently exist -- i.e., facts are asserted in the complaint regarding which there is as yet no admission, disavowal or qualification; or specific denials or affirmative defenses are in truth set out in the answer -- but the issues thus arising from the pleadings are sham, fictitious, not genuine, as shown by admissions, depositions or admissions. In other words, as a noted authority remarks, a judgment on the pleadings is a judgment on the facts as pleaded while a summary judgment is a judgment on the facts as summarily proven by affidavits, depositions or admissions. Another distinction is that while the remedy of a judgment on the pleadings may be sought only by a claimant (one seeking to recover upon a claim, counterclaim, or cross-claim or to obtain a declaratory relief, supra), a summary judgment may be applied for by either a claimant or a defending party. The Heirs had proven nothing whatever to justify a judgment in their favor. They had not presented any copy whatever of the title they wished to be quieted. They had not adduced any proof worthy of the name to establish their precedessors' ownership of the land. On the contrary, their own evidence, from whatever aspect viewed, more than persuasively

CA ruled that a "perusal of the Complaint and the Answer will clearly show that material issue is raised in that both plaintiffs and defendants claimed ownership over the land in dispute, presenting their respective titles thereto and accused each other of possessing false title to the land." It also added that a summary judgment "is not proper where the defendant presented defenses tendering factual issues which call for the presentation of evidence." Hence the petition. ISSUE: W/N CA erred in not granting the motion for summary judgment HELD: YES RULE: Rule 19 expresses the principle as follows: "Where an answer fails to tender an issue, or otherwise admits the material allegations of the adverse party's pleading, the court may, on motion of that party, direct judgment on such pleading." APPLICATION:

indicated their lack of title over the land, or the spuriousness of their claim of ownership thereof. The evidence on record could not be interpreted in any other way, and no other conclusion could be drawn therefrom except the unmeritoriousness of the complaint. The case at bar is a classic example of the eminent propriety of a summary judgment, or a judgment on demurrer to evidence. Considering these circumstances, including the outlandish grounds of opposition advanced by the Heirs against the Dimans' motions for summary judgment and for demurrer to evidence, no less than the obviously mistaken grounds cited by the Trial Court for denying said motions, this Court has no hesitation in declaring that it was indeed grave abuse of discretion on the part of the Trial Court to have refused to render a summary judgment or one on demurrer to evidence. In no sense may the Trial Court's errors be considered, as the Court of Appeals did in its judgment of September 9, 1997, as mere errors of judgment correctible by appeal, untarnished by any capriciousness or whimsicality. DISPOSITIVE PORTION: WHEREFORE, the challenged decision of the Court of Appeals promulgated on September 9, 1997 is REVERSED and SET ASIDE. TOPIC: Propriety of SJ NATALIA REALTY CORPORATION, plaintiff-appellee, vs. PROTACIO RANCHU VALLEZ, CEFERINO MARTINEZ, PABLO ESPEMEDA, AUGUSTO ARIZOLA and CERIACO BANDOC, defendants-appellants. SYLLABUS 1. REMEDIAL LAW; SUMMARY JUDGMENT; PROPER IF THERE IS NO GENUINE ISSUE AS TO THE EXISTENCE OF MATERIAL FACT; PURPOSE. It is settled that a summary judgment under Rule 34 of the Rules of Court is proper only if there is no genuine issue as to the existence of any material fact. It is intended to expedite or promptly dispose of cases where the facts appear undisputed and certain from the pleadings, depositions, admissions and affidavits on record. 2. ID.; ID.; PLEADINGS AND DOCUMENTS MUST BE ANALYZED; CASE AT BAR. The focal point of inquiry is whether or not there is a factual controversy in these consolidated cases. To resolve this query, the pleadings and documents on file and an analysis thereof are both indispensable and decisive. The sine qua non of such an adjudicative recourse is spelled out thus: After the hearing, the judgment sought shall be rendered forthwith if the pleadings, depositions, and admissions on file together with the affidavits, show that, except as to the amount of damages, there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. We are convinced that the rendition of the questioned summary judgment by the trial court is proper and valid. Tested against the statutory and jurisprudential rules above stated, the very allegations of the defendants prove that no valid issue has been tendered by them. They relied mainly on two

points, the alleged invalidity of the title of the plaintiff and their supposed acquisition of the properties by adverse possession. Defendants' theses are obviously puerile but they are entitled to the benefit of clarification. FACTS: Five (5) civil cases commenced by herein appellee Natalia Realty Corporation against the five (5) appellants, namely, Protacio Ranchu Vallez, Ceferino Martinez, Pablo Espemeda, Augusto Arizola, and Ceriaco Bandoc, which were consolidated and assigned to the RTC Rizal. Plaintiff alleged that the defendants unlawfully occupied portions of the parcels of land belonging to it and registered in its name under TCT Nos. 31527 and 31528 of the RD of Rizal. It was prayed that defendants be adjudged without valid right whatsoever in plaintiff's land, that they be ordered to vacate the same and to pay the reasonable compensation and financial reliefs stated in the respective complaints against them. Defendants sought the dismissal of all the aforesaid complaints for ejectment on the ground of lack of jurisdiction. Their motion was denied on a holding that the grounds therefor are not indubitable. Plaintiff Corporation moved for a summary judgment on the consolidated cases under Rule 34 of the Rules of Court. Plaintiff claimed that the only issue for resolution, if any, is strictly legal; and that "the pleadings manifestly show that there is no genuine issue or issues as to any material fact averred in the complaint and that defendants in their common answer to complaint have put up sham defenses and counterclaims all of which are mere pretended denials and flimsy defenses." Annexed to said motion is the affidavit of the company's executive vice-president, Eugenia Oliveros, attesting to the truth of the averments therein. An opposition was filed by defendants. The trial court rendered a summary judgment upon finding that no valid issue was raised by defendants but only "conclusions that because they have been in actual possession for over 30 years of their respective farm lots they are entitled to be respected of (sic) such occupancy and as such the complaints should be dismissed, that the titles of plaintiff are null and void ab initio and should be cancelled and in lieu thereof issued new certificates of titles (sic) to the defendants in accordance with the land reform program under P.D. No. 2. Judgment was rendered in favor of the plaintiff ordering the defendants to vacate the portions of land involved. ISSUE: Whether or not the court a quo acted correctly in rendering a summary judgment in the aforesaid cases. HELD: We affirm the summary judgment rendered by the court a quo. (See Syllabus)

ST. PETER MEMORIAL PARK, INC., petitioner, vs. HON. JOSE C. CAMPOS, JR. and/or COURT OF FIRST INSTANCE OF RIZAL (Quezon City, REGINO CLEOFAS, and LUCIA DE LA CRUZ, respondents. BANCO FILIPINO SAVINGS & MORTGAGE BANK, petitioner, vs. HON. JOSE CAMPOS, REGINO CLEOFAS, and LUCIA DE LA CRUZ, respondents. TOPIC: Remedies from judgments; Newly discovered evidence DOCTRINE: The rule for the granting of a motion for new trial, as all other rules of procedure, should be liberally construed to assist the parties in obtaining a just and speedy determination of their rights. FACTS: Regino Cleofas and Lucia de la Cruz filed suit against St. Peter Memorial Park, Inc, Araceli Wijangco del Rosario, National Investment and Development Corporation, Banco Filipino Savings and Mortgage Bank, the Register of Deeds of Rizal, the Register of Deeds of Quezon City and the Sheriff of Quezon City. In their amended complaint, the spouses prayed that they be declared the rightful owners of Lot No. 719 of the Piedad Estate, The amended complaint likewise sought issuance of preliminary injunction and the appointment of a receiver. The lower court ordered appointment of a receiver, but upon filing of a bond by the Memorial Park, the receivership was lifted. o that the Torrens Title to said lot be reconstituted, the title thereto of their deceased predecessor, Antonio Cleofas, having been burned in a fire in 1933; that the certificates of title over said lot in the name of the Memorial Park, and that in the

name of Wijangco del Rosario, and all the certificates of title from which these certificates were derived be declared null and void; o that the mortgages over said, lot constituted in favor of Banco Filipino and the NIDC be declared null and void; and that the Memorial Park be ordered to pay plaintiffs damages.

The lower court, on May 2, 1973, rendered a decision in favor of the plaintiffs and against the defendants. The Memorial Park and Banco Filipino, on June 23, 1973, filed their joint motion for reconsideration of the decision. On June 30, 1973, they filed a joint motion for new trial. On July 9, 1973, the Memorial Park filed a supplement to the motion for reconsideration with prayer for new trial. On February 28, 1974, the Memorial Park filed before this Court a petition for certiorari and prohibition with preliminary injunction (L-38280) against the trial judge and the plaintiff spouses, seeking annulment of the court's order denying new trial, on the ground that the same was issued in grave abuse of discretion. However, on July 8, 1974, the court, again upon motion of said spouses, dismissed the appeal filed by both the Memorial Park and Banco Filipino, on the ground that the same was abandoned when Memorial Park filed the present petition for certiorari on February 28, 1974, the dismissal order having been brought to the attention of this Court in the manifestation of the Memorial Park of July 31, 1974. On January 3, 1975, Banco Filipino, for its part, filed in this Court a petition

for certiorari and mandamus with preliminary injunction (L-38843), against the trial judge and the spouses Cleofas and Dela Cruz, to annul the trial court's order of July 8, 1974 dismissing its own appeal. ISSUE: The main issue in these two cases is whether or not the respondent Judge acted in grave abuse of discretion in dismissing the joint appeal of the Memorial Park and Banco Filipino in its order of July 8, 1974. And with respect to Case No. L-38280, the main issue is whether or not the respondent Judge committed a grave abuse of discretion when it denied in its order of February 5, 1974 the motion for new trial of the Memorial Park. RULING: It must be noted that the petitioner in L38280 is only St. Peter Memorial Park. Banco Filipino is not a party in that first proceeding before this Court. Thus, whatever may be the effect of the filing of a petition for certiorari, on the pending appeal, cannot affect the appeal of Banco Filipino. And the respondent Judge clearly committed a clear error and a grave abuse of discretion when it dismissed the appeal of Banco Filipino due to the filing by the Memorial Park of its petition in L-38280. Moreover, as will now be explained, the dismissal of the appeal violated the restraining order issued by this Court. Even with respect to the Memorial Park, we cannot say there was abandonment of the appeal. There would have been abandonment if there is incompatibility between the two remedies sought by the Memorial Park, that is, between said appeal and the petition for certiorari. The

appeal is from the decision of May 2, 1973; the certiorari petition is directed against the order dated February 5, 1974. A motion for new trial does not work as a waiver of the appeal, unless there is a rule to the contrary. Thus, both the motion for new trial and the appeal may be pursued at the same time. This ruling is of persuasive effect on us considering the source of our rules on appeal and new trial. Here, the certiorari petition in L-38280 is in pursuance of the motion for new trial. Memorial Park can pursue this remedy as well as that of the appeal from the main decision. Any court action or order that would change any circumstance of the decision is necessarily included in the scope of the restraining order. At the time that restraining order was issued, the trial court's decision was a decision on appeal. The order dismissing the appeal tended to change the status quo since by reason of the dismissal, the enjoined decision became final. For the reasons we have expounded we find said dismissal order to have been issued in grave abuse of discretion. Fully convinced of the validity of its title, having discovered no flaw in spite of extraordinary diligence and extensive search into record connected with Lot No. 719 of the Piedad Estate, defendant St. Peter assessed and analyzed the situation after receipt of a copy of the Decision sought to be reconsidered. o The hunch of defendant St. Peter became a reality. The entry on sheet or page 15 of OCT no. 614 refers to another lot (not 719) and another title (TCT No. 15694 covering Lot No. 640 of the Piedad Estate).

ON THE MOTION FOR NEW TRIAL

Sec. 1, Rule 37 of the Rules of Court, the requisites for the grant of new trial based on: Newly discovered evidence, which he could not, with reasonable diligence, have discovered, and produced at the trial, and which if presented would probably alter the result, are: (1) that such evidence has been discovered after the trial; (2) that even with the exercise of reasonable diligence, it could not have been discovered and produced at that trial; and (3) that such evidence is of such a nature as to alter the result of the case if admitted (People vs. Ventura, 5 SCRA 741). Gauged by these standards, we find the evidence proposed to be presented by petitioner in a new trial are newly discovered evidence within the contemplation of the Rules of Court. The said evidence could not have been produced during the trial because the subject-matter of the trial was Lot No. 719. Petitioner correctly searched, discovered and presented during that trial, all documents pertaining to Lot No. 719 only. If admitted in a new trial, these newly discovered evidence will probably alter the judgment of the trial court. We hold that respondent Judge committed grave abuse of discretion in denying the motion for new trial, having disregarded in a capricious and arbitrary manner, the newly discovered.

remanded to the trial court for new trial pursuant to the motion to that effect of both Banco Filipino and Memorial Park, dated June 30, 1973, which is hereby granted. Costs against private respondents. EMILIO TUASON, petitioner, vs. COURT OF APPEALS and MARIA VICTORIA L. TUASON, respondents. TOPIC: Relief From Judgment DOCTRINE: REMEDIAL LAW; CIVIL PROCEDURE; RELIEF FROM JUDGMENT; ALLOWED ONLY IN EXCEPTIONAL CASES WHERE THERE IS NO OTHER AVAILABLE OR ADEQUATE REMEDY . - A petition for relief from judgment is an equitable remedy; it is allowed only in exceptional cases where there is no other available or adequate remedy. When a party has another remedy available to him, which may be either a motion for new trial or appeal from an adverse decision of the trial court, and he was not prevented by fraud, accident, mistake or excusable negligence from filing such motion or taking such appeal, he cannot avail himself of this petition. Indeed, relief will not be granted to a party who seeks avoidance from the effects of the judgment when the loss of the remedy at law was due to his own negligence; otherwise the petition for relief can be used to revive the right to appeal which have been lost thru inexcusable negligence. WHEN AVAILED MUST BE BASED ON THE GROUND OF FRAUD, ACCIDENT, MISTAKE OR EXCUSABLE NEGLIGENCE AND THAT IT IS SHOWN THAT PETITIONER HAS A GOOD, SUBSTANTIAL AND MERITORIOUS DEFENSE OR CAUSE OF ACTION. - A petition for relief from judgment is governed by Rule 38, Section 2 of the Revised Rules of Court. A final and executory judgment or order of the

We rule, therefore, in favor of new trial. The grant of new trial necessarily vacates the judgment. WHEREFORE, PREMISES CONSIDERED, the petitions in L-38280 and L-39905 are granted, the orders of February 5, 1974 and July 8, 1974 are hereby declared null and void and set aside, and both cases are

Regional Trial Court may be set aside on the ground of fraud, accident, mistake or excusable negligence. In addition, the petitioner must assert facts showing that he has a good, substantial and meritorious defense or cause of action. If the petition is granted, the court shall proceed to hear and determine the case as if a timely motion for new trial had been granted therein. FACTS: Maria Victoria Lopez Tuason filed with the Regional Trial Court, Branch 149, Makati a petition for annulment or declaration of nullity of her marriage to petitioner Emilio R. Tuason. Imputations were raised against him (physical injuries, etc) Petitioner answered denying the imputations against him. As affirmative defense, he claimed that he and private respondent were a normal married couple during the first ten years of their marriage and actually begot two children during this period; that it was only in 1982 that they began to have serious personal differences when his wife did not accord the respect and dignity due him as a husband but treated him like a persona non grata; that due to the extreme animosities between them, he temporarily left the conjugal home for a cooling-off period in 1984. Petitioner petitioned the court to allow him to return to the conjugal home and continue his administration of the conjugal partnership. After the issues were joined, trial commenced on March 30, 1990. Private respondent presented four witnesses, namely, herself; Dr. Samuel Wiley, a Canon Law expert and marriage counselor of both private respondent and petitioner; Ms. Adelita Prieto, a close friend of the spouses, and Any. Jose F. Racela IV, private respondents counsel.

Private respondent likewise submitted documentary evidence consisting of newspaper articles of her husbands relationship with other women, his apprehension by the authorities for illegal possession of drugs; and copies of a prior church annulment decree. The parties marriage was clerically annulled by the Tribunal Metropolitanum Matrimoniale which was affirmed by the National Appellate Matrimonial Tribunal in 1986. During presentation of private respondents evidence, petitioner, on April 18, 1990, filed his Opposition to private respondents petition for appointment as administratrix of the conjugal partnership of gains. After private respondent rested her case, the trial court scheduled the reception of petitioners evidence on May 11, 1990. On May 8, 1990, two days before the scheduled hearing, a counsel for petitioner moved for a postponement on the ground that the principal counsel was out of the country and due to return on the first week of June. The court granted the motion and reset the hearing to June 8, 1990. On June 8, 1990, petitioner failed to appear. On oral motion of private respondent, the court declared petitioner to have waived his right to present evidence and deemed the case submitted for decision on the basis of the evidence presented. On June 29, 1990, the trial court rendered judgment declaring the nullity of private respondents marriage to petitioner and awarding custody of the children to private respondent. Counsel for petitioner received a copy of this decision on August 24, 1990. No appeal was taken from the decision.

Private respondent filed a Motion for Dissolution of Conjugal Partnership of Gains and Adjudication to Plaintiff of the Conjugal Properties Petitioner opposed the motion on October 17, 1990. Also on the same day, October 17, 1990, petitioner, through new counsel, filed with the trial court a petition for relief from judgment of the June 29, 1990 decision. The trial court denied the petition on August 8, 1991. Petitioner appealed before the Court of Appeals the order of the trial court denying his petition for relief from judgment. On July 29, 1994, the Court of Appeals dismissed the appeal and affirmed the order of the trial court. Hence this petition.

of the adverse judgment to enable him to appeal therefrom is negligence which is not excusable. Notice sent to counsel of record is binding upon the client and the neglect or failure of counsel to inform him of an adverse judgment resulting in the loss of his right to appeal is not a ground for setting aside a judgment valid and regular on its face. Clearly, petitioner cannot now claim that he was deprived of due process. He may have lost his right to present evidence but he was not denied his day in court. ] Indeed, relief will not be granted to a party who seeks avoidance from the effects of the judgment when the loss of the remedy at law was due to his own negligence; otherwise the petition for relief can be used to revive the right to appeal which had been lost thru inexcusable negligence.

ISSUE: The threshold issue is whether a petition for relief from judgment is warranted under the circumstances of the case. RULING: We rule in the negative. Under the rules, a final and executory judgment or order of the Regional Trial Court may be set aside on the ground of fraud, accident, mistake or excusable negligence. In addition, the petitioner must assert facts showing that he has a good, substantial and meritorious defense or cause of action. If the petition is granted, the court shall proceed to hear and determine the case as if a timely motion for new trial had been granted therein. In the case at bar, the decision annulling petitioners marriage to private respondent had already become final and executory when petitioner failed to appeal during the reglementary period. The failure of petitioners counsel to notify him on time

IN VIEW WHEREOF, the petition is denied and the decision dated July 29, 1994 of the Court of Appeals in CA-G.R. CV No. 37925 is affirmed.
G. R. No. L-60036 January 27, 1987 INVESTMENTS, INC., petitioner, vs. COURT OF APPEALS, TOBACCO INDUSTRIES OF THE PHILIPPINES, INC., and THE SHERIFF OF THE CITY OF MANILA, respondents. NARVASA, J.: DOCTRINE: A "final" judgment or order is one that finally disposes of a case. Once rendered, the task of the Court is ended, as far as deciding the controversy or determining the rights and liabilities of the litigants is concerned. A judgment is FINAL upon the expiration of the period to appeal or if no appeal has been perfected. The records of the case are returned to the Court of origin and the judgment can be EXECUTED. FINAL AND EXECUTORY FACTS: Civil Case No. 116617 was instituted by petitioners against TIP for the annulment of a chattel mortgage executed by Investments in TIP's favor covering 5 cigarette-making machines, which were about to be

sold on foreclosure. Initially, a TRO was issued by the Court ex-parte enjoining the Sheriff from proceeding with the auction sale. However, the TC denied Investments' application for a writ of injunction and dissolved the TRO. With the MR being denied, Investments brought the matter to the CA on certiorari and prohibition. Upon posting of bond by Investments, CA directed issuance of a writ of preliminary injunction against the auction sale on 12/21/1978. The injunction was subsequently lifted. At the hearing, Investments argued for the reinstatement of the preliminary injunction since "the hearing on the merits of the main case below is about to be terminated." The injunction bond was increased to cover the principal obligation. The parties both agreed and the Court approved the bond and issued a restraining order which in effect reinstated the injunction earlier granted (12/21/1978). The CA deemed the proceedings before it terminated because it had already stopped the sale of the machines, until final judgment shall have been rendered in Civil Case No. 116617. The Clerk of Court caused entry of judgment in CAG.R. No. SP-08253-R. [COMMENTO: Upon the posting of the increased bond, the CA terminated the proceedings for certiorari and prohibition (CA-G.R. No. SP-08253R), but the Injunction subsists until the final determination of the Civil Case.] Trial in Civil Case No. 116617 continued and judgment was rendered in 12/19/1980, dismissing Investment's complaint for lack of merit, and awarding moral and exemplary damages to TIP. Investments appealed that decision to the CA. TIP filed with the Trial Court a motion for execution pending appeal and with the CA (CA-G.R. No. SP08253-R), a motion to lift the writ of preliminary injunction. PETITIONER opposed both motions on the ground that the injunction issued by the Appellate Court against the holding of the auction sale was meant to subsist until "final in Civil Case No. 116617" and since the decision rendered in said case was not yet final and executory, said injunction was still in force. PETITIONERS CONTENTION: The judgment rendered by the TC in Civil Case No. 116617 on 12/19/1980 was not a "final judgment" because it was an appealable judgment and in fact, it had been appealed seasonably. RESPONDENTS CONTENTION: The judgment was a "final judgment" as the term is used in procedural law, even if appealable. Hence, upon its rendition, the preliminary injunction of the Appellate Court expired. TIP then caused the mortgaged chattels to be sold

by the Sheriff at a public auction (8/24/1981), at which sale it was the successful bidder. Investments filed with respondent CA a motion for contempt and for annulment of the sale, but the Court declared the auction sale valid and dissolved the restraining order. Investments then presented a motion for extension of time to file a MR which was denied for lack of merit. Hence, the present petition. ISSUE: What is the meaning that is to be accorded to the term "final judgment" in the context of Civil Case No. 116617? RULING: A "final" judgment or order is one that finally disposes of a case. The Court has nothing more to do in respect thereto because there have been an adjudication on the merits based on the evidence presented during the trial. A Final judgment declares categorically what the rights and obligations of the parties are and which party is in the right; for instance, a judgment or order that dismisses an action on the ground of res adjudicata or prescription. Once rendered, the task of the Court is ended, as far as deciding the controversy or determining the rights and liabilities of the litigants is concerned. Nothing more remains to be done by the Court except to await the parties' next move (which may consist of the filing of a motion for new trial or reconsideration, or the taking of an appeal) and ultimately, to cause the execution of the judgment once it becomes "final" or to use the established distinctive term, "final and executory." An order that does not finally dispose of the case and does not end the Court's task of adjudicating the parties' contentions and determining their rights and liabilities is "interlocutory." Unlike a "final" judgment or order, which is appealable, an "interlocutory" order may not be questioned on appeal except only as part of an appeal that may eventually be taken from the final judgment rendered in the case. A "final judgment" becomes final upon expiration of the period to appeal, if no appeal has been perfected or an appeal therefrom having been taken, the judgment of the appellate tribunal becomes final and the records of the case are returned to the Court of origin. The "final" judgment is then correctly categorized as a "final and executory judgment" in respect to which, as the law explicitly provides, "execution shall issue as a matter of right ." Only a final judgment or order, i.e., "a judgment or order that finally disposes of the action of proceeding" can become final and executory. There is no showing that the parties and their counsel intended to give the term "final judgment" a special signification, a meaning other than that accorded to it by law and established usage. Their agreement must be construed to mean that upon rendition by the Trial Court of its judgment on the merits (its "final judgment,") the life and effectivity of the preliminary injunction came to an end, regardless of the appealability of, or the actual taking of an appeal from said judgment. The petitioner's theory of the case, founded on its concept of a "final judgment" is erroneous and cannot be

sustained. BF CORPORATION, petitioner, vs. EDSA SHANGRILA HOTEL and RESORT, INC., RUFO B. COLAYCO, RUFINO T. SAMANIEGO, CYNTHIA DEL CASTILLO, KUOK KHOON CHEN, and KUOK KHOON TSEN,respondents. [G.R. No. 132655. August 11, 1998] MENDOZA, J.: FACTS: 1. On July 26, 1993, petitioner BF Corporation brought suit to collect from respondents EDSA Shangri-La Hotel and Resort, Inc. (ESHRI), et al for the which amount represents the alleged liability of respondents to petitioner for the construction of the EDSA Shangri-La Hotel on St. Francis Street, Mandaluyong City. 2. RTC of Pasig City rendered judgment ordering respondents to pay. 3. MR denied, whereupon they appealed. 4. Pending disposition of the appeal, petitioner filed a motion for the execution of the decision in its favor which the trial court granted in its order dated January 21, 1997. 5. Private respondents assailed the order of execution pending appeal in a petition for certiorari which they filed in the Court of Appeals. In due time, petitioner filed a Comment with Opposition to Preliminary Injunction. 6. CA issued a writ of preliminary injunction enjoining the trial court from carrying out its order of execution, upon the filing by respondents of a bond in the amount of P1 million. In a supplemental resolution issued on the same day, the appellate court issued a writ of preliminary mandatory injunction ordering that: a. all garnishments and levy made under the enjoined order of execution pending appeal be lift. b. Said Sheriff desist from delivering to private respondent all his garnishments on petitioners bank deposits and, instead, immediately return the same to PNB, Shangri-la Plaza Branch. c. If the garnished deposits have been delivered to private respondent [herein petitioner], the latter should forthwith return them to petitioners [herein respondents] deposit accounts.[2] 7. Petitioner moved for a reconsideration of the two resolutions. 8. MR denied.CA held that the trial courts reason for ordering execution pending appeal, that (petitioners) viability as a building contractor is being threatened by (respondents) continued refusal to pay their obligations, did not justify such an order. 9. Hence, this petition. ISSUE: WoN CA gravely erred when it held that petitioners serious financial distress and urgent need of funds were

not good reason to justify execution pending appeal in utter disregard of well-founded and established jurisprudential precepts. HELD: NO First. Execution pending appeal is not to be granted except for good reason to be stated in a special order. For the general rule is that only judgments which have become final and executory may be executed. In this case, the issuance of an order granting execution pending appeal is sought to be justified on the plea that the [r]espondents dilatory appeal and refusal to pay petitioner the amount justly due it had placed petitioner in actual and imminent danger of insolvency. The contention is without merit. As we recently held in Philippine Bank of Communications v. Court of Appeals: It is significant to stress that private respondent Falcon is a juridical entity and not a natural person. Even assuming that it was indeed in financial distress and on the verge of facing civil or even criminal suits, the immediate execution of a judgment in its favor pending appeal cannot be justified as Falcons situation may not be likened to a case of a natural person who may be ill or may be of advanced age. Even the danger of extinction of the corporation will not per se justify a discretionary execution unless there are showings of other good reasons, such as for instance, impending insolvency of the adverse party or the appeal being patently dilatory. But even as to the latter reason, it was noted in Aquino vs. Santiago (161 SCRA 570 [1988]), that it is not for the trial judge to determine the merit of a decision he rendered as this is the role of the appellate court. Hence, it is not within competence of the trial court, in resolving a motion for execution pending appeal, to rule that the appeal is patently dilatory and rely on the same as its basis for finding good reasons to grant the motion. Only an appellate court can appreciate the dilatory intent of an appeal as an additional good reason in upholding an order for execution pending appeal which may have been issued by the trial court for other good reasons, or in cases where the motion for execution pending appeal is filed with the appellate court in accordance with Section 2, paragraph (a), Rule 39 of the 1997 Rules of Court. Nor does the fact that petitioner filed a bond in the amount of P35 million justify the grant of execution pending appeal. As the Court have held in a number of cases, the posting of a bond to answer for damages is not alone a sufficient reason for ordering execution pending appeal. Otherwise, execution pending appeal could be obtained through the mere filing of such a bond. DISPOSITIVE PORTION: WHEREFORE, the decision of the Court of Appeals dated June 30, 1997 and its resolutions dated March 7, 1997 are AFFIRMED with the MODIFICATION that recovery of the garnished deposits delivered to petitioner shall be against the bond of petitioner BF Corporation. SO ORDERED

Other relevant matter: The issuance by the Court of Appeals of writs of preliminary prohibitory and mandatory injunction against the trial court, the sheriff, and petitioner is justifiable. Petitioner assails the issuance of the writs, claiming that the same had been issued on the basis of motions which had no verification and without affording it due process. The motions referred to by petitioner merely sought the expeditious resolution of respondents application for a writ of preliminary injunction as contained in their verified petition for certiorari. This petition contained the necessary factual averments justifying the grant of injunction. Nor was petitioner denied the right to be heard before the writs were issued. Petitioner filed a comment which controverted the allegations of the petition, including its prayer for a writ of preliminary injunction. There is, therefore, no basis for its claim that it was denied due process. Be that as it may, this question became moot in view of the appellate courts decision rendered on June 30, 1997, permanently enjoining the trial court from enforcing its order of execution pending appeal and ordering petitioner to return the amounts paid to it by virtue of the garnishment of respondents bank deposits. Petitioner argues that, instead of being required to make restitution, the bond for P35 million, which it had posted, should have been proceeded against. It cites the case of Engineering Construction Inc. v. National Power Corp., where this Court, instead of ordering the judgment creditor to return funds that had been improperly garnished pursuant to an order of execution pending appeal, directed the judgment debtor to proceed against the bond filed by the judgment creditor. We find this contention correct. Rule 39, 5 of the Rules of Civil Procedure provides that Where the executed judgment is reversed totally or partially, or annulled, on appeal or otherwise, the trial court may, on motion, issue such orders of restitution or reparation of damages as equity and justice may warrant under the circumstances. As garnishment is a specie of attachment, the procedure provided in Rule 57, 20 of the Rules of Court for the recovery of damages against a bond in case of irregular attachment should be applied. This means that notice should be given to petitioners surety and that there should be a hearing before it is held liable on its bond. In its supplemental petition, petitioner contends that the propriety of the issuance of the writ of execution pending appeal is an ancillary issue which should have been raised by respondents in their appeal from the trial courts decision on the merits instead of in a separate petition for certiorari. The contention is also without merit. Certiorari lies against an order granting execution pending appeal where the same is not founded upon good reasons. Appeal is not a speedy and adequate remedy that can relieve the losing party from the immediate effects of an improvident execution pending appeal. DISPOSITIVE PORTION: WHEREFORE, the decision of the Court of Appeals dated June 30, 1997 and its resolutions dated March 7, 1997 are AFFIRMED with the MODIFICATION that recovery of the garnished deposits delivered to petitioner

shall be against the bond of petitioner BF Corporation. SO ORDERED

ERIBERTO G. VALENCIA, petitioner, vs. HON. COURT OF APPEALS, HON. CARLOS C. OFILADA, Presiding Judge, Regional Trial Court, Bulacan, Branch XL, Third Judicial Region, Deputy Sheriff PABLO R. GLORIOSO, MIGUEL BUNYE and RICARDO BAGTAS, respondents. TOPIC: DISCRETIONARY EXECUTIONS, when stayed Facts: Valencia filed an action for rescission of a contract of lease over a 24-hectare fishpond against Bunye and Bagtas (private respondents). Private respondents filed an answer with counterclaim for damages. During the pendency of the case, the lease contract expired so private respondents surrendered the fishpond to Valencia. The RTC ruled that the case is now moot and academic in view of the surrender of the said fishpond but it awarded moral and exemplary damages to private respondents. January 3, 1989 private respondents received the RTC order. (So they have until January 18, 1989 within which to appeal.) January 10, 1989 Valencia received the copy of the RTC order. (So he has until January 25, 1989 within which to appeal.) On January 16, 1989, Valencia filed a NOTICE of APPEEAL which was given due course. On January 17, 1989, Private respondents filed a MOTION FOR EXECUTION PENDING APPEAL. The RTC Judge GRANTED the motion for execution pending appeal upon payment by private respondents of a bond. On April 10, 1989, the RTC Judge issued a WRIT OF EXECUTION PENDING APPEAL. Valencia filed a petition for certiorari but the CA dismissed the petition. Hence this petition. Issue: WON the judge erred in issuing the writ of execution pending appeal? Held: YES. In order that there may be a discretionary issuance of a writ of execution pending appeal the following requisites must be satisfied: (a) There must be a motion by the prevailing party with notice to the adverse party; (b) There must be a good reason for issuing the writ of execution; and (c) The good reason must be stated in a special order. (This is absent in this case!) The mere filing of a bond by private respondents is not a good reason for the court to issue/grant the writ of execution pending appeal. The exercise of the power to grant or deny immediate or advance execution is addressed to the sound discretion of the court. However, the existence of good reasons is principally what

confers such discretionary power. Absent any such good reason, the special order of execution must be struck down for having been issued with grave abuse of discretion. The courts look with disfavor upon any attempt to execute a judgment which has not acquired a final character. Section 2 of Rule 39 which authorizes the discretionary execution of judgments, being an exception to the general rule, must be restrictively construed. It would not be a sound rule to allow indiscriminately the execution of a money judgment, even if there is a sufficient bond. Awards for moral and exemplary damages cannot be the subject of execution pending appeal. The execution of any award for moral and exemplary damages is dependent on the outcome of the main case. Unlike actual damages for which the petitioners may clearly be held liable if they breach a specific contract and the amounts of which are fixed and certain, liabilities with respect to moral and exemplary damages as well as the exact amounts remain uncertain and indefinite pending resolution by the Intermediate Appellate Court and eventually the Supreme Court. The existence of the factual bases of these types of damages and their causal relation to the petitioners' act will have to be determined in the light of the assignments of errors on appeal. It is possible that the petitioners, after all, while liable for actual damages may not be liable for moral and exemplary damages. Or as in some cases elevated to the Supreme Court, the awards may be reduced. CA reversed and set aside. WRIT of EXECUTION is hereby ANNULLED.