G.R. No.
131094 May 16, 2005 This prompted Fernandez to file a Petition for Certiorari, Prohibition and Mandamus with
ATTY. JESUS F. FERNANDEZ, petitioner,
vs.
HON. COURT OF APPEALS and CONCEPCION OLIVARES, respondents.
DECISION
CHICO-NAZARIO, J.:
The undisputed facts of this case show that a Complaint dated 23 January 1993 for unlawful
detainer docketed as Civil Case No. 140953 was filed by private respondent Concepcion
Olivares against the herein petitioner Jesus Fernandez. 1 The Metropolitan Trial Court of
Manila (MeTC), Branch XV, dismissed the Complaint for lack of sufficient cause of action. 2
Olivares appealed to the Regional Trial Court (RTC) of Manila, Branch 46, and the latter
reversed the MeTC, ordering Fernandez to pay rental arrearages, attorney's fees, litigation
expenses and costs3 in a decision dated 02 May 1994.4
On 28 June 1994, Fernandez received a copy of the decision. On 12 July 1994 or 14 days
after receipt of the decision, he filed a Motion for Reconsideration.5 On 29 November 1994,
Fernandez received an order denying his motion for reconsideration. 6 On 01 December 1994,
Fernandez filed with the Court of Appeals a Motion for Extension of Time to File Petition for
Review which was granted.7 Said resolution was received by Fernandez on 12 December
1994.
In the meantime, on 09 December 1994, Fernandez filed a Motion for New Trial, 8 docketed
as Civil Case No. 93-67034, before the RTC of Manila, Branch 46, citing newly discovered
evidence of receipts proving his rental payments. In view of his Motion for New Trial,
Fernandez, thru counsel, filed on 29 December 1994 in the Court of Appeals a Motion to
Withdraw his Petition For Review9 which the court duly noted in its resolution dated 19
January 1995.10
In an Order11 dated 06 February 1995, the RTC denied the Motion for New Trial. It explained
that when Fernandez went to the Court of Appeals and filed a Motion for Extension of Time to
File Petition for Review, and the Court of Appeals accordingly acted on the same by granting
the extension sought, jurisdiction of the Court of Appeals over the parties and the subject
matter had already attached.
Fernandez filed a motion for reconsideration which the trial court denied in its Order dated 14
December 1995.12 Fernandez filed a Motion to Reconsider the Order, while Olivares moved
for the execution of the judgment of the RTC citing Section 21 of the Revised Rules on
Summary Procedure.13 In an Order dated 30 January 1996, the RTC granted the Motion for
Execution and denied the Motion for Reconsideration.14 A writ of execution was in fact issued
by the RTC on 31 January 1996.15
prayer for the issuance of a writ of preliminary injunction and temporary restraining order,
docketed as CA-G.R. SP No. 39655, before the Court of Appeals.16
The Court of Appeals, in a resolution dated 14 February 1996 temporarily restrained the
respondents from proceeding with the enforcement of the writ of execution, "so as not to
render the petition moot and ineffectual pending fuller consideration thereof, as well as for the
preservation of the rights of the parties."17 In a decision18 dated 16 May 1997, the Court of
Appeals denied the Petition and affirmed the stance of the RTC. It ruled:
When petitioner herein elected to file before this Court a motion for extension of time
to file petition for review, he in effect opted to appeal the adverse decision of the
Regional Trial Court of Manila to the Court of Appeals. This is so because appeal to
this Court is perfected by petition for review, where judgment was rendered by the
Regional Trial Court in the exercise of appellate jurisdiction. This Court's assumption
of appellate jurisdiction resulted initially in the issuance of the resolution granting
petitioner an extension of fifteen (15) days within which to file the petition for review.
Since this Court acquired appellate jurisdiction, the only proper thing for the court
below to do was to deny the motion for new trial.19
Fernandez filed a Motion for Reconsideration which the Court of Appeals denied in a
resolution dated 13 October 1997.20
Hence, this petition.
In a resolution of this Court dated 26 January 1998,21 respondents were required to file their
Comment on the Petition. Private respondent Olivares submitted her Comment on 26
February 1998.22 Fernandez, in turn, was directed to file his Reply.23 After the submission of
Fernandez's reply,24 the parties were then required by this Court, in a resolution 25 dated 02
December 1998, to submit their respective memoranda.
The only issue26 submitted for resolution in this case is:
WHETHER OR NOT THE MERE FILING BY PETITIONER OF A MOTION FOR
EXTENSION OF TIME TO FILE PETITION FOR REVIEW (WHICH INTENTION [sic]
WAS LATER WITHDRAWN), AUTOMATICALLY DIVESTED THE REGIONAL TRIAL
COURT (RTC) OF ITS JURISDICTION OVER THE CASE, AS TO ENTERTAIN A
MOTION FOR NEW TRIAL.
In general, in order for a Court to have authority to dispose of the case on the merits, it must
acquire jurisdiction over the subject matter and over the parties. 27 Jurisdiction over the
subject matter, or the jurisdiction to hear and decide a case, is conferred by law.28 Jurisdiction
over the person, on the other hand, is acquired by service of summons or by voluntary
appearance.29
At first glance and mindful of the rule that the filing of motions seeking affirmative relief, such
as the motion for extension of time to file petition for review filed by Fernandez in this case, is
considered voluntary submission to the jurisdiction of the court 30 it may seem at once
apparent that the Court of Appeals had in fact acquired jurisdiction over his person. It has
been repeatedly held that an appearance in whatever form, without expressly objecting to the
jurisdiction of the court over the person, is a submission to the jurisdiction of the court over
the person. He may appear by presenting a motion, for example, and unless by such
appearance he specifically objects to the jurisdiction of the court, he thereby gives his assent
to the jurisdiction of the court over his person.31
As we are dealing here with the jurisdiction of an appellate court, additional rules are required
for jurisdiction to attach therein, to wit: (1) the petitioner must have invoked the jurisdiction of
the Court of Appeals within the time for doing so;32 (2) he must have filed his petition for
review likewise within the time for doing so; 33 (3) he must have paid the necessary docket
fees;34 and (4) the other parties must have perfected their appeals in due time.35
The Rule requires that in an appeal by way of Petition For Review, the appeal is deemed
perfected as to the petitioner upon the timely filing of the petition and the payment of docket
and other lawful fees.36 In the discussion of the Committee on the revision of the Rules of
Court, it was emphasized that to perfect the appeal, the party has to file the petition for review
and to pay the docket fees within the prescribed period. The law and its intent are clear and
unequivocal that the petition is perfected upon its filing and the payment of the docket fees.
Thus, it may be argued, and rightly so, that the Court of Appeals has not yet acquired
jurisdiction over the case because Fernandez merely filed a motion for extension of time to
file petition but not the petition itself. Withal, sans the petition, it cannot be said that the Court
of Appeals has acquired jurisdiction over the case as to say that the trial court is without
authority to act on a motion for new trial. It is axiomatic that if a statute is clear, plain and free
from ambiguity, it must be given its literal meaning and applied without attempted
interpretation.37 Indeed, when the law speaks in clear and categorical language, there is no
room for interpretation, vacillation or construction, but only for application. 38 On this point we
fully agree in the position taken by Fernandez that when he filed the motion for extension of
time to file petition for review, jurisdiction of the Court of Appeals had not yet attached, such
that his failure to file the petition itself would normally have the effect of rendering the
decision of the lower court final and executory.39
The consequential question is: what is the legal effect of the filing by Fernandez of a motion
for new trial before the trial court?
Assuming that Fernandez filed his motion for new trial on time, we hold that the trial court still
had jurisdiction to rule on the matter as the jurisdiction it originally acquired had not yet been
lost.
The appellate jurisdiction of the trial court is to be juxtaposed with its residual jurisdiction as
set forth in Rule 42, Section 8(a), 3rd paragraph of the Rules of Court. Before the Court of
Appeals gives due course to a Petition for Review, the RTC retains jurisdiction for specified
instances enumerated therein, to wit:
(1) To issue orders for the protection and preservation of the rights of the parties
which do not involve any matter litigated by the appeal, such as, the appointment of a
receiver, and the issuance of writs of preliminary attachment or preliminary injunction.
(2) To approve compromises.
(3) To permit appeals of indigent litigants.
(4) To order execution pending appeal in accordance with section 2 of Rule 39.
(5) To allow withdrawal of the appeal.40
The residual jurisdiction of the trial court is available at a stage in which the court is normally
deemed to have lost jurisdiction over the case or the subject matter involved in the appeal.
This stage is reached upon the perfection of the appeals by the parties or upon the approval
of the records on appeal, but prior to the transmittal of the original records or the records on
appeal.41 Considering that no appeal was perfected in this case and the records of the case
have not yet been transmitted to the Court of Appeals, the case has not as yet attained the
residual jurisdiction stage so as to say that the trial court already lost the jurisdiction it first
acquired and that it is left with only its residual powers.
The foregoing considered, the inevitable recourse would have been to remand this case to
the trial court for hearing on his motion for new trial. Such is not to be, however.
So much has been said by the parties over the issue of whether or not jurisdiction attaches to
the Court of Appeals upon the filing of a motion for extension of time to file petition for review
thereby divesting the court of origin the power to rule on a motion for new trial. As shall be
hereunder shown, however, it turns out that the unraveling of this issue is quite peripheral
and that the resolution of this case hinges on another matter totally different from that raised
by the parties.
From the records of the case, the ultimate issue to be tackled concerns the proper
computation of the period to file a motion for new trial.
Rule 37, Section 1 of the Revised Rules of Court providing for the period to file a motion for
new trial in relation to Rule 41, Section 3 is in point.
Rule 37. . . .
Section 1. Grounds of and period for filing motion for new trial or reconsideration. –
Within the period for taking an appeal, the aggrieved party may move the trial court to
 set aside the judgment or final order and grant a new trial for one or more of the before the Supreme Court, which may in its sound discretion either grant or deny the
following causes materially affecting the substantial rights of said party. extension requested. No such motion may be filed before any lower courts. 48

Rule 41 . . . .
Sec. 3. Period of ordinary appeal. – The appeal shall be taken within fifteen (15) days
from notice of the judgment or final order appealed from. Where a record on appeal is
required, the appellant shall file a notice of appeal and a record on appeal within
thirty (30) days from notice of the judgment or final order.
The period of appeal shall be interrupted by a timely motion for new trial or
reconsideration. No motion for extension of time to file a motion for new trial or
reconsideration shall be allowed.
IN SUM, considering that a motion for new trial must be filed during the period for filing an
appeal and that such period cannot be extended, Fernandez, by filing his motion for new trial
beyond the period to appeal, had unwittingly sealed his fate and stripped himself of any
further relief.
WHEREFORE, premises considered, the instant petition is DENIED for lack of merit. The
Regional Trial Court of Manila, Branch 46, is ordered to execute the decision dated 02 May
1994 in Civil Case No. 93-67034.
SO ORDERED.

It is without question that Fernandez received a copy of the RTC Decision on 28 June 1994.
Fourteen (14) days after the receipt of the decision or specifically on 12 July 1994, he filed a
motion for reconsideration. This motion was denied by the RTC and the Order of denial was
received by Fernandez on 29 November 1994. Applying Rule 37, Section 1 of the Revised
Rules of Court, he had only one (1) day left to file a motion for new trial since a motion for
new trial should be filed within the period to appeal, that is, within fifteen (15) days from
notice of the judgment.42 The motion for new trial suspends the running of the period to
appeal but does not extend the time within which an appeal must be perfected. 43 Hence if
denied, a movant, like Fernandez in this case has only the balance of the reglementary
period within which to appeal.44 It bears repeating that Fernandez received a copy of the RTC
decision on 28 June 1994. Applying Rule 41, Section 3 of the Revised Rules of Court, he had
fifteen (15) days from receipt of the RTC decision to file a motion for new trial or
reconsideration. He filed a motion for reconsideration fourteen (14) days after receipt of the
decision. The motion was denied and he had only the remaining one (1) day to file a motion
for new trial which day fell on 01 December 1994. Since 30 November 1994 was a holiday,
Fernandez had up to 01 December 1994 to file the motion for new trial. Extant from the
records, instead of a motion for new trial, he filed before the Court of Appeals on 01
December 1994 the motion for extension of time to file petition for review. Thereafter, and
pending the resolution of his motion before the Court of Appeals, Fernandez went back to the
RTC and filed on 09 December 1994 a motion for new trial.

Applying the foregoing, Fernandez's motion for new trial was filed out of time. The fifteen
(15)-day period for filing a motion for new trial cannot be extended. As early as the case of
Habaluyas v. Japzon,45 cited in Naguiat v. Intermediate Appellate Court,46 and reiterated in
Tung Chin Hui v. Rodriguez,47 motions for extension of time to file a motion for new trial or
reconsideration may no longer be filed before all courts, lower than the Supreme Court. The
rule in Habaluyas applies even if the motion is filed before the expiration of the period sought
to be extended because the fifteen (15) days period for filing a motion for new trial or
reconsideration with said court is non-extendible. Thus, motions for extension of time to file a
motion for new trial or reconsideration may be filed only in connection with cases pending
G. R. No. 158149 February 9, 2006
BOSTON BANK OF THE PHILIPPINES, (formerly BANK OF COMMERCE), Petitioner,
vs.
PERLA P. MANALO and CARLOS MANALO, JR., Respondents.
DECISION
CALLEJO, SR., J.:
Before us is a Petition for Review on Certiorari of the Decision 1 of the Court of Appeals (CA)
in CA-G.R. CV No. 47458 affirming, on appeal, the Decision 2 of the Regional Trial Court
(RTC) of Quezon City, Branch 98, in Civil Case No. Q-89-3905.
The Antecedents
The Xavierville Estate, Inc. (XEI) was the owner of parcels of land in Quezon City, known as
the Xavierville Estate Subdivision, with an area of 42 hectares. XEI caused the subdivision of
the property into residential lots, which was then offered for sale to individual lot buyers. 3
On September 8, 1967, XEI, through its General Manager, Antonio Ramos, as vendor, and
The Overseas Bank of Manila (OBM), as vendee, executed a "Deed of Sale of Real Estate"
over some residential lots in the subdivision, including Lot 1, Block 2, with an area of 907.5
square meters, and Lot 2, Block 2, with an area of 832.80 square meters. The transaction
was subject to the approval of the Board of Directors of OBM, and was covered by real estate
mortgages in favor of the Philippine National Bank as security for its account amounting to
₱5,187,000.00, and the Central Bank of the Philippines as security for advances amounting
to ₱22,185,193.74.4 Nevertheless, XEI continued selling the residential lots in the subdivision
as agent of OBM.5
Sometime in 1972, then XEI president Emerito Ramos, Jr. contracted the services of Engr.
Carlos Manalo, Jr. who was in business of drilling deep water wells and installing pumps
under the business name Hurricane Commercial, Inc. For ₱34,887.66, Manalo, Jr. installed a
water pump at Ramos’ residence at the corner of Aurora Boulevard and Katipunan Avenue,
Quezon City. Manalo, Jr. then proposed to XEI, through Ramos, to purchase a lot in the
Xavierville subdivision, and offered as part of the downpayment the ₱34,887.66 Ramos owed
him. XEI, through Ramos, agreed. In a letter dated February 8, 1972, Ramos requested
Manalo, Jr. to choose which lots he wanted to buy so that the price of the lots and the terms
of payment could be fixed and incorporated in the conditional sale. 6 Manalo, Jr. met with
Ramos and informed him that he and his wife Perla had chosen Lots 1 and 2 of Block 2 with
a total area of 1,740.3 square meters.
In a letter dated August 22, 1972 to Perla Manalo, Ramos confirmed the reservation of the
lots. He also pegged the price of the lots at ₱200.00 per square meter, or a total of
₱348,060.00, with a 20% down payment of the purchase price amounting to ₱69,612.00 less
the ₱34,887.66 owing from Ramos, payable on or before December 31, 1972; the
corresponding Contract of Conditional Sale would then be signed on or before the same date,
but if the selling operations of XEI resumed after December 31, 1972, the balance of the
downpayment would fall due then, and the spouses would sign the aforesaid contract within
five (5) days from receipt of the notice of resumption of such selling operations. It was also
stated in the letter that, in the meantime, the spouses may introduce improvements thereon
subject to the rules and regulations imposed by XEI in the subdivision. Perla Manalo
conformed to the letter agreement.7
The spouses Manalo took possession of the property on September 2, 1972, constructed a
house thereon, and installed a fence around the perimeter of the lots.
In the meantime, many of the lot buyers refused to pay their monthly installments until they
were assured that they would be issued Torrens titles over the lots they had purchased. 8 The
spouses Manalo were notified of the resumption of the selling operations of XEI. 9 However,
they did not pay the balance of the downpayment on the lots because Ramos failed to
prepare a contract of conditional sale and transmit the same to Manalo for their signature. On
August 14, 1973, Perla Manalo went to the XEI office and requested that the payment of the
amount representing the balance of the downpayment be deferred, which, however, XEI
rejected. On August 10, 1973, XEI furnished her with a statement of their account as of July
31, 1973, showing that they had a balance of ₱34,724.34 on the downpayment of the two lots
after deducting the account of Ramos, plus ₱3,819.6810 interest thereon from September 1,
1972 to July 31, 1973, and that the interests on the unpaid balance of the purchase price of
₱278,448.00 from September 1, 1972 to July 31, 1973 amounted to ₱30,629.28.11 The
spouses were informed that they were being billed for said unpaid interests.12
On January 25, 1974, the spouses Manalo received another statement of account from XEI,
inclusive of interests on the purchase price of the lots. 13 In a letter dated April 6, 1974 to XEI,
Manalo, Jr. stated they had not yet received the notice of resumption of Lei’s selling
operations, and that there had been no arrangement on the payment of interests; hence, they
should not be charged with interest on the balance of the downpayment on the property. 14
Further, they demanded that a deed of conditional sale over the two lots be transmitted to
them for their signatures. However, XEI ignored the demands. Consequently, the spouses
refused to pay the balance of the downpayment of the purchase price. 15
Sometime in June 1976, Manalo, Jr. constructed a business sign in the sidewalk near his
house. In a letter dated June 17, 1976, XEI informed Manalo, Jr. that business signs were not
allowed along the sidewalk. It demanded that he remove the same, on the ground, among
others, that the sidewalk was not part of the land which he had purchased on installment
basis from XEI.16 Manalo, Jr. did not respond. XEI reiterated its demand on September 15,
1977.17
Subsequently, XEI turned over its selling operations to OBM, including the receivables for lots
already contracted and those yet to be sold.18 On December 8, 1977, OBM warned Manalo,
Jr., that "putting up of a business sign is specifically prohibited by their contract of conditional
sale" and that his failure to comply with its demand would impel it to avail of the remedies as
provided in their contract of conditional sale.19
Meanwhile, on December 5, 1979, the Register of Deeds issued Transfer Certificate of Title
(TCT) No. T-265822 over Lot 1, Block 2, and TCT No. T-265823 over Lot 2, Block 2, in favor
of the OBM.20 The lien in favor of the Central Bank of the Philippines was annotated at the
dorsal portion of said title, which was later cancelled on August 4, 1980. 21
Subsequently, the Commercial Bank of Manila (CBM) acquired the Xavierville Estate from
OBM. CBM wrote Edilberto Ng, the president of Xavierville Homeowners Association that, as
of January 31, 1983, Manalo, Jr. was one of the lot buyers in the subdivision. 22 CBM
reiterated in its letter to Ng that, as of January 24, 1984, Manalo was a homeowner in the
subdivision.23
In a letter dated August 5, 1986, the CBM requested Perla Manalo to stop any on-going
construction on the property since it (CBM) was the owner of the lot and she had no
permission for such construction.24 She agreed to have a conference meeting with CBM
officers where she informed them that her husband had a contract with OBM, through XEI, to
purchase the property. When asked to prove her claim, she promised to send the documents
to CBM. However, she failed to do so.25 On September 5, 1986, CBM reiterated its demand
that it be furnished with the documents promised,26 but Perla Manalo did not respond.
On July 27, 1987, CBM filed a complaint27 for unlawful detainer against the spouses with the
Metropolitan Trial Court of Quezon City. The case was docketed as Civil Case No. 51618.
CBM claimed that the spouses had been unlawfully occupying the property without its
consent and that despite its demands, they refused to vacate the property. The latter alleged
that they, as vendors, and XEI, as vendee, had a contract of sale over the lots which had not
yet been rescinded.28
While the case was pending, the spouses Manalo wrote CBM to offer an amicable
settlement, promising to abide by the purchase price of the property (₱313,172.34), per
agreement with XEI, through Ramos. However, on July 28, 1988, CBM wrote the spouses,
through counsel, proposing that the price of ₱1,500.00 per square meter of the property was
a reasonable starting point for negotiation of the settlement.29 The spouses rejected the
counter proposal,30 emphasizing that they would abide by their original agreement with XEI.
CBM moved to withdraw its complaint31 because of the issues raised.32
In the meantime, the CBM was renamed the Boston Bank of the Philippines. After CBM filed
its complaint against the spouses Manalo, the latter filed a complaint for specific performance
and damages against the bank before the Regional Trial Court (RTC) of Quezon City on
October 31, 1989.
The plaintiffs alleged therein that they had always been ready, able and willing to pay the
installments on the lots sold to them by the defendant’s remote predecessor-in-interest, as
might be or stipulated in the contract of sale, but no contract was forthcoming; they
constructed their house worth ₱2,000,000.00 on the property in good faith; Manalo, Jr.,
informed the defendant, through its counsel, on October 15, 1988 that he would abide by the
terms and conditions of his original agreement with the defendant’s predecessor-in-interest;
during the hearing of the ejectment case on October 16, 1988, they offered to pay
₱313,172.34 representing the balance on the purchase price of said lots; such tender of
payment was rejected, so that the subject lots could be sold at considerably higher prices to
third parties.
Plaintiffs further alleged that upon payment of the ₱313,172.34, they were entitled to the
execution and delivery of a Deed of Absolute Sale covering the subject lots, sufficient in form
and substance to transfer title thereto free and clear of any and all liens and encumbrances of
whatever kind and nature.33 The plaintiffs prayed that, after due hearing, judgment be
rendered in their favor, to wit:
WHEREFORE, it is respectfully prayed that after due hearing:
(a) The defendant should be ordered to execute and deliver a Deed of Absolute Sale
over subject lots in favor of the plaintiffs after payment of the sum of ₱313,172.34,
sufficient in form and substance to transfer to them titles thereto free and clear of any
and all liens and encumbrances of whatever kind or nature;
(b) The defendant should be held liable for moral and exemplary damages in the
amounts of ₱300,000.00 and ₱30,000.00, respectively, for not promptly executing
and delivering to plaintiff the necessary Contract of Sale, notwithstanding repeated
demands therefor and for having been constrained to engage the services of
undersigned counsel for which they agreed to pay attorney’s fees in the sum of
₱50,000.00 to enforce their rights in the premises and appearance fee of ₱500.00;
(c) And for such other and further relief as may be just and equitable in the
premises.34
In its Answer to the complaint, the defendant interposed the following affirmative defenses:
(a) plaintiffs had no cause of action against it because the August 22, 1972 letter agreement
between XEI and the plaintiffs was not binding on it; and (b) "it had no record of any contract
to sell executed by it or its predecessor, or of any statement of accounts from its
predecessors, or records of payments of the plaintiffs or of any documents which entitled
them to the possession of the lots."35 The defendant, likewise, interposed counterclaims for
damages and attorney’s fees and prayed for the eviction of the plaintiffs from the property. 36
Meanwhile, in a letter dated January 25, 1993, plaintiffs, through counsel, proposed an
amicable settlement of the case by paying ₱942,648.70, representing the balance of the
purchase price of the two lots based on the current market value. 37 However, the defendant
rejected the same and insisted that for the smaller lot, they pay ₱4,500,000.00, the current
market value of the property.38 The defendant insisted that it owned the property since there
was no contract or agreement between it and the plaintiffs’ relative thereto.
During the trial, the plaintiffs adduced in evidence the separate Contracts of Conditional Sale
executed between XEI and Alberto Soller;39 Alfredo Aguila,40 and Dra. Elena Santos-Roque41
to prove that XEI continued selling residential lots in the subdivision as agent of OBM after
the latter had acquired the said lots.
For its part, defendant presented in evidence the letter dated August 22, 1972, where XEI
proposed to sell the two lots subject to two suspensive conditions: the payment of the
balance of the downpayment of the property, and the execution of the corresponding contract
of conditional sale. Since plaintiffs failed to pay, OBM consequently refused to execute the
corresponding contract of conditional sale and forfeited the ₱34,877.66 downpayment for the
two lots, but did not notify them of said forfeiture.42 It alleged that OBM considered the lots
unsold because the titles thereto bore no annotation that they had been sold under a contract
of conditional sale, and the plaintiffs were not notified of XEI’s resumption of its selling
operations.
On May 2, 1994, the RTC rendered judgment in favor of the plaintiffs and against the
defendant. The fallo of the decision reads:
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the
defendant –
(a) Ordering the latter to execute and deliver a Deed of Absolute Sale over Lot 1 and
2, Block 2 of the Xavierville Estate Subdivision after payment of the sum of
₱942,978.70 sufficient in form and substance to transfer to them titles thereto free
from any and all liens and encumbrances of whatever kind and nature.
(b) Ordering the defendant to pay moral and exemplary damages in the amount of
₱150,000.00; and
(c) To pay attorney’s fees in the sum of ₱50,000.00 and to pay the costs.
SO ORDERED.43
The trial court ruled that under the August 22, 1972 letter agreement of XEI and the plaintiffs,
the parties had a "complete contract to sell" over the lots, and that they had already partially
consummated the same. It declared that the failure of the defendant to notify the plaintiffs of
the resumption of its selling operations and to execute a deed of conditional sale did not
prevent the defendant’s obligation to convey titles to the lots from acquiring binding effect.
Consequently, the plaintiffs had a cause of action to compel the defendant to execute a deed
of sale over the lots in their favor.
Boston Bank appealed the decision to the CA, alleging that the lower court erred in (a) not
concluding that the letter of XEI to the spouses Manalo, was at most a mere contract to sell
subject to suspensive conditions, i.e., the payment of the balance of the downpayment on the
property and the execution of a deed of conditional sale (which were not complied with); and
(b) in awarding moral and exemplary damages to the spouses Manalo despite the absence of
testimony providing facts to justify such awards.44
On September 30, 2002, the CA rendered a decision affirming that of the RTC with
modification. The fallo reads:
WHEREFORE, the appealed decision is AFFIRMED with MODIFICATIONS that (a) the figure
"₱942,978.70" appearing [in] par. (a) of the dispositive portion thereof is changed to
"₱313,172.34 plus interest thereon at the rate of 12% per annum from September 1, 1972
until fully paid" and (b) the award of moral and exemplary damages and attorney’s fees in
favor of plaintiffs-appellees is DELETED.
SO ORDERED.45
The appellate court sustained the ruling of the RTC that the appellant and the appellees had
executed a Contract to Sell over the two lots but declared that the balance of the purchase
price of the property amounting to ₱278,448.00 was payable in fixed amounts, inclusive of
pre-computed interests, from delivery of the possession of the property to the appellees on a
monthly basis for 120 months, based on the deeds of conditional sale executed by XEI in
favor of other lot buyers.46 The CA also declared that, while XEI must have resumed its
selling operations before the end of 1972 and the downpayment on the property remained
unpaid as of December 31, 1972, absent a written notice of cancellation of the contract to sell
from the bank or notarial demand therefor as required by Republic Act No. 6552, the spouses
had, at the very least, a 60-day grace period from January 1, 1973 within which to pay the
same.
Boston Bank filed a motion for the reconsideration of the decision alleging that there was no
perfected contract to sell the two lots, as there was no agreement between XEI and the
respondents on the manner of payment as well as the other terms and conditions of the sale.
It further averred that its claim for recovery of possession of the aforesaid lots in its
Memorandum dated February 28, 1994 filed before the trial court constituted a judicial
demand for rescission that satisfied the requirements of the New Civil Code. However, the
appellate court denied the motion.
Boston Bank, now petitioner, filed the instant petition for review on certiorari assailing the CA
rulings. It maintains that, as held by the CA, the records do not reflect any schedule of
payment of the 80% balance of the purchase price, or ₱278,448.00. Petitioner insists that
unless the parties had agreed on the manner of payment of the principal amount, including
the other terms and conditions of the contract, there would be no existing contract of sale or
contract to sell.47 Petitioner avers that the letter agreement to respondent spouses dated
August 22, 1972 merely confirmed their reservation for the purchase of Lot Nos. 1 and 2,
consisting of 1,740.3 square meters, more or less, at the price of ₱200.00 per square meter
(or ₱348,060.00), the amount of the downpayment thereon and the application of the
₱34,887.00 due from Ramos as part of such downpayment.
Petitioner asserts that there is no factual basis for the CA ruling that the terms and conditions
relating to the payment of the balance of the purchase price of the property (as agreed upon
by XEI and other lot buyers in the same subdivision) were also applicable to the contract
entered into between the petitioner and the Respondents. It insists that such a ruling is
contrary to law, as it is tantamount to compelling the parties to agree to something that was
not even discussed, thus, violating their freedom to contract. Besides, the situation of the
respondents cannot be equated with those of the other lot buyers, as, for one thing, the
respondents made a partial payment on the downpayment for the two lots even before the
execution of any contract of conditional sale.
Petitioner posits that, even on the assumption that there was a perfected contract to sell
between the parties, nevertheless, it cannot be compelled to convey the property to the
respondents because the latter failed to pay the balance of the downpayment of the property,
as well as the balance of 80% of the purchase price, thus resulting in the extinction of its
obligation to convey title to the lots to the Respondents.
Another egregious error of the CA, petitioner avers, is the application of Republic Act No.
6552. It insists that such law applies only to a perfected agreement or perfected contract to
sell, not in this case where the downpayment on the purchase price of the property was not
completely paid, and no installment payments were made by the buyers.
Petitioner also faults the CA for declaring that petitioner failed to serve a notice on the
respondents of cancellation or rescission of the contract to sell, or notarial demand therefor.
Petitioner insists that its August 5, 1986 letter requiring respondents to vacate the property
and its complaint for ejectment in Civil Case No. 51618 filed in the Metropolitan Trial Court
amounted to the requisite demand for a rescission of the contract to sell. Moreover, the action
of the respondents below was barred by laches because despite demands, they failed to pay
the balance of the purchase price of the lots (let alone the downpayment) for a considerable
number of years.
For their part, respondents assert that as long as there is a meeting of the minds of the
parties to a contract of sale as to the price, the contract is valid despite the parties’ failure to
agree on the manner of payment. In such a situation, the balance of the purchase price would
be payable on demand, conformably to Article 1169 of the New Civil Code. They insist that
the law does not require a party to agree on the manner of payment of the purchase price as
a prerequisite to a valid contract to sell. The respondents cite the ruling of this Court in
Buenaventura v. Court of Appeals48 to support their submission.
They argue that even if the manner and timeline for the payment of the balance of the
purchase price of the property is an essential requisite of a contract to sell, nevertheless, as
shown by their letter agreement of August 22, 1972 with the OBM, through XEI and the other
letters to them, an agreement was reached as to the manner of payment of the balance of the
purchase price. They point out that such letters referred to the terms of the terms of the
deeds of conditional sale executed by XEI in favor of the other lot buyers in the subdivision,
which contained uniform terms of 120 equal monthly installments (excluding the
downpayment, but inclusive of pre-computed interests). The respondents assert that XEI was
a real estate broker and knew that the contracts involving residential lots in the subdivision
contained uniform terms as to the manner and timeline of the payment of the purchase price
of said lots.
Respondents further posit that the terms and conditions to be incorporated in the
"corresponding contract of conditional sale" to be executed by the parties would be the same
as those contained in the contracts of conditional sale executed by lot buyers in the
subdivision. After all, they maintain, the contents of the corresponding contract of conditional
sale referred to in the August 22, 1972 letter agreement envisaged those contained in the
contracts of conditional sale that XEI and other lot buyers executed. Respondents cite the
ruling of this Court in Mitsui Bussan Kaisha v. Manila E.R.R. & L. Co.49
The respondents aver that the issues raised by the petitioner are factual, inappropriate in a
petition for review on certiorari under Rule 45 of the Rules of Court. They assert that
petitioner adopted a theory in litigating the case in the trial court, but changed the same on
appeal before the CA, and again in this Court. They argue that the petitioner is estopped from
adopting a new theory contrary to those it had adopted in the trial and appellate courts.
Moreover, the existence of a contract of conditional sale was admitted in the letters of XEI
and OBM. They aver that they became owners of the lots upon delivery to them by XEI.
The issues for resolution are the following: (1) whether the factual issues raised by the
petitioner are proper; (2) whether petitioner or its predecessors-in-interest, the XEI or the
OBM, as seller, and the respondents, as buyers, forged a perfect contract to sell over the
property; (3) whether petitioner is estopped from contending that no such contract was forged
by the parties; and (4) whether respondents has a cause of action against the petitioner for
specific performance.
The rule is that before this Court, only legal issues may be raised in a petition for review on
certiorari. The reason is that this Court is not a trier of facts, and is not to review and calibrate
the evidence on record. Moreover, the findings of facts of the trial court, as affirmed on
appeal by the Court of Appeals, are conclusive on this Court unless the case falls under any
of the following exceptions:
(1) when the conclusion is a finding grounded entirely on speculations, surmises and
conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible; (3)
where there is a grave abuse of discretion; (4) when the judgment is based on a
misapprehension of facts; (5) when the findings of fact are conflicting; (6) when the Court of
Appeals, in making its findings went beyond the issues of the case and the same is contrary
to the admissions of both appellant and appellee; (7) when the findings are contrary to those
of the trial court; (8) when the findings of fact are conclusions without citation of specific
evidence on which they are based; (9) when the facts set forth in the petition as well as in the
petitioners’ main and reply briefs are not disputed by the respondents; and (10) when the
findings of fact of the Court of Appeals are premised on the supposed absence of evidence
and contradicted by the evidence on record. 50
We have reviewed the records and we find that, indeed, the ruling of the appellate court
dismissing petitioner’s appeal is contrary to law and is not supported by evidence. A careful
examination of the factual backdrop of the case, as well as the antecedental proceedings
constrains us to hold that petitioner is not barred from asserting that XEI or OBM, on one
hand, and the respondents, on the other, failed to forge a perfected contract to sell the
subject lots.
It must be stressed that the Court may consider an issue not raised during the trial when
there is plain error.51 Although a factual issue was not raised in the trial court, such issue may
still be considered and resolved by the Court in the interest of substantial justice, if it finds
that to do so is necessary to arrive at a just decision,52 or when an issue is closely related to
an issue raised in the trial court and the Court of Appeals and is necessary for a just and
complete resolution of the case.53 When the trial court decides a case in favor of a party on
certain grounds, the Court may base its decision upon some other points, which the trial court
or appellate court ignored or erroneously decided in favor of a party. 54
In this case, the issue of whether XEI had agreed to allow the respondents to pay the
purchase price of the property was raised by the parties. The trial court ruled that the parties
had perfected a contract to sell, as against petitioner’s claim that no such contract existed.
However, in resolving the issue of whether the petitioner was obliged to sell the property to
the respondents, while the CA declared that XEI or OBM and the respondents failed to agree
on the schedule of payment of the balance of the purchase price of the property, it ruled that
XEI and the respondents had forged a contract to sell; hence, petitioner is entitled to ventilate
the issue before this Court.
We agree with petitioner’s contention that, for a perfected contract of sale or contract to sell
to exist in law, there must be an agreement of the parties, not only on the price of the
property sold, but also on the manner the price is to be paid by the vendee.
Under Article 1458 of the New Civil Code, in a contract of sale, whether absolute or
conditional, one of the contracting parties obliges himself to transfer the ownership of and
deliver a determinate thing, and the other to pay therefor a price certain in money or its
equivalent. A contract of sale is perfected at the moment there is a meeting of the minds
upon the thing which is the object of the contract and the price. From the averment of
perfection, the parties are bound, not only to the fulfillment of what has been expressly
stipulated, but also to all the consequences which, according to their nature, may be in
keeping with good faith, usage and law.55 On the other hand, when the contract of sale or to
sell is not perfected, it cannot, as an independent source of obligation, serve as a binding
juridical relation between the parties.56
A definite agreement as to the price is an essential element of a binding agreement to sell
personal or real property because it seriously affects the rights and obligations of the parties.
Price is an essential element in the formation of a binding and enforceable contract of sale.
The fixing of the price can never be left to the decision of one of the contracting parties. But a
price fixed by one of the contracting parties, if accepted by the other, gives rise to a perfected
sale.57
It is not enough for the parties to agree on the price of the property. The parties must also
agree on the manner of payment of the price of the property to give rise to a binding and
enforceable contract of sale or contract to sell. This is so because the agreement as to the
manner of payment goes into the price, such that a disagreement on the manner of payment
is tantamount to a failure to agree on the price.58
In a contract to sell property by installments, it is not enough that the parties agree on the
price as well as the amount of downpayment. The parties must, likewise, agree on the
manner of payment of the balance of the purchase price and on the other terms and
conditions relative to the sale. Even if the buyer makes a downpayment or portion thereof,
such payment cannot be considered as sufficient proof of the perfection of any purchase and
sale between the parties. Indeed, this Court ruled in Velasco v. Court of Appeals 59 that:
It is not difficult to glean from the aforequoted averments that the petitioners themselves
admit that they and the respondent still had to meet and agree on how and when the down-
payment and the installment payments were to be paid. Such being the situation, it cannot,
therefore, be said that a definite and firm sales agreement between the parties had been
perfected over the lot in question. Indeed, this Court has already ruled before that a definite
agreement on the manner of payment of the purchase price is an essential element in the
formation of a binding and enforceable contract of sale. The fact, therefore, that the
petitioners delivered to the respondent the sum of ₱10,000.00 as part of the downpayment
that they had to pay cannot be considered as sufficient proof of the perfection of any
purchase and sale agreement between the parties herein under article 1482 of the New Civil
Code, as the petitioners themselves admit that some essential matter – the terms of payment
– still had to be mutually covenanted.60
We agree with the contention of the petitioner that, as held by the CA, there is no showing, in
the records, of the schedule of payment of the balance of the purchase price on the property
amounting to ₱278,448.00. We have meticulously reviewed the records, including Ramos’
February 8, 1972 and August 22, 1972 letters to respondents, 61 and find that said parties
confined themselves to agreeing on the price of the property (₱348,060.00), the 20%
downpayment of the purchase price (₱69,612.00), and credited respondents for the
₱34,887.00 owing from Ramos as part of the 20% downpayment. The timeline for the
payment of the balance of the downpayment (₱34,724.34) was also agreed upon, that is, on
or before XEI resumed its selling operations, on or before December 31, 1972, or within five
(5) days from written notice of such resumption of selling operations. The parties had also
agreed to incorporate all the terms and conditions relating to the sale, inclusive of the terms
of payment of the balance of the purchase price and the other substantial terms and
conditions in the "corresponding contract of conditional sale," to be later signed by the
parties, simultaneously with respondents’ settlement of the balance of the downpayment.
The February 8, 1972 letter of XEI reads:
Mr. Carlos T. Manalo, Jr. In the meanwhile, you may introduce such improvements on the said lots as you may desire,
Hurricane Rotary Well Drilling subject to the rules and regulations of the subdivision.
Rizal Avenue Ext.,Caloocan City
If the above terms and conditions are acceptable to you, please signify your conformity by
Dear Mr. Manalo: signing on the space herein below provided.

We agree with your verbal offer to exchange the proceeds of your contract with us to form as Thank you.
a down payment for a lot in our Xavierville Estate Subdivision.
Very truly yours,
Please let us know your choice lot so that we can fix the price and terms of payment in our
conditional sale. XAVIERVILLE ESTATE, INC. CONFORME:

Sincerely yours, By:

XAVIERVILLE ESTATE, INC. (Signed) (Signed)

EMERITO B. RAMOS, JR. PERLA P. MANALO
(Signed)
EMERITO B. RAMOS, JR.
President President Buyer63

CONFORME: Based on these two letters, the determination of the terms of payment of the ₱278,448.00
had yet to be agreed upon on or before December 31, 1972, or even afterwards, when the
parties sign the corresponding contract of conditional sale.
(Signed)
CARLOS T. MANALO, JR.
Hurricane Rotary Well Drilling62 Jurisprudence is that if a material element of a contemplated contract is left for future
negotiations, the same is too indefinite to be enforceable.64 And when an essential element of
a contract is reserved for future agreement of the parties, no legal obligation arises until such
The August 22, 1972 letter agreement of XEI and the respondents reads: future agreement is concluded.65

Mrs. Perla P. Manalo So long as an essential element entering into the proposed obligation of either of the parties
1548 Rizal Avenue Extensionbr>Caloocan City remains to be determined by an agreement which they are to make, the contract is
incomplete and unenforceable.66 The reason is that such a contract is lacking in the
Dear Mrs. Manalo: necessary qualities of definiteness, certainty and mutuality.67

This is to confirm your reservation of Lot Nos. 1 and 2; Block 2 of our consolidation-
subdivision plan as amended, consisting of 1,740.3 square meters more or less, at the price
of ₱200.00 per square meter or a total price of ₱348,060.00.
It is agreed that as soon as we resume selling operations, you must pay a down payment of
20% of the purchase price of the said lots and sign the corresponding Contract of Conditional
Sale, on or before December 31, 1972, provided, however, that if we resume selling after
December 31, 1972, then you must pay the aforementioned down payment and sign the
aforesaid contract within five (5) days from your receipt of our notice of resumption of selling
operations.
There is no evidence on record to prove that XEI or OBM and the respondents had agreed,
after December 31, 1972, on the terms of payment of the balance of the purchase price of the
property and the other substantial terms and conditions relative to the sale. Indeed, the
parties are in agreement that there had been no contract of conditional sale ever executed by
XEI, OBM or petitioner, as vendor, and the respondents, as vendees. 68
The ruling of this Court in Buenaventura v. Court of Appeals has no bearing in this case
because the issue of the manner of payment of the purchase price of the property was not
raised therein.
We reject the submission of respondents that they and Ramos had intended to incorporate
the terms of payment contained in the three contracts of conditional sale executed by XEI
and other lot buyers in the "corresponding contract of conditional sale," which would later be
signed by them.69 We have meticulously reviewed the respondents’ complaint and find no
such allegation therein.70 Indeed, respondents merely alleged in their complaint that they
were bound to pay the balance of the purchase price of the property "in installments." When
respondent Manalo, Jr. testified, he was never asked, on direct examination or even on
cross-examination, whether the terms of payment of the balance of the purchase price of the
lots under the contracts of conditional sale executed by XEI and other lot buyers would form
part of the "corresponding contract of conditional sale" to be signed by them simultaneously
with the payment of the balance of the downpayment on the purchase price.
We note that, in its letter to the respondents dated June 17, 1976, or almost three years from
the execution by the parties of their August 22, 1972 letter agreement, XEI stated, in part,
that respondents had purchased the property "on installment basis."71 However, in the said
letter, XEI failed to state a specific amount for each installment, and whether such payments
were to be made monthly, semi-annually, or annually. Also, respondents, as plaintiffs below,
failed to adduce a shred of evidence to prove that they were obliged to pay the ₱278,448.00
monthly, semi-annually or annually. The allegation that the payment of the ₱278,448.00 was
to be paid in installments is, thus, vague and indefinite. Case law is that, for a contract to be
enforceable, its terms must be certain and explicit, not vague or indefinite. 72
There is no factual and legal basis for the CA ruling that, based on the terms of payment of
the balance of the purchase price of the lots under the contracts of conditional sale executed
by XEI and the other lot buyers, respondents were obliged to pay the ₱278,448.00 with pre-
computed interest of 12% per annum in 120-month installments. As gleaned from the ruling
of the appellate court, it failed to justify its use of the terms of payment under the three
"contracts of conditional sale" as basis for such ruling, to wit:
On the other hand, the records do not disclose the schedule of payment of the purchase
price, net of the downpayment. Considering, however, the Contracts of Conditional Sale
(Exhs. "N," "O" and "P") entered into by XEI with other lot buyers, it would appear that the
subdivision lots sold by XEI, under contracts to sell, were payable in 120 equal monthly
installments (exclusive of the downpayment but including pre-computed interests)
commencing on delivery of the lot to the buyer. 73
By its ruling, the CA unilaterally supplied an essential element to the letter agreement of XEI
and the Respondents. Courts should not undertake to make a contract for the parties, nor
can it enforce one, the terms of which are in doubt.74 Indeed, the Court emphasized in Chua
v. Court of Appeals75 that it is not the province of a court to alter a contract by construction or
to make a new contract for the parties; its duty is confined to the interpretation of the one
which they have made for themselves, without regard to its wisdom or folly, as the court
cannot supply material stipulations or read into contract words which it does not contain.
Respondents, as plaintiffs below, failed to allege in their complaint that the terms of payment
of the ₱278,448.00 to be incorporated in the "corresponding contract of conditional sale"
were those contained in the contracts of conditional sale executed by XEI and Soller, Aguila
and Roque.76 They likewise failed to prove such allegation in this Court.
The bare fact that other lot buyers were allowed to pay the balance of the purchase price of
lots purchased by them in 120 or 180 monthly installments does not constitute evidence that
XEI also agreed to give the respondents the same mode and timeline of payment of the
₱278,448.00.
Under Section 34, Rule 130 of the Revised Rules of Court, evidence that one did a certain
thing at one time is not admissible to prove that he did the same or similar thing at another
time, although such evidence may be received to prove habit, usage, pattern of conduct or
the intent of the parties.
Similar acts as evidence. – Evidence that one did or did not do a certain thing at one time is
not admissible to prove that he did or did not do the same or a similar thing at another time;
but it may be received to prove a specific intent or knowledge, identity, plan, system, scheme,
habit, custom or usage, and the like.
However, respondents failed to allege and prove, in the trial court, that, as a matter of
business usage, habit or pattern of conduct, XEI granted all lot buyers the right to pay the
balance of the purchase price in installments of 120 months of fixed amounts with pre-
computed interests, and that XEI and the respondents had intended to adopt such terms of
payment relative to the sale of the two lots in question. Indeed, respondents adduced in
evidence the three contracts of conditional sale executed by XEI and other lot buyers merely
to prove that XEI continued to sell lots in the subdivision as sales agent of OBM after it
acquired said lots, not to prove usage, habit or pattern of conduct on the part of XEI to require
all lot buyers in the subdivision to pay the balance of the purchase price of said lots in 120
months. It further failed to prive that the trial court admitted the said deeds 77 as part of the
testimony of respondent Manalo, Jr.78
Habit, custom, usage or pattern of conduct must be proved like any other facts. Courts must
contend with the caveat that, before they admit evidence of usage, of habit or pattern of
conduct, the offering party must establish the degree of specificity and frequency of uniform
response that ensures more than a mere tendency to act in a given manner but rather,
conduct that is semi-automatic in nature. The offering party must allege and prove specific,
repetitive conduct that might constitute evidence of habit. The examples offered in evidence
to prove habit, or pattern of evidence must be numerous enough to base on inference of
systematic conduct. Mere similarity of contracts does not present the kind of sufficiently
similar circumstances to outweigh the danger of prejudice and confusion.
In determining whether the examples are numerous enough, and sufficiently regular, the key
criteria are adequacy of sampling and uniformity of response. After all, habit means a course
of behavior of a person regularly represented in like circumstances. 79 It is only when
examples offered to establish pattern of conduct or habit are numerous enough to lose an proportion to variations in calories and ash content, and not otherwise." In this case, the
inference of systematic conduct that examples are admissible. The key criteria are adequacy parties did not fix in their letters-agreement, any method or mode of determining the terms of
of sampling and uniformity of response or ratio of reaction to situations.80 payment of the balance of the purchase price of the property amounting to ₱278,448.00.

There are cases where the course of dealings to be followed is defined by the usage of a
particular trade or market or profession. As expostulated by Justice Benjamin Cardozo of the
United States Supreme Court: "Life casts the moulds of conduct, which will someday become
fixed as law. Law preserves the moulds which have taken form and shape from life." 81 Usage
furnishes a standard for the measurement of many of the rights and acts of men. 82 It is also
well-settled that parties who contract on a subject matter concerning which known usage
prevail, incorporate such usage by implication into their agreement, if nothing is said to be
contrary.83
It bears stressing that the respondents failed and refused to pay the balance of the
downpayment and of the purchase price of the property amounting to ₱278,448.00 despite
notice to them of the resumption by XEI of its selling operations. The respondents enjoyed
possession of the property without paying a centavo. On the other hand, XEI and OBM failed
and refused to transmit a contract of conditional sale to the Respondents. The respondents
could have at least consigned the balance of the downpayment after notice of the resumption
of the selling operations of XEI and filed an action to compel XEI or OBM to transmit to them
the said contract; however, they failed to do so.

However, the respondents inexplicably failed to adduce sufficient competent evidence to
prove usage, habit or pattern of conduct of XEI to justify the use of the terms of payment in
the contracts of the other lot buyers, and thus grant respondents the right to pay the
₱278,448.00 in 120 months, presumably because of respondents’ belief that the manner of
payment of the said amount is not an essential element of a contract to sell. There is no
evidence that XEI or OBM and all the lot buyers in the subdivision, including lot buyers who
pay part of the downpayment of the property purchased by them in the form of service, had
executed contracts of conditional sale containing uniform terms and conditions. Moreover,
under the terms of the contracts of conditional sale executed by XEI and three lot buyers in
the subdivision, XEI agreed to grant 120 months within which to pay the balance of the
purchase price to two of them, but granted one 180 months to do so. 84 There is no evidence
on record that XEI granted the same right to buyers of two or more lots.
As a consequence, respondents and XEI (or OBM for that matter) failed to forge a perfected
contract to sell the two lots; hence, respondents have no cause of action for specific
performance against petitioner. Republic Act No. 6552 applies only to a perfected contract to
sell and not to a contract with no binding and enforceable effect.
IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The Decision of the Court of
Appeals in CA-G.R. CV No. 47458 is REVERSED and SET ASIDE. The Regional Trial Court
of Quezon City, Branch 98 is ordered to dismiss the complaint. Costs against the
Respondents.
SO ORDERED.

Irrefragably, under Article 1469 of the New Civil Code, the price of the property sold may be
considered certain if it be so with reference to another thing certain. It is sufficient if it can be
determined by the stipulations of the contract made by the parties thereto 85 or by reference to
an agreement incorporated in the contract of sale or contract to sell or if it is capable of being
ascertained with certainty in said contract;86 or if the contract contains express or implied
provisions by which it may be rendered certain;87 or if it provides some method or criterion by
which it can be definitely ascertained.88 As this Court held in Villaraza v. Court of Appeals,89
the price is considered certain if, by its terms, the contract furnishes a basis or measure for
ascertaining the amount agreed upon.

We have carefully reviewed the August 22, 1972 letter agreement of the parties and find no
direct or implied reference to the manner and schedule of payment of the balance of the
purchase price of the lots covered by the deeds of conditional sale executed by XEI and that
of the other lot buyers90 as basis for or mode of determination of the schedule of the payment
by the respondents of the ₱278,448.00.

The ruling of this Court in Mitsui Bussan Kaisha v. Manila Electric Railroad and Light
Company91 is not applicable in this case because the basic price fixed in the contract was
₱9.45 per long ton, but it was stipulated that the price was subject to modification "in
G.R. No. 162447 December 27, 2006 In their defense, respondents maintained that petitioners were terminated for dishonesty
amounting to serious misconduct and willful breach of trust. They presented affidavits of
ANABELLE MUAJE-TUAZON and ALMER R. ABING, petitioners, witnesses, receipts and other documents to support the charges against petitioners.
vs. Respondents posited that since petitioners occupied managerial positions, loss of trust and
WENPHIL CORPORATION, ELIZABETH P. ORBITA*, and THE COURT OF APPEALS, confidence by the employer was sufficient cause for their termination. Moreover, respondents
respondents. insisted that petitioners were afforded due process, with two required notices, and the
opportunity to defend themselves. Lastly, respondents asserted that the preventive
DECISION suspension was necessary for the protection of the company's property and possible
destruction of evidence pending investigation.
QUISUMBING, J.:
During the hearings, the Labor Arbiter disregarded the affidavits of respondents' witnesses for
being executed only after the company investigation and held that respondents' evidence
Before us is a petition for review under Rule 45 assailing the Decision 1 dated August 27, insufficiently proved the alleged cheating of the petitioners. The Labor Arbiter ruled in favor of
2003 of the Court of Appeals in CA-G.R. SP No. 75419 and its Resolution dated February 23, the petitioners as follows:
2004 denying reconsideration. The Court of Appeals reversed the National Labor Relations
Commission's finding of illegal dismissal.
WHEREFORE, judgment is hereby rendered finding the suspension and dismissal of
complainants Almer R. Abing and Annabelle M. Tuazon illegal. Respondent
The pertinent facts of the case are as follows: WENPHIL CORPORATION is hereby ordered to:

Petitioners Annabelle M. Tuazon and Almer R. Abing worked as branch managers of the 1. immediately reinstate complainants to their former or equivalent position,
Wendy's food chains in MCU Caloocan and Meycauayan, respectively, of respondent actual or in payroll at, their option, without loss of seniority rights and
Wenphil Corporation. From September 14 to November 8, 1998, Wendy's had a "Biggie Size benefits.
It! Crew Challenge" promotion contest. The branch with the highest sales of "Biggie Size It"
wins. The Meycauayan and MCU Caloocan branches won first and second places,
2. to pay them backwages from the time they were illegally dismissed on 03
respectively. Because of its success, respondent had a second run of the contest from April
February 2000 until their reinstatement, computed as of the date of this
26 to July 4, 1999. The Meycauayan branch won again. The MCU Caloocan branch failed to
decision, as follows:
make it among the winners.2

([P15,000] + 3,000 + 2,000 + 1,000) x 10 months = P210,000.00 for each

Before the start of the third round from October 18, 1999 to January 16, 2000, Abing was
complainant.
assigned to the SM North Edsa Annex branch while Tuazon was assigned to the
Meycauayan branch. Before the announcement of the third round winners, management
received reports that as early as the first round of the contest, the Meycauayan, MCU 3. to pay them ten (10%) percent attorney's fees.
Caloocan, Tandang Sora and Fairview branches cheated. An internal investigation ensued. 3
All other claims are dismissed for lack of merit.
On February 3, 2000, petitioners were summoned to the main office regarding the reported
anomaly. Petitioners denied there was cheating. Immediately thereafter, petitioners were SO ORDERED.5
notified, in writing, of hearings scheduled on February 4 and 7, 2000 and of their immediate
suspension.4 Thereafter, on February 29, 2000, petitioners were dismissed. Respondents appealed to the National Labor Relations Commission (NLRC), which affirmed
with modification the decision of the Labor Arbiter in this wise:
Petitioners filed, with the Regional Arbitration Branch, a complaint for illegal suspension and
dismissal against respondent Wenphil Corporation and its General Manager, Elizabeth P. WHEREFORE, the appealed Decision is hereby AFFIRMED but with the following
Orbita. Petitioners insisted that they were innocent of the accusations and were dismissed modifications:
without cause. They claimed that the real reason for their termination was their persistent
demands for overtime and holiday pay. They aver that (a) they were not notified beforehand
why they were called to the main office; (b) their right to due process was denied; and (c)
they were not afforded counsel despite their request for one.
 1. Declaring the preventive suspension of the complainants to be legal. Accordingly,
the period from February 3-28, 2000, during which they were preventively
suspended, shall be excluded in the computation of their backwages; and
2. Ordering respondent company to pay complainants separation pay, in lieu of
reinstatement, at the rate of one (1) month salary for every year of service to be
computed from the date of employment up to the actual payment thereof.
SO ORDERED.6
Denied reconsideration, respondents elevated the case to the Court of Appeals, which found
substantial proof of petitioners' misconduct. The appellate court held that although the
affidavits were executed after the company investigation, the facts and issues therein were
discussed during the investigation and submitted to the management before the decision to
dismiss the petitioners was made. It also ruled that respondent Wenphil sufficiently complied
with the due process requirement. The appellate court ruled as follows:
WHEREFORE, premises considered, the instant petition for certiorari is hereby
GRANTED. The assailed resolutions of the National Labor Relations Commission
dated January 30, 2002 and September 24, 2002 are hereby SET ASIDE. In lieu
thereof, judgment is hereby rendered REVERSING and SETTING ASIDE the
decision of the Labor Arbiter, dated December 8, 2000 rendered in NLRC NCR
Cases Nos. 30-03-00993-00 and 30-03-01020-00. The private respondents'
complaints filed in the aforementioned cases are hereby DISMISSED.
SO ORDERED.7
Petitioners moved for reconsideration but the same was denied. Petitioners now come before
us assigning the following errors:
I. THE FACTUAL BASES USED BY THE COURT OF APPEALS IN REVERSING
THE RULING OF THE NLRC IS (sic) ACTUALLY UNFOUNDED;
II. THE COURT OF APPEALS HAD DELIBERATELY OVERLOOKED THE FACT
THAT THE INTERROGATION PROCESS CONDUCTED BY THE EMPLOYER IS
VOID AB INITIO, HENCE, CANNOT BE USED AS A SUBSTITUTE FOR LAWFUL
INVESTIGATION FOR PURPOSES OF DUE PROCESS;
III. THE COURT OF APPEALS HAD WHIMSICALLY GIVE[N] TOO MUCH WEIGHT
TO THE AFFIDAVITS WHICH ASIDE FROM BEING SELF-SERVING, ARE NON-
EXISTEN[T] AT THE TIME THEY WERE USED AS A GROUND FOR THE
DISMISSAL OF THE PETITIONERS;
IV. IN REVERSING THE FACTUAL FINDINGS OF THE LABOR TRIBUNALS, THE
COURT OF APPEALS WENT TO THE EXTENT OF OVER-EXPANDING ITS
CERTIORARI JURISDICTION, IN VIOLATION OF LAW AND ESTABLISHED
JURISPRUDENCE ON THE MATTER;
V. THE LABOR ARBITER, BEING THE ONE WHO ACTUALLY CONDUCTED THE
HEARING IN THE ARBITRATION STATE AND HAD PERSONALLY OBSERVED
THE DEMEANOR OF [THE] PARTIES DURING THE HEARING, HIS FACTUAL
FINDINGS (sic) CARRY HEAVIER WEIGHT THAN THE EVALUATION OF [THE]
COURT OF APPEALS' JUSTICES WHO MERELY RELY (sic) THEIR FINDINGS
SOLELY FROM THE RECORD OF THE CASE (sic).8
Essentially, we are asked to resolve the following issues: (1) Did the appellate court act in
excess of its jurisdiction when it reviewed factual findings of the Labor Arbiter and NLRC? (2)
Was there compliance with the due process requirement? (3) Were petitioners illegally
dismissed?
On the threshold procedural issue, petitioners contend that the appellate court went beyond
its jurisdiction when it re-evaluated the findings of facts of the Labor Arbiter also affirmed by
the NLRC.
Respondents counter that the appellate court correctly exercised its power of certiorari since
the Labor Arbiter and the NLRC gravely abused their discretion when it failed to consider the
affidavits of the witnesses against the petitioners. They also point out that the present petition
raises questions of fact which are not proper in a petition for review under Rule 45.
The rule is that a petition for certiorari is available when any tribunal, board or officer
exercising judicial or quasi-judicial functions has acted without or in excess of its or his
jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction. 9
Generally, factual issues are not proper subjects for certiorari which is limited to the issue of
jurisdiction and grave abuse of discretion.10 Grave abuse of discretion is committed when the
board, tribunal or officer exercising judicial function fails to consider evidence adduced by the
parties.11 In the present case, the Labor Arbiter and the NLRC disregarded the affidavits of
the witnesses against the petitioners.
Moreover, where the party's contention appears to be clearly tenable, or where the broader
interest of justice and public policy so require, the court may, in a certiorari proceeding,
correct the error committed.12 Hence, in our view, the Court of Appeals correctly exercised its
power of certiorari when it re-evaluated the findings of fact by the Labor Arbiter and the
NLRC.
The general rule is that the jurisdiction of this Court in a petition for review under Rule 45 is
confined to a review of questions of law. Further, the findings of fact of the Court of Appeals,
when supported by substantial evidence, are conclusive and binding on the parties, and are
not reviewed by this Court, except when the findings are contrary with those of the lower
court or quasi-judicial bodies.13 The contradictory findings of the NLRC and the Court of
Appeals provide sufficient justification for our review of the facts.
On the second issue. Did Wenphil comply with the due process requirement before
dismissing the petitioners?
Petitioners aver that their right to due process was violated. They were not notified of the
accusation against them before they were summoned to the main office of Wenphil on
February 3, 2000 for investigation. Further, they assert that the company investigation was
irregular or void since they were not allowed to seek the assistance of counsel, and that they
were not present when the testimonies of the witnesses were taken, and they were not given
the opportunity to confront the witnesses against them.
There is no denying that petitioners were managerial employees. They executed
management policies, they had the power to hire personnel and assign them tasks; and
discipline the employees in their branch. They recommended actions on employees to the
head office.19 Pertinent is Article 212 (m) of the Labor Code defining a managerial employee
as one who is vested with powers or prerogatives to lay down and execute management
policies and/or hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
employees. Consequently, as managerial employees, in the case of petitioners, the mere
existence of grounds for the loss of trust and confidence justify their dismissal.20 Pursuant to
our ruling in Caoile v. National Labor Relations Commission,21 as long as the employer has a
reasonable ground to believe that the managerial employee concerned is responsible for the
purported misconduct, or the nature of his participation renders him unworthy of the trust and
confidence demanded by his position, the managerial employee can be dismissed.

First, the law requires that the employee be given two written notices before terminating his In the present case, the tape receipts presented by respondents showed that there were
anomalies committed in the branches managed by the petitioners. On the principle of
employment, namely: (1) a notice which apprises the employee of the particular acts or
respondeat superior or command responsibility alone, petitioners may be held liable for
omissions for which his dismissal is sought; and (2) the subsequent notice which informs the
negligence in the performance of their managerial duties, unless petitioners can positively
employee of the employer's decision to dismiss him.14
show that they were not involved. Their position requires a high degree of responsibility that
necessarily includes unearthing of fraudulent and irregular activities. 22 Their bare,
The records show that the petitioners were given written notices informing them that they unsubstantiated and uncorroborated denial of any participation in the cheating does not prove
were charged with serious misconduct and dishonesty in relation to the "Biggie Size It! Crew their innocence nor disprove their alleged guilt. 23 Additionally, some employees declared in
Challenge" program, and notifying them of the scheduled hearings on February 4 and 7, their affidavits24 that the cheating was actually the idea of the petitioners.
2000.15 Although notices were given to them only on February 3, 2000, it will be noted that
there were other investigations or hearings set after February 4 and 7 where they had the
opportunity to explain their side after they were apprised of their alleged infractions. We note Petitioners make much of the fact that the affidavits were executed only after the
investigation. This is of no moment. For even without the affidavits, sufficient basis exists for
likewise that petitioners, thinking that their verbal explanations were sufficient, opted to forego
respondents' loss of trust and confidence on the petitioners as managerial officers.
a written explanation, and did not appear during the set hearing. These actions were choices
that petitioners voluntarily made.
WHEREFORE, the petition is DENIED. The Decision dated August 27, 2003 and Resolution
On record are the written notices dated February 29, 2000, 16 whereby petitioners were dated February 23, 2004 of the Court of Appeals in CA-G.R. SP No. 75419 are hereby
AFFIRMED.
notified of respondents' decision to terminate them. Petitioner Tuazon acknowledged receipt
of her notice as evidenced by her signature on the company's copy. Petitioner Abing's refusal
to sign the company's copy, despite his own copy having been tendered to him, does not No pronouncement as to costs.
invalidate the notice of his termination.
SO ORDERED.
Petitioners contend that they were not given the opportunity to confront the witnesses against
them. Petitioners must be reminded, however, that confrontation of witnesses is required only
in adversarial criminal prosecutions, and not in company investigations for the administrative
liability of the employee.17 Additionally, actual adversarial proceedings become necessary
only for clarification, or when there is a need to propound searching questions to witnesses
who give vague testimonies. This is not an inherent right, and in company investigations,
summary proceedings may be conducted.18

Finally, on the last issue. Petitioners contend that respondents did not sufficiently prove the
existence of a just cause for their termination, hence they were illegally dismissed.
G.R. No. 139442
December 6, 2006
LOURDES DELA CRUZ, petitioner,
vs.
HON. COURT OF APPEALS and MELBA TAN TE, respondents.
DECISION
VELASCO, JR., J.:
For unto every one that hath shall be given, and he shall have abundance: but from
him that hath not shall be taken away even that which he hath.
—Holy Bible, Matthew 25:29
The Case
This petition for review seeks to nullify the April 30, 1999 Decision and the July 16, 1999
Resolution of the Court of Appeals in CA-G.R. SP No. 49097, which reversed the Decision of
the Manila Regional Trial Court (RTC), Branch 35, in Civil Case No. 98-89174, and reinstated
the Decision of the Manila Metropolitan Trial Court (MeTC), Branch 20, which ordered
petitioner Dela Cruz to vacate the subject lot in favor of respondent Tan Te. 1
The Facts
The Reyes family, represented by Mr. Lino Reyes, owned the lot located at No. 1332 Lacson
Street (formerly Gov. Forbes Street), Sampaloc, Manila. Petitioner Lourdes Dela Cruz was
one of their lessees, and she religiously paid rent over a portion of the lot for well over 40
years. Sometime in 1989, a fire struck the premises and destroyed, among others,
petitioner’s dwelling. After the fire, petitioner and some tenants returned to the said lot and
rebuilt their respective houses; simultaneously, the Reyes family made several verbal
demands on the remaining lessees, including petitioner, to vacate the lot but the latter did not
comply. On February 21, 1994, petitioner was served a written demand to vacate said lot but
refused to leave. Despite the setback, the Reyes family did not initiate court proceedings
against any of the lessees.
On November 26, 1996, the disputed lot was sold by the Reyeses to respondent Melba Tan
Te by virtue of the November 26, 1996 Deed of Absolute Sale. Respondent bought the lot in
question for residential purposes. Despite the sale, petitioner Dela Cruz did not give up the
lot.
On January 14, 1997, petitioner was sent a written demand to relinquish the premises which
she ignored, prompting respondent Tan Te to initiate conciliation proceedings at the
barangay level. While respondent attempted to settle the dispute by offering financial
assistance, petitioner countered by asking PhP 500,000.00 for her house. Respondent
rejected the counter offer which she considered unconscionable. As a result, a certificate to
file action was issued to Tan Te.
On September 8, 1997, respondent Tan Te filed an ejectment complaint with damages before
the Manila MeTC, entitled Melba Tan Te v. Lourdes Dela Cruz and docketed as Civil Case
No. 156730-CV. The complaint averred that: (1) the previous owners, the Reyeses were in
possession and control of the contested lot; (2) on November 26, 1996, the lot was sold to
Tan Te; (3) prior to the sale, Dela Cruz forcibly entered the property with strategy and/or
stealth; (4) the petitioner unlawfully deprived the respondent of physical possession of the
property and continues to do so; and, (5) the respondent sent several written demands to
petitioner to vacate the premises but refused to do so.
On October 24, 1997, petitioner filed her answer and alleged that: (1) the MeTC had no
jurisdiction over the case because it falls within the jurisdiction of the RTC as more than one
year had elapsed from petitioner’s forcible entry; (2) she was a rent-paying tenant protected
by PD 20;2 (3) her lease constituted a legal encumbrance upon the property; and (4) the lot
was subject of expropriation.
The Ruling of the Manila MeTC
On April 3, 1998, the MeTC decided as follows:
WHEREFORE, judgment is hereby rendered in favor of the plaintiff as follows:
1. Ordering the defendant and all persons claiming right under her to vacate the
premises situated at 1332 Lacson Street (formerly Gov. Forbes Street), Sampaloc,
Manila and peacefully return possession thereof to plaintiff;
2. Ordering the defendant to pay the plaintiff the amount of P360.00 a month from
December 1996 to November 1997; P432.00 a month from December 1997 to
November 1998, plus 20% for each subsequent year until the premises shall have
been vacated and turned over to the plaintiff;
3. Ordering the defendant to pay the plaintiff the amount of P10,000.00 as attorney’s
fees; and, the costs of the suit.
SO ORDERED.3
The Ruling of the Regional Trial Court
Unconvinced, petitioner Dela Cruz appealed the Decision of the MeTC in the Manila RTC and
the appeal was docketed as Civil Case No. 98-89174. On September 1, 1998, the RTC
rendered its judgment setting aside the April 3, 1998 Decision of the Manila MeTC and
dismissed respondent Tan Te’s Complaint on the ground that it was the RTC and not the
MeTC which had jurisdiction over the subject matter of the case. The RTC believed that since
Tan Te’s predecessor-in-interest learned of petitioner’s intrusion into the lot as early as
February 21, 1994, the ejectment suit should have been filed within the one-year prescriptive
period which expired on February 21, 1995. Since the Reyes did not file the ejectment suit
and respondent Tan Te filed the action only on September 8, 1997, then the suit had become
an accion publiciana cognizable by the RTC.
The Ruling of the Court of Appeals
Disappointed at the turn of events, respondent Tan Te appealed the adverse Decision to the
Court of Appeals (CA) which was docketed as CA-G.R. SP No. 49097. This time, the CA
rendered a Decision in favor of respondent Tan Te reversing the Manila RTC September 1,
1998 Decision and reinstated the Manila MeTC April 3, 1998 Decision.
Petitioner tried to have the CA reconsider its Decision but was rebutted in its July 16, 1999
Resolution.
Unyielding to the CA Decision and the denial of her request for reconsideration, petitioner
Dela Cruz now seeks legal remedy through the instant Petition for Review on Certiorari
before the Court.
The Issues
Petitioner Dela Cruz claims two (2) reversible errors on the part of the appellate court, to wit:
A Section 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and
THE HON. COURT OF APPEALS, WITH DUE RESPECT, WENT BEYOND THE
ISSUES OF THE CASE AND CONTRARY TO THOSE OF THE TRIAL COURT.
B
THE HON. COURT OF APPEALS, WITH DUE RESPECT, ERRED IN REVERSING
THE DECISION OF THE RTC AND IN EFFECT, REINSTATING THE DECISION OF
THE [MeTC] WHICH IS CONTRADICTED BY THE EVIDENCE ON RECORD.4
The Court’s Ruling
Discussion on Rule 45
Before we dwell on the principal issues, a few procedural matters must first be resolved.
Petitioner Dela Cruz asks the Court to review the findings of facts of the CA, a course of
action proscribed by Section 1, Rule 45. Firm is the rule that findings of fact of the CA are
final and conclusive and cannot be reviewed on appeal to this Court provided they are
supported by evidence on record or substantial evidence. Fortunately for petitioner, we will be
liberal with her petition considering that the CA’s factual findings contradict those of the RTC,
and there was an asseveration that the court a quo went beyond the issues of the case.
Indeed, these grounds were considered exceptions to the factual issue bar rule.
Secondly, the petition unnecessarily impleaded the CA in violation of Section 4, Rule 45. We
will let this breach pass only because there is a need to entertain the petition due to the
conflicting rulings between the lower courts; however, a repetition may result to sanctions.
The actual threshold issue is which court, the Manila RTC or the Manila MeTC, has
jurisdiction over the Tan Te ejectment suit. Once the jurisdictional issue is settled, the heart of
the dispute is whether or not respondent is entitled to the ejectment of petitioner Dela Cruz
from the premises.
However, the petition is bereft of merit.
On the Issue of Jurisdiction
Jurisdiction is the power or capacity given by the law to a court or tribunal to entertain, hear
and determine certain controversies.5 Jurisdiction over the subject matter is conferred by law.
Section 33 of Chapter III -- on Metropolitan Trial Courts, Municipal Trial Courts, and Municipal
Circuit Trial Courts of B. P. No. 1296 provides:
Municipal Circuit Trial Courts in civil cases.—Metropolitan Trial Courts, Municipal
Trial Courts, and Municipal Circuit Trial Courts shall exercise:
xxxx
(2) Exclusive original jurisdiction over cases of forcible entry and unlawful detainer:
Provided, That when, in such cases, the defendant raises the question of ownership
in his pleadings and the question of possession cannot be resolved without deciding
the issue of ownership, the issue of ownership shall be resolved only to determine
the issue of possession.
Thus exclusive, original jurisdiction over ejectment proceedings (accion interdictal) is lodged
with the first level courts. This is clarified in Section 1, Rule 70 of the 1997 Rules of Civil
Procedure that embraces an action for forcible entry (detentacion), where one is deprived of
physical possession of any land or building by means of force, intimidation, threat, strategy,
or stealth. In actions for forcible entry, three (3) requisites have to be met for the municipal
trial court to acquire jurisdiction. First, the plaintiffs must allege their prior physical possession
of the property. Second, they must also assert that they were deprived of possession either
by force, intimidation, threat, strategy, or stealth. Third, the action must be filed within one (1)
year from the time the owners or legal possessors learned of their deprivation of physical
possession of the land or building.
The other kind of ejectment proceeding is unlawful detainer (desahucio), where one
unlawfully withholds possession of the subject property after the expiration or termination of
the right to possess. Here, the issue of rightful possession is the one decisive; for in such
action, the defendant is the party in actual possession and the plaintiff’s cause of action is the
termination of the defendant’s right to continue in possession. 7 The essential requisites of
unlawful detainer are: (1) the fact of lease by virtue of a contract express or implied; (2) the
expiration or termination of the possessor’s right to hold possession; (3) withholding by the
lessee of the possession of the land or building after expiration or termination of the right to
possession; (4) letter of demand upon lessee to pay the rental or comply with the terms of the
lease and vacate the premises; and (5) the action must be filed within one (1) year from date
of last demand received by the defendant.
A person who wants to recover physical possession of his real property will prefer an
ejectment suit because it is governed by the Rule on Summary Procedure which allows
immediate execution of the judgment under Section 19, Rule 70 unless the defendant
perfects an appeal in the RTC and complies with the requirements to stay execution; all of
which are nevertheless beneficial to the interests of the lot owner or the holder of the right of
possession.
On the other hand, Section 19, of Chapter II of B.P. No. 129 on Regional Trial Courts
provides:
Section 19. Jurisdiction in civil cases.—Regional Trial Courts shall exercise
exclusive original jurisdiction:
xxxx
(2) In all civil actions which involve the title to, or possession of, real property, or any
interest therein, except actions for forcible entry into and unlawful detainer of lands or
buildings, original jurisdiction over which is conferred upon Metropolitan Trial Courts,
Municipal Trial Courts and Municipal Circuit Trial Courts.
Two (2) kinds of action to recover possession of real property which fall under the jurisdiction
of the RTC are: (1) the plenary action for the recovery of the real right of possession (accion
publiciana) when the dispossession has lasted for more than one year or when the action
was filed more than one (1) year from date of the last demand received by the lessee or
defendant; and (2) an action for the recovery of ownership (accion reivindicatoria) which
includes the recovery of possession.
These actions are governed by the regular rules of procedure and adjudication takes a longer
period than the summary ejectment suit.
To determine whether a complaint for recovery of possession falls under the jurisdiction of
the MeTC (first level court) or the RTC (second level court), we are compelled to go over the
allegations of the complaint. The general rule is that what determines the nature of the action
and the court that has jurisdiction over the case are the allegations in the complaint. These
cannot be made to depend upon the defenses set up in the answer or pleadings filed by the
defendant.8
This general rule however admits exceptions. In Ignacio v. CFI of Bulacan, it was held "that
while the allegations in the complaint make out a case for forcible entry, where tenancy is
averred by way of defense and is proved to be the real issue, the case should be dismissed
for lack of jurisdiction as the case should properly be filed with the then Court of Agrarian
Relations."9
The cause of action in a complaint is not what the designation of the complaint states, but
what the allegations in the body of the complaint define and describe. The designation or
caption is not controlling, more than the allegations in the complaint themselves are, for it is
not even an indispensable part of the complaint.10
Let us refer to the allegations of the complaint filed in the Manila MeTC in Civil Case No. 98-
89174, which we quote verbatim:
3. That plaintiff is the absolute and registered owner of a parcel of land located at No.
1332, Lacson Street, Sampaloc, Manila now being occupied by defendant;
4. That plaintiff purchased the above-said parcel of land together with its
improvements from the legal heirs of the late EMERLINDA DIMAYUGA REYES on
November 26, 1996, under and by virtue of a Deed of Absolute Sale x x x;
5. That pursuant to the said deed of sale, the title to the land and all its improvements
was transferred in plaintiff’s name as evidenced by Transfer Certificate of Title No.
233273 issued by the Register of Deeds of Manila on April 22, 1997 x x x;
6. That prior to said sale, the previous owners, represented by Mr. Lino Reyes,
husband of the said deceased Emerlinda D. Reyes and the administrator of her
estate, was in possession and control of the property subject of this complaint;
7. That also prior to said sale, defendant, without the knowledge and consent of Mr.
Lino Reyes, surreptitiously and by means of stealth and strategy entered, used and
occupied the said premises thus depriving the former of rightful possession thereof;
 8. That on February 21, 1994, Mr. Lino Reyes, through Atty. Alejo Sedico, his lawyer,
furnished the defendants a letter formally demanding that defendant vacate the
premises x x x;
9. That, however, defendant failed and refused to vacate despite just and legal
demand by Mr. Lino Reyes;
10. That after the sale to plaintiff of said premises, plaintiff has several times
demanded of defendants to vacate the premises, the last demand having been made
on them personally and in writing on January 14, 1997 x x x;
11. That defendant failed and refused and still fails and refuses to vacate the
premises without legal cause or justifiable reason whatsoever; 11
The answer of petitioner averred:
4. The Court has no jurisdiction over the case, having been filed by plaintiff more than
the reglementary one year period to commence forcible entry case, which is
reckoned from the date of the alleged unlawful entry of defendant by the use of
stealth and strategy into the premises;
5. For more than four decades now, defendant has been and still is a rent-paying
tenant of the subject land occupied by their residential house, dating back to the
original owner-lessor, the Dimayuga family. Her lease with no definite duration,
commenced with a rent at P60.00 per month until it was gradually increased in the
ensuing years. As of November 1996, it stood at P300.00 a month;
6. In this circumstances [sic], defendant enjoys the protective mantle of P.D. 20 and
the subsequent rental control status against dispossession. She cannot be ejected
other than for causes prescribed under B.P. Blg. 25. Further, in case of sale of the
land, she has the right of first refusal under the express provision of P.D. 1571;
7. Throughout the years of her tenancy, defendant has been updated in her rental
payment until the collector of the original owner-lessor no longer came around as she
has done theretofore;
7.1. As a result, she was compelled to file a petition for consignation of rent
before the Metropolitan Trial Court of Manila;
8. A bona fide tenant within the ambit if [sic] P.D. 20 and the subsequent rental
control status, including B.P. Blg. 25, under its terms, cannot be ousted on a plea of
expiration of her monthly lease;
9. Her lease constitutes a legal encumbrance upon the property of the lessor/owner
and binds the latter’s successor-in-interest who is under obligation to respect it;
10. The land at bench is the subject of a pending expropriation proceedings;
11. Plaintiff being a married woman cannot sue or be sued without being joined by
her husband;12
Undeniably, the aforequoted allegations of the complaint are vague and iffy in revealing the
nature of the action for ejectment.
The allegations in the complaint show that prior to the sale by Lino Reyes, representing the
estate of his wife Emerlinda Reyes, he was in possession and control of the subject lot but
were deprived of said possession when petitioner, by means of stealth and strategy, entered
and occupied the same lot. These circumstances imply that he had prior physical possession
of the subject lot and can make up a forcible entry complaint.
On the other hand, the allegation that petitioner Dela Cruz was served several demands to
leave the premises but refused to do so would seem to indicate an action for unlawful
detainer since a written demand is not necessary in an action for forcible entry. It is a fact that
the MeTC complaint was filed on September 8, 1997 within one (1) year from the date of the
last written demand upon petitioner Dela Cruz on January 14, 1997.
As previously discussed, the settled rule is jurisdiction is based on the allegations in the
initiatory pleading and the defenses in the answer are deemed irrelevant and immaterial in its
determination. However, we relax the rule and consider the complaint at bar as an exception
in view of the special and unique circumstances present. First, as in Ignacio v. CFI of
Bulacan,13 the defense of lack of jurisdiction was raised in the answer wherein there was an
admission that petitioner Dela Cruz was a lessee of the former owners of the lot, the
Reyeses, prior to the sale to respondent Tan Te. The fact that petitioner was a tenant of the
predecessors-in-interest of respondent Tan Te is material to the determination of jurisdiction.
Since this is a judicial admission against the interest of petitioner, such admission can be
considered in determining jurisdiction. Second, the ejectment suit was filed with the Manila
MeTC on September 8, 1997 or more than nine (9) years ago. To dismiss the complaint
would be a serious blow to the effective dispensation of justice as the parties will start anew
and incur additional legal expenses after having litigated for a long time. Equitable justice
dictates that allegations in the answer should be considered to aid in arriving at the real
nature of the action. Lastly, Section 6, Rule 1 of the Rules of Court clearly empowers the
Court to construe Rule 70 and other pertinent procedural issuances "in a liberal manner to
promote just, speedy, and inexpensive disposition of every action and proceeding."
Based on the complaint and the answer, it is apparent that the Tan Te ejectment complaint is
after all a complaint for unlawful detainer. It was admitted that petitioner Dela Cruz was a
lessee of the Reyeses for around four (4) decades. Thus, initially petitioner as lessee is the
legal possessor of the subject lot by virtue of a contract of lease. When fire destroyed her
house, the Reyeses considered the lease terminated; but petitioner Dela Cruz persisted in
returning to the lot and occupied it by strategy and stealth without the consent of the owners.
The Reyeses however tolerated the continued occupancy of the lot by petitioner. Thus,
when the lot was sold to respondent Tan Te, the rights of the Reyeses, with respect to the lot,
were transferred to their subrogee, respondent Tan Te, who for a time also tolerated the stay
of petitioner until she decided to eject the latter by sending several demands, the last being
the January 14, 1997 letter of demand. Since the action was filed with the MeTC on
September 8, 1997, the action was instituted well within the one (1) year period reckoned
from January 14, 1997. Hence, the nature of the complaint is one of unlawful detainer and the
Manila MeTC had jurisdiction over the complaint.
Thus, an ejectment complaint based on possession by tolerance of the owner, like the Tan
Te complaint, is a specie of unlawful detainer cases.
As early as 1913, case law introduced the concept of possession by tolerance in ejectment
cases as follows:
It is true that the landlord might, upon the failure of the tenant to pay the stipulated
rents, consider the contract broken and demand immediate possession of the rented
property, thus converting a legal possession into illegal possession. Upon the other
hand, however, the landlord might conclude to give the tenant credit for the payment
of the rents and allow him to continue indefinitely in the possession of the property. In
other words, the landlord might choose to give the tenant credit from month to month
or from year to year for the payment of their rent, relying upon his honesty of his
financial ability to pay the same. During such period the tenant would not be in illegal
possession of the property and the landlord could not maintain an action of
desahucio until after he had taken steps to convert the legal possession into illegal
possession. A mere failure to pay the rent in accordance with the contract would
justify the landlord, after the legal notice, in bringing an action of desahucio. The
landlord might, however, elect to recognize the contract as still in force and sue for
the sums due under it. It would seem to be clear that the landlord might sue for the
rents due and [unpaid, without electing to terminate the contract of tenancy;]
[w]hether he can declare the contract of tenancy broken and sue in an action
desahucio for the possession of the property and in a separate actions for the rents
due and damages, etc.14
The concept of possession by tolerance in unlawful detainer cases was further refined and
applied in pertinent cases submitted for decision by 1966. The rule was articulated as follows:
Where despite the lessee’s failure to pay rent after the first demand, the lessor did
not choose to bring an action in court but suffered the lessee to continue occupying
the land for nearly two years, after which the lessor made a second demand, the one-
year period for bringing the detainer case in the justice of the peace court should be
counted not from the day the lessee refused the first demand for payment of rent but
from the time the second demand for rents and surrender of possession was not
complied with.15
In Calubayan v. Pascual, a case usually cited in subsequent decisions on ejectment, the
concept of possession by tolerance was further elucidated as follows:
In allowing several years to pass without requiring the occupant to vacate the
premises nor filing an action to eject him, plaintiffs have acquiesced to
defendant’s possession and use of the premises. It has been held that a person
who occupies the land of another at the latter’s tolerance or permission,
without any contract between them, is necessarily bound by an implied
promise that he will vacate upon demand, failing which a summary action for
ejectment is the proper remedy against them. The status of the defendant is
analogous to that of a lessee or tenant whose term of lease has expired but whose
occupancy continued by tolerance of the owner. In such a case, the unlawful
deprivation or withholding of possession is to be counted from the date of the
demand to vacate.16 (Emphasis supplied.)
From the foregoing jurisprudence, it is unequivocal that petitioner’s possession after she
intruded into the lot after the fire—was by tolerance or leniency of the Reyeses and hence,
the action is properly an unlawful detainer case falling under the jurisdiction of the Manila
MeTC.
Even if we concede that it is the RTC and not the MeTC that has jurisdiction over the Tan Te
complaint, following the reasoning that neither respondent nor her predecessor-in-interest
filed an ejectment suit within one (1) year from February 21, 1994 when the Reyeses knew of
the unlawful entry of petitioner, and hence, the complaint is transformed into an accion
publiciana, the Court deems it fair and just to suspend its rules in order to render efficient,
effective, and expeditious justice considering the nine (9) year pendency of the ejectment
suit. More importantly, if there was uncertainty on the issue of jurisdiction that arose from the
averments of the complaint, the same cannot be attributed to respondent Tan Te but to her
counsel who could have been confused as to the actual nature of the ejectment suit. The
lawyer’s apparent imprecise language used in the preparation of the complaint without any
participation on the part of Tan Te is sufficient special or compelling reason for the grant of
relief.
The case of Barnes v. Padilla17 elucidates the rationale behind the exercise by this Court of
the power to relax, or even suspend, the application of the rules of procedure:
Let it be emphasized that the rules of procedure should be viewed as mere tools
designed to facilitate the attainment of justice. Their strict and rigid application, which
would result in technicalities that tend to frustrate rather than promote substantial
justice, must always be eschewed. Even the Rules of Court reflect this principle. The
power to suspend or even disregard rules can be so pervasive and compelling as to
alter even that which this Court itself has already declared to be final x x x.
 The emerging trend in the rulings of this Court is to afford every party litigant the
amplest opportunity for the proper and just determination of his cause, free from the
constraints of technicalities. Time and again, this Court has consistently held that
rules must not be applied rigidly so as not to override substantial justice.18
Moreover, Section 8, Rule 40 authorizes the RTC—in case of affirmance of an order of the
municipal trial court dismissing a case without trial on the merits and the ground of dismissal
is lack of jurisdiction over the subject matter—to try the case on the merits as if the case was
originally filed with it if the RTC has jurisdiction over the case. In the same vein, this Court, in
the exercise of its rule-making power, can suspend its rules with respect to this particular
case (pro hac vice), even if initially, the MeTC did not have jurisdiction over the ejectment
suit, and decide to assume jurisdiction over it in order to promptly resolve the dispute.
[a]uthorizing the Manila City Mayor to acquire either by negotiation or expropriation
certain parcels of land covered by Transfer Certificates of Title Nos. 233273, 175106
and 140471, containing an area of One Thousand Four Hundred Twenty Five (1,425)
square meters, located at Maria Clara and Governor Forbes Streets, Sta. Cruz,
Manila, for low cost housing and award to actual bonafide residents thereat and
further authorizing the City Mayor to avail for that purpose any available funds of the
city and other existing funding facilities from other government agencies x x x. 19
It readily appears that this issue was not presented before the Court of Appeals in CA-G.R.
SP No. 49097 despite the fact that the respondent’s petition was filed on September 25,
1998, six months after the ordinance was passed. Thus, this issue is proscribed as are all
issues raised for the first time before the Court are proscribed.

The issue of jurisdiction settled, we now scrutinize the main issue.
At the heart of every ejectment suit is the issue of who is entitled to physical possession of
the lot or possession de facto.
We rule in favor of respondent Tan Te for the following reasons:
Even granting for the sake of argument that we entertain the issue, we rule that the intended
expropriation of respondent’s lot (TCT No. 233273) by the city government of Manila will not
affect the resolution of this petition. For one thing, the issue can be raised by petitioner in the
appropriate legal proceeding. Secondly, the intended expropriation might not even be
implemented since it is clear from the ordinance that the City Mayor will still locate available
funds for project, meaning the said expense is not a regular item in the budget.

1. Petitioner admitted in her Answer that she was a rent-paying tenant of the Reyeses,
predecessors-in-interest of respondent Tan Te. As such, she recognized the ownership of the
lot by respondent, which includes the right of possession.
WHEREFORE, this petition is DENIED for lack of merit. The April 30, 1999 Decision of the
Court of Appeals reinstating the April 3, 1998 MeTC Decision in Civil Case No. 156730-CV
and the July 16, 1999 Resolution in CA-G.R. SP No. 49097 are hereby AFFIRMED IN TOTO.

No costs. SO ORDERED.
2. After the fire raged over the structures on the subject lot in late 1989 the contracts of lease
expired, as a result of which Lino Reyes demanded that all occupants, including petitioner,
vacate the lot but the latter refused to abandon the premises. During the duration of the
lease, petitioner’s possession was legal but it became unlawful after the fire when the lease
contracts were deemed terminated and demands were made for the tenants to return
possession of the lot.

3. Petitioner’s possession is one by the Reyeses’ tolerance and generosity and later by
respondent Tan Te’s.

Petitioner fully knows that her stay in the subject lot is at the leniency and magnanimity of Mr.
Lino Reyes and later of respondent Tan Te; and her acquiescence to such use of the lot
carries with it an implicit and assumed commitment that she would leave the premises the
moment it is needed by the owner. When respondent Tan Te made a last, written demand on
January 14, 1997 and petitioner breached her promise to leave upon demand, she lost her
right to the physical possession of the lot. Thus, respondent Tan Te should now be allowed to
occupy her lot for residential purposes, a dream that will finally be realized after nine (9)
years of litigation.

Petitioner raises the ancillary issue that on March 15, 1998, the Manila City Council passed
and approved Ordinance No. 7951:
G.R. No. 154101 March 10, 2006
EJR CRAFTS CORPORATION, Petitioner,
vs.
HON. COURT OF APPEALS
CHICO-NAZARIO, J.:
Before Us is a Petition for Review on Certiorari under Rule 45 of the Rules of Civil Procedure
assailing the Decision2 of the Court of Appeals which dismissed the special civil action for
certiorari filed by petitioner seeking to annul the Resolutions 3 of the Undersecretary of Labor
affirming the Order4 of the Regional Director, National Capital Region (NCR), which found
petitioner liable to private respondents in the amount of P1,382,332.80 for underpayment of
wages, regular holiday pay, overtime pay, nonpayment of 13th month pay and service
incentive leave pay.
Sometime in 1997, private respondents filed a complaint for underpayment of wages, regular
holiday pay, overtime pay, nonpayment of 13th month pay and service incentive leave pay
against petitioner before the Regional Office, NCR of the Department of Labor and
Employment (DOLE). Acting on the complaint, Regional Director Bartolome Amoguis issued
an inspection authority to Senior Labor Enforcement Officer Napoleon Santos.
On 22 August 1997, an inspection was conducted on the premises of petitioner’s offices
wherein the following violations of labor standards law were discovered, to wit:
nonpresentation of employment records (payrolls and daily time records); underpayment of
wages, regular holiday pay, and overtime pay; and nonpayment of 13th month pay and
service incentive leave pay. On the same day, the Notice of Inspection Result was received
by and explained to the manager of petitioner corporation Mr. Jae Kwan Lee, with the
corresponding directive that necessary restitution be effected within five days from said
receipt.
As no restitution was made, the Regional Office thereafter conducted summary
investigations. However, despite due notice, petitioner failed to appear for two consecutive
scheduled hearings. Furthermore, petitioner failed to question the findings of the Labor
Inspector received by and explained to the corporation’s manager.
Thus, on 6 November 1997, Regional Director Amoguis issued the assailed Order, the
decretal portion of which reads:
WHEREFORE, premises considered, respondents EJR CRAFTS CORPORATION and/or
MR. SASIGWANI DAVE and MR. JAE KUAN LEE is hereby ordered to pay JEAN ARO, ET
AL., the total amount of ONE MILLION THREE HUNDRED EIGHTY-TWO THOUSAND
THREE HUNDRED THIRTY-TWO PESOS and 80/100 (P1,382,332.80) corresponding to
their claims within ten (10) days from receipt hereof, otherwise, a WRIT OF EXECUTION
shall be issued.5
Petitioner then filed a Motion for Reconsideration of said Order on 21 November 1997
arguing that the Regional Director has no jurisdiction over the case as private respondents
were allegedly no longer connected with petitioner corporation at the time of the filing of the
complaint and when the inspection was conducted, and that private respondents’ claims are
within the exclusive and original jurisdiction of the Labor Arbiters. Petitioner further contends
that it was never served with the notices of the hearings nor was it notified of the inspection
results, thus denying it of due process.
In the 14 May 1998 Order of the Labor Secretary Cresenciano B. Trajano, petitioner’s Motion
for Reconsideration was treated as an appeal and petitioner was directed to file an appeal
bond equivalent to the amount adjudged in the assailed Order within 10 calendar days from
receipt of the order; otherwise, the appeal will be dismissed for not having been perfected.
On 3 June 1998, petitioner filed a supplemental motion for reconsideration and a motion for
reduction of bond. Thereafter, petitioner filed a manifestation and motion praying that the
surety bond in the amount of P100,000.00 be approved as compliance with the order of
Secretary Trajano. In an order dated 10 July 1998, Undersecretary Jose M. Español, Jr.
denied the motion for reduction of bond for lack of merit, and petitioner was ordered to post a
cash or surety bond in the amount of P1,382,332.80, which petitioner complied with on 31
July 1998 by filing a surety bond in the amount ordered.
On 24 November 1998, Undersecretary Español issued the assailed Resolution affirming the
Order of the Regional Director with modification that Mr. Dave Sasigwani and Mr. Jae Kwan
Lee are not personally liable. The Motion for Reconsideration filed by petitioner was
subsequently denied for lack of merit.
Upon receipt of the Resolution denying its motion for reconsideration, petitioner filed a
Petition for Certiorari under Rule 65 of the Rules of Court before the Court of Appeals. Said
petition was thereafter dismissed in the Decision dated 20 July 2001. According to the
appellate court:
The pivotal issue in this case is whether the Regional Director has jurisdiction over the claims
of herein private respondents.
We find in favor of the private respondents.
It is admitted that for the Regional Director to exercise the power to order compliance, or the
so-called "enforcement power" under Article 128(b) of P.D. No. 442 as amended, it is
necessary that the employer-employee relationship still exists.
In support of its contention that it is the Labor Arbiter and not the Regional Director who has
jurisdiction over the claims of herein private respondents, petitioner contends that at the time
the complaint was filed, the private respondents were no longer its employees. However,
aside from photocopies of documents entitled "Release and Quitclaim," no other evidence
was adduced by the petitioner to substantiate this claim. These documents, being mere
photocopies are unreliable and incompetent without the original and deserves little credence
or weight.
Moreover, when compared to other documents in the records of this case, the entries in said
"Release and Quitclaim" raise serious doubts as to the authenticity and veracity of such
photocopies. Upon perusal of such "Release and Quitclaim", We find that the entries therein
do not correspond with the declarations of the private respondents in the
Questionnaires/Affidavits which they filled up and submitted to the DOLE.
xxxx
As is well-settled, if doubts exist between the evidence presented by the employer and the
employee, the scales of justice must be tilted in favor of the employee. Since it is a time-
honored rule that in controversies between a laborer and his master, doubts reasonably
arising from the evidence, or in the interpretation of agreements and writings should be
resolved in the former’s favor (Prangan vs. NLRC, 289 SCRA 142).
xxxx
Left with no other evidence of its allegation, petitioner’s denial becomes a negative and self-
serving evidence which has no weight in law. Accordingly, the allegation of lack of jurisdiction
necessarily fails.
xxxx
Petitioner’s allegation that it was denied due process is not well taken.
A perusal of the records, particularly the Notice of Inspection Result, reveals that petitioner,
through its manager Mr. Jae Kwan Lee, was served a copy of the result of the inspection and
that the same was explained to him. The said notice of inspection result advised petitioner to
submit within five (5) working days to the Regional Office its questions or objections to the
findings of the Labor Enforcement Officer, otherwise an order of compliance shall be issued.
However, instead of submitting its objections or question such findings, petitioner chose to
remain silent even after it was notified of the hearings to be conducted on said case. It is only
after an order was issued by the Regional Director directing the petitioner to pay a substantial
amount that it began to assert its right. Clearly, there was no denial of due process.
Furthermore, petitioner was given another chance to present its case when it filed a motion
for reconsideration which the DOLE considered an appeal.
Finally, the Undersecretary of Labor correctly affirmed the Order of the Regional Director
since the assailed Order was not without basis.
Said order of Regional Director Amoguis was based on the uncontested result of the
inspection, on the Questionnaires/Affidavits of the private respondents, and on the applicable
provision of the Labor Code. Moreover, petitioner failed to prove its case during the appeal
since it did not adduce evidence sufficient to warrant reversal of the assailed Order of
Regional Director.
Accordingly, We find the assailed resolutions to be in harmony with the evidence on record
and existing law and jurisprudence.
WHEREFORE, based on the foregoing premises, the instant petition is hereby DISMISSED. 6
Petitioner’s Motion for Reconsideration was subsequently denied in a Resolution dated 28
June 2002.
Hence, the instant petition seeking the resolution of the following issues:
I. Whether or not public respondent Regional Director has jurisdiction over the case;
II. Whether or not public respondents had committed grave abuse of discretion in
dismissing the appeal and/or motion for reconsideration and the subsequent petition
for certiorari of the petitioner;
III. Whether or not the public respondents had denied to the petitioner its right to due
process of law;
IV. Whether or not, in the possibility that public respondent Regional Director has
jurisdiction over the case, his decision was a faithful application of the law and correct
appreciation of the evidence on record.
Petitioner maintains that the Regional Director has no jurisdiction over the instant case since
private respondents have ceased to be connected with the petitioner at the time of the filing
of the complaint as well as when the inspection/investigation was conducted by the Labor
Enforcement Officer. According to petitioner, this fact is supported by the Quitclaim and
Release forms submitted by petitioner and attached as annexes to the petition for certiorari
filed before the Court of Appeals, as it is clearly stated therein that private respondents had
already finished their contract with petitioner. Thus, petitioner contends that there being no
employer-employee relationship between private respondents and petitioner, the claims of
the private respondents for payment of monetary benefits fall within the exclusive and original
jurisdiction of the Labor Arbiter.
It is further argued by petitioner that it was denied due process as it was not given an
opportunity to prove before the Regional Director that private respondents had already
severed their employment with the corporation and had been paid the claimed monetary
benefits because they were never notified of the inspection results nor of the hearings
conducted.
At this juncture, it would be wise to stress that the arguments espoused by petitioner in
support of its position are anchored on alleged facts the contrary of which have been found
by the Regional Director, the Undersecretary of Labor, and the Court of Appeals. In essence,
petitioner implores this Court to ascertain and evaluate certain material facts which, however,
are not within the province of the Court to consider in petitions for review, especially since
said facts have already been determined by the administrative agency involved and such
findings thereafter affirmed by the appellate court.
As a rule, findings of fact by administrative agencies are accorded great respect, if not finality
by the courts. As stated in the case of Villaflor v. Court of Appeals 7:
The findings of fact of an administrative agency must be respected as long as they are
supported by substantial evidence, even if such evidence might not be overwhelming or even
preponderant. It is not the task of an appellate court to weigh once more the evidence
submitted before the administrative body and to substitute its own judgment for that of the
administrative agency in respect of sufficiency of evidence.
Furthermore, as a general rule, findings of fact of the Court of Appeals are final and
conclusive and cannot be reviewed on appeal by the Supreme Court, provided they are
borne out by the record or based on substantial evidence. 8 It is not the function of this Court
to analyze or weigh evidence all over again, unless there is a showing that the findings of the
lower court are totally devoid of support or are glaringly erroneous as to constitute palpable
error or grave abuse of discretion.9
Therefore, this Court not being a trier of facts cannot pass upon the authenticity and veracity
of the quitclaim and release forms – the only piece of evidence presented by petitioner to
support its contention that no employer-employee relationship exists between petitioner and
private respondents at the time of the filing of the complaint. The said quitclaim and release
forms had already been considered by both the Undersecretary of Labor and the Court of
Appeals and found to be "unreliable and do not correspond to other documents on record
which would prove that private respondents were working for the petitioner up to August
1997."10 The conclusion reached by both the Undersecretary of Labor and the Court of
Appeals, after thoroughly considering all pieces of evidence presented before them regarding
this issue, must now be regarded with great respect and finality by this Court.
While it is true that there are instances when this Court may resolve factual issues, such as:
1) when the findings are grounded entirely on speculation, surmises, or conjectures; 2) when
the inference made is manifestly mistaken, absurd or impossible; 3) when there is grave
abuse of discretion; 4) when the judgment is based on a misapprehension of facts; 5) when
the findings of facts are conflicting; 6) when in making its findings, the Court of Appeals went
beyond the issues of the case, or its findings are contrary to the admissions of both the
appellant and the appellee; 7) when the findings are contrary to the trial court; 8) when the
findings are conclusions without citation of specific evidence on which they are based; 9)
when the facts set forth in the petition as well as in the petitioner’s main and reply briefs are
not disputed by the respondent; 10) when the findings of fact are premised on the supposed
absence of evidence and contradicted by the evidence on record; or 11) when the Court of
Appeals manifestly overlooked certain relevant facts not disputed by the parties, which, if properly
considered, would justify a different conclusion;11 however, none of these exceptions are
applicable in the instant case.
Considering thus that there still exists an employer-employee relationship between petitioner and
private respondents and that the case involves violations of labor standard provisions of the Labor
Code, we agree with the Undersecretary of Labor and the appellate court that the Regional
Director has jurisdiction to hear and decide the instant case in conformity with Article 128(b) of the
Labor Code which states:
Art. 128. Visitorial and Enforcement Power. –
(b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in
cases where the relationship of employer-employee still exists, the Secretary of Labor and
Employment or his duly authorized representatives shall have the power to issue compliance
orders to give effect to the labor standards provisions of this Code and other labor legislation
based on the findings of labor employment and enforcement officers or industrial safety engineers
made in the course of inspection. The Secretary or his duly authorized representatives shall issue
writs of execution to the appropriate authority for the enforcement of their orders, except in cases
where the employer contests the findings of the labor employment and enforcement officer and
raises issues supported by documentary proofs which were not considered in the course of
inspection.12
With respect to petitioner’s claim that it had been denied due process as it was not served a copy
of the inspection report and neither was it notified of the hearings, thus refusing it the opportunity
to contest the findings of the Labor Enforcement Officer and the jurisdiction of the Regional
Director, We cannot but agree with both the Undersecretary of Labor and the Court of Appeals
that such assertion is bereft of merit. A perusal of the records will reveal that petitioner
corporation’s manager Mr. Jae Kwan Lee was served a copy of the Inspection Report and that the
same was explained to him on the same day that the said inspection was conducted. As correctly
pointed out by the Undersecretary of Labor, by affixing his signature thereon, Mr. Jae Kwan Lee
acknowledged receipt of the same and that he has understood its contents. Nevertheless,
petitioner failed to object to the findings of the Labor Enforcement Officer. Moreover, petitioner
was again given an opportunity to contest such findings when it was summoned by the Office of
Chief Labor Enforcement Division to attend the summary investigation on 8 and 22 September
1997, but petitioner failed to attend. It was only after the Regional Director issued an order
adjudging petitioner liable to pay private respondents the amount of P1,382,332.80 that it
commenced to question the jurisdiction of the Regional Director over the complaints of private
respondents. Evidently, petitioner was never denied its right to due process, but rather it chose not
to participate in the proceedings until an order unfavorable to its interests was issued.
WHEREFORE, premises considered, the petition for review is hereby DENIED. The Decision of
the Court of Appeals in CA-G.R. SP No. 53791 is hereby AFFIRMED. With Costs.SO ORDERED.
G.R. No. 148267. August 8, 2002
ARMANDO C. CARPIO, petitioner, vs. SULU RESOURCES DEVELOPMENT
CORPORATION, respondent.
DECISION
PANGANIBAN, J.:
Decisions and final orders of the Mines Adjudication Board (MAB) are appealable to the
Court of Appeals under Rule 43 of the 1997 Rules of Court. Although not expressly included
in the Rule, the MAB is unquestionably a quasi-judicial agency and stands in the same
category as those enumerated in its provisions.
The Case
Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court,
challenging the August 31, 2000 Decisioni[1] and May 3, 2001 Resolutionii[2] of the Court of
Appeals (CA) in CA-GR SP No. 46830. The Assailed Decision disposed as follows:
WHEREFORE, premises considered, the petition for review is hereby DENIED.iii[3]
Reconsideration was denied in the assailed Resolution.
The Facts
In the challenged Decision, the CA summarized the facts of this case as follows:
This case originated from a petition filed by respondent [Sulu Resources Development
Corporation] for Mines Production Sharing Agreement (MPSA) No. MPSA-IV-131, covering
certain areas in Antipolo, Rizal. Petitioner [Armando C. Carpio] filed an opposition/adverse
claim thereto, alleging, inter alia, that his landholdings in Cupang and Antipolo, Rizal will be
covered by respondents claim, thus he enjoys a preferential right to explore and extract the
quarry resources on his properties.
After due proceedings were held, the Panel of Arbitrators of the Mines and Geo-Sciences
Bureau of the DENR rendered a Resolution dated September 26, 1996, upholding petitioners
opposition/adverse claim. This dispositive portion of said Resolution reads:
x x x. WHEREFORE, the opposition/adverse claims of ARMANDO C. CARPIO is hereby
UPHELD. Accordingly, the properties of CARPIO are ordered excluded from the area of
PMPSA-IV-131 of SULU RESOURCES DEVELOPMENT CORPORATION, and the area not
covered by the adverse claim as subject to mining locations in accordance with existing laws,
rules and regulations.
SO ORDERED.
Respondent appealed the foregoing Resolution to the Mines Adjudication Board. Meanwhile,
petitioner filed a motion to dismiss appeal on the ground of respondents failure to comply with
the requirements of the New Mining Acts Implementing Rules and Regulations.
On June 20, 1997, the Mines Adjudication Board rendered the assailed Order dismissing
petitioners opposition/adverse claim. The dispositive portion of the assailed Order provides:
WHEREFORE, in view of the foregoing premises, this Resolution of the Panel of Arbitrators
of Region IV dated September 26, 1996, is hereby SET ASIDE and the adverse
claim/opposition of CARPIO DISMISSED. Accordingly, the PMSPA of SULU should be given
due process and evaluated subject to the pertinent provisions of RA 7942 and DAO 96-40.
SO ORDERED.
Petitioner filed a motion for reconsideration of said Order which was denied by the Board per
Order dated November 24, 1997, the decretal portion of which provides:
WHEREFORE, the Motion for Reconsideration is hereby DENIED for lack of merit.iv[4]
Ruling of the Court of Appeals
Citing Section 79 of Chapter XIII of the Philippine Mining Act of 1995 (RA 7942), the CA ruled
that it did not have jurisdiction to review the Decision of the Mines Adjudication Board (MAB).
The adjudication of conflicting mining claims is completely administrative in nature, as held in
Pearson v. Intermediate Appellate Court.v[5] Under RA 7942, the settlement of disputes
involving rights to mining areas, mineral agreements, and surface owners, occupants and
claimholders/concessionaires shall pertain exclusively to a Panel of Arbitrators in the regional
office of the Department of Environment and Natural Resources, whose decisions are
appealable to the Mines Adjudication Board. Under Section 79 of RA 7942, the findings of
fact by the MAB as well as its decision or order shall be final and executory.
Inasmuch as the issue raised by petitioner relates to whether an overlap or a conflict between
his properties and the area covered by the application of respondent has been proven, MABs
finding thereon was binding and conclusive, and the Boards Decision was already final and
executory.
Hence, this Petition.vi[6]
Issue
In his Memorandum, petitioner raises this sole issue for our consideration:
Whether or not appeals from the Decision or Final Orders of the Mines Adjudication Board
should be made directly to the Supreme Court as contended by the respondent and the Court
of Appeals, or such appeals be first made to the Court of Appeals as contended by herein
petitioner.vii[7]
This Courts Ruling
The Petition is meritorious.
Sole Issue:
Appellate Jurisdiction over MAB Decisions
Petitioner submits that appeals from the decisions of the MAB should be filed with the CA.
First, the Supreme Court has authority, under Section 5(5) of Article VIII of the Philippine
Constitution, to promulgate rules of procedure in all courts, including all quasi-judicial
agencies such as the MAB. Second, Section 3 of Rule 43 of the 1997 Rules of Civil
Procedure authorizes appeals to the CA from judgments or final orders of quasi-judicial
tribunals by means of petitions for review. Third, the MAB gravely abused its discretion in
deliberately, willfully and unlawfully disregarding petitioners rights to the land unduly included
in the questioned application for a Mines Productive Sharing Agreement (MPSA).
En contrario, the CA ruled and respondent agrees that the settlement of disputes involving
rights to mining areas and overlapping or conflicting claim is a purely administrative matter,
over which the MAB has appellate jurisdiction. The latters factual findings, decisions and final
orders on such matters are final and executory as provided in Section 79 of Chapter XIII of
the Philippine Mining Act of 1995 and as held in Pearson v. IAC. Since the appeal of
petitioner pertains to the factual matter of whether he was able to prove the existence of the
overlap or conflict between his claimed area and that covered by respondents application,
then the findings of the MAB should be deemed final and executory.
The CA refused to take jurisdiction over the case because, under Section 79 of the Philippine
Mining Act of 1995, petitions for review of MAB decisions are to be brought directly to the
Supreme Court. The provision reads in part:
xxx xxx xxx
A petition for review by certiorari and question of law may be filed by the aggrieved party with
the Supreme Court within thirty (30) days from receipt of the order or decision of the Board.
We hold that respondents reliance on Pearson is misplaced. The claimant therein sued in the
then Court of First Instance (CFI) to prevent the execution of a Decision rendered by the
panel of investigators of the Bureau of Mines and the Office of the President. Despite a
Motion to Dismiss filed by the mining companies, the CFI ordered the creation of a committee
to determine the correct tie-point of their claims. So, the mining companies went to the then
Intermediate Appellate Court (IAC) via a Petition for Certiorari under Rule 65. The claimants
averred that the appellate court had no jurisdiction.
Still, we can draw one lesson. Far from dismissing the case on the ground of lack of
jurisdiction, Pearson expressly held that the CA had jurisdiction over the petition for certiorari,
because Section 9 of BP Blg. 129 (The Judiciary Reorganization Act of 1980), now
incorporated in Section 4, Rule 65 of the 1997 Rules of Civil Procedure, vested the then IAC
with original jurisdiction to issue writs of certiorari and prohibition, among other auxillary writs
x x x. However, even though the Supreme Court has concurrent jurisdiction with the CA and
the Regional Trial Courts to issue a writ of mandamus, prohibition or certiorari, litigants are
well advised against taking a direct recourse to this Court without initially seeking proper relief
from the lower courts, in accordance with the hierarchy of courts.viii[8]
In Pearson, what was under review was the ruling of the CFI to take cognizance of the case
which had been earlier decided by the MAB, not the MAB Decision itself which was
promulgated by the CA under Rule 43. The present petitioner seeks a review of the latter.
Pearson held that the nature of the primary powers granted by law to the then secretary of
agriculture and natural resources as well as to the director of mines were executive or
administrative, such as granting of license, permits, lease and contracts[;] or approving,
rejecting, reinstating or canceling applications[;] or deciding conflicting applications. These
powers should be distinguished from litigants disagreements or controversies that are civil or
contractual in nature, which may be adjudicated only by the courts of justice. The findings of
fact of the MAB, which exercises appellate jurisdiction over decisions or orders of the panel of
arbitrators, are conclusive and binding on the parties; its decisions or orders on these are
final and executory. But petitions for certiorari may be filed with the appropriate courts.ix[9] In
short, the Court held that the appellate jurisdiction of the IAC (now the CA) in Pearson fell
under Rule 65 -- not 43 -- because what was being impugned was grave abuse of discretion
on the part of the CFI.
Pearson, however, should be understood in the light of other equally relevant jurisprudence.
In Fabian v. Desierto,x[10] the Court clarified that appeals from judgments and final orders of
quasi-judicial agencies are now required to be brought to the CA, under the requirements and
conditions set forth in Rule 43. This Rule was adopted precisely to provide a uniform rule of
appellate procedure from quasi-judicial agencies.xi[11]
Section 27 of RA 6770xii[12] which is similarly worded as Section 79 of the Philippine Mining
Act, was struck down by Fabian as unconstitutional, because it had broadened the appellate
jurisdiction of the Supreme Court without its consent, in violation of Section 30 of Article VI of
the Constitution.xiii[13] In short, Section 27 of RA 6770 which provides that all administrative
decisions of the Office of the Ombudsman may be appealed to the Supreme Court, was
unconstitutional.
In another case, held invalid in the light of Rule 43 of the 1997 Rules of Court was Section
3(2) of Executive Order No. 561, which had declared that decisions of the Commission on
Settlement of Land Problems (COSLAP) were appealable exclusively to the Supreme
Court.xiv[14] There is no convincing reason why appeals from the COSLAP should be treated
differently from those arising from other quasi-judicial bodies, the decisions of which are
directly appealable to the CA under Rule 43 of the 1997 Rules.
Finally, Metro Construction, Inc. v. Chat ham Properties, Inc.xv[15] held that Section 19 of
Executive Order No. 1008 -- which had deemed arbitral awards of the Construction Industry
Arbitration Commission (CIAC) to be appealable to the Supreme Court on questions of law --
was modified by Circular No. 1-91, Batas Pambansa Blg. 129 as amended by RA 7902,
Revised Administrative Circular 1-95, and Rule 43 of the Rules of Court. Reiterating Fabian,
the Court ruled that appeals were procedural and remedial in nature; hence, constitutionally
subject to this Courts rule-making power.
In the present case, it is claimed that a petition for review is improper because petitioners
challenge is purely factual, bearing only on the MAB ruling that there was no overlap or
conflict between the litigants claims.
We clarify. Factual controversies are usually involved in administrative actions; and the CA is
prepared to handle such issues because, unlike this Court, it is mandated to rule on
questions of fact.xvi[16] In Metro Construction, we observed that not only did the CA have
appellate jurisdiction over CIAC decisions and orders, but the review of such decisions
included questions of fact and law.xvii[17] At the very least when factual findings of the MAB
are challenged or alleged to have been made in grave abuse of discretion as in the present
case, the CA may review them, consistent with the constitutional dutyxviii[18] of the judiciary.
To summarize, there are sufficient legal footings authorizing a review of the MAB Decision
under Rule 43 of the Rules of Court. First, Section 30 of Article VI of the 1987 Constitution,
mandates that [n]o law shall be passed increasing the appellate jurisdiction of the Supreme
Court as provided in this Constitution without its advice and consent. On the other hand,
Section 79 of RA No. 7942 provides that decisions of the MAB may be reviewed by this Court
on a petition for review by certiorari. This provision is obviously an expansion of the Courts
appellate jurisdiction, an expansion to which this Court has not consented. Indiscriminate
enactment of legislation enlarging the appellate jurisdiction of this Court would unnecessarily
burden it.xix[19]
Second, when the Supreme Court, in the exercise of its rule-making power, transfers to the
CA pending cases involving a review of a quasi-judicial bodys decisions, such transfer relates
only to procedure; hence, it does not impair the substantive and vested rights of the parties.
The aggrieved partys right to appeal is preserved; what is changed is only the procedure by
which the appeal is to be made or decided.xx[20] The parties still have a remedy and a
competent tribunal to grant this remedy.
Third, the Revised Rules of Civil Procedure included Rule 43 to provide a uniform rule on
appeals from quasi-judicial agencies.xxi[21] Under the rule, appeals from their judgments and
final orders are now required to be brought to the CA on a verified petition for review.xxii[22]
A quasi-judicial agency or body has been defined as an organ of government, other than a
court or legislature, which affects the rights of private parties through either adjudication or
rule-making.xxiii[23] MAB falls under this definition; hence, it is no different from the other
quasi-judicial bodies enumerated under Rule 43. Besides, the introductory words in Section 1
of Circular No. 1-91 -- among these agencies are -- indicate that the enumeration is not
exclusive or conclusive and acknowledge the existence of other quasi-judicial agencies
which, though not expressly listed, should be deemed included therein.xxiv[24]
Fourth, the Court realizes that under Batas Pambansa (BP) Blg. 129xxv[25] as amended by
RA No. 7902, [26] factual controversies are usually involved in decisions of quasi-judicial
bodies; and the CA, which is likewise tasked to resolve questions of fact, has more elbow
room to resolve them. By including questions of factxxvi[27] among the issues that may be
raised in an appeal from quasi-judicial agencies to the CA, Section 3 of Revised
Administrative Circular No. 1-95 and Section 3 of Rule 43 explicitly expanded the list of such
issues.
According to Section 3 of Rule 43, [a]n appeal under this Rule may be taken to the Court of
Appeals within the period and in the manner herein provided whether the appeal involves
questions of fact, of law, or mixed questions of fact and law. Hence, appeals from quasi-
judicial agencies even only on questions of law may be brought to the CA.
Fifth, the judicial policy of observing the hierarchy of courts dictates that direct resort from
administrative agencies to this Court will not be entertained, unless the redress desired
cannot be obtained from the appropriate lower tribunals, or unless exceptional and
compelling circumstances justify availment of a remedy falling within and calling for the
exercise of our primary jurisdiction.1[28]
Consistent with these rulings and legal bases, we therefore hold that Section 79 of RA 7942
is likewise to be understood as having been modified by Circular No. 1-91, BP Blg. 129 as
amended by RA 7902, Revised Administrative Circular 1-95, and Rule 43 of the Rules of
Court. In brief, appeals from decisions of the MAB shall be taken to the CA through petitions
for review in accordance with the provisions of Rule 43 of the 1997 Rules of Court.
WHEREFORE, the Petition is GRANTED, and the assailed Decision and Resolution
REVERSED and SET ASIDE. The Petition in CA-GR SP No. 46830 is REINSTATED, and
the CA is ordered to RESOLVE it on the merits with deliberate dispatch. No costs.
SO ORDERED.