THIRD DIVISION

G.R. No. 86421 May 31, 1994

SPS. THELMA R. MASINSIN and MIGUEL MASINSIN, SPS. GILBERTO
and ADELINA, ROLDAN, petitioners,
vs.
THE HON. ED VINCENT ALBANO, Presiding Judge of the
Metropolitan Trial Court of Manila, Branch X, DEPUTY SHERIFF JESS
ARREOLA, VICENTE CAEDA and THE HON. LEONARDO CRUZ, in his
capacity as Presiding Judge Regional Trial of Manila, Branch
XXV, respondents.

VITUG, J.:
Spouses Miguel and Thelma Masinsin, et al., instituted this petition
for certiorari, prohibition, relief from judgment, as well as declaratory relief,
with prayer for preliminary mandatory injunction, asking us to order the
Metropolitan Trial Court ("MTC") of Manila, Branch X, to cease and desist
from further proceeding with Civil Case No. 107203-CV.
This case emerged from an ejectment suit (docketed Civil Case No.
107203-CV) filed by private respondent Vicente Caeda ("Caeda"), then
as plaintiffs, against herein petitioners, as defendants, with the
Metropolitan Trial Court of Manila (Branch X). After trial, the MTC, on 01 July
1985, rendered judgment; thus:
PREMISES CONSIDERED, judgment is hereby rendered ordering the
defendants and all persons claiming right under them to vacate the
premises and to remove their house/apartment and surrender possession
of the subject land to the plaintiff; to pay to the plaintiff the sum of
P100.00 a month from January 1987 as the reasonable compensation for
the use and occupation of the premises until the land is actually vacated,
and the costs of suit. 1
No appeal having been taken therefrom, the judgment became final and
executory. On 22 August 1985, petitioners filed a petition
for certiorari before the Regional Trial Court of Manila (Branch XXXII)
seeking the annulment of the aforesaid decision in the ejectment case and
to set aside an order of its execution. The petition was in due time
dismissed. Again, no appeal was taken therefrom.
On 07 October 1985, a complaint for "Annulment of Judgment, Lease
Contract and Damages" was filed by petitioners before the Regional Trial

Court of Manila (Branch XLI) asking, in main, for the nullification of the
judgment in the ejectment case. The complaint was dismissed on the
ground of res judicata. This time, petitioners appealed the dismissal to the
Court of Appeals. Meanwhile, a writ of execution was issued by the MTC for
the enforcement of its decision. The writ, however, was held in abeyance
when petitioners deposited with the Court of Appeals the sum of P3,000.00
in cash plus an amount of P100.00 to be paid every month beginning
February 1987. On 11 March 1987, the Court of Appeals affirmed the order
of dismissal of the lower court. Petitioners' recourse to this Court was to be
of no avail. The petition was denied, and an entry of judgment was made
on 14 July 1987.
Accordingly, the records were remanded to the MTC for execution. When
petitioners refused to remove their house on the premises in question,
upon motion of private respondent, an order of demolition was issued.
Shortly thereafter, the demolition began. Before the completion of the
demolition, a restraining order was issued by the Regional Trial Court of
Manila (Branch XIX) following a petition for certiorari, with preliminary
injunction and restraining order, filed by petitioners. On 23 February 1988,
the trial court dismissed the petition.
Unfazed by the series of dismissals of their complaints and petitions,
petitioners assailed anew the MTC decision in a petition for certiorari, with
preliminary injunction, and for declaratory relief (docketed Civil Case No.
88-43944) before the Regional Trial Court of Manila (Branch XXV), which,
again, issued a restraining order. 2
Private respondent then filed a motion for an alias writ of execution with
the MTC. An ex-parte motion of petitioners for the issuance of a second
restraining order was this time denied by the RTC (Branch XXV). 3 On 23
August 1990, 4 the trial court, ultimately, dismissed the petition with costs
against petitioners.
In this petition, petitioners contend that the MTC of Manila (Branch X) has
lost jurisdiction to enforce its decision, dated 01 July 1985, in Civil Case No.
107203, when the property in question was proclaimed an area for priority
development by the National Housing Authority on 01 December 1987 by
authority of Presidential Decree 2016.
The petition is totally without merit.
In resolving this issue, we only have to refer to our resolution of 01
February 1993 in G.R. No. 98446, entitled, "Spouses Thelma R. Masinsin, et
al. vs. Court of Appeals, et al.," to which this case is intimately related,
where we ruled:

. . . The singular question common to both cases submitted for resolution

of this court is the implication of Presidential Decree No. 1517, otherwise
known as the "Urban Land Reform Law," and its amendments or
ramifications embodied in Proclamation No. 1893, as amended by
Proclamation No. 1967 and Presidential Decree No. 2016. All the above
statutes are being implemented by the Housing and Land Use Regulatory
Board, and the Housing and Urban Development Coordinating Council,
Office of the President.
There is a prejudicial issue the answer to which hangs the resolution of this
case. On May 20, 1992, this Court required the National Housing Authority
to submit a Comment on the status of the program of acquisition by the
Government of the land area which includes the disputed property, as part
of the Areas for Priority Development (APD), under the aforementioned
decrees and proclamations.
In compliance with said order of this Court, Mr. Andres C. Lingan, Manager
of the Metro Manila Project Department of the National Housing Authority,
submitted the following report on the status of Lot 6-A, Block 1012, located
at No. 1890 Obesis Street, Pandacan, Manila, known as the Carlos Estate,
an APD site. Pertinent portions of the report read:
Please be informed that Lot 6-A, Block 1012 located at No. 1890 Obesis St.,
Pandacan, Manila which is the subject matter of the case and located
within the Carlos Estate declared as APD site pursuant to Presidential
Proclamation No. 1967, is not for acquisition by NHA.
The Carlos Estate is located outside of the NHA projects under the Zonal
Improvement Project (ZIP) and Community Mortgage Program (CMP). The
site, however, is under the administration of the Presidential Commission
on Urban Poor (PCUP) for acquisition and upgrading. (Emphasis Supplied.)
The above information answers the uncertainty concerning the status of
the alleged negotiation for the acquisition by the government of certain
areas in Metro Manila. The NHA is definitely NOT acquiring the said lot for
its program.
It appearing that the purpose of this Petition for Review is to set aside the
decision of the respondent Court of Appeals which affirmed the decision of
the lower courts, in order to avoid eviction from the disputed premises and
to be allowed to acquire the same allegedly under the Community
Mortgage Program of the National Housing Authority, we find the petition
without merit and deny the same. Consequently, the petition is
DISMISSED. 5

What immediately catches one's attention to this case is the evident

predilection of petitioners, through different counsel, to file pleadings, one
after another, from which not even this Court has been spared. The utter
lack of merit of the complaints and petitions simply evinces the deliberate
intent of petitioners to prolong and delay the inevitable execution of a
decision that has long become final and executory.
Four times did the petitioners, with the assistance of counsel, try to nullify
the same MTC decision before different branches of the court, trifling with
judicial processes. Never, again, should this practice be countenanced. 6
The lawyer's oath to which we have all subscribed in solemn agreement in
dedicating ourselves to the pursuit of justice, is not a mere fictile of words,
drift and hollow, but a sacred trust that we must uphold and keep
inviolable. Perhaps, it is time we are here reminded of that pledge; thus LAWYER'S OATH
I, . . ., do solemnly swear that I will maintain allegiance to the Republic of
the Philippines; I will support and defend its Constitution and obey the laws
as well as the legal orders of the duly constituted authorities therein; I will
do no falsehood nor consent to its commission; I will not wittingly or
willingly promote or sue any groundless, false or unlawful suit nor give aid
nor consent to the same; I will not delay any man's cause for money or
malice and will conduct myself as a lawyer according to the best of my
knowledge and discretion with all good fidelity as well to the courts as to
my clients and I impose upon myself this obligation voluntary, without any
mental reservation or purpose of evasion.
SO HELP ME GOD. (Emphasis supplied.)
We have since emphasized in no uncertain terms that any act on the part
of a lawyer, an officer of the court, which visibly tends to obstruct, pervert,
impede and degrade the administration of justice is contumacious calling
for both an exercise of disciplinary action and warranting application of the
contempt power. 7
WHEREFORE, the petition is DISMISSED. Petitioners' counsel of record is
hereby strongly CENSURED and WARNED that a similar infraction of the
lawyer's oath in the future will be dealt with most severely. Double costs
against petitioners.
This resolution is immediately executory. SO ORDERED
[A.C. No. 5624. January 20, 2004]

NATASHA HUEYSUWAN-FLORIDO, complainant, vs. ATTY. JAMES

BENEDICT C. FLORIDO, respondent.

surrender to him the custody of their children. He threatened to forcefully

take them away with the help of his companions, whom he claimed to be
agents of the National Bureau of Investigation.

DECISION
YNARES-SANTIAGO, J.:
This is an administrative complaint for the disbarment of respondent
Atty. James Benedict C. Florido and his eventual removal from the Roll of
Attorneys for allegedly violating his oath as a lawyer by manufacturing,
flaunting and using a spurious and bogus Court of Appeals
Resolution/Order.[1]
In her Complaint-Affidavit, Natasha V. Heysuwan-Florido averred that
she is the legitimate spouse of respondent Atty. James Benedict C. Florido,
but that they are estranged and living separately from each other. They
have two children namely, Kamille Nicole H. Florido, five years old, and
James Benedict H. Florido, Jr., three years old both of whom are in
complainants custody. Complainant filed a case for the annulment of her
marriage with respondent, docketed as Civil Case No. 23122, before the
Regional Trial Court of Cebu City, Branch 24. Meanwhile, there is another
case related to the complaint for annulment of marriage which is pending
before the Court of Appeals and docketed as CA-G.R. SP No. 54235
entitled, James Benedict C. Florido v. Hon. Pampio Abarientos, et al.
Sometime in the middle of December 2001, respondent went to
complainants residence in Tanjay City, Negros Oriental and demanded that
the custody of their two minor children be surrendered to him. He showed
complainant a photocopy of an alleged Resolution issued by the Court of
Appeals which supposedly granted his motion for temporary child custody.
[2]
Complainant called up her lawyer but the latter informed her that he had
not received any motion for temporary child custody filed by respondent.

Alarmed, complainant immediately sought the assistance of the

Tanjay City Police. The responding policemen subsequently escorted her to
the police station where the matter could be clarified and settled
peacefully. At the police station, respondent caused to be entered in the
Police Blotter a statement that he, assisted by agents of the NBI, formally
served on complainant the appellate courts resolution/order. [3] In order to
diffuse the tension, complainant agreed to allow the children to sleep with
respondent for one night on condition that he would not take them away
from Tanjay City. This agreement was entered into in the presence of
Tanjay City Chief of Police Juanito Condes and NBI Investigator Roger
Sususco, among others.
In the early morning of January 16, 2002, complainant received
information that a van arrived at the hotel where respondent and the
children were staying to take them to Bacolod City. Complainant rushed to
the hotel and took the children to another room, where they stayed until
later in the morning.
On the same day, respondent filed with the Regional Trial Court of
Dumaguete City, Branch 31, a verified petition [4] for the issuance of a writ
of habeas corpus asserting his right to custody of the children on the basis
of the alleged Court of Appeals resolution. In the meantime, complainant
verified the authenticity of the Resolution and obtained a certification
dated January 18, 2002[5] from the Court of Appeals stating that no such
resolution ordering complainant to surrender custody of their children to
respondent had been issued.
At the hearing of the petition for habeas corpus on January 23, 2002,
respondent did not appear. Consequently, the petition was dismissed.

Complainant asked respondent for the original copy of the alleged

resolution of the Court of Appeals, but respondent failed to give it to her.
Complainant then examined the resolution closely and noted that it bore
two dates: November 12, 2001 and November 29, 2001. Sensing
something amiss, she refused to give custody of their children to
respondent.

Hence, complainant filed the instant complaint alleging that

respondent violated his attorneys oath by manufacturing, flaunting and
using a spurious Court of Appeals Resolution in and outside a court of law.
Furthermore, respondent abused and misused the privileged granted to
him by the Supreme Court to practice law in the country.

In the mid-morning of January 15, 2002, while complainant was with

her children in the ABC Learning Center in Tanjay City, respondent,
accompanied by armed men, suddenly arrived and demanded that she

After respondent answered the complaint, the matter was referred to

the IBP-Commission on Bar Discipline for investigation, report and
recommendation. The IBP-CBD recommended that respondent be

suspended from the practice of law for a period of three years with a
warning that another offense of this nature will result in his disbarment.
[6]
On June 23, 2003, the IBP Board of Governors adopted and approved the
Report and recommendation of the Commission with the modification that
the penalty of suspension be increased to six years.
The issue to be resolved is whether or not the respondent can be held
administratively liable for his reliance on and attempt to enforce a spurious
Resolution of the Court of Appeals.
In his answer to the complaint, respondent claims that he acted in
good faith in invoking the Court of Appeals Resolution which he honestly
believed to be authentic. This, however, is belied by the fact that he used
and presented the spurious resolution several times. As pointed out by the
Investigating Commissioner, the assailed Resolution was presented by
respondent on at least two occasions: first, in his Petition for Issuance of
Writ of Habeas Corpus docketed as Special Proc. Case No. 3898,[7] which he
filed with the Regional Trial Court of Dumaguete City; and second, when he
sought the assistance of the Philippine National Police (PNP) of Tanjay City
to recover custody of his minor children from complainant. Since it was
respondent who used the spurious Resolution, he is presumed to have
participated in its fabrication.
Candor and fairness are demanded of every lawyer. The burden cast
on the judiciary would be intolerable if it could not take at face value what
is asserted by counsel. The time that will have to be devoted just to the
task of verification of allegations submitted could easily be imagined. Even
with due recognition then that counsel is expected to display the utmost
zeal in the defense of a clients cause, it must never be at the expense of
the truth.[8] Thus, the Code of professional Responsibility states:
CANON 10. A LAWYER OWES CANDOR, FAIRNESS AND GOOD
FAITH TO THE COURT.
Rule 10.01 - A lawyer shall not do any falsehood; nor consent to
the doing of any in court; nor shall he mislead, or
allow the Court to be misled by any artifice.
Rule 10.02 - A lawyer shall not knowingly misquote or
misrepresent the contents of a paper, the language
or the argument of an opposing counsel, or the text
of a decision or authority, or knowingly cite as a
law a provision already rendered inoperative by

repeal or amendment, or assert as a fact that

which has not been proved.
Moreover, the records show that respondent used offensive language
in his pleadings in describing complainant and her relatives. A lawyers
language should be forceful but dignified, emphatic but respectful as
befitting an advocate and in keeping with the dignity of the legal
profession.[9] The lawyers arguments whether written or oral should be
gracious to both court and opposing counsel and should be of such words
as may be properly addressed by one gentlemen to another.[10] By calling
complainant, a sly manipulator of truth as well as a vindictive congenital
prevaricator, hardly measures to the sobriety of speech demanded of a
lawyer.
Respondents actions erode the public perception of the legal
profession. They constitute gross misconduct and the sanctions for such
malfeasance is prescribed by Section 27, Rule 138 of the Rules of Court
which states:
SEC. 27. Disbarment and suspension of attorneys by Supreme Court,
grounds therefore.- A member of the bar may be disbarred or suspended
from his office as attorney by the Supreme Court for any deceit,
malpractice or other gross misconduct in such office, grossly immoral
conduct or by reason of his conviction of a crime involving moral turpitude,
or for any violation of the oath which he is required to take before the
admission to practice, or for a willful disobedience appearing as attorney
for a party without authority to do so.
Considering the attendant circumstances, we agree with the
recommendation of the IBP Board of Governors that respondent should be
suspended from the practice of law. However, we find that the period of six
years is too harsh a penalty. Instead, suspension for the lesser period of
two years, which we deem commensurate to the offense committed, is
hereby imposed on respondent.
WHEREFORE, in view of all the foregoing, Atty. James Benedict C.
Florido is SUSPENDED from the practice of law for a period of two (2) years.
Let copies of this resolution be entered in the personal record of
respondent as a member of the Bar and furnished the Bar Confidant, the
Integrated Bar of the Philippines (IBP) and the Court Administrator for
circulation to all courts of the country.

SO ORDERED.

trial court on 16 May 1997. On 28 July 1997, she filed a "Motion to Resolve
Petition to Reopen Case."

THIRD DIVISION
A.M. No. MTJ-00-1335

November 27, 2000

YOLANDA FLORO, complainant,

vs.
JUDGE ORLANDO C. PAGUIO, Municipal Trial Court, Branch 1,
Meycauayan, Bulacan, respondent.
DECISION
VITUG, J.:
This case originated from a verified complaint filed by Yolanda Floro
against Judge Orlando C. Paguio of the Municipal Trial Court, Branch 1, of
Meycauayan, Bulacan, charging the latter with gross ignorance of the law,
gross misconduct, inefficiency, as well as violation of the rules on judicial
conduct and of Republic Act No. 3019 (The Anti-Graft and Corrupt Practices
Act), relative to his actuations, as presiding judge, in Criminal Cases No.
94-16053-58; No. 94-16073-78; No. 94-16184-90 (for nineteen [19] counts
of violation of Batas Pambansa Blg. 22) and No. 94-16183 (for estafa),
entitled "People of the Philippines vs. Joy Lee Recuerdo."
Floro, the complaining witness in the criminal cases aforenumbered,
asseverated that on 30 July 1996, the scheduled date for the reception of
evidence for the defense, after the prosecution had formally offered its
evidence and rested its case, the accused and her counsel failed to appear
despite due notice. The prosecution moved that the accused be held to
have waived her right to adduce further evidence. The motion was granted
by the court and in an order, issued on even date, it deemed the cases
submitted for decision.
Several months later, or on 11 March 1997, Floro filed, by registered mail,
a "Motion for An Early Resolution" of the cases. The motion was received
by the trial court on 18 March 1997. On 20 March 1997, Floro received a
copy of a "Motion to Reopen Trial," dated 04 March 1997, filed by counsel
for the accused asserting that the defense witness supposed to have been
presented on 30 July 1996 had become available to testify. On 06 May
1997, Floro filed a "Second Motion for Early Resolution," received by the

In a joint decision, dated 28 January 1998 and promulgated on 05 February

1998, respondent Judge, dismissed the criminal cases predicated on
improper venue and lack of jurisdiction. On 12 March 1998, Floro moved
for the reconsideration of the joint decision, claiming that the depository
bank, the Liberty Savings Bank, Meycauayan Branch, was located at
Poblacion, Meycauayan, Bulacan, and that, therefore, the court had
jurisdiction over the cases. On 04 June 1998, the defense filed its comment
on and opposition to the motion for reconsideration. On 13 August 1998,
respondent judge denied the motion on the ground of double jeopardy.
In addition, Floro claimed in her complaint, Judge Paguio had falsely stated
in his Certificate of Service that no pending cases/matters before him were
left undecided/unresolved beyond the required period.
Finally, Floro called attention to the fact that respondent Judge had
previously been found guilty of inefficiency and neglect of duty and meted
a fine of P5,000 in A.M. No. MTJ-93-781 (Santos vs. Paguio). 1
Respondent Judge, in his answer to the complaint, said that he issued the
order of 30 July 1996 submitting the criminal cases for decision when the
accused and her counsel did not appear on the day of the scheduled
hearing. The defense counsel, however, failed to receive a notice of the
order since he had moved out from his old address. When it became
apparent that the copy of the order was not received, the Judge instructed
the process server to personally serve a copy of the order to counsel. On
18 March 1997, the defense filed a "Motion to Reopen Trial" on the ground
that the witness who was supposed to be presented on 30 July 1996 had
become available to testify. The motion was set for hearing on 21 March
1997. The complainant and her counsel failed to appear on the hearings
held on 21 March, as well as those set for 12 May and 24 June 1997,
despite due notice. On 15 September 1997, the defense formally offered
its evidence and a "Joint Decision" was rendered on 28 January 1998 and
promulgated on 05 February 1998. The prosecution filed a notice of appeal
and the records of the cases were then forwarded to the Regional Trial
Court of Malolos, Bulacan.
Respondent Judge added that he purposely ignored the two motions for
early resolution filed by complainant because they both lacked a date,
time, and place of hearing. He maintained that his order of 30 July 1996
was interlocutory and could not attain finality due to incidental matters
that supervened after the issuance thereof, particularly, the motions filed

by complainant. He justified his joint decision by stating that while the

checks were deposited at complainant's depository bank in Meycauayan,
Bulacan, the checks, however, were issued and delivered by the accused in
Makati City where they were dishonored. Respondent Judge said that he
was detailed as Assisting Judge of MeTC, Valenzuela City, Branch 82, per
the Court's resolution, dated 16 January 1996, in A.M. No. 95-4-41 MeTC
("Re: Quarterly Report of Cases of Judge Evelyn Corpuz-Cabochan), which
was partially revoked only on 27 May 1996. Within the period, he was
unable to act on a number of cases pending before hissala.
In its report to the Court, the Office of the Court Administrator ("OCA"),
which evaluated this administrative case, recommended that respondent
Judge, for the delay in deciding the criminal cases within the prescribed
period and for his failure to resolve the incidents relative to the motion for
the reopening of the criminal cases for trial, be fined in the amount of
"P20,000.00 with a warning that the commission of the same or similar act
in the future will be dealt with more severely."

As so aptly observed by the OCA, respondent Judge could not so use as an

excuse the fact that he was detailed Assisting Judge at the Valenzuela City
MeTC considering that the case was submitted for decision when he was
already back at his regular station in Meycauayan, Bulacan. There was,
however, no delay in resolving complainant's motion for reconsideration of
the joint decision because the defense filed its comment/opposition on 04
June 1998 and the ninety-day period should only be reckoned therefrom.
Obviously, the Court could not, at this time, rule on the merits of the
decision nor the incidents affecting the criminal cases, the same being the
subject of an appeal before the Regional Trial Court of Malolos.
WHEREFORE, for his delay in deciding Criminal Cases No. 94-16053-58; No.
94-16073-78; No. 94-16184-90 and No. 94-16183, respondent Judge
Orlando C. Paguio is meted a FINE in the amount of FIVE THOUSAND
(P5,000.00) PESOS with a warning that the commission of the same or
similar act in the future will be dealt with severely. SO ORDERED.

The Court accepts the findings, and adopts the recommendation, of the
OCA but reduces the suggested fine.
The Constitutional mandate requires a case filed before a lower court to be
resolved within three months from date of its submission for decision.
Respondent judge had been remiss in the above responsibility.1wphi1 The
subject criminal cases were submitted for decision on 30 July 1996; hence,
a decision thereon should have been rendered on or before 28 October
1996. Despite Complainant's motions for early resolution filed months
thereafter, no action was taken by respondent Judge. These motions for
early resolution were non-litigable motions that thereby required no notice
of hearing, the cases having already been submitted for decision.
Certainly, the motions did not have the effect of extending the period
prescribed for the resolution of the cases. For valid reasons, of course, he
could have asked for an extension but he did not.
The Court, in a number of cases, has said that it is not unaware of the
heavy caseload of judges, and while it has thus been sympathetic to
requests for extension of time within which to decide cases and resolve
pending matters before them,2 it, nevertheless, must caution against any
judge taking lightly the Code of Professional Conduct3that requires the
disposition of court business promptly.

EN BANC
A.C. No. 2837 October 7, 1994
ESTEBAN M. LIBIT, complainant, vs .ATTYS. EDELSON G. OLIVA and
FLORANDO A. UMALI, respondent.
RESOLUTION
PER CURIAM:
In civil Case No. 84-24144 of the Court of First Instance of Manila, entitled
"Pedro Cutingting, plaintiff versus Alfredo Tan, defendant", the Honorable
Presiding Judge Domingo Panis issued the following order:
The Director of the National Bureau of Investigation (NBI) is
hereby ordered to conduct an investigation with the end in
view of determining the author of the Sheriff's Return
which appears to have been falsified and to institute such
criminal action as the evidence will warrant. (p. 1, Final
Report.)

After conducting the necessary investigation, the National Bureau of

Investigation (NBI), through herein complainant, charged respondents as
follows:
That sometime in May 1984 in the City of Manila, at the
Regional Trial Court, Branch XLI, Manila, Philippines, the
above-named Respondents, as Counsels for PEDRO
CUTINGTING in Civil Case No. 84-24144, entitled PEDRO
CUTINGTING, Plaintiff vs. ALFREDO TAN, Defendant, did
then and there, knowingly, willfully introduced/presented in
evidence before the aforesaid Regional Trial Court, a
falsified Sheriff's Return of Summons during the hearing of
the aforesaid Civil Case thereby impending and/or
obstructing the speedy administration and/or dispensation
of Justice. (p. 2, Final Report, ff. p. 69, Record.)
Respondents in their respective answers denied having any hand in the
falsification of the said sheriff's return.
Pursuant to Rule 139-B of the Rules of Court and the resolution of the
Court En Banc of April 12, 1988, the case was referred to the Commission
on Bar Discipline of the Integrated Bar of the Philippines (IBP) for
investigation, report, and recommendation.
In view, however, of the report of the National Bureau of Investigation to
the effect that the signature above the typewritten name Florando Umali
on the last page of the complaint in said civil case is not his signature,
complainant, through counsel, agreed to the dismissal of the case with
respect to Atty. Umali.
With respect to Atty. Edelson G. Oliva, the IBP submitted the following
report and recommendation:
There is ample evidence extant in the records to prove that
Atty. Oliva has something to do with the falsification of the
Sheriff's Return on the Summons in said Civil Case No. 8424144.
The oral and documentary evidence of the complainant
strongly tend to show the following: (1) The Sheriff's Return
of the Summon in the said civil case was falsified as it was
not signed by Deputy Sheriff Rodolfo Torella (Exh. "J"
Sworn Statement of Rodolfo Torella dated February 1, 1985,

and Exh. "S", which is the falsified Sheriff's Return); (2) The
summons was received from the clerk of the Court of the
Manila
RTC-Branch LXI by Ronaldo Romero, a messenger in the law
office of Attys. Umali and Oliva and said messenger
brought the summons to the law office of the respondents
(Exh. "H" Sinumpaang Salaysay ni Ronaldo Romero, and
Exh. "G", Exh. "I" Sworn Statement dated February 28,
1985 of Mariano Villanueva, Chief Staff Asst. 2, RTC,
Manila; (3) On the basis of the falsified Sheriff's Return on
the Summons, Atty. Oliva, counsel for the defendant
[should be plaintiff] in said civil case, filed a typewritten
Motion to Declare Defendant in Default (Exh.) "R" Motion
to Declare Defendant In Default in said civil case signed
and filed by Atty. Oliva);
(4) On March 29, 1984, Atty. Oliva, in his capacity as
Operations Manager of Judge Pio R. Marcos Law Office, sent
a final demand letter on Alfredo Tan, the defendant in said
Civil case, for payment of the sum of P70,174.00 (Exh. "T"
Demand Letter dated March 28, 1984 of Atty. Oliva
addressed to Alfredo Tan); (5) The demand letter of Atty.
Oliva (Exh. "T"), the complaint in said civil case (Exh. "Q",
"Q-1", and "Q-2"), the falsified Sheriff's Return on the
Summons (Exh. "S"), the Motion To Declare Defendant In
Default dated October 30, 1984 signed and filed by
Atty. Oliva (Exh. "R" and "R-1") were typed on one and the
same typewriter, as shown in the Questioned Document
Report No. 198-585 dated 19 June 1985 (Exh. "Q", "Q-1"
and "Q-2"; Exh. "V", "V-1" and
"V-2").
After the careful review of the record of the case and the report and
recommendation of the IBP, the Court finds that respondent Atty. Edelson
G. Oliva committed acts of misconduct which warrant the exercise by the
Court of its disciplinary powers. The facts, as supported by the evidence,
obtaining in this case indubitably reveal respondent's failure to live up to
his duties as a lawyer in consonance with the strictures of the lawyer's
oath, the Code of Professional Responsibility, and the Canons of
Professional Ethics. A lawyer's responsibility to protect and advance the
interests of his client does not warrant a course of action propelled by ill
motives and malicious intentions against the other party.
At this juncture, it is well to stress once again that the practice of law is not
a right but a privilege bestowed by the State on those who show that they

possess, and continue to possess, the qualifications required by law for the
conferment of such privilege. One of these requirements is the observance
of honesty and candor. It can not be gainsaid that candidness, especially
towards the courts, is essential for the expeditious administration of
justice. Courts are entitled to expect only complete candor and honesty
from the lawyers appearing and pleading before them. A lawyer, on the
other hand, has the fundamental duty to satisfy the expectation. It is
essential that lawyers bear in mind at all times that their first duty is not to
their clients but rather to the courts, that they are above all court officers
sworn to assist the courts in rendering justice to all and sundry, and only
secondarily are they advocates of the exclusive interests of their clients.
For this reason, he is required to swear to do no falsehood, nor consent to
the doing of any in court (Chavez vs. Viola, 196 SCRA 10 [1991].
In this case, respondent Atty. Edelson Oliva has manifestly violated that
part of his oath as a lawyer that he shall not do any falsehood. He has
likewise violated Rule 10.01 of the Code of Professional Responsibility
which provides:
A lawyer shall not do any falsehood, nor consent to the
doing of any in court nor shall he mislead or allow the court
to be misled by any artifice.
Accordingly, the Court resolved to impose upon Atty. Edelson Oliva the
supreme penalty of DISBARMENT. His license to practice law in the
Philippines is CANCELLED and the Bar Confidant is ordered to strike out his
name from the Roll of Attorneys.
The case is ordered dismissed as against Atty. Florando Umali.
SO ORDERED.

EN BANC
Per Rec. Nos. 3527, 3408

August 23, 1935

JUSTA MONTEREY, complainant,

vs.
EUSTAQUIO V. ARAYATA and TERESO MA. MONTOYA, respondents.

Eustaquio V. Arayata in his own behalf.

Office of the Solicitor-General Hilado for the Government.
IMPERIAL, J.:
It is alleged in the charges filed against Attorney Eustaquio V. Arayata (1)
that on August 27, 1931, while practicing his profession, he prepared and
drew up in his favor a deed of sale of the land described in transfer
certificate of title No. 7591, for the sum of P4,000, stating therein that the
person who executed the document and sold the land to him was his
father, Arcadio Arayata, when he knew positively that this alleged vendor
had already died on November 5, 1916; that knowing the document to be
fictitious, he appeared before notary public Tereso Ma. Montoya and made
the latter legalize said document and state that Arcadio Arayata personally
appeared before him, although said fact was not true; and he later
succeeded in having the register of deeds cancel the transfer certificate of
title issued to Arcadio Arayata and issue transfer certificate of title No.
8370 in his favor; and (2) that on June 5, 1933, being legally married to
Aurora L. Saguil, he filed an application to marry Engracia F. Ortega, stating
therein under oath that he was single when in fact he was married, said
marriage not having been dissolved.
The charge filed against attorney and notary public Tereso Ma. Montoya
consists in having ratified the deed of sale and having stated that Arcadio
Arayata personally appeared before him and confirmed the sale, knowing
fully well that said person is already dead and therefore could do neither
the one nor the other.
The investigation was finally conducted by the Judge of the Court of First
Instance of the Province of Cavite, who recommended that a disciplinary
action be taken against Arayata and that Montoya be exonerated, it having
been clearly established that the latter, in ratifying the document, acted in
good faith and relied on Arayata's assurance that the old man then with
him was really the vendor Arcadio Arayata who ratified all the contents of
the instrument. We concur in the appreciation of the facts and we are of
the opinion that said notary public and attorney should really be
exonerated and held innocent.
The established facts show that the respondent Arayata is the son of
Arcadio Arayata who died on November 5, 1916, leaving a widow and five
children; that Arcadio Arayata in life, purchased from the Bureau of Lands
lot No. 3448 of the Hacienda de Santa Cruz de Malabon, for which transfer
certificate of title No. 7591 was issued to him; that on August 27, 1931,
many years after Arcadio Arayata's death, the respondent attorney

prepared the deed, Exhibit A, stating therein that his father sold the land in
question to him for the sum of P4,000; that after affixing the names of the
alleged vendor and the two witnesses, the respondent brought an old man
and the two witnesses before notary public Tereso Ma. Montoya and
requested the latter to ratify said document, assuring him that the old man
was the grantor and vendor and the other two were the instrumental
witnesses thereto; that the notary honestly believing said information,
legalized and registered the document after verifying from the old man
that he ratified the contents thereof; that the transfer was invalid and the
document not genuine because another, not Arcadio Arayata, signed it;
that the respondent later applied for and obtained transfer certificate of
title No. 8370 of said land from the registry of deeds of Cavite after the
former title was cancelled; that sometime later, or on April 11, 1933, the
respondent sold a portion of said land having an area of two and one-half
(2 ) hectares to Sinforosa Torres, married to Basilio Sorosoro, for the sum
of P500.
With regard to the second charge, it likewise appears established that on
June 5, 1933, the respondent, being legally married to Aurora L. Saguil and
said marriage not having been dissolved, signed under oath an application
to marry Engracia F. Ortega stating therein that he was single, he being in
fact married; the application was registered and duly considered and on
September 25, 1933, the register of the Province of Cavite issued the
corresponding license upon payment by the respondent of the sum of P2;
for some unknown reasons the marriage applied for was not solemnized;
the respondent's wife, nevertheless, filed a complaint for bigamy against
the former, which is now pending in the justice of the peace court of Santa
Rosa, Laguna, for which reason the investigator is of the opinion, and so
recommends, that no action should be taken on the second charge. The
recommendation is well founded and has our approval.
In his first answer, respondent Arayata admitted that the sale had been
made by his father who was his true predecessor in interest, but alleged
that nobody, including the complainant, could complain of the transfer
because none was prejudiced, he being the true and only heir. In his
second answer, however, and in the course of the investigation, he set up
another defense alleging that the person who had really sold him the land
was his uncle Januario Arayata who, in the deed and relative to the land,
assumed the name of Arcadio Arayata. He further alleged that it was his
said uncle who signed the deed of transfer and ratified it before notary
Montoya. We find this second new defense improbable and unestablished.
The acts committed by the respondent Arayata relative to the deed of sale
Exhibit A, and his statements to notary Montoya with regard to said

document, constitute malpractice and unprofessional conduct under the

provisions of section 21 of the Code of Civil Procedure, meriting for him a
disciplinary action mitigated in this case by the circumstance that he was
apparently the heir entitled to the ownership of the land and that the
complainant has neither real nor direct interest in the transaction
complained of by her.
For the foregoing reasons, we hold Attorney Eustaquio V. Arayata guilty of
malpractice and suspend him from the practice of his profession for one (1)
month, hereby reprimanding him for having prepared and executed the
deed of sale in question. So ordered.

EN BANC
G.R. No. L-25291 January 30, 1971
THE INSULAR LIFE ASSURANCE CO., LTD., EMPLOYEES
ASSOCIATION-NATU, FGU INSURANCE GROUP WORKERS and
EMPLOYEES ASSOCIATION-NATU, and INSULAR LIFE BUILDING
EMPLOYEES ASSOCIATION-NATU, petitioners,
vs.
THE INSULAR LIFE ASSURANCE CO., LTD., FGU INSURANCE GROUP,
JOSE M. OLBES and COURT OF INDUSTRIAL RELATIONS, respondents.
Lacsina, Lontok and Perez and Luis F. Aquino for petitioners.
Francisco de los Reyes for respondent Court of Industrial Relations.
Araneta, Mendoza and Papa for other respondents.

CASTRO, J.:
Appeal, by certiorari to review a decision and a resolution en banc of the
Court of Industrial Relations dated August 17, 1965 and October 20, 1965,
respectively, in Case 1698-ULP.

The Insular Life Assurance Co., Ltd., Employees Association-NATU, FGU

Insurance Group Workers & Employees Association-NATU, and Insular Life
Building Employees Association-NATU (hereinafter referred to as the
Unions), while still members of the Federation of Free Workers (FFW),
entered into separate collective bargaining agreements with the Insular
Life Assurance Co., Ltd. and the FGU Insurance Group (hereinafter referred
to as the Companies).
Two of the lawyers of the Unions then were Felipe Enaje and Ramon Garcia;
the latter was formerly the secretary-treasurer of the FFW and acting
president of the Insular Life/FGU unions and the Insular Life Building
Employees Association. Garcia, as such acting president, in a circular
issued in his name and signed by him, tried to dissuade the members of
the Unions from disaffiliating with the FFW and joining the National
Association of Trade Unions (NATU), to no avail.
Enaje and Garcia soon left the FFW and secured employment with the AntiDummy Board of the Department of Justice. Thereafter, the Companies
hired Garcia in the latter part of 1956 as assistant corporate secretary and
legal assistant in their Legal Department, and he was soon receiving P900
a month, or P600 more than he was receiving from the FFW. Enaje was
hired on or about February 19, 1957 as personnel manager of the
Companies, and was likewise made chairman of the negotiating panel for
the Companies in the collective bargaining with the Unions.
In a letter dated September 16, 1957, the Unions jointly submitted
proposals to the Companies for a modified renewal of their respective
collective bargaining contracts which were then due to expire on
September 30, 1957. The parties mutually agreed and to make whatever
benefits could be agreed upon retroactively effective October 1, 1957.
Thereafter, in the months of September and October 1957 negotiations
were conducted on the Union's proposals, but these were snagged by a
deadlock on the issue of union shop, as a result of which the Unions filed
on January 27, 1958 a notice of strike for "deadlock on collective
bargaining." Several conciliation conferences were held under the auspices
of the Department of Labor wherein the conciliators urged the Companies
to make reply to the Unions' proposals en toto so that the said Unions
might consider the feasibility of dropping their demand for union security
in exchange for other benefits. However, the Companies did not make any
counter-proposals but, instead, insisted that the Unions first drop their
demand for union security, promising money benefits if this was done.
Thereupon, and prior to April 15, 1958, the petitioner Insular Life Building
Employees Association-NATU dropped this particular demand, and

requested the Companies to answer its demands, point by point, en toto.

But the respondent Insular Life Assurance Co. still refused to make any
counter-proposals. In a letter addressed to the two other Unions by the
joint management of the Companies, the former were also asked to drop
their union security demand, otherwise the Companies "would no longer
consider themselves bound by the commitment to make money benefits
retroactive to October 1, 1957." By a letter dated April 17, 1958, the
remaining two petitioner unions likewise dropped their demand for union
shop. April 25, 1958 then was set by the parties to meet and discuss the
remaining demands.
From April 25 to May 6, 1958, the parties negotiated on the labor demands
but with no satisfactory result due to a stalemate on the matter of salary
increases. On May 13, 1958 the Unions demanded from the Companies
final counter-proposals on their economic demands, particularly on salary
increases. Instead of giving counter-proposals, the Companies on May 15,
1958 presented facts and figures and requested the Unions to submit a
workable formula which would justify their own proposals, taking into
account the financial position of the former. Forthwith the Unions voted to
declare a strike in protest against what they considered the Companies'
unfair labor practices.
Meanwhile, eighty-seven (87) unionists were reclassified as supervisors
without increase in salary nor in responsibility while negotiations were
going on in the Department of Labor after the notice to strike was served
on the Companies. These employees resigned from the Unions.
On May 20, 1958 the Unions went on strike and picketed the offices of the
Insular Life Building at Plaza Moraga.
On May 21, 1958 the Companies through their acting manager and
president, the respondent Jose M. Olbes (hereinafter referred to as the
respondent Olbes), sent to each of the strikers a letter (exhibit A) quoted
verbatim as follows:
We recognize it is your privilege both to strike and to
conduct picketing.
However, if any of you would like to come back to work
voluntarily, you may:
1. Advise the nearest police officer or security guard of
your intention to do so.

2. Take your meals within the office.

3. Make a choice whether to go home at the end of the day
or to sleep nights at the office where comfortable cots have
been prepared.

gates, entrance and driveway and the free movement of persons and
vehicles to and from, out and in, of the Companies' building.
On the same date, the Companies, again through the respondent Olbes,
sent individually to the strikers a letter (exhibit B), quoted hereunder in its
entirety:

4. Enjoy free coffee and occasional movies.

The first day of the strike was last 21 May 1958.
5. Be paid overtime for work performed in excess of eight
hours.

Our position remains unchanged and the strike has made

us even more convinced of our decision.

6. Be sure arrangements will be made for your families.

The decision to make is yours whether you still believe
in the motives of the strike or in the fairness of the
Management.
The Unions, however, continued on strike, with the exception of a few
unionists who were convinced to desist by the aforesaid letter of May 21,
1958.
From the date the strike was called on May 21, 1958, until it was called off
on May 31, 1958, some management men tried to break thru the Unions'
picket lines. Thus, on May 21, 1958 Garcia, assistant corporate secretary,
and Vicente Abella, chief of the personnel records section, respectively of
the Companies, tried to penetrate the picket lines in front of the Insular Life
Building. Garcia, upon approaching the picket line, tossed aside the placard
of a picketer, one Paulino Bugay; a fight ensued between them, in which
both suffered injuries. The Companies organized three bus-loads of
employees, including a photographer, who with the said respondent Olbes,
succeeded in penetrating the picket lines in front of the Insular Life
Building, thus causing injuries to the picketers and also to the strikebreakers due to the resistance offered by some picketers.
Alleging that some non-strikers were injured and with the use of
photographs as evidence, the Companies then filed criminal charges
against the strikers with the City Fiscal's Office of Manila. During the
pendency of the said cases in the fiscal's office, the Companies likewise
filed a petition for injunction with damages with the Court of First Instance
of Manila which, on the basis of the pendency of the various criminal cases
against striking members of the Unions, issued on May 31, 1958 an order
restraining the strikers, until further orders of the said court, from stopping,
impeding, obstructing, etc. the free and peaceful use of the Companies'

We do not know how long you intend to stay out, but we

cannot hold your positions open for long. We have
continued to operate and will continue to do so with or
without you.
If you are still interested in continuing in the employ of the
Group Companies, and if there are no criminal charges
pending against you, we are giving you until 2 June 1958 to
report for work at the home office. If by this date you have
not yet reported, we may be forced to obtain your
replacement.
Before, the decisions was yours to make.
So it is now.
Incidentally, all of the more than 120 criminal charges filed against the
members of the Unions, except three (3), were dismissed by the fiscal's
office and by the courts. These three cases involved "slight physical
injuries" against one striker and "light coercion" against two others.
At any rate, because of the issuance of the writ of preliminary injunction
against them as well as the ultimatum of the Companies giving them until
June 2, 1958 to return to their jobs or else be replaced, the striking
employees decided to call off their strike and to report back to work on
June 2, 1958.
However, before readmitting the strikers, the Companies required them not
only to secure clearances from the City Fiscal's Office of Manila but also to
be screened by a management committee among the members of which
were Enage and Garcia. The screening committee initially rejected 83

strikers with pending criminal charges. However, all non-strikers with

pending criminal charges which arose from the breakthrough incident were
readmitted immediately by the Companies without being required to
secure clearances from the fiscal's office. Subsequently, when practically
all the strikers had secured clearances from the fiscal's office, the
Companies readmitted only some but adamantly refused readmission to 34
officials and members of the Unions who were most active in the strike, on
the ground that they committed "acts inimical to the interest of the
respondents," without however stating the specific acts allegedly
committed. Among those who were refused readmission are Emiliano
Tabasondra, vice president of the Insular Life Building Employees'
Association-NATU; Florencio Ibarra, president of the FGU Insurance Group
Workers & Employees Association-NATU; and Isagani Du Timbol, acting
president of the Insular Life Assurance Co., Ltd. Employees AssociationNATU. Some 24 of the above number were ultimately notified months later
that they were being dismissed retroactively as of June 2, 1958 and given
separation pay checks computed under Rep. Act 1787, while others (ten in
number) up to now have not been readmitted although there have been no
formal dismissal notices given to them.
On July 29, 1958 the CIR prosecutor filed a complaint for unfair labor
practice against the Companies under Republic Act 875. The complaint
specifically charged the Companies with (1) interfering with the members
of the Unions in the exercise of their right to concerted action, by sending
out individual letters to them urging them to abandon their strike and
return to work, with a promise of comfortable cots, free coffee and movies,
and paid overtime, and, subsequently, by warning them that if they did not
return to work on or before June 2, 1958, they might be replaced; and (2)
discriminating against the members of the Unions as regards readmission
to work after the strike on the basis of their union membership and degree
of participation in the strike.
On August 4, 1958 the Companies filed their answer denying all the
material allegations of the complaint, stating special defenses therein, and
asking for the dismissal of the complaint.
After trial on the merits, the Court of Industrial Relations, through Presiding
Judge Arsenio Martinez, rendered on August 17, 1965 a decision dismissing
the Unions' complaint for lack of merit. On August 31, 1965 the Unions
seasonably filed their motion for reconsideration of the said decision, and
their supporting memorandum on September 10, 1965. This was denied by
the Court of Industrial Relations en banc in a resolution promulgated on
October 20, 1965.

Hence, this petition for review, the Unions contending that the lower court
erred:
1. In not finding the Companies guilty of unfair labor
practice in sending out individually to the strikers the
letters marked Exhibits A and B;
2. In not finding the Companies guilty of unfair labor
practice for discriminating against the striking members of
the Unions in the matter of readmission of employees after
the strike;
3. In not finding the Companies guilty of unfair labor
practice for dismissing officials and members of the Unions
without giving them the benefit of investigation and the
opportunity to present their side in regard to activities
undertaken by them in the legitimate exercise of their right
to strike; and
4. In not ordering the reinstatement of officials and
members of the Unions, with full back wages, from June 2,
1958 to the date of their actual reinstatement to their
usual employment.
I. The respondents contend that the sending of the letters, exhibits A and
B, constituted a legitimate exercise of their freedom of speech. We do not
agree. The said letters were directed to the striking employees individually
by registered special delivery mail at that without being coursed
through the Unions which were representing the employees in the
collective bargaining.
The act of an employer in notifying absent employees
individually during a strike following unproductive efforts at
collective bargaining that the plant would be operated the
next day and that their jobs were open for them should
they want to come in has been held to be an unfair labor
practice, as an active interference with the right of
collective bargaining through dealing with the employees
individually instead of through their collective bargaining
representatives. (31 Am. Jur. 563, citing NLRB v.
Montgomery Ward & Co. [CA 9th] 133 F2d 676, 146 ALR
1045)

Indeed, it is an unfair labor practice for an employer operating under a

collective bargaining agreement to negotiate or to attempt to negotiate
with his employees individually in connection with changes in the
agreement. And the basis of the prohibition regarding individual bargaining
with the strikers is that although the union is on strike, the employer is still
under obligation to bargain with the union as the employees' bargaining
representative (Melo Photo Supply Corporation vs. National Labor Relations
Board, 321 U.S. 332).
Indeed, some such similar actions are illegal as constituting unwarranted
acts of interference. Thus, the act of a company president in writing letters
to the strikers, urging their return to work on terms inconsistent with their
union membership, was adjudged as constituting interference with the
exercise of his employees' right to collective bargaining (Lighter Publishing,
CCA 7th, 133 F2d 621). It is likewise an act of interference for the employer
to send a letter to all employees notifying them to return to work at a time
specified therein, otherwise new employees would be engaged to perform
their jobs. Individual solicitation of the employees or visiting their homes,
with the employer or his representative urging the employees to cease
union activity or cease striking, constitutes unfair labor practice. All the
above-detailed activities are unfair labor practices because they tend to
undermine the concerted activity of the employees, an activity to which
they are entitled free from the employer's molestation. 1
Moreover, since exhibit A is a letter containing promises of benefits to the
employees in order to entice them to return to work, it is not protected by
the free speech provisions of the Constitution (NLRB v. Clearfield Cheese
Co., Inc., 213 F2d 70). The same is true with exhibit B since it contained
threats to obtain replacements for the striking employees in the event they
did not report for work on June 2, 1958. The free speech protection under
the Constitution is inapplicable where the expression of opinion by the
employer or his agent contains a promise of benefit, or threats, or reprisal
(31 Am. Jur. 544; NLRB vs. Clearfield Cheese Co., Inc., 213 F2d 70; NLRB
vs. Goigy Co., 211 F2d 533, 35 ALR 2d 422).
Indeed, when the respondents offered reinstatement and attempted to
"bribe" the strikers with "comfortable cots," "free coffee and occasional
movies," "overtime" pay for "work performed in excess of eight hours," and
"arrangements" for their families, so they would abandon the strike and
return to work, they were guilty of strike-breaking and/or union-busting
and, consequently, of unfair labor practice. It is equivalent to an attempt to
break a strike for an employer to offer reinstatement to striking employees
individually, when they are represented by a union, since the employees

thus offered reinstatement are unable to determine what the

consequences of returning to work would be.
Likewise violative of the right to organize, form and join labor organizations
are the following acts: the offer of a Christmas bonus to all "loyal"
employees of a company shortly after the making of a request by the union
to bargain; wage increases given for the purpose of mollifying employees
after the employer has refused to bargain with the union, or for the
purpose of inducing striking employees to return to work; the employer's
promises of benefits in return for the strikers' abandonment of their strike
in support of their union; and the employer's statement, made about 6
weeks after the strike started, to a group of strikers in a restaurant to the
effect that if the strikers returned to work, they would receive new benefits
in the form of hospitalization, accident insurance, profit-sharing, and a new
building to work in.2
Citing paragraph 5 of the complaint filed by the acting prosecutor of the
lower court which states that "the officers and members of the
complainant unions decided to call off the strike and return to work on June
2, 1958 by reason of the injunction issued by the Manila Court of First
Instance," the respondents contend that this was the main cause why the
strikers returned to work and not the letters, exhibits A and B. This
assertion is without merit. The circumstance that the strikers later decided
to return to work ostensibly on account of the injunctive writ issued by the
Court of First Instance of Manila cannot alter the intrinsic quality of the
letters, which were calculated, or which tended, to interfere with the
employees' right to engage in lawful concerted activity in the form of a
strike. Interference constituting unfair labor practice will not cease to be
such simply because it was susceptible of being thwarted or resisted, or
that it did not proximately cause the result intended. For success of
purpose is not, and should not, be the criterion in determining whether or
not a prohibited act constitutes unfair labor practice.
The test of whether an employer has interfered with and
coerced employees within the meaning of subsection (a)
(1) is whether the employer has engaged in conduct which
it may reasonably be said tends to interfere with the free
exercise of employees' rights under section 3 of the Act,
and it is not necessary that there be direct evidence that
any employee was in fact intimidated or coerced by
statements of threats of the employer if there is a
reasonable inference that anti-union conduct of the
employer does have an adverse effect on self-organization

and collective bargaining. (Francisco, Labor Laws 1956, Vol.

II, p. 323, citing NLRB v. Ford, C.A., 1948, 170 F2d 735).
Besides, the letters, exhibits A and B, should not be considered by
themselves alone but should be read in the light of the preceding and
subsequent circumstances surrounding them. The letters should be
interpreted according to the "totality of conduct doctrine,"
... whereby the culpability of an employer's remarks were
to be evaluated not only on the basis of their implicit
implications, but were to be appraised against the
background of and in conjunction with collateral
circumstances. Under this "doctrine" expressions of opinion
by an employer which, though innocent in themselves,
frequently were held to be culpable because of the
circumstances under which they were uttered, the history
of the particular employer's labor relations or anti-union
bias or because of their connection with an established
collateral plan of coercion or interference. (Rothenberg on
Relations, p. 374, and cases cited therein.)
It must be recalled that previous to the petitioners' submission of proposals
for an amended renewal of their respective collective bargaining
agreements to the respondents, the latter hired Felipe Enage and Ramon
Garcia, former legal counsels of the petitioners, as personnel manager and
assistant corporate secretary, respectively, with attractive compensations.
After the notice to strike was served on the Companies and negotiations
were in progress in the Department of Labor, the respondents reclassified
87 employees as supervisors without increase in salary or in responsibility,
in effect compelling these employees to resign from their unions. And
during the negotiations in the Department of Labor, despite the fact that
the petitioners granted the respondents' demand that the former drop their
demand for union shop and in spite of urgings by the conciliators of the
Department of Labor, the respondents adamantly refused to answer the
Unions' demands en toto. Incidentally, Enage was the chairman of the
negotiating panel for the Companies in the collective bargaining between
the former and the Unions. After the petitioners went to strike, the strikers
were individually sent copies of exhibit A, enticing them to abandon their
strike by inducing them to return to work upon promise of special
privileges. Two days later, the respondents, thru their president and
manager, respondent Jose M. Olbes, brought three truckloads of nonstrikers and others, escorted by armed men, who, despite the presence of
eight entrances to the three buildings occupied by the Companies, entered
thru only one gate less than two meters wide and in the process, crashed

thru the picket line posted in front of the premises of the Insular Life
Building. This resulted in injuries on the part of the picketers and the strikebreakers.lwph1.t Then the respondents brought against the picketers
criminal charges, only three of which were not dismissed, and these three
only for slight misdemeanors. As a result of these criminal actions, the
respondents were able to obtain an injunction from the court of first
instance restraining the strikers from stopping, impeding, obstructing, etc.
the free and peaceful use of the Companies' gates, entrance and driveway
and the free movement of persons and vehicles to and from, out and in, of
the Companies' buildings. On the same day that the injunction was issued,
the letter, Exhibit B, was sent again individually and by registered
special delivery mail to the strikers, threatening them with dismissal if
they did not report for work on or before June 2, 1958. But when most of
the petitioners reported for work, the respondents thru a screening
committee of which Ramon Garcia was a member refused to admit 63
members of the Unions on the ground of "pending criminal charges."
However, when almost all were cleared of criminal charges by the fiscal's
office, the respondents adamantly refused admission to 34 officials and
union members. It is not, however, disputed that all-non-strikers with
pending criminal charges which arose from the breakthrough incident of
May 23, 1958 were readmitted immediately by the respondents. Among
the non-strikers with pending criminal charges who were readmitted were
Generoso Abella, Enrique Guidote, Emilio Carreon, Antonio Castillo,
Federico Barretto, Manuel Chuidian and Nestor Cipriano. And despite the
fact that the fiscal's office found no probable cause against the petitioning
strikers, the Companies adamantly refused admission to them on the
pretext that they committed "acts inimical to the interest of the
respondents," without stating specifically the inimical acts allegedly
committed. They were soon to admit, however, that these alleged inimical
acts were the same criminal charges which were dismissed by the fiscal
and by the courts..
Verily, the above actuations of the respondents before and after the
issuance of the letters, exhibit A and B, yield the clear inference that the
said letters formed of the respondents scheme to preclude if not destroy
unionism within them.
To justify the respondents' threat to dismiss the strikers and secure
replacements for them in order to protect and continue their business, the
CIR held the petitioners' strike to be an economic strike on the basis of
exhibit 4 (Notice of Strike) which states that there was a "deadlock in
collective bargaining" and on the strength of the supposed testimonies of
some union men who did not actually know the very reason for the strike.

It should be noted that exhibit 4, which was filed on January 27, 1958,
states, inter alia:
TO: BUREAU OF LABOR RELATIONS
DEPARTMENT OF LABOR
MANILA
Thirty (30) days from receipt of this notice by the Office,
this [sic] unions intends to go on strike against
THE INSULAR LIFE ASSURANCE CO., LTD.
Plaza Moraga, Manila
THE FGU INSURANCE GROUP
Plaza Moraga, Manila
INSULAR LIFE BUILDING ADMINISTRATION
Plaza Moraga, Manila .
for the following reason: DEADLOCK IN COLLECTIVE
BARGAINING...
However, the employees did not stage the strike after the thirty-day
period, reckoned from January 27, 1958. This simply proves that the reason
for the strike was not the deadlock on collective bargaining nor any lack of
economic concessions. By letter dated April 15, 1958, the respondents
categorically stated what they thought was the cause of the "Notice of
Strike," which so far as material, reads:
3. Because you did not see fit to agree with our position on
the union shop, you filed a notice of strike with the Bureau
of Labor Relations on 27 January 1958, citing `deadlock in
collective bargaining' which could have been for no other
issue than the union shop." (exhibit 8, letter dated April 15,
1958.)
The strike took place nearly four months from the date the said notice of
strike was filed. And the actual and main reason for the strike was, "When
it became crystal clear the management double crossed or will not
negotiate in good faith, it is tantamount to refusal collectively and
considering the unfair labor practice in the meantime being committed by
the management such as the sudden resignation of some unionists and
[who] became supervisors without increase in salary or change in

responsibility, such as the coercion of employees, decided to declare the

strike." (tsn., Oct. 14, 1958, p. 14.) The truth of this assertion is amply
proved by the following circumstances: (1) it took the respondents six (6)
months to consider the petitioners' proposals, their only excuse being that
they could not go on with the negotiations if the petitioners did not drop
the demand for union shop (exh. 7, respondents' letter dated April 7,
1958); (2) when the petitioners dropped the demand for union shop, the
respondents did not have a counter-offer to the petitioners' demands. Sec.
14 of Rep. Act 875 required the respondents to make a reply to the
petitioners' demands within ten days from receipt thereof, but instead they
asked the petitioners to give a "well reasoned, workable formula which
takes into account the financial position of the group companies." (tsn.,
Sept. 8, 1958, p. 62; tsn., Feb. 26, 1969, p. 49.)
II. Exhibit H imposed three conditions for readmission of the strikers,
namely: (1) the employee must be interested in continuing his work with
the group companies; (2) there must be no criminal charges against him;
and (3) he must report for work on June 2, 1958, otherwise he would be
replaced. Since the evidence shows that all the employees reported back
to work at the respondents' head office on June 2, 1953, they must be
considered as having complied with the first and third conditions.
Our point of inquiry should therefore be directed at whether they also
complied with the second condition. It is not denied that when the strikers
reported for work on June 2, 1958, 63 members of the Unions were refused
readmission because they had pending criminal charges. However, despite
the fact that they were able to secure their respective clearances 34
officials and union members were still refused readmission on the alleged
ground that they committed acts inimical to the Companies. It is beyond
dispute, however, that non-strikers who also had criminal charges pending
against them in the fiscal's office, arising from the same incidents whence
the criminal charges against the strikers evolved, were readily readmitted
and were not required to secure clearances. This is a clear act of
discrimination practiced by the Companies in the process of rehiring and is
therefore a violation of sec. 4(a) (4) of the Industrial Peace Act.
The respondents did not merely discriminate against all the strikers in
general. They separated the active from the less active unionists on the
basis of their militancy, or lack of it, on the picket lines. Unionists belonging
to the first category were refused readmission even after they were able to
secure clearances from the competent authorities with respect to the
criminal charges filed against them. It is significant to note in this
connection that except for one union official who deserted his union on the
second day of the strike and who later participated in crashing through the

picket lines, not a single union officer was taken back to work.
Discrimination undoubtedly exists where the record shows that the union
activity of the rehired strikers has been less prominent than that of the
strikers who were denied reinstatement.
So is there an unfair labor practice where the employer,
although authorized by the Court of Industrial Relations to
dismiss the employees who participated in an illegal strike,
dismissed only the leaders of the strikers, such dismissal
being evidence of discrimination against those dismissed
and constituting a waiver of the employer's right to dismiss
the striking employees and a condonation of the fault
committed by them." (Carlos and Fernando, Labor and
Social Legislation, p. 62, citing Phil. Air Lines, Inc. v. Phil. Air
Lines Emloyees Association, L-8197, Oct. 31, 1958.)
It is noteworthy that perhaps in an anticipatory effort to exculpate
themselves from charges of discrimination in the readmission of strikers
returning to work the respondents delegated the power to readmit to a
committee. But the respondent Olbes had chosen Vicente Abella, chief of
the personnel records section, and Ramon Garcia, assistant corporate
secretary, to screen the unionists reporting back to work. It is not difficult
to imagine that these two employees having been involved in
unpleasant incidents with the picketers during the strike were hostile to
the strikers. Needless to say, the mere act of placing in the hands of
employees hostile to the strikers the power of reinstatement, is a form of
discrimination in rehiring.
Delayed reinstatement is a form of discrimination in
rehiring, as is having the machinery of reinstatement in the
hands of employees hostile to the strikers, and reinstating
a union official who formerly worked in a unionized plant,
to a job in another mill, which was imperfectly organized.
(Morabe, The Law on Strikes, p. 473, citing Sunshine Mining
Co., 7 NLRB 1252; Cleveland Worsted Mills, 43 NLRB 545;
emphasis supplied.)
Equally significant is the fact that while the management and the members
of the screening committee admitted the discrimination committed against
the strikers, they tossed back and around to each other the responsibility
for the discrimination. Thus, Garcia admitted that in exercising for the
management the authority to screen the returning employees, the
committee admitted the non-strikers but refused readmission to the
strikers (tsn., Feb. 6, 1962, pp. 15-19, 23-29). Vicente Abella, chairman of

the management's screening committee, while admitting the

discrimination, placed the blame therefor squarely on the management
(tsn., Sept. 20, 1960, pp. 7-8, 14-18). But the management, speaking
through the respondent Olbes, head of the Companies, disclaimed
responsibility for the discrimination. He testified that "The decision whether
to accept or not an employee was left in the hands of that committee that
had been empowered to look into all cases of the strikers." (tsn., Sept. 6,
1962, p. 19.)
Of course, the respondents through Ramon Garcia tried to explain the
basis for such discrimination by testifying that strikers whose participation
in any alleged misconduct during the picketing was not serious in nature
were readmissible, while those whose participation was serious were not.
(tsn., Aug. 4, 1961, pp. 48-49, 56). But even this distinction between acts
of slight misconduct and acts of serious misconduct which the respondents
contend was the basis for either reinstatement or discharge, is completely
shattered upon a cursory examination of the evidence on record. For with
the exception of Pascual Esquillo whose dismissal sent to the other strikers
cited the alleged commission by them of simple "acts of misconduct."
III. Anent the third assignment of error, the record shows that not a single
dismissed striker was given the opportunity to defend himself against the
supposed charges against him. As earlier mentioned, when the striking
employees reported back for work on June 2, 1958, the respondents
refused to readmit them unless they first secured the necessary
clearances; but when all, except three, were able to secure and
subsequently present the required clearances, the respondents still refused
to take them back. Instead, several of them later received letters from the
respondents in the following stereotyped tenor:
This will confirm the termination of your employment with
the Insular Life-FGU Insurance Group as of 2 June 1958.
The termination of your employment was due to the fact
that you committed acts of misconduct while picketing
during the last strike. Because this may not constitute
sufficient cause under the law to terminate your
employment without pay, we are giving you the amount of
P1,930.32 corresponding to one-half month pay for every
year of your service in the Group Company.
Kindly acknowledge receipt of the check we are sending
herewith.

Olbes
The respondents, however, admitted that the alleged "acts of misconduct"
attributed to the dismissed strikers were the same acts with which the said
strikers were charged before the fiscal's office and the courts. But all these
charges except three were dropped or dismissed.
Indeed, the individual cases of dismissed officers and members of the
striking unions do not indicate sufficient basis for dismissal.
Emiliano Tabasondra, vice-president of the petitioner FGU Insurance Group
Workers & Employees Association-NATU, was refused reinstatement
allegedly because he did not report for duty on June 2, 1958 and, hence,
had abandoned his office. But the overwhelming evidence adduced at the
trial and which the respondents failed to rebut, negates the respondents'
charge that he had abandoned his job. In his testimony, corroborated by
many others, Tabasondra particularly identified the management men to
whom he and his group presented themselves on June 2, 1958. He
mentioned the respondent Olbes' secretary, De Asis, as the one who
received them and later directed them when Olbes refused them an
audience to Felipe Enage, the Companies' personnel manager. He
likewise categorically stated that he and his group went to see Enage as
directed by Olbes' secretary. If Tabasondra were not telling the truth, it
would have been an easy matter for the respondents to produce De Asis
and Enage who testified anyway as witnesses for the respondents on
several occasions to rebut his testimony. The respondents did nothing of
the kind. Moreover, Tabasondra called on June 21, 1958 the respondents'
attention to his non-admission and asked them to inform him of the
reasons therefor, but instead of doing so, the respondents dismissed him
by their letter dated July 10, 1958. Elementary fairness required that
before being dismissed for cause, Tabasondra be given "his day in court."
At any rate, it has been held that mere failure to report for work after
notice to return, does not constitute abandonment nor bar reinstatement.
In one case, the U.S. Supreme Court held that the taking back of six of
eleven men constituted discrimination although the five strikers who were
not reinstated, all of whom were prominent in the union and in the strike,
reported for work at various times during the next three days, but were
told that there were no openings. Said the Court:
... The Board found, and we cannot say that its finding is
unsupported, that, in taking back six union men, the
respondent's officials discriminated against the latter on
account of their union activities and that the excuse given

that they did not apply until after the quota was full was an
afterthought and not the true reason for the discrimination
against them. (NLRB v. Mackay Radio & Telegraph Co., 304
U.S. 333, 58 Sup. Ct. 904, 82 L. Ed. 1381) (Mathews, Labor
Relations and the Law, p. 725, 728)
The respondents' allegation that Tabasondra should have returned after
being refused readmission on June 2, 1958, is not persuasive. When the
employer puts off reinstatement when an employee reports for work at the
time agreed, we consider the employee relieved from the duty of returning
further.
Sixto Tongos was dismissed allegedly because he revealed that despite the
fact that the Companies spent more than P80,000 for the vacation trips of
officials, they refused to grant union demands; hence, he betrayed his trust
as an auditor of the Companies. We do not find this allegation convincing.
First, this accusation was emphatically denied by Tongos on the witness
stand. Gonzales, president of one of the respondent Companies and one of
the officials referred to, took a trip abroad in 1958. Exchange controls were
then in force, and an outgoing traveller on a combined business and
vacation trip was allowed by the Central Bank, per its Circular 52
(Notification to Authorized Agent Banks) dated May 9, 1952, an allocation
of $1,000 or only P2,000, at the official rate of two pesos to the dollar, as
pocket money; hence, this was the only amount that would appear on the
books of the Companies. It was only on January 21, 1962, per its Circular
133 (Notification to Authorized Agent Banks), that the Central Bank lifted
the exchange controls. Tongos could not therefore have revealed an
amount bigger than the above sum. And his competence in figures could
not be doubted considering that he had passed the board examinations for
certified public accountants. But assuming arguendo that Tongos indeed
revealed the true expenses of Gonzales' trip which the respondents
never denied or tried to
disprove his statements clearly fall within the sphere of a unionist's right
to discuss and advertise the facts involved in a labor dispute, in
accordance with section 9(a)(5) of Republic Act 875 which guarantees the
untramelled exercise by striking employees of the right to give "publicity to
the existence of, or the fact involved in any labor dispute, whether by
advertising, speaking, patrolling or by any method not involving fraud or
violence." Indeed, it is not only the right, it is as well the duty, of every
unionist to advertise the facts of a dispute for the purpose of informing all
those affected thereby. In labor disputes, the combatants are expected to
expose the truth before the public to justify their respective demands.
Being a union man and one of the strikers, Tongos was expected to reveal
the whole truth on whether or not the respondent Companies were justified

in refusing to accede to union demands. After all, not being one of the
supervisors, he was not a part of management. And his statement, if
indeed made, is but an expression of free speech protected by the
Constitution.
Free speech on both sides and for every faction on any side
of the labor relation is to me a constitutional and useful
right. Labor is free ... to turn its publicity on any labor
oppression, substandard wages, employer unfairness, or
objectionable working conditions. The employer, too,
should be free to answer and to turn publicity on the
records of the leaders of the unions which seek the
confidence of his men ... (Concurring opinion of Justice
Jackson in Thomas v. Collins, 323 U.S. 516, 547, 65 Sup. Ct.
315, 89 L. Ed. 430.) (Mathews, Labor Relations and the
Law, p. 591.)
The respondents also allege that in revealing certain confidential
information, Tongos committed not only a betrayal of trust but also a
violation of the moral principles and ethics of accountancy. But nowhere in
the Code of Ethics for Certified Public Accountants under the Revised Rules
and Regulations of the Board of Accountancy formulated in 1954, is this
stated. Moreover, the relationship of the Companies with Tongos was that
of an employer and not a client. And with regard to the testimonies of Juan
Raymundo and Antolin Carillo, both vice-presidents of the Trust Insurance
Agencies, Inc. about the alleged utterances made by Tongos, the lower
court should not have given them much weight. The firm of these
witnesses was newly established at that time and was still a "general
agency" of the Companies. It is not therefore amiss to conclude that they
were more inclined to favor the respondents rather than Tongos.
Pacifico Ner, Paulino Bugay, Jose Garcia, Narciso Dao, Vicente Alsol and
Hermenigildo Ramirez, opined the lower court, were constructively
dismissed by non-readmission allegedly because they not only prevented
Ramon Garcia, assistant corporate secretary, and Vicente Abella, chief of
the personnel records section of the Companies, from entering the
Companies' premises on May 21, 1958, but they also caused bruises and
abrasions on Garcia's chest and forehead acts considered inimical to the
interest of the respondents. The Unions, upon the other hand, insist that
there is complete lack of evidence that Ner took part in pushing Garcia;
that it was Garcia who elbowed his way through the picket lines and
therefore Ner shouted "Close up," which the picketers did; and that Garcia
tossed Paulino Bugay's placard and a fight ensued between them in which
both suffered injuries. But despite these conflicting versions of what

actually happened on May 21, 1958, there are grounds to believe that the
picketers are not responsible for what happened.lwph1.t The picketing
on May 21, 1958, as reported in the police blotter, was peaceful (see Police
blotter report, exh. 3 in CA-G.R. No. 25991-R of the Court of Appeals, where
Ner was acquitted). Moreover, although the Companies during the strike
were holding offices at the Botica Boie building at Escolta, Manila; Tuason
Building at San Vicente Street, Manila; and Ayala, Inc. offices at Makati,
Rizal, Garcia, the assistant corporate secretary, and Abella, the chief of the
personnel records section, reported for work at the Insular Life Building.
There is therefore a reasonable suggestion that they were sent to work at
the latter building to create such an incident and have a basis for filing
criminal charges against the petitioners in the fiscal's office and applying
for injunction from the court of first instance. Besides, under the
circumstances the picketers were not legally bound to yield their grounds
and withdraw from the picket lines. Being where the law expects them to
be in the legitimate exercise of their rights, they had every reason to
defend themselves and their rights from any assault or unlawful
transgression. Yet the police blotter, about adverted to, attests that they
did not resort to violence.
The heated altercations and occasional blows exchanged on the picket line
do not affect or diminish the right to strike. Persuasive on this point is the
following commentary: .
We think it must be conceded that some disorder is
unfortunately quite usual in any extensive or long drawn
out strike. A strike is essentially a battle waged with
economic weapons. Engaged in it are human beings whose
feelings are stirred to the depths. Rising passions call forth
hot words. Hot words lead to blows on the picket line. The
transformation from economic to physical combat by those
engaged in the contest is difficult to prevent even when
cool heads direct the fight. Violence of this nature, however
much it is to be regretted, must have been in the
contemplation of the Congress when it provided in Sec. 13
of Act 29 USCA Sec. 163, that nothing therein should be
construed so as to interfere with or impede or diminish in
any way the right to strike. If this were not so, the rights
afforded to employees by the Act would indeed be illusory.
We accordingly recently held that it was not intended by
the Act that minor disorders of this nature would deprive a
striker of the possibility of reinstatement. (Republic Steel
Corp. v. N. L. R. B., 107 F2d 472, cited in Mathews, Labor
Relations and the Law, p. 378)

Hence the incident that occurred between Ner, et al. and Ramon Garcia
was but a necessary incident of the strike and should not be considered as
a bar to reinstatement. Thus it has been held that:
Fist-fighting between union and non-union employees in the midst of a
strike is no bar to reinstatement. (Teller, Labor Disputes and Collective
Bargaining, Vol. II, p. 855 citing Stackpole Carbon, Co. 6 NLRB 171,
enforced 105 F2d 167.)
Furthermore, assuming that the acts committed by the strikers were
transgressions of law, they amount only to mere ordinary misdemeanors
and are not a bar to reinstatement.
In cases involving misdemeanors the board has generally held that
unlawful acts are not bar to reinstatement. (Teller, Labor Disputes and
Collective Bargaining, Id., p. 854, citing Ford Motor Company, 23 NLRB No.
28.)
Finally, it is not disputed that despite the pendency of criminal charges
against non-striking employees before the fiscal's office, they were readily
admitted, but those strikers who had pending charges in the same office
were refused readmission. The reinstatement of the strikers is thus in
order.
[W]here the misconduct, whether in reinstating persons
equally guilty with those whose reinstatement is opposed,
or in other ways, gives rise to the inference that union
activities rather than misconduct is the basis of his
[employer] objection, the Board has usually required
reinstatement." (Teller, supra, p. 853, citing the Third
Annual Report of NLRB [1938], p. 211.)
Lastly, the lower Court justified the constructive dismissal of Florencio
Ibarra allegedly because he committed acts inimical to the interest of the
respondents when, as president of the FGU Workers and Employees
Association-NATU, he advised the strikers that they could use force and
violence to have a successful picket and that picketing was precisely
intended to prevent the non-strikers and company clients and customers
from entering the Companies' buildings. Even if this were true, the record
discloses that the picket line had been generally peaceful, and that
incidents happened only when management men made incursions into and
tried to break the picket line. At any rate, with or without the advice of
Ibarra, picketing is inherently explosive. For, as pointed out by one author,

"The picket line is an explosive front, charged with the emotions and fierce
loyalties of the union-management dispute. It may be marked by colorful
name-calling, intimidating threats or sporadic fights between the pickets
and those who pass the line." (Mathews, Labor Relations and the Law, p.
752). The picket line being the natural result of the respondents' unfair
labor practice, Ibarra's misconduct is at most a misdemeanor which is not
a bar to reinstatement. Besides, the only evidence presented by the
Companies regarding Ibarra's participation in the strike was the testimony
of one Rodolfo Encarnacion, a former member of the board of directors of
the petitioner FGU Insurance Group Workers and Employees Union-NATU,
who became a "turncoat" and who likewise testified as to the union
activities of Atty. Lacsina, Ricardo Villaruel and others (annex C, Decision,
p. 27) another matter which emphasizes the respondents' unfair labor
practice. For under the circumstances, there is good ground to believe that
Encarnacion was made to spy on the actvities of the union members. This
act of the respondents is considered unjustifiable interference in the union
activities of the petitioners and is unfair labor practice.
It has been held in a great number of decisions at
espionage by an employer of union activities, or
surveillance thereof, are such instances of interference,
restraint or coercion of employees in connection with their
right to organize, form and join unions as to constitute
unfair labor practice.
... "Nothing is more calculated to interfere with, restrain
and coerce employees in the exercise of their right to selforganization than such activity even where no discharges
result. The information obtained by means of espionage is
in valuable to the employer and can be used in a variety of
cases to break a union." The unfair labor practice is
committed whether the espionage is carried on by a
professional labor spy or detective, by officials or
supervisory employees of the employer, or by fellow
employees acting at the request or direction of the
employer, or an ex-employee..." (Teller, Labor Disputes and
Collective Bargaining, Vol. II, pp. 765-766, and cases cited.)
.
IV. The lower court should have ordered the reinstatement of the officials
and members of the Unions, with full back wages from June 2, 1958 to the
date of their actual reinstatement to their usual employment. Because all
too clear from the factual and environmental milieu of this case, coupled
with settled decisional law, is that the Unions went on strike because of the

unfair labor practices committed by the respondents, and that when the
strikers reported back for work upon the invitation of the respondents
they were discriminatorily dismissed. The members and officials of the
Unions therefore are entitled to reinstatement with back pay.
[W]here the strike was induced and provoked by improper
conduct on the part of an employer amounting to an 'unfair
labor practice,' the strikers are entitled to reinstatement
with back pay. (Rothenberg on Labor Relations, p. 418.)
[A]n employee who has been dismissed in violation of the
provisions of the Act is entitled to reinstatement with back
pay upon an adjudication that the discharge was illegal."
(Id., citingWaterman S. S. Corp. v. N. L. R. B., 119 F2d 760;
N. L. R. B. v. Richter's Bakery, 140 F2d 870; N. L. R. B. v.
Southern Wood Preserving Co., 135 F. 2d 606; C. G. Conn,
Ltd. v. N. L. R. B., 108 F2d 390; N. L. R. B. v. American Mfg.
Co., 106 F2d 61; N. L. R. B. v. Kentucky Fire Brick Co., 99
F2d 99.)
And it is not a defense to reinstatement for the respondents to allege that
the positions of these union members have already been filled by
replacements.
[W]here the employers' "unfair labor practice" caused or
contributed to the strike or where the 'lock-out' by the
employer constitutes an "unfair labor practice," the
employer cannot successfully urge as a defense that the
striking or lock-out employees position has been filled by
replacement. Under such circumstances, if no job
sufficiently and satisfactorily comparable to that previously
held by the aggrieved employee can be found, the
employer must discharge the replacement employee, if
necessary, to restore the striking or locked-out worker to
his old or comparable position ... If the employer's
improper conduct was an initial cause of the strike, all the
strikers are entitled to reinstatement and the dismissal of
replacement employees wherever necessary; ... . (Id., p.
422 and cases cited.)
A corollary issue to which we now address ourselves is, from what date
should the backpay payable to the unionists be computed? It is now a
settled doctrine that strikers who are entitled to reinstatement are not
entitled to back pay during the period of the strike, even though it is

caused by an unfair labor practice. However, if they offer to return to work

under the same conditions just before the strike, the refusal to re-employ
or the imposition of conditions amounting to unfair labor practice is a
violation of section 4(a) (4) of the Industrial Peace Act and the employer is
liable for backpay from the date of the offer (Cromwell Commercial
Employees and Laborers Union vs. Court of Industrial Relations, L-19778,
Decision, Sept. 30, 1964, 12 SCRA 124; Id., Resolution on motion for
reconsideration, 13 SCRA 258; see also Mathews, Labor Relations and the
Law, p. 730 and the cited cases). We have likewise ruled that
discriminatorily dismissed employees must receive backpay from the date
of the act of discrimination, that is, from the date of their discharge
(Cromwell Commercial Employees and Laborers Union vs. Court of
Industrial Relations, supra).
The respondents notified the petitioner strikers to report back for work on
June 2, 1958, which the latter did. A great number of them, however, were
refused readmission because they had criminal charges against them
pending before the fiscal's office, although non-strikers who were also
facing criminal indictments were readily readmitted. These strikers who
were refused readmission on June 2, 1958 can thus be categorized as
discriminatorily dismissed employees and are entitled to backpay from said
date. This is true even with respect to the petitioners Jose Pilapil, Paulino
Bugay, Jr. and Jose Garcia, Jr. who were found guilty only of misdemeanors
which are not considered sufficient to bar reinstatement (Teller, Labor
Disputes and Collective Bargaining, p. 854), especially so because their
unlawful acts arose during incidents which were provoked by the
respondents' men. However, since the employees who were denied
readmission have been out of the service of the Companies (for more than
ten years) during which they may have found other employment or other
means of livelihood, it is only just and equitable that whatever they may
have earned during that period should be deducted from their back wages
to mitigate somewhat the liability of the company, pursuant to the
equitable principle that no one is allowed to enrich himself at the expense
of another (Macleod & Co. of the Philippines v. Progressive Federation of
Labor, 97 Phil. 205 [1955]).
The lower court gave inordinate significance to the payment to and
acceptance by the dismissed employees of separation pay. This Court has
ruled that while employers may be authorized under Republic Act 1052 to
terminate employment of employees by serving the required notice, or, in
the absence thereof, by paying the required compensation, the said Act
may not be invoked to justify a dismissal prohibited by law, e.g., dismissal
for union activities.

... While Republic Act No. 1052 authorizes a commercial

establishment to terminate the employment of its
employee by serving notice on him one month in advance,
or, in the absence thereof, by paying him one month
compensation from the date of the termination of his
employment, such Act does not give to the employer a
blanket authority to terminate the employment regardless
of the cause or purpose behind such termination. Certainly,
it cannot be made use of as a cloak to circumvent a final
order of the court or a scheme to trample upon the right of
an employee who has been the victim of an unfair labor
practice. (Yu Ki Lam, et al. v. Nena Micaller, et al., 99 Phil.
904 [1956].)
Finally, we do not share the respondents' view that the findings of fact of
the Court of Industrial Relations are supported by substantial and credible
proof. This Court is not therefore precluded from digging deeper into the
factual milieu of the case (Union of Philippine Education Employees v.
Philippine Education Company, 91 Phil. 93; Lu Do & Lu Ym Corporation v.
Philippine-Land-Air-Sea Labor Union, 11 SCRA 134 [1964]).
V. The petitioners (15 of them) ask this Court to cite for contempt the
respondent Presiding Judge Arsenio Martinez of the Court of Industrial
Relations and the counsels for the private respondents, on the ground that
the former wrote the following in his decision subject of the instant petition
for certiorari, while the latter quoted the same on pages 90-91 of the
respondents' brief: .
... Says the Supreme Court in the following decisions:
In a proceeding for unfair labor practice, involving
a determination as to whether or not the acts
of the employees concerned justified the
adoption of the employer of disciplinary
measures against them, the mere fact that the
employees may be able to put up a valid
defense in a criminal prosecution for the same
acts, does not erase or neutralize the
employer's right to impose discipline on said
employees. For it is settled that not even the
acquittal of an employee of the criminal charge
against him is a bar to the employer's right to
impose discipline on its employees, should the
act upon which the criminal charged was

based constitute nevertheless an activity

inimical to the employer's interest... The act of
the employees now under consideration may
be considered as a misconduct which is a just
cause for dismissal. (Lopez, Sr., et al. vs.
Chronicle Publication Employees Ass'n. et al.,
G.R. No. L-20179-81, December 28, 1964.)
(emphasis supplied)
The two pertinent paragraphs in the above-cited decision * which
contained the underscored portions of the above citation read however as
follows:
Differently as regard the dismissal of Orlando Aquino and
Carmelito Vicente, we are inclined to uphold the action
taken by the employer as proper disciplinary measure. A
reading of the article which allegedly caused their
dismissal reveals that it really contains an insinuation
albeit subtly of the supposed exertion of political pressure
by the Manila Chronicle management upon the City Fiscal's
Office, resulting in the non-filing of the case against the
employer. In rejecting the employer's theory that the
dismissal of Vicente and Aquino was justified, the lower
court considered the article as "a report of some acts and
omissions of an Assistant Fiscal in the exercise of his
official functions" and, therefore, does away with the
presumption of malice. This being a proceeding for unfair
labor practice, the matter should not have been viewed or
gauged in the light of the doctrine on a publisher's
culpability under the Penal Code. We are not here to
determine whether the employees' act could stand criminal
prosecution, but only to find out whether the aforesaid act
justifies the adoption by the employer of disciplinary
measure against them. This is not sustaining the ruling
that the publication in question is qualified privileged, but
even on the assumption that this is so, the exempting
character thereof under the Penal Code does not
necessarily erase or neutralize its effect on the employer's
interest which may warrant employment of disciplinary
measure. For it must be remembered that not even the
acquittal of an employee, of the criminal charges against
him, is a bar to the employer's right to impose discipline on
its employees, should the act upon which the criminal

charges was based constitute nevertheless an activity

inimical to the employer's interest.

should the act upon which the criminal charges were based constitute
nevertheless an activity inimical to the employer's interest."

In the herein case, it appears to us that for an employee to

publish his "suspicion," which actually amounts to a public
accusation, that his employer is exerting political pressure
on a public official to thwart some legitimate activities on
the employees, which charge, in the least, would sully the
employer's reputation, can be nothing but an act inimical
to the said employer's interest. And the fact that the same
was made in the union newspaper does not alter its
deleterious character nor shield or protect a reprehensible
act on the ground that it is a union activity, because such
end can be achieved without resort to improper conduct or
behavior. The act of the employees now under
consideration may be considered as a misconduct which is
a just cause for dismissal.** (Emphasis ours)

Be that as it may, we must articulate our firm view that in citing this
Court's decisions and rulings, it is the bounden duty of courts, judges and
lawyers to reproduce or copy the same word-for-word and punctuation
mark-for-punctuation mark. Indeed, there is a salient and salutary reason
why they should do this. Only from this Tribunal's decisions and rulings do
all other courts, as well as lawyers and litigants, take their bearings. This is
because the decisions referred to in article 8 of the Civil Code which reads,
"Judicial decisions applying or interpreting the laws or the Constitution
shall form a part of the legal system of the Philippines," are only those
enunciated by this Court of last resort. We said in no uncertain terms
in Miranda, et al. vs. Imperial, et al. (77 Phil. 1066) that "[O]nly the
decisions of this Honorable Court establish jurisprudence or doctrines in
this jurisdiction." Thus, ever present is the danger that if not faithfully and
exactly quoted, the decisions and rulings of this Court may lose their
proper and correct meaning, to the detriment of other courts, lawyers and
the public who may thereby be misled. But if inferior courts and members
of the bar meticulously discharge their duty to check and recheck their
citations of authorities culled not only from this Court's decisions but from
other sources and make certain that they are verbatim reproductions down
to the last word and punctuation mark, appellate courts will be precluded
from acting on misinformation, as well as be saved precious time in finding
out whether the citations are correct.

It is plain to the naked eye that the 60 un-underscored words of the

paragraph quoted by the respondent Judge do not appear in the pertinent
paragraph of this Court's decision in L-20179-81. Moreover, the first
underscored sentence in the quoted paragraph starts with "For it is
settled ..." whereas it reads, "For it must be remembered ...," in this Court's
decision. Finally, the second and last underlined sentence in the quoted
paragraph of the respondent Judge's decision, appears not in the same
paragraph of this Court's decision where the other sentence is, but in the
immediately succeeding paragraph.
This apparent error, however, does not seem to warrant an indictment for
contempt against the respondent Judge and the respondents' counsels. We
are inclined to believe that the misquotation is more a result of clerical
ineptitude than a deliberate attempt on the part of the respondent Judge to
mislead. We fully realize how saddled with many pending cases are the
courts of the land, and it is not difficult to imagine that because of the
pressure of their varied and multifarious work, clerical errors may escape
their notice. Upon the other hand, the respondents' counsels have
the prima facie right to rely on the quotation as it appears in the
respondent Judge's decision, to copy it verbatim, and to incorporate it in
their brief. Anyway, the import of the underscored sentences of the
quotation in the respondent Judge's decision is substantially the same as,
and faithfully reflects, the particular ruling in this Court's decision, i.e., that
"[N]ot even the acquittal of an employee, of the criminal charges against
him, is a bar to the employer's right to impose discipline on its employees,

Happily for the respondent Judge and the respondents' counsels, there was
no substantial change in the thrust of this Court's particular ruling which
they cited. It is our view, nonetheless, that for their mistake, they should
be, as they are hereby, admonished to be more careful when citing
jurisprudence in the future. ACCORDINGLY, the decision of the Court of
Industrial Relations dated August 17, 1965 is reversed and set aside, and
another is entered, ordering the respondents to reinstate the dismissed
members of the petitioning Unions to their former or comparatively similar
positions, with backwages from June 2, 1958 up to the dates of their actual
reinstatements. Costs against the respondents.
A.C. No. 6501 August 31, 2006
(CBD Case Nos. 03-1076, 03-1108, 03-1109, 03-1125)
ATTY. LEON L. ASA and ATTY. JOSE A. OLIVEROS, Complainants,
vs.

ATTY. PABLITO M. CASTILLO and ATTY. GINGER ANNE

CASTILLO, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - - -x
ATTY. PABLITO M. CASTILLO, Complainant,
vs.
ATTY. JOSE A. OLIVEROS, Respondent.
x-----------------------x
ATTY. PABLITO M. CASTILLO, Complainant,
vs.
ATTY. LEON L. ASA, Respondent.
x- - - - - - - - - - - - - - - - - - - - - - - - x
ATTY. LEON L. ASA, Complainant,
vs.
ATTY. PABLITO M. CASTILLO, Respondent.
DECISION
CARPIO MORALES, J.:
Subject of the present Decision are four administrative cases, docketed by
the Integrated Bar of the Philippines (IBP) as Commission on Bar Discipline
(CBD) Case Nos. 03-1076,03-1108,03-1109, and 03-1125.
I. CBD Case No. 03-1076
In 1996, Atty. Pablito M. Castillo (Castillo), then an associate of the Laurel
Law Offices of which Attorneys Leon L. Asa (Asa) and Jose A. Oliveros
(Oliveros) are partners, endorsed to the law firm a guardianship case,
Special Proceeding No. 5222, "In re: Guardianship of the Minors Honeylyn,
Alexandra and Jerill Nonan," which was pending before the Regional Trial
Court (RTC) of Angeles City, Branch 59. Castillo appeared as counsel of
record for the therein petitioner, Dr. Salvador H. Laurel, guardian ad
litem of the minors Nonan who appear to have inherited a sizeable amount
of US dollars.
A misunderstanding later occurred between Asa and Castillo as regards
their sharing in the attorneys fees in the guardianship case.

On page 6 of a pleading entitled "Reply to Petitioner-Guardians

Comment/Opposition,1 ETC." dated July 19, 2002 filed before Branch 59 of
the Angeles RTC and signed by Castillos daughter Ginger Anne Castillo
(Ginger Anne) as "counsel" for Castillo who filed a Notice Ad Cautelam, it
was alleged that, inter alia, "Asa wants to be paid an additional $75,000.00
for his services in providing coffee and opening doors whenever there is a
conference at the Laurel Law Offices."2
Finding the above statement of Castillo and Ginger Anne to be a brazen
falsehood concocted to besmirch Asas reputation, Asa and Oliveros filed
before IBP an administrative complaint3 against Castillo and Ginger Anne,
for gross violation of the lawyers oath and the Code of Professional
Responsibility. The case was docketed as CBD Case No. 03-1076.
In their complaint, Asa and Oliveros also charged Castillo with
machinations and deceit arising from the following alleged incidents:
In a conference held at the Laurel Law Offices prior to January 20, 2000
attended by Dr. Laurel, the Nonan minors counsel abroad Atty. Benjamin
Cassiday III (Cassiday), Asa and Castillo, it was agreed that the amount to
be received by Dr. Laurel in trust for the Nonan heirs would be deposited at
the Rizal Commercial Banking Corporation (RCBC), St. Francis Square
Branch, Pasig City under Dollar Savings Account No. 8-250-00043-0.
Castillo, however, proposed that the funds be deposited instead at the
United Coconut Planters Bank (UCPB), he explaining that he knew an
employee there who could facilitate "the transaction." Dr. Laurel rejected
this proposition and instead instructed Castillo to file the appropriate
motion to have the funds deposited at the RCBC.4
Without showing to Dr. Laurel the motion he was instructed to prepare,
Castillo filed the same with the Angeles trial court. Dr. Laurel subsequently
received a copy of a March 2, 2000 RTC Order 5 signed by the then trial
Judge Eliezer R. De los Santos granting his motion and accordingly
directing that the funds to be held in trust for the Nonan children
be deposited at the Trust Department of the UCPB Head Office. Dr. Laurel,
Cassiday and Asa thus filed with the Angeles City trial court an Urgent
Motion for Reconsideration6 of the March 2, 2000 Angeles RTC Order in
order to have the funds deposited at the RCBC transferred to the RTC, as
previously agreed upon. This motion was granted.
Still in the same complaint, Asa and Oliveros alleged that in a "Reply to
Answer"7 dated June 25, 2001 filed by Castillo with the RTC of Makati City,
Branch 145 in Civil Case No. 01-506, "Atty. P.M. Castillo v. United Coconut

Planters Bank, Lorenzo V. Tan and Angelica S. Hernandez," Castillo again

committed a clear falsehood when he therein stated that:
On the other hand, retired Justice Felipe Kalalo of the Court of Appeals who
personally knew the plaintiff [Castillo] was also profuse in extolling his
academic credentials and accomplishments as a Trial lawyer as follows:
Q: Do you know the claimant Atty. P.M. Castillo?
A: Yes sir, because we were both active Senior Trial lawyers of the Laurel
Law Offices,8 (Underscoring supplied),
he knowing that retired Justice Kalalo had never been at any time a lawyer
at the Laurel Law Offices. In support of this allegation, they appended to
the complaint a certified true copy of the Service Record9 of Justice Kalalo
which does not show that he was ever connected with the Laurel Law
Office.
In their Answer10 to the complaint, Castillo and Ginger Anne declared:
There is nothing wrong or objectionable to the statement that Asas
services in the guardianship case consisted in providing coffee and
opening doors whenever there was a conference at the Laurel Law Offices,
as this was in fact the truth, the comportment being "strictly in accordance
with long cherished Filipino hospitality," and "he [Castillo] would have done
the same with his own visitors."11 In any event, they claim that the assailed
factual narration was material and relevant to Castillos question why Asa
was given the lions share of attorneys fees when he had not rendered any
known material service which redounded to the benefit of the Nonan
children.
Moreover, the Castillos declared that the deposit of the Nonan funds at the
UCPB was not attended with malice or bad faith, nor was it intended to
benefit them as the funds could only be withdrawn by Dr. Laurel who had
exclusive access to all the information pertaining to the interest and
benefits accruing thereto.
As regards the assailed June 25, 2001 "Reply to Answer" filed with the
Makati RTC in Civil Case No. 01-506, the Castillos asserted that Castillo had
no control nor influence over the voluntary and spontaneous testimony of
retired Justice Kalalo in his favor during the proceedings adverted to. 12
II. CBD Case No. 03-1108

Castillo subsequently filed a complaint13 against Oliveros before the IBP,

docketed as CBD Case No. 03-1108, for gross violation of lawyers oath and
the Code of Professional Responsibility.
Castillo alleged that: (1) Oliveros assisted Cassiday in embezzling US
$950,000 representing the share adjudicated to the Nonan heirs; (2) in
conspiracy with Dr. Laurel and a certain Atty. Douglas Cushnie, Oliveros
resorted to forum shopping to undermine and defeat the jurisdiction of the
Philippine court in the guardianship proceedings; (3) Oliveros, along with
Asa, Dr. Laurel and Cassiday, perpetuated other acts of fraud in the
guardianship proceedings; and (4) Oliveros, together with Asa, deliberately
and maliciously filed a groundless administrative complaint against him
and Ginger Anne.
In his Answer14 to the Complaint in CBD Case No. 03-1108, Oliveros,
decrying the allegations against him as patently false, baseless and
malicious, claimed that the complaint was Castillos way of retaliating
against him for having joined Asa in filing the administrative complaint
against him and Ginger Anne (CBD Case No. 03-1076).
III. CBD Case No. 03-1109
Castillo also filed an administrative complaint15 against Asa before the IBP,
charging him with embezzlement, dishonesty, betrayal of trust, grave
abuse of confidence and violation of the lawyers oath and the Code of
Professional Responsibility. The case was docketed as CBD Case No. 031109.
Castillo alleged that (1) Asa, Cassiday and Dr. Laurel scandalously
mismanaged the estate of the Nonan heirs, the bulk of which they
indiscriminately pocketed; (2) Asa and Oliveros filed a groundless
administrative complaint against him and Ginger Anne to compel him to
withdraw his claim for attorneys fees against Dr. Laurel and his bid to
replace the latter as guardian of the Nonan heirs; (3) despite an
Agreement16 dated February 16, 2000 between him and Asa that the latter
would receive only 25% of whatever he (Castillo) would receive as
attorneys fees, Asa secretly pocketed the amounts of $24,500 and
$160,500 from the guardianship case on April 18, 2000; (4) Asa refused to
account for and turn over the amount of $130,000 in attorneys fees which
belonged to him (Castillo); and (5) Asa embarked on a scheme to force him
into resigning as counsel for Dr. Laurel to enable them to exercise absolute
control over the guardianship case and appropriate for themselves the
attorneys fees allocated for him.

In his Answer to the Complaint17 in CBD Case No. 03-1109, Asa alleged as
follows: It was in fact Castillo who reneged on their February 16, 2000
Agreement as the latter had earlier bluntly told him that he changed his
mind and that he would not give him (Asa) any share in the attorneys fees
he would receive from the guardianship case, Castillo reasoning that he
was the therein counsel of record and had endorsed the case to the Laurel
Law Offices. He thus reported the matter to Dr. Laurel and informed him
that he "would likewise not give Castillos share in the attorneys fees he
[Asa] might receive because [Castillo] has no word of honor." 18

On August 25, 2003, Asa filed yet another administrative

complaint,21 against Castillo before the IBP, for disbarment/suspension,
docketed as CBD Case No. 03-1125, charging him with deceit, malpractice,
gross misconduct in office, immoral conduct, violation of the lawyers oath
and the Code of Professional Responsibility in light of his baseless,
malicious and derogatory allegations in CBD Case No. 03-1109 which were
founded on deceit and deliberate falsehood, and of promoting a
groundless, false and unlawful suit.
IBP REPORT AND RECOMMENDATION:

As regards the $24,500 that he allegedly secretly pocketed, Asa explained

that several days prior to April 18, 2000, Dr. Laurel and Atty. Cassiday fixed
the attorneys fees of both Castillo and Asa at $100,000 each, based on the
amount to be paid by the four heirs or $25,000 per heir. When the first heir
Merceditas Feliciano (Merceditas) paid $1,150,000 on April 18, 2000, he
deposited $24,500 of this amount in his and his wifes joint Dollar Account
No. 247-702-9275 at the Philippine National Bank (PNB), Ortigas Branch as
his share in the attorneys fees, while he opened a new account in the
name of Dr. Laurel to which he deposited the amount of $160,500.
Asa went on to declare that Castillo received his own $25,000 plus interest
amounting to $25,023.13 representing full payment of his attorneys fees
from Merceditas, as evidenced by a Receipt19 dated May 2, 2000 signed by
Castillo.
Continuing, Asa declared that of the $160,500 belonging to Dr. Laurel,
$100,000 represented partial payment for his consenting to be the
guardian ad litem of the Nonan heirs and $60,000 represented
reimbursement for expenses incurred over several years by Dr. Laurel, the
total of which was placed temporarily on April 18, 2000 in his (Asas) Dollar
Account No. 8-250-00047-3 in RCBC. Dr. Laurel, however, withdrew
$160,000.00 the following day from RCBC and placed it in his own Dollar
Time Deposit Account for which $500.00 was spent for the purpose. A
Certification20 to this effect, issued by RCBC Ortigas Business Center
Manager Dolores L. Del Valle, was appended to Asas Answer.
Finally, Asa declared that Castillos claim for $130,000 in attorneys fees is
baseless and unconscionable, and that Castillo filed the complaint merely
to harass him in retaliation for the complaint he and Oliveros priorly filed
against him and Ginger Anne.
IV. CBD Case No. 03-1125

By Report and Recommendation22 of February 27, 2004, the IBP CBD,

through Commissioner Rebecca Villanueva-Maala, recommended the
dismissal of the consolidated cases in this wise.
From the facts and evidence presented, what have been shown by the
counsels are mutual bickerings, unjustified recriminations and offensive
personalities between brother lawyers which detract from the dignity of the
legal profession and do not deserve the attention of the Commission. The
voluminous case record contains butpersonal peculiarities and
idiosyncrasies hurled by the counsels against each other which constitute
highly unprofessional conduct. A great part of mans comfort, as well as of
his success at the bar, depends upon his relations with his professional
brethren. With them he is in daily necessary intercourse, and he must have
their respect and confidence, if he wishes to sail along in smooth waters.
Hence, the parties are advised to conduct themselves honorably, fairly and
candidly toward each other and try to maintain the dignity of the legal
profession.23 (Underscoring supplied)
By Resolution24 of April 16, 2004, the Board of Governors of the IBP
adopted and approved the February 27, 2004 Report and Recommendation
and dismissed the consolidated cases for lack of merit.
The records of the cases were then forwarded for final action to this Court.
Asa filed with this Court an August 2, 2004 a Motion for
Reconsideration25 in CBD Case No. 03-1125. He too, together with Oliveros,
filed on August 3, 2004 a Motion for Reconsideration 26 in CBD Case No. 031076.
Castillo likewise filed with this Court a Consolidated Omnibus Motion for
Partial Reconsideration27 dated August 9, 2004 in CBD Case No. 03-1108
and CBD Case No. 03-1109.

On January 12, 2005, Asa filed his Comment28 on Castillos Consolidated

Omnibus Motion for Partial Reconsideration in CBD Case No. 03-1109 while
also Oliveros filed his Comment on the same motion on February 28, 2005.
On March 16, 2005, Castillo filed his Consolidated Reply to the Comments
of Asa and Oliveros, with Omnibus Motion to Appoint a Commissioner. 29
THIS COURTS RULING
In his questioned "Reply to Petitioner-Guardians Comment/Opposition,"
Castillos statement reads:
x x x Atty. Leon Asa wants to be paid an additional $75,000.00 for his
services in providing coffee and opening the doors whenever there is a
conference at the Laurel Law Offices. He also conveniently provides himself
with the Nonan expediente to give assistance to the parties during their socalled conferences. Worse, his express reluctance to appear before this
Honorable Court was repeatedly announced by Atty. Jose Oliveros because
of his so-called failing health x x x30

unprofessional conduct subject to disciplinary action, even if the

publication thereof is privileged.35
x x x this Court will not be inhibited from exercising its supervisory
authority over lawyers who misbehave or fail to live up to that standard
expected of them as members of the Bar. Indeed, the rule of absolute
privileged communication absolves beforehand the lawyer from civil and
criminal liability based on the statements made in the pleadings. But like
the member of the legislature who enjoys immunity from civil and criminal
liability arising from any speech or debate delivered in the Batasan or in
any committee thereof, but nevertheless remains subject to the
disciplinary authority of the legislature for said speech or debate, a lawyer
equally remains subject to this Courts supervisory and disciplinary powers
for lapses in the observance of his duty as a member of the legal
profession.36 (Underscoring supplied)
Castillo and Ginger Anne are thus admonished to exercise greater care and
circumspection in the preparation of their pleadings and refrain from using
offensive or otherwise improper language.

Canon 8 of the Code of Professional Responsibility mandates that a lawyer

shall conduct himself with courtesy, fairness and candor toward his
professional colleagues and shall avoid harassing tactics against opposing
counsel. Rule 8.01 of the same Canon mandates that a lawyer shall not, in
his professional dealings, use language which is abusive, offensive or
otherwise improper.

In support of Asa and Oliveros allegation that Castillo employed deceit and
falsehood in attempting to change the depositary bank for the funds to be
held in trust by Dr. Laurel for the Nonan heirs, they presented the March 2,
2000 RTC Order directing Dr. Laurel and his principal counsel Castillo to
deposit the balance of the proceeds of the settlement with any and all of
the adjudicated heirs with UCPB and the March 14, 2000 RTC Order
directing the deposit of the settlement proceeds with the RCBC.

That a member of the bar is enjoined to observe honorable, candid and

courteous dealing with other lawyers31and employ respectful and
restrained language is in keeping with the dignity of the legal
profession.32 It is through a scrupulous preference for respectful language
that a lawyer best demonstrates his observance or respect due to the
courts and judicial officers.33

A perusal of the Urgent Motion for Reconsideration dated March 8, 2000

signed by Dr. Laurel, however, fails to establish any wrongdoing on the part
of Castillo in having filed the Motion to deposit the funds at UCPB. It simply
stated that:

In the case at bar, Castillo and Ginger Annes choice of words manifestly
falls short of this criterion. Their disparaging statements in the pleading
referred to above belie their proffered good intention and exceed the
bounds of civility and propriety.
Castillos claim that the statement about Asas services is relevant and
pertinent to the claim for attorneys fees and was, for all legal intents and
purposes, a "privileged communication"34 deserves short shrift. Indulging in
offensive personalities in the course of judicial proceedings constitutes

Considering the present raging controversy arising from the P50 Billion
coconut levy funds, the stability of the United Coconut Planters Bank
(UCPB), Head Office at Makati, may be seriously affected x x x
The Petitioner-Guardian can best protect the deposits of the Nonan children
if the proceeds of the settlement will be deposited with a solvent and more
conservative bank like the RIZAL COMMERCIAL BANKING CORPORATION
(RCBC) x x x37

In administrative cases against lawyers, the quantum of proof required is

clearly preponderant evidence and the burden of proof rests upon the
complainant. Moreover, an administrative case against a lawyer must show
the dubious character of the act done as well as the motivation thereof. 38 In
the case at bar, Asa and Oliveros failed to present clear and preponderant
evidence to show that Castillo willfully and deliberately resorted to deceit
and falsehood in filing the Motion to have the funds deposited at UCPB.
Respecting Castillos June 25, 2001 Reply to Answer in the Makati RTC Civil
Case No. 01-506, he therein alleged:
On the other hand, retired Justice Felipe Kalalo of the Court of Appeals who
personally knew the plaintiff, was also profuse in extolling his academic
credentials and accomplishments as a Trial lawyer, as follows:
Q: Do you know the claimant Atty. P.M. Castillo?
A: Yes sir, because we were both active Senior Trial lawyers at the Laurel
Law Offices.
Q: How could you characterize and rate the trial competency, performance
and expertise of Atty. P.M. Castillo?
A: He is highly competent, low key, aggressive and very brilliant in the
conduct of trial, as well as, in the formulation of courtroom strategies. His
pleadings are also very well written, direct to the point, convincing,
scholarly and exhaustive. To be sure, he is one of the popular trial lawyers
of our firm (The Laurel Law Offices), not only because he came from an
exclusive school, but also because of his scholastic records at Ateneo de
Manila was also impressive. That is why he was taken in by former VP
Salvador H. Laurel even before the release of the 1964 bar where he was
also No. 2 among the Ateneo bar candidates for the year. He was No. 15
among the bar topnotchers. This is not to mention his impressive and
highly (sic) batting average of winning about 80% to 90% of his load cases
and work. He was also one of the busy lawyers of our office, until he went
on private practice and excelled as one of the more successful and
respected trial practitioners.39 (Underscoring supplied)
To Asa, by the foregoing allegation, Castillo committed clear falsehood for
Justice Kalalo had never been a lawyer at any time at the Laurel Law
Offices.

Castillo explained, however, that he "can only say that he has no control,
nor influence on the voluntary and spontaneous declaration and testimony
of Retired Justice Felipe Kalalo of the Court of Appeals in his favor during
the highly adversarial proceedings."40
Castillos explanation does not impress, however. The records show that
the above-quoted statements attributed by Castillo to Justice Kalalo were
lifted from an unsigned and unsubscribed affidavit entitled "Question and
Answer Format in Lieu of Direct Testimony of Justice Felipe Kalalo"41 dated
January 21, 1993. This affidavit was earlier filed by Castillo with the Pasig
RTC, Branch 154 in connection with his claim for attorneys fees in Civil
Cases Nos. 43049 and 56637 which affidavit was subsequently
withdrawn,42 however, as it was unsigned and unsubscribed.
Canon 10 of the Code of Professional Responsibility provides that a lawyer
owes candor, fairness and good faith to the courts. Rule 10.01 of said
Canon specifically commands that a member of the bar shall not do any
falsehood, nor consent to the doing of any in court; nor shall he mislead, or
allow the court to be misled by any artifice. Rule 10.02 of the same Canon
provides that a member of the bar shall not knowingly misquote or
misrepresent the contents of a paper or assert as a fact that which has not
been proved.
And Section 20(d), Rule 138 of the Rules of Court directs that a lawyer
must employ such means only as are consistent with truth and honor, and
never seek to mislead the judge or any judicial officer by any artifice or
false statement of fact or law.43
Complete candor or honesty is thus expected from lawyers, particularly
when they appear and plead before the courts.44 They have an obligation
to the court as well as to the opposing party to make only truthful
statements in their pleadings.45 The burden cast on the judiciary would be
intolerable if it could not take at face value what is asserted by counsel.
The time that will have to be devoted just to the task of verification of
allegations submitted could easily be imagined.46
In light of the above findings reflecting Castillos administrative culpability,
his charge against Asa and Oliveros of filing groundless disbarment cases
against him and Ginger Anne necessarily fails.
As regards Castillos claim that Asa secretly pocketed $24,500 and
$160,500, the undated certification issued by RCBC Branch Operation Head
Dolores del Valle reading:

This is to certify that on April 18, 2000, Mr. Leon L. Asa opened a Dollar
Savings Account at our Business Center. A credit was made to his assigned
Dollar Savings Account Number 8-250-00047-3 in the amount of US
Dollars: One Hundred Sixty Thousand Five Hundred (USD: 160,500.00) as
initial transaction. We further certify that on April 19, 2000, there was a
debit made for said account in the amount of US Dollars: One Hundred
Sixty Thousand (USD: 160,000.00) and that same amount was placed in
the Dollar Time Deposit Account of Salvador H. Laurel. Mr. Leon Asa left the
amount of USD: Five Hundred in his account to serve as the maintaining
balance requirement. Subject Dollar Savings Account had closed already, 47
and Dr. Laurel Partial Inventory, Account and Report of Guardian48 dated
February 13, 2002 filed with the Angeles City RTC, Branch 59 in Sp. Proc.
No. 5222 stating that:
3. On April 18, 2000, Guardian Ad Litem Salvador H. Laurel and his
Principal Foreign Legal Counsel, Atty. Benjamin Cassiday III received by way
of settlement from one of the duly adjudicated heirs of Larry Lee Hillblom,
Mercedita Feliciano, by and through her Guardian Ad Litem, Milagros
Feliciano, the amount of ONE MILLION ONE HUNDRED FIFTY THOUSAND US
DOLLARS (US$1,150,000.00) which was deposited with the Rizal
Commercial Banking Corporation (RCBC), St. Francis Square Branch,
Ortigas Center, Pasig City under Dollar Savings Account No. 8-250-000430ABA. Routing No. RCBC PH MM in the name of "Salvador H. Laurel, in trust
for Honeylyn, Alexandra and Jeril Nonan", in compliance with the Order of
this Honorable Court dated April 26, 2000;
4. Pursuant to the above-stated Orders of this Honorable Court, the
Guardian Ad Litem and Atty. Benjamin Cassiday III disbursed the following
amounts for the purposes indicated:
A. ATTORNEYS FEES & OTHER NECESSARY LEGAL EXPENSES:
xxxx
(7) Partial payment of the fee of Salvador H. Laurel for consenting to be the
guardian ad litem of the Nonan children and accepting all responsibilities
attached to said position .US$100,000.00
(8) Reimbursement to Salvador H. Laurel for expenses incurred during the
last six (6) years for airfare, car rentals, overseas calls, and representation
and other incidental expenses while in the various states in the United

States in order to pursue the claim of the Nonan children against the
Hillblom estate .US$60,000.00
x x x x49 (Underscoring supplied),
validate Asas explanation that the amount of $160,500 belonged to Dr.
Laurel but was merely temporarily placed in his (Asas) account.
The Partial Inventory, Account and Report of Guardian shows that $12,500
was received by Asa as attorneys fees for assisting Dr. Laurel and Castillo
from 1996 to 2000.50 Confirming such disbursement is a Receipt51 dated
April 18, 2000 signed by Asa. The remaining $12,500 of the $25,000
attorneys fees of Asa per heir (as priorly agreed upon by Dr. Laurel and
Cassiday) were remitted by Asa to the Laurel Law Offices as Official Receipt
No. 176652 issued by the treasurer/cashier of the Laurel Law Offices dated
April 19, 2000 shows:
RECEIVED from Atty. Leon L. Asa the sum of Twelve thousand five hundred
US Dollars US$12,500.00 as fifty percent (50%) share of LLO [Laurel Law
Offices] in attorneys fees of US$25,000 of Atty. Asa in SP Proc. 5222 of RTC
Angeles City, Br. 59.
Cash.US$12,500By: Sgd.
Treasurer/Cashier
On Asas alleged unjust refusal to turn over Castillos attorneys fees: It
appears that Asa and Castillo each received $25,000 as attorneys fees but
pursuant to their February 2000 Agreement, the aggregate amount of
$50,000 would be divided between them, and Castillo would receive 75%
thereof or $37,500, while Asa would receive 25% or $12,500. The records
show that Asa kept only $12,500 for himself, he having remitted, as
reflected above, the remaining $12,500 to the Laurel Law Offices.
Dr. Laurel eventually gave Castillo $10,000 out of the $12,500 which Asa
remitted to the Laurel Law Offices, as reflected in the Partial Inventory,
Account and Report of Guardian.53
Respecting Castillos claim that, in violation of the Code of Professional
Responsibility, Asa and Oliveros "embarked on another sinister strategy to
spite, insult and provoke him to ostracize him and make him feel unwanted

to continue as [Dr. Laurels] lawyer in furtherance of their conspiracy to

force him into resignation for them to replace him and have absolute
control over the guardianship case, the funds of the estate and the
attorneys fees," the same is unsubstantiated, hence, deserves no further
consideration.

Let copies of this Decision be entered in the respective personal records of

Atty. Ginger Anne Castillo and of Atty. Pablito M. Castillo in the Office of the
Bar Confidant. Let copies too be furnished the Integrated Bar of the
Philippines. SO ORDERED.
FIRST DIVISION

As to Castillos charge against Asa and Oliveros of embezzlement due to

alleged scandalous mismanagement of the estate of the Nonan heirs,
premised on the October 13, 2003 RTC Order54 in SP No. 5222, this Court
finds the evidence presented insufficient to warrant the imposition of
sanctions against them.
Finally, on Castillos Omnibus Motion to Appoint a Commissioner, the
matters raised therein55 being entirely inappropriate, to say the least, for
consideration in these administrative proceedings, the same is denied.
A final word. The spectacle of members of the bar being engaged in
bickering and recrimination is far from edifying. Mutual bickerings and
unjustified recriminations between brother attorneys detract from the
dignity of the legal profession and will not receive any sympathy from this
Court.56 Personal colloquies between counsels which promote unseemly
wrangling should thus be carefully avoided.57

G.R. No. L-35469 October 9, 1987

ENCARNACION BANOGON, ZOSIMA MUNOZ, and DAVIDINA
MUNOZ, petitioners,
vs.
MELCHOR ZERNA, CONSEJO ZERNA DE CORNELIO, FRANCISCO
ZERNA, and the HON. CIPRIANO VAMENTA, JR., Judge of the Court
of First Instance of Negros Oriental (Branch III).

CRUZ, J.:

It appears that Castillo had previously been suspended for Six (6) Months
by this Court in CBD Case No. 176,Bongalonta v. Castillo,58 for committing
falsehood in violation of his lawyers oath and of the Code of Professional
Responsibility. He was then warned that commission of the same or similar
offense in the future would call for the imposition of a more severe penalty.
This Court thus imposes upon him a penalty of suspension from the
practice of law for a period of One (1) year.

It's unbelievable. The original decision in this case was rendered by the
cadastral court way back on February 9, 1926, sixty one years ago. A
motion to amend that decision was filed on March 6, 1957, thirty one years
later. This was followed by an amended petition for review of the judgment
on March 18, 1957, and an opposition thereto on March 26, 1957. On
October 11, 1971, or after fourteen years, a motion to dismiss the petition
was filed. The petition was dismissed on December 8, 1971, and the
motion for reconsideration was denied on February 14, 1972. 1 The
petitioners then came to us on certiorari to question the orders of the
respondent judge. 2

WHEREFORE, the administrative cases filed against Atty. Leon L. Asa and
Atty. Jose A. Oliveros are DISMISSED.

These dates are not typographical errors. What is involved here are errors
of law and lawyers.

Atty. Ginger Anne Castillo is found GUILTY of breach of Canon 8 of the

Code of Professional Responsibility and is hereby admonished to refrain
from using offensive and improper language in her pleadings.

The respondent court dismissed the petition for review of the decision
rendered in 1926 on the ground that it had been filed out of time, indeed
thirty one years too late. Laches, it was held, had operated against the
petitioners. 3

Atty. Pablito M. Castillo is likewise found GUILTY of breach of Canons 8, as

well as Canon 10 of the Code of Professional Responsibility, and
is SUSPENDED from the practice of law for a period of One (1) Year,
effective upon receipt of this Decision.

The petitioners contend that the said judgment had not yet become final
and executory because the land in dispute had not yet been registered in
favor of the private respondents. The said judgment would become so only
after one year from the issuance of the decree of registration. If any one

was guilty of laches, it was the private respondents who had failed to
enforce the judgment by having the land registered in their the pursuant
thereto. 4
For their part, the private respondents argue that the decision of February
9, 1926, became final and executory after 30 days, same not having been
appealed by the petitioners during that period. They slept on their rights
forthirty one years before it occurred to them to question the judgment of
the cadastral court. In fact, their alleged predecessor-in-interest, Filomeno
Banogon, lived for nineteen more years after the 1926 decision and did not
see fit to challenge it until his death in 1945. The herein petitioners
themselves waited another twelve years, or until 195 7, to file their petition
for review. 5
While arguing that they were not guilty of laches because the 1926
decision had not yet become final and executory because the land subject
thereof had not yet been registered, the petitioners rationalize: "If an
aggrieved party is allowed the remedy of re-opening the case within one
year after the issuance of the decree, why should the same party be
denied this remedy before the decree is issued? 6
Why not indeed? Why then did they not file their petition earlier? Why do
they now pretend that they have all the time in the world because the land
has not yet been registered and the one-year reglementary period has not
yet expired?
Thinking to support their position, the petitioners cite Rivera v.
Moran 7 where it was held:
... It is conceded that no decree of registration has been
entered and section 38 of the Land Registration Act
provides that a petition for review of such a decree on the
grounds of fraud must be filed "within one year after entry
of the decree." Giving this provision a literal
interpretation, it may first blush seem that the petition for
review cannot be presented until the final decree has been
entered. But on further reflection, it is obvious that such
could not have been the intention of the Legislatureand
that what it meant would have been better expressed by
stating that such petitioners must be presented before the
expiration of one year from the entry of the decree.
Statutes must be given a reasonable construction
and there can be no possible reason for requiring the
complaining party to wait until the final decree is entered

before urging his claim of fraud. We therefore hold that a

petition for review under section 38, supra, may be filed at
any time the rendition of the court's decision and before
the expiration of one year from the entry of the final
decree of registration. (Emphasissupplied).
A reading thereof will show that it is against their contentions and that
under this doctrine they should not have delayed in asserting their claim of
fraud. Their delay was not only for thirty one days but for thirty
one years.Laches bars their petition now. Their position is clearly contrary
to law and logic and to even ordinary common sense.
This Court has repeatedly reminded litigants and lawyers alike:
"Litigation must end and terminate sometime and
somewhere, and it is assent essential to an effective and
efficient administration of justice that, once a judgment
has become final, the winning party be not, through a mere
subterfuge, deprived of the fruits of the verdict. Courts
must therefore guard against any scheme calculated to
bring about that result. Constituted as they are to put an
end to controversies, courts should frown upon any
attempt to prolong them." 8
There should be a greater awareness on the part of
litigants that the time of the judiciary, much more so of this
Court, is too valuable to be wasted or frittered away by
efforts, far from commendable, to evade the operation of a
decision final and executory, especially so, where, as
shown in this case, the clear and manifest absence of any
right calling for vindication, is quite obvious and
indisputable. 9
This appeal moreover, should fail, predicated as it is on an
insubstantial objection bereft of any persuasive force.
Defendants had to display ingenuity to conjure a
technicality. From Alonso v. Villamor, a 1910 decision, we
have left no doubt as to our disapproval of such a practice.
The aim of a lawsuit is to render justice to the parties
according to law. Procedural rules are precisely designed to
accomplish such a worthy objective. Necessarily, therefore,
any attempt to pervert the ends for which they are
intended deserves condemnation. We have done so before.
We do so again. 10

Regarding the argument that the private respondents took fourteen years
to move for the dismissal of the petition for review, it suffices to point out
that an opposition thereto had been made as early as March 26, 1957, or
nine days after the filing of the petition. 11 Moreover, it was for the
petitioners to move for the hearing of the petition instead of waiting for the
private respondents to ask for its dismissal. After all, they were the parties
asking for relief, and it was the private respondents who were in
possession of the land in dispute.
One reason why there is a degree of public distrust for lawyers is the way
some of them misinterpret the law to the point of distortion in a cunning
effort to achieve their purposes. By doing so, they frustrate the ends of
justice and at the same time lessen popular faith in the legal profession as
the sworn upholders of the law. While this is not to say that every wrong
interpretation of the law is to be condemned, as indeed most of them are
only honest errors, this Court must express its disapproval of the adroit and
intentional misreading designed precisely to circumvent or violate it.
As officers of the court, lawyers have a responsibility to assist in the proper
administration of justice. They do not discharge this duty by filing pointless
petitions that only add to the workload of the judiciary, especially this
Court, which is burdened enough as it is. A judicious study of the facts and
the law should advise them when a case, such as this, should not be
permitted to be filed to merely clutter the already congested judicial
dockets. They do not advance the cause of law or their clients by
commencing litigations that for sheer lack of merit do not deserve the
attention of the courts.
This petition is DISMISSED, with costs against the petitioners. This decision
is immediately executory. It is so ordered.

EN BANC
G.R. No. L-22320

July 29, 1968

MERCEDES RUTH COBB-PEREZ and DAMASO P. PEREZ, petitioners,

vs.
HON. GREGORIO LANTIN, Judge of the Court of First Instance of
Manila,
RICARDO P. HERMOSO and the CITY SHERIFF OF
MANILA, respondents.

Crispin D. Baizas and Associates for petitioners.

Isidro T. Almeda for respondents.
CASTRO, J.:
This is a motion for partial reconsideration of this Court's decision of May
22, 1968, specifically directed against the following observation therein
made:
We feel compelled to observe that during the protracted litigation
below, the petitioners resorted to a series of actions and petitions,
at some stages alternatingly, abetted by their counsel, for the sole
purpose of thwarting the execution of a simple money judgment
which has long become final and executory. Some of the actions
were filed, only to be abandoned or withdrawn. The petitioners and
their counsel, far from viewing courts as sanctuaries for those who
seek justice, have tried to use them to subvert the very ends of
justice.
Corollarily, this Court assessed treble costs against the petitioners, to "be
paid by their counsel.".
The herein movants, Attys. Crispin D. Baizas and A. N. Bolinas, counsels for
the petitioners, while submitting to the judgment on the merits, seek
reconsideration of the decision in so far as it reflects adversely upon their
"professional conduct" and condemns them to pay the treble costs
adjudged against their clients.
At first blush, the motion for reconsideration presents a semblance of
merit. After mature deliberation and patient reprobing into the records of
the case, however, we are of the firmer conviction that the protracted
litigation, alluded to in the above-quoted portion of our decision, was
designed to cause delay, and the active participation of the petitioners'
counsels in this adventure is patent.
After November 15, 1962 when the Court of Appeals rendered judgment
sustaining Damaso Perez' position with respect to the extent of the levy,
the subsequent proceedings interposed alternatingly by the petitioner
spouses were obviously quixotic maneuvers expected to be overthrown by
the courts but calculated to delay an execution long overdue.
Had the petitioners and their counsels seriously believed that the levied
shares of stock were conjugal property, why did they not adopt this

position from the very start, or, at the latest, in CA-G.R. 29962-R, wherein
Damaso Perez challenged the legality of the levy's coverage, in order to
end the litigation with reasonable dispatch? They chose, however, to attack
the execution in a piecemeal fashion, causing the postponement of the
projected execution sale six times. More than eight years after the finality
of the judgment have passed, and the same has yet to be satisfied.
In a determined effort to prolong the litigation, the Perez spouses, as
represented by their counsels, sought the issuance of preliminary
injunctions to restrain the execution of the final judgment in civil case
39407 from courts which did not have jurisdiction and which would, as
expected, initially or ultimately deny their prayer. For instance, after
Damaso Perez bowed out temporarily from the scene following the
rendition of the aforementioned Court of Appeals decision, his wife,
Mercedez, Ruth Cobb-Perez, intruded into the controversy and asked for an
ex parte writ of preliminary injunction from the Court of First Instance of
Rizal in connection with civil case 7532 which she filed with the said court,
knowing fully well that the basic civil case 39407 was decided by the Court
of First Instance of Manila (Branch VII presided by the respondent Judge
Lantin), which latter court was the proper forum for any action relative to
the execution. Judge Eulogio Mencias of the Court of First Instance of Rizal,
looking to Acosta vs. Alvendia (L-14598, October 31, 1960), which held that
courts of first instance have no power to restrain acts outside their
territorial jurisdictions, lifted on October 4, 1963 the ex parte writ which he
previously issued enjoining the respondent sheriff from carrying out the
execution sale. It is clear, however, that Mrs. Perez and her counsels, the
movants, knew or ought to have known beforehand that the Court of First
Instance of Rizal did not have jurisdiction to issue the writ which Mrs. Perez
herself sought, and, anticipating the recall of the writ improvidently issued,
on September 3, 1963, a month before the said writ was actually lifted,
filed in the basic civil case 39407 an urgent motion to lift the writ of
execution issued on August 15, 1961, alleging as justification the conjugal
nature of the levied shares of stock and the personal nature of Damaso
Perez' judgment debt, the very same reasons advanced in civil case 7532
which was then still pending in the Court of First Instance of Rizal.
Incidentally, Mrs. Perez failed to adduce any evidence in support of her
aforesaid urgent motion, as in fact neither she nor her counsels appeared
during the scheduled hearing, prompting the respondent judge to issue the
following order:
When the urgent motion to recall or lift writ of execution was called
this morning for hearing, counsel for the movant did not appear
despite the fact that he had been duly notified of the motion for
hearing. In view thereof the court assumes that he is waiving his

right to present evidence in support of his urgent motion to recall

or lift writ of execution. Said urgent motion is therefore deemed
submitted for resolution.
Despite the recall of the aforementioned writ of injunction by Judge
Mencias on a disclaimer of jurisdiction (since the execution sought to be
enjoined was ordered by another tribunal), Mrs. Perez, now assisted by her
husband who had staged a comeback, prayed for the issuance of another
injunction, this time from Branch XXII of the Court of First Instance of
Manila (not the same Branch which issued the controverted writ of
execution), in connection with civil case 7532, then still pending in the
Court of First Instance of Rizal. As most probably anticipated anew by the
Perez spouses and their counsels, Judge Alikpala, presiding judge of Branch
XXII, on November 8, 1963 denied the preliminary injunction sought, on
the ground, among others, that he had no power to interfere by injunction
with the judgment or decree of a court of concurrent or coordinate
jurisdiction. On the very day the injunction was denied, Damaso Perez, as if
expecting the reversal from Judge Alikpala, was already prepared with
another "remedy," as in fact on that day, November 8, 1963, he filed in the
basic civil case 39407 an "Urgent Motion for Reconsideration" of the order
of October 19, 1963, which denied his wife's above-mentioned motion to
recall the controverted writ of execution.
The foregoing motion, far from seriously seeking the reconsideration of the
order of October 19, 1963, which in the first place Damaso Perez could not
legally do for he was not even a party to the denied "Urgent Motion to
Recall Writ of Execution" (filed by his wife alone), was merely an offer to
replace the levied stocks with supposed cash dividends due to the Perez
spouses as stockholders in the Republic Bank.1 As a matter of fact, when
the motion was set for hearing on December 21, 1963, the counsels for
Damaso Perez promised to produce the said cash dividends within five
days, but the promise was never fulfilled.2 Consequently, the respondent
Judge on January 4, 1964, denied the said motion for reconsideration.
The above exposition of the circumstances relative to the protracted
litigation clearly negates the avowal of the movants that "in none of the
various incidents in the case at bar has any particular counsel of
petitioners acted with deliberate aforethought to delay the enforcement of
the judgment in Civil Case No. 39407." From the chronology of antecedent
events, the fact becomes inescapable that the Perez spouses, coached by
their counsels, had sallied forth on a strategem of "remedies" projected to
foil the lawful execution of a simple money judgment. It is equally obvious
that they foreshadowed their own reversals in the "remedies" they
ventured to adopt, such that even before, one remedy had been

exhausted, they interposed another until the case reached this Court for
the second time. 3 Meanwhile, justice was delayed, and more than one
member of this Court are persuaded that justice was practically waylaid.
The movants also contend that even this Court sanctions the aforesaid civil
cases 7532 and 55292 as the "proper remedy" when we said that.
In reality, what they attacked is not the writ of execution, the
validity and regularity of which are unchallenged, but the levy
made by the respondent Sheriff. In this regard, the remedy is not
the recall of the writ, but an independent action to enjoin the
Sheriff from proceeding with the projected sale, in which action the
conjugal nature of the levied stocks should be established as a
basis for the subsequent issuance of a permanent injunction, in the
event of a successful claim. Incidentally, in the course of the
protracted litigation, the petitioners had already availed of this
remedy in civil cases 7532 and 55292, only to abandon it as they
incessantly sought other, and often simultaneous, devices of
thwarting satisfaction of the judgment debt. (Emphasis supplied) .
And because of this statement, they now counter that the said cases could
not be branded as having been instituted for delay.
The reference we made to civil cases 7532 and 55292 in the above-quoted
statement must not be considered out of context. We said that the
petitioners incidentally had already availed of the suggested remedy only
in the sense that said civil cases 7532 and 55292
were apparently instituted to prove the conjugal nature of the levied
shares of stocks in question. We used the word incidentally advisedly to
show that in their incessant search for devices to thwart the controverted
execution, they accidentally stumbled on the suggested remedy. But the
said civil cases were definitely not the "proper remedy" in so far as they
sought the issuance of writs of preliminary injunction from the Court of First
Instance of Rizal and the Court of First Instance of Manila (Branch XXII)
where civil cases 7532 and 55292 were filed respectively, for the said
courts did not have jurisdiction to restrain the enforcement of the writ of
execution issued by the Court of First Instance of Manila (Branch VII) under
the settled doctrines that Courts are without power to restrain acts outside
of their territorial jurisdiction 4 or interfere with the judgment or decree of
a court of concurrent or coordinate jurisdiction. 5 However, the recall and
the denial of the writs of preliminary injunction in civil cases 7532 and
55292 did not amount to the termination or dismissal of the principal
action in each case. Had the Perez spouses desired in earnest to continue
with the said cases they could have done so. But the fact is that Mrs. Perez

practically abandoned civil case 7532 when she instituted the above
mentioned urgent motion to recall writ of execution in the basic civil case
39407, anchored on the same grounds which she advanced in the former
case, until the said civil case 7532 was dismissed on November 9,
1963, upon her own motion. Anent civil case 55292, the Perez spouses
virtually deserted the same when they instituted the herein petition
for certiorari with urgent writ of preliminary injunction based on the same
grounds proffered in the said civil case until the latter was also
dismissed on March 20, 1964, with the consent of the parties because of
the pendency then of the aforesaid petition for certiorari.
The movants further contend that "If there was delay, it was because
petitioners' counsel happened to be more assertive ... a quality of the
lawyers (which) is not to be condemned."
A counsel's assertiveness in espousing with candour and honesty his
client's cause must be encouraged and is to be commended; what we do
not and cannot countenance is a lawyer's insistence despite the patent
futility of his client's position, as in the case at bar.
It is the duty of a counsel to advise his client, ordinarily a layman to the
intricacies and vagaries of the law, on the merit or lack of merit of his case.
If he finds that his client's cause is defenseless, then it is his bounden duty
to advise the latter to acquiesce and submit, rather than traverse the
incontrovertible. A lawyer must resist the whims and caprices of his client,
and temper his client's propensity to litigate. A lawyer's oath to uphold the
cause of justice is superior to his duty to his client; its primacy is
indisputable.
The movants finally state that the "Petitioners have several counsel in this
case but the participation of each counsel was rather limited implying that
the decision of this Court ordering that "treble costs are assessed against
the petitioners, which shall be paid by their counsel" is not clear. The word
"counsel" may be either singular or plural in construction, so that when we
said "counsel" we meant the counsels on record of the petitioners who
were responsible for the inordinate delay in the execution of the final
judgment in the basic civil case 39407, after the Court of Appeals had
rendered its aforementioned decision of November 15, 1962. And it is on
record that the movants are such counsels. Atty. Bolinas, upon his own
admission, "entered his appearance in the case at bar about the time the
Court of First Instance of Manila dismissed the petitioners' Petition for
Relief in Civil Case No. 39407," or about August 3, 1961 and even prior to
the Court of Appeals decision above-mentioned. Atty. Baizas claims that he
"became petitioners' counsel only in October, 1963 when he filed, with

Atty. A.N. Bolinao, Jr. Civil Case No. 55292 before the Court of First Instance
of Manila presided by the Hon. Judge Alikpala although it appears on record
that the urgent motion to recall writ of execution filed by Mrs. Perez in the
basic civil case 39407 on September 3, 1963, was over the signature of
one Ruby Zaida of the law firm of "Crispin Baizas & Associates" as counsel
for Mrs. Perez. It is to be recalled that the said urgent motion is the same
motion discussed above, which, curiously enough, antedated by at least
one month the lifting of the writ of preliminary injunction issued in civil
case 7532.
ACCORDINGLY, the motion for partial reconsideration is denied. Our
decision of May 22, 1968 is hereby modified in the sense that Attys. Crispin
D. Baizas and A.N. Bolinao, Jr. shall pay jointly and severally the treble
costs assessed against the petitioners.

executed deeds of mortgage in favor of the corporation over the parcels

aforesaid. On August 28,1979, and upon the maturing of said loans, the
firm caused an extrajudicial foreclosure of mortgage following his failure to
pay, as a consequence of which, the said eight (six, according to the
petitioner) parcels of land were disposed of at public auction, and in which
L & R Corporation was itself the highest bidder.
Pending redemption, the private respondent filed a complaint for injunction
against L & R Corporation, to enjoin consolidation of title in its name, in
which he succeeded in obtaining preliminary injunctive relief. He was
represented by the petitioner. Two years later, and with no imminent end to
the litigation in sight, the parties entered into a compromise agreement
whereby L & R Corporation accorded the private respondent another year
to redeem the foreclosed properties subject to payment of P600,000.00,
with interest thereon at one per cent per month. They likewise stipulated
that the petitioner shall be entitled to attorney's fees of P100,000.00. On
November 19, 1982, the court 3 approved the compromise.

SECOND DIVISION
G.R. No. L-77691 August 8,1988
PATERNO R. CANLAS, petitioner,
vs.
HON. COURT OF APPEALS, and FRANCISCO HERRERA, respondents..
SARMIENTO, J.:
The case dramatizes the unpleasant spectacle of a lawyer tangling with his
own client, more often than not, in the matter of fees. The lawyer, the
petitioner himself, would have his petition decided on pure questions of
procedure, yet, the Court cannot let pass unnoticed the murkier face of the
controversy, wherein the law is corrupted to promote a lawyer's
selfseeking ends, and the law profession, debased into a simple business
dealing. Accordingly, we resolve it on the basis not only of the questions
raised by the petitioner pertaining to procedure, but considering its serious
ethical implications, on its merits as well.
We turn to the facts.
The private respondent was the registered owner of eight (six, according to
the petitioner) parcels of land located in Quezon City. 1 Between 1977 and
1978, 2 he obtained various loans from the L & R Corporation, a financing
institution, in various sums totalling P420,000.00 As security therefor, he

The private respondent, however, remained in dire financial straits a fact

the petitioner himself concede 4 for which reason he failed to acquire the
finding to repay the loans in question, let alone the sum of P100,000.00 in
attorney's fees demanded by the petitioner. That notwithstanding, the
petitioner moved for execution insofar as his fees were concemed. The
court granted execution, although it does not appear that the sum was
actually collected. 5
Sometime thereafter, the petitioner and the private respondent met to
discuss relief for the latter with respect to his liability to L & R Corporation
on the one hand, and his obligation to the petitioner on the other. The
petitioner contends that the private respondent "earnestly implored" 6 him
to redeem the said properties; the private respondent maintains that it was
the petitioner himself who 'offered to advance the money," 7 provided that
he, the private respondent, executed a "transfer of mortgage" 8 over the
properties in his favor. Who implored whom is a bone of contention, but as
we shall see shortly, we are inclined to agree with the private respondent's
version, considering primarily the petitioner's moral ascendancy over his
client and the private respondent's increasing desperation.
The records further show that the parties, pursuant to their agreement,
executed a "Deed of Sale and Transfer of Rights of Redemption and/or to
Redeem," a document that enabled the petitioner, first, to redeem the
parcels in question, and secondly, to register the same in his name. The
private respondent alleges that he subsequently filed loan applications
with the Family Savings Bank to finance a wet market project upon the

subject premises to find, according to him, and to his dismay, the

properties already registered in the name of the petitioner. He likewise
contends that the "Deed of Sale and Transfer of Rights of Redemption
and/or to Redeem" on file with the Register of Deeds (for Quezon City) had
been falsified as follows:
WHEREFORE, for and in full settlement of the attorney's
fees of TRANSFEREE in the amount of ONE HUNDRED
THOUSAND PESOS (Pl00,000.00) I, FRANCISCO HERRERA,
hereby transfer, assign and convey unto TRANSFEREE, Atty.
Paterno R. Canlas, any and all my rights of the real
properties and/or to redeem from the Mortgagee, L & R
Corporation my mortgaged properties foreclosed and sold
at public auction by the Sheriff of Quezon City and subject
matter of the above Compromise Agreement in Civil Case
No. Q30679 ... 9
whereas it originally reads:
WHEREFORE, for and in full settlement of the attorney's
fees of TRANSFEREE in the amount of ONE HUNDRED
THOUSAND PESOS (P100,000.00), I, FRANCISCO HERRERA,
hereby transfer, assign and convey unto TRANSFEREE, Atty.
Paterno R. Canlas, any and all my rights of equity of
redemption and/or to redeem from the Mortgagee, L & R
Corporation my mortgaged properties foreclosed and sold
at public auction by the Sheriff of Quezon City and subject
matter of the above Compromise Agreement in Civil Case
No. Q30679. . . 10
As a consequence, the private respondent caused the annotation of an
adverse claim upon the respective certificates of title embracing the
properties. Upon learning of the same, the petitioner moved for the
cancellation of the adverse claim and for the issuance of a writ of
possession. The court granted both motions. The private respondent
countered with a motion for a temporary restraining order and later, a
motion to recall the writ of possession. He likewise alleges that he
commenced disbarment proceedings before this Court against the
petitioner 11 as well as various criminal complaints for estafa, falsification,
and "betrayal of trust" 12 with the Department of Justice. On December 1,
1983, finally, he instituted an action for reconveyance and reformation of
document, 13 praying that the certificates of title issued in the name of the
petitioner be cancelled and that "the Deed of Sale and Transfer of Rights of
Equity of Redemption and/or to Redeem dated May 3, 1983 ... be reformed

to reflect the true agreement of Francisco Herrera and Paterno R. Canlas, of

a mortgage." 14 He vehemently maintains that the petitioner's "agreement
with [him] was that the latter would lend the money to the former for a
year, so that [petitioner] would have time to look for a loan for the wet
market which [the petitioner] intended to put up on said
property." 15 Predictably, the petitioner moved for dismissal.
The trial court, however, denied the private respondent's petition. It held
that the alteration complained of did not change the meaning of the
contract since it was "well within [the petitioner's] rights" 16 "to protect and
insure his interest of P654,000.00 which is the redemption price he has
paid;" 17 secondly, that the petitioner himself had acquired an interest in
the properties subject of reconveyance based on the
compromise agreement approved by Judge Castro in the injunction case,
pursuant to Section 29(b), of Rule 39, of the Rules of Court, that had,
consequently, made him a judgment creditor in his own right; thirdly, that
the private respondent had lost all rights over the same arising from his
failure to redeem them from L & R Corporation within the extended period;
and finally, that the petitioner cannot be said to have violated the ban
against sales of properties in custodia legis to lawyers by their
clients pendente lite, since the sale in question took place after judgment
in the injunction case abovesaid had attained finality. The complaint was
consequently dismissed, a dismissal that eventually attained a character of
finality.
Undaunted, the private respondent, on December 6, 1985, filed a suit for
"Annulment Of Judgment 18 in the respondent Court of Appeals, 19 praying
that the orders of Judge Castro: (1). granting execution over the portion of
the compromise agreement obliging the private respondent to pay the
petitioner P100,000.00 as attorney's fees; (2) denying the private
respondent's prayer for a restraining order directed against the execution:
and (3) denying the motion to recall writ of possession, all be set aside.
The petitioner filed a comment on the petition, but followed it up with a
motion to dismiss. On December 8, 1986, the respondent Court of Appeals
promulgated the first of its challenged resolutions, denying the motion to
dismiss. On March 3, 1987, the Appellate Court denied reconsideration. 20
Hence the instant petition.
As we stated, the petitioner assails these twin resolutions on grounds of
improper procedure. Specifically, he assigns the following errors:

I.
THE RESPONDENT COURT GRAVELY ABUSE [sic] ITS DISCRETION IN NOT
DISMISSING AC G.R. NO. 07860 ON THE GROUND THAT IT IS IN REALITY A
PETITION FOR CERTIORARI FILED OUT OF TIME AND SHOULD NOT BE GIVEN
DUE COURSE.
II.
THE RESPONDENT COURT GRAVELY ABUSE [sic] ITS DISCRETION IN NOT
DISMISSING AC G.R. NO. 07860 ON THE GROUND OF RES JUDICATA
III.
THE RESPONDENT COURT GRAVELY ABUSE [sic] ITS DISCRETION IN NOT
CONSIDERING AC G. R. 07860 AS MOOT AND ACADEMIC SINCE PETITIONER
HAD DISPOSED OF THE SUBJECT PROPERTIES LONG BEFORE THE FILING OF
THIS SUIT.
IV
THE RESPONDENT COURT GRAVELY ABUSED ITS DISCRETION IN NOT
DENYING PETITIONER'S MOTION TO DISMISS SOLELY ON THE GROUND
THAT THE ARGUMENT RAISED THEREIN ARE BUT REHASH OF THE
ARGUMENTS IN HIS COMMENT TO THE PETITION. 21
The petitioner argues that the petition pending with the respondent court
"is actually a petition for certiorari," 22disguised as a pleading for
annulment of judgment and that in such a case, it faces alleged legal
impediments (1) It had been filed out of time, allegedly two years from the
issuance of the assailed orders, and (2) It was not preceded by a motion for
reconsideration. He adds that assuming annulment of judgment were
proper, no judgment allegedly exists for annulment, the aforesaid two
orders being in the nature of interlocutory issuances.
On purely technical grounds, the petitioner's arguments are impressive.
Annulment of judgment, we have had occasion to rule, rests on a single
ground: extrinsic fraud. What "extrinsic fraud" means is explained
inMacabingkil v. People's Homesite and Housing Corporation : 23
xxx xxx xxx

It is only extrinsic or collateral fraud, as distinguished from

intrinsic fraud, however, that can serve as a basis for the
annulment of judgment. Fraud has been regarded as
extrinsic or collateral, within the meaning of the rule,
"where it is one the effect of which prevents a party from
having a trial, or real contest, or from presenting all of his
case to the court, or where it operates upon matters
pertaining, not to the judgment itself, but of the manner in
which it was procured so that there is not a fair submission
of the controversy." In other words, extrinsic fraud refers to
any fraudulent act of the prevailing party in the litigation
which is committed outside of the trial of the case,
whereby the defeated party has been prevented from
exhibiting fully his side of the case, by fraud or deception
practiced on him by his opponent. 24
A perusal of the petition of therein private respondent Herrera pending
before the respondent Court reveals no cause of action for annulment of
judgment. In the first place, and as herein petitioner Canlas correctly points
out, the judgment itself is not assailed, but rather, the orders merely
implementing it. Secondly, there is no showing that extrinsic fraud,
as Makabingkil defines it, indeed vitiated the proceedings presided over by
Judge Castro. On the contrary, Herrera's petition in the respondent court
will show that he was privy to the incidents he complains of, and in fact,
had entered timely oppositions and motions to defeat Atty. Canlas' claims
under the compromise agreement.
What he objects to is his suspected collusion between Atty. Canlas and His
Honor to expedite the former's collection of his fees. He alleges that his
counsel had deliberately, and with malevolent designs, postponed
execution to force him (Herrera) to agree to sell the properties in
controversy to him (Atty. Canlas) subject to redemption. ("...[I]t was
understandable that respondent Atty. Paterno R. Canlas did not implement
the writ of execution, instead he contacted petitioner in order that
petitioner would sign the questioned documents. This was the clincher of
the plan of respondent Atty, Paterno R. Canlas to divest petitioner of his
properties. For this purpose, it is obvious that respondent Atty. Paterno R.
Canlas had to conspire with the respondent court judge to achieve his
plan." 25) Aside from being plain speculation, it is no argument to justify
annulment. Clearly, it does not amount to extrinsic fraud as the term is
defined in law.
Neither is it proper for the extraordinary remedy of
certiorari. Certiorari presupposes the absence of an appeal

26

and while

there is no appeal from execution of judgment, appeal lies in case of

irregular implementation of the writ. 27 In the case at bar, there is no
irregular execution to speak of As a rule, "irregular execution" means the
failure of the writ to conform to the decree of the decision executed. 28 In
the instant case, respondent Herrera's charges, to wit, that Judge Castro
had erred in denying his motions for temporary restraining order and to
recall writ of possession, or that His Honor had acted hastily (". . . that
respondent court/judge took only one [1) day to resolve petitioner's motion
for issuance of [a] [restraining] order. . ." 29) in denying his twofold motions,
do not make out a case for irregular execution. The orders impugned are
conformable to the letter of the judgment approving the
parties'compromise agreement.
The lengths the private respondent, Francisco Herrera, would go to in a
last-ditch bid to hold on to his lands and constraints of economic privation
have not been lost on us. It is obvious that he is uneasy about the
judgment on compromise itself, as well as the subsequent contract
between him and his lawyer. In such a case, Article 2038 of the Civil Code
applies:
Art. 2038. A compromise in which there is mistake, fraud,
violence intimidation, undue influence, or falsity of
documents, is subject to the provisions of article 1330 of
this Code ...
in relation to Article 1330 thereof:
Art. 1330. A contract where consent is given through
mistake, violence, intimidation, undue influence, or fraud is
voidable.
in relation to its provisions on avoidance of'contracts. 30 The court notes
that he had, for this purpose, gone to the Regional Trial Court, a vain effort
as we stated, and in which the decision had become final.
We, however, sustain Atty. Canlas' position-on matters of procedure for
the enlightenment solely of the bench and the bar. It does not mean that
we find merit in his petition. As we have intimated, we cannot overlook the
unseemlier side of the proceeding, in which a member of the bar would
exploit his mastery of procedural law to score a "technical knockout" over
his own client, of all people. Procedural rules, after all, have for their object
assistance unto parties "in obtaining just, speedy, and inexpensive
determination of every action and proceeding."31 If procedure were to be

an impediment to such an objective, "it deserts its proper office as an aid

to justice and becomes its great hindrance and chief enemy." 32 It was
almost eight decades ago that the Court held:
... A litigation is not a game of technicalities in which one,
more deeply schooled and skilled in the subtle art of
movement and position, entraps and destroys the other. It
is, rather, a contest in which each contending party fully
and fairly lays before the court the facts in issue and then,
brushing aside as wholly trivial and indecisive all
imperfections of form and technicalities of procedure, asks
that justice be done upon the merits. Lawsuits, unlike
duels, are not to be won by the a rapier's thrust ... 33
It is a ruling that almost eight decades after it was rendered, holds true as
ever.
By Atty. Canlas' own account, "due to lack of paying capacity of respondent
Herrera, no financing entity was willing to extend him any loan with which
to pay the redemption price of his mortgaged properties and petitioner's
P100,000.00 attorney's fees awarded in the Compromise Judgment," 34 a
development that should have tempered his demand for his fees. For
obvious reasons, he placed his interests over and above those of his client,
in opposition to his oath to "conduct himself as a lawyer ... with all good
fidelity ... to [his] clients." 35 The Court finds the occasion fit to stress that
lawyering is not a moneymaking venture and lawyers are not merchants, a
fundamental standard that has, as a matter of judicial notice, eluded not a
few law advocates. The petitioner's efforts partaking of a shakedown" of
his own client are not becoming of a lawyer and certainly, do not speak
well of his fealty to his oath to "delay no man for money." 36
It is true that lawyers are entitled to make a living, in spite of the fact that
the practice of law is not a commercial enterprise; but that does not furnish
an excuse for plain lust for material wealth, more so at the expense of
another. Law advocacy, we reiterate, is not capital that yields profits. The
returns it births are simple rewards for a job done or service rendered. It is
a calling that, unlike mercantile pursuits which enjoy a greater deal of
freedom from government interference, is impressed with a public interest,
for which it is subject to State regulation. 37Anent attomey's fees, section
24, of Rule 138, of the Rules, provides in part as follows:
SEC. 24. Compensation of attorneys, agreement as to fees.
An attorney shall be entitled to have and recover from
his client no more than a reasonable compensation for his

services, with a view to the importance of the subject

matter of the controversy, the extent of the services
rendered, and the professional standing of the attorney... A
written contract for services shall control the amount to be
paid therefor unless found by the court to be
unconscionable or unreasonable.
So also it is decreed by Article 2208 of the Civil Code, reproduced in part,
as follows:
Art. 2208 ...
In all cases, the attorney's fees and expenses of litigation
must be reasonable.
We do not find the petitioner's claim of attorney's fees in the sum of
P100,000.00 reasonable. We do not believe that it satisfies the standards
set forth by the Rules. The extent of the services he had rendered in Civil
Case No. 30679, and as far as the records will yield, is not impressive to
justify payment of such a gargantuan amount. The case itself moreover did
not involve complex questions of fact or law that would have required
substantial effort as to research or leg work for the petitioner to warrant his
demands. The fact that the properties subject thereof commanded quite
handsome prices in the market should not be a measure of the importance
or non-importance of the case. We are not likewise persuaded that the
petitioner's stature warrants the sum claimed.
All things considered, we reduce the petitioner's fees, on a quantum
meruit basis, to P20,000.00.
It is futile to invoke the rule granting attorneys a lien upon the things won
in litigation similar to that vested upon redemptioners. 38 To begin with, the
rule refers to realty sold as a result of execution in satisfaction of
judgment. In this case, however, redemption was decreed by agreement
(on compromise) between the mortgagor and mortgagee. It did not give
the petitioner any right to the properties themselves, much less the right
of redemption, although provisions for his compensation were purportedly
provided. It did not make him a redemptioner for the plain reason that he
was not named one in the amicable settlement. To this extent, we reverse
Judge Pedro Santiago's ruling in Civil Case No. 40066, recognizing Atty.
Canlas' "legal right, independent of the questioned deed of sale and
transfer which was executed subsequently on May 3, 1983, to redeem the
subject realty from the L & R Corporation pursuant to Sec. 29 (b), Rule 39

of the Rules of Court." 39Whatever right he had, it was, arguably with

respect alone to his renumeration. It did not extend to the lands.
Secondly, and assuming that such a right exists, it must be in proportion to
the "just fees and disbursements" 40due him. It is still subject to the
tempering hand of this Court.
The Court notes a hidden agenda in the petitioner's haste to execute the
compromise agreement and subsequently, to force the transfer of the
properties to himself. As we have observed, in spite of the issuance of the
writ of execution, it does not appear that the petitioner took pains to
implement it. We find this perplexing given his passionate and persistent
pleas that he was entitled to the proceeds. There can indeed be no
plausible explanation other than to enable him to keep an "ace" against
the private respondent that led finally, to the conveyance of the properties
in his favor. To be sure, he would have us beheve that by redeeming the
same from the mortgagee and by in fact parting with his own money he
had actually done the private respondent a favor, but this is to assume
that he did not get anything out of the transaction. Indeed, he himself
admits that "[t]itles to the properties have been issued to the new owners
long before the filing of private respondents [sic] petition for
annulment." 41 To say that he did not profit therefrom is to take either this
Court or the petitioner for naive, a proposition this Court is not prepared to
accept under the circumstances.
We are likewise convinced that it was the petitioner who succeeded in
having the private respondent sign the "Deed of Sale and Transfer of Rights
of Equity of Redemption and/or to Redeem," a pre-prepared document
apparently, that allowed him (the petitioner) to exercise the right of
redemption over the properties and to all intents and purposes, acquire
ownership thereof. As we have earlier averred, the private respondent, by
reason of bankruptcy, had become an easy quarry to his counsel's moral
influence and ascendancy. We are hard put to believe that it was the
private respondent who "earnestly implored" 42 him to undertake the
redemption amid the former's obstinate attempts to keep his lands that
have indeed led to the multiple suits the petitioner now complains of, apart
from the fact that the latter himself had something to gain from the
transaction, as alluded to above. We are of the opinion that in ceding his
right of redemption, the private respondent had intended merely to
forestall the total loss of the parcels to the mortgagee upon the
understanding that his counsel shall acquire the same and keep them
therefore within reach, subject to redemption by his client under easier
terms and conditions. Surely, the petitioner himself would maintain that he
agreed to make the redemption"in order that [he] may already be paid the

P100,000.00 attorney's fees awarded him in the Compromise

Agreement," 43 and if his sole concern was his fees, there was no point in
keeping the properties in their entirety.

(2) Agents, the property whose administration or sale may

have been intrusted to them, unless the consent of the
principal have been given;

The Court simply cannot fag for the petitioner's pretensions that he
acquired the properties as a gesture of magnanimity and altruism He
denies, of course, having made money from it, but what he cannot dispute
is the fact that he did resell the properties. 44

(3) Executors and administrators, the property of the

estate under administration;

But if he did not entertain intents of making any profit, why was it
necessary to reword the conveyance document executed by the private
respondent? It shall be recalled that the deed, as originally drafted,
provided for conveyance of the private respondent's "rights of equity of
redemption and/or redeem" 45 the properties in his favor, whereas the
instrument registered with the Register of Deeds purported to transfer "any
and all my rights of the real properties and/or to redeem," 46 in his favor.
He admits having entered the intercalations in question but argues that he
did so "to facilitate the registration of the questioned deed with the
Register of Deeds" 47 and that it did not change the meaning of the paper,
for which Judge Santiago acquitted him of any falsification charges. 48 To
start with, the Court is at a loss how such an alteration could "facilitate"
registration. Moreover, if it did not change the tenor of the deed, why was
it necessary then? And why did he not inform his client? At any rate, the
agreement is clearly a contract of adhesion. Its provisions should be read
against the party who prepared it.
But while we cannot hold the petitioner liable for falsification this is not
the proper occasion for it we condemn him nonetheless for infidelity to
his oath "to do no falsehood" 49
This brings us to the final question: Whether or not the conveyance in favor
of the petitioner is subject to the ban on acquisition by attorneys of things
in litigation. The pertinent provisions of the Civil Code state as follows:
Art. 1491. The following persons cannot acquire by
purchase, even at a public or judicial action, either in
person or through the mediation of another:
(1) The guardian, the property of the person or persons
who may be under his guardianship;

(4) Public officers and employees, the property of the State

or of any subdivision thereof, or of any government owned
or controlled corporation, or institution, the administration
of which has been instrusted to them; this provision shall
apply to judges and government experts who, in any
manner whatsoever, take part in the sale;
(5) Justice judges prosecuting attorneys clerks of superior
and inferior courts, and other officers and employees
connected with the administration of justice, the property
and rights in litigation or levied upon an execution before
the court within whose jurisdiction or territory they
exercise their respective functions; this prohibition
includes the act of acquiring by assignment and shall apply
to lawyers, with respect to the property and rights which
may be the object of any litigation in which they may take
part by virtue of their profession.
(6) Any others specially disqualified by law.**
In Rubias v. Batiller, 50 we declared such contracts to be void by force of
Article 1409, paragraph (7), of the Civil Code, defining inexistent contracts.
In Director of Lands v. Ababa 51 however, we said that the prohibition does
not apply to contingent contracts, in which the conveyance takes place
after judgment, so that the property can no longer be said to be "subject of
litigation."
In the instant case, the Court observes that the "Deed of Sale and Transfer
of Rights of Equity of Redemption and/or to Redeem" was executed
following the finality of the decision approving the compromise agreement.
It is actually a new contract not one in pursuance of what had been
agreed upon on compromise in which, as we said, the petitioner
purportedly assumed redemption rights over the disputed properties (but
in reality, acquired absolute ownership thereof). By virtue of such a
subsequent agreement, the lands had ceased to be properties which are
"the object of any litigation." Parenthetically, the Court states that a writ of

possession is improper to eject another from possession unless sought in

connection with: (1) a land registration proceeding; (2) an extrajudicial
foreclosure of mortgage of real property; (3) in a judicial foreclosure of
property provided that the mortgagor has possession and no third party
has intervened; and (4) in execution sales. 52 It is noteworthy that in this
case, the petitioner moved for the issuance of the writ pursuant to the
deed of sale between him and the private respondent and not the
judgment on compromise. (He was, as we said, issued a writ of execution
on the compromise agreement but as we likewise observed, he did not
have the same enforced. The sale agreement between the parties, it
should be noted, superseded the compromise.) The writ does not lie in
such a case. His remedy is specific performance.
At any rate, the transfer, so we hold, is not subject to the injunction of
Article 1491 of the Civil Code. But like all voidable contracts, it is open to
annulment on the ground of mistake, fraud, or undue influence, 53 which is
in turn subject to the right of innocent purchasers for value. 54
For this reason, we invalidate the transfer in question specifically for undue
influence as earlier detailed. While the respondent Herrera has not
specifically prayed for invalidation, this is the clear tenor of his petition for
annulment in the Appellate Court. It appearing, however, that the
properties have been conveyed to third persons whom we presume to be
innocent purchasers for value, the petitioner, Atty. Paterno Canlas, must be
held liable, by way of actual damages, for such a loss of properties.
We are not, however, condoning the private respondent's own
shortcomings. In condemning Atty. Canlas monetarily, we cannot overlook
the fact that the private respondent has not settled his hability for
payment of the properties. To hold Atty. Canlas alone liable for damages is
to enrich said respondent at the expense of his lawyer. The parties must
then set off their obligations against the other. To obviate debate as the
actual amounts owing by one to the other, we hold Francisco Herrera, the
private respondent, liable to Atty. Paterno Canlas, the petitioner, in the sum
of P654,000.00 representing the redemption price of the properties, 55 in
addition to the sum of P20,000. 00 as and for attomey's fees. We order
Atty. Canlas, in turn, to pay the respondent Herrera the amount of
P1,000,000.00, the sum he earned from the resale thereof, 56 such that he
shall, after proper adjustments, be indebted to his client in the sum of
P326,000.00 as and for damages.
Needless to say, we sustain the action of the respondent Court of Appeals
in taking cognizance of the petition below. But as we have stated, we are
compelled, as the final arbiter of justiciable cases and in the highest

interests ofjustice, to write finis to the controversy that has taxed

considerably the dockets of the inferior courts.
Let the Court further say that while its business is to settle actual
controversies and as a matter of general policy, to leave alone moot ones,
its mission is, first and foremost, to dispense justice. At the outset, we have
made clear that from a technical vantage point, certiorari, arguably lies,
but as we have likewise stated, the resolution of the case rests not only on
the mandate of technical rules, but if the decision is to have any real
meaning, on the merits too. This is not the first time we would have done
so; in many cases we have eschewed the rigidity of the Rules of Court if it
would establish a barrier upon the administration ofjustice. It is especially
so in the case at bar, in which no end to suit and counter-suit appears
imminent and for which it is high time that we have the final say. We
likewise cannot, as the overseer of good conduct in both the bench and the
bar, let go unpunished what convinces us as serious indiscretions on the
part of a lawyer.
WHEREFORE, judgment is hereby rendered.
1. ORDERING the petitioner, Atty. Patemo Canlas, to pay to the private
respondent, Francisco Herrera, the sum of P326,000.00, as and for
damages;
2. ORDERING the petitioner to SHOW CAUSE why no disciplinary action
may be imposed on him for violation of his oath, as a lawyer, within ten
(10) days from notice, after which the same will be consolidated with AC
No. 2625;
3. DISMISSING this petition and REMANDING the case to the respondent
Court of Appeals for execution; and
4. ORDERING the petitioner to pay costs.
SO ORDERED.

SECOND DIVISION
G.R. No. 112869

January 29, 1996

KELLY R. WICKER and ATTY. ORLANDO A. RAYOS, petitioners,

vs.
HON. PAUL T. ARCANGEL, as Presiding Judge of the RTC, Makati,
Branch 134, respondent.
DECISION
MENDOZA, J.:
This is a petition for certiorari, assailing the orders dated December 3,
1993 and December 17, 1993 of respondent Judge Paul T. Arcangel of the
Regional Trial Court, Branch 134 of Makati, finding petitioners guilty of
direct contempt and sentencing each of them to suffer imprisonment for
five (5) days and to pay a fine of P100.00.
The antecedent facts are as follows:
Kelly Wicker, with his wife Wynee Dieppe and the Tectonics Asia Architects
and Engineering Co., brought suit in the Regional Trial Court of Makati
against the LFS Enterprises, Inc. and others, for the annulment of certain
deeds by which a house and lot at Forbes Park, which the plaintiffs claimed
they had purchased, was allegedly fraudulently titled in the name of the
defendant LFS Enterprises and later sold by the latter to codefendant Jose
Poe. The case, docketed as Civil Case No. 14048, was assigned to Branch
134 formerly presided over by Judge Ignacio Capulong who later was
replaced by respondent Judge Paul T. Arcangel.
It appears that on November 18, 1993, Wicker's counsel, Atty. Orlando A.
Rayos, filed a motion seeking the inhibition of respondent judge from the
consideration of the case.1 The motion alleged in pertinent part:
1. That before the Acting Presiding Judge took over, defendant LFS
Enterprises, Inc. was able to maneuver the three (3) successive
postponements for the presentation for cross-examination of Mrs.
Remedios Porcuna on her 10 August 1992 Affidavit, but eventually,
she was not presented;
2. Meantime, Judge [Ignacio] Capulong who had full grasp of this
case was eased out of his station. In one hearing, the Acting
Presiding Judge had not yet reported to his station and in that set
hearing, counsel for defendant LFS Enterprises, Inc. who must have
known that His Honor was not reporting did not likewise appear
while other counsels were present;

3. Plaintiffs have information that the Acting Presiding Judge was

personally recruited from the south by Atty. Benjamin Santos
and/or his wife, Atty. Ofelia Calcetas-Santos, one time member of
the Judicial and Bar Council, against whom plaintiff Kelly R. Wicker
filed Administrative Case No. 3796, and although said case was
dismissed, nevertheless, plaintiffs feel that it was the reason for
Atty. Ofelia Calcetas-Santos' relief;
4. Plaintiffs have reason to doubt the partiality and integrity of His
Honor and to give a fighting chance for plaintiffs to prove their
case, since this will be the last case to recover the partnership
property, plaintiffs feel that His Honor inhibit himself and set this
case for re-raffle;
5. This move finds support in the Rules of Court and jurisprudence
that in the first instance that a litigant doubts the partiality and
integrity of the Presiding Judge, he should immediately move for
his inhibition.
The motion was verified by Kelly Wicker.
Considering the allegations to be "malicious, derogatory and
contemptuous," respondent judge ordered both counsel and client to
appear before him on November 26, 1993 and to show cause why they
should not be cited for contempt of court.2
In a pleading entitled "Opposition to and/or Comment to Motion to Cite for
Direct Contempt Directed Against Plaintiff Kelly R. Wicker and his Counsel,"
Atty. Rayos claimed that the allegations in the motion did not necessarily
express his views because he merely signed the motion "in a
representative capacity, in other words, just lawyering," for Kelly Wicker,
who said in a note to him that a "young man possibly employed by the
Court" had advised him to have the case reraffled, when the opposing
counsel Atty. Benjamin Santos and the new judge both failed to come for a
hearing, because their absence was an indication that Atty. Santos knew
who "the judge may be and when he would appear." Wicker's sense of
disquiet increased when at the next two hearings, the new judge as well as
Atty. Santos and the latter's witness, Mrs. Remedios Porcuna, were all
absent, while the other counsels were present. 3
Finding petitioners' explanation unsatisfactory, respondent judge, in an
order dated December 3, 1993, held them guilty of direct contempt and

sentenced each to suffer imprisonment for five (5) days and to pay a fine
of P100.00.
Petitioners filed a motion for reconsideration, which respondent judge
denied for lack of merit in his order of December 17, 1993. In the same
order respondent judge directed petitioners to appear before him on
January 7, 1994 at 8:30 a.m. for the execution of their sentence.
In their petition 4 before this Court, Kelly Wicker and Atty. Orlando A. Rayos
contend that respondent judge committed a grave abuse of his discretion
in citing them for contempt. They argue that "when a person, impelled by
justifiable apprehension and acting in a respectful manner, asks a judge to
inhibit himself from hearing his case, he does not thereby become guilty of
contempt."
In his comment,5 respondent judge alleges that he took over as Acting
Presiding Judge of the Regional Trial Court of Makati, Branch 134 by virtue
of Administrative Order No. 154-93 dated September 2, 1993 of this Court
and not because, as petitioners alleged, he was "personally recruited from
the South" by Atty. Santos and/or his wife, Atty. Ofelia Calcetas-Santos; that
he assumed his new office on October 11, 1993 and started holding
sessions on October 18, 1993; that when all male personnel of his court
were presented to petitioner Kelly Wicker he failed to pick out the young
man who was the alleged source of the remarks prompting the filing of the
motion for inhibition; that he was not vindictive and that he in fact
refrained from implementing the execution of his order dated December 3,
1993 to enable petitioners to "avail themselves of all possible remedies;"
that after holding petitioners in contempt, he issued an order dated
December 8, 1993 inhibiting himself from trying Civil Case No. 14048; that
Atty. Rayos' claim that he was just "lawyering" and acting as "the vehicle or
mouthpiece of his client" is untenable because his (Atty. Rayos') duties to
the court are more important than those which he owes to his client; and
that by tendering their "profuse apologies" in their motion for
reconsideration of the December 3, 1993 order, petitioners acknowledged
the falsity of their accusations against him; and that the petitioners have
taken inconsistent positions as to who should try Civil Case No. 14048
because in their Motion for Inhibition dated November 18, 1993 they asked
that the case be reraffled to another sala of the RTC of Makati, while in
their petition dated November 29, 1993, which they filed with the Office of
Court Administrator, petitioners asked that Judge Capulong be allowed to
continue hearing the case on the ground that he had a "full grasp of the
case."

In reply to the last allegation of respondent judge, petitioners claim that

although they wanted a reraffle of the case, it was upon the suggestion of
respondent judge himself that they filed the petition with the Court
Administrator for the retention of Judge Capulong in the case.
What is involved in this case is an instance of direct contempt, since it
involves a pleading allegedly containing derogatory, offensive or malicious
statements submitted to the court or judge in which the proceedings are
pending, as distinguished from a pleading filed in another case. The former
has been held to be equivalent to "misbehavior committed in the presence
of or so near a court or judge as to interrupt the proceedings before the
same" within the meaning of Rule 71, 1 of the Rules of Court and,
therefore, direct contempt.6
It is important to point out this distinction because in case of indirect or
constructive contempt, the contemnor may be punished only "[a]fter
charge in writing has been filed, and an opportunity given to the accused
to be heard by himself or counsel," whereas in case of direct contempt, the
respondent may be summarily adjudged in contempt. Moreover, the
judgment in cases of indirect contempt is appealable, whereas in cases of
direct contempt only judgments of contempt by MTCs, MCTCs and MeTCs
are appealable.7
Consequently, it was unnecessary in this case for respondent judge to hold
a hearing. Hence even if petitioners are right about the nature of the case
against them by contending that it involves indirect contempt, they have
no ground for complaint since they were afforded a hearing before they
were held guilty of contempt. What is important to determine now is
whether respondent judge committed grave abuse of discretion in holding
petitioners liable for direct contempt.
We begin with the words of Justice Malcolm that the power to punish for
contempt is to be exercised on the preservative and not on the vindictive
principle. Only occasionally should it be invoked to preserve that respect
without which the administration of justice will fail. 8 The contempt power
ought not to be utilized for the purpose of merely satisfying an inclination
to strike back at a party for showing less than full respect for the dignity of
the court.9
Consistent with the foregoing principles and based on the abovementioned
facts, the Court sustains Judge Arcangel's finding that petitioners are guilty
of contempt. A reading of the allegations in petitioners' motion for
inhibition, particularly the following paragraphs thereof:

2. Meantime, Judge Capulong who had full grasp of this case was
eased out of his station. In one hearing, the Acting Presiding Judge
had not yet reported to his station and in that set hearing, counsel
for defendant LFS Enterprises, Inc. who must have known that His
Honor was not reporting did not likewise appear while other
counsels were present;
3. Plaintiffs have information that the Acting Presiding Judge was
personally recruited from the south by Atty. Benjamin Santos
and/or his wife, Atty. Ofelia Calcetas-Santos, one time member of
the Judicial and Bar Council, against whom plaintiff Kelly R. Wicker
filed Administrative Case No. 3796, and although said case was
dismissed, nevertheless, plaintiffs feel that it was the reason for
Atty. Ofelia Calcetas-Santos' relief;
leads to no other conclusion than that respondent judge was beholden to
the opposing counsel in the case, Atty. Benjamin Santos, to whom or to
whose wife, the judge owed his transfer to the RTC of Makati, which
necessitated "easing out" the former judge to make room for such transfer.
These allegations are derogatory to the integrity and honor of respondent
judge and constitute an unwarranted criticism of the administration of
justice in this country. They suggest that lawyers, if they are well
connected, can manipulate the assignment of judges to their advantage.
The truth is that the assignments of Judges Arcangel and Capulong were
made by this Court, by virtue of Administrative Order No. 154-93, precisely
"in the interest of an efficient administration of justice and pursuant to Sec.
5 (3), Art. VIII of the Constitution."10 This is a matter of record which could
have easily been verified by Atty. Rayos. After all, as he claims, he
"deliberated" for two months whether or not to file the offending motion for
inhibition as his client allegedly asked him to do.

"personally recruited" by the opposing counsel to replace Judge Capulong

who had been "eased out" were Atty. Rayos' and not Wicker's. Atty. Rayos
is thus understating his part in the preparation of the motion for inhibition.
Atty. Rayos, however, cannot evade responsibility for the allegations in
question. As a lawyer, he is not just an instrument of his client. His client
came to him for professional assistance in the representation of a cause,
and while he owed him whole souled devotion, there were bounds set by
his responsibility as a lawyer which he could not overstep. 11 Even a hired
gun cannot be excused for what Atty. Rayos stated in the motion. Based on
Canon 11 of the Code of Professional Responsibility, Atty. Rayos bears as
much responsibility for the contemptuous allegations in the motion for
inhibition as his client.
Atty. Rayos' duty to the courts is not secondary to that of his client. The
Code of Professional Responsibility enjoins him to "observe and maintain
the respect due to the courts and to judicial officers and [to] insist on
similar conduct by others" 12 and "not [to] attribute to a Judge motives not
supported by the record or have materiality to the case." 13
After the respondent judge had favorably responded to petitioners'
"profuse apologies" and indicated that he would let them off with a fine,
without any jail sentence, petitioners served on respondent judge a copy of
their instant petition which prayed in part that "Respondent Judge Paul T.
Arcangel be REVERTED to his former station. He simply cannot do in the
RTC of Makati where more complex cases are heared (sic) unlike in Davao
City." If nothing else, this personal attack on the judge only serves to
confirm the "contumacious attitude, a flouting or arrogant belligerence"
first evident in petitioners' motion for inhibition belying their protestations
of good faith.
Petitioners cite the following statement in Austria v. Masaquel:

In extenuation of his own liability, Atty. Rayos claims he merely did what he
had been bidden to do by his client of whom he was merely a
"mouthpiece." He was just "lawyering" and "he cannot be gagged," even if
the allegations in the motion for the inhibition which he prepared and filed
were false since it was his client who verified the same.
To be sure, what Wicker said in his note to Atty. Rayos was that he had
been told by an unidentified young man, whom he thought to be employed
in the court, that it seemed the opposing counsel, Atty. Santos, knew who
the replacement judge was, because Atty. Santos did not show up in court
on the same days the new judge failed to come. It would, therefore, appear
that the other allegations in the motion that respondent judge had been

14

Numerous cages there have been where judges, and even members of the
Supreme Court, were asked to inhibit themselves from trying, or from
participating in the consideration of a case, but scarcely were the movants
punished for contempt, even if the grounds upon which they based their
motions for disqualification are not among those provided in the rules. It is
only when there was direct imputation of bias or prejudice, or a stubborn
insistence to disqualify the judge, done in a malicious, arrogant, belligerent
and disrespectful manner, that movants were held in contempt of court.
It is the second sentence rather than the first that applies to this case.

Be that as it may, the Court believes that consistent with the rule that the
power to cite for contempt must be exercised for preservative rather than
vindictive principle we think that the jail sentence on petitioners may be
dispensed with while vindicating the dignity of the court. In the case of
petitioner Kelly Wicker there is greater reason for doing so considering that
the particularly offending allegations in the motion for inhibition do not
appear to have come from him but were additions made by Atty. Rayos. In
addition, Wicker is advanced in years (80) and in failing health (suffering
from angina), a fact Judge Arcangel does not dispute. Wicker may have
indeed been the recipient of such a remark although he could not point a
court employee who was the source of the same. At least he had the grace
to admit his mistake both as to the source and truth of said information. It
is noteworthy Judge Arcangel was also willing to waive the imposition of
the jail sentence on petitioners until he came upon petitioners' description
of him in the instant petition as a judge who cannot make the grade in the
RTC of Makati, where complex cases are being filed. In response to this, he
cited the fact that the Integrated Bar of the Philippines chose him as one of
the most outstanding City Judges and Regional Trial Court Judges in 1979
and 1988 respectively and that he is a 1963 graduate of the U.P. College of
Law.

Manila

In Ceniza v. Sebastian, 15 which likewise involved a motion for inhibition

which described the judge "corrupt," the Court, while finding counsel guilty
of direct contempt, removed the jail sentence of 10 days imposed by the
trial court for the reason that

It is settled law-that habeas corpus is the appropriate remedy for release

from confinement of a person who has served his sentence. 1 It i s on such
a doctrine that reliance is placed by petitioner Manuel de Gracia in this
application for the issuance of such a writ. It is undisputed that while the
information against petitioner charged him with the commission of
frustrated homicide to which he pleaded not guilty, it was later amended to
one of serious physical injuries. It is to such lesser offense that on
September 10, 1971, he entered a plea of guilty. On the very same day,
respondent Judge Reynaldo P. Honrado imposed upon him the penalty of
four months and one day of arrests mayor without subsidiary imprisonment
in case of insolvency. That period of confinement he had duly served by
November 10, 1975, considering that he had been under detention since
July 18, 1975. 2 This notwithstanding, the petition alleged that he was not
set free, the reason being that on November 19, 1975, the last day of the
prison term imposed upon him, "respondent Assistant Provincial Fiscal
Marciano P. Sta. Ana filed with the respondent Judge, in the very same case
where your petitioner was convicted and for which he served sentence,
Criminal Case No. 15289, a 'Motion to Order the Warden to Hold the
Release of Manuel de Gracia (your petitioner)' alleging as a ground that the
'father of the victim, Gilberts Valenzuela, informed the movant (respondent
Asst. Fiscal, not the People of the Philippines), that the victim in the aboveentitled case died and for this reason the undersigned will file an amended
information. 3 Then came this paragraph in the petition: "That on the

Here, while the words were contumacious, it is hard to resist the

conclusion, considering the background of this occurrence that
respondent Judge in imposing the ten-day sentence was not duly
mindful of the exacting standard [of] preservation of the dignity of
his office not indulging his sense of grievance sets the limits of the
authority he is entitled to exercise. It is the view of the Court that
under the circumstances the fine imposed should be increased to
P500.00.
The same justification also holds true in this case.
WHEREFORE, the order of December 3, 1993 is MODIFIED by DELETING the
sentence of imprisonment for five (5) days and INCREASING the fine from
P100.00 to P200.00 for each of the petitioners.
SO ORDERED.

SECOND DIVISION
G.R. No. L-42032 January 9, 1976
IN THE MATTER OF THE PRODUCTION OF THE BODY OF MANUEL DE
GRACIA ON A WRIT OF HABEAS CORPUS. MANUEL DE
GRACIA, petitioner,
vs.
THE WARDEN, MUNICIPAL JAIL, Makati, Rizal; THE PROVINCIAL
WARDEN, PROVINCIAL JAIL, Pasig, Rizal; HON. REYNALDO P.
HONRADO, Judge of the Court of First Instance of Rizal, Branch
XXV, Pasig, Rizal; and MARCIANO P. STA. ANA, Assistant Provincial
Fiscal, Pasig, Rizal, respondents.

FERNANDO, J.:

following day, November 20, 1975, the respondent Judge, despite the clear
and incontrovertible fact that he had no jurisdiction to act on said motion
because the case had long been terminated and his decision therein had
already been executed, and, further, even assuming that the respondent
Judge could still act in the case, he could not and should not act on the
Fiscal's motion because the same was not set for hearing and no copy
thereof was furnished to your petitioner whose very liberty was being
sought to be deprived, still [he] persisted in acting upon the Fiscal's motion
and granted the same 'in the interest of justice,' not at all minding that
your petitioner, while maybe a convict in the eyes of the respondent Judge,
is still entitled to due process of law and to some justice; ...." 4 There was a
motion for reconsideration, but it was fruitless. 5 Hence this petition.
On December 8, 1975, this Court issued the following resolution: "The
Court [issued] the writ of habeas corpus returnable to this Court on Friday,
December 12, 1975 and required the respondents to make a [return] of the
writ not later than the aforesaid date. The Court further Resolved: (a) to set
this case for hearing on Monday, December 15, 1975 at 10:30 a.m.; and
(b) to [grant] the motion of petitioner to litigate as pauper in this
case." 6On the date set for hearing, respondent Judge Reynaldo P. Honrado
filed his return, worded as follows: "1. That the petitioner Manuel de Gracia
has already been ordered released by this court per order dated December
11, 1975, in view of the fact that Trial Fiscal Marciano P. Sta. Ana, Jr. has not
as of this time filed the amended information for Homicide after the death
of Florante Valenzuela, the offended party in this case, notwithstanding his
motion entitled 'Motion to Order the Warden to hold the Release of Manuel
de Gracia dated November 19, 1975, ...; 2. That in view of the release from
custody of Manuel de Gracia, the present petition for habeas corpus has
become moot and academic. ..." 7 Fiscal of Rizal, did likewise. The return
stated: "1. That the Respondent Marciano P. Sta. Ana, Jr., the Assistant
Provincial petitioner is not in his custody or power although, as alleged in
the petition, it was upon his motion that the respondent Judge issued the
Order ... ordering the warden to hold the release of the accused (herein
petitioner). 2. That the reason for his said motion ... is, as stated therein,
that he was informed of the death of the victim and he was going to file an
amended information. 3. That because of the necessity for immediate
action so as to avoid the accused being released so that he could be held
to answer for a crime of homicide, and in the honest belief at that time that
the proper remedy was the filing of an amended information for homicide,
the undersigned filed the motion on said ground. The information
concerning the death of the victim was given to the undersigned by the
victim's father only on November 19, 1975, the last day of confinement of
the accused. However, after being able to study the applicable rule and
jurisprudence, the undersigned concluded that the proper remedy is not

amendment of the information because judgment had already been

rendered on the first information, but the filing of a new information for
homicide upon the authority of this Honorable Court's ruling in People v.
Manolong, and It is similar cases. 8
As no return of the writ had been filed on the date set for hearing by
respondent wardens, a resolution of the following tenor was adopted by
this Court: "When this case was called for hearing this morning, Atty.
Salvador N. Beltran appeared for the petitioner while Assistant Provincial
'Fiscal Marciano P. Sta. Ana, Jr. and Major o Maristela appeared for the
respondents. Thereafter, the Court Resolved (a) to require Assistant
Provincial Fiscal Marciano P. Sta. Ana, Jr. to file a [return] of the writ for the
respondent wardens not later than 10:30 a.m. of Wednesday, December
17, 1975; and (b) to [reset] the hearing of this case on the aforesaid date
and time. 9 It should be stated likewise that Major Edgardo Maristela
assured the Court that petitioner had been release What was declared
orally by him was thereafter set forth in writing in accordance with his
return dated December 16, 1975: II That on Sept. 18, 1975, the Office of
the Provincial Warden received a commitment order issued by Judge
Reynaldo Honrado, dated 16 September 1975, ...; IV. That by virtue 6f that
commitment order which the petitioner was sentenced to suffer the
penalty of from four (4) months and one (1) day, he was transferred to
Makati Municipal Jail, on Sept. 18, 1975, to service his prison term thereat
pursuant to Presidential Decree No. 29 as said prisoner is classified as
Municipal prisoner; V That the petitioner was brought back and confined
again to the Rizal Provincial Jail on Dec. 3, 1975, by virtue of Remittance
order issued by Judge Pedro Revilla, Executive Judge CFI Rizal dated Dec. 3,
1975, ...; VI. That on December 12, 1975, the Office of the Provincial
Warden of Rizal received an Order from the Court of First Instance of Rizal
presided by Honorable Judge Reynaldo Honrado, directing him to release
Manuel de Gracia, the petitioner in this case; VII. That by virtue of odd
order ... and the Order of Release, ... the undersigned respondent released
on said date the petitioner as evidenced by certificate of discharge from
prison and that is the reason why he cannot produce the body of said
person before this Honorable Court; VIII That he was not able to make the
return of the writ immediately on the ground that he was at that time
confined in the hospital, and he was d only on December 13,
1975." 10 There was likewise a return of the writ on such a date on behalf of
respondent Cresencio T. Pimentel, Municipal Warden of Makati, Rizal. It was
therein declared: "1. That the petitioner was not in his custody when he
received copy of the petition as the petitioner was transferred to 'the Rizal
Provincial Jail on December 3, 1975, as he was going to be charged with
the crime of homicide and 'therefore, his confinement has to be in the Rizal
Provincial Jail and that by virtue of said transfer, respondent Municipal

Warden could not produce the body of the 'petitioner before thisHonorable Court." 11
On the morning Deeember 17, 1975, respondent Assistant Provincial Fiscal
Marciano P. Sta. Ana, Jr. and the two aforesaid wardens appeared. Neither
petitioner nor his counsel, Salvador N. Beltran, was present. There was this
manifestation though: '[Petitioner thru counsel, respectfully manifests that
he has already been released from confinement, for which reason the
present petition has been rendered moot and academic .... 12 It would
appear, therefore, that with the release of petitioner, the matter had
indeed become moot and academic. That disposes of this petition, except
for one final note. There was a lapse in judicial propriety by counsel
Salvador N. Beltran who did not even take the trouble of appearing in Court
on the very day his own petition was reset for hearing, a lapse explicable,
it may be assumed, by his comparative inexperience and paucity of
practice before this Tribunal. it suffices to call his attention to such failing
by way of guidance for his future actuations as a member of the bar.
WHEREFORE, the petition for habeas corpus is dismissed for being moot
and academic.

vs.
ABRAHAM M. REGALADO, CIRILO M. REGALADO, ISIDRO M.
REGALADO, CIRIACO M. REGALADO, JORGE M. REGALADO, JULIANA
R. ABELLO, LUCIO M. REGALADO, and APOLONIO M. REGALADO,
JR.,Respondents.
DECISION
GARCIA, J.:
Herein petitioners, the spouses Pedro Regalado and Zanita Regalado, have
come to this Court via this appeal1by certiorari under Rule 45 of the Rules
of Court to nullify and set aside the following issuances of the Regional Trial
Court (RTC) of Kalibo, Aklan, Branch 8, in its Spl. Civil Action No. 4518, to
wit:
1. Order dated July 26, 1995,2 granting the petition for appointment
of a receiver embodied in the main complaint filed by respondents,
and directing such receiver to put up a bond;
2. Decision dated November 28, 1997,3 declaring the parcel of
fishpond land subject of the case as the common property of all the
parties; ordering the partition of the same into nine (9) equal parts;
requiring petitioners to render an accounting of the produce of said
fishpond starting 1980 until actual partition is effected; ordering
petitioners to pay jointly and severally attorneys fees and litigation
expenses and other costs; and ordering the appointment of a
receiver agreeable to all parties upon the filing of the bond for
receivership;
3. Order dated January 14, 1998,4 dismissing the appeal filed by
petitioners for failure to file their record on appeal and to pay the
appellate court docket and other lawful fees; and
4. Order dated May 19, 1998,5 denying petitioners petition for
relief from judgment.
The facts:

SECOND DIVISION
G.R. No. 134154

February 28, 2006

SPOUSES PEDRO M. REGALADO and ZANITA F.

REGALADO, Petitioners,

Petitioner Pedro M. Regalado, married to co-petitioner Zanita F. Regalado,

and respondents Abraham, Cirilo, Isidro, Ciriaco, Jorge, Lucio, and Apolonio,
all surnamed Regalado, and Juliana R. Abello (hereinafter collectively

referred to as respondents), are the children of the deceased spouses

Apolonio Regalado and Sofia Regalado.
It appears that as early as 1929, the parties parents had been in
possession of a 40-hectare fishpond which the parents developed and even
leased to third persons for a time. At one time, their father leased part of
the fishpond property to one Benjamin Roxas for a period of nine (9) years
commencing January 6, 1972 to January 6, 1981. However, in 1980, before
the termination of the lease contract with Roxas, petitioner Pedro Regalado
with one of the respondents, Ciriaco Regalado, forcibly took possession of
the fishpond from its lessee.
Upon the death of their father, respondents demanded from petitionerspouses who are in the possession of the entire fishpond, the partition
thereof. Respondents alleged that petitioners refused and merely
requested for another three (3) years to be in possession of the subject
property.
Again, in 1989, respondents reiterated their demand for partition but
petitioners again refused and once more requested that they be allowed to
remain in possession and usufruct of the property for five (5) more years
after all the litigations concerning the same shall have been terminated,
reasoning out that they have not yet recovered all their expenses in
developing and recovering possession of the fishpond from third persons.
In 1992, respondents again demanded for partition but as before,
petitioners again refused. Hence, on August 20, 1992, in the RTC of Kalibo,
Aklan, respondents filed against petitioners a complaint for Partition of Real
Estate, Accounting, Damages and Appointment of a Receiver, 6 thereat
docketed as Spl. Civil Action No. 4518 which was raffled to Branch 8 of the
court.
In their Answer, petitioner-spouses, as defendants a quo, claimed that the
fishpond in question was not part of the hereditary estate of their parents
as it is a public land covered by a Fishpond Lease Agreement. They argued
that even if it were to be considered as part of the hereditary estate of the
parents, respondents as plaintiffs below are not entitled to share equally in
the fishpond property as it was allegedly only petitioner Pedro Regalado
who recovered the actual physical possession of the same from third
persons. Petitioners also claimed that respondents did not keep their part
in the agreement to let the spouses recover all the expenses they incurred
in the development and re-possession of the subject fishpond and to enjoy
sole usufruct thereof for five (5) years.

On May 31, 1993, respondents filed in Spl. Civil Case No. 4518, a verified
Petition for Receivership,7 thereunder alleging that there was a compelling
need for the appointment of a receiver to safeguard the property and its
produce from being wasted or materially injured on account of petitioners
failure to pay the real estate taxes and fishpond rentals due thereon.
Respondents further averred that the property and the income derived
therefrom are in danger of being lost or misappropriated by petitioners
who were allegedly constructing their own house thereat out of the income
of the fishpond, throwing lavish parties frequently and getting heavily
indebted to several persons.
Petitioners opposed the petition for receivership, claiming that mere coownership does not justify the appointment of a receiver, since it was
actually petitioner Pedro Regalado who risked his own life, spent his own
money and time in recovering the fishpond without the other parties
contributing a single centavo. Petitioners also argued in their opposition
that the subject fishpond was public property which belongs to the
Government, hence it would be folly and a waste of money to pay the real
property taxes thereon in addition to the fishpond rentals to the Bureau of
Fisheries and Aquatic Resources (BFAR).
In the herein first assailed Order dated July 26, 1995, 8 the trial court
granted respondents petition for receivership, explaining that respondents
had rights and interests on the subject property, which property is in
danger of being foreclosed by petitioners creditors or forfeited by the
Government for non-payment of taxes.
Aggrieved by the aforementioned Order, petitioners filed a motion for
reconsideration, contending that said Order was premature as they
(petitioners) were not yet finished with their presentation of evidence in
opposition to respondents petition for the appointment of a receiver.
Acting thereon, the trial court issued an Order 9 on August 14, 1995 holding
in abeyance the resolution of the receivership issue and setting the main
case for trial on the merits.
Eventually, in the herein assailed Decision 10 dated November 28, 1997, the
trial court rendered judgment for the respondents, as follows:
WHEREFORE, premises considered, judgment is hereby rendered:
a) Declaring the parcel of fishpond land located at Barangay
Camanci, Batan, Aklan described under paragraph 4 of the

complaint and herein referred to as the land in question, the

common property of all the parties herein;
b) Ordering the partition of the fishpond in question into nine (9)
equal parts, each part shall represent the share of Abraham M.
Regalado, Cirilo M. Regalado, Isidro M. Regalado, Ciriaco M.
Regalado, Jorge M. Regalado, Juliana R. Abello, Lucio M. Regalado,
Apolonio M. Regalado, Jr. and Pedro M. Regalado in the following
manner: Within thirty (30) days from receipt by the parties of this
decision, they may make partition among themselves, if they are
able to agree, by proper instruments of conveyance to be
conformed by the court, otherwise, partition would be effected in
accordance with Sections 3 or 5, Rule 69 of the Revised Rules of
Court, as amended;
c) Ordering the defendants [now petitioners] to render an
accounting of the produce of the fishpond in question starting 1980
when they first actually took possession of the same until actual
partition of the property is effected among the parties;
d) Ordering the defendants [now petitioners], to pay jointly and
severally, the plaintiffs [now respondents] the sum of P10,000.00
attorneys fees, and litigation expenses and to pay the costs;
e) Ordering, upon filing of the petitioners [plaintiffs] bond for
receivership in the amount of ONE HUNDRED THOUSAND PESOS
(P100,000.00), the appointment of a receiver agreeable to all the
parties, who is likewise directed to put-up a bond before assuming
his duties as such in the amount which will be fixed later by this
Court. [Words in brackets supplied]
SO ORDERED.
Against said decision, petitioners filed a Notice of Appeal 11 on December
17, 1997, therein making known their intention to take an appellate
recourse to the Court of Appeals.
In the herein other assailed Order12 dated January 14, 1998, the lower court
denied due course to petitioners notice of appeal, saying that while the
notice was timely filed, yet petitioners did not pay the appellate court
docket and other lawful fees nor a record on appeal filed by them.

With the November 28, 1997 Decision having become final and executory,
respondents filed a Motion for Execution which was granted by the trial
court. In time, an Entry of Judgment13 was made on February 27, 1998.
Then, on March 10, 1998, petitioners, this time thru one Atty. Pedro
Icamina who was without any proof of entry of appearance in the case
either as new or collaborating counsel for the petitioners, filed a Petition for
Relief from Order,14 thereto attaching an affidavit of Atty. Tirol, petitioners
counsel on record about whom there is no indication of any withdrawal of
appearance. In that affidavit, Atty. Tirol alleged that while his office
received on January 19, 1998 a copy of the January 14, 1998 Order
(denying due course to petitioners appeal), his law clerk did not personally
inform him about it and just placed said order on his table among the piles
of legal and court papers, adding that he (Atty. Tirol) had several court
hearings, not to mention the fact that he was a member of the
Sangguniang Panlalawigan of Aklan which required his attendance, all of
which caused him to overlook the filing of the Record on Appeal. In the
same pleading, Atty. Icamina attached petitioners Record on Appeal and a
check for P400.00 as appellate court docket fee.1avvphil.net
In the herein last assailed Order15 dated May 19, 1998, the trial court
denied petitioners petition for relief on the ground that the instances
therein cited by counsel "are not those excusable negligence which
warrant the granting of relief under Rule 38 of the Rules of Court."
Hence, this recourse by the petitioners.
We DENY.
At the outset, it must be stressed that in seeking the reversal and setting
aside of the assailed Orders and Decision of the trial court in its Spl. Civil
Action No. 4518, petitioners came to us on a petition for review under Rule
45 of the Rules of Court.
Under Section 1(b), Rule 41 of the Rules, the denial of a petition for relief
from judgment or an order disallowing or dismissing an appeal may only be
challenged through the special civil action of certiorari under Rule 65:
Section 1. Subject of appeal. An appeal may be taken from a judgment or
final order that completely disposes of the case, or of a particular matter
therein when declared by these Rules to be appealable.
No appeal may be taken from:

xxx xxx xxx

(b) An order denying a petition for relief or any similar motion seeking
relief from judgment;
xxx xxx xxx
(d) An order disallowing or dismissing an appeal;
xxx xxx xxx
In all the above instances where the judgment or final order is not
appealable, the aggrieved party may file an appropriate special civil action
under Rule 65. (Emphasis supplied)
Hence, in seeking the reversal of the trial courts Order dated May 19,
1998 which denied their petition for relief from judgment, petitioners, in
coming to us via the vehicle of appeal by certiorari under Rule 45, have
thus clearly availed of the wrong remedy.
In any event, even if petitioners came to us by certiorari under Rule 65, still
the recourse must fail. For, from a perusal of the petition itself, it is quite
apparent that no allegation of grave abuse of discretion on the part of the
trial court was ever presented by them, and even assuming there was, the
same would still have to be dismissed.
A petition for relief from denial of an appeal is governed by Rule 38,
Section 2 of the Rules of Court which provides:
"Section 2. Petition for relief from denial of appeal. When a judgment or
final order is rendered by any court in a case, and a party thereto, by
fraud, accident, mistake, or excusable negligence, has been prevented
from taking an appeal, he may file a petition in such court and in the same
case praying that the appeal be given due course."
In Tuason v. Court of Appeals,16 we ruled:
"A petition for relief from judgment is an equitable remedy; it is allowed
only in exceptional cases where there is no other available or adequate
remedy. When a party has another remedy available to him, which may be
either a motion for new trial or appeal from an adverse decision of the trial
court, and he was not prevented by fraud, accident, mistake or excusable
negligence from filing such motion or taking such appeal, he cannot avail

himself of this petition. Indeed, relief will not be granted to a party who
seeks avoidance from the effects of the judgment when the loss of the
remedy at law was due to his own negligence; otherwise the petition for
relief can be used to revive the right to appeal which had been lost thru
inexcusable negligence." (Citations omitted)
Here, there was no fraud, accident, mistake, or excusable negligence that
prevented petitioners from filing their Record on Appeal on time and
paying the necessary appellate court docket and filing fees therefor. In the
precise words of the trial court:
"The petition for relief stresses the reasons that the clerk of Atty. Tirol, a
certain Ms. Nina Temporaza, in charged (sic) of receiving and filing of office
papers failed to bring to the attention of Atty. Tirol the order of denial dated
January 14, 1998 and secondly, Atty. Tirol due to pressure of work and
court appearances and being an incumbent Sangguniang Panlalawigan of
Aklan, thinking all the time that his notice of appeal filed by him was in
order (sic).
On the first excuse, the Supreme Court in an analogous case had the
occasion to rule, viz;
"The excuse offered by respondent Santos as reason for his failure to
perfect in due time his appeal from the judgment of the Municipal Court,
that counsels clerk forgot to hand him the court notice, is the most
hackneyed and habitual subterfuge employed by litigants who fail to
observe the procedural requirements prescribed by the Rules of Court. x x
x in the face of the Supreme Court repeated rulings (that) they are neither
credible nor constitutive of excusable negligence" (Phil. Airlines Inc. vs.
Arca, et al., Vol. 19 SCRA 350).
As to the second excuse, the Supreme Court has this to say,
"Volume and pressure of work is not an excusable negligence. Moreover,
the said petition was not based on a valid ground as We have consistently
ruled that volume and pressure of work does not constitute mistake or
excusable negligence as to warrant relief from judgment which is available
only in exceptional cases" (Biscarra vs. Republic, 95 SCRA 248).
Furthermore, the appellate court docket fee and other lawful fees are now
required to be paid within the period for taking an appeal to the clerk of
court which rendered the judgment or order appealed from. Failure to pay

said fees on time is also a ground for dismissal of the appeal (Sec. 1 (c) of
Rule 50)."
To stress, even in the matter of questioning the trial courts Order dated
January 14, 1998 denying due course to petitioners appeal, the glaring
fact reveals that again, petitioners availed of the wrong remedy.
It must be remembered that a party aggrieved by an order disallowing or
dismissing an appeal may file an appropriate special civil action under Rule
65. Sadly, however, petitioners erroneously filed an appeal by certiorari
under Rule 45.

not been sufficiently diligent, experienced or learned. This will put a

premium on the willful and intentional commission of errors by counsel,
with a view to securing new trials in the event of conviction."
There must, therefore, be an end to this litigation.
We take this occasion to require Atty. Pedro Icamina to explain within ten
(10) days from receipt hereof why he should not be proceeded
administratively for filing the very petition in this case and the Petition for
Relief from Order in the lower court without first entering his appearance
as petitioners counsel.

Assuming, arguendo, that petitioners are allowed to take an appeal from

said Order, we find no excusable negligence to merit the grant of the
petition for relief.

WHEREFORE, the instant petition is DENIED for lack of merit.

In this case, it is undisputed that petitioners merely filed a Notice of

Appeal. The Record on Appeal was belatedly filed, as in fact it was merely
attached to their March 10, 1998 Petition for Relief from Order. What is
more, no appellate docket and legal fees were paid with the filing of the
Notice of Appeal. Petitioners merely harp on their counsels alleged
excusable negligence resulting in their failure to seasonably file their
Record on Appeal and pay the required appellate docket and other legal
fees.

SO ORDERED.

Unfortunately for petitioners, negligence, to be "excusable," must be one

which ordinary diligence and prudence could not have guarded
against.17 Again, petitioners failure to file a Record on Appeal and pay the
appellate docket fees cannot be considered as excusable negligence due to
counsels pressure of work and inadvertence of his office clerk.
On a final note, we emphasize that petitioners are bound by the acts of
their counsel in the conduct of the instant case. They have to bear the
consequences thereof. Petitioners cannot thereafter be heard to complain
that the result might have been different had their counsel proceeded
differently. So it is that in Rivera v. Court of Appeals, 18 we ruled:
"xxx It has been held time and again that blunders and mistakes made in
the conduct of the proceedings in the trial court as a result of the
ignorance, inexperience or incompetence of counsel do not qualify as a
ground for new trial. If such were to be admitted as valid reasons for
reopening cases, there would never be an end to litigation so long as a new
counsel could be employed to allege and show that the prior counsel had

Costs against petitioners.

THIRD DIVISION
A.C. No. 7399

August 25, 2009

ANTERO J. POBRE, Complainant,

vs.
Sen. MIRIAM DEFENSOR-SANTIAGO, Respondent.
DECISION
VELASCO, JR., J.:
In his sworn letter/complaint dated December 22, 2006, with enclosures,
Antero J. Pobre invites the Courts attention to the following excerpts of
Senator Miriam Defensor-Santiagos speech delivered on the Senate floor:
x x x I am not angry. I am irate. I am foaming in the mouth. I am homicidal.
I am suicidal. I am humiliated, debased, degraded. And I am not only that, I
feel like throwing up to be living my middle years in a country of this
nature. I am nauseated. I spit on the face of Chief Justice Artemio
Panganiban and his cohorts in the Supreme Court, I am no longer
interested in the position [of Chief Justice] if I was to be surrounded by

idiots. I would rather be in another environment but not in the Supreme

Court of idiots x x x.
To Pobre, the foregoing statements reflected a total disrespect on the part
of the speaker towards then Chief Justice Artemio Panganiban and the
other members of the Court and constituted direct contempt of court.
Accordingly, Pobre asks that disbarment proceedings or other disciplinary
actions be taken against the lady senator.
In her comment on the complaint dated April 25, 2007, Senator Santiago,
through counsel, does not deny making the aforequoted statements. She,
however, explained that those statements were covered by the
constitutional provision on parliamentary immunity, being part of a speech
she delivered in the discharge of her duty as member of Congress or its
committee. The purpose of her speech, according to her, was to bring out
in the open controversial anomalies in governance with a view to future
remedial legislation. She averred that she wanted to expose what she
believed "to be an unjust act of the Judicial Bar Council [JBC]," which, after
sending out public invitations for nomination to the soon to-be vacated
position of Chief Justice, would eventually inform applicants that only
incumbent justices of the Supreme Court would qualify for nomination. She
felt that the JBC should have at least given an advanced advisory that nonsitting members of the Court, like her, would not be considered for the
position of Chief Justice.
The immunity Senator Santiago claims is rooted primarily on the provision
of Article VI, Section 11 of the Constitution, which provides: "A Senator or
Member of the House of Representative shall, in all offenses punishable by
not more than six years imprisonment, be privileged from arrest while the
Congress is in session.No member shall be questioned nor be held
liable in any other place for any speech or debate in the Congress
or in any committee thereof." Explaining the import of the underscored
portion of the provision, the Court, in Osmea, Jr. v. Pendatun, said:
Our Constitution enshrines parliamentary immunity which is a fundamental
privilege cherished in every legislative assembly of the democratic world.
As old as the English Parliament, its purpose "is to enable and encourage a
representative of the public to discharge his public trust with firmness and
success" for "it is indispensably necessary that he should enjoy the fullest
liberty of speech and that he should be protected from resentment of
every one, however, powerful, to whom the exercise of that liberty may
occasion offense."1

As American jurisprudence puts it, this legislative privilege is founded upon

long experience and arises as a means of perpetuating inviolate the
functioning process of the legislative department. Without parliamentary
immunity, parliament, or its equivalent, would degenerate into a polite and
ineffective debating forum. Legislators are immune from deterrents to the
uninhibited discharge of their legislative duties, not for their private
indulgence, but for the public good. The privilege would be of little value if
they could be subjected to the cost and inconvenience and distractions of
a trial upon a conclusion of the pleader, or to the hazard of a judgment
against them based upon a judges speculation as to the motives. 2
This Court is aware of the need and has in fact been in the forefront in
upholding the institution of parliamentary immunity and promotion of free
speech. Neither has the Court lost sight of the importance of the legislative
and oversight functions of the Congress that enable this representative
body to look diligently into every affair of government, investigate and
denounce anomalies, and talk about how the country and its citizens are
being served. Courts do not interfere with the legislature or its members in
the manner they perform their functions in the legislative floor or in
committee rooms. Any claim of an unworthy purpose or of the falsity and
mala fides of the statement uttered by the member of the Congress does
not destroy the privilege.3 The disciplinary authority of the assembly4 and
the voters, not the courts, can properly discourage or correct such abuses
committed in the name of parliamentary immunity.5
For the above reasons, the plea of Senator Santiago for the dismissal of the
complaint for disbarment or disciplinary action is well taken. Indeed, her
privilege speech is not actionable criminally or in a disciplinary proceeding
under the Rules of Court. It is felt, however, that this could not be the last
word on the matter.
The Court wishes to express its deep concern about the language Senator
Santiago, a member of the Bar, used in her speech and its effect on the
administration of justice. To the Court, the lady senator has undoubtedly
crossed the limits of decency and good professional conduct. It is at once
apparent that her statements in question were intemperate and highly
improper in substance. To reiterate, she was quoted as stating that she
wanted "to spit on the face of Chief Justice Artemio Panganiban and his
cohorts in the Supreme Court," and calling the Court a "Supreme Court of
idiots."
The lady senator alluded to In Re: Vicente Sotto.6 We draw her attention to
the ensuing passage in Sotto that she should have taken to heart in the
first place:

x x x [I]f the people lose their confidence in the honesty and integrity of
this Court and believe that they cannot expect justice therefrom, they
might be driven to take the law into their own hands, and disorder and
perhaps chaos would be the result.1avvphi1
No lawyer who has taken an oath to maintain the respect due to the courts
should be allowed to erode the peoples faith in the judiciary. In this case,
the lady senator clearly violated Canon 8, Rule 8.01 and Canon 11 of the
Code of Professional Responsibility, which respectively provide:
Canon 8, Rule 8.01.A lawyer shall not, in his professional dealings, use
language which is abusive, offensive or otherwise improper.
Canon 11.A lawyer shall observe and maintain the respect due to the
courts and to the judicial officers and should insist on similar conduct by
others.
Senator/Atty. Santiago is a cut higher than most lawyers. Her achievements
speak for themselves. She was a former Regional Trial Court judge, a law
professor, an oft-cited authority on constitutional and international law, an
author of numerous law textbooks, and an elected senator of the land.
Needless to stress, Senator Santiago, as a member of the Bar and officer of
the court, like any other, is duty-bound to uphold the dignity and authority
of this Court and to maintain the respect due its members. Lawyers in
public service are keepers of public faith and are burdened with the higher
degree of social responsibility, perhaps higher than their brethren in
private practice.7Senator Santiago should have known, as any perceptive
individual, the impact her statements would make on the peoples faith in
the integrity of the courts.
As Senator Santiago alleged, she delivered her privilege speech as a
prelude to crafting remedial legislation on the JBC. This allegation strikes
the Court as an afterthought in light of the insulting tenor of what she said.
We quote the passage once more:
x x x I am not angry. I am irate. I am foaming in the mouth. I am
homicidal. I am suicidal. I am humiliated, debased, degraded. And I am not
only that, I feel like throwing up to be living my middle years in a country
of this nature. I am nauseated. I spit on the face of Chief Justice Artemio
Panganiban and his cohorts in the Supreme Court, I am no longer
interested in the position [of Chief Justice] if I was to be surrounded by
idiots. I would rather be in another environment but not in the Supreme
Court of idiots x x x. (Emphasis ours.)

A careful re-reading of her utterances would readily show that her

statements were expressions of personal anger and frustration at not being
considered for the post of Chief Justice. In a sense, therefore, her remarks
were outside the pale of her official parliamentary functions. Even
parliamentary immunity must not be allowed to be used as a vehicle to
ridicule, demean, and destroy the reputation of the Court and its
magistrates, nor as armor for personal wrath and disgust. Authorities are
agreed that parliamentary immunity is not an individual privilege accorded
the individual members of the Parliament or Congress for their personal
benefit, but rather a privilege for the benefit of the people and the
institution that represents them.
To be sure, Senator Santiago could have given vent to her anger without
indulging in insulting rhetoric and offensive personalities.
Lest it be overlooked, Senator Santiagos outburst was directly traceable to
what she considered as an "unjust act" the JBC had taken in connection
with her application for the position of Chief Justice. But while the JBC
functions under the Courts supervision, its individual members, save
perhaps for the Chief Justice who sits as the JBCs exofficio chairperson,8 have no official duty to nominate candidates for
appointment to the position of Chief Justice. The Court is, thus, at a loss to
understand Senator Santiagos wholesale and indiscriminate assault on the
members of the Court and her choice of critical and defamatory words
against all of them.
At any event, equally important as the speech and debate clause of Art. VI,
Sec. 11 of the Constitution is Sec. 5(5) of Art. VIII of the Constitution that
provides:
Section 5. The Supreme Court shall have the following powers:
xxxx
(5) Promulgate rules concerning the protection and enforcement of
constitutional rights, pleading, practice, and procedure in all courts, the
admission to the practice of the law, the Integrated Bar, and legal
assistance to the underprivileged. (Emphasis ours.)
The Court, besides being authorized to promulgate rules concerning
pleading, practice, and procedure in all courts, exercises specific authority
to promulgate rules governing the Integrated Bar with the end in view that
the integration of the Bar will, among other things:

(4) Shield the judiciary, which traditionally cannot defend itself except
within its own forum, from the assaults that politics and self interest may
level at it, and assist it to maintain its integrity, impartiality and
independence;
xxxx
(11) Enforce rigid ethical standards x x x.9
In Re: Letter Dated 21 February 2005 of Atty. Noel S. Sorreda, 10 we
reiterated our pronouncement in Rheem of the Philippines v. Ferrer11 that
the duty of attorneys to the courts can only be maintained by rendering no
service involving any disrespect to the judicial office which they are bound
to uphold. The Court wrote in Rheem of the Philippines:
x x x As explicit is the first canon of legal ethics which pronounces that "[i]t
is the duty of a lawyer to maintain towards the Courts a respectful attitude,
not for the sake of the temporary incumbent of the judicial office, but for
the maintenance of its supreme importance." That same canon, as a
corollary, makes it peculiarly incumbent upon lawyers to support the courts
against "unjust criticism and clamor." And more. The attorneys oath
solemnly binds him to a conduct that should be "with all good fidelity x x x
to the courts."
Also, in Sorreda, the Court revisited its holding in Surigao Mineral
Reservation Board v. Cloribel12 that:
A lawyer is an officer of the courts; he is, "like the court itself, an
instrument or agency to advance the ends of justice." His duty is to uphold
the dignity and authority of the courts to which he owes fidelity, "not to
promote distrust in the administration of justice." Faith in the courts, a
lawyer should seek to preserve. For, to undermine the judicial edifice "is
disastrous to the continuity of government and to the attainment of the
liberties of the people." Thus has it been said of a lawyer that "[a]s an
officer of the court, it is his sworn and moral duty to help build and not
destroy unnecessarily that high esteem and regard towards the courts so
essential to the proper administration of justice."13
The lady senator belongs to the legal profession bound by the exacting
injunction of a strict Code. Society has entrusted that profession with the
administration of the law and dispensation of justice. Generally speaking, a
lawyer holding a government office may not be disciplined as a member of
the Bar for misconduct committed while in the discharge of official duties,

unless said misconduct also constitutes a violation of his/her oath as a

lawyer.14
Lawyers may be disciplined even for any conduct committed in their
private capacity, as long as their misconduct reflects their want of probity
or good demeanor,15 a good character being an essential qualification for
the admission to the practice of law and for continuance of such privilege.
When the Code of Professional Responsibility or the Rules of Court speaks
of "conduct" or "misconduct," the reference is not confined to ones
behavior exhibited in connection with the performance of lawyers
professional duties, but also covers any misconduct, whichalbeit
unrelated to the actual practice of their professionwould show them to be
unfit for the office and unworthy of the privileges which their license and
the law invest in them.16
This Court, in its unceasing quest to promote the peoples faith in courts
and trust in the rule of law, has consistently exercised its disciplinary
authority on lawyers who, for malevolent purpose or personal malice,
attempt to obstruct the orderly administration of justice, trifle with the
integrity of courts, and embarrass or, worse, malign the men and women
who compose them. We have done it in the case of former Senator Vicente
Sotto in Sotto, in the case of Atty. Noel Sorreda in Sorreda, and in the case
of Atty. Francisco B. Cruz in Tacordan v. Ang 17who repeatedly insulted and
threatened the Court in a most insolent manner.
The Court is not hesitant to impose some form of disciplinary sanctions on
Senator/Atty. Santiago for what otherwise would have constituted an act of
utter disrespect on her part towards the Court and its members. The
factual and legal circumstances of this case, however, deter the Court from
doing so, even without any sign of remorse from her. Basic constitutional
consideration dictates this kind of disposition.
We, however, would be remiss in our duty if we let the Senators offensive
and disrespectful language that definitely tended to denigrate the
institution pass by. It is imperative on our part to re-instill in Senator/Atty.
Santiago her duty to respect courts of justice, especially this Tribunal, and
remind her anew that the parliamentary non-accountability thus granted to
members of Congress is not to protect them against prosecutions for their
own benefit, but to enable them, as the peoples representatives, to
perform the functions of their office without fear of being made responsible
before the courts or other forums outside the congressional hall. 18 It is
intended to protect members of Congress against government pressure
and intimidation aimed at influencing the decision-making prerogatives of
Congress and its members.

The Rules of the Senate itself contains a provision on Unparliamentary Acts

and Language that enjoins a Senator from using, under any circumstance,
"offensive or improper language against another Senator or against any
public institution."19 But as to Senator Santiagos unparliamentary
remarks, the Senate President had not apparently called her to order, let
alone referred the matter to the Senate Ethics Committee for appropriate
disciplinary action, as the Rules dictates under such circumstance. 20 The
lady senator clearly violated the rules of her own chamber. It is unfortunate
that her peers bent backwards and avoided imposing their own rules on
her.
Finally, the lady senator questions Pobres motives in filing his complaint,
stating that disciplinary proceedings must be undertaken solely for the
public welfare. We cannot agree with her more. We cannot overstress that
the senators use of intemperate language to demean and denigrate the
highest court of the land is a clear violation of the duty of respect lawyers
owe to the courts.21
Finally, the Senator asserts that complainant Pobre has failed to prove that
she in fact made the statements in question. Suffice it to say in this regard
that, although she has not categorically denied making such statements,
she has unequivocally said making them as part of her privilege speech.
Her implied admission is good enough for the Court.
WHEREFORE, the letter-complaint of Antero J. Pobre against Senator/Atty.
Miriam Defensor-Santiago is, conformably to Art. VI, Sec. 11 of the
Constitution, DISMISSED.
SO ORDERED.

EN BANC
G.R. No. 71169 December 22, 1988
JOSE D. SANGALANG and LUTGARDA D. SANGALANG, petitioners,
FELIX C. GASTON and DOLORES R. GASTON, JOSE V. BRIONES and
ALICIA R. BRIONES, and BEL-AIR VILLAGE ASSOCIATION,

INC.,intervenors-petitioners,
vs.
INTERMEDIATE APPELLATE COURT, and AYALA
CORPORATION, respondents.
G.R. No. 74376 December 22, 1988
BEL-AIR VILLAGE ASSOCIATION, INC., petitioner,
vs.
THE INTERMEDIATE APPELLATE COURT, ROSARIO DE JESUS
TENORIO, and CECILIA GONZALVEZ,respondents.
G.R. No. 76394 December 22,1988

performance restrictive easement upon property, specifically the Bel- Air

Village subdivision in Makati, Metro Manila, pursuant to stipulations
embodied in the deeds of sale covering the subdivision, and for damages.
Later, the Sangalangs were joined by Felix Gaston, a resident of No. 64
Jupiter Street of the same municipality, and by Mr. and Mrs. Jose and Alicia
Briones, both of No. 66 Jupiter Street. Pending further proceedings, the BelAir Village Association, Inc. (BAVA), an incorporated homeowners'
association, entered its appearance as plaintiff-in-intervention.
BAVA itself had brought its own complaints, four in number, likewise for
specific performance and damages to enforce the same 'deed restrictions.'
(See G.R. Nos. 74376, 76394, 78182, and 82281.)
ANTECEDENTS FACTS

BEL-AIR VILLAGE ASSOCIATION, INC., petitioner,

vs.
THE COURT OF APPEALS, and EDUARDO and BUENA
ROMUALDEZ respondents.

The facts are stated in the decision appealed from. We quote:

G.R. No. 78182 December 22, 1988

xxxxxxxxx

BEL-AIR VILLAGE ASSOCIATION, INC., petitioner,

vs.
COURT OF APPEALS, DOLORES FILLEY, and J. ROMERO &
ASSOCIATES, respondents.
G.R. No. 82281 December 22, 1988
BEL-AIR VILLAGE ASSOCIATION, INC, petitioner,
vs.
COURT OF APPEALS, VIOLETA MONCAL, and MAJAL DEVELOPMENT
CORPORATION, respondents.
SARMIENTO, J.:
Before the Court are five consolidated petitions, 1 docketed as G.R. Nos.
71169, 74376, 76394, 78182, and 82281 hereof, in the nature of appeals
(by certiorari under Rule 45 of the Rules of Court) from five decisions of the
Court of Appeals, denying specific performance and damages.
The proceedings were commenced at the first instance by Jose Sangalang,
joined by his wife Lutgarda Sangalang, both residents of No. 110 Jupiter
Street, Makati, Metro Manila (G.R. No. 71169) to enforce by specific

I. G.R. No. 71169

(1) Bel-Air Village is located north of Buendia Avenue

extension (now Sen. Gil J. Puyat Ave.) across a stretch of
commercial block from Reposo Street in the west up to
Zodiac Street in the east, When Bel-Air Village was
planned, this block between Reposo and Zodiac Streets
adjoining Buendia Avenue in front of the village was
designated as a commercial block. (Copuyoc TSN, p. 10,
Feb. 12, 1982).
(2) Bel-Air Village was owned and developed into a
residential subdivision in the 1950s by Makati Development
Corporation (hereinafter referred to as MDC), which in 1968
was merged with appellant Ayala Corporation.
(3) Appellees-spouses Sangalang reside at No. 11O Jupiter
Street between Makati Avenue and Reposo Street;
appellees-spouses Gaston reside at No. 64 Jupiter Street
between Makati Avenue and Zodiac Street; appelleesspouses Briones reside at No. 66 Jupiter Street also
between Makati Avenue and Zodiac Street; while appellee
Bel-Air Village Association, Inc. (hereinafter referred to as
BAVA) is the homeowners' association in Bel-Air Village

which takes care of the sanitation, security, traffic

regulations and general welfare of the village.
(4) The lots which were acquired by appellees Sangalang
and spouse Gaston and spouse and Briones and spouse in
1960, 1957 and 1958, respectively, were all sold by MDC
subject to certain conditions and easements contained in
Deed Restrictions which formed a part of each deed of
sale. The pertinent provisions in said Deed Restrictions,
which are common to all lot owners in Bel-Air Village, are
as follows:
I-BEL-AIR ASSOCIATION
The owner of this lot/s or his successors in interest is
required to be and is automatically a member of the Bel-Air
Association and must abide by such rules and regulations
laid down by the Association in the interest of the
sanitation, security and the general welfare of the
community.
The association will also provide for and collect
assessments, which will constitute as a lien on the property
junior only to liens of the government for taxes and to
voluntary mortgages for sufficient consideration entered
into in good faith.
II-USE OF LOTS
Subject to such amendments and additional restrictions,
reservations, servitudes, etc., as the Bel- Air Association
may from time to time adopt and prescribe, this lot is
subject to the following restrictions:

c. Only one single family house may be constructed on a

single lot, although separate servants' quarters or garage
may be built.
d. Commercial or advertising signs shall not be placed,
constructed, or erected on this lot. Name plates and
professional signs of homeowners are permitted so long as
they do not exceed 80 x 40 centimeters in size.
e. No cattle, pigs, sheep, goats, ducks, geese, roosters or
rabbits shall be maintained in the lot, except that pets may
be maintained but must be controlled in accordance with
the rulings of the Association. The term "pets' includes
chickens not in commercial quantities.
f. The property is subject to an easement of two (2) meters
within the lot and adjacent to the rear and sides thereof
not fronting a street for the purpose of drainage, sewage,
water and other public facilities as may be necessary and
desirable; and the owner, lessee or his representative shall
permit access thereto by authorized representatives of the
Bel-Air Association or public utility entities for the purposes
for which the easement is created.
g. This lot shall not be used for any immoral or illegal trade
or activity.
h. The owner and/or lessee of this lot/s shall at all times
keep the grass cut and trimmed to reduce the fire hazard
of the property.
xxx xxx xxx
VI-TERM OF RESTRICTIONS

a. This lot/s shall not be subdivided. However, three or

more lots may be consolidated and subdivided into a lesser
number of lots provided that none of the resulting lots be
smaller in area than the smallest lot before the
consolidation and that the consolidation and subdivision
plan be duly approved by the governing body of the Bel-Air
Association.

The foregoing restrictions shall remain in force for fifty

years from January 15, 1957, unless sooner cancelled in its
entirety by two thirds vote of members in good standing of
the Bel-Air Association. However, the Association may,
from time to time, add new ones, amend or abolish
particular restrictions or parts thereof by majority rule.

b. This lot/s shall only be used for residential purposes.

VII--ENFORCEMENT OF RESTRICTIONS

The foregoing restrictions may be enjoined and/or enforced

by court action by the Bel-Air Association, or by the Makati
Development Corporation or its assigns, or by any
registered owner of land within the boundaries of the BelAir Subdivision (Sub-division plan PSD-49226 and Lot 7-B,
Psd-47848) or by any member in good standing of the BelAir association." (Exh. 1 -b; Exh. 22, Annex "B").
(Appellant's Brief, pp. 4- 6)
(5) When MDC sold the above-mentioned lots to appellees'
predecessors-in-interest, the whole stretch of the
commercial block between Buendia Avenue and Jupiter
Street, from Reposo Street in the west to Zodiac Street in
the east, was still undeveloped. Access, therefore, to BelAir Village was opened to all kinds of people and even
animals. So in 1966, although it was not part of the original
plan, MDC constructed a fence or wall on the commercial
block along Jupiter Street. In 1970, the fence or wall was
partly destroyed by typhoon "Yoling." The destroyed
portions were subsequently rebuilt by the appellant.
(Copuyoc TSN, pp. 31-34, Feb. 12, 1982). When Jupiter
Street was widened in 1972 by 3.5 meters, the fence or
wall had to be destroyed. Upon request of BAVA, the wall
was rebuilt inside the boundary of the commercial block.
(Copuyoc TSN, pp. 4447, Feb. 12,1982).
(6) When the appellant finally decided to subdivide and sell
the lots in the commercial block between Buendia and
Jupiter, BAVA wrote the appellant on May 9, 1972,
requesting for confirmation on the use of the commercial
lots. The appellant replied on May 16, 1972, informing
BAVA of the restrictions intended to be imposed in the sale
and use of the lots. Among these restrictions are: that the
building shall have a set back of 19 meters; and that with
respect to vehicular traffic along Buendia Avenue, entrance
only will be allowed, and along Jupiter Street and side
streets, both entrance and exit will be allowed.
(7) On June 30, 1972, appellant informed BAVA that in a
few months it shall subdivide and sell the commercial lots
bordering the north side of Buendia Avenue Extension from
Reposo Street up to Zodiac Street. Appellant also informed
BAVA that it had taken all precautions and will impose upon
the commercial lot owners deed restrictions which will

harmonize and blend with the development and welfare of

Bel-Air Village. Appellant further applied for special
membership in BAVA of the commercial lot owners. A copy
of the deed restrictions for the commercial lots was also
enclosed. The proposed deed restrictions shall include the
19 meter set back of buildings from Jupiter Street, the
requirement for parking space within the lot of one (1)
parking slot for every seventy five (75) meters of office
space in the building and the limitation of vehicular traffic
along Buendia to entrance only, but allowing both vehicular
entrance and vehicular exit through Jupiter Street and any
side street.
In its letter of July 10, 1972, BAVA acknowledged the above
letter of appellant and informed the latter that the
application for special membership of the commercial lot
owners in BAVA would be submitted to BAVA's board of
governors for decision.
(8) On September 25, 1972, appellant notified BAVA that,
after a careful study, it was finally decided that the height
limitation of buildings on the commercial lots shall be
increased from 12.5 meters to 15 meters. Appellant further
informed BAVA that Jupiter Street shall be widened by 3.5
meters to improve traffic flow in said street. BAVA did not
reply to said letter, but on January 22, 1973, BAVA wrote a
letter to the appellant informing the latter that the
Association had assessed the appellant, as special member
of the association, the amount of P40,795.00 (based on
81,590 square meters at P.50 per square meter)
representing the membership dues to the commercial lot
owners for the year 1973, and requested the appellant to
remit the amount which its board of governors had already
included in its current budget. In reply, appellant on
January 31, 1973 informed BAVA that due to the widening
of Jupiter Street, the area of the lots which were accepted
by the Association as members was reduced to 76,726
square meters. Thus, the corresponding dues at P.50 per
square meter should be reduced to P38,363.00. This
amount, therefore, was remitted by the appellant to BAVA.
Since then, the latter has been collecting membership dues
from the owners of the commercial lots as special
members of the Association. As a matter of fact, the dues
were increased several times. In 1980, the commercial lot

owners were already being charged dues at the rate of

P3.00 per square meter. (Domingo, TSN, p. 36, March 19,
1980). At this rate, the total membership dues of the
commercial lot owners amount to P230,178. 00 annually
based on the total area of 76,726 square meters of the
commercial lots.
(9) Meantime, on April 4, 1975, the municipal council of
Makati enacted its ordinance No. 81, providing for the
zonification of Makati (Exh. 18). Under this Ordinance, BelAir Village was classified as a Class A Residential Zone,
with its boundary in the south extending to the center line
of Jupiter Street (Exh. 18-A).
Thus, Chapter III, Article 1, Section 3.03, par. F. of the
Ordinance provides:

The above zoning under Ordinance No. 81 of Makati was

later followed under the Comprehensive Zoning Ordinance
for the National Capital Region adopted by the Metro
Manila Commission as Ordinance 81 -01 on March 14, 1981
(Exh. 19). However, under this ordinance, Bel-Air Village is
simply bounded in the South-Southeast by Jupiter Streetnot anymore up to the center line of Jupiter Street (Exh. B).
Likewise, the blockdeep strip along the northwest side of
Buendia Avenue Extension from Reposo to EDSA was
classified as a High Intensity Commercial Zone (Exh. 19-c).
Thus, the Zoning District Boundaries -Makati, in Annex B of the Ordinance
provides:
R-I-Low Intensity Residential
xxxxxxxxx

F. Bel-Air Village area, as bounded on the N by Polaris and

Mercedes streets and on the NE by Estrella Street; on the
SE by Epifanio de los Santos Avenue and on the SW by the
center line of Jupiter Street. Then bounded on the N by the
abandoned MRR Pasig Line; on the E by Makati Avenue; on
the S by the center line of Jupiter Street and on the W by
the center line of Reposo Street." (Exh. 18-A)
Similarly, the Buendia Avenue Extension area was
classified as Administrative Office Zone with its boundary
in the North-North East Extending also up to the center line
of Jupiter Street (Exh. 18b).
Thus, Chapter III, Article I, Section 3.05, par. C. of the Ordinance provides:
C. The Buendia Avenue Extension areas, as bounded on the
N-NE by the center line of Jupiter Street, on the SE by
Epifanio de los Santos Avenue; on the SW by Buendia
Avenue and on the NW by the center line of Reposo Street,
then on the NE by Malugay Street; on the SE by Buendia
Avenue and on the W by Ayala Avenue Extension." (Exh.
18-B)
The Residential Zone and the Administrative Office Zone,
therefore, have a common boundary along the center line
of Jupiter Street.

4. Bel-Air 1, 3, 4
Bounded on the North -- J.P. Rizal and Amapola St.
South - Rockwell
Northwest - P. Burgos
Southeast - Jupiter
Southwest - Epifanio de los Santos Ave. (EDSA)
5. Bel-Air 2
Bounded on the Northwest - J.P. Rizal
Southwest - Makati Avenue
South --- Jupiter
Southeast -- Pasig Line
East - South Avenue" (Exh. 19-b)

xxxxxxxxx

Paseo de Roxas - from Mercedes Street to Buendia Avenue

(Exh. 17, Annex A, BAVA Petition)

C-3-High Intensity Commercial Zone

2. A block deep strip along the northwest side of Buendia
Ave. Ext. from Reposo to EDSA." (Exh, 19-c)
Under the above zoning classifications, Jupiter Street,
therefore, is a common boundary of Bel-Air Village and the
commercial zone.
(10) Meanwhile, in 1972, BAVA had installed gates at
strategic locations across Jupiter Street which were
manned and operated by its own security guards who were
employed to maintain, supervise and enforce traffic
regulations in the roads and streets of the village.
(Villavicencio, TSN, pp, 22-25, Oct. 30, 1980; BAVA Petition,
par. 11, Exh. 17).
Then, on January 17, 1977, the Office of the Mayor of
Makati wrote BAVA directing that, in the interest of public
welfare and for the purpose of easing traffic congestion,
the following streets in Bel-Air Village should be opened for
public use:
Amapola Street - from Estrella Street to Mercedes Street
Amapola Street -junction of Palma Street gate going to J.
Villena Street
Mercedes Street -- from EDSA to Imelda Avenue and
Amapola junction

On February 10, 1977, BAVA wrote the Mayor of Makati,

expressing the concern of the residents about the opening
of the streets to the general public, and requesting
specifically the indefinite postponement of the plan to open
Jupiter Street to public vehicles. (Exh. 17, Annex B, BAVA
Petition).
However, BAVA voluntarily opened to the public Amapola,
Mercedes, Zodiac, Neptune and Paseo de Roxas streets.
(Exh. 17-A, Answer of Makati par. 3-7).
Later, on June 17,1977, the Barangay Captain of Bel-Air
Village was advised by the Office of the Mayor that, in
accordance with the agreement entered into during the
meeting on January 28, 1 977, the Municipal Engineer and
the Station Commander of the Makati Police were ordered
to open for public use Jupiter Street from Makati Avenue to
Reposo Street. Accordingly, he was requested to advise the
village residents of the necessity of the opening of the
street in the interest of public welfare. (Exh. 17, Annex E,
BAVA Petition).
Then, on June 10, 1977, the Municipal Engineer of Makati in
a letter addressed to BAVA advised the latter to open for
vehicular and pedestrian traffic the entire portion of Jupiter
Street from Makati Avenue to Reposo Street (Exh. 17, BAVA
Petition, par. 14).

Jupiter Street -- from Zodiac Street to Reposo Street

connecting Metropolitan Avenue to Pasong Tamo and V.
Cruz Extension intersection

Finally, on August 12, 1977, the municipal officials of

Makati concerned allegedly opened, destroyed and
removed the gates constructed/located at the corner of
Reposo Street and Jupiter Street as well as the
gates/fences located/constructed at Jupiter Street and
Makati Avenue forcibly, and then opened the entire length
of Jupiter Street to public traffic. (Exh. 17, BAVA Petition,
pars. 16 and 17).

Neptune Street - from Makati Avenue to Reposo Street

Orbit Street - from F. Zobel-Candelaria intersection to
Jupiter Street

(11) Before the gates were-removed, there was no parking

problem or traffic problem in Jupiter Street, because Jupiter
Street was not allowed to be used by the general public

Zodiac Street - from Mercedes Street to Buendia Avenue

(Villavicencio, TSN, pp. 24-25, Oct. 30, 1980). However,

with the opening of Zodiac Street from Estrella Street to
Jupiter Street and also the opening to the public of the
entire length of Jupiter Street, there was a tremendous
increase in the volume of traffic passing along Jupiter
Street coming from EDSA to Estrella Street, then to Zodiac
Street to Jupiter Street, and along the entire length of
Jupiter Street to its other end at Reposo Street.
(Villavicencio, TSN, pp. 30-32, Oct. 30, 1980).
In the meantime, the purchasers of the commercial lots
between Jupiter Street and Buendia Avenue extension had
started constructing their respective buildings in 19741975. They demolished the portions of the fence or wall
standing within the boundary of their lots. Many of the
owners constructed their own fences or walls in lieu of the
wall and they employed their own security guards. (TSN, p.
83, Feb. 20,1981; TSN, pp. 53-54; 72-74, March 20,1981;
TSN, pp. 54-55, July 23, 1981).
(12) Then, on January 27, 1978, appellant donated the
entire Jupiter Street from Metropolitan Avenue to Zodiac
Street to BAVA (Exh. 7)- However, even before 1978, the
Makati Police and the security force of BAVA were already
the ones regulating the traffic along Jupiter Street after the
gates were opened in 1977. Sancianco TSN, pp. 26-30, Oct.
2,1981).
In October, 1979, the fence at the corner of Orbit and
Neptune Streets was opened and removed (BAVA Petition,
par. 22, Exh. 17). The opening of the whole stretch of Orbit
Street from J.P. Rizal Avenue up to Imelda Avenue and later
to Jupiter Street was agreed to at the conference attended
by the President of BAVA in the office of the Station
Commander of Makati, subject to certain conditions, to wit:
That, maintenance of Orbit St. up to Jupiter St. shall be
shouldered by the Municipality of Makati.
That, street lights will be installed and maintenance of the
same along Orbit St. from J.P. Rizal Ave. up to Jupiter St.
shall be undertaken by the Municipality.

That for the security of the residents of San Miguel Village

and Bel-Air Village, as a result of the opening of Orbit
Street, police outposts shall be constructed by the
Municipality of Makati to be headed by personnel of Station
No. 4, in close coordination with the Security Guards of San
Miguel Village and Bel-Air Village." (CF. Exh. 3 to CounterAffidavit, of Station Commander, Ruperto Acle p. 253,
records)" (Order, Civil Case No. 34948, Exh. 17-c).
(13) Thus, with the opening of the entire length of Jupiter
Street to public traffic, the different residential lots located
in the northern side of Jupiter Street ceased to be used for
purely residential purposes. They became, for all purposes,
commercial in character.
(14) Subsequently, on October 29, 1979, the plaintiffsappellees Jose D. Sangalang and Lutgarda D. Sangalang
brought the present action for damages against the
defendant-appellant Ayala Corporation predicated on both
breach of contract and on tort or quasi-delict A
supplemental complaint was later filed by said appellees
seeking to augment the reliefs prayed for in the original
complaint because of alleged supervening events which
occurred during the trial of the case. Claiming to be
similarly situated as the plaintiffs-appellees, the spouses
Felix C. Gaston and Dolores R. Gaston, Jose V. Briones and
Alicia R. Briones, and the homeowners' association (BAVA)
intervened in the case.
(15) After trial on the merits, the then Court of First
Instance of Rizal, Pasig, Metro Manila, rendered a decision
in favor of the appellees the dispositive portion of which is
as follows:
WHEREFORE, judgment is hereby accordingly rendered as
follows:
ON PLAINTIFFS' COMPLAINT:
Defendant is ordered to pay to the plaintiffs-spouses
Sangalang the following damages:

1. The sum of P500,000.00 as actual and consequential

damages;

ON INTERVENOR BAVA'S COMPLAINT:

2. The sum of P2,000,000.00 as moral damages;

Defendant is ordered to pay intervenor BAVA, the following

damages:

3. The sum of P500,000.00 as exemplary damages;

1. The sum of P400,000.00 as consequential damages;

4. The sum of P100,000.00 as attorney's fees; and

2. The sum of P500,000.00 as exemplary damages;

5. The costs of suit.

3. The sum of P50,000.00 as attorney's fees; and

ON INTERVENORS FELIX and DOLORES GASTON'S

COMPLAINT:

4. The costs of suit.

Defendant is ordered to pay to the spouses Felix and

Dolores Gaston, the following damages:
1 . The sum of P400,000.00 as consequential damages;
2 The sum of P500,000.00 as moral damages;
3 The sum of P500,000.00 as exemplary damages:
4 The sum of P50,000.00 as attorney's fees; and
5 The costs of suit.
ON INTERVENORS JOSE and ALICIA BRIONES' COMPLAINT:
Defendant is ordered to pay to the spouses Jose and Alicia
Briones, the following damages:
1 . The sum of P400,000.00 as consequential damages;
2 The sum of P500,000.00 as moral damages;
3 The sum of P500,000.00 as exemplary damages;
4 The sum of P50,000.00 as attorney's fees; and
5 The costs of suit.

The above damages awarded to the plaintiffs and

intervenors shall bear legal interest from the filing of the
complaint.
Defendant is further ordered to restore/reconstruct the
perimeter wall at its original position in 1966 from Reposo
Street in the west to Zodiac Street in the east, at its own
expense, within SIX (6) MONTHS from finality of judgment.
SO ORDERED.
(Record on Appeal, pp. 400-401)

xxxxxxxxx
On appeal, the Court of Appeals
disposed as follows:

rendered a reversal, and

ACCORDINGLY, finding the decision appealed from as not

supported by the facts and the law on the matter, the
same is hereby SET ASIDE and another one entered
dismissing the case for lack of a cause of action. Without
pronouncement as to costs.
SO ORDERED.

II. G.R. No. 74376

This petition was similarly brought by BAVA to enforce the aforesaid

restrictions stipulated in the deeds of sale executed by the Ayala
Corporation. The petitioner originally brought the complaint in the Regional
Trial Court of Makati, 5 principally for specific performance, plaintiff [now,
petitioner] alleging that the defendant [now, private respondent] Tenorio
allowed defendant [Tenorio's co-private respondent] Gonzalves to occupy
and convert the house at 50 Jupiter Street, Bel-Air Village, Makati, Metro
Manila, into a restaurant, without its knowledge and consent, and in
violation of the deed restrictions which provide that the lot and building
thereon must be used only for residential purposes upon which the prayed
for main relief was for 'the defendants to permanently refrain from using
the premises as commercial and to comply with the terms of the Deed
Restrictions." 6 The trial court dismissed the complaint on a procedural
ground, i.e., pendency of an Identical action, Civil Case No. 32346, entitled
"Bel-Air Village Association, Inc. v. Jesus Tenorio." The Court of
Appeals7 affirmed, and held, in addition, that Jupiter Street "is classified as
High density commercial (C-3) zone as per Comprehensive Zoning
Ordinance No. 81-01 for National Capital Region," 8 following its own ruling
in AC-G.R. No. 66649, entitled "Bel-Air Village Association, Inc. vs. Hy-Land
Realty & Development Corporation, et al."

entirety by two-thirds vote of the members in good

standing of the Bel-Air Association. However, the
Association may from time to time, add new ones, amend
or abolish particular restrictions or parts thereof by
majority rule.
During the early part of 1979, plaintiff noted that certain
renovations and constructions were being made by the
defendants on the subject premises, for which reason the
defendants were advised to inform the plaintiff of the kind
of construction that was going on. Because the defendants
failed to comply with the request of the plaintiff, the
latter's chief security officer visited the subject premises on
March 23, 1979 and found out that the defendants were
putting up a bake and coffee shop, which fact was
confirmed by defendant Mrs. Romualdez herself.
Thereafter, the plaintiff reminded defendants that they
were violating the deed restriction. Despite said reminder,
the defendants proceeded with the construction of the
bake shop. Consequently, plaintiff sent defendants a letter
dated April 30, 1979 warning them that if they will not
desist from using the premises in question for commercial
purposes, they will be sued for violations of the deed
restrictions.

III. G.R. No. 76394

xxxxxxxxx
Defendants-spouses Eduardo V. Romualdez, Jr. and Buena
Tioseco are the owners of a house and lot located at 108
Jupiter St., Makati, Metro Manila as evidenced by Transfer
Certificate of Title No. 332394 of the Registry of Deeds of
Rizal. The fact is undisputed that at the time the
defendants acquired the subject house and lot, several
restrictions were already annotated on the reverse side of
their title; however, for purposes of this appeal we shall
quote hereunder only the pertinent ones, to wit:
(b,) This lot/shall be used only for residential purposes.
xxxxxxxxx
IV. Term of Restriction
The foregoing restriction(s) shall remain in force for fifty
years from January 15, 1957, unless sooner cancelled in its

Despite the warning, the defendants proceeded with the

construction of their bake shop. 9
xxxxxxxxx
The trial court 10 adjudged in favor of BAVA. On appeal, the Court of
Appeals 11 reversed, on the strength of its holding in AC-G.R. No. 66649
earlier referred to.
BAVA then elevated the matter to the Court by a petition for review on
certiorari. The Court 12 initially denied the petition "for lack of merit, it
appearing that the conclusions of the respondent Court of Appeals that
private respondents' bake and coffee shop lies within a commercial zone
and that said private respondents are released from their obligations to
maintain the lot known as 108 Jupiter Street for residential purposes by
virtue of Ordinance No. 81 of the Municipality of Makati and
Comprehensive Zoning Ordinance No. 81-01 of the Metropolitan Manila
Commission, are in accord with law and jurisprudence," 13 for which BAVA
sought a reconsideration. Pending resolution, the case was referred to the

Second Division of this Court, 14 and thereafter, to the Court En Banc en

consulta. 15 Per our Resolution, dated April 29, 1988, we consolidated this
case with G.R. Nos. 74376 and 82281. 16
IV. G.R. No. 78182.
xxxxxxxxx
The case stemmed from the leasing by defendant Dolores
Filley of her building and lot situated at No. 205 Reposo
Street, Bel-Air Village Makati, Metro Manila to her codefendant, the advertising firm J. Romero and Associates,
in alleged violation of deed restrictions which stipulated
that Filley's lot could only be used for residential purposes.
Plaintiff sought judgment from the lower court ordering the
defendants to "permanently refrain" from using the
premises in question "as commercial" and to comply with
the terms of the deed restrictions.
After the proper proceedings, the court granted the plaintiff
the sought for relief with the additional imposition of
exemplary damages of P50,000.00 and attorney's fees of
P10,000.00. The trial court gave emphasis to the restrictive
clauses contained in Filley's deed of sale from the plaintiff,
which made the conversion of the building into a
commercial one a violation.
Defendants now seek review and reversal on three (3) assignments of
errors, namely:
I.
THE TRIAL COURT ERRED IN NOT FINDING THAT THE
REGULATIONS PROMULGATED BY THE MUNICIPAL
AUTHORITIES IN MAKATI AND THE MINISTRY OF HUMAN
SETTLEMENT'S CHANGING THE CHARACTER OF THE AREAS
IN QUESTION HAD RENDERED THE RESTRICTIVE EASEMENT
ON THE TITLE OF THE APPELLANTS VACATED.
II.
THE COURT ERRED IN NOT RULING THAT BECAUSE THE
APPELLEE(S) HAD ALLOWED THE USE OF THE PROPERTY

WITHIN THE VILLAGE FOR NON- RESIDENTIAL PURPOSES, IT

IS NOW ESTOPPED FROM ENFORCING THE RESTRICTIVE
PROHIBITIONS SUBJECT MATTER OF THIS CASE.
III.
THE COURT ERRED IN NOT FINDING THAT THERE EXISTED A
BILATERAL CONTRACT BETWEEN THE PARTIES AND THAT
SINCE APPELLEE HAD NOT PERFORMED ITS OBLIGATIONS
UNDER THIS ARRANGEMENT THE APPELLANT IN TURN WAS
UNDER NO OBLIGATION TO ANNOTATE THE RESTRICTIVE
PROHIBITIONS ON THE BACK OF THE TITLE.
Appellants anchor their appeal on the proposition that the
Bel-Air Village area, contrary to plaintiff- appellee's
pretension of being a strictly residential zone, is in fact
commercial and characterize the restrictions contained in
appellant Filley's deed of sale from the appellee as
completely outmoded, which have lost all relevance to the
present-day realities in Makati, now the premier business
hub of the nation, where there is a proliferation of
numerous commercial enterprises established through the
years, in fact even within the heart of so-called
"residential" villages. Thus, it may be said that appellants
base their position on the inexorable march of progress
which has rendered at naught the continued efficacy of the
restrictions. Appellant on the other hand, relies on a rigid
interpretation of the contractual stipulations agreed upon
with appellant Filley, in effect arguing that the restrictions
are valid ad infinitum.
The lower court quite properly found that other commercial
establishments exist in the same area (in fact, on the same
street) but ignored it just the same and saidThe fact that defendants were able to prove the existence
of several commercial establishments inside the village
does not exempt them from liability for violating some of
the restrictions evidently choosing to accord primacy to
contractual stipulation. 17
xxxxxxxxx

The Court of Appeals 18 overturned the lower court, 19 likewise based on

AC-G.R. No. 66649. The respondent Court observed also that J. Romero &
Associates had been given authority to open a commercial office by the
Human Settlements Regulatory Commission.
V. G.R. No. 82281
The facts of this case have been based on stipulation. We quote:
COMES NOW, the Parties, assisted by their respective
counsel and to this Honorable Court, respectfully enter into
the following stipulations of facts, to wit:
1. The parties admit the personal circumstances of each
other as well as their capacities to sue and be sued.
2. The parties admit that plaintiff BAVA for short) is the
legally constituted homeowners' association in Bel-Air
Subdivision, Makati, Metro Manila.
3. The parties admit that defendant Violets Moncal is the
registered owner of a parcel of land with a residential
house constructed thereon situated at No. 104 Jupiter
Street, Bel-Air Village, Makati, Metro Manila; that as such
lot owner, she is a member of the plaintiff association.
4. The parties admit that defendant Majal Development
Corporation (Majal for short) is the lessee of defendant
Moncal's house and lot located at No. 104 Jupiter Street.
5. The parties admit that a deed restrictions is annotated
on the title of defendant Moncal, which provides, among
others, that the lot in question must be used only for
residential purposes;' that at time Moncal purchased her
aforesaid lot in 1959 said deed restrictions was already
annotated in the said title.
6. The parties admit that when Moncal leased her subject
property to Majal, she did not secure the consent of BAVA
to lease the said house and lot to the present lessee.
7. The parties admit that along Jupiter Street and on the
same side where Moncal's property is located, there are

restaurants, clinics placement or employment agencies

and other commercial or business establishments. These
establishments, however, were sued by BAVA in the proper
court.
8. The parties admit that at the time Moncal purchased the
subject property from the Makati Development
Corporation, there was a perimeter wall, running along
Jupiter Street, which wall was constructed by the
subdivision owner; that at that time the gates of the
entrances to Jupiter Street were closed to public traffic. In
short, the entire length of Jupiter which was inside the
perimeter wall was not then open to public traffic
9. The parties admit that subsequent thereto, Ayala tore
down the perimeter wall to give way to the commercial
building fronting Buendia Avenue (now Gil J. Puyat Avenue).
10. The parties admit that on August 12, 1977, the Mayor
of Makati forcibly opened and removed the street gates
constructed on Jupiter Street and Reposo Street, thereby
opening said streets to the public.
11. The parties admit plaintiffs letters of October 10, 23
and 31, 1984; as well as defendants' letters-reply dated
October 17 and 29, 1984. 20
xxxxxxxxx
The trial court 21 dismissed the petitioner's complaint, a dismissal affirmed
on appeal, 22 According to the appellate court, the opening of Jupiter Street
to human and vehicular traffic, and the commercialization of the
Municipality of Makati in general, were circumstances that had made
compliance by Moncal with the aforesaid "deed restrictions" "extremely
difficult and unreasonable," 23 a development that had excused compliance
altogether under Article 1267 of the Civil Code.
VI. The cases before the Court; the Court's decision.
In brief, G.R. Nos. 74376, 76394, 78182, and 82281 are efforts to enforce
the "deed restrictions" in question against specific residents (private
respondents in the petitions) of Jupiter Street and with respect to G.R. No.
78182, Reposo Street. The private respondents are alleged to have

converted their residences into commercial establishments (a restaurant in

G.R. No. 74376, a bakery and coffee shop in G.R. No. 76394, an advertising
firm in G.R. No. 78182; and a construction company, apparently, in G.R. No.
82281) in violation of the said restrictions.24

on its own unsupported conclusions totally reverse the trial

court's decision? 26
May the Honorable Intermediate Appellate Court disregard
the trial court's documented findings that respondent Ayala
for its own self-interest and commercial purposes contrived
in bad faith to do away with the Jupiter Street perimeter
wall it put up three times which wall was really intended to
separate the residential from the commercial areas and
thereby insure the privacy and security of Bel Air Village
pursuant to respondent Ayala's express continuing
representation and/or covenant to do so?27

Their mother case, G. R. No. 71169 is, on the other hand, a petition to hold
the vendor itself, Ayala Corporation (formerly Makati Development
Corporation), liable for tearing down the perimeter wall along Jupiter Street
that had therefore closed its commercial section from the residences of
Bel-Air Village and ushering in, as a consequence, the full
"commercialization" of Jupiter Street, in violation of the very restrictions it
had authored.
As We indicated, the Court of Appeals dismissed all five appeals on the
basis primarily of its ruling in AC-G.R. No. 66649, "Bel-Air Village, Inc. v. HyLand Realty Development Corporation, et al.," in which the appellate court
explicitly rejected claims under the same 'deed restrictions" as a result of
Ordinance No. 81 enacted by the Government of the Municipality of Makati,
as well as Comprehensive Zoning Ordinance No. 8101 promulgated by the
Metropolitan Manila Commission, which two ordinances allegedly allowed
the use of Jupiter Street both for residential and commercial purposes. It
was likewise held that these twin measures were valid as a legitimate
exercise of police power.
The Court of Appeals' reliance on Ordinance Nos. 81. and 8101 is now
assailed in these petitions, particularly the Sangalang, et al. petition.
Aside from this fundamental issue, the petitioners likewise raise procedural
questions. G.R. No. 71169, the mother case, begins with one.
1. G.R. No. 71169
In this petition, the following questions are specifically put to the Court:
May the Honorable Intermediate Appellate Court reverse
the decision of the trial court on issues which were neither
raised by AYALA in its Answers either to the Complaint or
Supplemental Complaint nor specifically assigned as one of
the alleged errors on appeal? 25
May the Honorable Intermediate Appellate Court arbitrarily
ignore the decisive findings of fact of the trial court, even if
uncontradicted and/or documented, and premised mainly

a.
The first question represents an attack on the appellate court's reliance on
Ordinances Nos. 81 and 81-01, a matter not supposedly taken up at the
trial or assigned as an error on appeal. As a rule, the Court of Appeals
(then the Intermediate Appellate Court) may determine only such
questions as have been properly raised to it, yet, this is not an inflexible
rule of procedure. In Hernandez v. Andal, 28 it was stated that "an
unassigned error closely related to an error properly assigned, or upon
which the determination of the question raised by the error properly
assigned is dependent, will be considered by the appellate court
notwithstanding the failure to assign it as error." 29
In Baquiran v. Court of Appeals, 30 we referred to the " modern trend of
procedure . . . according] the courts broad discretionary power" 31 and in
which we allowed consideration of matters "having some bearing on the
issue submitted which the parties failed to raise or the lower court
ignore[d]. 32 And in Vda. de Javellana v. Court of Appeals, 33 we permitted
the consideration of a 'patent error' of the trial court by the Court of
Appeals under Section 7, of Rule 51, of the Rules of Court, 34 although such
an error had not been raised in the brief. But what we note is the fact that
the Ayala Corporation did raise the zoning measures as affirmative
defenses, first in its answers 35 and second, in its brief, 36 and submitted at
the trial as exhibits. 37 There is accordingly no cause for complaint on the
part of the petitioners for Ayala's violation of the Rules. But while there was
reason for the consideration, on appeal, of the said zoning ordinances in
question, this Court nevertheless finds as inaccurate the Court of Appeals'
holding that such measures, had "in effect, [made] Jupiter Street ... a street
which could be used not only for residential purposes," 38 and that "[It lost
its character as a street for the exclusive benefit of those residing in Bel-Air
Village completely." 39

Among other things, there is a recognition under both Ordinances Nos. 81

and 8 1-01 that Jupiter Street lies as the boundary between Bel-Air Village
and Ayala Corporation's commercial section. And since 1957, it had been
considered as a boundary not as a part of either the residential or
commercial zones of Ayala Corporation's real estate development projects.
Thus, the Bel-Air Village Association's articles of incorporation state that
Bel-Air Village is 'bounded on the NE., from Amapola St., to de los Santos
Ave., by Estrella St., on the SE from Extrella St., to Pedestrian Lane by E.
De los Santos Ave., on the SW., from Pedestrian Lane to Reposo St., by
Jupiter Street
. . . . 40 Hence, it cannot be said to have been "for the exclusive benefit" of
Bel-Air Village residents.
We come to the perimeter wall then standing on the commercial side of
Jupiter Street the destruction of which opened the street to the public. The
petitioners contend that the opening of the thoroughfare had opened, in
turn, the floodgates to the commercialization of Bel-Air Village. The wall, so
they allege, was designed precisely to protect the peace and privacy of
Bel-Air Village residents from the din and uproar of mercantile pursuits, and
that the Ayala Corporation had committed itself to maintain it. It was the
opinion of the Court of Appeals, as we said, that Ayala's liability therefor, if
one existed, had been overtaken by the passage of Ordinances Nos. 81
and 82-01, opening Jupiter Street to commerce.
It is our ruling, we reiterate, that Jupiter Street lies as a mere boundary, a
fact acknowledged by the authorities of Makati and the National
Government and, as a scrutiny of the records themselves reveals, by the
petitioners themselves, as the articles of incorporation of Bel-Air Village
Association itself would confirm. As a consequence, Jupiter Street was
intended for the use by both -the commercial and residential blocks. It was
not originally constructed, therefore, for the exclusive use of either block,
least of all the residents of Bel-Air Village, but, we repeat, in favor of both,
as distinguished from the general public.
When the wall was erected in 1966 and rebuilt twice, in 1970 and 1972, it
was not for the purpose of physically separating the two blocks. According
to Ayala Corporation, it was put up to enable the Bel-Air Village Association
"better control of the security in the area, 41 and as the Ayala Corporation's
"show of goodwill " 42 a view we find acceptable in the premises. For it
cannot be denied that at that time, the commercial area was vacant, "open
for [sic] animals and people to have access to Bel-Air Village." 43 There was
hence a necessity for a wall.

In any case, we find the petitioners' theory, that maintaining the wall was a
matter of a contractual obligation on the part of Ayala, to be pure
conjecture. The records do not establish the existence of such a purported
commitment. For one, the subdivision plans submitted did not mention
anything about it. For another, there is nothing in the "deed restrictions"
that would point to any covenant regarding the construction of a wall.
There is no representation or promise whatsoever therein to that effect.
With the construction of the commercial buildings in 1974, the reason for
which the wall was built- to secure Bel-Air Village from interlopers had
naturally ceased to exist. The buildings themselves had provided
formidable curtains of security for the residents. It should be noted that the
commercial lot buyers themselves were forced to demolish parts of the
wall to gain access to Jupiter Street, which they had after all equal right to
use.
In fine, we cannot hold the Ayala Corporation liable for damages for a
commitment it did not make, much less for alleged resort to machinations
in evading it. The records, on the contrary, will show that the Bel-Air Village
Association had been informed, at the very outset, about the impending
use of Jupiter Street by commercial lot buyers. We quote:
xxxxxxxxx
1. Exh. I of appellee, the memorandum of Mr. Carmelo
Caluag, President of BAVA, dated May 10, 1972, informing
the BAVA Board of Governors and Barrio Council members
about the future use of Jupiter Street by the lot owners
fronting Buendia Avenue. The use of Jupiter Street by the
owners of the commercial lots would necessarily require
the demolition of the wall along the commercial block
adjoining Jupiter Street.
2. Exh. J of appellee, the minutes of the joint meeting of
BAVA Board of Governors and the Bel-Air Barrio Council
where the matter that "Buendia lot owners will have equal
rights to use Jupiter Street," and that Ayala's "plans about
the sale of lots and use of Jupiter Street" were precisely
taken up. This confirms that from the start BAVA was
informed that the commercial lot owners will use Jupiter
Street and that necessarily the wall along Jupiter Street
would be demolished.

3. Exh. 10, the letter of Mr. Demetrio Copuyoc to the

President of BAVA, dated May 16, 1972, expressly stating
that vehicular entrance and exit to the commercial lots
would be allowed along Jupiter and side streets.
4. Exhs. 27, 27-A, 27-B, the letter of Atty. Salvador J.
Lorayes dated June 30, 1972, with enclosed copy of
proposed restriction for the commercial lots to BAVA. He
proposed restriction again expressly stated that "Vehicular
entrances and exits are allowed thru Jupiter and any side
streets."
5. Exh. L of appellee, the minutes of the meeting of the
members of BAVA, dated August 26, 1972, where it is
stated "Recently, Ayala Corporation informed the Board
that the lots fronting Buendia Avenue will soon be offered
for sale, and that future lot owners will be given equal
rights to use Jupiter Street as well as members of the
Association."
6. Exh. 25, the letter of Atty. Lorayes dated September 25,
1972, informing BAVA of the widening of Jupiter Street by
3.5 meters to improve traffic flow in said street to benefit
both the residents of Bel-Air and the future owners of the
commercial lots. 44
The petitioners cannot successfully rely on the alleged promise by
Demetrio Copuyoc, Ayala's manager, to build a "[f]ence along Jupiter with
gate for entrance and/or exit 45 as evidence of Ayala's alleged continuing
obligation to maintain a wall between the residential and commercial
sections. It should be observed that the fence referred to included a "gate
for entrance and or exit" which would have defeated the purpose of a wall,
in the sense the petitioners would put in one, that is to say, an
impenetrable barrier. But as Ayala would point out subsequently, the
proposed fence was not constructed because it had become unnecessary
when the commercial lot owners commenced constructions thereon.
Be that as it may, the Court cannot visualize any purported obligation by
Ayala Corporation to keep the wall on the strength of this supposed
promise alone. If truly Ayala promised anything assuming that Capuyoc
was authorized to bind the corporation with a promise it would have been
with respect to the fence. It would not have established the pre-existing
obligation alleged with respect to the wall.

Obligations arise, among other things, from contract. 46 If Ayala, then, were
bound by an obligation, it would have been pursuant to a contract. A
contract, however, is characterized by a "meeting of minds between two
persons . 47 As a consensual relation, it must be shown to exist as a fact,
clearly and convincingly. But it cannot be inferred from a mishmash of
circumstances alone disclosing some kind of an "understanding," when
especially, those disparate circumstances are not themselves incompatible
with contentions that no accord had existed or had been reached. 48
The petitioners cannot simply assume that the wall was there for the
purpose with which they now give it, by the bare coincidence that it had
divided the residential block from the commercial section of Bel-Air. The
burden of proof rests with them to show that it had indeed been built
precisely for that objective, a proof that must satisfy the requirements of
our rules of evidence. It cannot be made to stand on the strength of plain
inferences.
b.
This likewise answers the petitioners' second query, whether or not the
Court of Appeals had "arbitrarily ignore(d) the decisive findings of the trial
court." 49 i.e., findings pointing to alleged acts performed by the Ayala
Corporation proving its commitment to maintain the wall abovesaid.
Specifically, the petitioners refer to, among other things: (1) Ayala's
alleged announcement to Bel- Air Village Association members that "[the
perimeter wall along Jupiter Street will not be demolished," 50 (2) Ayala's
alleged commitment "during the pendency of the case in the trial court" to
restore the wall; (3) alleged assurances by Copuyoc that the wall will not
be removed; (4) alleged contrivances by the corporation to make the
association admit as members the commercial lot buyers which provided
them equal access to Jupiter Street; and (5) Ayala's donation to the
association of Jupiter Street for "private use" of Bel-Air residents. 51
682 (1903), where it was held that "whether the plaintiffs services were
solicited or whether they were offered to the defendant for his assistance,
inasmuch as these services were accepted and made use of by the latter,
we must consider that there was a tacit and mutual consent as to the
rendition of services." (At 686.) In that case, the defendant had enormously
benefitted from the services that entitled the plaintiff to compensation on
the theory that no one may unjustly enrich himself at the expense of
another (Solutio indebiti) The facts of this case differ.

As we stated, the Ayala Corporation's alleged conduct prior to or during the

proceedings below are not necessarily at war with claims that no
commitment had been in fact made.
With respect to Ayala's alleged announcement before the association, the
Court does not agree that Ayala had categorically assumed as an
obligation to maintain the wall "perpetually," i.e., until the year 2007 (the
expiration date under the "deed restrictions.") There is nothing in its
statement that would bare any commitment. In connection with the
conference between the parties "during the pendency" of the trial, it is to
be noted that the Ayala Corporation denies having warranted the
restoration of the said wall therein. What, on the other hand, appears in
the records is the fact that Ayala did make that promise, but provided that
the Mayor allowed it. It turned out, however, that the Mayor balked at the
Idea. 52 But assuming that Ayala did promise to rebuild the wall (in that
conference), it does not seem to us that it did consequently promise to
maintain it in perpetuity.
It is unfair to say, as the trial court did, that the Ayala had "contrived to
make future commercial lot owners special members of BAVA and thereby
acquire equal right with the regular members thereof to use Jupiter
Street 53 since, as we stated, the commercial lot buyers have the right, in
any event, to make use of Jupiter Street, whether or not they are members
of the association. It is not their memberships that give them the right to
use it. They share that right with Bel-Air residents from the outset.
The objective of making the commercial lot owners special members of the
Bel-Air Village Association was not to accord them equal access to Jupiter
Street and inferentially, to give them the right to knock down the perimeter
wall. It was, rather, to regulate the use of the street owing precisely to the
"planned" nature of Ayala's development project, and real estate
development in general, and this could best be done by placing the
commercial lot owners under the association's jurisdiction.
Moreover, Ayala's overtures with the association concerning the
membership of commercial lot buyers therein have been shown to be
neither perfidious nor unethical nor devious (paraphrasing the lower court).
We quote anew:
xxxxxxxxx
(7) On June 30, 1972, appellant informed BAVA that in a
few months it shall subdivide and sell the commercial lots

bordering the north side of Buendia Avenue Extension from

Reposo Street up to Zodiac Street. Appellant also informed
BAVA that it had taken all precautions and will impose upon
the commercial lot owners deed restrictions which will
harmonize and blend with the development and welfare of
Bel-Air Village. Appellant further applied for special
membership in BAVA of the commercial lot owners. A copy
of the deed restrictions for the commercial lots was also
enclosed. The proposed deed restrictions shall include the
19 meter set back of buildings from Jupiter Street, the
requirement for parking space within the lot of one (1)
parking slot for every seventy five (75) meters of office
space in the building and the limitation of vehicular traffic
along Buendia to entrance only, but allowing both vehicular
entrance and vehicular exit through Jupiter Street and any
side street.
In its letter of July 10, 1972, BAVA acknowledged the above letter of
appellant and informed the latter that the application for special
membership of the commercial lot owners in BAVA would be submitted to
BAVA's board of governors for decision.
(8) On September 25,1972, appellant notified BAVA that,
after a careful study, it was finally decided that the height
limitation of buildings on the commercial lots shall be
increased from 12.5 meters to 15 meters. Appellant further
informed BAVA that Jupiter Street shall be widened by 3.5
meters to improve traffic flow in said street. BAVA did not
reply to said letter, but on January 22, 1973, BAVA wrote a
letter to the appellant informing the latter that the
Association had assessed the appellant, as special member
of the association, the amount of P40,795.00 (based on
81,590 square meters at P.50 per square meter)
representing the membership dues of the commercial lot
owners for the year 1973, and requested the appellant to
remit the amount which its board of governors had already
included in its current budget. In reply, appellant on
January 31, 1973 informed BAVA that due to the widening
of Jupiter Street, the area of the lots which were accepted
by the Association as members was reduced to 76,726
square meters. Thus, the corresponding due at P.50 per
square meter should be reduced to P38,363.00. This
amount, therefore, was remitted by the appellant to BAVA.
Since then, the latter has been collecting membership dues

from the owners of the commercial lots as special

members of the Association. As a matter of fact, the dues
were increased several times. In 1980, the commercial lot
owners were already being charged dues at the rate of
P3.00 per square meter. (Domingo, TSN, p. 36, March 19,
1980). At this rate, the total membership dues of the
commercial lot owners amount to P230,178.00 annually
based on the total area of 76,726 square meters of the
commercial lots. 54
xxxxxxxxx
The alleged undertaking, finally, by Ayala in the deed of donation (over
Jupiter Street) to leave Jupiter Street for the private use of Bel-Air residents
is belied by the very provisions of the deed. We quote:
xxxxxxxxx
IV. That the offer made by the DONOR had been accepted
by the DONEE subject to the condition that the property
will be used as a street for the use of the members of the
DONEE, their families, personnel, guests, domestic help
and, under certain reasonable conditions and restrictions,
by the general public, and in the event that said lots or
parts thereof cease to be used as such, ownership thereof
shall automatically revert to the DONOR. The DONEE shall
always have Reposo Street, Makati Avenue, and Paseo de
Roxas open for the use of the general public. It is also
understood that the DONOR shall continue the
maintenance of the street at its expense for a period of
three years from date hereof." (Deed of Donation, p. 6,
Exh. 7) 55
xxxxxxxxx
The donation, on the contrary, gave the general public equal right to it.
The Court cannot then say, accepting the veracity of the petitioners' facts"
enumerated above, that the Ayala Corporation may be held liable for
specific performance of a demandable obligation, let alone damages.
The Court adds that Ayala can hardly be held responsible for the alleged
deterioration of "living and environmental conditions" 56 of the Bel-Air area,

as a consequence of "Ayala's authorized demolition of the Jupiter perimeter

wall in 1974-1975. " 57 We agree with Ayala that until 1976, "there was
peace and quiet" at Jupiter Street, as the petitioners' (Sangalang, Gaston,
and Briones) complaints admit. Hence, the degeneration of peace and
order in Bel-Air cannot be ascribed to the destruction of the wall in 1974
and 1975.
What Ayala submits as the real cause was the opening of Jupiter Street to
vehicular traffic in 1977., 58 But this was upon orders of the Mayor, and for
which the homeowners' association had precisely filed suit (Civil Case No.
34998) 59 to contest the act of the Mayor.
c.
This likewise disposes of the third question presented. The petitioners'
reliance on Ayala's alleged conduct (proving its alleged commitment), so
we have ruled, is not well-taken. Ayala's alleged acts do not, by
themselves, reflect a commitment to maintain the wall in dispute. It cannot
be therefore said that the Court of Appeals "arbitrarily ignore(d]" 60 the
lower court's findings. Precisely, it is the duty of the appellate court to
review the findings of the trial judge, be they of fact or law. 61 It is not
bound by the conclusions of the judge, for which reason it makes its own
findings and arrives at its own conclusions. Unless a grave abuse of
discretion may be imputed to it, it may accept or reject the lower tribunal's
determinations and rely solely on the records.
Accordingly, the Court affirms the Court of Appeals' holding that the Ayala
Corporation, in its dealings with the petitioners, the Bel-Air Village
Association in particular, had "acted with justice, gave the appellees
[petitioners] their due and observed honesty and good faith." 62 "Therefore,
under both Articles 19 and 21 of the Civil Code, the appellant [Ayala]
cannot be held liable for damages." 63
2. G.R. Nos. 74376, 76394, 78182, & 82281
Our decision also resolves, quite anticlimactically, these companion cases.
But we do so for various other reasons. In the Sangalang case, we absolve
the Ayala Corporation primarily owing to our finding that it is not liable for
the opening of Jupiter Street to the general public. Insofar as these
petitions are concerned, we likewise exculpate the private respondents, not
only because of the fact that Jupiter Street is not covered by the restrictive
easements based on the "deed restrictions" but chiefly because the
National Government itself, through the Metro Manila Commission (MMC),

had reclassified Jupiter Street into high density commercial (C-3)

zone, 64 pursuant to its Ordinance No. 81-01. Hence, the petitioners have
no cause of action on the strength alone of the said "deed restrictions.
In view thereof, we find no need in resolving the questions raised as to
procedure, since this disposition is sufficient to resolve these cases.
It is not that we are saying that restrictive easements, especially the
easements herein in question, are invalid or ineffective. As far as the BelAir subdivision itself is concerned, certainly, they are valid and enforceable.
But they are, like all contracts, subject to the overriding demands, needs,
and interests of the greater number as the State may determine in the
legitimate exercise of police power. Our jurisdiction guarantees sanctity of
contract and is said to be the "law between the contracting parties, 65 but
while it is so, it cannot contravene 'law, morals, good customs, public
order, or public policy. 66 Above all, it cannot be raised as a deterrent to
police power, designed precisely to promote health, safety, peace, and
enhance the common good, at the expense of contractual rights, whenever
necessary. In Ortigas & Co., Limited Partnership v. Feati Bank and Trust
Co., 67 we are told:
xxxxxxxxx
2. With regard to the contention that said resolution cannot
nullify the contractual obligations assumed by the
defendant-appellee referring to the restrictions
incorporated in the deeds of sale and later in the
corresponding Transfer Certificates of Title issued to
defendant-appellee it should be stressed, that while nonimpairment of contracts is constitutionally guaranteed, the
rule is not absolute, since it has to be reconciled with the
legitimate exercise of police power, i.e., "the power to
prescribe regulations to promote the health, morals, peace,
education, good order or safety and general welfare of the
people.' Invariably described as "the most essential,
insistent, and illimitable of powers" and "in a sense, the
greatest and most powerful attribute of government," the
exercise of the power may be judicially inquired into and
corrected only if it is capricious, whimsical, unjust or
unreasonable, there having been a denial of due process or
a violation of any other applicable constitutional
guarantee. As this Court held through Justice Jose P.
Bengson in Philippine Long Distance Company vs. City of
Davao, et al. police power 'is elastic and must be

responsive to various social conditions; it is not confined

within narrow circumscriptions of precedents resting on
past conditions; it must follow the legal progress of a
democratic way of life.' We were even more emphatic in
Vda. de Genuino vs. The Court of agrarian Relations, et al.,
when We declared: "We do not see why public welfare
when clashing with the individual right to property should
not be made to prevail through the state's exercise of its
police power."
Resolution No. 27, 1960 declaring the western part of High
way 54, now E. de los Santos Avenue (EDSA, for short)
from Shaw Boulevard to the Pasig River as an industrial
and commercial zone, was obviously passed by the
Municipal Council of Mandaluyong, Rizal in the exercise of
police power to safeguard or promote the health, safety,
peace, good order and general welfare of the people in the
locality. Judicial notice may be taken of the conditions
prevailing in the area, especially where Lots Nos. 5 and 6
are located. The lots themselves not only front the
highway; industrial and commercial complexes have
flourished about the place. EDSA, a main traffic artery
which runs through several cities and municipalities in the
Metro Manila area, supports an endless stream of traffic
and the resulting activity, noise and pollution are hardly
conducive to the health, safety or welfare of the residents
in its route. Having been expressly granted the power to
adopt zoning and subdivision ordinances or regulations, the
municipality of Mandaluyong, through its Municipal Council,
was reasonably, if not perfectly, justified under the
circumstances, in passing the subject resolution. 68
xxxxxxxxx
Undoubtedly, the MMC Ordinance represents a legitimate exercise of police
power. The petitioners have not shown why we should hold otherwise other
than for the supposed "non-impairment" guaranty of the Constitution,
which, as we have declared, is secondary to the more compelling interests
of general welfare. The Ordinance has not been shown to be capricious or
arbitrary or unreasonable to warrant the reversal of the judgments so
appealed. In that connection, we find no reversible error to have been
committed by the Court of Appeals.

WHEREFORE, premises considered, these petitions are DENIED No

pronouncement as to costs.
IT IS SO ORDERED.

SECOND DIVISION
A.C. No. 8920

September 28, 2011

JUDGE RENE B. BACULI, Complainant,

vs.
ATTY. MELCHOR A. BATTUNG, Respondent.
DECISION

While other cases were being heard, the respondent re-entered the
courtroom and shouted, "Judge, I will file gross ignorance against you! I am
not afraid of you!"6 Judge Baculi ordered the sheriff to escort the
respondent out of the courtroom and cited him for direct contempt of court
for the second time.
After his hearings, Judge Baculi went out and saw the respondent at the
hall of the courthouse, apparently waiting for him. The respondent again
shouted in a threatening tone, "Judge, I will file gross ignorance against
you! I am not afraid of you!" He kept on shouting, "I am not afraid of you!"
and challenged the judge to a fight. Staff and lawyers escorted him out of
the building.7
Judge Baculi also learned that after the respondent left the courtroom, he
continued shouting and punched a table at the Office of the Clerk of Court. 8
Violation of Canon 12 of the Code of Professional Responsibility

BRION, J.:
Before us is the resolution of the Board of Governors of the Integrated Bar
of the Philippines (IBP) finding Atty. Melchor Battung liable for violating
Rule 11.03, Canon 11 of the Code of Professional Responsibility and
recommending that he be reprimanded. The complainant is Judge Rene B.
Baculi, Presiding Judge of the Municipal Trial Court in Cities, Branch 2,
Tuguegarao City. The respondent, Atty. Battung, is a member of the Bar
with postal address on Aguinaldo St., Tuguegarao City.
1

Background
Judge Baculi filed a complaint for disbarment 2 with the Commission on
Discipline of the IBP against the respondent, alleging that the latter
violated Canons 113 and 124 of the Code of Professional Responsibility.
Violation of Canon 11 of the Code of Professional Responsibility
Judge Baculi claimed that on July 24, 2008, during the hearing on the
motion for reconsideration of Civil Case No. 2502, the respondent was
shouting while arguing his motion. Judge Baculi advised him to tone down
his voice but instead, the respondent shouted at the top of his voice. When
warned that he would be cited for direct contempt, the respondent
shouted, "Then cite me!"5 Judge Baculi cited him for direct contempt and
imposed a fine of P100.00. The respondent then left.

According to Judge Baculi, the respondent filed dilatory pleadings in Civil

Case No. 2640, an ejectment case.
Judge Baculi rendered on October 4, 2007 a decision in Civil Case No. 2640,
which he modified on December 14, 2007. After the modified decision
became final and executory, the branch clerk of court issued a certificate
of finality. The respondent filed a motion to quash the previously issued
writ of execution, raising as a ground the motion to dismiss filed by the
defendant for lack of jurisdiction. Judge Baculi asserted that the
respondent knew as a lawyer that ejectment cases are within the
jurisdiction of First Level Courts and the latter was merely delaying the
speedy and efficient administration of justice.
The respondent filed his Answer,9 essentially saying that it was Judge
Baculi who disrespected him.10 We quote from his Answer:
23. I only told Judge Rene Baculi I will file Gross ignorance of the
Law against him once inside the court room when he was
lambasting me[.]
24. It was JUDGE BACULI WHO DISRESPECTED ME. He did not like
that I just submit the Motion for Reconsideration without oral
argument because he wanted to have an occasion to just
HUMILIATE ME and to make appear to the public that I am A
NEGLIGENT LAWYER, when he said "YOU JUSTIFY YOUR

NEGLIGENCE BEFORE THIS COURT" making it an impression to the

litigants and the public that as if I am a NEGLIGENT, INCOMPETENT,
MUMBLING, and IRRESPONSIBLE LAWYER.

(NOTE: The underlined words "we are very sorry" [ were] actually
uttered by Atty. Battung while the judge was saying the quoted portion of
the TSN)

25. These words of Judge Rene Baculi made me react[.]

That it was during the time when the complainant asked the following
questions when the undersigned noticed that Atty. Battung shouted at the
presiding judge.

xxxx
28. Since I manifested that I was not going to orally argue the
Motion, Judge Rene Baculi could have just made an order that the
Motion for Reconsideration is submitted for resolution, but what he
did was that he forced me to argue so that he will have the room to
humiliate me as he used to do not only to me but almost of the
lawyers here (sic).
Atty. Battung asked that the case against him be dismissed.
The IBP conducted its investigation of the matter through Commissioner
Jose de la Rama, Jr. In his Commissioners Report, 11 Commissioner De la
Rama stated that during the mandatory conference on January 16, 2009,
both parties merely reiterated what they alleged in their submitted
pleadings. Both parties agreed that the original copy of the July 24, 2008
tape of the incident at the courtroom would be submitted for the
Commissioners review. Judge Baculi submitted the tape and the transcript
of stenographic notes on January 23, 2009.
Commissioner De la Rama narrated his findings, as follows:12
At the first part of the hearing as reflected in the TSN, it was observed that
the respondent was calm. He politely argued his case but the voice of the
complainant appears to be in high pitch. During the mandatory conference,
it was also observed that indeed, the complainant maintains a high pitch
whenever he speaks. In fact, in the TSN, where there was already an
argument, the complainant stated the following:
Court: Do not shout.
Atty. Battung: Because the court is shouting.
Court: This court has been constantly under this kind of voice Atty.
Battung, we are very sorry if you do not want to appear before my court,
then you better attend to your cases and do not appear before my court if
you do not want to be corrected! (TSN, July 24, 2008, page 3)

Court: Did you proceed under the Revised Rules on Summary Procedure?
*
Atty. Battung: It is not our fault Your Honor to proceed because we were
asked to present our evidence ex parte. Your Honor, so, if should we were
ordered (sic) by the court to follow the rules on summary procedure. (TSN
page 3, July 24, 2008)
It was observed that the judge uttered the following:
Court: Do not shout.
Atty. Battung: Because the court is shouting.
(Page 3, TSN July 24, 2008)
Note: * it was at this point when the respondent shouted at the
complainant.
Thereafter, it was observed that both were already shouting at each other.
Respondent claims that he was provoked by the presiding judge that is why
he shouted back at him. But after hearing the tape, the undersigned in
convinced that it was Atty. Battung who shouted first at the complainant.
Presumably, there were other lawyers and litigants present waiting for their
cases to be called. They must have observed the incident. In fact, in the
joint-affidavit submitted by Elenita Pacquing et al., they stood as one in
saying that it was really Atty. Battung who shouted at the judge that is why
the latter cautioned him "not to shout."
The last part of the incident as contained in page 4 of the TSN reads as
follows:

Court: You are now ordered to pay a fine of P100.00.

Atty. Battung: We will file the necessary action against this court for gross
ignorance of the law.
Court: Yes, proceed.
(NOTE: Atty. Battung went out the courtroom)
Court: Next case.
Interpreter: Civil Case No. 2746.
(Note: Atty. Battung entered again the courtroom)
Atty. Battung: But what we do not like (not finished)
Court: The next time
Atty. Battung: We would like to clear
Court: Sheriff, throw out the counsel, put that everything in record. If you
want to see me, see me after the court.
Next case.
Civil Case No. 2746 for Partition and Damages, Roberto Cabalza vs. Teresita
Narag, et al.
(nothing follows)
Commissioner De la Rama found that the respondent failed to observe
Canon 11 of the Code of Professional Responsibility that requires a lawyer
to observe and maintain respect due the courts and judicial officers. The
respondent also violated Rule 11.03 of Canon 11 that provides that a
lawyer shall abstain from scandalous, offensive or menacing language or
behavior before the courts. The respondents argument that Judge Baculi
provoked him to shout should not be given due consideration since the
respondent should not have shouted at the presiding judge; by doing so,
he created the impression that disrespect of a judge could be tolerated.
What the respondent should have done was to file an action before the

Office of the Court Administrator if he believed that Judge Baculi did not act
according to the norms of judicial conduct.
With respect to the charge of violation of Canon 12 of the Code of
Professional Responsibility, Commissioner De la Rama found that the
evidence submitted is insufficient to support a ruling that the respondent
had misused the judicial processes to frustrate the ends of justice.
Commissioner De la Rama recommended that the respondent be
suspended from the practice of law for six (6) months.
On October 9, 2010, the IBP Board of Governors passed a Resolution
adopting and approving the Report and Recommendation of the
Investigating Commissioner, with the modification that the respondent be
reprimanded.
The Courts Ruling
We agree with the IBPs finding that the respondent violated Rule 11.03,
Canon 11 of the Code of Professional Responsibility. Atty. Battung
disrespected Judge Baculi by shouting at him inside the courtroom during
court proceedings in the presence of litigants and their counsels, and court
personnel. The respondent even came back to harass Judge Baculi. This
behavior, in front of many witnesses, cannot be allowed. We note that the
respondent continued to threaten Judge Baculi and acted in a manner that
clearly showed disrespect for his position even after the latter had cited
him for contempt. In fact, after initially leaving the court, the respondent
returned to the courtroom and disrupted the ongoing proceedings. These
actions were not only against the person, the position and the stature of
Judge Baculi, but against the court as well whose proceedings were openly
and flagrantly disrupted, and brought to disrepute by the respondent.
Litigants and counsels, particularly the latter because of their position and
avowed duty to the courts, cannot be allowed to publicly ridicule, demean
and disrespect a judge, and the court that he represents. The Code of
Professional Responsibility provides:
Canon 11 - A lawyer shall observe and maintain the respect due the courts
and to judicial officers and should insist on similar conduct by others.
Rule 11.03 - A lawyer shall abstain from scandalous, offensive or menacing
language or behavior before the Courts.

We ruled in Roxas v. De Zuzuarregui, Jr.13 that it is the duty of a lawyer, as

an officer of the court, to uphold the dignity and authority of the courts.
Respect for the courts guarantees the stability of the judicial institution;
without this guarantee, the institution would be resting on very shaky
foundations.

Let copies of this Decision be furnished the Office of the Bar Confidant, to
be appended to the respondents personal record as an attorney; the
Integrated Bar of the Philippines; the Department of Justice; and all courts
in the country, for their information and guidance.
SO ORDERED.

A lawyer who insults a judge inside a courtroom completely disregards the

latters role, stature and position in our justice system. When the
respondent publicly berated and brazenly threatened Judge Baculi that he
would file a case for gross ignorance of the law against the latter, the
respondent effectively acted in a manner tending to erode the public
confidence in Judge Baculis competence and in his ability to decide cases.
Incompetence is a matter that, even if true, must be handled with
sensitivity in the manner provided under the Rules of Court; an objecting or
complaining lawyer cannot act in a manner that puts the courts in a bad
light and bring the justice system into disrepute.
The IBP Board of Governors recommended that Atty. Battung be
reprimanded, while the Investigating Commissioner recommended a
penalty of six (6) months suspension.
We believe that these recommended penalties are too light for the offense.
In Re: Suspension of Atty. Rogelio Z. Bagabuyo, Former Senior State
Prosecutor,14 we suspended Atty. Bagabuyo for one year for violating Rule
11.05, Canon 11, and Rule 13.02, Canon 13 of the Code of Professional
Responsibility, and for violating the Lawyers Oath for airing his grievances
against a judge in newspapers and radio programs. In this case, Atty.
Battungs violations are no less serious as they were committed in the
courtroom in the course of judicial proceedings where the respondent was
acting as an officer of the court, and before the litigating public. His actions
were plainly disrespectful to Judge Baculi and to the court, to the point of
being scandalous and offensive to the integrity of the judicial system itself.
WHEREFORE, in view of the foregoing, Atty. Melchor A. Battung is found
GUILTY of violating Rule 11.03, Canon 11 of the Code of Professional
Responsibility, for which he is SUSPENDED from the practice of law for one
(1) year effective upon the finality of this Decision. He is STERNLY WARNED
that a repetition of a similar offense shall be dealt with more severely.

EN BANC
A.M. Nos. RTJ-89-331, 355, 361, 362, 438, 439 September 28, 1990
PRUDENCIO S. PENTICOSTES, complainant,
vs.
JUDGE RAFAEL HIDALGO, respondent.
RESOLUTION
PER CURIAM:
Complainant Prudencio S. Penticostes has filed a series of administrative
charges against Judge Rafael B. Hidalgo of Regional Trial Court Branch 68
of Tarlac, Tarlac. In the resolution dated June 20, 1989 dismissing RTJ-89294, the Court admonished the complainant "to exercise more care and
decorum in filing unfounded and unsubstantiated charges against officers
of the court in order to maintain and uphold the dignity of the same of
which he is a part" (also dismissed was RTJ-88213 in a Resolution dated
July 18, 1989.) Complainant did not heed this admonition.
In his Comment in RTJ-89-361, and his Compliance by way of comment in
RTJ-89-355, the respondent judge asked that the other administrative cases
by the same complainant be consolidated. Complainant, in his Reply in RTJ89-355, made a similar request.
The Court directed the Office of the Court Administrator (OCA) to gather all
charges filed by the complainant against the respondent judge and
thereafter consolidated six (6) administrative complaints: RTJ-89-331
(which recites ten [10] causes of action), RTJ-89-355, RTJ-89-361, RTJ-89362, RTJ-89-439, and RTJ-89-438.
Subsequent to the June 20, 1989 admonition, complainant continued to file
charges against respondent. He also threatened to bang more cases, as

evidenced by the following: (1) a Manifestation dated March 1, 1990

(submitted to respondent judge in relation to two civil cases), which reads:
Counsel will make it appear on record that if the motion
and joint motion will not be acted (upon) on March 21,
1990 as scheduled he will be forced much to his regret to
file the following administrative and criminal complaints,
against the presiding judge, namely:
1. violation of his oath;
2. falsification under Art. 171 of the Revised Penal Code;
3. knowingly rendering an unlawful order;
4. maliciously delaying the administration of justice;
5. grave misconduct. . . .
(2) his Reply to RTJ-89-361 dated May 18, 1990:
It is respectfully submitted, that the respondent has made
Branch 68 as his personal court thus making it as a court
for his friends, the rich, powerful and influential and
against his foes, the poor and powerless. This claim will be
discussed lengthily in the next administrative charge which
complainant will file against the respondent [Emphasis
supplied].
(3) his letter to the Court dated August 8, 1990, opposing
respondent's application for disability benefits because of the
"pendency of administrative cases against him filed by me
and some more will follow as soon as I consolidate my evidences"
[Emphasis supplied].
In a memorandum dated July 13, 1990, the OCA, after enumerating some
of the charges, noted that complainant's persistent filing of administrative
cases against respondent "signif(ies) a desire to unjustifiably bring
respondent to public disdain and ridicule." Also brought to the attention of
the Court was complainant's letter dated June 7, 1990, which contains
accusations that respondent has a "conspirator" in the Office of the Clerk
of Court. The conspirator allegedly inserted inconsistent words in a final
Court resolution, and supplied lies in respondent's comment. From the

foregoing, the OCA recommended that complainant be strongly

reprimanded, if not suspended from the practice of law for three (3)
months.
A careful study of the charges in these complaints, the Comment in RTJ-89361, the Compliance filed by respondent in RTJ-89-355, the records of the
consolidated cases, and the memorandum of the OCA dated July 13, 1990,
clearly reveals that all but three cases ** can be dismissed outright
because: (1) the complainant failed to establish prima faciecases: (2) the
complainant filed administrative cases as substitute for the appropriate
remedy in rulings adverse to him; and (3) the complaints involve the
appropriate exercise of respondent's discretionary authority.
First, no prima facie cases have been established in: (1) the Seventh Cause
of Action in RTJ-89-331, since the same grounds have already been found
to be without merit by the Court in Prudencio Penticostes, Sr. v. DBP, et al.
[G.R. No. 89620, July 13, 1990]; (2) RTJ-89-361, which charges respondent
with falsification of three separate orders in three different cases, since no
indication of such falsification can be gleaned from the record; and (3) RTJ89-438, which takes issue with the order to archive Civil Case No. 280,
"pending resolution of the matters raised by complainant in the Supreme
Court," there being nothing irregular in such order.
Second, in the First, Second and Fifth Causes of Action in RTJ-89-331 (which
arose from respondent's dismissal of Civil Case Nos. 198, 234, and 205,
respectively), the complainant resorted to the filing of administrative
complaints against respondent judge instead of availing of the appropriate
legal remedies from the adverse rulings, i.e., by motion for reconsideration,
appeal or petition for review or for certiorari.
Third, the complainant challenges the due exercise by respondent judge of
his discretion in the following instances: (1) RTJ-89-331, the Third Cause of
Action, the order denying a motion to declare defendants in contempt, and
the order deferring action on a motion for an accounting of harvests; the
Fourth Cause of Action, the denial of a motion to dismiss; the Sixth Cause
of Action, the denial of a motion for inhibition and two motions for
reconsideration; the Eighth Cause of Action, the order setting aside an
order of dismissal; the Ninth Cause of Action, the order granting a motion
for reconsideration; the Tenth Cause of Action, the denial of a motion for
inhibition; (2) RTJ-89-362, separate orders setting aside the amended
complaints in Civil Case Nos. 228, 253, 255, which complaints were
amended to implead respondent as co-defendant for his alleged use of his
judicial powers to prejudice complainant during the proceedings of the
aforestated cases; (3) RTJ-89-355, direct contempt orders, and (4) RTJ-89-

439, the failure of respondent judge to strike out the answer in two civil
cases.
Considering the nature, frequency and indiscriminate filing of groundless
charges and despite the admonition previously given by resolution of the
Court dated June 20, 1989, which the complainant willfully ignored and
disobeyed by manifesting the intent to file more of the same, the
complainant imposed upon the time, resources and forbearance of the
Court and diverted the energies of the respondent judge who has been
called upon to comment and defend his every action. This is not to say that
a judge may not be answerable for violation of the law and the Code of
Judicial Conduct, but not every order or ruling adverse to a party can be
made the basis for an administrative charge.

same will be dealt with more severely. The suspension shall take effect
from the date of receipt of this Resolution. Let copies of this Resolution be
circulated to all courts of this country for their information and guidance,
and spread in the personal record of Atty. Penticostes.
SO ORDERED.

G.R. No. 102781. April 22, 1993.

As a member of the bar, the complainant has responsibilities to the
judiciary. The Code of Professional Responsibility and the rules thereunder
impose obligations on the lawyer in relation to the court: Canon 10 states
that a lawyer owes candor, fairness and good faith to the court. Canon 11
provides that a lawyer shall observe and maintain the respect due to the
court and to judicial officers, while Canon 12 mandates that a lawyer shall
exert very effort and consider it his duty to assist in the speedy and
efficient administration of justice. Through his imprudent filing of
administrative cases against respondent judge, complainant has
transgressed the provisions of the Code of Professional Responsibility and
miserably failed to observe conduct expected of a member of the bar
under the Code and in accordance with his lawyer's oath.
WHEREFORE, having found the charges above-mentioned to be absolutely
without basis, the Court Resolved to:
(1) DISMISS outright the following complaints: RTJ-89-331; RTJ-89-362; RTJ89-438; and RTJ-89-355. RTJ-89-361 and RTJ 89-439 are likewise dismissed,
except as to charges for which comment has been required; and
(2) IMPOSE upon complainant a FINE of One Thousand Pesos (P1,000.00)
payable within ten (10) days from receipt of this Resolution, or
IMPRISONMENT of ten (10) days in the local jail in case of failure to pay the
fine within the time appointed; and
(3) SUSPEND complainant from the practice of law for one (1) year for his
willful disregard and disobedience of the admonition made by the Court in
RTJ-89-294, and his violation of Canons 10, 11 and 12 of the Code of
Professional Responsibility, with a stern warning that a repetition of the

BONIFACIO SANZ MACEDA, Presiding Judge, Branch 12, Regional Trial Court,
Antique, petitioner,
vs.
HON. OMBUDSMAN CONRADO M. VASQUEZ AND ATTY. NAPOLEON A.
ABIERA, respondents.
Bonifacio Sanz Maceda for and in his own behalf.
Public Attorney's Office for private respondent.
SYLLABUS
1. REMEDIAL LAW; JURISDICTION; OFFICE OF THE OMBUDSMAN HAS
JURISDICTION TO INVESTIGATE OFFENSE COMMITTED BY JUDGE WHETHER
OR NOT OFFENSE RELATES TO OFFICIAL DUTIES; REASON. Petitioner also
contends that the Ombudsman has no jurisdiction over said cases despite
this Court's ruling in Orap vs. Sandiganbayan, since the offense charged
arose from the judge's performance of his official duties, which is under the
control and supervision of the Supreme Court . . . The Court disagrees with
the first part of petitioner's basic argument. There is nothing in the
decision in Orap that would restrict it only to offenses committed by a
judge unrelated to his official duties. A judge who falsifies his certificate of
service is administratively liable to the Supreme Court for serious
misconduct and inefficiency under Section 1, Rule 140 of the Rules of
Court, and criminally liable to the State under the Revised Penal Code for
his felonious act.
2. ID.; ID.; ID.; JURISDICTION TO INVESTIGATE OFFENSE RELATED TO
OFFICIAL DUTIES SUBJECT TO PRIOR ADMINISTRATIVE ACTION TAKEN
AGAINST JUDGE BY SUPREME COURT; REASON. However, We agree with
petitioner that in the absence of any administrative action taken against
him by this Court with regard to his certificates of service, the investigation

being conducted by the Ombudsman encroaches into the Court's power of

administrative supervision over all courts and its personnel, in violation of
the doctrine of separation of powers.
3. ID.; ID.; ID.; ID.; PROCEDURE TO BE OBSERVED BY OMBUDSMAN
REGARDING COMPLAINT AGAINST JUDGE OR OTHER COURT EMPLOYEE;
PURPOSE. Thus, the Ombudsman should first refer the matter of
petitioner's certificates of service to this Court for determination of
whether said certificates reflected the true status of his pending case load,
as the Court has the necessary records to make such a determination . . .
In fine, where a criminal complaint against a judge or other court employee
arises from their administrative duties, the Ombudsman must defer action
on said complaint and refer the same to this Court for determination
whether said judge or court employee had acted within the scope of their
administrative duties.
4. ID.; ID.; ID.; ID.; OMBUDSMAN CANNOT SUBPOENA SUPREME COURT
AND ITS PERSONNEL; REASON. The Ombudsman cannot compel this
Court, as one of the three branches of government, to submit its records,
or to allow its personnel to testify on this matter, as suggested by public
respondent Abiera in his affidavit-complaint. The rationale for the foregoing
pronouncement is evident in this case. Administratively, the question
before Us is this: should a judge, having been granted by this Court an
extension of time to decide cases before him, report these cases in his
certificate of service? As this question had not yet been raised with, much
less resolved by, this Court, how could the Ombudsman resolve the
present criminal complaint that requires the resolution of said question?
DECISION
NOCON, J p:
The issue in this petition for certiorari with prayer for preliminary
mandatory injunction and/or restraining order is whether the Office of the
Ombudsman could entertain a criminal complaint for the alleged
falsification of a judge's certification submitted to the Supreme Court, and
assuming that it can, whether a referral should be made first to the
Supreme Court.

alleged that petitioner had falsified his Certificate of Service 1 dated

February 6, 1989, by certifying "that all civil and criminal cases which have
been submitted for decision or determination for a period of 90 days have
been determined and decided on or before January 31, 1998," when in
truth and in fact, petitioner knew that no decision had been rendered in
five (5) civil and ten (10) criminal cases that have been submitted for
decision. Respondent Abiera further alleged that petitioner similarly
falsified his certificates of service for the months of February, April, May,
June, July and August, all in 1989; and the months beginning January up to
September 1990, or for a total of seventeen (17) months.
On the other hand, petitioner contends that he had been granted by this
Court an extension of ninety (90) days to decide the aforementioned cases.
Petitioner also contends that the Ombudsman has no jurisdiction over said
case despite this Court's ruling in Orap vs. Sandiganbayan, 2 since the
offense charged arose from the judge's performance of his official duties,
which is under the control and supervision of the Supreme Court.
Furthermore, the investigation of the Ombudsman constitutes an
encroachment into the Supreme Court's constitutional duty of supervision
over all inferior courts.
The Court disagrees with the first Part of petitioner's basic argument. There
is nothing in the decision in Orap that would restrict it only to offenses
committed by a judge unrelated to his official duties. A judge who falsifies
his certificate of service is administratively liable to the Supreme Court for
serious misconduct and inefficiency under Section 1, Rule 140 of the Rules
of Court, and criminally liable to the State under the Revised Penal Code
for his felonious act.
However, We agree with petitioner that in the absence of any
administrative action taken against him by this Court with regard to his
certificates of service, the investigation being conducted by the
Ombudsman encroaches into the Court's power of administrative
supervision over all courts and its personnel, in violation of the doctrine of
separation of powers.

Petitioner Bonifacio Sanz Maceda, Presiding Judge of Branch 12 of the

Regional Trial Court of Antique, seeks the review of the following orders of
the Office of the Ombudsman: (1) the Order dated September 18, 1991
denying the ex-parte motion to refer to the Supreme Court filed by
petitioner; and (2) the Order dated November 22, 1951 denying
petitioner's motion for reconsideration and directing petitioner to file his
counter-affidavit and other controverting evidences.

Article VIII, section 6 of the 1987 Constitution exclusively vests in the

Supreme Court administrative supervision over all courts and court
personnel, from the Presiding Justice of the Court of Appeals down to the
lowest municipal trial court clerk. By virtue of this power, it is only the
Supreme Court that can oversee the judges' and court personnel's
compliance with all laws, and take the proper administrative action against
them if they commit any violation thereof. No other branch of government
may intrude into this power, without running afoul of the doctrine of
separation of powers.

In his affidavit-complaint dated April 18, 1991 filed before the Office of the
Ombudsman, respondent Napoleon A. Abiera of the Public Attorney's Office

The Ombudsman cannot justify its investigation of petitioner on the powers

granted to it by the Constitution, 3 for such a justification not only runs

counter to the specific mandate of the Constitution granting supervisory

powers to the Supreme Court over all courts and their personnel, but
likewise undermines the independence of the judiciary.
Thus, the Ombudsman should first refer the matter of petitioner's
certificates of service to this Court for determination of whether said
certificates reflected the true status of his pending case load, as the Court
has the necessary records to make such a determination. The Ombudsman
cannot compel this Court, as one of the three branches of government, to
submit its records, or to allow its personnel to testify on this matter, as
suggested by public respondent Abiera in his affidavit-complaint. 4
The rationale for the foregoing pronouncement is evident in this case.
Administratively. the question before Us is this: should a judge, having
been granted by this Court an extension of time to decide cases before
him, report these cases in his certificate of service? As this question had
not yet been raised with, much less resolved by, this Court. how could the
Ombudsman resolve the present criminal complaint that requires the
resolution of said question?
In fine, where a criminal complaint against a Judge or other court employee
arises from their administrative duties, the Ombudsman must defer action
on said complaint and refer the same to this Court for determination
whether said Judge or court employee had acted within the scope of their
administrative duties.
WHEREFORE, the instant petition is hereby GRANTED. The Ombudsman is
hereby directed to dismiss the complaint filed by public respondent Atty.
Napoleon A. Abiera and to refer the same to this Court for appropriate
action.
SO ORDERED.
Narvasa, C .J ., Cruz

FIRST DIVISION
A.M. No. 188 November 29, 1976
RICARDA GABRIEL DE BUMANGLAG, complainant,
vs.
ESTEBAN T. BUMANGLAG, respondent.
RESOLUTION

TEEHANKEE, J.:
In the Court's decision of September 24, 1973, the Court found respondent
guilty of gross immoral conduct and ordered his suspension from the
practice of law for a period of two (2) years. Respondent filed several
motions for reconsideration, all of which were denied per the Court's
Resolutions of November 20, 1973, December 19, 1973, January 9, 1974
and October 30, 1974.
On March 31, 1975, the Clerk of Court received a 1st Indorsement dated
February 21, 1975 from then Assistant Executive Secretary Ronaldo B.
Zamora "requesting comment and/or appropriate action" on the therewith
enclosed petition of respondent to the President of the Philippines that he
"promulgate(s) a decree that the order of suspension by the Supreme
Court be set aside and that your humble self be allowed to become an
active member of the New Society".
The Court per its Resolution of June 16, 1975 directed the Clerk of Court "to
furnish the Office of the President through Assistant Executive Secretary
Zamora with copies of the Court's decision of September 24, 1973 wherein
the Court in a spirit of liberality by majority vote imposed a lesser penalty
of two-year suspension instead of disbarment (as voted by a minority
composed of Justices Castro and Makasiar) and of the Court's resolutions of
November 20, 1973 and December 19, 1973 denying for lack of merit
respondent's two motions for reconsideration dated October 18, 1973 and
December 12, 1973"; and further resolved "to require respondent to show
cause within ten (10) days from notice why he should not be subjected to
further disciplinary action for making false statements and
misrepresentations in his petition to the President that he has been
allegedly deprived of due process of law contrary to the facts of record as
stated in the Court's decision, and for gross ignorance of the law and of the
Constitution in asking the President to set aside by decree this Court's
decision imposing upon him two-year suspension from the practice of law".
In a 2nd Indorserment of June 18, 1975 and received by the Clerk of Court
on the same day, then Assistant Executive Secretary Zamora forwarded
respondent's letter of the same date to the President stating that "(T)he
undersigned by now (has) come to realize that I made a big mistake by
making said letter to you, Your Excellency, because the Honorable
Supreme Court may believe that I may be challenging the decision which is
already final and executory and as such do not observe the doctrine of

protocol of separation of power(s)", and withdrawing and asking the

President to disregard his first letter.
Respondent in his Explanation of July 23, 1975 cited the fact that he had
"immediately" withdrawn his letter asking for the President's intervention
and that "lately, however, he has fully realized that the Chief Executive is
bereft (of) any authority to set aside or modify the decision of this
Honorable Supreme Court" and "with folded hands begs and asks an
apology from the members of this Honorable Court, with the full assurance
that nothing of this sort will be repeated by him in the future."
Respondent served his two-year suspension, as duly noted in the Court's
Resolution of November 7, 1975. Since respondent has apologized for his
"big mistake" and now appreciates that under the fundamental principle of
separation of powers enshrined in both the 1935 and 1973 Constitutions, a
decision of this Court may not be set aside by the President, the Court is
disposed to view his misconduct and/or ignorance with liberality and will
administer a reprimand with warning of severe action on any future
transgressions, considering respondent's unenviable record.
A final word is called for on respondent's statement in his Explanation
inferring that he was led to file his petition with the President by the fact
that his motions for reconsideration "were only denied by the Clerk of
Court without any comment whatsoever". As the Court has had occasion to
state in People vs. Catolico * and earlier cases, this remark of respondent
exposes his lack of appreciation or disregard of the time-honored usage of
the Court that minute resolutions, summons and processes of the Court,
upon being duly adopted and recorded are transmitted to the interested
parties by and upon the signature of the Clerk of Court who is duly
authorized to do so. With the thousands of resolutions approved monthly
by the Court, it would unduly tax the time and attention of the Chief Justice
and members of the Court to the prejudice of the administration of justice
if all such papers, other than decisions, could be released only upon their
own signatures.
ACCORDINGLY, respondent is hereby administered a reprimand for gross
ignorance of the law and of the Constitution in having asked the President
to set aside by decree the Court's decision which suspended him for two
years from the practice of law, with warning that the commission of any
transgression in the future of his oath and duties as a member of the bar
will be severely dealt with.
SO ORDERED.

G.R. Nos. 112438-39 December 12, 1995

CHEMPHIL EXPORT & IMPORT CORPORATION (CEIC), petitioner,
vs.
THE HONORABLE COURT OF APPEALS JAIME Y. GONZALES, as
Assignee of the Bank of the Philippine Islands (BPI), RIZAL
COMMERCIAL BANKING CORPORATION (RCBC), LAND BANK OF THE
PHILIPPINES (LBP), PHILIPPINE COMMERCIAL & INTERNATIONAL
BANK (PCIB) and THE PHILIPPINE INVESTMENT SYSTEM
ORGANIZATION (PISO), respondents.
G.R. No. 113394 December 12, 1995
PHILIPPINE COMMERCIAL INDUSTRIAL BANK (AND ITS ASSIGNEE
JAIME Y. GONZALES) petitioner,
vs.
HONORABLE COURT OR APPEALS and CHEMPHIL EXPORT AND
IMPORT CORPORATION (CEIC),respondents.

KAPUNAN, J.:
Before us is a legal tug-of-war between the Chemphil Export and Import
Corporation (hereinafter referred to as CEIC), on one side, and the PISO
and Jaime Gonzales as assignee of the Bank of the Philippine Islands (BPI),
Rizal Commercial Banking Corporation (RCBC), Land Bank of the Philippines
(LBP) and Philippine Commercial International Bank (PCIB), on the other
(hereinafter referred to as the consortium), over 1,717,678 shares of stock
(hereinafter referred to as the "disputed shares") in the Chemical Industries
of the Philippines (Chemphil/CIP).
Our task is to determine who is the rightful owner of the disputed shares.
Pursuant to our resolution dated 30 May 1994, the instant case is a
consolidation of two petitions for review filed before us as follows:
In G.R. Nos. 112438-39, CEIC seeks the reversal of the decision of the
Court of Appeals (former Twelfth Division) promulgated on 30 June 1993

and its resolution of 29 October 1993, denying petitioner's motion for

reconsideration in the consolidated cases entitled "Dynetics, Inc., et al. v.
PISO, et al." (CA-G.R. No. 20467) and "Dynetics, Inc., et al. v. PISO, et al.;
CEIC, Intervenor-Appellee" (CA-G.R. CV No. 26511).
The dispositive portion of the assailed decision reads, thus:
WHEREFORE, this Court resolves in these consolidated
cases as follows:
1. The Orders of the Regional Trial Court, dated March 25,
1988, and May 20, 1988, subject of CA-G.R. CV No. 10467,
are SET ASIDE and judgment is hereby rendered in favor of
the consortium and against appellee Dynetics, Inc., the
amount of the judgment, to be determined by Regional
Trial Court, taking into account the value of assets that the
consortium may have already recovered and shall have
recovered in accordance with the other portions of this
decision.
2. The Orders of the Regional Trial Court dated December
19, 1989 and March 5, 1990 are hereby REVERSED and SET
ASIDE and judgment is hereby rendered confirming the
ownership of the consortium over the Chemphil shares of
stock, subject of CA-G.R. CV No. 26511, and the Order
dated September 4, 1989, is reinstated.
No pronouncement as to costs.
SO ORDERED.

In G.R. No. 113394, PCIB and its assignee, Jaime Gonzales, ask for the
annulment of the Court of Appeals' decision (former Special Ninth Division)
promulgated on 26 March 1993 in "PCIB v. Hon. Job B. Madayag & CEIC"
(CA-G.R. SP NO. 20474) dismissing the petition for certiorari, prohibition
and mandamus filed by PCIB and of said court's resolution dated 11
January 1994 denying their motion for reconsideration of its decision. 2
The antecedent facts leading to the aforementioned controversies are as
follows:
On September 25, 1984, Dynetics, Inc. and Antonio M. Garcia filed a
complaint for declaratory relief and/or injunction against the PISO, BPI, LBP,

PCIB and RCBC or the consortium with the Regional Trial Court of Makati,
Branch 45 (Civil Case No. 8527), seeking judicial declaration, construction
and interpretation of the validity of the surety agreement that Dynetics
and Garcia had entered into with the consortium and to perpetually enjoin
the latter from claiming, collecting and enforcing any purported obligations
which Dynetics and Garcia might have undertaken in said agreement. 3
The consortium filed their respective answers with counterclaims alleging
that the surety agreement in question was valid and binding and that
Dynetics and Garcia were liable under the terms of the said agreement. It
likewise applied for the issuance of a writ of preliminary attachment
against Dynetics and Garcia. 4
Seven months later, or on 23 April 1985, Dynetics, Antonio Garcia and
Matrix Management & Trading Corporation filed a complaint for declaratory
relief and/or injunction against the Security Bank & Trust Co. (SBTC case)
before the Regional Trial Court of Makati, Branch 135 docketed as Civil
Case No. 10398. 5
On 2 July 1985, the trial court granted SBTC's prayer for the issuance of a
writ of preliminary attachment and on 9 July 1985, a notice of garnishment
covering Garcia's shares in CIP/Chemphil (including the disputed shares)
was served on Chemphil through its then President. The notice of
garnishment was duly annotated in the stock and transfer books of
Chemphil on the same date. 6
On 6 September 1985, the writ of attachment in favor of SBTC was lifted.
However, the same was reinstated on 30 October 1985. 7
In the meantime, on 12 July 1985, the Regional Trial Court in Civil Case No.
8527 (the consortium case) denied the application of Dynetics and Garcia
for preliminary injunction and instead granted the consortium's prayer for a
consolidated writ of preliminary attachment. Hence, on 19 July 1985, after
the consortium had filed the required bond, a writ of attachment was
issued and various real and personal properties of Dynetics and Garcia
were garnished, including the disputed shares. 8 This garnishment,
however, was not annotated in Chemphil's stock and transfer book.
On 8 September 1987, PCIB filed a motion to dismiss the complaint of
Dynetics and Garcia for lack of interest to prosecute and to submit its
counterclaims for decision, adopting the evidence it had adduced at the
hearing of its application for preliminary attachment. 9

On 25 March 1988, the Regional Trial Court dismissed the complaint of

Dynetics and Garcia in Civil Case No. 8527, as well as the counterclaims of
the consortium, thus:
Resolving defendant's, Philippine Commercial International
Bank, MOTION TO DISMISS WITH MOTION TO SUBMIT
DEFENDANT PCIBANK's COUNTERCLAIM FOR DECISION,
dated September 7, 1987:
(1) The motion to dismiss is granted; and the instant case
is hereby ordered dismissed pursuant to Sec. 3, Rule 17 of
the Revised Rules of Court, plaintiff having failed to comply
with the order dated July 16, 1987, and having not taken
further steps to prosecute the case; and
(2) The motion to submit said defendant's counterclaim for
decision is denied; there is no need; said counterclaim is
likewise dismissed under the authority of Dalman vs. City
Court of Dipolog City, L-63194, January 21, 1985, wherein
the Supreme Court stated that if the civil case is dismissed,
so also is the counterclaim filed therein. "A person cannot
eat his cake and have it at the same time" (p. 645, record,
Vol. I). 10
The motions for reconsideration filed by the consortium were, likewise,
denied by the trial court in its order dated 20 May 1988:
The Court could have stood pat on its order dated 25 March
1988, in regard to which the defendants-banks concerned
filed motions for reconsideration. However, inasmuch as
plaintiffs commented on said motions that: "3). In any
event, so as not to unduly foreclose on the rights of the
respective parties to refile and prosecute their respective
causes of action, plaintiffs manifest their conformity to the
modification of this Honorable Court's order to indicate that
the dismissal of the complaint and the counterclaims is
without prejudice." (p. 2, plaintiffs' COMMENT etc. dated
May 20, 1988). The Court is inclined to so modify the said
order.

WHEREFORE , the order issued on March 25, 1988, is

hereby modified in the sense that the dismissal of the
complaint as well as of the counterclaims of defendants
RCBC, LBP, PCIB and BPI shall be considered as without
prejudice (p. 675, record, Vol. I). 11
Unsatisfied with the aforementioned order, the consortium appealed to the
Court of Appeals, docketed as CA-G.R. CV No. 20467.
On 17 January 1989 during the pendency of consortium's appeal in CA-G.R.
CV No. 20467, Antonio Garcia and the consortium entered into a
Compromise Agreement which the Court of Appeals approved on 22 May
1989 and became the basis of its judgment by compromise. Antonio Garcia
was dropped as a party to the appeal leaving the consortium to proceed
solely against Dynetics, Inc. 12 On 27 June 1989, entry of judgment was
made by the Clerk of Court. 13
Hereunder quoted are the salient portions of said compromise agreement:
xxx xxx xxx
3. Defendants, in consideration of avoiding an extended
litigation, having agreed to limit their claim against plaintiff
Antonio M. Garcia to a principal sum of P145 Million
immediately demandable and to waive all other claims to
interest, penalties, attorney's fees and other charges. The
aforesaid compromise amount of indebtedness of P145
Million shall earn interest of eighteen percent (18%) from
the date of this Compromise.
4. Plaintiff Antonio M. Garcia and herein defendants have
no further claims against each other.
5. This Compromise shall be without prejudice to such
claims as the parties herein may have against plaintiff
Dynetics, Inc.
6. Plaintiff Antonio M. Garcia shall have two (2) months
from date of this Compromise within which to work for the
entry and participation of his other creditor, Security Bank
and Trust Co., into this Compromise. Upon the expiration of
this period, without Security Bank and Trust Co. having
joined, this Compromise shall be submitted to the Court for

its information and approval (pp. 27, 28-31, rollo, CA-G.R.

CV No. 10467). 14
It appears that on 15 July 1988, Antonio Garcia under a Deed of Sale
transferred to Ferro Chemicals, Inc. (FCI) the disputed shares and other
properties for P79,207,331.28. It was agreed upon that part of the
purchase price shall be paid by FCI directly to SBTC for whatever judgment
credits that may be adjudged in the latter's favor and against Antonio
Garcia in the aforementioned SBTC case. 15
On 6 March 1989, FCI, through its President Antonio M. Garcia, issued a
Bank of America Check No. 860114 in favor of SBTC in the amount of
P35,462,869.62. 16 SBTC refused to accept the check claiming that the
amount was not sufficient to discharge the debt. The check was thus
consigned by Antonio Garcia and Dynetics with the Regional Trial Court as
payment of their judgment debt in the SBTC case. 17
On 26 June 1989, FCI assigned its 4,119,614 shares in Chemphil, which
included the disputed shares, to petitioner CEIC. The shares were
registered and recorded in the corporate books of Chemphil in CEIC's name
and the corresponding stock certificates were issued to it. 18
Meanwhile, Antonio Garcia, in the consortium case, failed to comply with
the terms of the compromise agreement he entered into with the
consortium on 17 January 1989. As a result, on 18 July 1989, the
consortium filed a motion for execution which was granted by the trial
court on 11 August 1989. Among Garcia's properties that were levied upon
on execution were his 1,717,678 shares in Chemphil (the disputed shares)
previously garnished on 19 July 1985. 19

THE PHILS., INC. (CHEMPIL) TO ENTER IN THE STOCK AND

TRANSFER BOOKS OF CHEMPHIL THE SHERIFF'S
CERTIFICATE OF SALE DATED AUGUST 22, 1989 AND TO
ISSUE NEW CERTIFICATES OF STOCK IN THE NAME OF THE
DEFENDANT BANKS, dated August 29, 1989, is hereby
granted.
WHEREFORE, the corporate secretary of the aforesaid
corporation, or whoever is acting for and in his behalf, is
hereby ordered to (1) record and/or register the Certificate
of Sale dated August 22, 1989 issued by Deputy Sheriff
Cristobal S. Jabson of this Court; (2) to cancel the
certificates of stock of plaintiff Antonio M. Garcia and all
those which may have subsequently been issued in
replacement and/or in substitution thereof; and (3) to issue
in lieu of the said shares new shares of stock in the name
of the defendant Banks, namely, PCIB, BPI, RCBC, LBP and
PISO bank in such proportion as their respective claims
would appear in this suit (p. 82, record, Vol. II). 22
On 26 September 1989, CEIC filed a motion to intervene (dated 25
September 1989) in the consortium case seeking the recall of the
abovementioned order on grounds that it is the rightful owner of the
disputed shares. 23 It further alleged that the disputed shares were
previously owned by Antonio M. Garcia but subsequently sold by him on 15
July 1988 to Ferro Chemicals, Inc. (FCI) which in turn assigned the same to
CEIC in an agreement dated 26 June 1989.

On 22 August 1989, the consortium acquired the disputed shares of stock

at the public auction sale conducted by the sheriff for
P85,000,000.00. 20 On same day, a Certificate of Sale covering the
disputed shares was issued to it.

On 27 September 1989, the trial court granted CEIC's motion allowing it to

intervene, but limited only to the incidents covered by the order dated 4
September 1989. In the same order, the trial court directed Chemphil's
corporate secretary to temporarily refrain from implementing the 4
September 1989
order. 24

On 30 August 1989, 21 the consortium filed a motion (dated 29 August

1989) to order the corporate secretary of Chemphil to enter in its stock and
transfer books the sheriff's certificate of sale dated 22 August 1989, and to
issue new certificates of stock in the name of the banks concerned. The
trial court granted said motion in its order dated 4 September 1989, thus:

On 2 October 1989, the consortium filed their opposition to CEIC's motion

for intervention alleging that their attachment lien over the disputed
shares of stocks must prevail over the private sale in favor of the CEIC
considering that said shares of stock were garnished in the consortium's
favor as early as 19 July 1985. 25

For being legally proper, defendant's MOTION TO ORDER

THE CORPORATE SECRETARY OF CHEMICAL INDUSTRIES OF

On 4 October 1989, the consortium filed their opposition to CEIC's motion

to set aside the 4 September 1989 order and moved to lift the 27
September 1989 order. 26

On 12 October 1989, the consortium filed a manifestation and motion to lift

the 27 September 1989 order, to reinstate the 4 September 1989 order
and to direct CEIC to surrender the disputed stock certificates of Chemphil
in its possession within twenty-four (24) hours, failing in which the
President, Corporate Secretary and stock and transfer agent of Chemphil
be directed to register the names of the banks making up the consortium
as owners of said shares, sign the new certificates of stocks evidencing
their ownership over said shares and to immediately deliver the stock
certificates to them. 27
Resolving the foregoing motions, the trial court rendered an order dated 19
December 1989, the dispositive portion of which reads as follows:
WHEREFORE, premises considered, the Urgent Motion
dated September 25, 1989 filed by CEIC is hereby
GRANTED. Accordingly, the Order of September 4, 1989, is
hereby SET ASIDE, and any and all acts of the Corporate
Secretary of CHEMPHIL and/or whoever is acting for and in
his behalf, as may have already been done, carried out or
implemented pursuant to the Order of September 4, 1989,
are hereby nullified.
PERFORCE, the CONSORTIUM'S Motions dated October 3,
1989 and October 11, 1989, are both hereby denied for
lack of merit.
The Cease and Desist Order dated September 27, 1989, is
hereby AFFIRMED and made PERMANENT.
SO ORDERED. 28
In so ruling, the trial court ratiocinated in this wise:
xxx xxx xxx
After careful and assiduous consideration of the facts and
applicable law and jurisprudence, the Court holds that
CEIC's Urgent Motion to Set Aside the Order of September
4, 1989 is impressed with merit. The CONSORTIUM has
admitted that the writ of attachment/garnishment issued
on July 19, 1985 on the shares of stock belonging to
plaintiff Antonio M. Garcia was not annotated and
registered in the stock and transfer books of CHEMPHIL. On

the other hand, the prior attachment issued in favor of

SBTC on July 2, 1985 by Branch 135 of this Court in Civil
Case No. 10398, against the same CHEMPHIL shares of
Antonio M. Garcia, was duly registered and annotated in
the stock and transfer books of CHEMPHIL. The matter of
non-recording of the Consortium's attachment in
Chemphil's stock and transfer book on the shares of
Antonio M. Garcia assumes significance considering CEIC's
position that FCI and later CEIC acquired the CHEMPHIL
shares of Antonio M. Garcia without knowledge of the
attachment of the CONSORTIUM. This is also important as
CEIC claims that it has been subrogated to the rights of
SBTC since CEIC's predecessor-in-interest, the FCI, had paid
SBTC the amount of P35,462,869.12 pursuant to the Deed
of Sale and Purchase of Shares of Stock executed by
Antonio M. Garcia on July 15, 1988. By reason of such
payment, sale with the knowledge and consent of Antonio
M. Garcia, FCI and CEIC, as party-in-interest to FCI, are
subrogated by operation of law to the rights of SBTC. The
Court is not unaware of the citation in CEIC's reply that "as
between two (2) attaching creditors, the one whose claims
was first registered on the books of the corporation enjoy
priority." (Samahang Magsasaka, Inc. vs. Chua Gan, 96 Phil.
974.)
The Court holds that a levy on the shares of corporate
stock to be valid and binding on third persons, the notice of
attachment or garnishment must be registered and
annotated in the stock and transfer books of the
corporation, more so when the shares of the corporation
are listed and traded in the stock exchange, as in this case.
As a matter of fact, in the CONSORTIUM's motion of August
30, 1989, they specifically move to "order the Corporate
Secretary of CHEMPHIL to enter in the stock and transfer
books of CHEMPHIL the Sheriff's Certificate of Sale dated
August 22, 1989." This goes to show that, contrary to the
arguments of the CONSORTIUM, in order that attachment,
garnishment and/or encumbrances affecting rights and
ownership on shares of a corporation to be valid and
binding, the same has to be recorded in the stock and
transfer books.
Since neither CEIC nor FCI had notice of the CONSORTIUM's
attachment of July 19, 1985, CEIC's shares of stock in

CHEMPHIL, legally acquired from Antonio M. Garcia, cannot

be levied upon in execution to satisfy his judgment debts.
At the time of the Sheriff's levy on execution, Antonio M.
Garcia has no more in CHEMPHIL which could be levied
upon. 29

IV
WHETHER OR NOT THE ATTACHMENT OF SHARES OF
STOCK, IN ORDER TO BIND THIRD PERSONS, MUST BE
RECORDED IN THE STOCK AND TRANSFER BOOK OF THE
CORPORATION; AND

xxx xxx xxx

V
On 23 January 1990, the consortium and PCIB filed separate motions for
reconsideration of the aforestated order which were opposed by petitioner
CEIC. 30
On 5 March 1990, the trial court denied the motions for
reconsideration. 31
On 16 March 1990, the consortium appealed to the Court of Appeals (CAG.R. No. 26511). In its Resolution dated 9 August 1990, the Court of
Appeals consolidated CA-G.R. No. 26511 with CA-G.R. No. 20467. 32
The issues raised in the two cases, as formulated by the Court of Appeals,
are as follows:
I
WHETHER OR NOT, UNDER THE PECULIAR CIRCUMSTANCES
OF THE CASE, THE TRIAL COURT ERRED IN DISMISSING THE
COUNTERCLAIMS OF THE CONSORTIUM IN CIVIL CASE NO.
8527;
II
WHETHER OR NOT THE DISMISSAL OF CIVIL CASE NO. 8527
RESULTED IN THE DISCHARGE OF THE WRIT OF
ATTACHMENT ISSUED THEREIN EVEN AS THE CONSORTIUM
APPEALED THE ORDER DISMISSING CIVIL CASE NO. 8527;
III
WHETHER OR NOT THE JUDGMENT BASED ON
COMPROMISE RENDERED BY THIS COURT ON MAY 22, 1989
HAD THE EFFECT OF DISCHARGING THE ATTACHMENTS
ISSUED IN CIVIL CASE NO. 8527;

WHETHER OR NOT FERRO CHEMICALS, INC. (FCI), AND ITS

SUCCESSOR-IN-INTEREST, CEIC, WERE SUBROGATED TO
THE RIGHTS OF SECURITY BANK & TRUST COMPANY (SBTC)
IN A SEPARATE CIVIL ACTION. (This issue appears to be
material as SBTC is alleged to have obtained an earlier
attachment over the same Chemphil shares that the
consortium seeks to recover in the case at bar). 33
On 6 April 1990, the PCIB separately filed with the Court of Appeals a
petition for certiorari, prohibition andmandamus with a prayer for the
issuance of a writ of preliminary injunction (CA-G.R. No. SP-20474),
likewise, assailing the very same orders dated 19 December 1989 and 5
March 1990, subject of CA-G.R. No. 26511. 34
On 30 June 1993, the Court of Appeals (Twelfth Division) in CA-G.R. No.
26511 and CA-G.R. No. 20467 rendered a decision reversing the orders of
the trial court and confirming the ownership of the consortium over the
disputed shares. CEIC's motion for reconsideration was denied on 29
October 1993. 35
In ruling for the consortium, the Court of Appeals made the following
ratiocination: 36
On the first issue, it ruled that the evidence offered by the
consortium in support of its counterclaims, coupled with
the failure of Dynetics and Garcia to prosecute their case,
was sufficient basis for the RTC to pass upon and
determine the consortium's counterclaims.
The Court of Appeals found no application for the ruling
in Dalman v. City Court of Dipolog, 134 SCRA 243 (1985)
that "a person cannot eat his cake and have it at the same
time. If the civil case is dismissed, so also is the
counterclaim filed therein" because the factual background

of the present action is different. In the instant case, both

Dynetics and Garcia and the consortium presented
testimonial and documentary evidence which clearly
should have supported a judgment on the merits in favor of
the consortium. As the consortium correctly argued, the
net atrocious effect of the Regional Trial Court's ruling is
that it allows a situation where a party litigant is forced to
plead and prove compulsory counterclaims only to be
denied those counterclaims on account of the adverse
party's failure to prosecute his case. Verily, the consortium
had no alternative but to present its counterclaims in Civil
Case No. 8527 since its counterclaims are compulsory in
nature.
On the second issue, the Court of Appeals opined that
unless a writ of attachment is lifted by a special order
specifically providing for the discharge thereof, or unless a
case has been finally dismissed against the party in whose
favor the attachment has been issued, the attachment lien
subsists. When the consortium, therefore, took an appeal
from the Regional Trial Court's orders of March 25, 1988
and May 20, 1988, such appeal had the effect of preserving
the consortium's attachment liens secured at the inception
of Civil Case No. 8527, invoking the rule in Olib
v. Pastoral,188 SCRA 692 (1988) that where the main
action is appealed, the attachment issued in the said main
case is also considered appealed.
Anent the third issue, the compromise agreement between
the consortium and Garcia dated 17 January 1989 did not
result in the abandonment of its attachment lien over his
properties. Said agreement was approved by the Court of
Appeals in a Resolution dated 22 May 1989. The judgment
based on the compromise agreement had the effect of
preserving the said attachment lien as security for the
satisfaction of said judgment (citing BF Homes, Inc. v. CA,
190 SCRA 262, [1990]).
As to the fourth issue, the Court of Appeals agreed with the
consortium's position that the attachment of shares of
stock in a corporation need not be recorded in the
corporation's stock and transfer book in order to bind third
persons.

Section 7(d), Rule 57 of the Rules of Court was complied

with by the consortium (through the Sheriff of the trial
court) when the notice of garnishment over the Chemphil
shares of Garcia was served on the president of Chemphil
on July 19, 1985. Indeed, to bind third persons, no law
requires that an attachment of shares of stock be recorded
in the stock and transfer book of a corporation. The
statement attributed by the Regional Trial Court to the
Supreme Court in Samahang Magsasaka, Inc.vs. Gonzalo
Chua Guan, G.R. No. L-7252, February 25, 1955
(unreported), to the effect that "as between two attaching
creditors, the one whose claim was registered first on the
books of the corporation enjoys priority," is an obiter
dictum that does not modify the procedure laid down in
Section 7(d), Rule 57 of the Rules of Court.
Therefore, ruled the Court of Appeals, the attachment
made over the Chemphil shares in the name of Garcia on
July 19, 1985 was made in accordance with law and the
lien created thereby remained valid and subsisting at the
time Garcia sold those shares to FCI (predecessor-ininterest of appellee CEIC) in 1988.
Anent the last issue, the Court of Appeals rejected CEIC's
subrogation theory based on Art. 1302 (2) of the New Civil
Code stating that the obligation to SBTC was paid by Garcia
himself and not by a third party (FCI).
The Court of Appeals further opined that while the check
used to pay SBTC was a FCI corporate check, it was funds
of Garcia in FCI that was used to pay off SBTC. That the
funds used to pay off SBTC were funds of Garcia has not
been refuted by FCI or CEIC. It is clear, therefore, that there
was an attempt on the part of Garcia to use FCI and CEIC
as convenient vehicles to deny the consortium its right to
make itself whole through an execution sale of the
Chemphil shares attached by the consortium at the
inception of Civil Case No. 8527. The consortium, therefore,
is entitled to the issuance of the Chemphil shares of stock
in its favor. The Regional Trial Court's order of September 4,
1989, should, therefore, be reinstated in toto.
Accordingly, the question of whether or not the attachment
lien in favor of SBTC in the SBTC case is superior to the

attachment lien in favor of the consortium in Civil Case No.

8527 becomes immaterial with respect to the right of
intervenor-appellee CEIC. The said issue would have been
relevant had CEIC established its subrogation to the rights
of SBTC.

and annotated in the stock and transfer

books of Chemphil on 2 July 1985, and that
the Consortium's attachment failed to
comply with Sec. 7(d), Rule 57 of the Rules
as evidenced by the notice of garnishment
of the deputy sheriff of the trial court dated
19 July 1985 (annex "D") which the sheriff
served on a certain Thelly Ruiz who was
neither President nor managing agent of
Chemphil;

On 26 March 1993, the Court of Appeals (Special Ninth Division) in CA-G.R.

No. SP 20474 rendered a decision denying due course to and dismissing
PCIB's petition for certiorari on grounds that PCIB violated the rule against
forum-shopping and that no grave abuse of discretion was committed by
respondent Regional Trial Court in issuing its assailed orders dated 19
December 1989 and 5 March 1990. PCIB's motion for reconsideration was
denied on 11 January 1994. 37

(2) In not applying the case law enunciated

by this Honorable Supreme Court
inSamahang Magsasaka, Inc. vs. Gonzalo
Chua Guan, 96 Phil. 974 that as between
two attaching creditors, the one whose
claim was registered first in the books of
the corporation enjoys priority, and which
respondent Court erroneously
characterized as mere obiter dictum;

On 7 July 1993, the consortium, with the exception of PISO, assigned

without recourse all its rights and interests in the disputed shares to Jaime
Gonzales. 38
On 3 January 1994, CEIC filed the instant petition for review docketed as
G.R. Nos. 112438-39 and assigned the following errors:

(3) In not holding that the dismissal of the

appeal of the Consortium from the order of
the trial court dismissing its counterclaim
against Antonio M. Garcia and the finality
of the compromise agreement which ended
the litigation between the Consortium and
Antonio M. Garcia in the Dynetics
case had ipso jure discharged the
Consortium's purported attachment over
the disputed shares.

I.
THE RESPONDENT COURT OF APPEALS GRAVELY ERRED IN
SETTING ASIDE AND REVERSING THE ORDERS OF THE
REGIONAL TRIAL COURT DATED DECEMBER 5, 1989 AND
MARCH 5, 1990 AND IN NOT CONFIRMING PETITIONER'S
OWNERSHIP OVER THE DISPUTED CHEMPHIL SHARES
AGAINST THE FRIVOLOUS AND UNFOUNDED CLAIMS OF
THE CONSORTIUM.
II.

III.

THE RESPONDENT COURT OF APPEALS GRAVELY ERRED:

(1) In not holding that the Consortium's
attachment over the disputed Chemphil
shares did not vest any priority right in its
favor and cannot bind third parties since
admittedly its attachment on 19 July 1985
was not recorded in the stock and transfer
books of Chemphil, and subordinate to the
attachment of SBTC which SBTC registered

THE RESPONDENT COURT OF APPEALS GRAVELY ERRED IN

NOT HOLDING THAT CEIC HAD BEEN SUBROGATED TO THE
RIGHTS OF SBTC SINCE CEIC'S PREDECESSOR IN INTEREST
HAD PAID SBTC PURSUANT TO THE DEED OF SALE AND
PURCHASE OF STOCK EXECUTED BY ANTONIO M. GARCIA
ON JULY 15, 1988, AND THAT BY REASON OF SUCH
PAYMENT, WITH THE CONSENT AND KNOWLEDGE OF
ANTONIO M. GARCIA, FCI AND CEIC, AS PARTY IN INTEREST
TO FCI, WERE SUBROGATED BY OPERATION OF LAW TO THE
RIGHTS OF SBTC.

IV.
THE RESPONDENT COURT OF APPEALS GRAVELY ERRED
AND MADE UNWARRANTED INFERENCES AND
CONCLUSIONS, WITHOUT ANY SUPPORTING EVIDENCE,
THAT THERE WAS AN ATTEMPT ON THE PART OF ANTONIO
M. GARCIA TO USE FCI AND CEIC AS CONVENIENT
VEHICLES TO DENY THE CONSORTIUM ITS RIGHTS TO MAKE
ITSELF WHOLE THROUGH AN EXECUTION OF THE
CHEMPHIL SHARES PURPORTEDLY ATTACHED BY THE
CONSORTIUM ON 19 JULY 1985. 39
On 2 March 1994, PCIB filed its own petition for review docketed as G.R.
No. 113394 wherein it raised the following issues:
I. RESPONDENT COURT OF APPEALS COMMITTED SERIOUS
ERROR IN RENDERING THE DECISION AND RESOLUTION IN
QUESTION (ANNEXES A AND B) IN DEFIANCE OF LAW AND
JURISPRUDENCE BY FINDING RESPONDENT CEIC AS HAVING
BEEN SUBROGATED TO THE RIGHTS OF SBTC BY THE
PAYMENT BY FCI OF GARCIA'S DEBTS TO THE LATTER
DESPITE THE FACT THAT
A. FCI PAID THE SBTC DEBT BY VIRTUE OF A
CONTRACT BETWEEN FCI AND GARCIA,
THUS, LEGAL SUBROGATION DOES NOT
ARISE;
B. THE SBTC DEBT WAS PAID BY GARCIA
HIMSELF AND NOT BY FCI, HENCE,
SUBROGATION BY PAYMENT COULD NOT
HAVE OCCURRED;
C. FCI DID NOT ACQUIRE ANY RIGHT OVER
THE DISPUTED SHARES AS SBTC HAD NOT
YET LEVIED UPON NOR BOUGHT THOSE
SHARES ON EXECUTION. ACCORDINGLY,
WHAT FCI ACQUIRED FROM SBTC WAS
SIMPLY A JUDGMENT CREDIT AND AN
ATTACHMENT LIEN TO SECURE ITS
SATISFACTION.

II. RESPONDENT COURT OF APPEALS COMMITTED SERIOUS

ERROR IN SUSTAINING THE ORDERS OF THE TRIAL COURT
DATED DECEMBER 19, 1989 AND MARCH 5, 1990 WHICH
DENIED PETITIONER'S OWNERSHIP OVER THE DISPUTED
SHARES NOTWITHSTANDING PROVISIONS OF LAW AND
EXTANT JURISPRUDENCE ON THE MATTER THAT PETITIONER
AND THE CONSORTIUM HAVE PREFERRED SENIOR RIGHTS
THEREOVER.
III. RESPONDENT COURT OF APPEAL COMMITTED SERIOUS
ERROR IN CONCLUDING THAT THE DISMISSAL OF THE
COMPLAINT AND THE COUNTERCLAIM IN CIVIL CASE NO.
8527 ALSO RESULTED IN THE DISCHARGE OF THE WRIT OF
ATTACHMENT DESPITE THE RULINGS OF THIS HONORABLE
COURT IN BF HOMES VS. COURT OF APPEALS, G.R. NOS.
76879 AND 77143, OCTOBER 3, 1990, 190 SCRA 262, AND
IN OLIB VS. PASTORAL, G.R. NO. 81120, AUGUST 20, 1990,
188 SCRA 692 TO THE CONTRARY.
IV. RESPONDENT COURT OF APPEALS EXCEEDED ITS
JURISDICTION IN RULING ON THE MERITS OF THE MAIN
CASE NOTWITHSTANDING THAT THOSE MATTERS WERE
NOT ON APPEAL BEFORE IT.
V. RESPONDENT COURT OF APPEALS COMMITTED SERIOUS
ERROR IN HOLDING THAT PETITIONER IS GUILTY OF FORUM
SHOPPING DESPITE THE FACT THAT SC CIRCULAR NO. 2891 WAS NOT YET IN FORCE AND EFFECT AT THE TIME THE
PETITION WAS FILED BEFORE RESPONDENT APPELLATE
COURT, AND THAT ITS COUNSEL AT THAT TIME HAD
ADEQUATE BASIS TO BELIEVE THAT CERTIORARI AND NOT
AN APPEAL OF THE TRIAL COURT'S ORDERS WAS THE
APPROPRIATE RELIEF. 40
As previously stated, the issue boils down to who is legally entitled to the
disputed shares of Chemphil. We shall resolve this controversy by
examining the validity of the claims of each party and, thus, determine
whose claim has priority.
CEIC's claim
CEIC traces its claim over the disputed shares to the attachment lien
obtained by SBTC on 2 July 1985 against Antonio Garcia in Civil Case No.

10398. It avers that when FCI, CEIC's predecessor-in-interest, paid SBTC

the due obligations of Garcia to the said bank pursuant to the Deed of
Absolute Sale and Purchase of Shares of Stock, 41 FCI, and later CEIC, was
subrogated to the rights of SBTC, particularly to the latter's
aforementioned attachment lien over the disputed shares.
CEIC argues that SBTC's attachment lien is superior as it was obtained on 2
July 1985, ahead of the consortium's purported attachment on 19 July
1985. More importantly, said CEIC lien was duly recorded in the stock and
transfer books of Chemphil.
CEIC's subrogation theory is unavailing.
By definition, subrogation is "the transfer of all the rights of the creditor to
a third person, who substitutes him in all his rights. It may either be legal
or conventional. Legal subrogation is that which takes place without
agreement but by operation of law because of certain acts; this is the
subrogation referred to in article 1302. Conventional subrogation is that
which takes place by agreement of the parties . . ." 42
CEIC's theory is premised on Art. 1302 (2) of the Civil Code which states:
Art. 1302. It is presumed that there is legal subrogation:
(1) When a creditor pays another creditor who is preferred,
even without the debtor's knowledge;
(2) When a third person, not interested in the obligation,
pays with the express or tacit approval of the debtor;
(3) When, even without the knowledge of the debtor, a
person interested in the fulfillment of the obligation pays,
without prejudice to the effects of confusion as to the
latter's share. (Emphasis ours.)
Despite, however, its multitudinous arguments, CEIC presents an
erroneous interpretation of the concept of subrogation. An analysis of the
situations involved would reveal the clear inapplicability of Art. 1302 (2).
Antonio Garcia sold the disputed shares to FCI for a consideration of
P79,207,331.28. FCI, however, did not pay the entire amount to Garcia as
it was obligated to deliver part of the purchase price directly to SBTC
pursuant to the following stipulation in the Deed of Sale:

Manner of Payment
Payment of the Purchase Price shall be made in
accordance with the following order of preferenceprovided
that in no instance shall the total amount paid by the Buyer
exceed the Purchase Price:
a. Buyer shall pay directly to the Security Bank and Trust
Co. the amount determined by the Supreme Court as due
and owing in favor of the said bank by the Seller.
The foregoing amount shall be paid within fifteen (15) days
from the date the decision of the Supreme Court in the
case entitled "Antonio M. Garcia, et al. vs. Court of Appeals,
et al." G.R. Nos. 82282-83 becomes final and
executory. 43 (Emphasis ours.)
Hence, when FCI issued the BA check to SBTC in the amount of
P35,462,869.62 to pay Garcia's indebtedness to the said bank, it was in
effect paying with Garcia's money, no longer with its own, because said
amount was part of the purchase price which FCI owed Garcia in payment
for the sale of the disputed shares by the latter to the former. The money
"paid" by FCI to SBTC, thus properly belonged to Garcia. It is as if Garcia
himself paid his own debt to SBTC but through a third party FCI.
It is, therefore, of no consequence that what was used to pay SBTC was a
corporate check of FCI. As we have earlier stated, said check no longer
represented FCI funds but Garcia's money, being as it was part of FCI's
payment for the acquisition of the disputed shares. The FCI check should
not be taken at face value, the attendant circumstances must also be
considered.
The aforequoted contractual stipulation in the Deed of Sale dated 15 July
1988 between Antonio Garcia and FCI is nothing more but an arrangement
for the sake of convenience. Payment was to be effected in the aforesaid
manner so as to prevent money from changing hands needlessly. Besides,
the very purpose of Garcia in selling the disputed shares and his other
properties was to "settle certain civil suits filed against him." 44
Since the money used to discharge Garcia's debt rightfully belonged to
him, FCI cannot be considered a third party payor under Art. 1302 (2). It
was but a conduit, or as aptly categorized by respondents, merely an agent
as defined in Art. 1868 of the Civil Code:

Art. 1868. By the contract of agency a person binds himself

to render some service or to do something in
representation or on behalf of another, with the consent or
authority of the latter.
FCI was merely fulfilling its obligation under the aforementioned Deed of
Sale.
Additionally, FCI is not a disinterested party as required by Art. 1302 (2)
since the benefits of the extinguishment of the obligation would redound to
none other but itself. 45 Payment of the judgment debt to SBTC resulted in
the discharge of the attachment lien on the disputed shares purchased by
FCI. The latter would then have a free and "clean" title to said shares.
In sum, CEIC, for its failure to fulfill the requirements of Art. 1302 (2), was
not subrogated to the rights of SBTC against Antonio Garcia and did not
acquire SBTC's attachment lien over the disputed shares which, in turn,
had already been lifted or discharged upon satisfaction by Garcia, through
FCI, of his debt to the said bank. 46
The rule laid down in the case of Samahang Magsasaka, Inc. v. Chua
Guan, 47 that as between two attaching creditors the one whose claim was
registered ahead on the books of the corporation enjoys priority, clearly
has no application in the case at bench. As we have amply discussed, since
CEIC was not subrogated to SBTC's right as attaching creditor, which right
in turn, had already terminated after Garcia paid his debt to SBTC, it
cannot, therefore, be categorized as an attaching creditor in the present
controversy. CEIC cannot resurrect and claim a right which no longer exists.
The issue in the instant case, then, is priority between an attaching
creditor (the consortium) and a purchaser (FCI/CEIC) of the disputed shares
of stock and not between two attaching creditors the subject matter of
the aforestated Samahang Magsasaka case.
CEIC, likewise, argues that the consortium's attachment lien over the
disputed Chemphil shares is null and void and not binding on third parties
due to the latter's failure to register said lien in the stock and transfer
books of Chemphil as mandated by the rule laid down by the Samahang
Magsasaka v. Chua Guan. 48

The attachment lien acquired by the consortium is valid and effective. Both
the Revised Rules of Court and the Corporation Code do not require
annotation in the corporation's stock and transfer books for the attachment
of shares of stock to be valid and binding on the corporation and third
party.
Section 74 of the Corporation Code which enumerates the instances where
registration in the stock and transfer books of a corporation provides:
Sec. 74. Books to be kept; stock transfer agent.
xxx xxx xxx
Stock corporations must also keep a book to be known as
the stock and transfer book, in which must be kept a
record of all stocks in the names of the stockholders
alphabetically arranged; the installments paid and unpaid
on all stock for which subscription has been made, and the
date of payment of any settlement; a statement of every
alienation, sale or transfer of stock made, the date thereof,
and by and to whom made; and such other entries as the
by-laws may prescribe. The stock and transfer book shall
be kept in the principal office of the corporation or in the
office of its stock transfer agent and shall be open for
inspection by any director or stockholder of the corporation
at reasonable hours on business days. (Emphasis ours.)
xxx xxx xxx
Section 63 of the same Code states:
Sec. 63. Certificate of stock and transfer of shares. The
capital stock of stock corporations shall be divided into
shares for which certificates signed by the president or
vice-president, countersigned by the secretary or assistant
secretary, and sealed with the seal of the corporation shall
be issued in accordance with the by-laws. Shares of stock
so issued are personal property and may be transferred by
delivery of the certificate or certificates indorsed by the
owner or his attorney-in-fact or other person legally
authorized to make the transfer. No transfer, however,
shall be valid, except as between the parties, until the
transfer is recorded in the books of the corporation so as to

show the names of the parties to the transaction, the date

of the transfer, the number of the certificate or certificates
and the number of shares transferred.

In the case of Noble vs. Ft. Smith Wholesale Grocery Co.

(127 Pac., 14, 17; 34 Okl., 662; 46 L.R.A. [N.S.], 455), cited
in Words and Phrases, second series, vol. 4, p. 978, the
following appears:

No shares of stock against which the corporation holds any

unpaid claim shall be transferable in the books of the
corporation. (Emphasis ours.)
Are attachments of shares of stock included in the term "transfer" as
provided in Sec. 63 of the Corporation Code? We rule in the negative. As
succinctly declared in the case of Monserrat v. Ceron, 49 "chattel mortgage
over shares of stock need not be registered in the corporation's stock and
transfer book inasmuch as chattel mortgage over shares of stock does not
involve a "transfer of shares," and that only absolute transfers of shares of
stock are required to be recorded in the corporation's stock and transfer
book in order to have "force and effect as against third persons."
xxx xxx xxx
The word "transferencia" (transfer) is defined by the
"Diccionario de la Academia de la Lengua Castellana" as
"accion y efecto de transfeir" (the act and effect of
transferring); and the verb "transferir", as "ceder or
renunciar en otro el derecho o dominio que se tiene sobre
una cosa, haciendole dueno de ella" (to assign or waive the
right in, or absolute ownership of, a thing in favor of
another, making him the owner thereof).
In the Law Dictionary of "Words and Phrases", third series,
volume 7, p. 5867, the word "transfer" is defined as
follows:
"Transfer" means any act by which
property of one person is vested in
another, and "transfer of shares", as used
in Uniform Stock Transfer Act (Comp. St.
Supp. 690), implies any means whereby
one may be divested of and another
acquire ownership of stock. (Wallach vs.
Stein [N.J.], 136 A., 209, 210.)
xxx xxx xxx

A "transfer" is the act by which the owner

of a thing delivers it to another with the
intent of passing the rights which he has in
it to the latter, and a chattel mortgage is
not within the meaning of such term.
xxx xxx xxx. 50
Although the Monserrat case refers to a chattel mortgage over shares of
stock, the same may be applied to the attachment of the disputed shares
of stock in the present controversy since an attachment does not
constitute an absolute conveyance of property but is primarily used as a
means "to seize the debtor's property in order to secure the debt or claim
of the creditor in the event that a judgment is rendered." 51
Known commentators on the Corporation Code expound, thus:
xxx xxx xxx
Shares of stock being personal property, may be the
subject matter of pledge and chattel mortgage.
Such collateral transfers are however not covered by the
registration requirement of Section 63, since our Supreme
Court has held that such provision applies only to absolute
transfers thus, the registration in the corporate books of
pledges and chattel mortgages of shares cannot have any
legal effect. 52 (Emphasis ours.)
xxx xxx xxx
The requirement that the transfer shall be recorded in the
books of the corporation to be valid as against third
persons has reference only to absolute transfers or
absolute conveyance of the ownership or title to a share.
Consequently, the entry or notation on the books of the
corporation of pledges and chattel mortgages on shares is
not necessary to their validity (although it is advisable to

do so) since they do not involve absolute alienation of

ownership of stock (Monserrat vs. Ceron, 58 Phil. 469
[1933]; Chua Guan vs. Samahang Magsasaka, Inc., 62 Phil.
472 [1935].) To affect third persons, it is enough that the
date and description of the shares pledged appear in a
public instrument. (Art. 2096, Civil Code.) With respect to a
chattel mortgage constituted on shares of stock, what is
necessary is its registration in the Chattel Mortgage
Registry. (Act No. 1508 and Art. 2140, Civil Code.) 53
CEIC's reliance on the Samahang Magsasaka case is misplaced. Nowhere in
the said decision was it categorically stated that annotation of the
attachment in the corporate books is mandatory for its validity and for the
purpose of giving notice to third persons.
The only basis, then, for petitioner CEIC's claim is the Deed of Sale under
which it purchased the disputed shares. It is, however, a settled rule that a
purchaser of attached property acquires it subject to an attachment legally
and validly levied thereon. 54
Our corollary inquiry is whether or not the consortium has indeed a prior
valid and existing attachment lien over the disputed shares.
Jaime Gonzales' /Consortium's Claim
Is the consortium's attachment lien over the disputed shares valid?
CEIC vigorously argues that the consortium's writ of attachment over the
disputed shares of Chemphil is null and void, insisting as it does, that the
notice of garnishment was not validly served on the designated officers on
19 July 1985.
To support its contention, CEIC presented the sheriff's notice of
garnishment 55 dated 19 July 1985 which showed on its face that said
notice was received by one Thelly Ruiz who was neither the president nor
managing agent of Chemphil. It makes no difference, CEIC further avers,
that Thelly Ruiz was the secretary of the President of Chemphil, for under
the above-quoted provision she is not among the officers so authorized or
designated to be served with the notice of garnishment.
We cannot subscribe to such a narrow view of the rule on proper service of
writs of attachment.

A secretary's major function is to assist his or her superior. He/she is in

effect an extension of the latter. Obviously, as such, one of her duties is to
receive letters and notices for and in behalf of her superior, as in the case
at bench. The notice of garnishment was addressed to and was actually
received by Chemphil's president through his secretary who formally
received it for him. Thus, in one case, 56 we ruled that the secretary of the
president may be considered an "agent" of the corporation and held that
service of summons on him is binding on the corporation.
Moreover, the service and receipt of the notice of garnishment on 19 July
1985 was duly acknowledged and confirmed by the corporate secretary of
Chemphil, Rolando Navarro and his successor Avelino Cruz through their
respective certifications dated 15 August 1989 57 and 21 August 1989. 58
We rule, therefore, that there was substantial compliance with Sec. 7(d),
Rule 57 of the Rules of Court.
Did the compromise agreement between Antonio Garcia and the
consortium discharge the latter's attachment lien over the disputed
shares?
CEIC argues that a writ of attachment is a mere auxiliary remedy which,
upon the dismissal of the case, dies a natural death. Thus, when the
consortium entered into a compromise agreement, 59 which resulted in the
termination of their case, the disputed shares were released from
garnishment.
We disagree. To subscribe to CEIC's contentions would be to totally
disregard the concept and purpose of a preliminary attachment.
A writ of preliminary attachment is a provisional remedy
issued upon order of the court where an action is pending
to be levied upon the property or properties of the
defendant therein, the same to be held thereafter by the
Sheriff as security for the satisfaction of whatever
judgment might be secured in said action by the attaching
creditor against the defendant. 60 (Emphasis ours.)
Attachment is a juridical institution which has for its
purpose to secure the outcome of the trial, that is, the
satisfaction of the pecuniary obligation really contracted by
a person or believed to have been contracted by him,
either by virtue of a civil obligation emanating from

contract or from law, or by virtue of some crime or

misdemeanor that he might have committed, and the writ
issued, granted it, is executed by attaching and safely
keeping all the movable property of the defendant, or so
much thereof may be sufficient to satisfy the plaintiff's
demands . . . 61 (Emphasis ours.)

thereby acquires specific lien upon the

attached property which ripens into a
judgment against the res when the order of
sale is made. Such a proceeding is in effect
a finding that the property attached is an
indebted thing and a virtual condemnation
of it to pay the owner's debt. The law does
not provide the length of time an
attachment lien shall continue after the
rendition of judgment, and it must
therefore necessarily continue until the
debt is paid, or sale is had under execution
issued on the judgment or until judgment is
satisfied, or the attachment discharged or
vacated in some manner provided by law.

The chief purpose of the remedy of attachment is to secure

a contingent lien on defendant's property until plaintiff
can, by appropriate proceedings, obtain a judgment and
have such property applied to its satisfaction, or to make
some provision for unsecured debts in cases where the
means of satisfaction thereof are liable to be removed
beyond the jurisdiction, or improperly disposed of or
concealed, or otherwise placed beyond the reach of
creditors. 62 (Emphasis ours.)

It has been held that the lien obtained by

attachment stands upon as high equitable
grounds as a mortgage lien:

We reiterate the rule laid down in BF Homes, Inc. v. CA 63 that an

attachment lien continues until the debt is paid, or sale is had under
execution issued on the judgment or until judgment is satisfied, or the
attachment discharged or vacated in the same manner provided by law.
We expounded in said case that:

The lien or security obtained by an

attachment even before judgment, is a
fixed and positive security, a specific lien,
and, although whether it will ever be made
available to the creditor depends on
contingencies, its existence is in no way
contingent, conditioned or inchoate. It is a
vested interest, an actual and substantial
security, affording specific security for
satisfaction of the debt put in suit, which
constitutes a cloud on the legal title, and is
as specific as if created by virtue of a
voluntary act of the debtor and stands
upon as high equitable grounds as a
mortgage. (Corpus Juris Secundum, 433,
and authorities therein cited.)

The appointment of a rehabilitation receiver who took

control and custody of BF has not necessarily secured the
claims of Roa and Mendoza. In the event that the
receivership is terminated with such claims not having
been satisfied, the creditors may also find themselves
without security therefor in the civil action because of the
dissolution of the attachment. This should not be
permitted. Having previously obtained the issuance of the
writ in good faith, they should not be deprived of its
protection if the rehabilitation plan does not succeed and
the civil action is resumed.
xxx xxx xxx
As we ruled in Government of the Philippine Islands
v. Mercado:
Attachment is in the nature of a
proceeding in rem. It is against the
particular property. The attaching creditor

xxx xxx xxx

The case at bench admits of a peculiar character in the sense that it
involves a compromise agreement. Nonetheless, the rule established in the
aforequoted cases still applies, even more so since the terms of the
agreement have to be complied with in full by the parties thereto. The
parties to the compromise agreement should not be deprived of the

protection provided by an attachment lien especially in an instance where

one reneges on his obligations under the agreement, as in the case at
bench, where Antonio Garcia failed to hold up his own end of the deal, so
to speak.
Moreover, a violation of the terms and conditions of a compromise
agreement entitles the aggrieved party to a writ of execution.
In Abenojar & Tana v. CA, et al.,

64

we held:

The non-fulfillment of the terms and conditions of a

compromise agreement approved by the Court justifies
execution thereof and the issuance of the writ for said
purpose is the Court's ministerial duty enforceable
by mandamus.
Likewise we ruled in Canonizado v. Benitez: 65
A judicial compromise may be enforced by a writ of
execution. If a party fails or refuses to abide by the
compromise, the other party may enforce the compromise
or regard it as rescinded and insist upon his original
demand.
If we were to rule otherwise, we would in effect create a back door by
which a debtor can easily escape his creditors. Consequently, we would be
faced with an anomalous situation where a debtor, in order to buy time to
dispose of his properties, would enter into a compromise agreement he has
no intention of honoring in the first place. The purpose of the provisional
remedy of attachment would thus be lost. It would become, in analogy, a
declawed and toothless tiger.
From the foregoing, it is clear that the consortium and/or its assignee Jaime
Gonzales have the better right over the disputed shares. When CEIC
purchased the disputed shares from Antonio Garcia on 15 July 1988, it took
the shares subject to the prior, valid and existing attachment lien in favor
of and obtained by the consortium.
Forum Shopping in G.R. No. 113394
We uphold the decision of the Court of Appeals finding PCIB guilty of
forum-shopping. 66

The Court of Appeals opined:

True it is, that petitioner PCIB was not a party to the appeal
made by the four other banks belonging to the consortium,
but equally true is the rule that where the rights and
liabilities of the parties appealing are so interwoven and
dependent on each other as to be inseparable, a reversal
of the appealed decision as to those who appealed,
operates as a reversal to all and will inure to the benefit of
those who did not join the appeal (Tropical Homes vs.
Fortun, 169 SCRA 80, p. 90, citing Alling vs. Wenzel, 133
111. 264-278; 4 C.J. 1206). Such principal, premised upon
communality of interest of the parties, is recognized in this
jurisdiction (Director of Lands vs. Reyes, 69 SCRA 415). The
four other banks which were part of the consortium, filed
their notice of appeal under date of March 16, 1990,
furnishing a copy thereof upon the lawyers of petitioner.
The petition for certiorari in the present case was filed on
April 10, 1990, long after the other members of the
consortium had appealed from the assailed order of
December 19, 1989.
We view with skepticism PCIB's contention that it did not join the
consortium because it "honestly believed thatcertiorari was the more
efficacious and speedy relief available under the circumstances." 67 Rule 65
of the Revised Rules of Court is not difficult to understand. Certiorari is
available only if there is no appeal or other plain, speedy and adequate
remedy in the ordinary course of law. Hence, in instituting a separate
petition for certiorari, PCIB has deliberately resorted to forum-shopping.
PCIB cannot hide behind the subterfuge that Supreme Court Circular 28-91
was not yet in force when it filed thecertiorari proceedings in the Court of
Appeals. The rule against forum-shopping has long been
established. 68Supreme Court Circular 28-91 merely formalized the
prohibition and provided the appropriate penalties against transgressors.
It alarms us to realize that we have to constantly repeat our warning
against forum-shopping. We cannot over-emphasize its ill-effects, one of
which is aptly demonstrated in the case at bench where we are confronted
with two divisions of the Court of Appeals issuing contradictory
decisions 69 one in favor of CEIC and the other in favor of the
consortium/Jaime Gonzales.

Forum-shopping or the act of a party against whom an adverse judgment

has been rendered in one forum, of seeking another (and possibly
favorable) opinion in another forum (other than by appeal or the special
civil action of certiorari), or the institution of two (2) or more actions or
proceedings grounded on the same cause on the supposition that one or
the other court would make a favorable disposition, 70 has been
characterized as an act of malpractice that is prohibited and condemned as
trifling with the Courts and abusing their processes. It constitutes improper
conduct which tends to degrade the administration of justice. It has also
been aptly described as deplorable because it adds to the congestion of
the already heavily burdened dockets of the
courts. 71
WHEREFORE, premises considered the appealed decision in G.R. Nos.
112438-39 is hereby AFFIRMED and the appealed decision in G.R. No.
113394, insofar as it adjudged the CEIC the rightful owner of the disputed
shares, is hereby REVERSED. Moreover, for wantonly resorting to forumshopping, PCIB is hereby REPRIMANDED and WARNED that a repetition of
the same or similar acts in the future shall be dealt with more severely.

This is an administrative complaint against Atty. Ernesto Flores filed by

Benguet Electric Cooperative, Inc. (BENECO) before this Court on July 5,
1993, seeking his removal or suspension from the bar for forum shopping,
which amounted to grave misconduct, x x x unduly delaying the
administration of justice, and violating with impunity his oath of office and
applicable laws and jurisprudence.[1]
After the respondent submitted his Comment, dated August 21, 1993,
we referred the case to the Integrated Bar of the Philippines (IBP) on
September 27, 1993 for investigation, report and recommendation. On
August 15, 1997, we received a resolution from the IBP Board of
Governors, finding respondent guilty of violating Canons 10 and 12 of the
Code of Professional Responsibility and recommending his suspension from
the practice of law for a period of six months, viz:
RESOLUTION NO. XII-97-149
Adm. Case NO. 4058
Benguet Electric Cooperative, Inc. vs.

SO ORDERED.

Atty. Ernesto B. Flores

EN BANC
[A.C. No. 4058. March 12, 1998]
BENGUET ELECTRIC COOPERATIVE, INC. complainant, vs. ATTY.
ERNESTO B. FLORES, respondent.
DECISION

RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED

and APPROVED, the Report and Recommendation of the Investigating
Commissioner in the above-entitled case, hereinmade [sic] part of this
Resolution/Decision as Annex A; and finding the recommendation
therein to be fully supported by the evidence on record and the
applicable laws and rules, Respondent Atty. Ernesto Flores is hereby
SUSPENDED from the practice of law for six (6) months for violating
the provision of Canon[s] 10 and 12 of the Code of Professional
Responsibility.[2]

PANGANIBAN, J.:

The Facts

The profession of law exacts the highest standards from its members
and brooks no violation of its code of conduct. Accordingly, a lawyer who
trifles with judicial processes, engages in forum shopping and blatantly lies
in his pleadings must be sanctioned.

Because the parties[3] agreed to dispense with the presentation of

testimonial evidence, the case was submitted for resolution on the basis of
their documentary evidence. As found by Investigating Commissioner
Plaridel C. Jose, the facts are as follows:

The Case

x x x. On February 25, 1993, Labor Arbiter Irenarco Rimando of

the National Labor Relations Commission, Regional Arbitration Branch,
Cordillera Administrative Region, Baguio City, issued a Writ of

Execution (x x x) in NLRC Case No. RAB-1-0313-84 to enforce the

decision rendered by the Supreme Court on May 18, 1992 in G.R. No.
89070 (Benguet Electric Cooperative, Inc. vs. NLRC, 209 SCRA
55). The Writ of Execution was issued on motion of Benguet Electric
Cooperative (BENECO for short) to collect the amount of P344,000.00
which it paid to Peter Cosalan during the pendency of the case before
the Supreme Court, on the basis of its decision ordering the
respondent board members to reimburse petitioner BENECO any
amount that it may be compelled to pay to respondent Cosalan by
virtue of the decision of Labor Arbiter Amado T. Adquilen.
After issuance of the writ of execution, the respondent, as new
counsel for the losing litigant-members of the BENECO Board of
Directors, filed a Motion for Clarification with the Third Division of the
Supreme Court in G.R. No. 89070, the minute resolution to wit: to note
without action the aforesaid motion.
Thereafter, the respondent instituted a suit docketed as Civil
Case NO. 2738-R (x x x) with the Regional Trial Court, Branch 7,
Baguio City, seeking to enjoin the defendants Clerk of Court, et al.
from levying on their properties in satisfaction of the said writ of
execution. That case, however, was dismissed by the Presiding Judge
Clarence Villanueva in his Order dated March 18, 1993 (x x x).
Accordingly, the Office of the Clerk of Court, MTC, Baguio City,
through Sheriff III Wilfredo Mendez, proceeded to levy on the
properties of the losing board members of BENECO.Thus, a sale at
public auction was set on June 1, 1993, at 10:00 oclock in the morning
in front of the Baguio City Hall, per Sheriffs Notice of Sale dated May
4, 1993 (x x x), of the properties of Abundio Awal and Nicasio
Aliping[,] two of the losing members of the Board of Directors of
BENECO in the aforementioned case.

While respondent never essentially intended to assail the

issuance by the NLRC of the Writ of Execution x x x nor sought to
undo it (x x x) the complaint in Civil Case No. 2738-R which he filed
prays for the immediate issuance of a temporary restraining order
and/or preliminary writ of injunction for defendants Clerk of Court and
Ex-Officio City Sheriff to cease and desist from enforcing the
execution and levy of the writ of execution issued by the NLRC-CAR,
pending resolution of the main action in said court (x x x) which
complainant likewise claims as an unprocedural maneuver to frustrate
the execution of the decision of the Supreme Court in G.R. No. 89070
in complete disregard of settled jurisprudence that regular courts
have no jurisdiction to hear and decide questions which arise and are
incidental to the enforcement of decisions, orders and awards
rendered in labor cases citing the case of Cangco vs. CA, 199 SCRA
677, a display of gross ignorance of the law.
On May 26, 1993, respondent again filed for Abundio Awal and Nicasio
Aliping with the Regional Trial Court, Branch 9, La Trinidad, Benguet,
separate complaints for Judicial Declaration of Family Home
Constituted, Ope Lege, and thus Exempt from Levy and Execution the
subject properties with Damages, etc. docketed as Civil Cases Nos.
93-F-0414 (x x x) and 93-F-0415 (x x x), which are essentially similar
actions to enjoin the enforcement of the judgment rendered in NLRC
Case No. RAB-1-0313-84. He also filed an urgent Motion Ex-parte (x x
x) praying for temporary restraining order in these two (2) cases.
The complainant further alleges that respondents claim for
damages against the defendant Sheriff is another improper and
unprocedural maneuver which is likewise a violation of respondents
oath not to sue on groundless suit since the said Sheriff was merely
enforcing a writ of execution as part of his job.
Recommendation of the IBP

Respondent claims in his comment (x x x) that Branch 7, motu

proprio, dismissed Civil Case No. 2738-R for lack of jurisdiction on
March 18,1993, which dismissal was [sic] became final due to
respondents failure to perfect an appeal therefrom which claim
according to the complainant, constitute[s] deliberate
misrepresentation, if not falsehood, because the respondent indeed
interposed an appeal such that on May 11, 1993, the RTC 7 of Baguio
City transmitted the entire record of Civil Case No. 2738-R to the
Court of Appeals per certified machine copy of the letter transmittal of
same date (x x x).

As noted earlier, Investigating Commissioner Plaridel C. Jose

recommended, and the IBP Board of Governors concurred, that respondent
be suspended from the bar for six months for:
1. Falsehood, for stating in his comment before this Court that the
order of the RTC dismissing the complaint in Civil Case No.
2738-R was not appealed on time

2. Failure to comply with Supreme Court Circular No. 28-91 on

forum shopping
Commissioner Jose ratiocinated:
A cursory glance of (sic) x x x the complaint filed by the respondent in Civil
Case No. 2738-R before the RTC of Baguio City, which complaint was
signed and verified under oath by the respondent, reveals that it lacks the
certification required by Supreme Court Circular No. 28-91 which took
effect on January 1, 1992 to the effect that to the best of his knowledge, no
such action or proceeding is pending in the Supreme Court, Court of
Appeals or different divisions thereof or any tribunal or agency. If there is
any other action pending, he must state the status of the same. If he
should learn that a similar action or proceeding has been filed or pending
before the Supreme Court, Court of Appeals or different divisions thereof or
any tribunal or agency[,] he should notify the court, tribunal or agency
within five (5) days from such notice.
Among the other penalties, the said circular further provides that the
lawyer may also be subjected to disciplinary proceedings for noncompliance thereof.
In sum, it is clear that the respondent violated the provisions of Canon[s]
10 and 12 of the Code of Professional Responsibility under which the
lawyer owes candor, fairness and good faith to the court and exert[s] every
effort and consider[s] it his duty to assist in the speedy and efficient
administration of justice.[4]

We distinguish. Respondents failure to attach the said certificate

cannot be deemed a violation of the aforementioned circular, because the
said requirement applied only to petitions filed with this Court and the
Court of Appeals.[7] Likewise inapplicable is Administrative Circular No. 0494 dated February 8, 1994 which extended the requirement of a certificate
of non-forum shopping to all initiatory pleadings filed in all courts and
quasi-judicial agencies other than this Court and the Court of
Appeals. Circular No. 04-94 became effective only on April 1, 1994, but the
assailed complaint for injunction was filed on March 18, 1993, and the
petition for the constitution of a family home was instituted on May 26,
1993.
Be that as it may, respondent is still guilty of forum
shopping. In Chemphil Export and Import Corporation vs. Court of Appeals,
[8]
this Court declared that (t)he rule against forum shopping has long been
established and subsequent circulars[9] of this Court merely formalized the
prohibition and provided the appropriate penalties against
transgressors. The prohibition is found in Section 1(e) of Rule 16 and
Section 4 of Rule 2 of the 1964 Rules of Court, which provide:
SECTION 1. Grounds. -- Within the time for pleading, a motion to dismiss
the action may be made on any of the following grounds:
xxx xxx xxx
(e) That there is another action pending between the same parties for the
same cause;

This Courts Ruling

xxx xxx xxx[10]

We adopt and affirm the recommendation of the IBP suspending the

respondent from the bar, but we increase the period from six (6) months to
one (1) year and six (6) months.

SEC. 4. Effect of splitting a single cause of action. -- If two or more

complaints are brought for different parts of a single cause of action, the
filing of the first may be pleaded in abatement of the other or others, in
accordance with section 1 (e) of Rule 16, and a judgment upon the merits
in any one is available as a bar in the others.[11]

Forum Shopping

Circular No. 28-91,[5] dated September 4, 1991 which took effect on

January 1, 1992, requires a certificate of non-forum shopping to be
attached to petitions filed before this Court and the Court of Appeals. This
circular was revised on February 8, 1994. The IBP found that the
respondent had violated it, because the complaint he filed before the RTC
of Baguio City lack[ed] the certification required by Supreme Court Circular
No. 28-91.[6]

The prohibition is also contained in Circular No. 28-91. This circular did
not only require that a certification of non-forum shopping be attached to
the petitions filed before this Court or the Court of Appeals; it also decreed
that forum shopping constituted direct contempt of court and could subject
the offending lawyer to disciplinary action. The third paragraph thereof
reads:

3. Penalties.
(a) Any violation of this Circular shall be a cause for the summary dismissal
of the multiple petition or complaint.
(b) Any willful and deliberate forum shopping by any party and his lawyer
wit the filing of multiple petitions and complaints to ensure favorable
action shall constitute direct contempt of court.
(c) The submission of false certification under Par. 2 of the Circular shall
likewise constitute contempt of Court, without prejudice to the filing of
criminal action against the guilty party. The lawyer may also be subjected
to disciplinary proceedings. (Underscoring supplied.)
The foregoing were substantially reproduced in Revised Circular No.
28-91[12] and Administrative Circular No. 04-94.[13]
In a long line of cases, this Court has held that forum shopping exists
when, as a result of an adverse opinion in one forum, a party seeks a
favorable opinion (other than by appeal or certiorari) in another, [14] or
when he institutes two or more actions or proceedings grounded on the
same cause, on the gamble that one or the other court would make a
favorable disposition.[15] The most important factor in determining the
existence of forum shopping is the vexation caused the courts and partieslitigants by a party who asks different courts to rule on the same or related
causes or grant the same or substantially the same reliefs. [16]
After this Court rendered its Decision [17] in Benguet Electric
Cooperative, Inc. vs. National Labor Relations Commission, et al. [18] and
upon motion of BENECO, Labor Arbiter Irenarco R. Rimando issued a writ of
execution[19] ordering the clerk of court and ex officio city sheriff of the
Municipal Trial Court of Baguio City to levy on and sell at public auction
personal and real property of the members of the Board of Directors of
BENECO.

On March 18, 1993, Respondent Flores, acting as counsel for BENECO

Board Members Victor Laoyan, Nicasio Aliping, Lorenzo Pilando and
Abundio Awal, filed with the RTC an injunction suit praying for the issuance
of a temporary restraining order (TRO) to preserve the status quo as now
obtaining between the parties, as well as a writ of preliminary preventive
injunction ordering the clerk of court and the ex officio city sheriff of the
MTC of Baguio to cease and desist from enforcing by execution and levy
the writ of execution from the NLRC-CAR, pending resolution of the main
action raised in court.[20]
When this injunction case was dismissed, Respondent Flores filed with
another branch of the RTC two identical but separate actions both entitled
Judicial Declaration of Family Home Constituted, ope lege, Exempt from
Levy and Execution; with Damages, etc., docketed as Civil Case Nos. 93-F0414 and 93-F-0415.[21] The said complaints were supplemented by an
Urgent Motion Ex Parte[22] which prayed for an order to temporarily restrain
Sheriff Wilfredo V. Mendez from proceeding with the auction sale of
plaintiffs property to avoid rendering ineffectual and functus [oficio] any
judgment of the court later in this [sic] cases, until further determined by
the court.
Civil Case Nos. 93-F-0414 and 93-F-0415 are groundless
suits. Modequillo vs. Breva,[23] reiterated in Manacop vs. Court of Appeals,
[24]
shows the frivolity of these proceedings:
Under the Family Code, a family home is deemed constituted on a house
and lot from the time it is occupied as a family residence. There is no need
to constitute the same judicially or extrajudicially as required in the Civil
Code. If the family actually resides in the premises, it is, therefore, a family
home as contemplated by law. Thus, the creditors should take the
necessary precautions to protect their interest before extending credit to
the spouses or head of the family who owns the home.
xxx.
The exemption provided as aforestated is effective from the time of the
constitution of the family home as such, and lasts so long as any of its
beneficiaries actually resides therein.
Adhering to the Courts declaration in said cases, the subject
properties are deemed constituted as family homes by operation of law
under Article 153 of the Family Code.

The suits for the constitution of a family home were not only frivolous
and unnecessary; they were clearly asking for reliefs identical to the prayer
previously dismissed by another branch of the RTC, i.e., to forestall the
execution of a final judgment of the labor arbiter. That they
were filed ostensibly for the judicial declaration of a family home was a
mere smoke screen; in essence, their real objective was to restrain or delay
the enforcement of the writ of execution. In his deliberate attempt to
obtain the same relief in two different courts, Respondent Flores was
obviously shopping for a friendly forum which would capitulate to his
improvident plea for an injunction and was thereby trifling with the judicial
process.[25]
We remind the respondent that, under the Code of Professional
Responsibility,[26] he had a duty to assist in the speedy and efficient
administration of justice.[27] The Code also enjoins him from unduly
delaying a case by impeding the execution of a judgment or by misusing
court processes.[28]
In consonance with Millare vs. Montero[29] and Garcia vs. Francisco,
respondent should be suspended from the practice of law for one
year. In Millare, the respondent filed with different courts a total of six
appeals, complaints and petitions which frustrated and delayed the
execution of a final judgment. Holding that respondent made a mockery of
the judicial processes and disregarded canons of professional ethics in
intentionally frustrating the rights of a litigant in whose favor a judgment in
the case was rendered [and], thus, abused procedural rules to defeat the
ends of substantial justice,[31] this Court suspended the respondent from
the practice of law for one year.
[30]

In Garcia, the respondent was also suspended for one year from the
practice of law, for violating the proscription against forum shopping. This
Court held that he deserve[d] to be sanctioned, not only as a punishment
for his misconduct but also as a warning to other lawyers who may be
influenced by his example.[32]
Falsehood

The investigating commissioner also held respondent liable for

committing a falsehood because, in this administrative case, he stated in
his comment that he had not perfected an appeal on the dismissal of his
petition for injunction. In his said comment, the respondent stated:

Branch 7 (of the RTC) motu proprio, dismissed the case for lack of
jurisdiction on March 18, 1993. Not having perfected an appeal on the
dismissal, the order of dismissal became final under the Rules 15 days
after its receipt by respondent on record, or before April 6, 1993. So that
today this case is no longer pending.
xxx.
It should be noted that when Civil Case Nos. 93-F-0414 and 93-F-0415 for
family homes and damages were filed in the court below on May 26,
1993, Civil Case NO. 2378-R which seems to give basis to the present
Complaint was deemed terminated, there being no appeal formally taken
and perfected in accordance with the Rules.
xxx.
And that precisely was the primal reason why respondent decided not to
appeal any further anymore [sic] the order of dismissal for lack of
jurisdiction of the court below in Civil Case No. 2738, and let it be deemed
final by the Rules and jurisprudence.[33] (Underscoring supplied.)
The indelible fact, however, is that respondent did file an appeal which
was perfected later on. The original records of the injunction suit had been
transmitted to the appellate court.[34]Moreover, the Court of Appeals issued
a resolution dismissing the appeal.[35] Thus, in denying that he had
appealed the decision of the RTC, respondent was making a false
statement.
Respondent argues that the withdrawal of his appeal means that no
appeal was made under Section 2 of Rule 50 of the Rules of Court. The
pertinent provisions of Rule 50[36]read:
SEC. 2. Effect of dismissal.-- Fifteen (15) days after the dismissal of an
appeal, the clerk shall return to the court below the record on appeal with
a certificate under the seal of the court showing that the appeal has been
dismissed. Upon the receipt of such certificate in the lower court the case
shall stand there as though no appeal had ever been taken, and the
judgment of the said court may be enforced with the additional costs
allowed by the appellate court upon dismissing the appeal.
xxx xxx xxx

SEC. 4. Withdrawal of appeal.-- An appeal may be withdrawn as of right at

any time before the filing of appellees brief. x x x. The withdrawal of an
appeal shall have the same effect as that of a dismissal in accordance with
section 2 of this rule.
Respondents explanation misses the point. True, he withdrew his
appeal. But it is likewise true that he had actually filed an appeal, and that
this was perfected. False then is his statement that no appeal was
perfected in the injunction suit. Worse, he made the statement before this
Court in order to exculpate himself, though in vain, from the charge of
forum shopping.
A lawyer must be a disciple of truth. Under the Code of Professional
Responsibility, he owes candor, fairness and good faith to the courts. [37] He
shall neither do any falsehood, nor consent to the doing of any. He also has
a duty not to mislead or allow the courts to be misled by any artifice. [38]
For this offense, we suspend the respondent from the practice of law
for another year. True, in Ordonio vs. Eduarte,[39] Porac Trucking, Inc. vs.
Court of Appeals[40] and Erectors, Inc. vs. NLRC,[41] we imposed a
suspension of only six months for a similar malfeasance. But in Flores case,
his falsehood is aggravated by its brazenness, for it was committed in an
attempt, vain as it was, to cover up his forum shopping.
Before we close, we note that this simple case was referred to the IBP
on September 27, 1993. It was deemed submitted for resolution per the
investigating commissioners order dated May 10, 1995. However, the
investigating commissioner submitted his report only on May 5,
1997. Moreover, the IBP transmitted its recommendation to the Court only
through a letter dated July 31, 1997, which was received by the Office of
the Bar Confidant on August 15, 1997. Why it took the IBP almost four
years to finish its investigation of the case and over two years from the
date the parties filed their last pleadings to resolve it escapes us. After all,
the case did not require any trial-type investigation, and the parties
submitted only documentary evidence to prove or rebut their respective
cases. Thus, we find it opportune to urge the IBP to hasten the disposition
of administrative cases and to remind it that this Court gives it only ninety
days to finish its investigation, report and recommendation. Should it
require more time, it should file with the Court a request for extension,
giving the reason for such request.
WHEREFORE, for trifling with judicial processes by resorting to forum
shopping, Respondent Ernesto B. Flores is hereby SUSPENDED from the
practice of law for a period of ONE (1) YEAR and, for violating his oath and

the Canon of Professional Responsibility to do no falsehood, he

is SUSPENDED for another period of ONE (1) YEAR, resulting in a total
period of TWO (2) YEARS, effective upon finality of this Decision. He
is WARNED that a repetition of a similar misconduct will be dealt with more
severely.
Let a copy of this Decision be included in his files which are with the
Office of the Bar Confidant, and circularized to all courts and to the
Integrated Bar of the Philippines.
SO ORDERED.

FIRST DIVISION
[G.R. No. L-75349. October 13, 1986.]
ROSALINA BUAN, RODOLFO TOLENTINO, TOMAS MERCADO, CECILIA
MORALES, LIZA OCAMPO, Quiapo Church Vendors, for themselves
and all others similarly situated as themselves, Petitioners, v.
OFFICER-IN-CHARGE GEMILIANO C. LOPEZ, JR., OFFICE OF THE
MAYOR OF MANILA, Respondent.

DECISION

NARVASA, J.:

On August 5, 1986 petitioners instituted in this Court a special civil action

for prohibition to the end that respondent Gemiliano C. Lopez, Jr., acting as
Mayor of the City of Manila, be "perpetually prohibited from arbitrarily,
whimsically and capriciously revoking or cancelling . . . their licenses or
permits (as hawkers or street vendors) and threatening the physical
demolition of their respective business stalls in the places specified in such
licenses or permits. 1 They also sought a temporary restraining order in
view of Mayor Lopez actual threats of physical demolition of their
respective small business establishment at 12:00 noon today." This the
Court granted on the same day. 2
Petitioners claim to be five of about 130 "licensed and duly authorized
vendors of . . . religious articles, medicine herbs and plants around the
Quiapo Church, . . . Manila," bringing suit for themselves and all others
similarly situated as themselves." 3 They allege that their licenses "were
revoked or cancelled (by respondent Mayor) for reasons unknown to them
which is tantamount to deprivation of property without due process of

laws," written notice of such cancellation having been served on them on

or about May 30 (actually May 3), 1986; that the revocation of their
licenses was beyond respondent Mayors competence, since Section 171
(n) of the Local Government Code (B.P. Blg. 337) authorizes the same only
"for violation of the law or ordinances or conditions upon which they have
been granted," and no such violation had been committed by them; 4 but
this notwithstanding, respondent Mayor "bad given (them) an ultimatum of
7:00 up to 12:00 oclock in the afternoon" (of August 5, 1986) to vacate the
premises where their respective stalls are situated or suffer physical
demolition thereof." 5
In the light of the facts disclosed by the pleadings 6 and at the hearing of
the case on August 13, 1986, the petition must be given short
shrift.chanroblesvirtualawlibrary
The action must in the first place be abated on the ground of lis pendens,
or more correctly, auter action pendant; pendency of another action
between the same parties for the same cause. 7
It appears that on July 7, 1986 there was filed in the Regional Trial Court of
Manila, docketed as Civil Case No. 86-36563, a special civil action of
"prohibition with preliminary injunction" against Acting Manila City Mayor
Gemiliano Lopez, Jr. 8 It was filed by Samahang Kapatiran Sa Hanapbuhay
Ng Bagong Lipunan, Inc." (hereafter, simply "Samahan") composed,
according to the petition, of "some 300 individual owners and operators of
separate business stalls . . . mostly at the periphery immediately beyond
the fence of the Quiapo Church." The president of the Samahan is Rosalina
Buan and its Press Relations Officer, Liza Ocampo. 9 Rosalina Buan and
Liza Ocampo are two of the five petitioners in the case at bar, 10 described
in the petition before this Court as suing "for themselves and all others
similarly situated as themselves" : i.e., vendors "around the Quiapo
Church." 11 The three other petitioners also appear to be Samahan
members. 12
The petition in Case No. 86-36563 is grounded on the same facts as those
in the case at bar: the members of the Samahan had been legitimately
engaged "in their respective business of selling sundry merchandise, more
particularly religious articles, flowers and ornamental plants, and medicinal
herbs;" they had been religiously paying "the corresponding license and
permit fees imposed by prevailing ordinances of the City of Manila," but
this notwithstanding they had been given written notice dated May 3, 1986
emanating from the Mayors Office, advising of the cancellation of their
permits and their possible relocation to another site; and these acts "are
unjust, illegal, arbitrary, oppressive and constitute grave abuse of
discretion on the part of the Respondent."cralaw virtua1aw library
There thus exists between the action before this Court and RTC Case No.
86-36563 identity of parties, or at least such parties as represent the same
interests in both actions, as well as identity of rights asserted and relief
prayed for, the relief being founded on the same facts, and the identity on
the two preceding particulars is such that any judgment rendered in the

other action, will regardless of which party is successful, amount to res

adjudicata in the action under consideration: all the requisites, in fine, of
auter action pendant. 13
Indeed, the petitioners in both actions, described in their petitions as
vendors of religious articles, herbs and plants, and sundry merchandise
around the Quiapo Church or its "periphery," have incurred not only the
sanction of dismissal of their case before this Court in accordance with Rule
16 of the Rules of Court, but also the punitive measure of dismissal of both
their actions, that in this Court and that in the Regional Trial Court as well.
Quite recently, upon substantially identical factual premises, the Court en
banc had occasion to condemn and penalize the act of litigants of filing the
same suit in different courts, aptly described as "forum-shopping,"
viz:jgc:chanrobles.com.ph
"The acts of petitioners constitute a clear case of forum-shopping, an act of
malpractice that is proscribed and condemned as trifling with the courts
and abusing their processes. It is improper conduct that tends to degrade
the administration of justice. The rule has been formalized in Section 17 of
the Interim Rules and Guidelines issued by this Court on January 11, 1983
in connection with the implementation of the Judiciary Reorganization Act,
specifically with the grant in Section 9 of B.P. Blg. 129 of equal original
jurisdiction to the Intermediate Appellate Court to issue writs of
mandamus, prohibition, etc., and auxiliary writs or processes, whether or
not in aid of its appellate jurisdiction Thus, the cited Rule provides that no
such petition may be filed in the Intermediate Appellate Court if another
similar petition has been filed or is still pending in the Supreme Court and
vice versa. The Rule orders that A violation of the rule shad constitute
contempt of court and shall be a cause for the summary dismissal of both
petitions, without prejudice to the taking of appropriate action against the
counsel or party concerned. The rule applies with equal force where the
party having filed an action in the Supreme Court shops for the same
remedy of prohibition and a restraining order or injunction in the regional
trial court . . . (or vice versa). . . ." 14
As already observed, there is between the action at bar and RTC Case No.
86-36563, an identity as regards parties, or interests represented, rights
asserted and relief sought, as well as basis thereof, to a degree sufficient
to give rise to the ground for dismissal known as auter action pendant or lis
pendens. 15 That same identity puts into operation the sanction of twin
dismissals just mentioned. The application of this sanction will prevent any
further delay in the settlement of the controversy which might ensue from
attempts to seek reconsideration of or to appeal from the Order of the
Regional Trial Court in Civil Case No. 86-36563 promulgated on July 15,
1986, which dismissed the petition upon grounds which appear persuasive.
16
It would seem that after the filing by Rosalina Buan and Liza Ocampo
(president and press relations officer, respectively, of the Quiapo Church
vendors association known as the Samahan) of the petition in this case,
"for themselves and all others similarly situated as themselves" (i.e., the

members of the Samahan, who are vendors in the area of Quiapo Church)
they came to the belated realization that in view of the pendency of the
identical action filed by them in the Regional Trial Court (Case No. 8636563), they were vulnerable to the accusation of "forum shopping," and
thus amenable to its dire consequences. This explains the filing in this
Court by their lawyers of a "MANIFESTATION WITH AFFIDAVIT OF
WITHDRAWAL" on August 11, 1986, 17 another "MANIFESTATION AND
MOTION" on August 29, 1986, and an "URGENT MANIFESTATION AND
MOTION TO STRIKE-OUT THE NAME ROSALINA BUAN AND LIZA OCAMPO"
on September 13, 1986. In these manifestations the claim is made that the
five (5) petitioners in the action before this Court who are members of the
Samahan, "were forcibly brainwashed and guarded by . . . (Atty. Reynaldo
Aralar) and his associates to accede to the invitation of the said
counsel . . . to appear for them and file the case before the Honorable
Court knowingly (sic) that he was furnished the status quo-order of the
same case pending before the Regional Trial Court Branch 45 of Manila,"
and/or said Atty. Aralar and his associates had perpetrated "piracy" of
clients and "should be condemned and suspended for committing act of
shopping for courts." The claim does not inspire belief It is so out of the
ordinary as to require clear and convincing evidence of its actuality, which
is lacking in this case. It is also belied by the fact that Rosalina Buan and
Liza Ocampo themselves were among those who verified the petition at
bar before a notary public. 18 And the claim is undermined by the
misrepresentation in Buans and Ocampos "Joint Affidavit of Withdrawal"
that the status quo order in RTC Case No. 86-36563 was still subsisting and
the case still pending trial 19 when in truth, the case had already been
dismissed and the restraining order lifted by Order of July 27,
1986.chanrobles law library : red
Yet another reason exists for the denial of the petition. Not one of the
petitioners or the "others similarly situated as themselves" had a valid and
subsisting license or permit as of the date of the filing of their petition in
this Court, August 5, 1986, all licenses and permits having expired prior
thereto. 20 This is confirmed by the few receipts submitted by petitioners
21 which all set out expiry dates before August 5, 1986. The petitioners
thus have no basis whatever to postulate a right to ply their trade in the
Quiapo area or elsewhere. The argument that the non-renewal by the
municipal authorities of their licenses was in effect a cancellation or
revocation thereof without cause is puerile.
Finally, the action for prohibition has become moot and academic by the
occurrence of the acts sought to be inhibited. The petitioners permits and
licenses have all expired; hence, there can be no occasion whatsoever to
speak of the inhibition of any revocation or cancellation thereof. And the
"physical demolition of their respective business stalls" has already been
consummated.
WHEREFORE, the petition is denied for lack of merit, and the Regional Trial
Court is commanded to dismiss Civil Case No. 86-36563 and to conduct no
further proceedings in connection therewith save in accordance with and in
implementation of this Decision. Costs against petitioners.

SO ORDERED.
EN BANC

G.R. No. 130068 October 1, 1998

FAR EASTERN SHIPPING COMPANY, petitioner,
vs.
COURT OF APPEALS and PHILIPPINE PORTS
AUTHORITY, respondents.
G.R. No. 130150 October, 1998
MANILA PILOTS ASSOCIATION, petitioner,
vs.
PHILIPPINE PORTS AUTHORITY and FAR EASTERN SHIPPING
COMPANY, respondents.

REGALADO, J.:
These consolidated petitions for review on certiorari seek in unison to
annul and set aside the decision 1 of respondent Court of Appeals of
November 15, 1996 and its resolution 2 dated July 31, 1997 in CA-G.R. CV
No. 24072, entitled "Philippine Ports Authority, Plaintiff-Appellee vs. Far
Eastern Shipping Company, Senen C. Gavino and Manila Pilots' Association,
Defendants-Appellants," which affirmed with modification the judgment of
the trial court holding the defendants-appellants therein solidarily liable for
damages in favor of herein private respondent.
There is no dispute about the facts as found by the appellate court,
thus
. . . On June 20, 1980, the M/V PAVLODAR, flying under the
flagship of the USSR, owned and operated by the Far
Eastern Shipping Company (FESC for brevity's sake),
arrived at the Port of Manila from Vancouver, British
Columbia at about 7:00 o'clock in the morning. The vessel

was assigned Berth 4 of the Manila International Port, as its

berthing space. Captain Roberto Abellana was tasked by
the Philippine Port Authority to supervise the berthing of
the vessel. Appellant Senen Gavino was assigned by the
Appellant Manila Pilots' Association (MPA for brevity's sake)
to conduct docking maneuvers for the safe berthing of the
vessel to Berth No. 4.
Gavino boarded the vessel at the quarantine anchorage
and stationed himself in the bridge, with the master of the
vessel, Victor Kavankov, beside him. After a briefing of
Gavino by Kavankov of the particulars of the vessel and its
cargo, the vessel lifted anchor from the quarantine
anchorage and proceeded to the Manila International Port.
The sea was calm and the wind was ideal for docking
maneuvers.
When the vessel reached the landmark (the big church by
the Tondo North Harbor) one-half mile from the pier,
Gavino ordered the engine stopped. When the vessel was
already about 2,000 feet from the pier, Gavino ordered the
anchor dropped. Kavankov relayed the orders to the crew
of the vessel on the bow. The left anchor, with two (2)
shackles, were dropped. However, the anchor did not take
hold as expected. The speed of the vessel did not slacken.
A commotion ensued between the crew members. A brief
conference ensued between Kavankov and the crew
members. When Gavino inquired what was all the
commotion about, Kavankov assured Gavino that there was
nothing to it.
After Gavino noticed that the anchor did not take hold, he
ordered the engines half-astern. Abellana, who was then on
the pier apron, noticed that the vessel was approaching the
pier fast. Kavankov likewise noticed that the anchor did not
take hold. Gavino thereafter gave the "full-astern" code.
Before the right anchor and additional shackles could be
dropped, the bow of the vessel rammed into the apron of
the pier causing considerable damage to the pier. The
vessel sustained damage too, (Exhibit "7-Far Eastern
Shipping). Kavankov filed his sea protest (Exhibit "1Vessel"). Gavino submitted his report to the Chief Pilot
(Exhibit "1-Pilot") who referred the report to the Philippine

Ports Authority (Exhibit 2-Pilot"). Abellana likewise

submitted his report of the incident (Exhibit "B").
Per contract and supplemental contract of the Philippine
Ports Authority and the contractor for the rehabilitation of
the damaged pier, the same cost the Philippine Ports
Authority the amount of P1,126,132.25 (Exhibits "D" and
"E"). 3
On January 10, 1983, the Philippine Ports Authority (PPA, for brevity),
through the Solicitor General, filed before the Regional Trial Court of
Manila, Branch 39, a complaint for a sum of money against Far Eastern
Shipping Co., Capt. Senen C. Gavino and the Manila Pilots' Association,
docketed as Civil Case No. 83-14958, 4 praying that the defendants therein
be held jointly and severally liable to pay the plaintiff actual and exemplary
damages plus costs of suit. In a decision dated August 1, 1985, the trial
court ordered the defendants therein jointly and severally to pay the PPA
the amount of P1,053,300.00 representing actual damages and the costs
of suit. 5
The defendants appealed to the Court of Appeals and raised the following
issues: (1) Is the pilot of a commercial vessel, under compulsory pilotage,
solely liable for the damage caused by the vessel to the pier, at the port of
destination, for his negligence? and (2) Would the owner of the vessel be
liable likewise if the damage is caused by the concurrent negligence of the
master of the vessel and the pilot under a compulsory pilotage?
As stated at the outset, respondent appellate court affirmed the findings of
the court a quo except that if found no employer-employee relationship
existing between herein private respondents Manila Pilots' Association
(MPA, for short) and Capt. Gavino. 6 This being so, it ruled instead that the
liability of MPA is anchored, not on Article 2180 of the Civil Code, but on
the provisions of Customs Administrative Order No. 15-65, 7 and
accordingly modified said decision of the trial court by holding MPA, along
with its co-defendants therein, still solidarily liable to PPA but entitled MPA
to reimbursement from Capt. Gavino for such amount of the adjudged
pecuniary liability in excess of the amount equivalent to seventy-five
percent (75%) of its prescribed reserve
fund. 8
Neither Far Eastern Shipping Co. (briefly, FESC) nor MPA was happy with
the decision of the Court of Appeals and both of them elevated their
respective plaints to us via separate petitions for review on certiorari.

In G. R. No. 130068, which was assigned to the Second Division of this

Court, FESC imputed that the Court of Appeals seriously erred:
1. in not holding Senen C. Gavino and the Manila Pilots'
Association as the parties solely responsible for the
resulting damages sustained by the pier deliberately
ignoring the established jurisprudence on the matter;
2. in holding that the master had not exercised the
required diligence demanded from him by the
circumstances at the time the incident happened;
3. in affirming the amount of damages sustained by the
respondent Philippine Ports Authority despite a strong and
convincing evidence that the amount is clearly exorbitant
and unreasonable;
4. in not awarding any amount of counterclaim prayed for
by the petitioner in its answer; and
5. in not granting herein petitioner's claim against pilot
Senen C. Gavino and Manila Pilots' Association in the event
that it be held
liable. 9
Petitioner asserts that since the MV PAVLODAR was under compulsory
pilotage at the time of the incident, it was the compulsory pilot, Capt.
Gavino, who was in command and had complete control in the navigation
and docking of the vessel. It is the pilot who supersedes the master for the
time being in the command and navigation of a ship and his orders must
be obeyed in all respects connected with her navigation. Consequently, he
was solely responsible for the damage caused upon the pier apron, and not
the owners of the vessel. It claims that the master of the boat did not
commit any act of negligence when he failed to countermand or overrule
the orders of the pilot because he did not see any justifiable reason to do
so. In other words, the master cannot be faulted for relying absolutely on
the competence of the compulsory pilot. If the master does not observe
that a compulsory pilot is incompetent or physically incapacitated, the
master is justified in relying on the pilot. 10
Respondent PPA, in its comment, predictably in full agreement with the
ruling of respondent court on the solidary liability of FESC, MPA and Capt.
Gavino, stresses the concurrent negligence of Capt. Gavino, the harbor

pilot, and Capt. Viktor Kabankov, * shipmaster of MV Pavlodar, as the basis

of their solidary liability for damages sustained by PPA. It posits that the
vessel was being piloted by Capt. Gavino with Capt. Kabankov beside him
all the while on the bridge of the vessel, as the former took over the helm
of MV Pavlodar when it rammed and damaged the apron of the pier of
Berth No. 4 of the Manila International Port. Their concurrent negligence
was the immediate and proximate cause of the collision between the
vessel and the pier Capt. Gavino, for his negligence in the conduct of
docking maneuvers for the safe berthing of the vessel; and Capt.
Kabankov, for failing to countermand the orders of the harbor pilot and to
take over and steer the vessel himself in the face of imminent danger, as
well as for merely relying on Capt. Gavino during the berthing procedure. 11
On the other hand, in G.R. No. 130150, originally assigned to the Court's
First Division and later transferred to the Third Division. MPA, now as
petitioner in this case, avers that respondent court's errors consisted in
disregarding and misinterpreting Customs Administrative Order No. 15-65
which limits the liability of MPA. Said pilots' association asseverates that it
should not be held solidarily liable with Capt. Gavino who, as held by
respondent court is only a member, not an employee, thereof. There being
no employer-employee relationship, neither can MPA be held liable for any
vicarious liability for the respective exercise of profession by its members
nor be considered a joint tortfeasor as to be held jointly and severally
liable. 12 It further argues that there was erroneous reliance on Customs
Administrative Order No. 15-65 and the constitution and by-laws of MPA,
instead of the provisions of the Civil Code on damages which, being a
substantive law, is higher in category than the aforesaid constitution and
by-laws of a professional organization or an administrative order which
bears no provision classifying the nature of the liability of MPA for the
negligence its member pilots. 13
As for Capt. Gavino, counsel for MPA states that the former had retired
from active pilotage services since July 28, 1994 and has ceased to be a
member of petitioner pilots' association. He is not joined as a petitioner in
this case since his whereabouts are unknown. 14
FESC's comment thereto relied on the competence of the Court of Appeals
in construing provisions of law or administrative orders as bases for
ascertaining the liability of MPA, and expressed full accord with the
appellate court's holding of solidary liability among itself, MPA and Capt.
Gavino. It further avers that the disputed provisions of Customs
Administrative Order No. 15-65 clearly established MPA's solidary
liability. 15

On the other hand, public respondent PPA, likewise through representations

by the Solicitor General, assumes the same supportive stance it took in
G.R. No. 130068 in declaring its total accord with the ruling of the Court of
Appeals that MPA is solidarily liable with Capt. Gavino and FESC for
damages, and in its application to the fullest extent of the provisions of
Customs Administrative Order No. 15-65 in relation to MPA's constitution
and by-laws which spell out the conditions of and govern their respective
liabilities. These provisions are clear and unambiguous as regards MPA's
liability without need for interpretation or construction. Although Customs
Administrative Order No. 15-65 is a mere regulation issued by an
administrative agency pursuant to delegated legislative authority to fix
details to implement the law, it is legally binding and has the same
statutory force as any valid statute. 16
Upon motion 17 by FESC dated April 24, 1998 in G.R. No. 130150, said case
was consolidated with G.R. No. 130068. 18
Prefatorily, on matters of compliance with procedural requirements, it must
be mentioned that the conduct of the respective counsel for FESC and PPA
leaves much to be desired, to the displeasure and disappointment of this
Court.
Sec. 2, Rule 42 of the 1997 Rules of Civil Procedure 19 incorporates the
former Circular No. 28-91 which provided for what has come to be known
as the certification against forum shopping as an additional requisite for
petitions filed with the Supreme Court and the Court of Appeals, aside from
the other requirements contained in pertinent provisions of the Rules of
Court therefor, with the end in view of preventing the filing of multiple
complaints involving the same issues in the Supreme Court, Court of
Appeals or different divisions thereof or any other tribunal or agency.
More particularly, the second paragraph of Section 2, Rule 42 provides:
xxx xxx xxx
The petitioner shall also submit together with the petition a
certification under oath that he has not theretofore
commenced any other action involving the same issues in
the Supreme Court, the Court of Appeals or different
divisions thereof, or any other tribunal or agency; if there
is such other action or proceeding, he must state the
status of the same; and if he should thereafter learn that a
similar action or proceeding has been filed or is pending

before the Supreme Court, the Court of Appeals or

different divisions thereof, or any other tribunal or agency,
he undertakes to promptly inform the aforesaid courts and
other tribunal or agency thereof within five (5) days
therefrom. (Emphasis ours.)
For petitions for review filed before the Supreme Court, Section
4(e), Rule 45 specifically requires that such petition shall contain a
sworn certification against forum shopping as provided in the last
paragraph of Section 2, Rule 42.
The records show that the law firm of Del Rosario and Del Rosario through
its associate, Atty. Herbert A. Tria, is the counsel of record for FESC in both
G.R. No. 130068 and G.R. No. 130150.
G.R. No. 130068, which is assigned to the Court's Second Division,
commenced with the filing by FESC through counsel on August 22, 1997 of
a verified motion for extension of time to file its petition for thirty (30) days
from August 28, 1997 or until September 27, 1997. 20 Said motion
contained the following certification against forum shopping 21 signed by
Atty. Herbert A. Tria as affiant:
CERTIFICATION
AGAINST FORUM SHOPPING
I/we hereby certify that I/we have not commenced any
other action or proceeding involving the same issues in the
Supreme Court, the Court of Appeals, or any other tribunal
or agency; that to the best of my own knowledge, no such
action or proceeding is pending in the Supreme Court, the
Court of Appeals, or any other tribunal or agency; that if
I/we should thereafter learn that a similar action or
proceeding has been filed or is pending before the
Supreme Court, the Court of Appeals, or any other tribunal
or agency, I/we undertake to report that fact within five (5)
days therefrom to this Honorable Court.
This motion having been granted, FESC subsequently filed its
petition on September 26, 1997, this time bearing a "verification
and certification against forum-shopping" executed by one Teodoro
P. Lopez on September 24, 1997, 22 to wit:

VERIFICATION AND CERTIFICATION

AGAINST FORUM SHOPPING
in compliance with Section 4(e), Rule 45 in relation
to Section 2, Rule 42 of the Revised Rules of Civil
Procedure
I, Teodoro P. Lopez, of legal age, after being duly sworn,
depose and state:
1. That I am the Manager, Claims Department of Filsov
Shipping Company, the local agent of petitioner in this
case.
2. That I have caused the preparation of this Petition for
Review on Certiorari.
3. That I have read the same and the allegations therein
contained are true and correct based on the records of this
case.
4. That I certify that petitioner has not commenced any
other action or proceeding involving the same issues in the
Supreme Court or Court of Appeals, or any other tribunal or
agency, that to the best of my own knowledge, no such
action or proceeding is pending in the Supreme Court, the
Court of Appeals or any other tribunal or agency, that if I
should thereafter learn that a similar action or proceeding
has been filed or is pending before the Supreme Court, the
Court of Appeals, or any other tribunal or agency, I
undertake to report the fact within five (5) days therefrom
to this Honorable Court. (Italics supplied for emphasis.)
Reviewing the records, we find that the petition filed by MPA in G.R. No.
130150 then pending with the Third Division was duly filed on August 29,
1997 with a copy thereof furnished on the same date by registered mail to
counsel for FESC. 23 Counsel of record for MPA. Atty. Jesus P. Amparo, in his
verification accompanying said petition dutifully revealed to the Court that

xxx xxx xxx

3. Petitioner has not commenced any other action or

proceeding involving the same issues in this Honorable
Court, the Court of Appeals or different Divisions thereof, or
any other tribunal or agency,but to the best of his
knowledge, there is an action or proceeding pending in this
Honorable Court, entitled Far Eastern Shipping Co.,
Petitioner, vs. Philippine Ports Authority and Court of
Appeals with a Motion for Extension of time to file Petition
For Review by Certiorari filed sometime on August 18,
1987. If undersigned counsel will come to know of any
other pending action or claim filed or pending he
undertakes to report such fact within five (5) days to this
Honorable Court. 24 (Emphasis supplied.)
Inasmuch as MPA's petition in G.R. No. 130150 was posted by registered
mail on August 29, 1997 and taking judicial notice of the average period of
time it takes local mail to reach its destination, by reasonable estimation it
would be fair to conclude that when FESC filed its petition in G.R. No.
130068 on September 26, 1997, it would already have received a copy of
the former and would then have knowledge of the pendency of the other
petition initially filed with the First Division. It was therefore incumbent
upon FESC to inform the Court of that fact through its certification against
forum shopping. For failure to make such disclosure, it would appear that
the aforequoted certification accompanying the petition in G.R. No. 130068
is defective and could have been a ground for dismissal thereof.
Even assuming that FESC had not yet received its copy of MPA's petition at
the time it filed its own petition and executed said certification, its
signatory did state "that if I should thereafter learn that a similar action or
proceeding has been filed or is pending before the Supreme Court, the
Court of Appeals or any other tribunal or agency, I undertake to report the
fact within five (5) days therefrom to this Honorable Court." 25 Scouring the
records page by page in this case, we find that no manifestation
concordant with such undertaking was then or at any other time thereafter
ever filed by FESC nor was there any attempt to bring such matter to the
attention of the Court. Moreover, it cannot feign non-knowledge of the
existence of such other petition because FESC itself filed the motion for
consolidation in G.R. No. 130150 of these two cases on April 24, 1998.
It is disturbing to note that counsel for FESC, the law firm of Del Rosario
and Del Rosario, displays an unprofessional tendency of taking the Rules
for granted, in this instance exemplified by its pro forma compliance
therewith but apparently without full comprehension of and with less than

faithful commitment to its undertakings to this Court in the interest of just,

speedy and orderly administration of court proceedings.
As between the lawyer and the courts, a lawyer owes candor, fairness and
good faith to the court. 26 He is an officer of the court exercising a privilege
which is indispensable in the administration of justice. 27 Candidness,
especially towards the courts, is essential for the expeditious
administration of justice. Courts are entitled to expect only complete
honesty from lawyers appearing and pleading before them. 28 Candor in all
dealings is the very essence of honorable membership in the legal
profession. 29 More specifically, a lawyer is obliged to observe the rules of
procedure and not to misuse them to defeat the ends of justice. 30 It
behooves a lawyer, therefore, to exert every effort and consider it his duty
to assist in the speedy and efficient administration of justice. 31 Being an
officer of the court, a lawyer has a responsibility in the proper
administration of justice. Like the court itself, he is an instrument to
advance its ends the speedy, efficient, impartial, correct and
inexpensive adjudication of cases and the prompt satisfaction of final
judgments. A lawyer should not only help attain these objectives but
should likewise avoid any unethical or improper practices that impede,
obstruct or prevent their realization, charged as he is with the primary task
of assisting in the speedy and efficient administration of justice. 32
Sad to say, the members of said law firm sorely failed to observe their
duties as responsible members of the Bar. Their actuations are indicative of
their predisposition to take lightly the avowed duties of officers of the
Court to promote respect for law and for legal processes. 33 We cannot
allow this state of things to pass judicial muster.
In view of the fact that at around the time these petitions were
commenced, the 1997 Rules of Civil Procedure had just taken effect, the
Court treated infractions of the new Rules then with relative liberality in
evaluating full compliance therewith. Nevertheless, it would do well to
remind all concerned that the penal provisions of Circular No. 28-91 which
remain operative provides, inter alia:
3. Penalties.
xxx xxx xxx

(c) The submission of a false certification under Par. 2 of

the Circular shall likewise constitute contempt of court,
without prejudice to the filing of criminal action against the
guilty party. The lawyer may also be subjected to
disciplinary proceedings.
It must be stressed that the certification against forum shopping ordained
under the Rules is to be executed by the petitioner, and not by counsel.
Obviously it is the petitioner, and not always the counsel whose
professional services have been retained for a particular case, who is in the
best position to know whether he or it actually filed or caused the filing of a
petition in that case. Hence, a certification against forum shopping by
counsel is a defective certification. It is clearly equivalent to noncompliance with the requirement under Section 2, Rule 42 in relation to
Section 4, Rule 45, and constitutes a valid cause for dismissal of the
petition.
Hence, the initial certification appended to the motion for extension of time
to file petition in G.R. No. 130068 executed in behalf of FESC by Atty. Tria is
procedurally deficient. But considering that it was a superfluity at that
stage of the proceeding, it being unnecessary to file such a certification
with a mere motion for extension, we shall disregard such error. Besides,
the certification subsequently executed by Teodoro P. Lopez in behalf of
FESC cures that defect to a certain extent, despite the inaccuracies earlier
pointed out. In the same vein, we shall consider the verification signed in
behalf of MPA by its counsel, Atty. Amparo, in G.R. No. 130150 as
substantial compliance inasmuch as it served the purpose of the Rules of
informing the Court of the pendency of another action or proceeding
involving the same issues.
It bears stressing that procedural rules are instruments in the speedy and
efficient administration of justice. They should be used to achieve such end
and not to derail it. 34
Counsel for PPA did not make matters any better. Despite the fact that,
save for the Solicitor General at the time, the same legal team of the Office
of the Solicitor General (OSG, for short) composed of Assistant Solicitor
General Roman G. Del Rosario and Solicitor Luis F. Simon, with the addition
of Assistant Solicitor General Pio C. Guerrero very much later in the
proceedings, represented PPA throughout the appellate proceedings in
both G.R. No. 130068 and G.R. No. 130150 and was presumably fully
acquainted with the facts and issues of the case, it took the OSG an
inordinately and almost unreasonably long period of time to file its
comment, thus unduly delaying the resolution of these cases. It took

several changes of leadership in the OSG from Silvestre H. Bello III to

Romeo C. dela Cruz and, finally, Ricardo P. Galvez before the comment
in behalf of PPA was finally filed.
In G.R. No. 130068, it took eight (8) motions for extension of time totaling
210 days, a warning that no further extensions shall be granted, and
personal service on the Solicitor General himself of the resolution requiring
the filing of such comment before the OSG indulged the Court with the long
required comment on July 10, 1998. 35This, despite the fact that said office
was required to file its comment way back on November 12, 1997. 36 A
closer scrutiny of the records likewise indicates that petitoner FESC was
not even furnished a copy of said comment as required by Section 5, Rule
42. Instead, a copy thereof was inadvertently furnished to MPA which, from
the point of view of G.R. No. 130068, was a non-party. 37 The OSG fared
slightly better in G.R. No. 130150 in that it took only six (6) extensions, or a
total of 180 days, before the comment was finally filed. 38 And while it
properly furnished petitioner MPA with a copy of its comment, it would
have been more desirable and expedient in this case to have furnished its
therein co-respondent FESC with a copy thereof, if only as a matter of
professional courtesy. 39
This undeniably dilatory disinclination of the OSG to seasonably file
required pleadings constitutes deplorable disservice to the tax-paying
public and can only be categorized as censurable inefficiency on the part
of the government law office. This is most certainly professionally
unbecoming of the OSG.
Another thing that baffles the Court is why the OSG did not take the
inititive of filing a motion for consolidation in either G.R. No. 130068 or G.R.
No. 130150, considering its familiarity with the background of the case and
if only to make its job easier by having to prepare and file only one
comment. It could not have been unaware of the pendency of one or the
other petition because, being counsel for respondent in both cases,
petitioner is required to furnish it with a copy of the petition under pain of
dismissal of the petition for failure otherwise. 40
Besides, in G.R. 130068, it prefaces its discussions thus

Incidentally, the Manila Pilots' Association (MPA), one of the

defendants-appellants in the case before the respondent
Court of Appeals, has taken a separate appeal from the
said decision to this Honorable Court, which was docketed
as G.R. No. 130150 and entitled "Manila Pilots' Association,
Petitioner, versus Philippine Ports Authority and Far Eastern
Shipping Co., Respondents." 41
Similarly, in G.R. No. 130150, it states
Incidentally, respondent Far Eastern Shipping Co. (FESC)
had also taken an appeal from the said decision to this
Honorable Court, docketed as G.R. No. 130068, entitled
"Far Eastern Shipping Co. vs. Court of Appeals and
Philippine Ports Authority." 42
We find here a lackadaisical attitude and complacency on the part of the
OSG in the handling of its cases and an almost reflexive propensity to
move for countless extensions, as if to test the patience of the Court,
before favoring it with the timely submission of required pleadings.
It must be emphasized that the Court can resolve cases only as fast as the
respective parties in a case file the necessary pleadings. The OSG, by
needlessly extending the pendency of these cases through its numerous
motions for extension, came very close to exhausting this Court's
forbearance and has regrettably fallen short of its duties as the People's
Tribune.
The OSG is reminded that just like other members of the Bar, the canons
under the Code of Professional Responsibility apply with equal force on
lawyers in government service in the discharge of their official
tasks. 43These ethical duties are rendered even more exacting as to them
because, as government counsel, they have the added duty to abide by
the policy of the State to promote a high standard of ethics in public
service. 44 Furthermore, it is incumbent upon the OSG, as part of the
government bureaucracy, to perform and discharge its duties with the
highest degree of professionalism, intelligence and skill 45 and to extend
prompt, courteous and adequate service to the public. 46
Now, on the merits of the case. After a judicious examination of the records
of this case, the pleadings filed, and the evidence presented by the parties
in the two petitions, we find no cogent reason to reverse and set aside the
questioned decision. While not entirely a case of first impression, we shall

discuss the issues seriatim and, correlatively by way of a judicial onceover, inasmuch as the matters raised in both petitions beg for validation
and updating of well-worn maritime jurisprudence. Thereby, we shall
write finis to the endless finger-pointing in this shipping mishap which has
been stretched beyond the limits of judicial tolerance.

Sec. 32. Duties and responsibilities of the Pilot or Pilots'

Association. The duties and responsibilities of the Harbor
Pilot shall be as follows:

The Port of Manila is within the Manila Pilotage District which is under
compulsory pilotage pursuant to Section 8, Article III of Philippine Ports
Authority Administrative Order No. 03-85, 47 which provides that:

f) a pilot shall be held responsible for the direction of a

vessel from the time he assumes his work as a pilot thereof
until he leaves it anchored or berthed safely; Provided,
however, that his responsibility shall cease at the moment
the Master neglects or refuses to carry out hisorder.

Sec. 8. Compulsor Pilotage Service. For entering a

harbor and anchoring thereat, or passing through rivers or
straits within a pilotage district, as well as docking and
undocking at any pier/wharf, or shifting from one berth or
another, every vessel engaged in coastwise and foreign
trade shall be under compulsory pilotage. . . .
In case of compulsory pilotage, the respective duties and responsibilities of
the compulsory pilot and the master have been specified by the same
regulation in this wise:
Sec. 11. Control of vessels and liability for damage. On
compulsory pilotage grounds, the Harbor Pilot providing
the service to a vessel shall be responsible for the damage
caused to a vessel or to life and property at ports due to
his negligence or fault. He can only be absolved from
liability if the accident is caused by force majeure or
natural calamities provided he has exercised prudence and
extra diligence to prevent or minimize damage.
The Master shall retain overall command of the vessel even
on pilotage grounds whereby he can countermand or
overrule the order or command of the Harbor Pilot on
beard. In such event, any damage caused to a vessel or to
life and property at ports by reason of the fault or
negligence of the Master shall be the responsibility and
liability of the registered owner of the vessel concerned
without prejudice to recourse against said Master.
Such liability of the owner or Master of the vessel or its
pilots shall be determined by competent authority in
appropriate proceedings in the light of the facts and
circumstances of each particular case.

xxx xxx xxx

Customs Administrative Order No. 15-65 issued twenty years earlier

likewise provided in Chapter I thereof for the responsibilities of pilots:
Par. XXXIX. A Pilot shall be held responsible for the
direction of a vessel from the time he assumes control
thereof until he leaves it anchored free from
shoal: Provided, That his responsibility shall cease at the
moment the master neglects or refuses to carry out his
instructions.
xxx xxx xxx
Par. XLIV. Pilots shall properly and safely secure or
anchor vessels under their control when requested to do so
by the master of such vessels.
I. G.R. No. 130068
Petitioner FESC faults the respondent court with serious error in not holding
MPA and Capt. Gavino solely responsible for the damages cause to the pier.
It avers that since the vessel was under compulsory pilotage at the time
with Capt. Gavino in command and having exclusive control of the vessel
during the docking maneuvers, then the latter should be responsible for
damages caused to the pier. 48 It likewise holds the appellate court in error
for holding that the master of the ship, Capt. Kabankov, did not exercise
the required diligence demanded by the circumstances. 49
We start our discussion of the successive issues bearing in mind the
evidentiary rule in American jurisprudence that there is a presumption of
fault against a moving vessel that strikes a stationary object such as a
dock or navigational aid. In admiralty, this presumption does more than

merely require the ship to go forward and produce some evidence on the
presumptive matter. The moving vessel must show that it was without fault
or that the collision was occasioned by the fault of the stationary object or
was the result of inevitable accident. It has been held that such vessel
must exhaust every reasonable possibility which the circumstances admit
and show that in each, they did all that reasonable care required. 50 In the
absence of sufficient proof in rebuttal, the presumption of fault attaches to
a moving vessel which collides with a fixed object and makes a prima
facie case of fault against the vessel. 51 Logic and experience support this
presumption:
The common sense behind the rule makes the burden a
heavy one. Such accidents simply do not occur in the
ordinary course of things unless the vessel has been
mismanaged in some way. It is nor sufficient for the
respondent to produce witnesses who testify that as soon
as the danger became apparent everything possible was
done to avoid an accident. The question remains, How then
did the collision occur? The answer must be either that, in
spite of the testimony of the witnesses, what was done was
too little or too late or, if not, then the vessel was at fault
for being in a position in which an unavoidable collision
would occur. 52
The task, therefore, in these cases is to pinpoint who was negligent
the master of the ship, the harbor pilot or both.
A pilot, in maritime law, is a person duly qualified, and licensed, to conduct
a vessel into or out of ports, or in certain waters. In a broad sense, the
term "pilot" includes both (1) those whose duty it is to guide vessels into or
out of ports, or in particular waters and (2) those entrusted with the
navigation of vessels on the high seas. 53However, the term "pilot" is more
generally understood as a person taken on board at a particular place for
the purpose of conducting a ship through a river, road or channel, or from
a port. 54
Under English and American authorities, generally speaking, the pilot
supersedes the master for the time being in the command and navigation
of the ship, and his orders must be obeyed in all matters connected with
her navigation. He becomes the master pro hac vice and should give all
directions as to speed, course, stopping and reversing anchoring, towing
and the like. And when a licensed pilot is employed in a place where
pilotage is compulsory, it is his duty to insist on having effective control of
the vessel, or to decline to act as pilot. Under certain systems of foreign

law, the pilot does not take entire charge of the vessel, but is deemed
merely the adviser of the master, who retains command and control of the
navigation even in localities where pilotage is compulsory. 55
It is quite common for states and localities to provide for compulsory
pilotage, and safety laws have been enacted requiring vessels approaching
their ports, with certain exceptions, to take on board pilots duly licensed
under local law. The purpose of these laws is to create a body of seamen
thoroughly acquainted with the harbor, to pilot vessels seeking to enter or
depart, and thus protect life and property from the dangers of
navigation. 56
In line with such established doctrines, Chapter II of Customs
Administrative Order No. 15-65 prescribes the rules for compulsory
pilotage in the covered pilotage districts, among which is the Manila
Pilotage District,
viz.
PARAGRAPH I. Pilotage for entering a harbor and
anchoring thereat, as well as docking and undocking in any
pier or shifting from one berth to another shall be
compulsory, except Government vessels and vessels of
foreign governments entitled to courtesy, and other
vessels engaged solely in river or harbor work, or in a daily
ferry service between ports which shall be exempt from
compulsory pilotage provisions of these
regulations: provided, however, that compulsory pilotage
shall not apply in pilotage districts whose optional pilotage
is allowed under these regulations.
Pursuant thereto, Capt. Gavino was assigned to pilot MV Pavlodar into
Berth 4 of the Manila International Port. Upon assuming such office as
compulsory pilot, Capt. Gavino is held to the universally accepted high
standards of care and diligence required of a pilot, whereby he assumes to
have skill and knowledge in respect to navigation in the particular waters
over which his license extends superior to and more to be trusted than that
of the master. 57A pilot 57 should have a thorough knowledge of general
and local regulations and physical conditions affecting the vessel in his
charge and the waters for which he is licensed, such as a particular harbor
or river.

He is not held to the highest possible degree of skill and care, but must
have and exercise the ordinary skill and care demanded by the
circumstances, and usually shown by an expert in his profession. Under
extraordinary circumstancesm, a pilot must exercise extraordinary care.
In Atlee vs. The Northwesrern Union Packet Company.
spelled out in great detail the duties of a pilot:

59

Court: You have testified before that the

reason why the vessel bumped the pier
was because the anchor was not released
immediately or as soon as you have given
the order. Do you remember having srated
that?

58

Mr. Justice Miller

A Yes, your Honor.

. . . (T)he pilot of a river steamer, like the harbor pilot, is
selected for his personal knowledge of the topography
through which he steers his vessel. In the long course of a
thousand miles in one of these rivers, he must be familiar
with the appearance of the shore on each side of the river
as he goes along. Its banks, towns, its landings, its houses
and trees, are all landmarks by which he steers his vessel.
The compass is of little use to him. He must know where
the navigable channel is, in its relation to all these external
objects, especially in the night. He must also be familiar
with all dangers that are permanently located in the course
of the river, as sand-bars, snags, sunken rocks or trees or
abandoned vessels orbarges. All this he must know and
remember and avoid. To do this, he must be constantly
informed of the changes in the current of the river, of the
sand-bars newly made,of logs or snags, or other objects
newly presented, against which his vessel might be injured.

Q And you gave this order to the captain of

the vessel?
A Yes, your Honor.
Q By that testimony, you are leading the
Court to understand that if that anchor was
released immediately at the time you gave
the order, the incident would not have
happened. Is that correct?
A Yes, sir, but actually it was only a
presumption on my part because there was
a commotion between the officers who are
in charge of the dropping of the anchor and
the captain. I could not understand their
language, it was in Russian, so I presumed
the anchor was not dropped on time.

xxx xxx xxx

It may be said that this is exacting a very high order of
ability in a pilot. But when we consider the value of the
lives and property committed to their control, for in this
they are absolute masters, the high compensation they
receive, the care which Congress has taken to secure by
rigid and frequent examinations and renewal of licenses,
this very class of skill, we do not think we fix the standard
too high.
Tested thereby, we affirm respondent court's finding that Capt. Gavino
failed to measure up to such strict standard of care and diligence required
of pilots in the performance of their duties. Witness this testimony of Capt.
Gavino:

Q So, you are not sure whether it was really

dropped on time or not?
A I am not sure, your Honor.
xxx xxx xxx
Q You are not even sure what could have
caused the incident. What factor could
have caused the incident?
A Well, in this case now, because either the
anchor was not dropped on time or the
anchor did not hold, that was the cause of
the incident, your Honor. 60

It is disconcertingly riddled with too much incertitude and manifests a

seeming indifference for the possibly injurious consequences his
commands as pilot may have. Prudence required that he, as pilot, should
have made sure that his directions were promptly and strictly followed. As
correctly noted by the trial court
Moreover, assuming that he did indeed give the command
to drop the anchor on time, as pilot he should have seen to
it that the order was carried out, and he could have done
this in a number of ways, one of which was to inspect the
bow of the vessel where the anchor mechanism was
installed. Of course, Captain Gavino makes reference to a
commotion among the crew members which supposedly
caused the delay in the execution of the command. This
account was reflected in the pilot's report prepared four
hours later, but Capt. Kavankov, while not admitting
whether or not such a commotion occurred, maintained
that the command to drop anchor was followed
"immediately and precisely." Hence, the Court cannot give
much weight or consideration to this portion of Gavino's
testimony." 61
An act may be negligent if it is done without the competence that a
reasonable person in the position of the actor would recognize as
necessary to prevent it from creating an unreasonable risk of harm to
another. 62 Those who undertake any work calling for special skills are
required not only to exercise reasonable care in what they do but also
possess a standard minimum of special knowledge and ability. 63
Every man who offers his services to another, and is employed, assumes to
exercise in the employment such skills he possesses, with a reasonable
degree of diligence. In all these employments where peculiar skill is
requisite, if one offers his services he is understood as holding himself out
to the public as possessing the degree of skill commonly possessed by
others in the same employment, and if his pretensions are unfounded he
commits a species of fraud on every man who employs him in reliance on
his public profession. 64
Furthermore, there is an obligation on all persons to take the care which,
under ordinary circumstances of the case, a reasonable and prudent man
would take, and the omission of that care constitutes
negligence. 65Generally, the degree of care required is graduated according
to the danger a person or property attendant upon the activity which the
actor pursues or the instrumentality which he uses. The greater the danger

the greater the degree of care required. What is ordinary under

extraordinary of conditions is dictated by those conditions; extraordinary
risk demands extraordinary care. Similarly, the more imminent the danger,
the higher the degree of care. 66
We give our imprimatur to the bases for the conclusion of the Court of
Appeals that Capt. Gavino was indeed negligent in the performance of his
duties:
xxx xxx xxx
. . . As can be gleaned from the logbook, Gavino ordered
the left anchor and two (2) shackles dropped at 8:30
o'clock in the morning. He ordered the engines of the
vessel stopped at 8:31 o'clock. By then,Gavino must have
realized that the anchor did not hit a hard object and was
not clawed so as to reduce the momentum of the vessel. In
point of fact, the vessel continued travelling towards the
pier at the same speed. Gavino failed to react, At 8:32
o'clock, the two (2) tugboats began to push the stern part
of the vessel from the port side bur the momentum of the
vessel was not contained. Still, Gavino did not react. He did
not even order the other anchor and two (2) more shackles
dropped to arrest the momentum of the vessel. Neither did
he order full-astern. It was only at 8:34 o'clock, or four (4)
minutes, after the anchor was dropped that Gavino
reacted. But his reaction was even (haphazard) because
instead of arresting fully the momentum of the vessel with
the help of the tugboats, Gavino ordered merely "halfastern". It took Gavino another minute to order a "fullastern". By then, it was too late. The vessel's momentum
could no longer be arrested and, barely a minute
thereafter, the bow of the vessel hit the apron of the pier.
Patently, Gavino miscalculated. He failed to react and
undertake adequate measures to arrest fully the
momentum of the vessel after the anchor failed to claw to
the seabed. When he reacted, the same was even
(haphazard). Gavino failed to reckon the bulk of the vessel,
its size and its cargo. He erroneously believed that only
one (1) anchor would suffice and even when the anchor
failed to claw into the seabed or against a hard object in
the seabed, Gavino failed to order the other anchor
dropped immediately. His claim that the anchor was
dropped when the vessel was only 1,000 feet from the pier

is but a belated attempt to extricate himself from the

quagmire of his own insouciance and negligence. In sum,
then, Appellants' claim that the incident was caused by
"force majeure" is barren of factual basis.
xxx xxx xxx
The harbor pilots are especially trained for this job. In the
Philippines, one may not be a harbor pilot unless he passed
the required examination and training conducted then by
the Bureau of Custom, under Customs Administrative Order
No. 15-65, now under the Philippine Ports Authority under
PPA Administrative Order 63-85, Paragraph XXXIX of the
Customs Administrative Order No. 15-65 provides that "the
pilot shall be held responsible for the direction of the vessel
from the time he assumes control thereof, until he leaves it
anchored free from shoal: Provided, that his responsibility
shall cease at the.moment the master neglects or refuse(s)
to carry out his instructions." The overall direction
regarding the procedure for docking and undocking the
vessel emanates from the harbor pilot. In the present
recourse, Gavino failed to live up to his responsibilities and
exercise reasonable care or that degree of care required by
the exigencies of the occasion. Failure on his part to
exercise the degree of care demanded by the
circumstances is negligence (Reese versus Philadelphia &
RR Co. 239 US 363, 60 L ed. 384, 57 Am Jur, 2d page
418). 67
This affirms the findings of the trial court regarding Capt. Gavino's
negligence:
This discussion should not however, divert the court from
the fact that negligence in manuevering the vessel must
be attributed to Capt. Senen Gavino. He was an
experienced pilot and by this time should have long
familiarized himself with the depth of the port and the
distance he could keep between the vessel and port in
order to berth safely. 68
The negligence on the part of Capt. Gavino is evident; but Capt. Kabancov
is no less responsible for the allision. His unconcerned lethargy as master
of the ship in the face of troublous exigence constitutes negligence.

While it is indubitable that in exercising his functions a pilot is in sole

command of the ship 69 and supersedes the master for the time being in
the command and navigation of a ship and that he becomes master pro
hac vice of a vessel piloted by him, 70 there is overwhelming authority to
the effect that the master does not surrender his vessel to the pilot and the
pilot is not the master. The master is still in command of the vessel
notwithstanding the presence of a pilot. There are occasions when the
master may and should interfere and even displace the pilot, as when the
pilot is obviously incompetent or intoxicated and the circumstances may
require the master to displace a compulsory pilot because of incompetency
or physical incapacity. If, however, the master does nor observe that a
compulsory pilot is incompetent or physically incapacitated, the master is
justified in relying on the pilot, but not blindly. 71
The master is not wholly absolved from his duties while a pilot is on board
his vessel, and may advise with or offer suggestions to him. He is still in
command of the vessel, except so far as her navigation is concerned, and
must cause the ordinary work of the vessel to be properly carried on and
the usual precaution taken. Thus, in particular, he is bound to see that
there is sufficient watch on deck, and that the men are attentive to their
duties, also that engines are stopped, towlines cast off, and the anchors
clear and ready to go at the pilot's order. 72
A perusal of Capt. Kabankov's testimony makes it apparent that he was
remiss in the discharge of his duties as master of the ship, leaving the
entire docking procedure up to the pilot, instead of maintaining watchful
vigilance over this risky maneuver:
Q Will you please tell us whether you have
the right to intervene in docking of your
ship in the harbor?
A No sir, I have no right to intervene in
time of docking, only in case there is
imminent danger to the vessel and to the
pier.
Q Did you ever intervene during the time
that your ship was being docked by Capt.
Gavino?
A No sir, I did not intervene at the time
when the pilot was docking my ship.

Q Up to the time it was actually docked at

the pier, is that correct?

A You mean the action of Capt. Gavino or

his condition?

A No sir, I did not intervene up to the very

moment when the vessel was docked.

Court:
Q Not the actuation that conform to the
safety maneuver of the ship to the harbor?

xxx xxx xxx

Atty. Del Rosario (to the witness)

A No sir, it was a usual docking.

Q Mr. Witness, what happened, if any, or

was there anything unusual that happened
during the docking?

Q By that statement of yours, you are

leading the court to understand that there
was nothing irregular in the docking of the
ship?

A Yes sir, our ship touched ihe pier and the

pier was damaged.
Court (to the witness)

A Yes sir, during the initial period of the

docking, there was nothing unusual that
happened.

Q When you said touched the pier, are you

leading the court to understand that your
ship bumped the pier?

Q What about in the last portion of the

docking of the ship, was there anything
unusual or abnormal that happened?

A I believe that my vessel only touched the

pier but the impact was very weak.

A None Your Honor, I believe that Capt.

Gavino thought that the anchor could keep
or hold the vessel.

Q Do you know whether the pier was

damaged as a result of that slight or weak
impact?
A Yes sir, after the pier was damaged.
xxx xxx xxx
Q Being most concerned with the safety of
your vessel, in the maneuvering of your
vessel to the port, did you observe
anything irregular in the maneuvering by
Capt. Gavino at the time he was trying to
cause the vessel to be docked at the pier?

Q You want us to understand, Mr. Witness,

that the dropping of the anchor of the
vessel was nor timely?
A I don't know the depth of this port but I
think, if the anchor was dropped earlier and
with more shackles, there could not have
been an incident.
Q So you could not precisely tell the court
that the dropping of the anchor was timery
because you are not well aware of the
seabed, is that correct?
A Yes sir, that is right.

xxx xxx xxx

Q So from the beginning, you were not

competent whether the 2 shackles were
also dropped to hold the ship?

Q Alright, Capt. Kavankov, did you come to

know later whether the anchor held its
ground so much so that the vessel could
not travel?

A No sir, at the beginning, I did not doubt it

because I believe Capt. Gavino to be an
experienced pilot and he should be more
aware as to the depths of the harbor and
the ground and I was confident in his
actions.

A It is difficult for me to say definitely. I

believe that the anchor did not hold the
ship.
Q You mean you don't know whether the
anchor blades stuck to the ground to stop
the ship from further moving?
A Yes sir, it is possible.

xxx xxx xxx

Solicitor Abad (to the witness)

Q What is possible?

Q Now, you were standing with the pilot on

the bridge of the vessel before the inicident
happened, were you not?

A I think, the 2 shackles were not enough

to hold the vessel.

A Yes sir, all the time, I was standing with

the pilot.

Q Did you know that the 2 shackles were

dropped?

Q And so whatever the pilot saw, you could

also see from that point of view?

A Yes sir, I knew that.

A That is right.

Q If you knew that the shackles were not

enough to hold the ship, did you not make
any protest to the pilot?

Q Whatever the piler can read from the

panel of the bridge, you also could read, is
that correct?

A No sir, after the incident, that was my

assumption.

A What is the meaning of panel?

Q Did you come to know later whether that

presumption is correct?
A I still don't know the ground in the harbor
or the depths.

Q All indications necessary for men on the

bridge to be informed of the movements of
the ship?
A That is right.
Q And whatever sound the captain . . .
Capt. Gavino would hear from the bridge,
you could also hear?

A That is right.
Q Now, you said that when the command
to lower the anchor was given, it was
obeyed, is that right?
A This command was executed by the third
mate and boatswain.
Court (to the witness)
Q Mr. Witness, earlier in today's hearing,
you said that you did not intervene with
the duties of the pilot and that, in your
opinion, you can only intervene if the ship
is placed in imminent danger, is that
correct?

pilot in maneuvering the vessel, whose

command will prevail, in case of imminent
danger to the vessel?
A I did nor consider the situation as having
an imminent danger. I believed that the
vessel will dock alongside the pier.
Q You want us to understand that you did
not see an imminent danger to your ship, is
that what you mean?
A Yes sir, up to the very last moment, I
believed that there was no imminent
danger.
Q Because of that, did you ever intervene
in the command of the pilot?

A That is right, I did say that.

Q In your observation before the incident
actually happened, did you observe
whether or not the ship, before the actual
incident, the ship was placed in imminent
danger?
A No sir, I did not observe.
Q By that answer, are you leading the court
to understand that because you did not
intervene and because you believed that it
was your duty to intervene when the vessel
is placed in imminent danger to which you
did not observe any imminent danger
thereof, you have not intervened in any
manner to the command of the pilot?

A Yes sir, I did not intervene because I

believed that the command of the pilot to
be correct.
Solicitor Abad (to the witness)
Q As a captain of M/V Pavlodar, you
consider docking maneuvers a serious
matter, is it not?
A Yes sir, that is right.
Q Since it affects not only the safety of the
port or pier, but also the safety of the
vessel and the cargo, is it not?
A That is right.

A That is right, sir.

Q So that, I assume that you were watching

Capt. Gavino very closely at the time he
was making his commands?

Q Assuminp that you disagreed with the

pilot regarding the step being taken by the

A I was close to him, I was hearing his

command and being executed.

xxx xxx xxx

Q And that you were also alert for any

possible mistakes he might commit in the
maneuvering of the vessel?

Q And so after the anchors were ordered

dropped and they did not take hold of the
seabed, you were alerted that there was
danger already on hand?

A Yes sir, that is right.

Q But at no time during the maneuver did
you issue order contrary to the orders Capt.
Gavino made?
A No sir.
Q So that you were in full accord with all of
Capt. Gavino's orders?
A Yes sir.

A No sir, there was no imminent danger to

the vessel.
Q Do you mean to tell us that even if the
anchor was supposed to take hold of the
bottom and it did not, there was no danger
to the ship?
A Yes sir, because the anchor dragged on
the ground later.

Q Because, otherwise, you would have

issued order that would supersede his own
order?

Q And after a few moments when the

anchor should have taken hold the seabed
bur not done (sic), as you expected, you
already were alerted that there was danger
to the ship, is that correct?

A In that case, I should t,ke him away from

his command or remove the command
from him.

A Yes sir, I was alerted but there was no

danger.

Court (to the witness)

Q And you were alerted that somebody was

wrong?

Q You were in full accord with the steps

being taken by Capt. Gavino because you
relied on his knowledge, on his familiarity
of the seabed and shoals and other
surroundings or conditions under the sea,
is that correct?

A Yes sir, I was alerted.

Q And this alert vou assumed was the
ordinary alertness that you have for normal
docking?

A Yes sir, that is right.

A Yes sir, I mean that it was usual condition

of any man in time of docking to be alert.

Solicitor Abad (to the witness)

Q And that is the same alertness when the

anchor did not hold onto the ground, is that
correct?

xxx xxx xxx

A Yes sir, me and Capt. Gavino (thought)

that the anchor will hold the ground.

Q Since, as you said that you agreed all the

while with the orders of Capt. Gavino, you
also therefore agreed with him in his failure
to take necessary precaution against the
eventuality that the anchor will not hold as
expected?

Q When a pilot is on board a vessel, it is

the piler's command which should be
followed at that moment until the vessel is,
or goes to port or reaches port?

Atty. Del Rosario:

A Yes, your Honor, but it does not take

away from the Captain his prerogative to
countermand the pilot.

May I ask that the question . . .

Q In what way?

Solicitor Abad:

A In any case, which he thinks the pilot is

not maneuvering correctly, the Captain
always has the prerogative to countermand
the pilot's order.

Never mind, I will reform the question.

xxx xxx xxx
Solicitor Abad (to the witness)
Q Is it not a fact that the vessel bumped
the pier?
A That is right, it bumped the pier.
Q For the main reason that the anchor of
the vessel did not hold the ground as
expected?
A Yes sir, that is my opinion.

73

Further, on redirect examination, Capt. Kabankov fortified his apathetic

assessment of the situation:
Q Now, after the anchor was dropped, was
there any point in time that you felt that
the vessel was in imminent danger.
A No, at that time, the vessel was not in
imminent, danger, sir. 74
This cavalier appraisal of the event by Capt. Kabankov is disturbingly
antipodal to Capt. Gavino's anxious assessment of the situation:

Q But insofar as competence, efficiency

and functional knowledee of the seabed
which are vital or decisive in the safety
(sic) bringing of a vessel to the port, he is
not competent?
A Yes, your Honor. That is why they hire a
pilot in an advisory capacity, but still, the
safety of the vessel rest(s) upon the
Captain, the Master of the vessel.
Q In this case, there was not a
disagreement between you and the
Captain of the vessel in the bringing of the
vessel to port?
A No, your Honor.
Court:
May proceed.
Atty. Catris:
In fact, the Master of the vessel testified
here that he was all along in conformity
with the orders you, gave to him, and, as

matter of fact, as he said, he obeyed all

your orders. Can you tell, if in the course of
giving such normal orders for the saf(e)
docking of the MV Pavlodar, do you
remember of any instance that the Master
of the vessel did not obey your command
for the safety docking of the MV Pavlodar?
Atty. del Rosario:
Already answered, he already said yes sir.
Court:
Yes, he has just answered yes sir to the
Court that there was no disagreement
insofar as the bringing of the vessel safely
to the port.
Atty. Catris:
But in this instance of docking of the MV
Pavlodar, do you remember of a time
during the course of the docking that the
MV Pavlodar was in imminent danger of
bumping the pier?
A When we were about more than one
thousand meters from the pier, I think, the
anchor was not holding, so I immediately
ordered to push the bow at a fourth
quarter, at the back of the vessel in order
to swing the bow away from the pier and at
the same time, I ordered for a full astern of
the engine. 75
These conflicting reactions can only imply, at the very least,
unmindful disregard or, worse, neglectful relinquishment of duty by
the shipmaster, tantamount to negligence.
The findings of the trial court on this aspect is noteworthy:

For, while the pilot Gavino may indeed have been charged
with the task of docking the vessel in the berthing space, it
is undisputed that the master of the vessel had the
corresponding duty to countermand any of the orders
made by the pilot, and even maneuver the vessel himself,
in case of imminent danger to the vessel and the port.
In fact, in his testimony, Capt. Kavankov admitted that all
throughour the man(eu)vering procedures he did not notice
anything was going wrong, and even observed that the
order given to drop the anchor was done at the proper
time. He even ventured the opinion that the accident
occurred because the anchor failed to take hold but that
this did not alarm him because.there was still time to drop
a second anchor.
Under normal circumstances, the abovementioned facts
would have caused the master of a vessel to take charge of
the situation and see to the man(eu)vering of the vessel
himself. Instead, Capt. Kavankov chose to rely blindly upon
his pilot, who by this time was proven ill-equipped to cope
with the situation.
xxx xxx xxx
It is apparent that Gavino was negligent but Far Eastern's
employee Capt. Kavankov was no lesss responsible for as
master of the vessel he stood by the pilot during the
man(eu)vering procedures and was privy to every move
the latter made, as well as the vessel's response to each of
the commands. His choice to rely blindly upon the pilot's
skills, to the point that despite being appraised of a notice
of alert he continued to relinquish control of the vessel to
Gavino, shows indubitably that he was not performing his
duties with the diligence required of him and therefore may
be charged with negligence along with defend;int
Gavino. 76
As correctly affirmed by the Court of Appeals
We are in full accord with the findings and disquisitions of
the Court a quo.

In the present recourse, Captain Viktor Kavankov had been

a mariner for thirty-two years before the incident. When
Gavino was (in) the command of the vessel, Kavankov was
beside Gavino, relaying the commands or orders of Gavino
to the crewmembers-officers of the vessel concerned. He
was thus fully aware of the docking maneuvers and
procedure Gavino undertook to dock the vessel.
Irrefragably, Kavankov was fully aware of the bulk and size
of the vessel and its cargo as well as the weight of the
vessel. Kavankov categorically admitted that, when the
anchor and two (2) shackles were dropped to the sea floor,
the claws of the anchor did not hitch on to any hard object
in the seabed. The momentum of the vessel was not
arrested. The use of the two (2) tugboats was insufficient.
The momentum of the vessel, although a little bit arrested,
continued (sic) the vessel going straightforward with its
bow towards the port (Exhibit "A-1 ). There was thus a need
for the vessel to move "full-astern" and to drop the other
anchor with another shackle or two (2), for the vessel to
avoid hitting the pier. Kavankov refused to act even as
Gavino failed to act. Even as Gavino gave mere "halfastern" order, Kavankov supinely stood by. The vessel was
already about twenty (20) meters away from the pier when
Gavino gave the "full-astern" order. Even then, Kavankov
did nothing to prevent the vessel from hitting the pier
simply because he relied on the competence and plan of
Gavino. While the "full-astern'' maneuver momentarily
arrested the momentum of the vessel, it was, by then, too
late. All along, Kavankov stood supinely beside Gavino,
doing nothing but relay the commands of Gavino.
Inscrutably, then, Kavankov was negligent.
xxx xxx xxx
The stark incompetence of Kavankov is competent
evidence to prove the unseaworthiness of the vessel. It has
been held that the incompetence of the navigator, the
master of the vessel or its crew makes the vessel
unseaworthy (Tug Ocean Prince versus United States of
America, 584 F. 2nd, page 1151). Hence, the Appellant
FESC is likewise liable for the damage sustained by the
Appellee.77

We find strong and well-reasoned support in time-tested American

maritime jurisprudence, on which much of our laws and jurisprudence on
the matter are based, for the conclusions of the Court of Appeals adjudging
both Capt. Gavino and Capt. Kabankov negligent.
As early as 1869, the U.S. Supreme Court declared, through Mr. Justice
Swayne, in The Steamship China vs. Walsh, 78 that it is the duty of the
master to interfere in cases of the pilot's intoxication or manifest
incapacity, in cases of danger which he does not foresee, and in all cases
of great necessity. The master has the same power to displace the pilot
that he has to remove any subordinate officer of the vessel, at his
discretion.
In 1895, the U.S. Supreme Court, this time through Mr. Justice Brown,
emphatically ruled that:
Nor are rye satisfied with the conduct of the master in
leaving the pilot in sole charge of the vessel. While the
pilot doubtless supersedes the master for the time being in
the command and navigation of the ship, and his orders
must be obeyed in all matters connected with her
navigation, the master is not wholly absolved from his
duties while the pilot is on board, and may advise with him,
and even displace him in case he is intoxicated or
manifestly incompetent. He is still in command of the
vessel, except so far as her navigation is concerned, and
bound to see that there is a sufficient watch on deck, and
that the men are attentive to their duties.
. . . (N)orwithstanding the pilot has charge, it is the duty of
the master to prevent accident, and not to abandon the
vessel entirely to the pilot; but that there are certain duties
he has to discharge (notwithstanding there is a pilot on
board) for the benefit of the owners. . . . that in well
conducted ships the master does not regard the presence
of a duly licensed pilot in compulsory pilot waters as
freeing him from every, obligation to attend to the safety
of the vessel; but that, while the master sees that his
officers and crew duly attend to the pilot's orders, he
himself is bound to keep a vigilant eye on the navigation of
the vessel, and, when exceptional circumstances exist, not
only to urge upon the pilot to use every precaution, but to
insist upon such being taken. 79 (Italics for emphasis.)

In Jure vs. United Fruit Co., 80 which, like the present petitions, involved
compulsory pilotage, with a similar scenario where at and prior to the time
of injury, the vessel was in the charge of a pilot with the master on the
bridge of the vessel beside said pilot, the court therein ruled:
The authority of the master of a vessel is not in complete
abeyance while a pilot, who is required by law to be
accepted, is in discharge of his functions. . . . It is the duty
of the master to interfere in cases of the pilot's intoxication
or manifest incapacity, in cases of danger which he does
not foresee, and in all cases of great necessity. The master
has the same power to displace the pilot that he has to
remove any subordinate officer of the vessel. He may
exercise it, or not, according to his discretion. There was
evidence to support findings that piaintiff's injury was due
to the negligent operation of the Atenas, and that the
master of that vessel was negligent in failing to take action
to avoid endangering a vessel situated as the City of
Canton was and persons or property thereon.
A phase of the evidence furnished support for the
inferences . . . that he negligently failed to suggest to the
pilot the danger which was disclosed, and means of
avoiding such danger; and that the master's negligence in
failing to give timelt admonition to the pilot proximately
contributed to the injury complained of. We are of opinion
that the evidence mentioned tended to prove conduct of
the pilot, known to the master, giving rise to a case of
danger or great necessity, calling for the intervention of
the master. A master of a vessel is not without fault in
acquiescing in canduct of a pilot which involves apparent
and avoidable danger, whether such danger is to the
vessel upon which the pilot is, or to another vessel, or
persons or property thereon or on shore. (Emphasis ours.)
Still in another case involving a nearly identical setting, the captain of a
vessel alongside the compulsory pilot was deemed to be negligent, since,
in the words of the court, "he was in a position to exercise his superior
authority if he had deemed the speed excessive on the occasion in
question. I think it was clearly negligent of him not to have recognized the
danger to any craft moored at Gravell Dock and that he should have
directed the pilot to reduce his speed as required by the local
governmental regulations. His failure amounted to negligence and renders
the respondent liable." 81 (Emphasis supplied.) Though a compulsory pilot

might be regarded as an independent contractor, he is at all times subject

to the ultimate control of the ship's master. 82
In sum, where a compulsory pilot is in charge of a ship, the master being
required to permit him to navigate it, if the master observes that the pilot
is incompetent or physically incapable, then it is the dury of the master to
refuse to permit the pilot to act. But if no such reasons are present,
then the master is justified in relying upon the pilot, but not blindly. Under
the circumstances of this case, if a situation arose where the master,
exercising that reasonable vigilance which the master of a ship should
exercise, observed, or should have observed, that the pilot was so
navigating the vessel that she was going, or was likely to go, into danger,
and there was in the exercise of reasonable care and vigilance an
opportunity for the master to intervene so as to save the ship from danger,
the master should have acted accordingly. 83 The master of a vessel must
exercise a degree of vigilance commensurate with the circumstances. 84
Inasmuch as the matter of negligence is a question of fact, 85 we defer to
the findings of the trial court, especially as this is affirmed by the Court of
Appeals. 86 But even beyond that, our own evaluation is that Capt.
Kabankov's shared liability is due mainly to the fact that he failed to act
when the perilous situation should have spurred him into quick and
decisive action as master of the ship. In the face of imminent or actual
danger, he did not have to wait for the happenstance to occur before
countermanding or overruling the pilot. By his own admission, Capt.
Kabankov concurred with Capt. Gavino's decisions, and this is precisely the
reason why he decided not to countermand any of the latter's orders.
Inasmuch as both lower courts found Capt. Gavino negligent, by expressing
full agreement therewith Capt. Kabankov was just as negligent as Capt.
Gavino.
In general, a pilot is personally liable for damages caused by his own
negligence or default to the owners of the vessel, and to third parties for
damages sustained in a collision. Such negligence of the pilot in the
performance of duty constitutes a maritime tort. 87 At common law, a
shipowner is not liable for injuries inflicted exclusively by the negligence of
a pilot accepted by a vessel compulsorily. 88 The exemption from liability
for such negligence shall apply if the pilot is actually in charge and solely in
fault. Since, a pilot is responsible only for his own personal negligence, he
cannot be held accountable for damages proximately caused by the
default of others, 89 or, if there be anything which concurred with the fault
of the pilot in producing the accident, the vessel master and owners are
liable.

Since the colliding vessel is prima facie responsible, the burden of proof is
upon the party claiming benefit of the exemption from liability. It must be
shown affirmatively that the pilot was at fault, and that there was no fault
on the part of the officers or crew, which might have been conducive to the
damage. The fact that the law compelled the master to take the pilot does
not exonerate the vessel from liability. The parties who suffer are entitled
to have their remedy against the vessel that occasioned the damage, and
are not under necessity to look to the pilot from whom redress is not
always had for compensation. The owners of the vessel are responsible to
the injured party for the acts of the pilot, and they must be left to recover
the amount as well as they can against him. It cannot be maintained that
the circumstance of having a pilot on board, and acting in conformity to his
directions operate as a discharge of responsibility of the owners. 90 Except
insofar as their liability is limited or exempted by statute, the vessel or her
owner are liable for all damages caused by the negligence or other wrongs
of the owners or those in charge of the vessel. Where the pilot of a vessel
is not a compulsory one in the sense that the owner or master of the
vessel are bound to accept him, but is employed voluntarily, the owners of
the vessel are, all the more, liable for his negligent act. 91
In the United States, the owners of a vessel are not personally liable for the
negligent acts of a compulsory pilot, but by admiralty law, the fault or
negligence of a compulsory pilot is imputable to the vessel and it may be
held liable therefor in rem. Where, however, by the provisions of the
statute the pilot is compulsory only in the sense that his fee must be paid,
and is not in compulsory charge of the vessel, there is no exemption from
liability. Even though the pilot is compulsory, if his negligence was not the
sole cause of the injury, but the negligence of the master or crew
contributed thereto, the owners are liable. 92 But the liability of the ship in
rem does not release the pilot from the consequences of his own
negligence. 93 The rationale for this rule is that the master is not entirely
absolved of responsibility with respect to navigation when a compulsory
pilot is in charge. 94
By way of validation and in light of the aforecited guidepost rulings in
American maritime cases, we declare that our rulings during the early
years of this century in City of Manila vs. Gambe, 95 China Navigation Co.,
Ltd. vs. Vidal,96 and Yap Tica & Co. vs. Anderson, et al. 97 have withstood
the proverbial test of time and remain good and relevant case law to this
day.
City of Manila stands for the doctrine that the pilot who was in command
and complete control of a vessel, and not the owners, must be held
responsible for an accident which was solely the result of the mistake of

the pilot in not giving proper orders, and which did not result from the
failure of the owners to equip the vessel with the most modern and
improved machinery. In China Navigation Co., the pilot deviated from the
ordinary and safe course, without heeding the warnings of the ship captain.
It was this careless deviation that caused the vessel to collide with a
pinnacle rock which, though uncharted, was known to pilots and local
navigators. Obviously, the captain was blameless. It was the negligence of
the pilot alone which was the proximate cause of the collision. The Court
could not but then rule that
The pilot in the case at bar having deviated from the usual
and ordinary course followed by navigators in passing
through the strait in question, without a substantial reason,
was guilty of negligence, and that negligence having been
the proximate cause of the damages, he is liable for such
damages as usually and naturally flow therefrom. . . .
. . . (T)he defendant should have known of the existence
and location of the rock upon which the vessel struck while
under his control and management. . . . .
Consistent with the pronouncements in these two earlier cases, but on a
slightly different tack, the Court in Yap Tico & Co. exonerated the pilot from
liability for the accident where the orders of the pilot in the handling of the
ship were disregarded by the officers and crew of the ship. According to the
Court, a pilot is ". . . responsible for a full knowledge of the channel and the
navigation only so far as he can accomplish it through the officers and
crew of the ship, and I don't see chat he can be held responsible for
damage when the evidence shows, as it does in this case, that the officers
and crew of the ship failed to obey his orders." Nonetheless, it is possible
for a compulsory pilot and the master of the vessel to
be concurrently negligent and thus share the blame for the resulting
damage as joint tortfeasors, 98 but only under the circumstances obtaining
in and demonstrated by the instant petitions.
It may be said, as a general rule, that negligence in order to render a
person liable need not be the sole cause of an injury. It is sufficient that his
negligence, concurring with one or more efficient causes other than
piaintiff's, is the proximate cause of the injury. Accordingly, where several
causes combine to produce injuries, a person is not relieved from liability
because he is responsible for only one of them, it being sufficient that the
negligence of the person charged with injury is an efficient cause without
which the injury would not have resulted to as great an extent, and that
such cause is not attributable to the person injured. It is no defense to one

of the concurrent tortfeasors that the injury would not have resulted from
his negligence alone, without the negligence or wrongful acts of the other
concurrent rortfeasor. 99 Where several causes producing an injury are
concurrent and each is an efficient cause without which the injury would
not have happened, the injury may be attributed to all or any of the causes
and recovery may be had against any or all of the responsible persons
although under the circumstances of the case, it may appear that one of
them was more culpable, and that the duty owed by them to the injured
person was not the same. No actor's negligence ceases to be a proximate
cause merely because it does not exceed the negligence of other actors.
Each wrongdoer is responsible for the entire result and is liable as though
his acts were the sole cause of the injury. 100
There is no contribution between joint tortfeasors whose liability is solidary
since both of them are liable for the total damage. Where the concurrent or
successive negligent acts or omissions of two or more persons, although
acting independently, are in combination the direct and proximate cause of
a single injury to a third person, it is impossible to determine in what
proportion each contributed to the injury and either of them is responsible
for the whole injury. Where their concurring negligence resulted in injury or
damage to a third party, they become joint tortfeasors and are solidarily
liable for the resulting damage under Article 2194 101 of the Civil Code. 102
As for the amount of damages awarded by the trial court, we find the same
to be reasonable. The testimony of Mr. Pascual Barral, witness for PPA, on
cross and redirect examination, appears to be grounded on practical
considerations:
Q So that the cost of the two additional
piles as well as the (two) square meters is
already included in this P1,300,999.77.
A Yes sir, everything. It is (the) final cost
already.
Q For the eight piles.
A Including the reduced areas and other
reductions.
Q (A)nd the two square meters.
A Yes sir.

Q In other words, this P1,300,999.77 does

not represent only for the six piles that was
damaged as well as the corresponding two
piles.
A The area was corresponding, was
increased by almost two in the actual
payment. That was why the contract was
decreased, the real amount was
P1,124,627.40 and the final one is
P1,300,999.77.
Q Yes, but that P1,300,999.77 included the
additional two new posts.
A It was increased.
Q Why was it increased?
A The original was 48 and the actual was
46.
Q Now, the damage was somewhere in
1980. It took place in 1980 and you started
the repair and reconstruction in 1982, that
took almost two years?
A Yes sir.
Q May it not happen that by natural
factors, the existing damage in 1980 was
aggravated for the 2 year period that the
damage portion was not repaired?
A I don't think so because that area was at
once marked and no vehicles can park, it
was closed.
Q Even if or even natural elements cannot
affect the damage?
A Cannot, sir.

xxx xxx xxx

events the ramming of the dock would not have occurred if

proper care was used.
Q You said in the cross-examination that
there were six piles damaged by the
accident, but that in the reconstruction of
the pier, PPA drove and constructed 8 piles.
Will you explain to us why there was
change in the number of piles from the
original number?
A In piers where the piles are withdrawn or
pulled out, you cannot re-drive or drive
piles at the same point. You have to
redesign the driving of the piles. We cannot
drive the piles at the same point where the
piles are broken or damaged or pulled out.
We have to redesign, and you will note that
in the reconstruction, we redesigned such
that it necessitated 8 plies.
Q Why not, why could you not drive the
same number of piles and on the same
spot?
A The original location was already
disturbed. We cannot get required bearing
capacity. The area is already disturbed.
Q Nonetheless, if you drove the original
number of piles, six, on different places,
would not that have sustained the same
load?
A It will not suffice, sir.

103

We quote the findings of the lower court with approval.

With regards to the amount of damages that is to be
awarded to plaintiff, the Court finds that the amount of
P1,053,300.00 is justified. Firstly, the doctrine of res ipsa
loquitur best expounded upon in the landmark case
of Republic vs. Luzon Stevedoring Corp. (21 SCRA 279)
establishes the presumption that in the ordinary course of

Secondly, the various estimates and plans justify the cost

of the port construction price. The new structure
constructed not only replaced the damaged one but was
built of stronger materials to forestall the possibility of any
similar accidents in the future.
The Court inevitably finds that the plaintiff is entitled to an
award of P1,053,300.00 which represents actual damages
caused by the damage to Berth 4 of the Manila
International Port. Co-defendants Far Eastern Shipping,
Capt. Senen Gavino and Manila Pilots Association are
solidariiy liable to pay this amount to plaintiff. 104
The Solicitor General rightly commented that the adjudicated
amount of damages represents the proportional cost of repair and
rehabilitation of the damaged section of the pier. 105
Except insofar as their liability is limited or exempted by statute, the vessel
or her owners are liable for all damages caused by the negligence or other
wrongs of the owners or those in charge of the vessel. As a general rule,
the owners or those in possession and control of a vessel and the vessel
are liable for all natural and proximate damages caused to persons or
property by reason of her negligent management or navigation. 106
FESC's imputation of PPA's failure to provide a safe and reliable berthing
place is obtuse, not only because it appears to be a mere afterthought,
being tardily raised only in this petition, but also because there is no
allegation or evidence on record about Berth No. 4 being unsafe and
unreliable, although perhaps it is a modest pier by international standards.
There was, therefore, no error on the part of the Court of Appeals in
dismissing FESC's counterclaim.
II. G.R. No. 130150
This consolidated case treats on whether the Court of Appeals erred in
holding MPA jointly and solidarily liable with its member pilot. Capt. Gavino,
in the absence of employer-employee relationship and in applying Customs
Administrative Order No. 15-65, as basis for the adjudged solidary liability
of MPA and Capt. Gavino.

The pertinent provisions in Chapter I of Customs Administrative Order No.

15-65 are:
PAR. XXVII. In all pilotage districts where pilotage is
compulsory, there shall be created and maintained by the
pilots or pilots' association, in the manner hereinafter
prescribed, a reserve fund equal to P1,000.00 for each pilot
thereof for the purpose of paying claims for damages to
vessels or property caused through acts or omissions of its
members while rendered in compulsory pilotage service. In
Manila, the reserve fund shall be P2,000.00 for each pilot.

Sec. 17. Pilots' Association The Pilots in a Pilotage

District shall organize themselves into a Pilots' Association
or firm, the members of which shall promulgate their own
By-Laws not in conflict with the rules and regulations
promulgated by the Authority. These By-Laws shall be
submitted not later than one (1) month after the
organization of the Pilots' Association for approval by the
General Manager of the Authority. Subsequent
amendments thereto shall likewise be submitted for
approval.
Sec. 25. Indemnity Insurance and Reserve Fund

PAR. XXVIII. A pilots' association shall not be liable under

these regulations for damage to any vessel, or other
property, resulting from acts of a member of an association
in the actual performance of his duty for a greater amount
than seventy-five per centum (75%) of its prescribed
reserve fund; it being understood that if the association is
held liable for an amount greater than the amount abovestated, the excess shall be paid by the personal funds of
the member concerned.
PAR. XXXI. If a payment is made from the reserve fund of
an association on account of damages caused by a
member thereof, and he shall have been found at fault,
such member shall reimburse the association in the
amount so paid as soon as practicable; and for this
purpose, not less than twenty-five per centum of his
dividends shall be retained each month until the full
amount has been returned to the reserve fund.
PAR. XXXIV. Nothing in these regulations shall relieve
any pilots' association or members thereof, individually or
collectively, from civil responsibility for damages to life or
property resulting from the acts of members in the
performance of their duties.
Correlatively, the relevant provisions of PPA Administrative Order No. 0385, which timery amended this applicable maritime regulation, state:
Art. IV

a) Each Pilots' Association

shall collectively insure its
membership at the rate of
P50,000.00 each member
to cover in whole or in part
any liability arising from
any accident resulting in
damage to vessel(s), port
facilities and other
properties and/or injury to
persons or death which any
member may have caused
in the course of his
performance of pilotage
duties. . . . .
b) The Pilotage Association
shall likewise set up and
maintain a reserve fund
which shall answer for any
part of the liability referred
to in the immediately
preceding paragraph which
is left unsatisfied by the
insurance proceeds, in the
following manner:
1) Each
pilot in the
Association
shall

contribute
from his
own
account an
amount of
P4,000.00
(P6,000.00
in the
Manila
Pilotage
District) to
the reserve
fund. This
fund shall
not be
considered
part of the
capital of
the
Association
nor
charged as
an expense
thereof.
2) Seventyfive percent
(75 %) of
the reserve
fund shall
be set
aside for
use in the
payment of
damages
referred to
above
incurred in
the actual
performanc
e of pilots'
duties and
the excess
shall be

paid from
the
personal
funds of
the
member
concerned.
xxx xxx xxx
5) If
payment is
made from
the reserve
fund of an
Association
on account
of damage
caused by
a member
thereof who
is found at
fault, he
shall
reimburse
the
Association
in the
amount so
paid as
soon as
practicable;
and for this
purpose,
not less
than
twenty-five
percentum
(25 %) of
his
dividend
shall be
retained
each month

until the
full amount
has been
returned to
the reserve
fund.
Thereafter,
the pilot
involved
shall be
entitled to
his full
dividend.
6) When
the
reimburse
ment has
been
completed
as
prescribed
in the
preceding
paragraph,
the ten
percentum
(10%) and
the interest
withheld
from the
shares of
the other
pilots in
accordance
with
paragraph
(4) hereof
shall be
returned to
them.
c) Liability of Pilots'
Association Nothing in

these regulations shall

relieve any Pilots'
Association or members
thereof, individually or
collectively, from any civil,
administrative and/or
criminal responsibility for
damages to life or property
resulting from the
individual acts of its
members as well as those
of the Association's
employees and crew in the
performance of their
duties.
The Court of Appeals, while affirming the trial court's finding of solidary
liability on the part of FESC, MPA and Capt. Gavino, correctly based MPA' s
liability not on the concept of employer-employee relationship between
Capt. Gavino and itself, but on the provisions of Customs Administrative
Order No. 15-65:
The Appellant MPA avers that, contrary to the findings and
disquisitions of the Court a quo, the Appellant Gavino was
not and has never been an employee of the MPA but was
only a member thereof. The Court a quo, it is noteworthy,
did not state the factual basis on which it anchored its
finding that Gavino was the employee of MPA. We are in
accord with MPA's pose. Case law teaches Us that, for an
employer-employee relationship to exist, the confluence of
the following elements must be established: (1) selection
and engagement of employees; (2) the payment of wages;
(3) the power of dismissal; (4) the employer's power to
control the employees with respect to the means and
method by which the work is to be performed (Ruga versus
NLRC, 181 SCRA 266).
xxx xxx xxx
The liability of MPA for damages is not anchored on Article
2180 of the New Civil Code as erroneously found and
declared by the Court a quo but under the provisions of
Customs Administrative Order No. 15-65, supra, in tandem
with the by-laws of the MPA. 107

There being no employer-employee relationship, clearly Article 2180 108 of

the Civil Code is inapplicable since there is no vicarious liability of an
employer to speak of. It is so stated in American law, as follows:
The well established rule is that pilot associations are
immune to vicarious liability for the tort of their members.
They are not the employer of their members and exercise
no control over them once they take the helm of the
vessel. They are also not partnerships because the
members do not function as agents for the association or
for each other. Pilots' associations are also not liable for
negligently assuring the competence of their members
because as professional associations they made no
guarantee of the professional conduct of their members to
the general public. 109
Where under local statutes and regulations, pilot associations lack the
necessary legal incidents of responsibility, they have been held not liable
for damages caused by the default of a member pilot. 110 Whether or not
the members of a pilots' association are in legal effect a copartnership
depends wholly on the powers and duties of the members in relation to
one another under the provisions of the governing statutes and
regulations. The relation of a pilot to his association is not that of a servant
to the master, but of an associate assisting and participating in a common
purpose. Ultimately, the rights and liabilities between a pilots' association
and an individual member depend largely upon the constitution, articles or
by-laws of the association, subject to appropriate government
regulations. 111
No reliance can be placed by MPA on the cited American rulings as to
immunity from liability of a pilots' association in ljght of existing positive
regulation under Philippine law. The Court of Appeals properly applied the
clear and unequivocal provisions of Customs Administrative Order No. 1565. In doing so, it was just being consistent with its finding of the nonexistence of employer-employee relationship between MPA and Capt.
Gavino which precludes the application of Article 2180 of the Civil Code.
True. Customs Administrative Order No. 15-65 does not categorically
characterize or label MPA's liability as solidary in nature. Nevertheless, a
careful reading and proper analysis of the correlated provisions lead to the
conclusion that MPA is solidarily liable for the negligence of its member
pilots, without prejudice to subsequent reimbursement from the pilot at
fault.

Art. 1207 of the Civil Code provides that there is solidary liability only when
the obligation expressly so states, or when the law or the nature of the
obligation requires solidarity. Plainly, Customs Administrative Order No. 1565, which as an implementing rule has the force and effect of law, can
validly provide for solidary liability.We note the Solicitor General's comment
hereon, to wit:
. . . Customs Administrative Order No. 15-65 may be a
mere rule and regulation issued by an administrative
agency pursuant to a delegated authority to fix "the
details" in the execution or enforcement of a policy set out
in the law itself. Nonetheless, said administrative order,
which adds to the procedural or enforcing provisions of
substantive law, is legally binding and receives the same
statutory force upon going into effect. In that sense, it has
equal, not lower, statutory force and effect as a regular
statute passed by the legislature. 112
MPA's prayer for modification of the appellate court's decision under review
by exculpating petitioner MPA "from liability beyond seventy-five percent
(75 %) of Reserve Fund" is unnecessary because the liability of MPA under
Par. XXVIII of Customs Administrative Order No. 15-65 is in fact limited to
seventy-five percent (75 %) of its prescribed reserve fund, any amount of
liability beyond that being for the personal account of the erring pilot and
subject to reimbursement in case of a finding of fault by the member
concerned. This is clarified by the Solicitor General:
Moreover, contrary to petitioner's pretensions, the
provisions of Customs Administrative Order No. 15-65 do
not limit the liability of petitioner as a pilots' association to
an absurdly small amount of seventy-five per centum (75
%) of the member pilots' contribution of P2,000.00 to the
reserve fund. The law speaks of the entire reserve fund
required to be maintained by the pilots' association to
answer (for) whatever liability arising from the tortious act
of its members. And even if the association is held liable
for an amount greater than the reserve fund, the
association may not resist the liability by claiming to be
liable only up to seventy-five per centum (75 %) of the
reserve fund because in such instance it has the right to be
reimbursed by the offending member pilot for the
excess. 113

WHEREFORE, in view of all of the foregoing, the consolidated petitions for

review are DENIED and the assailed decision of the Court of Appeals is
AFFIRMED in toto.
Counsel for FESC, the law firm of Del Rosario and Del Rosario, specifically
its associate, Atty. Herbert A. Tria, is REPRIMANDED and WARNED that a
repetition of the same or similar acts of heedless disregard of its
undertakings under the Rules shall be dealt with more severely.
The original members of the legal team of the Office of the Solicitor
General assigned to this case, namely, Assistant Solicitor General Roman
G. Del Rosario and Solicitor Luis F. Simon, are ADMONISHED and WARNED
that a repetition of the same or similar acts of unduly delaying proceedings
due to delayed filing of required pleadings shall also be dealt with more
stringently.

The Solicitor Genral is DIRECTED to look into the circumstances of this case
and to adopt provident measures to avoid a repetition of this incident and
which would ensure prompt compliance with orders of this Court regarding
the timely filing of requisite pleadings, in the interest of just, speedy and
orderly administration of justice.
Let copies of this decision be spread upon the personal records of the
lawyers named herein in the Office of the Bar Confidant.
SO ORDERED.