Digests, R67 R71

Rule 67 Cases CITY OF MANILA vs. SERRANO FACTS: The City Council of Manila enacted Ordinance No. 7833 authorizing the expropriation of certain properties in Manila’s First District in Tondo. One of the properties sought to be expropriated was that supposedly owned by respondents. Petitioner City of Manila filed an amended complaint for expropriation, docketed as Civil Case No. 94-72282, with the RTC of Manila, against the supposed owners of the lots, which included herein respondents Oscar, Felicitas, Jose, Benjamin, Estelita, Leonora, Adelaida, all surnamed Serrano. Respondents filed a consolidated answer, in which they alleged that their mother, the late Demetria De Guia, had acquired Lot 1C from Lee Kian Hui; that they had been the bona fide occupants of the said parcel of land for more than 40 years; that the expropriation of Lot 1-C would result in their dislocation, it being the only residential land left to them by their deceased mother; and that the said lot was exempt from expropriation because dividing the said parcel of land among them would entitle each of them to only about 50 square meters of land. Respondents, therefore, prayed that judgment be rendered declaring Lot 1-C exempt from expropriation and ordering the cancellation of the notice annotated on the back of TCT No. 226048, regarding the pendency of Civil Case No. 94-72282 for eminent domain filed by petitioner. Upon motion by petitioner, the trial court issued an order, dated October 9, 1998, directing petitioner to deposit the amount of P1,825,241.00 equivalent to the assessed value of the properties. After petitioner had made the deposit, the trial court issued another order, dated December 15, 1998, directing the issuance of a writ of possession in favor of petitioner. Respondents filed a petition for certiorari with the Court of Appeals, alleging that the expropriation of Lot 1-C would render respondents, who are actual occupants thereof, landless; that Lot 1-C is exempt from expropriation because R.A. No. 7279 provides

that properties consisting of residential lands not exceeding 300 square meters in highly urbanized cities are exempt from expropriation; that respondents would only receive around 49 square meters each after the partition of Lot 1-C which consists of only 343.10 square meters; and that R.A. No. 7279 was not meant to deprive an owner of the entire residential land but only that in excess of 300 square meters. On November 16, 1999, the Court of Appeals rendered a decision holding that Lot 1-C is not exempt from expropriation because it undeniably exceeds 300 square meters which is no longer considered a small property within the framework of R.A. No. 7279. However, it held that in accordance with the ruling in Filstream International Inc. v. Court of Appeals, the other modes of acquisition of lands enumerated in §§9-10 of the law must first be tried by the city government before it can resort to expropriation. As petitioner failed to show that it had done so, the Court of Appeals gave judgment for respondents and enjoined petitioner from expropriating Lot 1-C. ISSUE: WON the CA erred in concluding that the Order of the RTC which authorizes the immediate entry of the City as the expropriating agency into the property sought to be expropriated upon the deposit thereof as tantamount to condemnation of the property. RULING: YES. Rule 67, §2 provides: Upon the filing of the complaint or at any time thereafter and after due notice to the defendant, the plaintiff shall have the right to take or enter upon the possession of the real property involved if he deposits with the authorized government depositary an amount equivalent to the assessed value of the property for purposes of taxation to be held by such bank subject to the orders of the court. After such deposit is made the court shall order the sheriff or other proper officer to forthwith place the plaintiff in possession of the property involved and promptly submit a report thereof to the court with service of

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copies to the parties. Thus, a writ of execution may be issued by a court upon the filing by the government of a complaint for expropriation sufficient in form and substance and upon deposit made by the government of the amount equivalent to the assessed value of the property subject to expropriation. Upon compliance with these requirements, the issuance of the writ of possession becomes ministerial. In this case, these requirements were satisfied and, therefore, it became the ministerial duty of the trial court to issue the writ of possession. The Court of Appeals, however, ruled that petitioner failed to comply with the requirements laid down in §§9-10 of R.A. No. 7279 and reiterated in the Filstream ruling. This is error. The ruling in Filstream was necessitated because an order of condemnation had already been issued by the trial court in that case. Thus, the judgment in that case had already become final. In this case, the trial court has not gone beyond the issuance of a writ of possession. Hearing is still to be held to determine whether or not petitioner indeed complied with the requirements provided in R.A. No. 7279. It is, therefore, premature at this stage of the proceedings to find that petitioner resorted to expropriation without first trying the other modes of acquisition enumerated in §10 of the law. Expropriation proceedings consists of two stages: first, condemnation of the property after it is determined that its acquisition will be for a public purpose or public use and, second, the determination of just compensation to be paid for the taking of private property to be made by the court with the assistance of not more than three commissioners. NATIONAL POWER CORPORATION, petitioner, vs. COURT OF APPEALS and ANTONINO POBRE, respondents. FACTS Antonio Pobre owns 68,969 square-meter land ("Property") located in Barangay Bano, Municipality of Tiwi, Albay which he developed into a resort-subdivision, Tiwi

Hot Spring Resorts Subdivision. When the Commission on Volcanology certified that thermal mineral water and steam, which were suitable for domestic use and potentially for commercial or industrial use, were present beneath the Property, National Power Corporation (NAPOCOR), began initiating two expropriation complaints on the said Property. The first expropriation complaint was granted by the court. During its pendency however, NPC began drilling operations and construction of steam wells. Said procedures produced waste materials which NPC dumped beyond the site agreed upon by NPC with Pobre. The dumping of waste materials altered the topography of some portions of the Property. NPC did not act on Pobre's complaints and NPC continued with its dumping. In the meantime, the second appropriation proceedings was filed by NPC to acquire an additional 5,554 square meters of the Property. Disturbed by what NPC did with his propery, Pobre filed a complaint for damages. Surprisingly, Napocor withdrew its complaint for expropriation by filing a motion to dismiss, five years after filing the second expropriation complaint, on the ground that NPC had found an alternative site and that NPC had already abandoned in 1981 the project within the Property due to Pobre's opposition. The trial court granted NPC’s motion dismiss but allowed Pobre to proceed with his complaint for damages. Despite the opposition of NPC, the trial court ruled in favor of Pobre and ordered NPC to pay P3,448,450.00 as damages. On appeal, the CA affirmed the assailed decision. Hence the present appeal. NPC argued that the complaint for damages filed by Pobre should be dismissed because of the dismissal of the second expropriation proceedings. ISSUE: WON the motion to dismiss filed by Napocor in order to withdraw its complaint for expropriation has rendered the complaint for damages filed against it by Pobre, nugatory. HELD: NO. In expropriation cases, there is no such thing as the plaintiff's matter of right to dismiss the complaint precisely because the landowner may have already suffered damages at the start of the taking. The plaintiff's right in expropriation cases to dismiss the complaint has always been

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subject to court approval and to certain conditions. The exceptional right that Section 1, Rule 17 of the 1964 Rules of Court conferred on the plaintiff must be understood to have applied only to other civil actions. The 1997 Rules of Civil Procedure abrogated this exceptional right. The power of eminent domain is subject to limitations. A landowner cannot be deprived of his right over his land until expropriation proceedings are instituted in court.30 The court must then see to it that the taking is for public use, there is payment of just compensation and there is due process of law. If the propriety of the taking of private property through eminent domain is subject to judicial scrutiny, the dismissal of the complaint must also pass judicial inquiry because private rights may have suffered in the meantime. The dismissal, withdrawal or abandonment of the expropriation case cannot be made arbitrarily. If it appears to the court that the expropriation is not for some public use, then it becomes the duty of the court to dismiss the action.33 However, when the defendant claims that his land suffered damage because of the expropriation, the dismissal of the action should not foreclose the defendant's right to have his damages ascertained either in the same case or in a separate action. Thus, NPC's theory that the dismissal of its complaint carried with it the dismissal of Pobre's claim for damages is baseless. There is nothing in Rule 67 of the 1964 Rules of Court that provided for the dismissal of the defendant's claim for damages, upon the dismissal of the expropriation case. Case law holds that in the event of dismissal of the expropriation case, the claim for damages may be made either in a separate or in the same action, for all damages occasioned by the institution of the expropriation case. The dismissal of the complaint can be made under certain conditions, such as the reservation of the defendant's right to recover damages either in the same or in another action. The trial court in this case reserved Pobre's right to prove his claim in the same case, a reservation that has become final due to NPC's own fault. We must correct NPC's claim that it filed the notice of dismissal just "shortly" after it had filed the complaint for expropriation. While NPC had intimated several times to the trial court its desire to dismiss the expropriation case it filed on 5 September 1979, it was only on 2 January 1985 that

NPC filed its notice of dismissal. It took NPC more than five years to actually file the notice of dismissal. Five years is definitely not a short period of time. NPC obviously dilly-dallied in filing its notice of dismissal while NPC meanwhile burdened Pobre's property rights. Asia’s Emerging Dragon Corp. vs. DOTC ( G.R. No. 169914) DOTC vs. C.A. and SalacnibBaternia (G.R. No. 174166) Expropriation Facts: This is a consolidated case, but in view of the topic of expropriation we focus more in the case of DOTC vs. SalacnibBaternia. In order to better appreciate the case we must first discuss the facts and rulings in the case ofAgan andGingoyon. In 1995 Asia’s Emerging Dragon (AEDC ),( composed of the 6 most influential businessman in the Philippines mainly John Gokongwei, Lucio Tan, Henry Sy, Andrew Gotianun, George Ty and Alfonso Yuchengco.,) – submitted an unsolicited proposal to the Government through the DOTC for the development of NAIA III under a build-operate-and transfer-arrangement pursuant to RA 6957 as amended by RA 7718. Wherefore the proposal was indeed approved by the Government. Biddings were held, in which in the end the Project was awarded to PIATCO. Objections were raised by AEDC but in the end the Government justified the award to PIATCO mainly because AEDC was not able to match the bid of PIATCO. In 2002 the Build-operate-and transfer-arrangement (BOT) between the GOvt. and PIATCO was questioned in the case of Agan. Wherefore the court ruled among others that, in view of anomalies in awarding PIATCO the BOT , the contract/ award (BOT) was declared null and void. However the court ruled that it was not unmindful of the reality that the structures comprising the NAIA III facility are almost complete and that the funds have been spent by PIATCO in their construction. For the Government to take over said facility, it has to compensate respondent PIATCO as builder of the said structures. The compensation must be just and accordance with law and equity for the government can not unjustly enriched itself at the expense of PIATCO and its investors. The abovementioned pronouncement of the Court in Agan gave rise to the petition in the GIngoyan case. The facts of

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which are as follows .After the promulgation of the ruling in Agan case, NAIA III was still in the possession of PIATCO, despite the avowed intent of the Government to put the airport terminal into immediate operation. Whereby the Govt. and PIATCO entered into several rounds of negotiation and even appeared before arbitral proceedings before International Chamber of Commerce International Court of Arbitration. Then on, Dec. 21, 2004 the Govt filed a complaint for expropriation with the Pasay RTC. The Govt seeks the issuance of a writ of possession authorizing immediate possession of NAIA III, it also declared that it had deposited the amount of 3 Billion in cash with the Land Bank, representing the NAIA 3 terminal assessed value for tax purposes. The RTC through Judge Gingoyonissued in the same day the Writ of Possession prayed for by the Government citing the case of Manila vs. Serrano that the RTC had the ministerial duty to issue the writ of possession upon filing of a complaint for expropriation sufficient in form and substance, and upon deposit made by the Government of the amount equivalent to assessed value of the property subject for expropriation. However, on Jan 4. 2005, the RTC issued another order – the assailed order in this case of Gingoyon- to supplement its earlier order dated Dec. 21, 2004. The RTC noted that the first order was issued pursuant to Sec. 2, Rule 67 of the Rules of Court. However, it was observed that R.A.8974, had amended Rule 67 in many respects. That there are at least two crucial differences between the respective procedures under RA 8974 and Rule 67. Under the Statute the Govt. is required to make immediate payment to the property owner upon filing of the complaint to be entitled to a writ of possession, whereas in Rule 67, the Govt. is required only to make an initial deposit with an authorized government depositary. Moreover Rule 67 prescribes that the initial deposit be equivalent to the assessed value of the property for purposes of Tax, unlike in RA 8974 which provides, as the relevant standard for initial compensation, the market value of the property as stated in the tax declarations or the current relevant zonal valuation of the BIR, whichever is higher, and the value of the improvements and/or structure using the replacement cost method. The Govt. in this case of GiNgoyon questioned the above ruling.

The Supreme Court held the validity of the RTC’s ruling. It held among others that 1. RA 8947 applies in this case, particularly insofar as it requires the immediate payment by the Govt. of at least the proferred value of the NAIA III facilities to PIATCO and provides certain valuation standard method for the determination of just compensation. 2. That in applying RA 8974, the implementation of Writ of Possession in favour of the Govt over NAIA is held in abeyance until PIATCO is directly paid the amount of 3 Billion pesos, representing the proferred value of NAIA III 3. The Govt. shall pay the just compensation fixed in the decision of the trial court to PIATCO immediately upon the finality of said decision. Finally we tackle the facts of the case of Republic vs. CA and Baterina. Congressman Baterina, together with other member of the Lower House filed a petition for Prohibition in Intervention with application for TRO. Baterina, et. al believes that the Govt. need not file expropriation proceedings to gain possession if NAIA 3 and that PIATCO is not entitled to just compensation, arguing that PIATCO does not own NAIA 3 because BOT contract do not vest ownership. That the land in which NAIA 3 is situated is owned by the Government. Issue:In essence, Baterina is opposing the expropriation proceedings on the ground that NAIA 3 is already a public property. Hence PIATCO is not entitled to just compensation for NAIA 3. HELD: PIATCO is entitled to just compensation and that the expropriation proceedings commenced by the Government was proper and valid.. The Government has chosen to resort to expropriation, a remedy available under the law, which has the added benefit of an integrated process for the determination of just compensation and the payment thereof to PIATCO. We appreciate that the case at bar is a highly unusual case, whereby the Government seeks to expropriated a building complex constructed on land which the State already owns. The right of eminent domain extends to personal property and real property, and the NAIA 3 structures, adhered as they are to the soil, are considered real property. The public purpose for the expropriation is also beyond dispute. It should also be noted that Section 1 of Rule 67 recognizes the possibility that the property sought to

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be expropriated may be titled in the name of the Republic of the Philippines, although occupied by private individuals, and in such case an averment to that effect should be made in the complaint. The instant expropriation complaint did aver that the NAIA 3 complex “stands on a parcel of land owned by the Bases Conversion Development Authority, another agency of the Republic”. Admittedly, eminent domain is not the sole judicial recourse by which the government may have acquired the NAIA 3 facilities while satisfying the requisites in the order held by the SC in the Case of Agan. Eminent Domain though may be the most effective, as well as the speediest means by which such goals may be accomplished. Not only does it enable immediate possession after satisfaction of the requisites under the law, it also has a builtin procedure through which just compensation may be ascertained. Thus, there should be no question as to the propriety of eminent domain proceedings in this case. Rule 68 Cases Unionbank v. CA Facts: A real estate mortgage was executed by Spouses Leopoldo and Jessica Dario in favor of Unionbank, as security for a loan. For non-payment of the principal obligation, Unionbank extrajudicially foreclosed the property mortgaged and sold the same at public auction, with itself posting the highest bid. One week before the one-year redemption period expired, private respondents Reynaldo and Fermina Dario filed a complaint against Unionbank for annulment of sale and real estate mortgage reconveyance. However, the complaint was dismissed because of procedural error in filing the complaint. While there is a pending motion for reconsideration and without informing the private respondents, Unionbank consolidated its title over the foreclosed property. Private respondents maintain that Unionbank 's consolidation of the title in its name was in bad faith, thus void ab initio. Petitioner claimed that it was a mortgagee in good faith and for value with a right to consolidate ownership over the foreclosed

property with the redemption period having expired and there having been no redemptioners. Issue: Whether the consolidation of title in Unionbank 's name proper. Held: Unionbank 's consolidation of title over the property was proper, though precipitate. In real estate mortgage, when the principal obligation is not paid when due, the mortgagee has the right to foreclose the mortgage and to have the property seized and sold with a view to applying the proceeds to the payment of the principal obligation. Foreclosure may be effected either judicially or extrajudicially. In a public bidding during extra-judicial foreclosure, the creditor —mortgagee, trustee, or other person authorized to act for the creditor may participate and purchase the mortgaged property as any other bidder. Thereafter the mortgagor has one year within which to redeem the property from and after registration of sale with the Register of Deeds. In case of nonredemption, the purchaser at foreclosure sale shall file with the Register of Deeds, either a final deed of sale executed by the person authorized by virtue of the power of attorney embodied in the deed or mortgage, or his sworn statement attesting to the fact of non-redemption; whereupon, the Register of Deeds Shall issue a new certificate of title in favor of the purchaser after the owner's duplicate of the certificate has been previously delivered and canceled. Thus, upon failure to redeem foreclosed realty, consolidation of title becomes a matter of right on the part of the auction buyer, and the issuance of a certificate of title in favor of the purchaser becomes ministerial upon the Register of Deeds.

Ardiente v. Provincial Sheriff; (436 SCRA 655) Facts: To secure the payment of the loan, the Ardientes executed in favor of the Peninsula Development Bank a Real Estate Mortgage. When they failed to settle their obligation, the bank extra-judicially

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foreclosed the property and sold in a public auction to the bank as the highest bidder. Later, the Ardientes were notified by the bank that they have one year to redeem the property. Two days before the period to redeem the foreclosed mortgage expired spouses Ardiente filed a complaint against the bank, the provincial Sheriff of Quezon, and the Register of deeds of Quezon, for Annulment of Auction Sale with Preliminary Injunction and Damages, claiming that the requisite of notifying the mortgagors of the intended extra-judicial foreclosure sale was not duly complied with. The trial court, noting the absence of documentary evidence showing strict compliance with the statutory requirements on publication of notice of extra-judicial foreclosure of mortgage, declared the extra-judicial foreclosure and the sale of the mortgaged properties null and void. However, CA reversed the decision of the trial court after finding the argument of the defendant appellants bank, et al. that the lack of required notice and publication of the extra judicial foreclosure of mortgage was not averred in the complaint, hence, cannot be the basis of adverse judgment. CA held that the case of Tambunting v. Court of Appeals, relied upon by the trial court, that the presumption of compliance with official duty is rebutted by the failure to present proof of posting and publication of the notice of sale, such may be applied only when these omissions are alleged and raised by the party in the complaint. Issue: Whether the extrajudicial foreclosure sale should be declared null and void for failure of the bank to aver in its petition the Sheriffs Certification of Posting and the newspaper where the notice was published as well as the publisher’s affidavits. Held: The Court is not persuaded. With respect to petitioners’ allegations in their Complaint, clearly, they were questioning the validity of the extra-judicial foreclosure of the mortgage on the basis of lack of notice to them as mortgagors. It is settled that personal notice to the mortgagor in extra-judicial foreclosure proceedings is not necessary, hence, not a ground to set aside the foreclosure sale.

The issue of lack of publication of the notice of foreclosure of the mortgage was raised only on appeal. Petitioner does not represent that he directly attacked in his complaint the validity of the foreclosure because of such lack of notice. Petitioner presented no evidence before the trial court to prove the absence of publication of the notice despite the fact that private respondents, in their Answer, squarely pleaded as a defense the foreclosure sale and petitioner’s receipt of the "notice of the sale which was published in a newspaper of general circulation." That the lack of publication of the notice of foreclosure was never raised in issue by petitioner and that it is not within the issues framed by the parties in the trial court are then too obvious. BPI FAMILY SAVINGS BANK, INC v. SPS. JANUARIO ANTONIO VELOSO AND NATIVIDAD VELOSO FACTS:Spouses Velose obtained a loan in the amount of P1.3M from Family Bank and Trust Company secured by a deed of mortgage over three parcels of land, with improvements, registered in their names. They likewise executed a promissory note. However, they failed to pay the installment amounts of the loan hence their properties were foreclosed and was sold to Family Bank and Trust Company as the highest bidder in the auction sale for P2,782,554.66. Later, Family Bank and Trust Company assigned its rights on the said properties in favor of BPI Family Bank, Inc. To effect the transfer of title, the certificate of sale was registered in the Register of Deeds of QC. Acting on the matter, respondents offered to redeem the properties for P1,872,935. This was, however, rejected by petitioner. Respondent thereafter filed a complaint for annulment of foreclosure with consignation and prayer for damages before RTC Branch 94 of QC where he was allowed to deposit with said court the sum of P1,500,000 representing the redemption price. In the meantime, BPI was able to obtain writ of possession from Branch 76 of said court. Based on this decision, respondent filed a petition for certiorari with prayer for preliminary injunction with the CA. The latter initially granted the prayer for

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injunction but later on lifted said injunction when it finally resolved the issue of possession in favor of BPI. Respondent went to the Supreme Court via petition for review which affirmed BPI’s right to possess the properties. Pursuant to the said decision, on December 16, 1992, upon motion of respondents and despite the opposition of petitioner, Branch 94 ordered the release of P1,400,000 of the consigned amount to respondents, with the balance of P100,000 to take the place of the injunction bond to answer for whatever damages petitioner might suffer because of the issuance of the preliminary injunction (previously issued and later lifted) in favor of respondents. After 10 years, Branch 94 finally decided in favor of the validity of the foreclosure proceedings but allowed the respondents to redeem the properties at P2.14M. From this decision BPI appealed to the CA which affirmed the trial court’s decision with modification that the redemption price should be at P2,678,639.80. Hence this petition. It was the contention of BPI that the decision of the CA in granting respondent’s right to redeem at P2,678,639.80 was in violation of the earlier ruling by the Supreme Court. ISSUE: WON the spouses have complied with all the requirements for redemption in order to obtain a favorable ruling from the Court of Appeals.

HELD: NO. Bona fide redemption necessarily implies a reasonable and valid tender of the entire repurchase price, otherwise the rule on the redemption period fixed by law can easily be circumvented. As explained by this Court in Basbas vs. Entena: x x x the existence of the right of redemption operates to depress the market value of the land until the period expires, and to render that period indefinite by permitting the tenant to file a suit for redemption, with either party unable to foresee when final judgment will terminate the action, would render nugatory the period of two years fixed by the statute for making the redemption and

virtually paralyze any efforts of the landowner to realize the value of his land. No buyer can be expected to acquire it without any certainty as to the amount for which it may be redeemed, so that he can recover at least his investment in case of redemption. In the meantime, the landowner’s needs and obligations cannot be met. It is doubtful if any such result was intended by the statute, absent clear wording to that effect. And in In Bodiongan vs. Court of Appeals,the higher court clearly stated what composes the redemption price: In order to effect a redemption, the judgment debtor must pay the purchaser the redemption price composed of the following: (1) the price which the purchaser paid for the property; (2) interest of 1% per month on the purchase price; (3) the amount of any assessments or taxes which the purchaser may have paid on the property after the purchase; and (4) interest of 1% per month on such assessments and taxes x x x. In this case, the offer by respondents on July 24, 1986 to redeem the foreclosed properties for P1,872,935 and the subsequent consignation in court of P1,500,000 on August 27, 1986, while made within the period of redemption, was ineffective since the amount offered and actually consigned not only did not include the interest but was in fact also way below the P2,782,554.66 paid by the highest bidder/purchaser of the properties during the auction sale. Furthermore, Article 1616 of the Civil Code of the Philippines provides: The vendor cannot avail himself of the right to repurchase without returning to the vendee the price of the sale x x x. It is not difficult to understand why the redemption price should either be fully offered in legal tender or else validly consigned in court. Only by such means can the auction winner be assured that the offer to redeem is being made in good faith. Whether or not respondents were diligent 7

in asserting their willingness to pay is irrelevant. Redemption within the period allowed by law is not a matter of intent but a question of payment or valid tender of the full redemption price within said period The law granted respondents the right of redemption. But in so granting that right, the law intended that their offer to redeem be valid and effective, accompanied by an actual tender of the redemption price. Fixing a definite term within which the property should be redeemed is meant to avoid prolonged economic uncertainty over the ownership of the thing sold.

The disposition of the instant case in the trial court unnecessarily dragged for almost a decade. Now, it is on its 18th year and still respondents have not tendered the full redemption price. Nor have they consigned the full amount, if only to prove their willingness and ability to pay. This would have evidenced their good faith. Their offer was not a legal and effective exercise of the right of redemption contemplated by law, hence, refusal of the offer by petitioner was completely justified.

subject property and also contained provisions wherein the parties admitted knowledge of the fact that their father mortgaged the subject property to the Bank and that they intended to redeem the same at the soonest possible time. Three years after the execution of the Extrajudicial Settlement, herein respondents bought the subject property from the Bank. Meanwhile, petitioner continued possession of the subject lot. Respondents filed a Complaint for Recovery of Possession and Damages against petitioner and RTC rendered a decision ordering the plaintiffs to execute a Deed of Sale in favor of the defendant, the one-third share of the property in question, presently possessed by him. The RTC held that the right of petitioner to purchase from the respondents his share in the disputed property was recognized by the provisions of the Extrajudicial Settlement of Estate, which the parties had executed before the respondents bought the subject lot from the Bank. Respondents appealed to the CA. CA reveresed decision of RTC.

CELESTINO BALUS vs. SATURNINO BALUS

ISSUE: WON co-ownership between petitioner and respondents persisted even after the lot was purchased by the Bank and even after it was eventually bought by the Respondents from the Bank.

FACTS: Herein petitioner and respondents are the children of the spouses Rufo and Sebastiana Balus. Sebastiana died on September 6, 1978, while Rufo died on July 6, 1984. On January 3, 1979, Rufo mortgaged a parcel of land, which he owns, as security for a loan he obtained from the Rural Bank of Maigo, Lanao del Norte (Bank). Rufo failed to pay his loan. As a result, the mortgaged property was foreclosed and was subsequently sold to the Bank as the sole bidder at a public auction held for that purpose. On November 20, 1981, a Certificate of Salewas executed by the sheriff in favor of the Bank. The property was not redeemed within the period allowed by law. More than two years after the auction, or on January 25, 1984, the sheriff executed a Definite Deed of Sale in the Bank’s favor. Thereafter, a new title was issued in the name of the Bank. On October 10, 1989, herein petitioner and respondents executed an Extrajudicial Settlement of Estate adjudicating to each of them a specific one-third portion of the

Held: NO. It bears to emphasize that there is no dispute with respect to the fact that the subject property was exclusively owned by petitioner and respondents’ father, Rufo, at the time that it was mortgaged in 1979. In the present case, since Rufo lost ownership of the subject property during his lifetime, it only follows that at the time of his death, the disputed parcel of land no longer formed part of his estate to which his heirs may lay claim. Stated differently, petitioner and respondents never inherited the subject lot from their father. There is nothing in the subject Extrajudicial Settlement to indicate any express stipulation for petitioner and respondents to continue with their supposed coownership of the contested lot. On the contrary, a plain reading of the provisions of the Extrajudicial Settlement would not, in any way, support petitioner’s contention that it was his and his sibling’s intention to buy the subject property from the Bank and continue what they believed to be coownership thereof. It is a cardinal rule in the interpretation of contracts that the

Rule 69 Cases

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intention of the parties shall be accorded primordial consideration. There is no coownership to talk about and no property to partition, as the disputed lot never formed part of the estate of their deceased father. Furthermore, petitioner’s contention that he and his siblings intended to continue their supposed co-ownership of the subject property contradicts the provisions of the subject Extrajudicial Settlement where they clearly manifested their intention of having the subject property divided or partitioned by assigning to each of the petitioner and respondents a specific 1/3 portion of the same. Partition calls for the segregation and conveyance of a determinate portion of the property owned in common. It seeks a severance of the individual interests of each co-owner, vesting in each of them a sole estate in a specific property and giving each one a right to enjoy his estate without supervision or interference from the other. In other words, the purpose of partition is to put an end to co-ownership, an objective which negates petitioner’s claims in the present case. Feliciano vs. Canoza Facts: Antonio Feliciano passed away and left behind a parcel of land. Leona, Maria, Pedro and Salina Feliciano declared themselves to be Antonio’s only surviving heirs. They executed an extrajudicial settlement of Antonio’s estate to the exclusion of the heirs of Esteban and Doroteo Feliciano, deceased children of Antonio. Further, they executed a deed of absolute sale in favor of the late Jacinto Feliciano (Pedro’s portion), Felisa Feliciano (Salina’s portion), and Pedro Canoza (Leona and Maria’s portion). On November 28, 1977, Jacinto was issued a Free Patent for the portion of land he bought, declaring that the same was public land which was first occupied and cultivated by Pedro Feliciano. On February 23, 1979, Pedro Canoza was issued an OCT for the land purchased from Leona and Maria Feliciano. On October 18, 1993, petitioners, which are the heirs of the late Esteban Feliciano (Eugenio Feliciano and Angelina Feliciano-De Leon) and of the late Doroteo Feliciano (Trinidad Feliciano-Valiente and Basilia Feliciano-Trinidad) filed a complaint against Salina, Felisa, Pedro Canoza, and the heirs of the late Jacinto Feliciano for the

Declaration of Nullity of Documents and title, Recovery of Real Property and Damages because the settlement of the estate andsale were done without their participation and consent as heirs of Esteban and Doroteo. RTC ruled in favor of petitioners. On appeal, CA reversed RTC’s decision ruling that prescription had set in and that the applicable prescriptive period to annul is four years from the discovery of the fraud. Petitioners filed a MR but was denied. Issue: WON the CA erred when it held that the applicable prescriptive period is four (4) years? Held: NO. A deed of extrajudicial partition executed without including some of the heirs, who had no knowledge of and consent to the same, is fraudulent and vicious. An action to set it aside on the ground of fraud could be instituted, however, such action must be brought within four (4) years from the discovery of the fraud. In this case, the heirs of Doroteo and Esteban was not able to participate in the extrajudicial partition executed by the other heirs and such deed was fraudulently obtained. Moreover, the records show that petitioners’ complaint was filed only on October 18, 1993, or 16 years after Jacinto Feliciano was issued a Free Patent and almost 14 years after Pedro Canoza was issued an OCT. Petitioners are deemed to have obtained constructive notice upon the registration of the Free Patent. Mangahas vs. Brobio Facts: Pacifico Brobio died intestate, leaving three parcels of land and was survived by his wife, respondent Eufrocina Brobio, four legitimate children, and three illegitimate children. Petitioner Carmela Brobio Mangahas is one the illegitimate children. The heirs of Pacifico (including petitioner) executed a Deed of Extrajudicial Settement with waiver wherein they waived their respective shares over the parcels of land in favor of respondent for a consideration of P150,000. According to petitioner, the respondent promised her an additional amount for her father’s share but when the former demanded it, the respondent refused to pay. A year later, respondent Brobio was required by the BIR to submit an original copy of the deed. Respondent did not have an original copy of the deed. When she

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asked petitioner Mangahas to countersign a copy of a deed, she refused to sign unless she was given the additional amount that she asked for. Later, petitioner signed the deed after the respondent executed a promissory note amounting to P600,000. However, respondent failed to pay the amount despite several demands. Thus, a complaint for specific performance was filed by the petitioner. Respondent avers that she was forced to sign the promissory note. RTC ruled in favor of petitioner. CA reversed the decision of the RTC. It ruled that there was no valuable consideration since petitioner had already previously signed the deed and was already given P150,000 and that there was intimidation on the signing of the promissory note. Further, it held that if petitioner disagreed with the amount she received, she should have filed an action for partition. Issue: (1) WON the CA erred when it found that the promissory note was without consideration and was signed with intimidation. (2) WON the CA erred when it stated that petitioner should have filed an action for partition instead of a case for specific performance. Held: (1) YES. There was no showing that respondent was deprived of free agency when she signed the promissory note. She still had a choice and could have refused to execute the promissory note and resorted to judicial means. As to the consideration, respondent failed to prove that the promissory note was not supported by any consideration. It was clear that the note was issued for a cause or consideration, which is the petitioner’s signature on the document. (2) YES. An action for partition implies that the property is still owned in common. Considering that the heirs had already executed a deed of extrajudicial settlement and waived their shares in favor or respondent, the properties are no longer under a state of co-ownership; there is nothing more to be partitioned, as ownership had already been merged in one person.

Rule 70 Cases SARMIENTA VS MANALITE HOMEOWNERS ASSO. GR 182953 October 11, 2010 FACTS Manalite Homeowners Association, Inc. (MAHA) filed a case for unlawful detainer/forcible entry. It alleged that it was the owner of the subject property and the Petitioner AMARA, through force, intimidation, strategy and stealth entered the premises and constructed a building. AMARA even filed a case for the annulment of MAHA’s title. When AMARA lost the case, MAHA ordered the former to vacate. AMARA pleaded MAHA to give them one year period to stay. MAHA acceded. Such period was repeatedly extended due to the benevolence of MAHA. Later on, AMARA proposed that they become members of MAHA so they can be qualified to acquire portions of the property by sale pursuant to the Community Mortgage Program (CMP). MAHA again agreed and tolerated AMARA’S possession, giving them until December 1999 to comply with the requirements. AMARA still failed to comply. Thus after formal demand letters to vacate was ignored by AMARA, MAHA filed the complaint for “Forcible Entry/Unlawful Detainer.” The MTCC dismissed the case. RTC reversed the decision of MTC. CA affirmed decision of RTC. Hence this present petition. Petitioners assert that the jurisdictional requirement of prior physical possession in actions for forcible entry was not alleged with particularity in the complaint, as it merely alleged that respondent had been deprived of its possession over the property. They also maintained that they were not withholding possession of the property upon the expiration or termination of their right to possess because they never executed any contract, express or implied, in favor of the respondent. Hence, there was also no unlawful detainer. ISSUE Whether or not the allegations in the complaint are sufficient to make up a case of unlawful detainer. HELD Yes. In forcible entry, the plaintiff must allege in the complaint, and prove, that he was in prior physical possession of the

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property in dispute until he was deprived thereof by the defendant by any of the means provided in Section 1, Rule 70 of the Rules either by force, intimidation, threat, strategy or stealth. In unlawful detainer, there must be an allegation in the complaint of how the possession of defendant started or continued, that is, by virtue of lease or any contract, and that defendant holds possession of the land or building “after the expiration or termination of the right to hold possession by virtue of any contract, express or implied.” Evidence proves that after MAHA acquired the property, MAHA tolerated petitioners’ stay and gave them the option to acquire portions of the property by becoming members of MAHA. Petitioners’ continued stay on the premises was subject to the condition that they shall comply with the requirements of the CMP. Thus, when they failed to fulfill their obligations, MAHA had the right to demand for them to vacate the property as their right of possession had already expired or had been terminated. The moment MAHA required petitioners to leave, petitioners became deforciants illegally occupying the land. Well settled is the rule that a person who occupies the land of another at the latter’s tolerance or permission, without any contract between them, is necessarily bound by an implied promise that he will vacate upon demand, failing which, a summary action for ejectment is the proper remedy against him. Thus, the RTC and the CA correctly ruled in favor of MAHA. As to petitioners’ argument that MAHA’s title is void for having been secured fraudulently, we find that such issue was improperly raised. In an unlawful detainer case, the sole issue for resolution is physical or material possession of the property involved, independent of any claim of ownership by any of the parties. Since the only issue involved is the physical or material possession of the premises, that is possession de facto and not possession de jure, the question of ownership must be threshed out in a separate action.

CALARA VS. FRANCISCO [G.R. No. 156439 : September 29, 2010] .

Facts Petitioner Clemencia Calara and her children own the Lophcal (Calara) Subdivision in Brgy. Anos, Los Banos. The respondents in this case are the buyers of the Calara subd. Some of the buyers of the subject lot instituted a case for violation of P.D. 957, a law that regulates the sale of subd lots and condominiums, before the then Human Settlement Regulatory Commission (HSRC) incorporating grievances such as absence of a drainage system, unfinished curb and gutter, undeveloped roads and abandoned electrical facilities. The Calaras consequently filed suits against respondents Francisco spouses and Gaudencio Navarro with the MTC. On 26 August 1982, respondents and Gaudencio Navarro filed a joint motion to dismiss on the ground that the Municipal Court had no jurisdiction over the complaints filed against them by petitioner since another action over the same cause and the same parties was pending before the HSRC. MTC denied the same. In the meantime, the HSRC rendered a decision ruling in favor of the buyers ordering the Calaras among others to to develop the subdivision. However trial ensued in the unlawful detainer case. MTC ruled in favor of the Calaras discounting the existence of a contract of sale between petitioners and respondents and upholding its jurisdiction over the case and ordered the respondents buyers to vacate the land. On appeal in RTC, the latter affirmed in toto the decision of MTC. However, when the case reached the CA, it rendered decision, reversing the decisions of the MTC and RTC and ordering the dismissal of petitioners' complaint for unlawful detainer upon the conclusion that when a complaint for unlawful detainer arises from the failure of a buyer on installment basis of real property to pay based on a right to stop paying monthly amortizations under PD 957, the determinative question is exclusively cognizable by the Housing and Land Use Regulatory Board (HLURB). Therefore, the question of the right to collect the monthly amortization must be determined by said agency.Petitioners urge the reversal of the assailed decision on the following grounds: ISSUE

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WHTHER OR NOT CA ERRED IN DECLARING THAT THE HOUSING AND LAND USE REGULATORY BOARD (HLURB) HAS EXCLUSIVE ORIGINAL JURISDICTION TO DETERMINE WHETHER THERE IS A PERFECTED CONTRACT TO SELL BETWEEN PETITIONER CALARA AND RESPONDENTS FRANCISCO HELD CA correctly ruled that the cause of action embodied in the complaint of petitioners not a simple cause of action for unlawful detainer against respondents. Petitioner's complaint is for unlawful detainer. While generally speaking such action falls within the original and exclusive jurisdiction of the MTC, the determination of the ground for ejectment requires a consideration of the rights of a buyer on installment basis of real property. Indeed private respondent claims that he has a right under P.D. No. 957, to stop paying monthly amortizations after giving due notice to the owner or developer of his decision to do so because of petitioner's alleged failure to develop the subdivision or condominium project according to the approved plans and within the time for complying with the same. The case thus involves a determination of the rights and obligations of parties in a sale of real estate under P.D. No. 957. The determinative question therefore is exclusively cognizable by the HLURB, the question of the right of petitioner must be determined by the agency. Thus, petitioner's cause of action against private respondent should instead be filed as a counterclaim in HLURB Case in accordance with Rule 6of the Rules of Court which is of suppletory application to the HLURB Rules of Procedure. As the sole regulatory body for housing and land development, the HLURB has jurisdiction over petitioners' cause against respondents and is clearly the best forum for the determination of all the issues relevant thereto. N.B. However, the mere relationship of the parties as a subdivision developer/owner and subdivision lot buyer does not, concededly, vest the HLURB automatic jurisdiction over a case. In the cases of Roxas vs. Court of Appeals and Filar Development Corporation vs. Sps. Villar, this Court upheld the MTC's jurisdiction over the complaint for ejectment commenced by the subdivision developer

on account of the buyer's failure to pay the installments stipulated in the party's contract to sell. In said cases, however, the buyers had no justifiable ground to stop payment of the stipulated installments and/or any of the causes of action cognizable by the HLURB under Section 1 of P.D. 1344. In not applying the ruling in Francel Realty Corporation vs. Sycip, moreover, the Court likewise took appropriate note of the fact that the buyers in said cases have not commenced an action for unsound real estate businesses practices against the subdivision developers. Here, respondents have not only instituted a complaint for violation of P.D. 957 against petitioner Clemencia Calara but had also already obtained a definitive ruling on the latter's failure to fully develop the subdivision which they cited as justification for not making further payments on Lot No. 23 of the Lophcal (Calara) Subdivision. Modestos vs. Urbina Facts: carlos Urbina filed a complaint for recovery of possession of a parcel of lot located at Taguig. He alleged that Modestos gained possession of lot through stealth, scheme, and machinations, and despite demand, Modestos refused to vacate the premises. Earlly on, Modestos negotiated with Urbina for the sale of the lot, however it did not materialize. Later on, Modestos claimed possessory right over the land by virtue of Insular Government Patent Sales application pending with the Land Management Bureau, on the other hand Urbina claimed by virtue of Miscellaneous Sales Application also pending with the Land Management Bureau. The RTC ruled in favor of Urbina, on the ground that Modestos were estopped in questioning the possessory right of Urbina by reason of the acknowledgement of the possessory right of the later, when he entered into negotiated contract of sale which was cancelled. The CA affirmed in toto the decision of the RTC. Hence this petition for review on certiorari. The Modestos mainly argued that at the time Urbina filed his MSA and acquired tax declaration over the subject property, it was still a government property, being part of Fort Bonifacio military reservation and since their offer to buy the property from Urbina was based on his false assertion, the principle of estoppel cannot apply.

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Issue: won Urbina has the better possessory right over the subject property by virtue of MSA and won Modestos was estopped? Held: No. The MSA (Miscellaneous Sale Application) filed by the Urbina is not appropriate because the subject lot is still a government property, being part of Fort Bonifacio military reservation, hence no one can claim possessory right over the said lot. It is only after October 16, 1987 that the questioned property has been declared alienable and disposable by virtue of Presidential Proclamation 172. It is the only that time when a private person can legally claim possessory right over it. Hence the claimed possession of Urbina as early as July 21, 1966, when he filed his MSA, is unlawful and could not be the basis of possessory rights. On the contrary, Modestos were the actual possessor of the property when it was declared alienable and disposable on October 16, 1987 and continued to possess the property until the present time. Furthermore Modestos have Insular Government Patent Sales Application over the property pending with the Land Management Bureau, which they filed on January 2009. In contrast Urbina has a MSA filed in 1966, which the Land Management Bureau considered invalid since it was filed when the property is still formed part of Fort Bonifacio military reservation. With respect on the issue on estoppel, no estoppel arises where the conduct of the party sought to be estopped is due to ignorance upon an innocent mistake.

the building, the mtcc ruled in favor of the respondents, for failure of carbonilla to refute the claim of the respondents. Carbonilla elevated the case to the rtc. Rtc affirmed the decision of the mtcc, however with respect to the building rtc ruled that the respondents failed to prove that the building was not included in the transfer in the name of carbonilla. Respondents filed a petition for review with the c.a. C.a. reversed the decision of the rtc, it found out that there was no evidence that the respondents possession was by mere tolerance. Further, the action has already prescribed since the 1 year period for filing forcible entry has already lapsed. Carbonilla filed a petition for review on certiorari with the sc. Issue: won the allegations in the complaint are sufficient to make up a case of unlawful detainer. Held: no, w/out a doubt, the registered owner of real property is entitled to its possession. However, the owner cannot simply wrest possession thereof from whoever is in actual occupation of the property to recover possession, he must resort to the proper judicial remedy. In the present case, carbonilla opted to file an ejectment case - forcible entry and unlawful detainer. The only question that the courts resolve in ejectment proceeding is: who is entitled to the physical possession of the property. For this reason, an ejectment case will not necessarily be decided in favor of one who has presented proof of ownership.

Carbonilla vs abiera Facts: dr. Dioscoro carbonilla filed a complaint for ejectment against marcelo abiera and maricris abiera paredes with the mtcc. He alleged that he is the owner of the land, as evidenced by torrens certificate of title. He further claimed that he is the also the owner of the building situated thereon and the respondents occupation is only by mere tolerance of the original owner. The respondents denied the allegation. They alleged that they inherited the land from theis predecessors and they have been in possession of it since 1960. The mtcc ruled that the land is owned by carbonilla, as evidenced by the torrens certificate of title. However with regard to

Carbonilla's allegation that respondents possession was by mere tolerance make out a case for unlawful detainer. It involves the person's withholding from another of possession of property to which the latter is entitled after the expiration of the former's right to hold possession. A requirement for a valid cause of action in an unlawful detainer case is that possession must be originally lawful, and such possession must have turned unlawful only upon expiration of the right of possession. Carbonilla failed to prove that respondents possession was based on his alleged tolerance.

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He did not offer any evidence that they tolerated respondents entry to and occupation of the subject property. A bare allegation of tolerance will not suffice. He must, at least, show overt acts indicative of his or his predecessors permission to occupy the subject property. La Campana Dev. Corp. vs. Ledesma Facts: Petitioner filed an ejectment case with the Metropolitan Trial Court (MeTC) against private respondent Ledesma, alleging that despite expiration of the contract of lease executed between them and demands to vacate subject premises and pay rentals therefor, the latter failed to comply with such demands. Private respondent countered in his Answer that he had paid the rentals over subject premises and petitioner no longer had the right to possess the property as it had been foreclosed by the Development Bank of the Philippines (DBP). Private respondent further pointed out that subject premises had in fact been in the possession of the DBP since March or April of 1997, so since that time, it was with the DBP that he made arrangements for his continued occupation of the subject premises. The MeTC then rendered judgment in favor of petitioner, ordering private respondent to surrender possession of subject premises to petitioner. Private respondent appealed to the Regional Trial Court (RTC), and to stay execution of said judgment, private respondent filed a supersedeas bond with the MeTC. The RTC affirmed the MeTC judgment. Petitioner then moved for the immediate execution of the RTC Decision, which motion was granted by the RTC. Meanwhile, private respondent elevated the case to the CA via a petition for review on certiorari with prayer for the issuance of a temporary restraining order or writ of preliminary injunction. A temporary restraining order was issued by the CA, effectively staying implementation of the writ of execution issued by the RTC. Now the present petition for certiorari for the annulment of the CA’s resolution Issue: 1. Whether the CA committed grave abuse of discretion amounting to lack or excess of jurisdiction when it ordered the issuance of a writ of preliminary injunction to stay the immediate execution of the RTC judgment 2. Whether the CA err in considering the supersedeas bond filed with the MTC, which

answers for unpaid rentals, as sufficient bond for the issuance of a writ of preliminary injunction Held: No. When exigencies in the case warrant it, the appellate court may stay the writ of execution issued by the RTC in an action for ejectment if there are circumstances necessitating such action. Where supervening events (occurring subsequent to the judgment) bring about a material change in the situation of the parties which makes the execution inequitable, or where there is no compelling urgency for the execution because it is not justified by the prevailing circumstances, the court may stay immediate execution of the judgment. There also exists a material change in the situation of the parties. The CA properly took into serious consideration the fact that in its Decision in CA-G.R. CV No. 34856 entitled La Campana Food Products, Inc. v. Development Bank of the Philippines, which has become final and executory, it ordered herein petitioner, formerly known as La Campana Food Products, Inc., to surrender possession of subject properties to the Development Bank of the Philippines. Evidently, a serious cloud of doubt has been cast on petitioner’s right of possession, making it questionable whether the RTC Decision, ordering private respondent to surrender possession of subject premises to petitioner, should be immediately implemented. Therefore, the CA did not gravely abuse its discretion in this case; rather, it acted prudently when it stayed execution of the RTC Decision until such time that a final resolution of the main case is reached. Petitioner's contention, that it was improper for the CA to have granted private respondent's motion to consider the supersedeas bond it posted with the Metropolitan Trial Court as sufficient to cover the bond required for the issuance of the writ of preliminary injunction, is likewise incorrect. Petitioner argues that, "said supersedeas bond is posted solely and primarily to answer for a specific purpose which is for the payment of unpaid rentals accruing up to the final judgment. This cannot be held answerable for damages to petitioner should it later be found out that the private respondent is not entitled to the issuance.

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Since the only damages that petitioner may be entitled to in an action for unlawful detainer are those arising from its loss of the use or occupation of subject premises, the only damages petitioner can claim by reason of the stay of execution of the RTC judgment is also only for the "rent" or "fair rental value" for the property in question. Therefore, the CA did not err in considering the supersedeas bond filed with the MTC, which answers for unpaid rentals, as sufficient bond for the issuance of a writ of preliminary injunction.

Ferrer vs. Rabeca

Facts: On July 12, 2004, the plaintiff’s counsel filed a motion for immediate execution, praying that a writ of execution be issued "for the immediate execution of the aforesaid Judgment." The plaintiff cited Section 19, Rule 70 of the Rules of Court as basis for its motion.2 In his order dated July 14, 2004, however, respondent Judge denied the motion for immediate execution,3 stating: A Notice of Appeal dated July 9, 2004, having been seasonably filed by counsel for the defendant, let the records of the abovecaptioned case be, as it is hereby ordered, elevated to the Regional Trial Court of Manila for appropriate proceedings and disposition. Considering that the Court has already given due course to the appeal of the defendant which was perfected within the reglementary period, no more action will be taken on the Motion for Reconsideration dated July 19, 2004 filed by the plaintiff thru counsel. The complainants averred that respondent Judge’s denial of their motions had rendered their victory inutile, and had unfairly deprived the plaintiff of the possession of the premises. They further averred that respondent Judge’s refusal to perform an act mandated by the Rules of Court had given undue advantage to the defendant to the plaintiff’s damage and prejudice. In his comment dated September 16, 2004, respondent Judge denied the charges. He

explained that he had honestly thought that his court had lost jurisdiction over the case pursuant to the provision of Section 9, Rule 41 of the Rules of Court (which provides that "in appeals by notice of appeal, the court loses jurisdiction over the case upon the perfection of the appeals filed in due time and the expiration of the time to appeal of the other parties") once he had given due course to the defendant’s notice of appeal. The complainants contended that respondent Judge exhibited his ignorance of the law and procedure in relying on Section 9, Rule 41 of the Rules of Court which referred to appeals from the Regional Trial Court; that Rule 40, which contained provisions on appeal from the Municipal Trial Courts to the Regional Trial Courts, and which provided in its Section 4 that the perfection of the appeal and the effect of such perfection should be governed by the provisions of Section 9 of Rule 41, concerned appeals by notice of appeal in general; and that instead, the applicable rule should be Section 19, Rule 70 of the Rules of Court. The complainants pointed out that respondent Judge apparently did not know that appeal in forcible entry and detainer cases was not perfected by the mere filing of a notice of appeal (as in ordinary actions) but by filing of a notice of appeal and a sufficient supersedeas bond approved by the trial judge executed to the plaintiff to pay the rents, damages and costs accruing down to the time of the judgment appealed from. They asserted that respondent Judge’s invocation of good faith and error of judgment did not absolve him of liability, because he had grossly neglected his duties mandated by law by failing and refusing to act on their motion for immediate execution and motion for reconsideration and by giving due course to the appeal despite no supersedeas bond having been filed and approved by the trial court. Issue: Whether the judge was ignorant in not considering the rule of procedure in appeal from cases of forcible entry or unlawful detainer

Held: Yes. In the case at bar based on sec 19 which states:

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"SEC. 19. If judgment is rendered against the defendant, execution shall issue immediately upon motion, unless an appeal has been perfected and the defendant to stay execution files a supersedeas bond, approved by the Municipal Trial Court and executed in favor of the plaintiff to pay the rents, damages, and costs accruing down to the time of the judgment appealed from, and unless, during the pendency of the appeal, he deposits with the appellate court the amount of rent due from time to time under the contract, if any, as determined by the judgment of the Municipal Trial Court. XXXX XXXX XXXX." It is clear from the foregoing that the perfection of an appeal by itself is not sufficient to stay the execution of the judgment in an ejectment case. The losing party should likewise file a supersedeas bond executed in favor of the plaintiff to answer for rents, damages and costs, and, if the judgment of the court requires it, he should likewise deposit the amount of the rent before the appellate court from the time during the pendency of the appeal. Otherwise, execution becomes ministerial and imperative. defendant seasonably filed his Notice of Appeal dated 9 July 2004 on 13 July 2004; he however failed to file any supersedeas bond. Prior to the filing of such notice of appeal, more specifically on 12 July 2004, complainants have already filed their Motion for Execution dated 8 July 2004. Instead of acting on the Motion for Execution, respondent Judge Rabaca gave due course to the appeal in an Order dated 14 July 2004 and directed his Branch Clerk of Court to elevate the records of the case to the Regional Trial Court (RTC). The Branch Clerk of Court however failed to forward the records to the RTC. This fact is clear from Judge Rabaca’s Order dated 28 July 2004 wherein he directed the Branch Clerk of Court to forward the records of the case to the Manila Regional Trial Court immediately. From the foregoing, it is clear that when the complainant moved for the immediate execution of Judge Rabaca’s decision, the latter still had jurisdiction over the case. He therefore clearly erred when he refused to act on the Motion for Execution.

Rule 71 Cases Yasay vs.

Recto

Facts: On June 28, 1996, some stockholders of Interport Resources Corporation (IRC) asked then SEC Chairman Perfecto Yasay to investigate and validate the proxies and nominations for directors of the corporation. In line with this and on the same date (June 28), the SEC issued a TRO against the officers of the corporation to CEASE and DESIST from conducting its annual stockholders meeting on July 9, 1996. But because the officers of IRC where able to get from the Court of Appeals a TRO against the Order of SEC not to go through with the July 9 stockholders’ conference, the respondents (who were the officers of IRC)still conducted its meeting as planned. On the next day, July 10, 1996, the SEC declared IRC’s conference as invalid and ordered the respondents (officers of the IRC) to show cause why they shouldn’t be cited for contempt. On the hearing, the respondent officers cited the TRO issued by the CA as the reason why they still went through with the meeting/conference. Nevertheless, the SEC still found the respondent officers guilty for contempt. The Order of the SEC went even as far as barring Atty. Manalaysay, one of the respondent officers, from engaging in the practice of law. And so, respondent went to the CA to appeal SEC’s decision wherein the appellate court reversed SEC’s decision. From this reversal, the petitioner SEC chairman APPEALS to the SC via petition for review, claiming that the reversal of the appellate court of the decision of the SEC was improper. But the respondents argue that the CONTEMPT CHARGE against them was CRIMINAL in nature. Thus, when the CA reversed the guilty verdict of the SEC finding respondents guilty of contempt, said decision/reversal was tantamount to a NOT GUILTY verdict wherein no appeal can be taken. Issue: (1) Was the reversal of the CA of the findings of SEC that respondents were guilty of contempt proper? (2) Was the

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contempt proceedings conducted by the SEC criminal or civil in nature? As such, was the reversal of the CA appealable? Held: (1) The ruling of the CA was proper because even though the SEC ordered the officers of IRC not to go through with the stockholders’ conference on July 9, said officers were able to get a TRO with the CA against SEC’s CEASE and DESIST Order on July 8. Thus, it was only proper that the stockholders’ conference pushed through. (2) We agree with respondents that the charge of contempt partakes of the nature of a criminal offense. The exoneration of the contemner from the charge amounts to an acquittal from which an appeal would not lie. “A distinction is made between a civil and criminal contempt. Civil contempt is the failure to do something ordered by a court to be done for the benefit of a party. A criminal contempt is any conduct directed against the authority or dignity of the court. Petitioners argue that the contempt committed by respondents was civil in nature, as the temporary restraining order the SEC issued was for the benefit of a party to a case. The contention is untenable. “Civil contempt proceedings are generally held to be remedial and civil in their nature; that is, they are proceedings for the enforcement of some duty, and essentially a remedy for coercing a person to do the thing required.” “In general, civil contempt proceedings should be instituted by an aggrieved party, or his successor, or someone who has a pecuniary interest in the right to be protected.” If the contempt is initiated by the court or tribunal exercising the power to punish a given contempt, it is criminal in nature, and the proceedings are to be conducted in accordance with the principles and rules applicable to criminal cases. The State is the real prosecutor. “The real character of the proceedings in contempt cases is to be determined by the relief sought or by the dominant purpose. The proceedings are to be regarded as criminal when the purpose is primarily punishment, and civil when the purpose is primarily compensatory or remedial.”

“But whether the first or the second, contempt is still a criminal proceeding in which acquittal, for instance, is a bar to a second prosecution. The distinction is for the purpose only of determining the character of punishment to be administered.” In this case, the contempt is not civil in nature, but criminal, imposed to vindicate the the dignity and power of the Commission; hence, as in criminal proceedings, an appeal would not lie from the order of dismissal of, or an exoneration from, a charge of contempt.” Sison v. Caoibes Facts: Respondent Caoibes (Las Pinas Judge) issued an order citing Sison (MMDA traffic enforcer) of Indirect Contempt. The order stemmed when Sison apprehended the official driver and son of Caoibes along EDSA for traffic violation. Because of this incident, Caoibes issued an order directed Sison to show cost within the non extendible period of 24hours “why he should not be cited as in contempt of court and dealt with accordingly.” Sison failed to appear as directed in the order. Thus, he was arrested and detained in Jail. Sison was only discharged from detention when he admitted under duress that he committed a mistake and upon appeal by his counsel assuring Caoibes that the same incident may not be repeated. Subsequently, Sison filed an administrative complaint against Caoibes. He alleged that he did not committed any offense except that he issued a traffic violation receipt to the driver-son of Caoibes. If indeed such act is an offense, then Las Pinas court has no jurisdiction over it, as the incident happened in Mandaluyong City. He charged that the acts of Caoibes in arresting him without a warrant or arrest before the charge of indirect contempt was heard constituted the “gravest abuse of authority ever committed.” Hence, he prayed that Caoibes be dismissed from the service. Caoibes denied the accusations. He claimed that he initiated the complaint for indirect comtempt pursuant to Sec. 3(d) of Rule 71 and its last par., and Sec. 5(3)of Rule 135. Investigating Justice found Caoibes guilty. Issue: Is the order citing Sison of indirect contempt proper. Was Caoibes justified in considering the act of Sison as deliberate disregard of the respect due to court.

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Held: (1) No. The person cited for contempt is not a party to case pending in court. At first blush, it would seem that the respondent judge was justified in holding the complainant for contempt, due to the latter’s refusal to comply with the judge’s Order of September 15, 1999. However, it is not lost upon this Court that the complainant was not a party to any of the cases pending before the RTC, Branch 253. What triggered the contempt charge was, in fact, the traffic violation incident involving the respondent judge’s son. Furthermore, the record shows that when the complainant filed his reply to the charge as required by the respondent judge, the same was refused by some staff member in the latter’s sala. In Cortes v. Bangalan, we held that a judge may not hold a party in contempt of court for expressing concern on the judge’s impartiality through a motion for voluntary inhibition, even if the latter may have felt insulted therein. The Court also declared, thus: …[W]hile the power to punish in contempt is inherent in all courts so as to preserve order in judicial proceedings and to uphold due administration of justice, judges, however, should exercise their contempt powers judiciously and sparingly, with utmost restraint, and with the end in view of utilizing their contempt powers for correction and preservation not for retaliation and vindication. (2) The respondent Judge was not justified to so consider the act and remarks of Sison as thereby displaying arrogance towards and deliberate disregard of the usual respect, courtesy and accommodation due to a court of law and its representative. First of all, the refusal of Sison and the supposed remarks should not cause resentment on the part of the respondent Judge (whom Sison most likely did not yet know at the time) because he knew, as a public official himself, that Sison was only doing his duty of enforcing evenly the particular traffic regulation against swerving into a one-way street from the wrong direction, regardless of the office or

position of the violator’s father. Secondly, the respondent Judge should have had the circumspection expected of him as a judge to realize that the remarks of Sison were invited by Caoibes III’s attempt to bluff his way out of the apprehension because he was the son of an RTC judge. Hence, the respondent Judge would have no grounds to cite Sison for contempt of court. And, thirdly, the respondent Judge and his son should have challenged the issuance of the traffic violation receipt pursuant to the pertinent rules if they did not agree with the basis of the apprehension and also administratively charged Sison for any unwarranted act committed. Since neither was done by them, but, on the contrary, both ultimately accepted the validity of the apprehension, as borne out by the retrieval of the driver’s license after September 29, 1999 by paying the fines corresponding to the traffic violation, then it follows that the respondent Judge had the consciousness that his son was at fault, instead of Sison.

G.R. No. 156829

June 8, 2004

RAMON D. MONTENEGRO, petitioner, vs. MA. TERESA L. MONTENEGRO, for herself and as the mother and natural guardian of the minors, ANTONIO AMELO and ANA MARIA PIA ISABEL, both surnamed "MONTENEGRO," respondents. FACTS: Ma. Teresa Montenegro filed, on June 1994, a complaint for support against her husband, Ramon, for herself and as mother and guardian of her two minor children Antonio Amelo and Ana Maria Pia Isabel. Four years after, they entered into a compromise agreement. It was approved by the court and since they did not appeal the court’s approval, it became final and executory. Under the agreement, Ramon obliged himself to give his P1,000,000 entire share in the conjugal funds in favor of his children, P500,000 of which payable immediately and the rest 1 year after the approval of the agreement; establish a trust fund worth P3M in favor of his children (effective 60 days after the approval of the agreement); and obtain an educational plan for his children (effective 1 year after the approval of the agreement. Unfortunately, Ramon was not able to comply with said obligations. Teresa was 18

thus prompted to file a motion for execution of the judgment approving the compromise agreement. It was approved and writs of execution and notice of garnishment were sent twice to Ramon but said writs remained unsatisfied. Teresa then filed on March 14, 2002, a motion for examination of Ramon as judgment obligor pursuant to Sec 38 and 39 of the Rules of Court. In her motion, she alleged that there is an urgency for the examination to be conducted at the earliest time since petitioner was about to migrate to Canada. It was approved on March 19, 2002. The hearing was however reset thrice due to failure of petitioner to attend because he was already in Canada resulting in his being cited in contempt of court. The following series of events showed how Ramon had committed indirect contempt of court’s orders: • March 22 – motion for examination was set. Neither his counsel and Ramon appeared. The hearing was rescheduled on April 10, 2002 and requiring petitioner why he should not be held in contempt of court for disobeying the March 19, 2002 order. •

•

March 26 - petitioner filed a Compliance with Motion to re-schedule Proceedings and explained his failure to attend based on his belief that he still have until April 14 to file his comment as agreed upon. April 4 - hearing for the Compliance with Motion to re-schedule Proceedings. Counsel for petitioner manifested that his client had already left for Canada and would not be able to attend the hearing on April 10 and that he would be available only on the last week of July or first week of August 2002. Counsel also manifested that he would

not be available on said date due to other hearings.

•

June 13 – court issued an order resetting the hearing for examination on July 3. Subpoena was issued to petitioner in his address at 8051 Estrella Avenue, San Antonio Village, Makati City.

•

June 17 – court issued an order directing petitioner to show cause why he should not be held in contempt of court for failure to attend the April 10 hearing. Petitioner alleged that it was because he was already in Canada and had no intentions of absconding from his obligations.

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July 3 – the hearing did not push through because petitioner filed a Motion to Quash because according to him he may not be compelled by subpoena to attend the 3 July 2002 hearing in Bacolod City. He did not allege that he was still in Canada.

•

Sept 2 – Motion to Quash was denied but re-schedule the hearing on October 23.

•

Oct 22 – petitioner manifested that he would not be able to attend the hearing the following day as he was still in Canada and would be available only on the first week of December. He moved that the hearing be rescheduled on 9 December.

•

Oct 23 – he did not appear. It was only then that he was cited in contempt of court.

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Ramon filed a motion for reconsideration but it was denied. Hence this petition. ISSUE: WON the court erred in holding the petitioner guilty of indirect contempt for willfully disobeying the orders of the trial court requiring him to appear for purposes of examination as a judgment obligor at in the hearings scheduled on 22 March 2002, 10 April 2002, and 23 October 2002. HELD: NO. Contempt of court involves the doing of an act, or the failure to do an act, in such a manner as to create an affront to the court and the sovereign dignity with which it is clothed.6 It is defined as "disobedience to the court by acting in opposition to its authority, justice and dignity."7 The power to punish contempt is inherent in all courts, because it is essential to the preservation of order in judicial proceedings, and to the enforcement of judgments, orders and mandates of the courts; and, consequently, to the due administration of justice.8 The Rules of Court penalizes two types of contempt, namely, direct contempt and indirect contempt. Direct contempt is committed in the presence of or so near a court as to obstruct or interrupt the proceedings before the same, and includes disrespect toward the court, offensive personalities toward others, or refusal to be sworn or to answer as a witness, or to subscribe an affidavit or deposition when lawfully required to do so.9 On the other hand, Section 3 of Rule 71 of the Rules of Court enumerates particular acts which constitute indirect contempt, thus: (a) Misbehavior of an officer of a court in the performance of his official duties or in his official transactions; (b) Disobedience of or resistance to a lawful writ, process, order, or judgment of a court, including the act of a person who, after being dispossessed or ejected from any real property by the judgment or process of any court of competent jurisdiction, enters or attempts or induces another to enter into or upon such real property, for the purpose of executing acts of ownership or possession, or in any manner disturbs the possession given to the person adjudged to be entitled thereto; (c) Any abuse of or any unlawful interference with the processes or

proceedings of a court not constituting direct contempt under section 1 of this Rule; (d) Any improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the administration of justice; (e) Assuming to be an attorney or an officer of a court, and acting as such without authority; (f) Failure to obey a subpoena duly served; (g) The rescue, or attempted rescue, of a person or property in the custody of an officer by virtue of an order or process of a court held by him. In relation to the foregoing, Section 38 of Rule 39 of the Rules of Court also provides that "a party or other person may be compelled, by an order or subpoena, to attend before the court or commissioner to testify as provided in the two preceding sections, and upon failure to obey such order or subpoena or to be sworn, or to answer as a witness or to subscribe his deposition, may be punished for contempt as in other cases." This provision relates specifically to Section 3(b) of Rule 71 of the Rules of Court. Indirect contempt may either be initiated (1) motu proprio by the court by issuing an order or any other formal charge requiring the respondent to show cause why he should not be punished for contempt or (2) by the filing of a verified petition, complying with the requirements for filing initiatory pleadings.10 In the present case, the trial court initiated the proceedings for indirect contempt by issuing two orders11 directing the petitioner to show cause why he should not be punished for indirect contempt. Contempt, whether direct or indirect, may be civil or criminal depending on the nature and effect of the contemptuous act. Criminal contempt is "conduct directed against the authority and dignity of the court or a judge acting judicially; it is an act obstructing the administration of justice which tends to bring the court into disrepute or disrespect."12 On the other hand, civil contempt is the failure to do something ordered to be done by a court or a judge for the benefit of the opposing party therein and is therefore, an offense against the party in whose behalf the violated order was made.13 If the purpose is to punish, then it is criminal in nature; but if to compensate, then it is civil.14 In the present case, the contemptuous act was the petitioner’s refusal to attend a hearing for his examination as judgment obligor, upon motion by the respondent

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Teresa. It must be pointed out that the purpose of Section 36 of Rule 39 is to provide the judgment obligee a remedy in case where the judgment obligor continues to fail to comply with its obligation under the judgment. Petitioner’s refusal to be examined, without justifiable reason, constituted indirect contempt which is civil in nature. Petitioner’s deliberate willfulness and even malice in disobeying the orders of the trial court are clearly shown in the pleadings he himself had filed before the trial court. In his Manifestation of 19 March 2002 petitioner insisted on his right to file a reply or comment on the Motion to Examine Defendant as Judgment Obligor until 14 April 2002 solely on the basis of the purported agreement at the conference on 6 March 2002. Petitioner merely brushed aside the Order of the trial court requiring him to appear on 22 March 2002 for the hearing by not appearing in court. Petitioner cannot simply assume that his manifestation would suffice for the trial court to re-schedule the 22 March 2002 hearing. That portion of the manifestation filed by petitioner on 19 March 2002, which reads: 3. In the meantime, we have no other option but to cancel the setting on March 22, 2002 until Respondent shall have submitted his Reply/Comment and the issue is finally laid to rest by the issuance of a final Order for that purpose. demonstrates beyond doubt arrogance, haughtiness and disrespect. While petitioner apparently disagrees with the 19 March 2002 Order of by the trial court, he did not file a motion for its reconsideration. Neither did he file a motion to reset the scheduled hearing on 22 March 2002. We have ruled that a motion for continuance or postponement is not a matter of right but is addressed to the sound discretion of the court.15 Petitioner sought to deprive the trial court of the discretion; he took it upon himself to cancel or to order the court to cancel the 22 March 2002 scheduled hearing. Petitioner makes a belated claim in the present petition that his failure to attend the 22 March 2002 hearing was due to the fact that he was already on his way to Manila on 22 March 2002 in preparation for his 26 March 2002 trip to Canada. However, such explanation was not stated in the 19 March 2002 Manifestation and 5 April 2002 Compliance and Motion to Reschedule Proceedings. The explanation is either a delayed afterthought or an

unguarded confession of a deliberate plan to delay or even avoid his examination as a judgment obligor. Neither can petitioner rely on the alleged irregularity in the trial court’s grant of the motion to examine him as judgment obligor before he was able to file a reply or comment. Section 36 of, Rule 39 of the Rules of Court allows, as a matter of right, the plaintiff who is a judgment obligee to examine the defendant as judgment obligor, at any time after the return of the writ of execution is made. Section 36 reads as follows: Sec. 36. Examination of judgment obligor when judgment unsatisfied. — When the return of a writ of execution issued against property of a judgment obligor, or any one of several obligors in the same judgment, shows that the judgment remains unsatisfied, in whole or in part, the judgment obligee, at any time after such return is made, shall be entitled to an order from the court which rendered the said judgment, requiring such judgment obligor to appear and be examined concerning his property and income before such court or before a commissioner appointed by it, at a specified time and place; and proceedings may thereupon be had for the application of the property and income of the judgment obligor towards the satisfaction of the judgment. But no judgment obligor shall be so required to appear before a court or commissioner outside the province or city in which such obligor resides or is found. (Emphasis supplied) Thus, the trial court committed no abuse of discretion in scheduling the examination of petitioner on 22 March 2002. On the contrary, it acted with utmost judiciousness to avoid a miscarriage of justice because petitioner was reported to be about to leave for Canada, a fact which petitioner did not refute in his Manifestation of 19 March 2002. It is noteworthy that while petitioner insisted that he still had until 14 April 2002 to file a reply or comment on the motion for examination, he also manifested through counsel on 5 April 2002 that he already left for Canada on 26 March 2002 and will not be back until the last week of July or the first week of August 2002. It is obvious then that petitioner wanted to gain time to avoid being examined. With respect to the 10 April 2002 hearing, it is established that petitioner was already in Canada at the time of the scheduled hearing. Nonetheless, it must be stressed

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that the re-scheduling of the hearing to 10 April 2002 was brought about by his unjustifiable failure to attend the 22 March 2002 hearing. Subsequently, despite petitioner’s 19 March 2002 and 5 April 2002 manifestations that he would return to the Philippines sometime during the last week of July or first week of August 2002, petitioner did not attend the 23 October 2002 hearing. Again, instead of filing a motion to reset the hearing, petitioner filed a manifestation the day before the scheduled hearing, informing the court that he will be unable to attend the hearing and suggesting the hearing to be reset to 9 December 2002. Such manifestation to reschedule the 23 October 2002 hearing was, for all intents and purposes, a motion to postpone the hearing , but the pleading did not contain a notice of hearing. It is of no moment that petitioner was eventually examined as judgment obligor on 17 December 2002, nine (9) months after the original setting. His subsequent appearance at the hearing did not wipe out his contemptuous conduct. BANK OF THE PHILIPPINEISLANDS vs CALANZA, GR 180699, October 13, 2010 NACHURA, J.: This is a Petition for Indirect Contempt filed by petitioner Bank of the Philippine Islands (BPI) against respondents Labor Arbiter Roderick Joseph Calanza (LA Calanza), Sheriff Enrico Y. Paredes (Sheriff Paredes), Amelia Enriquez (Enriquez), and Remo L. Sia (Sia). Facts: Enriquez and Sia were the branch manager and the assistant branch manager, respectively, of BacolodSingcang Branch of petitioner. On September 3, 2003, they were dismissed from employment on grounds of breach of trust and confidence and dishonesty. The following day, they filed separate complaints for illegal dismissal against petitioner before the National Labor Relations Commission (NLRC), Regional Arbitration Branch No. VI, Bacolod City. After the submission of their respective position papers, Executive LA Danilo C. Acosta rendered a decision on March 29, 2004, finding that Enriquez and Sia had been illegally dismissed from employment.

Pursuant to the Enriquez and Sia petitioner’s payroll.

aforesaid decision, were reinstated in

Petitioner appealed to the NLRC. The NLRC ruled that petitioner had just cause to terminate Enriquez and Sia. Hence, it reversed and set aside the LA decision and, although it dismissed the complaint, it ordered petitioner to give the dismissed employees financial assistance equivalent to one-half month’s pay for every year of service. In view of this decision, petitioner stopped the payroll reinstatement.[5] Enriquez and Sia elevated the matter to the Court of Appeals (CA), but failed to obtain a favorable decision. On November 30, 2005, the appellate court affirmed in toto the NLRC decision. The case eventually reached this Court and was docketed as G.R. No. 172812. During the pendency of the petition before this Court, Enriquez and Sia filed a Motion for Partial Execution[6] of the LA decision dated March 29, 2004. Citing Roquero v. Philippine Airlines, they claimed that the reinstatement aspect of the LA decision was immediately executory during the entire period that the case was on appeal. In an Order dated October 13, 2007, LA Calanza granted Enriquez and Sia’s motion despite the opposition of petitioner. He opined that so long as there is no finality yet of the decision reversing a ruling of the lower tribunal (in this case, the LA) awarding reinstatement, the same should be enforced. Considering that the case was then pending before this Court, he sustained Enriquez and Sia’s claim, applying the cases of Roquero and Air Philippines Corporation v. Zamora. The corresponding writ of execution was subsequently issued. Upon service of the writ, Sheriff Paredes served on petitioner a notice of sale of a parcel of land owned by petitioner to satisfy its obligation. Aggrieved, petitioner immediately filed an Urgent Petition for Injunction with prayer for the issuance of a Temporary Restraining Order (TRO) and/or Writ of Preliminary Injunction with the NLRC, Fourth Division, Cebu City. On November 26, 2007, the NLRC issued a TRO. Disappointed with the conduct of LA Calanza, Sheriff Paredes, Enriquez, and Sia,

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and in view of the pendency of G.R. No. 172812, entitled Enriquez v. Bank of the Philippine Islands, before this Court, petitioner instituted the present petition for indirect contempt. Petitioner avers that LA Calanza’s Order granting Enriquez and Sia’s motion for partial writ of execution preempts the decision of this Court and eventually results in the payment of Enriquez and Sia's claims which may be contrary to this Court’s conclusion. Petitioner adds that respondents obstinately persist in applying jurisprudence which is clearly inapplicable. Finally, petitioner argues that the execution proceedings were done with undue haste that petitioner was not given an opportunity to submit evidence in its defense to stop the execution. These, according to petitioner, clearly indicate utter disrespect to the Court and are grounds to cite respondents in indirect contempt. Meanwhile, on February 12, 2008, this Court rendered a Decision in G.R. No. 172812, denying the petition filed by Enriquez and Sia, thereby sustaining the NLRC and the CA’s conclusion that Enriquez and Sia were validly dismissed from employment by petitioner. On June 30, 2008, the NLRC, Fourth Division, Cebu City, granted BPI’s petition for injunction, On October 27, 2008, LA Calanza issued an Order considering the case closed and terminated based on Enriquez and Sia’s manifestation and motion to dismiss in view of the satisfaction and full payment of their claims. Issue: Whether or not respondents are guilty of indirect contempt. Or in the alternative, do the acts of respondents Enriquez and Sia in filing a motion for partial execution; of LA Calanza in granting the writ of execution and applying or not applying established jurisprudence; and of Sheriff Paredes in serving the notice of sale of the real property owned by petitioner fall under the Sec 3 Rule 71 Rules of Court. Held: SC answer in the negative and dismiss the petition for lack of merit. Contempt of court is defined as a disobedience to the court by acting in

opposition to its authority, justice, and dignity. It signifies not only a willful disregard or disobedience of the court’s order, but such conduct which tends to bring the authority of the court and the administration of law into disrepute or, in some manner, to impede the due administration of justice. It is a defiance of the authority, justice, or dignity of the court which tends to bring the authority and administration of the law into disrespect or to interfere with or prejudice party-litigants or their witnesses during litigation. The power to punish for contempt is inherent in all courts and is essential to the preservation of order in judicial proceedings and to the enforcement of judgments, orders, and mandates of the court, and consequently, to the due administration of justice. However, such power should be exercised on the preservative, not on the vindictive, principle. Only occasionally should the court invoke its inherent power in order to retain that respect, without which the administration of justice will falter or fail. Only in cases of clear and contumacious refusal to obey should the power be exercised. Such power, being drastic and extraordinary in its nature, should not be resorted to unless necessary in the interest of justice. It is true that, at the time of the filing by Enriquez and Sia of the motion for the partial execution of the LA decision which directed their reinstatement, the decision had already been reversed by the NLRC, and such reversal was affirmed by the CA. The case was then on appeal to this Court via a petition for review on certiorari under Rule 45 of the Rules of Court. We find that their motion for partial execution was a bona fide attempt to implement what they might have genuinely believed they were entitled to in accordance with existing laws and jurisprudence. This is especially true in the instant case where the means of livelihood of the dismissed employees was at stake. Any man in such an uncertain and economically threatened condition would be expected to take whatever measures are available to ensure a means of sustenance for himself and his family. Clearly, Enriquez and Sia were merely pursuing a claim which they honestly believed was due them. Their act is far from being contumacious.

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On the other hand, LA Calanza, on motion of Enriquez and Sia, issued the writ of execution considering that at the time of the application of the writ, this Court had yet to decide G.R. No. 172812. LA Calanza opined that so long as there is no finality yet of the decision reversing a ruling of the LA awarding reinstatement, the same should be enforced. This was how he interpreted this Court’s pronouncements in Roquero Case and Zamora Case that “even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court.” But as we clearly discussed in Bago v. National Labor Relations Commission, while it is true that the reinstatement aspect of the LA decision is immediately executory, the reversal thereof by the NLRC becomes final and executory after ten (10) days from receipt thereof by the parties. That the CA may take cognizance of and resolve a petition for the nullification of the NLRC decision on jurisdictional and due process considerations does not affect the statutory finality of the NLRC decision. It then logically follows that, at the time of the application for the writ since the Court eventually sustained the NLRC and the CA decisions in G.R. No. 172812 no issue of payroll reinstatement may be considered at all after the reversal of the LA decision by the NLRC.

execution. Thus, any act performed by Sheriff Paredes pursuant to the aforesaid writ cannot be considered contemptuous. At the time of the service of the notice of sale, there was no order from any court or tribunal restraining him from enforcing the writ. It was ministerial duty for him to implement it. To be considered contemptuous, an act must be clearly contrary to or prohibited by the order of the court or tribunal. A person cannot, for disobedience, be punished for contempt unless the act which is forbidden or required to be done is clearly and exactly defined, so that there can be no reasonable doubt or uncertainty as to what specific act or thing is forbidden or required.

Still, the erroneous issuance of the writ of execution by LA Calanza can only be deemed grave abuse of discretion which is more properly the subject of a petition for certiorari and not a petition for indirect contempt. No one who is called upon to try the facts or interpret the law in the process of administering justice can be infallible in his judgment. Finally, Sheriff Paredes, in serving the notice of sale, was only performing his duty pursuant to the writ of execution. No matter how erroneous the writ was, it was issued by LA Calanza and was addressed to him as the sheriff, commanding him to collect from petitioner the amount due Enriquez and Sia. In the event he failed to collect the amount, he was authorized to cause the satisfaction of the same on the movable and immovable properties of petitioner not exempt from

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