Rule 35 (Summary Judgment) Cases

MARIANO NOCOM, G.R. No. 182984 Petitioner,

Present:

- versus - PUNO, C.J., Chairperson, CARPIO,

CORONA, AZCUNA, and LEONARDO-DE

Respondents. Promulgated: February 10, 2009

X ---------------------------------------------------------------------------------------- X

DECISION

AZCUNA, J.:

This is a petition for review on certiorari seeking to reverse and set aside the

Decision dated February 14, 2008 of the Court of Appeals (CA) which affirmed the Joint

Order dated June 9, 2005 and Summary Judgment dated June 15, 2006 of the Regional

Trial Court (RTC) of Muntinlupa City, Branch 203 and dismissed petitioner’s appeal under

Rule 41 of the Rules of Court for lack of jurisdiction and its Resolution dated May 23,

2008 which denied petitioner’s motion for reconsideration.

The present case is an offshoot of the prior case, G.R. No. 161029, entitled

“Springsun Management Systems Corporation v. Oscar Camerino, Efren Camerino,

Cornelio Mantile, Nolasco Del Rosario, and Domingo Enriquez,” which was promulgated

on January 19, 2005 (449 SCRA 65) and became final and executory on May 4, 2005 as

recorded in the Book of Entries of Judgment.

The factual antecedents are as follows:

G.R. No. 161029:

Respondent Oscar Camerino and respondents-intervenors Efren Camerino,

Cornelio Mantile, the deceased Nolasco Del Rosario, represented by Mildred Del Rosario,

and Domingo Enriquez were the tenants who were tilling on the parcels of land planted

to rice and corn previously owned by Victoria Homes, Inc. covered by Transfer Certificate

of Title (TCT) Nos. 289237, now S-6135 (109,451 square meters); S-72244 (73,849

square meters); and 289236, now S-35855 (109,452 square meters). On February 9,

1983, without notifying the respondents, Victoria Homes, Inc. sold the said lots to

Springsun Management Systems Corporation (SMSC) for P9,790,612. The three deeds of

sale were duly registered with the Registry of Deeds of Rizal and new titles were issued

in the name of SMSC.

Subsequently, SMSC mortgaged to Banco Filipino (BF) the said lots as collaterals

for its loans amounting to P11,545,000. As SMSC failed to pay the loans due, BF

extrajudicially foreclosed the mortgage and, later, was adjudged the highest

bidder. On May 10, 2000, SMSC redeemed the lots from BF. Earlier, on March 7, 1995,

respondents filed a complaint against SMSC and BF for “Prohibition/Certiorari,

Reconveyance/Redemption, Damages, Injunction with Preliminary Injunction and

Temporary Restraining Order,” docketed as Civil Case No. 95-020, with the RTC of

Muntinlupa City, Branch 256.

On January 25, 2002, the RTC of Muntinlupa City, Branch 256, found respondents

to be tenants who have been tilling on the subject land planted to rice and corn since

1967 and, thus, authorized them to redeem the subject lots. The dispositive portion of

the decision states: WHEREFORE, judgment is hereby as follows: 1. Declaring that plaintiffs are entitled (sic) to redeem, and

ordering the defendant Springsun Management Systems Corporation (now petitioner) to allow plaintiffs to redeem the landholdings in question within 180 days from finality of this decision at the total price of P9,790,612.00; upon full payment of the redemption price, the defendant Springsun Management Systems Corporation is ordered to deliver plaintiffs the titles and the corresponding Deed of Redemption so that the titles to the properties in litigation can be transferred in the name of the plaintiffs;

2. Declaring plaintiffs entitled to possession, and ordering the

defendant Springsun Management Systems Corporation and all persons claiming under it to vacate the lands in question and to surrender the same to the plaintiffs;

3. Dismissing the case against Banco Filipino Savings and

Mortgage Bank; 4. Ordering the defendant Springsun Management Systems

Corporation to pay plaintiffs the sum of P200,000.00 as attorney’s fees, plus costs.

SO ORDERED.[1]

On September 23, 2003, the CA, in CA-G.R. SP No. 72475, affirmed with

modification the RTC by declaring the respondents to be tenants or agricultural lessees

on the disputed lots and, thus, entitled to exercise their right of redemption, but deleted

the award of P200,000 attorney’s fees for lack of legal basis.

On January 19, 2005, this Court, in G.R. No. 161029, affirmed the CA and

reiterated that being agricultural tenants of Victoria Homes, Inc. that had sold the lots to

SMSC without notifying them, respondents had the right to redeem the subject

properties from SMSC.

This Court denied SMSC’s motions for reconsideration and for leave to file a

second motion for reconsideration and, on May 4, 2005, an Entry of Judgment was

made.

The present G.R. No. 182984:

On December 3, 2003, petitioner Mariano Nocom gave the respondents several

Philtrust Bank Manager’s Checks amounting to P500,000 each, which the latter

encashed, representing the price of their “inchoate and contingent rights” over the

subject lots which they sold to him.

On December 18, 2003, respondents, with the marital consent of their wives,

executed an “Irrevocable Power of Attorney” which was notarized by their counsel Atty.

Arturo S. Santos. Thus,

IRREVOCABLE POWER OFATTORNEY [2]

KNOW ALL MEN BY THESE PRESENTS: WE, OSCAR CAMERINO, of legal age, Filipino, married to Teresita L. Magbanua: EFREN CAMERINO, of legal age, Filipino, married to Susana Camerino, CORNELIO MANTILE, of legal age, Filipino, married to Maria Fe Alon, NOLASCO DEL ROSARIO, of legal age, Filipino, married to Mildred Joplo, and DOMINGO ENRIQUEZ, of legal age, Filipino, married to Dionicia Enriquez whose residences are stated under our respective names, hereby APPOINT, NAME, and CONSTITUTE MARIANO NOCOM, of legal age, Filipino, married to Anacoreta Nocom and with office at No. 2315 Aurora Blvd, Pasay City, in an irrevocable manner, coupled with interest, for us and in our stead, to do all or any of the following acts and deeds:

1. To sell, assign, transfer, dispose of, mortgage and alienate the

properties described in TCT Nos. 120542, 120541 and 123872 of the Register of Deeds of Muntinlupa City, currently in the name of Springsun Management Systems Corporation, consisting of 292,752 square meters subject matter of Civil Case No. 95-020 of the Regional Trial Court of Muntinlupa City, Branch 256. The said court, in its decision dated January 25, 2002 which was affirmed with modification of the Court of Appeals in its decision dated September 24, 2003 in CA-G.R. SP No. 72475, adjudged that we are legally entitled to redeem the lands from Springsun Management Systems Corporation;

2. To comply with the said decision by paying the redemption

price to Springsun Management Systems Corporation and/or to the court, and upon such payment, to secure execution of the judgment so that the titles can be issued in the name of our attorney-in-fact;

3. To accept and receive for his exclusive benefit all the proceeds

which may be derived from the sale, mortgage, transfer or deposition thereof;

4. To sign and execute all the necessary papers, deed and

documents that may be necessary or the accomplishment of purposes of the Deed of Assignment, and to issue receipts and proper discharges therefor;

5. To negotiate, deal and transact with all the persons and entities

involved in Civil Case No. 95-020, RTC, Muntinlupa City, Branch 256, with full power and authority to compromise with them;

6. To procure all documents and papers in government agencies

relative to the said properties and case in court; and

7. To procure the necessary transfer certificate of titles in his name as the absolute owner of said properties.

GIVING AND GRANTING full power and authority to our said attorney-

in-fact to do all things requisite and necessary with legal effects as if done by us when present.

IN WITNESS WHEREOF, We have hereunto affixed [our] signatures this 18th day of December, 2003. (Sgd.) OSCAR CAMERINO (Sgd.) EFREN CAMERINO Principal PrincipalSparrow St., Diamond Park San Antonio, San PedroVictoria Homes, Tunasan LagunaMuntinlupa City (Sgd.) CORNELIO MANTILE (Sgd.) NOLASCO DEL ROSARIO Principal PrincipalVictoria Ave., Tunasan Esmido St., Diamond ParkMuntinlupa City Victoria Homes, Muntinlupa City (Sgd.) DOMINGO ENRIQUEZ Principal Tunasan Proper, Arandia Tunasan, Muntinlupa City WITH OUR MARITAL CONSENT: (Sgd.) TERESITA MAGBANUA (Sgd.) SUSANA CAMERINO Wife of Oscar Camerino Wife of Efren Camerino (Sgd.) MARIA FE ALON ALON (Sgd.) MILDRED JOPLO Wife of Cornelio Mantile Wife of Nolasco del Rosario (Sgd.) DIONICIA ENRIQUEZ Wife of Domingo Enriquez CONFORME: (Sgd.) MARIANO NOCOM Attorney-in-Fact

Meanwhile, on July 21, 2005, the respondents, in Civil Case No. 95-020 of the RTC

of Muntinlupa City, Branch 256, filed a Motion for Execution with Prayer to Order the

Register of Deeds of Muntinlupa City to divest SMSC of title to the subject lots and have

the same vested on them. As SMSC refused to accept the redemption amount

ofP9,790,612 plus P147,059.18 as commission given by the petitioner, the respondents

deposited, on August 4, 2005, the amounts of P9,790,612, P73,529.59, and P73,529.59,

duly evidenced by official receipts, with the RTC of Muntinlupa City, Branch 256. The

RTC of Muntinlupa City, Branch 256 granted respondents’ motion for execution and,

consequently, TCT Nos. 120542, 120541 and 123872 in the name of SMSC were

cancelled and TCT Nos. 15895, 15896 and 15897 were issued in the names of the

respondents. It also ordered that the “Irrevocable Power of Attorney,” executed

on December 18, 2003 by respondents in favor of petitioner, be annotated in the

memorandum of encumbrances of TCT Nos. 15895, 15896, and 15897.

On October 24, 2005, respondent Oscar Camerino filed a complaint against

petitioner, captioned as “Petition to Revoke Power of Attorney,” docketed as Civil Case

No. 05-172, in the RTC of Muntinlupa City, Branch 203, seeking to annul the “Irrevocable

Power of Attorney” dated December 18, 2003, the turnover of the titles to the properties

in his favor, and the payment of attorney’s fees and other legal fees.

Respondent Oscar Camerino’s complaint alleged that he and co-respondents were

asked by their counsel, Atty. Arturo S. Santos, to sign a document with the

representation that it was urgently needed in the legal proceedings against SMSC; that

the contents of the said document were not explained to him; that in the first week of

September 2005, he learned that TCT Nos. 15895, 15896 and 15897 were issued in their

favor by the Register of Deeds; that he discovered that the annotation of the

“Irrevocable Power of Attorney” on the said titles was pursuant to the Order of the RTC

of Muntinlupa City, Branch 256 dated August 31, 2005; that the “Irrevocable Power of

Attorney” turned out to be the same document which Atty. Santos required him and the

other respondents to sign on December 18, 2003; that despite repeated demands,

petitioner refused to surrender the owner’s duplicate copies of the said titles; that

petitioner had retained ownership over the subject lots; that he had no intention of

naming, appointing, or constituting anyone, including petitioner, to sell, assign, dispose,

or encumber the subject parcels of land; and that he executed an Affidavit of Adverse

Claim which was annotated on the titles involving the subject lots.

In his Answer with Counterclaim, petitioner countered that on September 3, 2003,

Atty. Santos informed him of the desire of his clients, herein respondents, to sell and

assign to him their “inchoate and contingent rights and interests” over the subject lots

because they were in dire need of money and could no longer wait until the termination

of the proceedings as SMSC would probably appeal the CA’s Decision to this Court; that

they did not have the amount of P9,790,612 needed to redeem the subject lots; that on

December 18, 2003, he decided to buy the contingent rights of the respondents and paid

each of them P500,000 or a total of P2,500,000 as evidenced by Philtrust Bank

Manager’s Check Nos. MV 0002060 (for respondent Oscar Camerino), MV 0002061 (for

respondent Efren Camerino), MV 0002062 (for respondent Cornelio Mantile), MV

0002063 (for Nolasco Del Rosario), and MV 0002064 (for Domingo Enriquez) which they

personally encashed on December 19, 2003; that on August 4, 2005, he also paid the

amount of P147,059.18 as commission; that simultaneous with the aforesaid payment,

respondents and their spouses voluntarily signed the “Irrevocable Power of Attorney”

dated December 18, 2003; that being coupled with interest, the “Irrevocable Power of

Attorney” cannot be revoked or cancelled at will by any of the parties; and that having

received just and reasonable compensation for their contingent rights, respondents had

no cause of action or legal right over the subject lots. Petitioner prayed for the dismissal

of the complaint and the payment of P1,000,000 moral damages, P500,000 exemplary

damages, and P500,000 attorney’s fees plus costs.

On January 17, 2006, petitioner filed a Motion for Preliminary Hearing on his

special and/or affirmative defense that respondent Oscar Camerino had no cause of

action or legal right over the subject lots because the latter and his wife received the

proceeds of the Philtrust Bank Manager’s check in the sum of P500,000 which they

personally encashed on December 19, 2003 and that being coupled with interest, the

“Irrevocable Power of Attorney” cannot be revoked or cancelled at will by any of the

parties.

On January 26, 2006, respondents Efren Camerino, Cornelio Mantile and Mildred

Del Rosario, in her capacity as legal heir and representative of Nolasco Del Rosario, filed

a Motion for Leave of Court to Admit the Complaint-in-Intervention with the attached

Complaint-in-Intervention, dated January 26, 2006, seeking the nullification of the

“Irrevocable Power of Attorney” for being contrary to law and public policy and the

annotation of the “Irrevocable Power of Attorney” on the titles of the subject lots with

prayer that petitioner be ordered to deliver to them the copies of the owner’s duplicate

certificate of TCT Nos. 15895, 15896, and 15897. Their Complaint-in-Intervention

alleged that they had a legal interest in the subject matter of the controversy and would

either be directly injured or benefited by the judgment in Civil Case No. 05-172; that

they were co-signatories or co-grantors of respondent Oscar Camerino in the

“Irrevocable Power of Attorney” they executed in favor of the petitioner; that their

consent was vitiated by fraud, misrepresentation, machination, mistake and undue

influence perpetrated by their own counsel, Atty. Santos, and petitioner; that sometime

in December 2003, Atty. Santos called for a meeting which was attended by petitioner

and one Judge Alberto Lerma where petitioner gave them checks in the amount

of P500,000 each as “Christmas gifts”; and that the “Irrevocable Power of Attorney” was

void ab initio as the same was contrary to law and public policy and for being a

champertous contract.

On January 30, 2006, respondent Oscar Camerino filed a Motion for Summary

Judgment alleging that since the existence of the “Irrevocable Power of Attorney” was

admitted by petitioner, the only issue to be resolved was whether the said document

was coupled with interest and whether it was revocable in contemplation of law and

jurisprudence; that Summary Judgment was proper because petitioner did not raise any

issue relevant to the contents of the “Irrevocable Power of Attorney”; and that in an

Affidavit dated January 23, 2005, he admitted receipt of a check amounting

to P500,000.00 which was given to him by petitioner as financial assistance.

On February 3, 2006, petitioner opposed respondent Oscar Camerino’s motion on

the ground that there were factual issues that required the presentation of

evidence.

On February 14, 2006, petitioner filed a Motion to Dismiss the complaint on the

ground that the petition for the cancellation of the “Irrevocable Power of Attorney” was

actually an action to recover the titles and ownership over the properties; that since

respondent Oscar Camerino alleged in paragraph 29 of his Motion for Summary

Judgment that the assessed value of the subject lots amounted to P600,000,000, the

case partook of the nature of a real action and, thus, the docket fees of P3,929 was

insufficient; and that due to insufficient docket fee, his complaint should be dismissed as

the RTC was not vested with jurisdiction over the subject matter of the complaint.

On February 22, 2006, respondent Oscar Camerino opposed petitioner’s motion

for preliminary hearing of special and/or affirmative defenses alleging that it was dilatory

and that he had a cause of action.

On March 9, 2006, respondent Oscar Camerino filed his Reply to petitioner’s

Opposition to the Motion for Summary Judgment claiming that the determinative issue of

whether or not the amount of P500,000 given to him by petitioner rendered the power of

attorney irrevocable can be determined from the allegations in the pleadings and

affidavits on record without the need of introduction of evidence.

On May 5, 2006, respondent Oscar Camerino filed an Opposition to petitioner’s

Motion to Dismiss stating that the instant case was a personal action for the revocation

of the “Irrevocable Power of Attorney” and not for the recovery of real property and,

thus, the correct docket fees were paid.

On June 9, 2006, the RTC of Muntinlupa City, Branch 203 admitted the Complaint-

in-Intervention because the movants-intervenors ([herein respondents] Efren Camerino,

Cornelio Mantile, and Mildred Del Rosario as legal heir of Nolasco Del Rosario) “have

legal interest in the subject properties in litigation and in the success of the petitioner

[herein respondent Oscar Camerino], who was precisely their co-plaintiff in Civil Case No.

95-020, entitled ‘Oscar Camerino, et al. v. Springsun Management Systems Corporation

et al.,’ where they are the prevailing parties against the defendant therein [SMSC], with

respect to the same properties, subject of this case, in a decision rendered by Branch

256 of this Court.” The RTC, Branch 203, also granted the Motion for Summary

Judgment because “a meticulous scrutiny of the material facts admitted in the pleadings

of the parties reveals that there is really no genuine issue of fact presented therein that

needs to be tried to enable the court to arrive at a judicious resolution of a matter of law

if the issues presented by the pleadings are not genuine issues as to any material fact

but are patently unsubstantial issues that do not require a hearing on the

merits.” Thus,

The instant Motion to Dismiss by the respondent is therefore DENIED, PROVIDED, the petitioner should pay the balance of the docket fees remaining unpaid, if any, pursuant to Rule 141, Section 7 of the Rules of Court, as amended by A.M. No. 04-2-04-SC within the applicable prescriptive or reglementary period. The “Motion for Intervention” timely filed by intervenors Efren Camerino, Cornelio Mantile and Mildred Del Rosario, in her capacity as legal heir of Nolasco Del Rosario, as opposed by the respondent, is hereby GRANTED.

x x x

Petitioner’s Motion for Summary Judgment is therefore GRANTED. Consequently, respondent’s Motion for Preliminary Hearing on his Special and Affirmative Defenses is deemed moot and academic. SO ORDERED.[3]

On June 15, 2006, the RTC of Muntinlupa City, Branch 203 rendered a Summary

Judgment annulling the “Irrevocable Power of Attorney” for being contrary to law and

public policy. The pertinent portions of the trial court’s decision state that:

Irrespective of whether the Power of Attorney in question is coupled with interest, or not, the same can be revoked or annulled, firstly, because it is contrary to law and secondly it is against public policy.

As aptly pointed out by the intervenors, the assailed Special Power of

Attorney which under its ultimate paragraph among others, authorizes the respondent (Nocom) ‘to procure the necessary Transfer Certificate of Title in his name, as the absolute owner of the said properties is a disguised conveyance or assignment of the signatories’ statutory rights of redemption and therefore prohibited under the provisions of Republic Act No. 3844, Sec. 62 which provides:

Sec. 62. Limitation on Land Rights. Except in case of heredity succession by one heir, landholdings

acquired under this Code may not be resold, mortgaged, encumbered, or transferred until after the lapse of ten years from the date of full payment and acquisition and after such ten year period, any transfer, sale or disposition may be made only in favor of persons qualified to acquire economic family-size farm units in accordance with the provisions of this Code xxx. (underlining supplied)

The assailed “power of attorney” which was executed on December 18, 2003 is void ab initio for being contrary to the express prohibition or spirit of the aforesaid law or the declared state and public policy on the qualification of the beneficiaries of the agrarian reform program. It bears stressing that the redemption price of the subject lots was paid only on August 4, 2005or 1 year, 8 months and 14 days after the execution of the assailed power of attorney. If pursuant to the spirit of the Agrarian Reform Law, the tenant cannot even sell or dispose of his landholding within ten (10) years after he already acquired the same or even thereafter to persons not qualified to acquire economic size farm units in accordance with the provisions of the Agrarian Reform Code, with more reason should the tenant not be allowed to alienate or sell his landholding before he actually acquires the same. The right of redemption of the petitioner and his co-plaintiffs in Civil Case No. 95-020 as upheld by the Court of Appeals and the Supreme Court is founded on a piece of social legislation known as Agrarian Reform Code. Enunciated in the case of Association of Small Landowners in the Philippines, et al., vs. Hon. Secretary of Agrarian Reform (G.R. No. 78742, July 14, 1989) is the policy of the State on agrarian reform legislation. Said State policy emphasizes the “Land for the Landless” slogan that underscores the acute imbalance in the distribution of land among the people. Furthermore, the assailed Special Power of Attorney is a champertous contract and therefore void for being against public policy. The pleadings of the parties show that the same special power of attorney was executed by the petitioner, et al. through the intercession of Atty. Arturo Santos and at the behest of the respondent. In his own answer to the instant petition which he is estopped to deny, the

respondent alleges that the actual agreement was for the respondent to pay the expenses of the proceedings to enforce the rights of the petitioner and his co-plaintiffs in Civil Case No. 95-020 without any provision for reimbursement. In other words, the respondents, through the intercession of Atty. Santos, petitioner’s attorney, had agreed to carry on with the action for the petitioner et al. at his own expense in consideration of procuring for himself the title to the lots in question as the absolute owner thereof, with the respondent paying the redemption price of said lots, as well as separate amounts of Five Hundred Thousand (P500,000.00) to each of the five (5) co-plaintiffs in Civil Case No. 95-020, including herein petitioner, or a total sum of Two Million Five Hundred Thousand Pesos (P2,500,000.00). Under the premises, the aforesaid contract brokered by Atty. Arturo Santos has all really the earmarks of a champertous contract which is against public policy as it violates the fiduciary relations between the lawyer and his client, whose weakness or disadvantage is being exploited by the former. In other words, the situation created under the given premises is a clear circumvention of the prohibition against the execution of champertous contracts between a lawyer and a client.

A champertous contract is defined as a contract between a stranger and a party to a lawsuit, whereby the stranger pursues the party’s claim in consideration of receiving part or any of the proceeds recovered under the judgment; a bargain by a stranger with a party to a suit, by which such third person undertakes to carry on the litigation at his own cost and risk, in consideration of receiving, if successful, a part of the proceeds or subject sought to be recovered. (Blacks Dictionary; Schnabel v. Taft Broadcasting Co., Inc. Mo. App. 525 S.W. 2d 819, 823). An Agreement whereby the attorney agrees to pay expenses of proceedings to enforce the client’s rights is champertous. [JBP Holding Corporation v. U.S. 166 F. Supp. 324 (1958)]. Such agreements are against public policy especially where as in this case, the attorney has agreed to carry on the action at its own expense in consideration of some bargain to have part of the thing in dispute. [See Sampliner v. Motion Pictures Patents Co., et al., 225 F. 242 (1918). The execution of these contracts violates the fiduciary relationship between the lawyer and his client, for which the former must incur administrative sanction.

The intention of the law in prohibiting this kind of contract is to prevent a lawyer from acquiring an interest in the subject of the litigation and to avoid a conflict of interest between him and his client. In the instant case, it seems that Atty. Santos and the respondent colluded and conspired to circumvent these prohibitions. Considering therefore that Atty. Santos, then petitioner’s counsel, brokered the alleged deal between petitioners et al. and the respondent with respect to the lands subject of litigation in Civil Case No. 95-020, the deal contracted is illegal for being a champertous agreement and therefore it cannot be enforced.

Be that as it may, granting the agency established in the assailed Power of Attorney is coupled with interest, the petitioner and his co-plaintiffs in Civil Case No. 95-020, who are the present intervenors, are not revoking the Power of Attorney at will but have precisely gone to court and filed the instant petition for its cancellation or revocation. What is prohibited by law and jurisprudence is the arbitrary and whimsical

revocation of a power of attorney or agency coupled with interest, at will by a party, without court declaration.

WHEREFORE, judgment is hereby rendered as follows: (1) Nullifying the “Irrevocable Power of Attorney” in question dated

December 18, 2003, signed by the petitioner [herein respondent Oscar Camerino] and his co-plaintiffs [herein respondents who were the movant-intervenors] in Civil Case No. 95-020 in favor of the respondent [herein petitioner];

(2) Ordering the respondent to turnover the Certificates of Title Nos.

15895, 15896 and 15897 covering the lots, the subject of this case, to the petitioner and the intervenors;

(3) Ordering the respondent to pay the petitioner attorney’s fees and

all other legal fees incurred by the latter in connection with this case; (4) Ordering the petitioner and the intervenors to return to the

respondent the amount of P7,790,612 paid by the latter as redemption price of the lots in question plus commission ofP147,049.18; and

(5) Ordering the petitioner Oscar Camerino and the intervenors Efren

Camerino, Cornelio Mantile, Nolasco Del Rosario or his heirs and Domingo Enriquez, who are petitioner’s co-plaintiffs in Civil Case No. 95-020, to return to the respondent the total amount of P2,500,000.00 or P500,000.00 from each of them paid by the respondent to them under Philtrust Bank Check Nos. MV 0002060, MV 0002061, MV 0002062, MV 0002063, and MV 0002064 which checks were encashed by them with the drawee bank.

SO ORDERED.[4]

On July 3, 2006 petitioner filed an Omnibus Motion for Reconsideration seeking to

set aside the trial court’s Joint Order dated June 9, 2005 and Summary Judgment

datedJune 15, 2006 which was opposed by the respondents.

On July 4, 2006, respondents filed a Motion for Execution Pending Final

Decision/Appeal which was opposed by petitioner.

On August 14, 2006, the trial court issued an order denying petitioner’s Omnibus

Motion for Reconsideration. Within the reglementary period, petitioner filed a Notice of

Appeal and paid the corresponding appeal docket fees.

On February 14, 2008, the CA affirmed the trial court’s Joint Order dated June 9,

2006 and Summary Judgment dated June 15, 2006 and dismissed the petitioner’s

appeal for lack of jurisdiction. The CA ruled that as the RTC rendered the assailed

Summary Judgment based on the pleadings and documents on record, without any trial

or reception of evidence, the same did not involve factual matters. The CA found the

issues raised by the petitioner in his appeal to be questions of law, to wit: (a) whether

Summary Judgment was proper under the admitted facts and circumstances obtaining in

the present case; (b) whether undue haste attended the rendition of the Summary

Judgment; (c) whether the Summary Judgment was valid for failure of the RTC to implead

an indispensable party; (d) whether the RTC erred in allowing the intervention of

respondents Efren Camerino, Cornelio Mantile, and Mildred Del Rosario; and (e) whether

the RTC erred in taking cognizance of the case despite nonpayment of the required

docket fees. The CA concluded that since the issues involved questions of law, the

proper mode of appeal should have been through a petition for review

on certiorari under Rule 45 of the Rules of Court directly to this Court and not through an

ordinary appeal under Rule 41 thereof and, thus, petitioner’s appeal to the CA should be

dismissed outright pursuant to this Court’s Circular No. 2-90, dated March 9, 1990,

mandating the dismissal of appeals involving pure questions of law erroneously brought

to the CA.

In its Resolution of May 23, 2008, the CA denied petitioner’s Motion for

Reconsideration dated February 26, 2008.

Hence, this present petition.

Petitioner raises the following issues:

I

WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED AN ERROR IN DISMISSING PETITIONER’S APPEAL.

II

WHETHER OR NOT THE COURT OF APPEALS ERRED IN UPHOLDING THE SUMMARY JUDGMENT OF THE TRIAL COURT DESPITE THE GENUINE ISSUE OF FACT RAISED IN PETITIONER’S ANSWER.

III

WHETHER OR NOT THE COURT OF APPEALS IS CORRECT IN NOT VOIDING THE ASSAILED SUMMARY JUDGMENT FOR FAILURE OF RESPONDENTS TO IMPLEAD AN INDISPENSABLE PARTY.

IV

WHETHER OR NOT THE COURT OF APPEALS ERRED IN NOT DISMISSING CIVIL CASE NO. 05-172 FOR NON-PAYMENT OF THE CORRECT DOCKET FEES.

Petitioner contends that the CA erred in dismissing his appeal as the case involves

questions of fact; that summary judgment was not proper as there were genuine issues

of fact raised in his Answer; that respondents failed to implead their lawyer, Atty. Arturo

S. Santos, as an indispensable party-defendant, who, according to them, allegedly

connived with him in making them sign the “Irrevocable Power of Attorney” in his favor;

and that since the case partakes of the nature of an action to recover ownership and

titles to the properties, respondents’ complaint should be dismissed for failure to pay the

correct docket fees.

Respondent Oscar Camerino argues that the sole issue to be resolved pertains to

the legal issue of whether the Special Power of Attorney (SPA) denominated as

irrevocable may be revoked; that three material facts have been established, i.e., that

the SPA was executed, that Atty. Santos facilitated the signing and execution of the SPA,

and that petitioner paid P500,000 to each of the respondents in consideration for the

signing of the SPA and, thus, summary judgment was proper; and that pure questions of

law are not proper in an ordinary appeal under Rule 41 of the Rules.

Respondents Efren Camerino, Cornelio Mantile, and Mildred Del Rosario, in her

capacity as legal heir of Nolasco Del Rosario, aver that petitioner’s petition is insufficient

in form, i.e., due to defective verification as the word “personal” was not stated when

referring to “personal knowledge,” and in substance, i.e., there is no genuine issue to be

resolved as the factual allegations of the petitioner are unsubstantial and that Atty.

Santos is not an indispensable party to the case.

The petition has merit.

In dismissing petitioner’s appeal, the CA erroneously relied on the rationale that

the petitioner’s appeal raised questions of law and, therefore, it had no recourse but to

dismiss the same for lack of jurisdiction. The summary judgment rendered by the trial

court has the effect of an adjudication on the merits and, thus, the petitioner, being the

aggrieved party, correctly appealed the adverse decision of the RTC to the CA by filing a

notice of appeal coupled with the appellant’s brief under Rule 41 of the Rules.

Contrary to the findings of the RTC and the CA, the present case involves certain

factual issues which remove it from the coverage of a summary judgment.

Under Section 1, Rule 35 of the Rules of Court, a party seeking to recover upon a

claim, counterclaim, or cross-claim or to obtain a declaratory relief may, at any time

after the pleading in answer thereto has been served, move with supporting affidavits,

depositions or admissions for a summary judgment in his favor upon all or any part

thereof.

Summary judgment is a procedural device resorted to in order to avoid long drawn

out litigations and useless delays. When the pleadings on file show that there are no

genuine issues of fact to be tried, the Rules allow a party to obtain immediate relief by

way of summary judgment, that is, when the facts are not in dispute, the court is allowed

to decide the case summarily by applying the law to the material facts. Conversely,

where the pleadings tender a genuine issue, summary judgment is not proper. A

“genuine issue” is such issue of fact which requires the presentation of evidence as

distinguished from a sham, fictitious, contrived or false claim. Section 3 of the said rule

provides two (2) requisites for summary judgment to be proper: (1) there must be

no genuine issue as to any material fact, except for the amount of damages; and (2) the

party presenting the motion for summary judgment must be entitled to a judgment as a

matter of law.[5] A summary judgment is permitted only if there is no genuine issue as to

any material fact and a moving party is entitled to a judgment as a matter of law. A

summary judgment is proper if, while the pleadings on their face appear to raise issues,

the affidavits, depositions, and admissions presented by the moving party show that

such issues are not genuine.[6]

The present case should not be decided via a summary judgment. Summary

judgment is not warranted when there are genuine issues which call for a full blown

trial. The party who moves for summary judgment has the burden of demonstrating

clearly the absence of any genuine issue of fact, or that the issue posed in the complaint

is patently unsubstantial so as not to constitute a genuine issue for trial. Trial courts

have limited authority to render summary judgments and may do so only when there is

clearly no genuine issue as to any material fact. When the facts as pleaded by the

parties are disputed or contested, proceedings for summary judgment cannot take the

place of trial.

Summary judgment is generally based on the facts proven summarily by affidavits,

depositions, pleadings, or admissions of the parties. In this present case, while both

parties acknowledge or admit the existence of the “Irrevocable Power of Attorney,” the

variance in the allegations in the pleadings of the petitioner vis-à-vis that of the

respondents require the presentation of evidence on the issue of the validity of the

“Irrevocable Power of Attorney” to determine whether its execution was attended by the

vices of consent and whether the respondents and their spouses did not freely and

voluntarily execute the same. In his Answer with Counterclaim, petitioner denied the

material allegations of respondent Oscar Camerino’s complaint for being false and

baseless as respondents were informed that the document they signed was the

“Irrevocable Power of Attorney” in his favor and that they had received the full

consideration of the transaction and, thus, had no legal right over the three parcels of

land. Indeed, the presentation of evidence is necessary to determine the validity and

legality of the “Irrevocable Power of Attorney,” dated December 18, 2003, executed by

the respondents in favor of the petitioner. From said main factual issue, other relevant

issues spring therefrom, to wit: whether the said “Irrevocable Power of Attorney” was

coupled with interest; whether it had been obtained through fraud, deceit, and

misrepresentation or other vices of consent; whether the five (5) Philtrust Bank

Manager’s checks given by petitioner to the respondents amounting to P500,000 each

were in consideration of the “inchoate and contingent rights” of the respondents in favor

of the petitioner; whether Atty. Santos connived with petitioner in causing the

preparation of the said document and, therefore, should be impleaded as party-

defendant together with the petitioner; whether respondents deposited the amount

of P9,790,612.00 plus P147,059.18 with the RTC of Muntinlupa City, Branch 256; and

whether the sale of respondents’ inchoate and contingent rights amounted to a

champertous contract.

The incongruence and disparity in the material allegations of both parties have

been evident. Respondent Oscar Camerino alleged in his complaint that he and his co-

respondents were required by their counsel, Atty. Santos, to sign a document on the

representation that it was urgently needed in the legal proceedings against SMSC which

turned out to be the “Irrevocable Power of Attorney”; but petitioner disproved the

vitiated consent on the part of the respondents as they knew fully well that the

document they signed, voluntarily and intelligently, on December 18, 2003, was the said

“Irrevocable Power of Attorney.” Respondent Oscar Camerino alleged in his complaint

that he has no intention of naming, appointing or constituting anyone, including the

petitioner, to sell, assign, dispose or encumber the lots in question; but petitioner

maintained that respondent Oscar Camerino agreed to sell and assign to him his

“inchoate and contingent rights and interests” over the subject lot for and in

consideration of the sum of P500,000, plus the redemption price

of P9,790,612. Respondents claimed that the amount they received was grossly

disproportionate to the value of the subject land; but petitioner countered that the

respondents did not have the amount of P9,790,612 needed to redeem the subject lots,

so he decided to buy their contingent rights and paid each of them P500,000 or a total

ofP2,500,000 as evidenced by five (5) Philtrust Bank Manager’s Check which they

personally encashed on December 19, 2003, that he also paid the amount

of P147,059.18 as commission on August 4, 2005, that simultaneous with the aforesaid

payment, respondents and their spouses voluntarily signed the “Irrevocable Power of

Attorney” dated December 18, 2003, and that being coupled with interest, the

“Irrevocable Power of Attorney” cannot be revoked at will by any of the parties.

Respondents maintain that they were deceived into executing the “Irrevocable

Power of Attorney” in favor of the petitioner which was done through the maneuverings

of their own lawyer, Atty. Santos, who, according to them, had connived with petitioner

in order to effect the fraudulent transaction. In this regard, respondents should have

impleaded Atty. Santos as an indispensable party-defendant early on when the case was

still with the RTC, but they failed to do so. However, their procedural lapse did not

constitute a sufficient ground for the dismissal of Civil Case No. 05-172.

In Domingo v. Scheer,[8] the Court explained that the non-joinder of an

indispensable party is not a ground for the dismissal of an action. Section 7, Rule 3 of

the Rules, as amended, requires indispensable parties to be joined as plaintiffs or

defendants. The joinder of indispensable parties is mandatory. Without the presence of

indispensable parties to the suit, the judgment of the court cannot attain real

finality. Strangers to a case are not bound by the judgment rendered by the court. The

absence of an indispensable party renders all subsequent actions of the court null and

void. There is lack of authority to act not only of the absent party but also as to those

present. The responsibility of impleading all the indispensable parties rests on the

petitioner or plaintiff. However, the non-joinder of indispensable parties is not a ground

for the dismissal of an action. Parties may be added by order of the court on motion of

the party or on its own initiative at any stage of the action and/or such times as are

just. If the petitioner or plaintiff refuses to implead an indispensable party despite the

order of the court, the latter may dismiss the complaint or petition for the petitioner or

plaintiff’s failure to comply therefor. The remedy is to implead the non-party claimed to

be indispensable. In the present case, the RTC and the CA did not require the

respondents to implead Atty. Santos as party-defendant or respondent in the case. The

operative act that would lead to the dismissal of Civil Case No. 05-172 would be the

refusal of respondents to comply with the directive of the court for the joinder of an

indispensable party to the case.

In his petition, petitioner prays for the reversal of the Decision dated February 14,

2008 of the CA which affirmed the Joint Order dated June 9, 2005 and Summary

Judgment dated June 15, 2006 of the RTC of Muntinlupa City, Branch 203 and dismissed

petitioner’s appeal under Rule 41 of the Rules for lack of jurisdiction and its Resolution

dated May 23, 2008 which denied petitioner’s motion for reconsideration; the annulment

of the RTC’s Summary Judgment rendered on June 15, 2006; and the dismissal of Civil

Case No. 05-172 filed with the RTC on the ground that respondents failed to pay the

correct docket fees as the action actually sought the recovery of ownership over the

subject properties.

The record shows that Civil Case No. 05-172 is a complaint filed by respondent

Oscar Camerino against petitioner, denominated as “Petition to Revoke Power of

Attorney,” that seeks to nullify the “Irrevocable Power of Attorney” coupled with interest

dated December 18, 2003; that petitioner be ordered to turn over TCT No. 15898, 15896,

and 15897 to him; and that petitioner be ordered to pay the attorney’s fees and other

legal fees as a consequence of the suit. This case is therefore not an action to recover

the titles and ownership over the subject properties. For now, the nature of the suit

remains that of personal action and not a real action in contemplation of Rule 4 of the

Rules. Hence, the docket fees paid by the respondents were in order. Should the

complaint be amended to seek recovery of ownership of the land, then the proper docket

fees should be paid and collected.

While the RTC erred in rendering the summary judgment, Civil Case No. 05-172

should not perforce be dismissed. Instead, this present case should be remanded to the

RTC for further proceedings and proper disposition according to the rudiments of a

regular trial on the merits and not through an abbreviated termination of the case by

summary judgment.

WHEREFORE, the petition is PARTLY GRANTED. The Decision of the Court of

Appeals dated February 14, 2008 which affirmed the Joint Order dated June 9, 2005 and

Summary Judgment dated June 15, 2006 of the Regional Trial Court of Muntinlupa City,

Branch 203 and dismissed petitioner’s appeal under Rule 41 of the Rules of Court on the

ground of lack of jurisdiction and the Resolution of the Court of Appeals dated May 23,

2008 which denied petitioner’s motion for reconsideration in CA-G.R. CV No. 87656

are REVERSED and SET ASIDE. The case is REMANDED to

the Regional Trial Court of Muntinlupa City, Branch 203, for further proceedings in

accordance with this Decision.

G.R. No. 176570 July 18, 2012

SPOUSES RAMON VILLUGA and MERCEDITA VILLUGA, Petitioners, vs.KELLY HARDWARE AND CONSTRUCTION SUPPLY INC., represented by ERNESTO V. YU, Executive Vice-President and General Manager, Respondent.

D E C I S I O N

PERALTA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse and set aside the Decision1 and Resolution2 dated November 30, 2006 and February 8, 2007 of the Court of Appeals (CA) in CA-G.R. CV No. 69001. The CA Decision affirmed the Orders of the Regional Trial Court (RTC) of Bacoor, Cavite, Branch 89, dated September 28, 1998 and May 6, 1999, while theCA Resolution denied petitioners' Motion for Reconsideration.

The factual and procedural antecedents of the case are as follows:

On March 3, 1995, herein respondent filed with the RTC of Bacoor, Cavite a Complaint for a Sum of Money and Damages against herein petitioners alleging as follows:

x x x x

(3) During the period of November 19, 1992 to January 5, 1993, defendants [herein petitioners] made purchases of various construction materials from plaintiff corporation [herein respondent] in the sum of P259,809.50, which has not been paid up to the present time, both principal and stipulated interests due thereon.

(4) Plaintiff made several demands, oral and written, for the same defendants to pay all their obligations due plaintiff herein, but defendants fail and refuse to comply with, despite demands made upon them, to the damage and prejudice of plaintiff.

x x x x

WHEREFORE, premises considered, it is most respectfully prayed of this Honorable Court that judgment be rendered in favor of plaintiff and against defendants by ordering defendants to pay the sum of:

(1) P259,809.50 as principal obligation due plaintiff, plus interest due thereon at 14% interest per annum, until all sums due are paid in full.

(2) P64,952.38 by way of reimbursements of attorney's fees plus P500.00 appearance fee in court.

(3) P26,000.00 for litigation and other related expenses.

And to pay the cost of suit.3

In their Answer to Complaint,4 petitioners admitted having made purchases from respondent, but alleged that they do not remember the exact amount thereof as no copy of the documents evidencing the purchases were attached to the complaint. Petitioners, nonetheless, claimed that they have made payments to the respondent on March 4, 1994 and August 9, 1994 in the amounts of P110,301.80 and P20,000.00, respectively, and they are willing to pay the balance of their indebtedness after deducting the payments made and after verification of their account.

In a Manifestation5 dated July 18, 1995, petitioners stated that in order to buy peace, they were willing to pay respondent the principal sum of P259,809.50, but without interests and costs, and on installment basis.

In its Counter Manifestation,6 respondent signified that it was amenable to petitioners' offer to pay the principal amount of P259,809.50. However, respondent insisted that petitioners should also pay interests, as well as litigation expenses and attorney's fees, and all incidental expenses.

Subsequently, on August 11, 1995, respondent filed a Motion for Partial Judgment on the Pleadings7 contending that petitioners were deemed to have admitted in their Answer that they owed respondent the amount of P259,809.50 when they claimed that they made partial payments amounting to P130,301.80. Based on this premise, respondent

http://www.lawphil.net/judjuris/juri2012/jul2012/gr_176570_2012.html#fnt7







prayed that it be awarded the remaining balance of P129,507.70. Petitioners filed their Opposition8 to the said Motion.

On September 11, 1995, the RTC issued an Order9 deferring resolution of respondent's Motion for Partial Judgment on the ground that there is no clear and specific admission on the part of petitioners as to the actual amount that they owe respondent.

On January 30, 1996, respondent filed an Amended Complaint,10 with leave of court, alleging that between October 1992 until January 5, 1993, petitioners purchased from it (respondent) various construction materials and supplies, the aggregate value of which is P279,809.50; that only P20,000.00 had been paid leaving a balance of P259,809.50.

In their Answer to Amended Complaint,11 petitioners reiterated their allegations in their Answer to Complaint.

On March 8, 1996, respondent filed a Request for Admission12 asking that petitioners admit the genuineness of various documents, such as statements of accounts, delivery receipts, invoices and demand letter attached thereto as well as the truth of the allegations set forth therein.

Respondent basically asked petitioners to admit that the latter's principal obligation is P279,809.50 and that only P20,000.00 was paid.

On June 3, 1996, respondent filed a Manifestation and Motion13 before the RTC praying that since petitioners failed to timely file their comment to the Request for Admission, they be considered to have admitted the genuineness of the documents described in and exhibited with the said Request as well as the truth of the matters of fact set forth therein, in accordance with the Rules of Court.

On June 6, 1996, petitioners filed their Comments on the Request for Admission14 stating their objections to the admission of the documents attached to the Request.

On January 24, 1997, respondent filed its Second Amended Complaint,15 again with leave of court. The amendment modified the period covered by the complaint. Instead of October 1992 to January 5, 1993, it was changed to July 29, 1992 until August 10, 1994. The amendment also confirmed petitioners' partial payment in the sum of P110,301.80 but alleged that this payment was applied to other obligations which petitioners owe respondent. Respondent reiterated its allegation that, despite petitioners' partial payment, the principal amount which petitioners owe remains P259,809.50.

Petitioners filed their Answer to the Second Amended Complaint16 denying the allegations therein and insisting that they have made partial payments.

On September 4, 1997, respondent filed a Motion to Expunge with Motion for Summary Judgment17 claiming that petitioners' Comments on respondent's Request for Admission is a mere scrap of paper as it was signed by petitioners' counsel and not by petitioners themselves and that it was filed beyond the period allowed by the Rules of Court. Respondent goes on to assert that petitioners, in effect, were deemed to have impliedly admitted the matters subject of the said request. Respondent also contended that it is already entitled to the issuance of a summary judgment in its favor as petitioners not only failed to tender a genuine issue as to any material fact but also did not raise any special defenses, which could possibly relate to any factual issue.

In their Opposition to Motion to Expunge with Motion for Summary Judgment,18 petitioners argued that respondent's request for admission is fatally defective, because it did not indicate or specify a period within which to answer; that verification by petitioners' counsel is sufficient compliance with the Rules of Court; that petitioners' request for admission should be deemed dispensed with and no longer taken into account as it only relates to the Amended Complaint, which was already abandoned when the Second Amended Complaint was filed; and that summary judgment is improper












and without legal basis, as there exists a genuine controversy brought about by petitioners' specific denials and defenses.

On September 28, 1998, the RTC issued an Order, the dispositive portion of which reads as follows:

ACCORDINGLY, plaintiff's [herein respondent's] Motion to Expunge with Motion for Summary Judgment is hereby GRANTED.

Defendants' Petitioners’ "Comments on the Request for Admission" dated 04 June 1996 is hereby expunged from the record for being contrary to the Rules of Court. Judgment is hereby rendered in favor of the plaintiff and against the defendants as follows:

Defendants are hereby ordered to pay, jointly and severally, plaintiff the sum of TWO HUNDRED FIFTY-NINE [THOUSAND] EIGHT HUNDRED NINE PESOS and 50/100 (P259,809.50), with legal interest due thereon until the whole amount is paid.

SO ORDERED.19

Petitioners filed a Motion for Reconsideration, but it was denied by the RTC in its Order dated May 6, 1999.

Unyielding, petitioners filed an appeal with the CA.

On November 30, 2006, the CA rendered its presently assailed Decision, affirming the September 28, 1998 and May 6, 1999 Orders of the RTC.

Petitioners' Motion for Reconsideration was subsequently denied by the CA via its Resolution dated February 8, 2007.

Hence, the instant petition for review on certiorari raising the following issues:

THE HONORABLE COURT SHOULD NOT HAVE DENIED DEFENDANTS-APPELLANTS' (PETITIONERS) COMMENT AND RULED THAT THERE WAS IMPLIED ADMISSION CONTAINED IN THE REQUEST.

THERE SHOULD NOT HAVE BEEN A SUMMARY JUDGMENT AGAINST DEFENDANTSAPPELLANTS (PETITIONERS).20

In their first assigned error, petitioners insist in arguing that respondent waived its Request for Admission when it filed its Second Amended Complaint; that all motions or requests based on the complaint, which was amended, should no longer be considered. Petitioners also contend that the Request for Admission was not in the form specified by the Rules of Court as it did not specify a period within which to reply as required by Section 1, Rule 26 of the same Rules.

As to the second assignment of error, petitioners aver that the summary judgment issued by the RTC is improper and without legal bases, considering that genuine issues were raised in the pleadings filed by petitioners.

The petition lacks merit.

The Court agrees with the CA in holding that respondent's Second Amended Complaint supersedes only its Amended Complaint and nothing more.

Section 8, Rule 10 of the Rules of Court provides:

Sec. 8. Effect of amended pleading. – An amended pleading supersedes the pleading that it amends. However, admissions in superseded pleadings may be received in evidence against the pleader; and claims or defenses alleged therein not incorporated in the amended pleading shall be deemed waived.



From the foregoing, it is clear that respondent's Request for Admission is not deemed abandoned or withdrawn by the filing of the Second Amended Complaint.

The Court also finds no error when the CA ruled that petitioners' Comments on the Request for Admission was filed out of time, and quotes with approval the disquisition of the appellate court on this matter, to wit:

x x x Pursuant to the above-quoted Section 2 of Rule 26 of the Rules of Court, the party to whom the request is directed must respond to the request within a period of not less than ten (10) days after the service thereof, or upon such further time the Court may allow on motion. In the instant case, the plaintiff-appellee's herein respondent's "Request" failed to designate any period for the filing of the defendants-appellants' herein petitioners' response. Neither did the trial court fix the period for the same upon motion of the parties. However, such failure to designate does not automatically mean that the filing or the service of an answer or comment to the "Request" would be left to the whims and caprices of defendants-appellants. It must be reiterated that one of the main objectives of Rule 26 is to expedite the trial of the case (Duque vs. Court of Appeals, 383,

SCRA 520, 527 2002 ). Thus, it is also provided in the second paragraph of Section 2 of Rule 26 of the Rules of Court that "[o]bjections on the ground of irrelevancy or impropriety of the matter requested shall be promptly submitted to the court for resolution."21

Nonetheless, the Court takes exception to the ruling of the CA that by reason of the belated filing of petitioners' Comments on the Request for Admission, they are deemed to have impliedly admitted that they are indebted to respondent in the amount of P259,809.50.

A careful examination of the said Request for Admission shows that the matters of fact set forth therein are simply a reiteration of respondent's main allegation in its Amended Complaint and that petitioners had already set up the affirmative defense of partial payment with respect to the above allegation in their previous pleadings.

This Court has ruled that if the factual allegations in the complaint are the very same allegations set forth in the request for admission and have already been specifically denied, the required party cannot be compelled to deny them anew.22 A request for admission that merely reiterates the allegations in an earlier pleading is inappropriate under Rule 26 of the Rules of Court, which as a mode of discovery, contemplates of interrogatories that would clarify and tend to shed light on the truth or falsity of the allegations in the pleading.23 Rule 26 does not refer to a mere reiteration of what has already been alleged in the pleadings.24 Nonetheless, consistent with the abovementioned Rule, the party being requested should file an objection to the effect that the request for admission is improper and that there is no longer any need to deny anew the allegations contained therein considering that these matters have already been previously denied.

The foregoing notwithstanding, the Court finds that the CA was correct in sustaining the summary judgment rendered by the RTC.1âwphi1

Sections 1 and 3, Rule 35 of the Rules of Court provide as follows:

Section 1. Summary judgment for claimant. – A party seeking to recover upon a claim, counterclaim, or cross-claim or to obtain a declaratory relief may, at any time after the pleading in answer thereto has been served, move with supporting affidavits, depositions or admissions for a summary judgment in his favor upon all or any part thereof.

Section 3. Motion and proceedings thereon. – The motion shall be served at least ten (10) days before the time specified for the hearing. The adverse party may serve opposing affidavits, depositions, or admissions at least three (3) days before the hearing. After the hearing, the judgment sought shall be rendered forthwith if the pleadings,






supporting affidavits, depositions, and admissions on file, show that, except as to the amount of damages, there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.

Summary judgment is a procedural device resorted to in order to avoid long drawn out litigations and useless delays.25 Such judgment is generally based on the facts proven summarily by affidavits, depositions, pleadings, or admissions of the parties.26

In this respect, the Court's ruling in Nocom v. Camerino,27 is instructive, to wit:

x x x When the pleadings on file show that there are no genuine issues of fact to be tried, the Rules of Court allow a party to obtain immediate relief by way of summary judgment, that is, when the facts are not in dispute, the court is allowed to decide the case summarily by applying the law to the material facts. Conversely, where the pleadings tender a genuine issue, summary judgment is not proper. A "genuine issue" is such issue of fact which requires the presentation of evidence as distinguished from a sham, fictitious, contrived or false claim. Section 3 of [Rule 35 of the Rules of Court] provides two (2) requisites for summary judgment to be proper: (1) there must be no genuine issue as to any material fact, except for the amount of damages; and (2) the party presenting the motion for summary judgment must be entitled to a judgment as a matter of law. A summary judgment is permitted only if there is no genuine issue as to any material fact and a moving party is entitled to a judgment as a matter of law. A summary judgment is proper if, while the pleadings on their face appear to raise issues, the affidavits, depositions, and admissions presented by the moving party show that such issues are not genuine.28

In the present case, it bears to note that in its original Complaint, as well as in its Amended Complaint, respondent did not allege as to how petitioners' partial payments of P110,301.80 and P20,000.00 were applied to the latter's obligations. In fact, there is no allegation or admission whatsoever in the said Complaint and Amended Complaint that such partial payments were made. Petitioners, on the other hand, were consistent in raising their affirmative defense of partial payment in their Answer to the Complaint and Answer to Amended Complaint. Having pleaded a valid defense, petitioners, at this point, were deemed to have raised genuine issues of fact.

The situation became different, however, when respondent subsequently filed its Second Amended Complaint admitting therein that petitioners, indeed, made partial payments of P110,301.80 and P20,000.00. Nonetheless, respondent accounted for such payments by alleging that these were applied to petitioners' obligations which are separate and distinct from the sum of P259,809.50 being sought in the complaint. This allegation was not refuted by petitioners in their Answer to Second Amended Complaint. Rather, they simply insisted on their defense of partial payment while claiming lack of knowledge or information to form a belief as to the truth of respondent's allegation that they still owe the amount of P259,809.50 despite their payments of P110,301.80 and P20,000.00. It is settled that the rule authorizing an answer to the effect that the defendant has no knowledge or information sufficient to form a belief as to the truth of an averment and giving such answer the effect of a denial, does not apply where the fact as to which want of knowledge is asserted, is so plainly and necessarily within the defendant’s knowledge that his averment of ignorance must be palpably untrue.29 In the instant case, it is difficult to believe that petitioners do not know how their payment was applied. Instead of denying knowledge, petitioners could have easily asserted that their payments of P110,301.80 and P20,000.00 were applied to, and should have been deducted from, the sum sought to be recovered by respondent, but they did not, leading the court to no other conclusion than that these payments were indeed applied to their other debts to respondent leaving an outstanding obligation of P259,809.50.

On the basis of the foregoing, petitioners' defense of partial payment in their Answer to Second Amended Complaint, in effect, no longer raised genuine issues of fact that require presentation of evidence in a full-blown trial. Hence, the summary judgment of the RTC in favor of respondent is proper.






WHEREFORE, the instant petition Is DENIED. The assailed Decision and Resolution of the Court of Appeals are AFFIRMED.

PHILIPPINE BUSINESS BANK, Petitioner,

- versus - FELIPE CHUA, Respondent.

G.R. No. 178899 Present:

CARPIO MORALES, J., Chairperson, BRION, BERSAMIN, VILLARAMA, JR., and SERENO, JJ. Promulgated: November 15, 2010

x-----------------------------------------------------------------------------------------x

D E C I S I O N

BRION, J.:

We resolve the petition for review on certiorari[1] filed by Philippine Business Bank

(PBB) challenging the decision of the Court of Appeals (CA) in CA-G.R. SP No. 94883

dated February 8, 2007,[2] insofar as it overturned the Regional Trial Court’s (RTC’s)

order dated December 16, 2005 declaring the finality of its Partial Summary Judgment

and granting the issuance of a writ of execution against respondent Felipe Chua

(respondent Chua). PBB also seeks to overturn the resolution of the CA dated July 18,

2007, which denied its motion for reconsideration.

FACTUAL ANTECEDENTS

From the records, the following facts are not in dispute.

On March 22, 2002, Tomas Tan (Tan), a stockholder and director/Treasurer of CST

Enterprises, Inc. (CST), filed a derivative suit for the Declaration of Unenforceability of

Promissory Notes and Mortgage, Nullity of Secretary’s Certificate, Injunction, Damages

with Prayer for the Issuance of Temporary Restraining Order/Writ of Preliminary

Injunction against PBB, Francis Lee, Alfredo Yao, Rodulfo Besinga, Stephen Taala, Rose

Robles, Henry Ramos, Yu Heng, Mabuhay Sugar Central, Inc., Nancy Chan, Henry Chan,

John Dennis Chua, Jaime Soriano, Voltaire Uychutin, Peter Salud, Edgar Lo, respondent

Felipe Chua, and John Does before the Makati City Regional Trial Court.[3]

In Tan’s amended complaint dated January 9, 2003, he alleged that sometime in

February 2001, before he went abroad for medical treatment, he turned over to

respondent Chua, a director and the President of CST, the original copies of Transfer

Certificate of Title Nos. 124275 and 157581, titles to lands owned by, and registered in

the name of, CST. In January 2002, the respondent informed him that CST’s properties

had been fraudulently used as collateral for loans allegedly taken out in CST’s name, but

without proper authority from CST stockholders and/or the Board of Directors.[4]

From his investigation, Tan discovered that a certain Atty. Jaime Soriano had

issued a Secretary’s certificate, which stated that John Dennis Chua was

authorized during a duly constituted CST board meeting to open a bank

account and obtain credit facilities under the name of CST with PBB. This

Secretary’s Certificate also authorized John Dennis Chua to use CST’s

properties as security for these loans.[5] Using this Secretary’s Certificate, John

Dennis Chua took out loans with PBB in the total amount of Ninety-One Million One

Hundred Thousand Pesos (P91,100,000.00),[6] and used CST properties as collateral.[7] Respondent Chua signed as co-maker with John Dennis Chua, who signed

both as the representative of CST, as well as in his personal capacity, on six

promissory notes to PBB to evidence parts of this loan.[8]

When PBB threatened to foreclose the mortgage on these properties after CST

defaulted,[9] Tan filed the present complaint, essentially arguing that the

loans/promissory notes and mortgage made out in CST’s name are unenforceable

against it, since they were entered into by persons who were unauthorized to bind the

company.[10]

In its Amended Answer,[11] PBB claimed that the loans to CST, as well as the

corresponding mortgage over CST properties, were all valid and binding since the loan

applications and documents accomplished by John Dennis Chua were supported by the

duly accomplished secretary’s certificate, which authorized him to obtain credit facilities

in behalf of CST. In addition, the original copies of the titles to the properties were

offered to PBB as collaterals.

PBB’s Amended Answer also included a cross-claim against respondent Chua,

demanding payment of the promissory notes he signed as co-maker with John Dennis

Chua.[12]

In respondent Chua’s Answer to the Cross-Claim of PBB, [13] he claimed that he

never applied for a loan with the PBB. He further denied authorizing John Dennis Chua to

apply for any loans in CST’s name, or to use CST properties as security for any loans.[14] Nevertheless, he admitted that he signed, as co-maker, six promissory notes

covering the loans obtained by John Dennis Chua with PBB. According to

respondent Chua, he executed these promissory notes after the loans had already been

consummated, “in a sincere effort to persuade John Dennis Chua to pay off the

unauthorized loan and retrieve from cross-claimant PBB the CST titles.”[15]

PBB subsequently filed a Motion for Partial Summary Judgment based on Section 1,

Rule 35 of the 1997 Rules of Civil Procedure (Rules), claiming that since respondent

Chua already admitted the execution of the promissory notes in favor of PBB amounting

to Seventy Five Million Pesos (P75,000,000.00),[16] insofar as its cross-claim against him

was concerned, there was no genuine issue on any material fact on the issue of his

liability to PBB. PBB argued that although respondent Chua claimed that he signed the

promissory notes merely to persuade John Dennis Chua to pay off his loan to PBB, he

was still liable as an accommodation party under Section 29 of the Negotiable

Instruments Law.[17]

THE RTC’S PARTIAL SUMMARY JUDGMENT

Acting on PBB’s motion, the RTC issued a partial summary judgment on PBB’s

cross-claim on July 27, 2005, finding respondent Chua liable as a signatory to the

promissory notes amounting to Seventy-Five Million Pesos (P75,000,000.00). The RTC

reasoned that by signing as a co-maker, he obligated himself to pay the amount

indicated in the promissory notes, even if he received no consideration in return. Thus,

the RTC ordered him to pay PBB the amount of P75,000,000.00, plus interests and costs.[18]

In its order dated December 16, 2005, the RTC resolved respondent Chua’s Notice

of Appeal, as well as PBB’s Motion to Disallow Appeal and to Issue Execution. Citing

Section 1, Rule 41 of the Rules, the RTC ruled that respondent Chua could not file a

notice of appeal. Instead, he should have filed a special civil action for certiorari under

Rule 65 of the Rules. However, since the period for filing a certiorari petition had already

lapsed without respondent filing any petition, the partial summary judgment had become

final and executory. Thus, it ordered the issuance of a writ of execution for the

satisfaction of the partial summary judgment in favor of PBB.[19]

On December 21, 2005, the RTC issued an order appointing Renato Flora as the

special sheriff to implement the writ of execution. In line with this order, Renato Flora,

onDecember 23, 2005, issued a Notice of Levy and Sale on Execution of Personal

Properties, addressed to respondent Chua. He proceeded with the execution sale, and

onDecember 28, 2005, he issued a certificate of sale over respondent Chua’s 900 shares

of stock in CST in favor of PBB. He also posted a notice of sheriff’s sale on January 10,

2006 over respondent Chua’s five parcels of land located in Las Pinas, Pasay City, and

Muntinlupa.[20]

THE COURT OF APPEALS DECISION

Respondent Chua filed a petition for certiorari and mandamus with the CA to

challenge: (a) the December 16, 2005 order, granting PBB’s motion to disallow his

appeal; (b) the December 21, 2005 order, granting PBB’s motion to appoint Renato Flora

as special sheriff to implement the writ of execution; and (c) the February 16, 2006 order

denying his motion for reconsideration and to suspend execution. In essence, respondent

Chua alleged that the RTC acted with grave abuse of discretion in disallowing his appeal

of the partial summary judgment, and in issuing a writ of execution. Significantly,

respondent Chua did not question the propriety of the partial summary judgment.

On February 8, 2007, the CA issued the assailed decision, partly affirming the RTC

order dated December 16, 2005 on the matter of the disallowance of respondent Chua’s

appeal. The CA held that respondent Chua could not appeal the partial summary

judgment while the main case remained pending, in keeping with Section 1(g), Rule 41

of the Rules.

However, the CA held that the RTC committed grave abuse of discretion

when it issued the writ of execution against respondent Chua. As found by the

CA, the RTC grievously erred when it held that the partial judgment had

become final and executory when respondent Chua failed to avail of the proper

remedy of certiorari within the 60 day reglementary period under Rule 65.

Since a partial summary judgment does not finally dispose of the action, it is

merely an interlocutory, not a final, order. Thus, it could not attain finality.

The CA further noted that certiorari is an independent action and not part of the

appeal proceedings, and failure to file a certiorari petition would not result in the finality

of the judgment or final order. The RTC, thus, committed grave abuse of discretion

amounting to lack of jurisdiction when it granted the issuance of a writ of execution, and

the corresponding writ of execution issued by the court a quo, as well as the subsequent

implementing proceedings, were void.

THE PETITION

PBB submits two issues for our resolution:

I.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED AN ERROR IN APPLYING JURISPRUDENCE NOT ON ALL FOURS [WITH] THE FACTUAL BACKDROP OF THE CASE.

II.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED AN ERROR IN RECALLING AND SETTING ASIDE THE WRIT OF EXECUTION AND ALL THE PROCEEDINGS TAKEN FOR ITS IMPLEMENTATION ON THE WRONG NOTION THAT THE PARTIAL SUMMARY JUDGMENT HAS NOT BECOME FINAL AND EXECUTORY.

THE RULING

We DENY the petition for being unmeritorious. Nature of Partial Summary Judgment

PBB’s motion for partial summary judgment against respondent Chua was based

on Section 1, Rule 35 of the Rules, which provides:Section 1. Summary Judgment for claimant. - A party seeking to recover upon a claim, counterclaim, or cross-claim or to obtain a declaratory relief may, at any time after the pleading in answer thereto has been served, move with supporting affidavits, depositions or admissions for a summary judgment in his favor upon all or any part thereof.

A summary judgment, or accelerated judgment, is a procedural technique to

promptly dispose of cases where the facts appear undisputed and certain from the

pleadings, depositions, admissions and affidavits on record, or for weeding out sham

claims or defenses at an early stage of the litigation to avoid the expense and loss of

time involved in a trial.[21] When the pleadings on file show that there are no genuine

issues of fact to be tried, the Rules allow a party to obtain immediate relief by way of

summary judgment, that is, when the facts are not in dispute, the court is allowed to

decide the case summarily by applying the law to the material facts.[22]

The rendition by the court of a summary judgment does not always result in the

full adjudication of all the issues raised in a case. For these instances, Section 4, Rule 35

of the Rules provides: Section 4. Case not fully adjudicated on motion. – If on motion under this Rule, judgment is not rendered upon the whole case or for all the reliefs sought and a trial is necessary, the court at the hearing of the motion, by examining the pleadings and the evidence before it and by interrogating counsel shall ascertain what material facts exist without substantial controversy and what are actually and in good faith controverted. It shall thereupon make an order specifying the facts that appear without substantial controversy, including the extent to which the amount of damages or other relief is not in controversy, and directing such further proceedings in the action as are just. The facts so specified shall be deemed established, and the trial shall be conducted on the controverted facts accordingly.

This is what is referred to as a partial summary judgment. A careful reading of this

section reveals that a partial summary judgment was never intended to be considered a

“final judgment,” as it does not “[put] an end to an action at law by declaring that the

plaintiff either has or has not entitled himself to recover the remedy he sues for.”[23] The

Rules provide for a partial summary judgment as a means to simplify the trial process by

allowing the court to focus the trial only on the assailed facts, considering as established

those facts which are not in dispute.

After this sifting process, the court is instructed to issue an order, the partial

summary judgment, which specifies the disputed facts that have to be settled in the

course of trial. In this way, the partial summary judgment is more akin to a record of pre-

trial,[24] an interlocutory order, rather than a final judgment.

The differences between a “final judgment” and an “interlocutory order” are well-

established. We said in Denso (Phils.) Inc. v. Intermediate Appellate Court[25] that: [A] final judgment or order is one that finally disposes of a case, leaving nothing more to be done by the Court in respect thereto, e.g., an adjudication on the merits which, on the basis of the evidence presented at the trial, declares categorically what the rights and obligations of the parties are and which party is in the right; or a judgment or order that dismisses an action on the ground, for instance, of res judicata or prescription. Once rendered, the task of the Court is ended, as far as deciding the controversy or determining the rights and liabilities of the litigants is concerned. Nothing more remains to be done by the Court except to await the parties' next move . . . and ultimately, of course, to cause the execution of the judgment

once it becomes “final” or, to use the established and more distinctive term, “final and executory.”

x x x x

Conversely, an order that does not finally dispose of the case, and does not end the Court's task of adjudicating the parties' contentions and determining their rights and liabilities as regards each other, but obviously indicates that other things remain to be done by the Court, is “interlocutory”, e.g., an order denying a motion to dismiss under Rule 16 of the Rules x x x Unlike a 'final judgment or order, which is appealable, as above pointed out, an 'interlocutory order may not be questioned on appeal except only as part of an appeal that may eventually be taken from the final judgment rendered in the case.[26]

Bearing in mind these differences, there can be no doubt that the partial

summary judgment envisioned by the Rules is an interlocutory order that was

never meant to be treated separately from the main case. As we explained

in Guevarra v. Court of Appeals:[27]

It will be noted that the judgment in question is a “partial summary

judgment.” It was rendered only with respect to the private respondents’ first and second causes of action alleged in their complaint. It was not intended to cover the other prayers in the said complaint, nor the supplementary counterclaim filed by the petitioners against the private respondents, nor the third-party complaint filed by the petitioners against the Security Bank and Trust Company. A partial summary judgment “is not a final or appealable judgment.” (Moran, Vol. 2, 1970 Edition, p. 189, citing several cases.) “It is merely a pre-trial adjudication that said issues in the case shall be deemed established for the trial of the case.” (Francisco, Rules of Court, Vol. II, p. 429.)

x x x x

The partial summary judgment rendered by the trial court being

merely interlocutory and not ‘a final judgment’, it is puerile to discuss whether the same became final and executory due to the alleged failure to appeal said judgment within the supposed period of appeal. What the rules contemplate is that the appeal from the partial summary judgment shall be taken together with the judgment that may be rendered in the entire case after a trial is conducted on the material facts on which a substantial controversy exists. This is on the assumption that the partial summary judgment was validly rendered, which, as shown above, is not true in the case at bar.[28]

We reiterated this ruling in the cases of Province of Pangasinan v. Court of

Appeals[29] and Government Service Insurance System v. Philippine Village Hotel, Inc.[30]

Applicability of Guevarra

PBB asserts that our pronouncement in the cases

of Guevarra, Province of Pangasinan, and Government Service Insurance System cannot

be applied to the present case because these cases involve factual circumstances that

are completely different from the facts before us. While the partial summary judgments

in the cited cases decided only some of the causes of action presented, leaving other

issues unresolved, PBB insists that as far as its cross-claim against respondent Chua is

concerned, the court a quo’s partial summary judgment is a full and complete

adjudication because the award is for the whole claim.[31] According to PBB, whatever the

court decides as regards the main case, this will not affect the liability of respondent

Chua as a solidary debtor in the promissory notes, since the creditor can proceed against

any of the solidary debtors. In other words, no substantial controversy exists between

PBB and respondent Chua, and there is nothing more to be done on this particular issue.

We do not agree with PBB’s submission.

In the Guevarra case, the Court held that the summary judgment rendered by the

lower court was in truth a partial summary judgment because it failed to resolve the

other causes of action in the complaint, as well as the counterclaim and the third party

complaint raised by the defendants.

Contrary to PBB’s assertions, the same could be said for the case presently before

us. The partial summary judgment in question resolved only the cross-claim made by

PBB against its co-defendant, respondent Chua, based on the latter’s admission that he

signed promissory notes as a co-maker in favor of PBB. This is obvious from the

dispositive portion of the partial summary judgment, quoted below for convenient

reference:

WHEREFORE, a partial summary judgment is hereby rendered on the

cross-claim of cross-defendant Philippine Business Bank against cross-defendant Felipe Chua, ordering the latter to pay the former as follows:

1. The amount of Ten Million (P10,000,000.00) Pesos, representing the

value of the Promissory Note dated April 17, 2001, plus interest thereof at the rate of 16% from April 12, 2002, until fully paid;

2. The amount of Twelve Million (P12,000,000.00) Pesos, representing the value of the Promissory Note dated April 5, 2001, plus interest thereon at the rate of 17% from April 1, 2002, until fully paid;

3. The amount of Twenty Three Million (P23,000,000.00) Pesos, representing the value of the Promissory Note dated April 25, 2001, plus interest thereon at the rate of 16% from April 19, 2002, until fully paid;

4. The amount of Eight Million (P8,000,000.00) Pesos, representing the value of the Promissory Note dated June 20, 2001, plus interest thereon at the rate of 17% from June 20, 2001, until fully paid;

5. The amount of Seven Million (P7,000,000.00) Pesos, representing the value of the Promissory Note dated June 22, 2001, plus interest thereon at the rate of 17% from June 17, 2002, until fully paid;

6. The amount of Fifteen Million (P15,000,000.00) Pesos, representing the value of the Promissory Note dated June 28, 2001, plus interest thereon at the rate of 17% from June 24, 2002, until fully paid;

7. Plus cost of suit.

SO ORDERED. [32]

Clearly, this partial summary judgment did not dispose of the case as the

main issues raised in plaintiff Tomas Tan’s complaint, i.e., the validity of the

secretary’s certificate which authorized John Dennis Chua to take out loans, and execute

promissory notes and mortgages for and on behalf of CST, as well as the validity of the

resultant promissory notes and mortgage executed for and on behalf of CST, remained

unresolved. Chua shares common interest with co-defendant- debtors

Still, PBB insists that the partial summary judgment is a final judgment as regards

PBB’s cross-claim against respondent Chua since respondent Chua’s liability will not be

affected by the resolution of the issues of the main case.

On its face, the promissory notes were executed by John Dennis Chua in two

capacities – as the alleged representative of CST, and in his personal capacity. Thus,

while there can be no question as to respondent Chua’s liability to PBB (since he already

admitted to executing these promissory notes as a co-maker), still, the court a quo’s

findings on: (a) whether John Dennis Chua was properly authorized to sign these

promissory notes on behalf of CST, and (b) whether John Dennis Chua actually signed

these promissory notes in his personal capacity, would certainly have the effect of

determining whether respondent Chua has the right to go after CST and/or John Dennis

Chua for reimbursement on any payment he makes on these promissory notes, pursuant

to Article 1217 of the Civil Code, which states: Article 1217. Payment made by one of the solidary debtors extinguishes the obligation. If two or more solidary debtors offer to pay, the creditor may choose which offer to accept.

He who made the payment may claim from his co-debtors only the share which corresponds to each, with the interest for the payment already made. If the payment is made before the debt is due, no interest for the intervening period may be demanded. When one of the solidary debtors cannot, because of his insolvency, reimburse his share to the debtor paying the obligation, such share shall be borne by all his co-debtors, in proportion to the debt of each.

In other words, PBB has a common cause of action against respondent Chua with

his alleged co-debtors, John Dennis Chua and CST, it would simply not be proper to treat

respondent Chua separately from his co-debtors.

Moreover, we cannot turn a blind eye to the clear intention of the trial court in

rendering a partial summary judgment. Had the trial court truly intended to treat PBB’s

cross-claim against respondent Chua separately, it could easily have ordered a separate

trial via Section 2, Rule 31 of the Rules, which states:

Section 2. Separate trials. – The court, in furtherance of convenience or to avoid prejudice, may order a separate trial of any claim, cross-claim, counterclaim, or third-party complaint, or of any separate issue or of any number of claims, cross-claims, counterclaims, third-party complaints or issues.

That the trial court did not do so belies PBB’s contention.

It has also not escaped our attention that PBB, in its Motion to Disallow Appeal and

to Issue Execution Against Cross-Defendant Felipe Chua,[33] already admitted that the

partial summary judgment is not a judgment or final order that completely

disposes of the case. In its own words:x x x x

3. However, the remedy availed of by [respondent Chua] is patently erroneous because under Rule 41 Section 1 of the Rules of Court, an appeal may be taken only from a judgment or final order that completely disposes the case; 4. The judgment rendered by [the RTC] dated July 27, 2005 is only a partial summary judgment against [respondent Chua], on the crossclaim of cross-claimant Philippine Business Bank. The main case which involves the claim of plaintiffs against the principal defendants is still pending and has not yet been adjudged by [the RTC].[34]

Thus, PBB cannot now be allowed to deny the interlocutory nature of the partial

summary judgment.

Certiorari not the proper remedy

PBB also maintains that the partial summary judgment attained finality when

respondent Chua failed to file a certiorari petition, citing the last paragraph of Section 1,

Rule 41 of the Rules as basis. We quote: Section 1. Subject of appeal. – An appeal maybe taken from a judgment or final order that completely disposes of the case, or of a particular matter therein when declared by these Rules to be appealable.

No appeal may be taken from:

x x x x

(g) A judgment or final order for or against one or more of several parties or in separate claims, counterclaims, cross-claims and third party complaints, while the main case is pending, unless the court allows an appeal therefrom;

x x x x

In all the above instances where the judgment, or final order is not appealable, the aggrieved party may file an appropriate special civil action under Rule 65.

Contrary to PBB’s contention, however, certiorari was not the proper recourse for

respondent Chua. The propriety of the summary judgment may be corrected only on

appeal or other direct review, not a petition for certiorari,[35] since it imputes error on the

lower court’s judgment. It is well-settled that certiorari is not available to correct errors

of procedure or mistakes in the judge’s findings and conclusions of law and fact. [36] As we

explained in Apostol v. Court of Appeals:[37]

As a legal recourse, the special civil action of certiorari is a limited form of review. The jurisdiction of this Court is narrow in scope; it is restricted to

resolving errors of jurisdiction, not errors of judgment. Indeed, as long as the courts below act within their jurisdiction, alleged errors committed in the exercise of their discretion will amount to mere errors of judgment correctable by an appeal or a petition for review.[38]

In light of these findings, we affirm the CA’s ruling that the partial summary

judgment is an interlocutory order which could not become a final and executory

judgment, notwithstanding respondent Chua’s failure to file a certiorari petition to

challenge the judgment. Accordingly, the RTC grievously erred when it issued the writ of

execution against respondent Chua.

In view of this conclusion, we find it unnecessary to resolve the issue raised by

respondent Chua on the validity of the RTC’s appointment of a special sheriff for the

implementation of the execution writ.

Propriety of Summary Judgment Reserved for Appeal

As a final point, we note that respondent Chua has raised with this Court the issue

of the propriety of the partial summary judgment issued by the RTC. Notably, respondent

Chua never raised this issue in his petition for certiorari before the CA. It is well settled

that no question will be entertained on appeal unless it has been raised in the

proceedings below.[39] Basic considerations of due process impel the adoption of this rule.[40]

Furthermore, this issue would be better resolved in the proper appeal, to be taken

by the parties once the court a quo has completely resolved all the issues involved in the

present case in a final judgment. If we were to resolve this issue now, we would be

preempting the CA, which has primary jurisdiction over this issue.

Lastly, taking jurisdiction over this issue now would only result in multiple appeals

from a single case which concerns the same, or integrated, causes of action. As we said

in Santos v. People:[41]

Another recognized reason of the law in permitting appeal only from a

final order or judgment, and not from an interlocutory or incidental one, is to avoid multiplicity of appeals in a single action, which must necessarily suspend the hearing and decision on the merits of the case during the pendency of the appeal. If such appeal were allowed, the trial on the merits of the case would necessarily be delayed for a considerable length of time, and compel the adverse party to incur unnecessary expenses, for one of the parties may interpose as many appeals as incidental questions may be raised by him, and interlocutory orders rendered or issued by the lower court.

WHEREFORE, premises considered, we DENY the petition for lack of merit

and AFFIRM the Decision of the Court of Appeals in CA-G.R. SP No. 94883

datedFebruary 8, 2007, as well as its Resolution dated July 18, 2007. Costs against the

petitioner, Philippine Business Bank.

SO ORDERED.

MANUEL C. BUNGCAYAO, SR., G.R. No. 170483represented in this case by hisAttorney-in-fact ROMEL R. Present:BUNGCAYAO, Petitioner, CARPIO, J., Chairperson, BRION, DEL CASTILLO, - versus - ABAD, and PEREZ, JJ.

FORT ILOCANDIA PROPERTY HOLDINGS, AND DEVELOPMENT Promulgated:CORPORATION, Respondent. April 19, 2010 x - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

D E C I S I O N

CARPIO, J.:

The Case

Before the Court is a petition for review[1] assailing the 21 November 2005

Decision[2] of the Court of Appeals in CA-G.R. CV No. 82415.

The Antecedent Facts

Manuel C. Bungcayao, Sr. (petitioner) claimed to be one of the two entrepreneurs

who introduced improvements on the foreshore area of Calayab Beach in 1978 when

Fort Ilocandia Hotel started its construction in the area. Thereafter, other entrepreneurs

began setting up their own stalls in the foreshore area. They later formed themselves

into the D’Sierto Beach Resort Owner’s Association, Inc. (D’Sierto).

In July 1980, six parcels of land in Barrio Balacad (now Calayad) were transferred,

ceded, and conveyed to the Philippine Tourism Authority (PTA) pursuant to Presidential

Decree No. 1704. Fort Ilocandia Resort Hotel was erected on the area. In 1992,

petitioner and other D’Sierto members applied for a foreshore lease with the Community

Environment and Natural Resources Office (CENRO) and was granted a provisional

permit. On 31 January 2002, Fort Ilocandia Property Holdings and Development

Corporation (respondent) filed a foreshore application over a 14-hectare area abutting

the Fort Ilocandia Property, including the 5-hectare portion applied for by D’Sierto

members. The foreshore applications became the subject matter of a conflict

case, docketed Department of Environment and Natural Resources (DENR) Case No.

5473, between respondent and D’Sierto members. In an undated Order,[3] DENR

Regional Executive Director Victor J. Ancheta denied the foreshore lease applications of

the D’Sierto members, including petitioner, on the ground that the subject area applied

for fell either within the titled property or within the foreshore areas applied for by

respondent. The D’Sierto members appealed the denial of their applications. In a

Resolution[4] dated 21 August 2003, then DENR Secretary Elisea G. Gozun denied the

appeal on the ground that the area applied for encroached on the titled property of

respondent based on the final verification plan.

In a letter dated 18 September 2003,[5] respondent, through its Public Relations

Manager Arlene de Guzman, invited the D’Sierto members to a luncheon meeting to

discuss common details beneficial to all parties concerned. Atty. Liza Marcos (Atty.

Marcos), wife of Governor Bongbong Marcos, was present as she was asked by Fort

Ilocandia hotel officials to mediate over the conflict among the parties. Atty. Marcos

offered P300,000 as financial settlement per claimant in consideration of the

improvements introduced, on the condition that they would vacate the area identified as

respondent’s property. A D’Sierto member made a counter-offer of P400,000, to which

the other D’Sierto members agreed.

Petitioner alleged that his son, Manuel Bungcayao, Jr., who attended the meeting,

manifested that he still had to consult his parents about the offer but upon the undue

pressure exerted by Atty. Marcos, he accepted the payment and signed the Deed of

Assignment, Release, Waiver and Quitclaim[6] in favor of respondent.

Petitioner then filed an action for declaration of nullity of contract before the

Regional Trial Court of Laoag, City, Branch 13 (trial court), docketed as Civil Case Nos.

12891-13, against respondent. Petitioner alleged that his son had no authority to

represent him and that the deed was void and not binding upon him.

Respondent countered that the area upon which petitioner and the other D’Sierto

members constructed their improvements was part of its titled property under Transfer

Certificate of Title No. T-31182. Respondent alleged that petitioner’s sons, Manuel, Jr.

and Romel, attended the luncheon meeting on their own volition and they were able to

talk to their parents through a cellular phone before they accepted respondent’s

offer. As a counterclaim, respondent prayed that petitioner be required to return the

amount ofP400,000 from respondent, to vacate the portion of the respondent’s property

he was occupying, and to pay damages because his continued refusal to vacate the

property caused tremendous delay in the planned implementation of Fort Ilocandia’s

expansion projects.

In an Order[7] dated 6 November 2003, the trial court confirmed the agreement of

the parties to cancel the Deed of Assignment, Release, Waiver and Quitclaim and the

return of P400,000 to respondent. Petitioner’s counsel, however, manifested that

petitioner was still maintaining its claim for damages against respondent.

Petitioner and respondent agreed to consider the case submitted for resolution on

summary judgment. Thus, in its Order[8] dated 28 November 2003, the trial court

considered the case submitted for resolution. Petitioner filed a motion for

reconsideration, alleging that he manifested in open court that he was withdrawing his

earlier manifestation submitting the case for resolution. Respondent filed a Motion for

Summary Judgment.

The trial court rendered a Summary Judgment[9] dated 13 February 2004.

The Decision of the Trial Court

The trial court ruled that the only issue raised by petitioner was his claim for

damages while respondent’s issue was only his claim for possession of the property

occupied by petitioner and damages. The trial court noted that the parties already

stipulated on the issues and admissions had been made by both parties. The trial court

ruled that summary judgment could be rendered on the case.

The trial court ruled that the alleged pressure on petitioner’s sons could not

constitute force, violence or intimidation that could vitiate consent. As regards

respondent’s counterclaim, the trial court ruled that based on the pleadings and

admissions made, it was established that the property occupied by petitioner was within

the titled property of respondent. The dispositive portion of the trial court’s decision

reads:

WHEREFORE, the Court hereby renders judgment DISMISSING the claim of plaintiff for damages as it is found to be without legal basis, and finding the counterclaim of the defendant for recovery of possession of the lot occupied by the plaintiff to be meritorious as it is hereby GRANTED. Consequently, the plaintiff is hereby directed to immediately vacate the premises administratively adjudicated by the executive department of the government in favor of the defendant and yield its possession unto the defendant. No pronouncement is here made as yet of the damages claimed by the defendant. SO ORDERED.[10]

Petitioner appealed from the trial court’s decision.

The Decision of the Court of Appeals

In its 21 November 2005 Decision, the Court of Appeals affirmed the trial court’s

decision in toto.

The Court of Appeals sustained the trial court in resorting to summary judgment as

a valid procedural device for the prompt disposition of actions in which the pleadings

raise only a legal issue and not a genuine issue as to any material fact. The Court of

Appeals ruled that in this case, the facts are not in dispute and the only issue to be

resolved is whether the subject property was within the titled property of

respondent. Hence, summary judgment was properly rendered by the trial court.

The Court of Appeals ruled that the counterclaims raised by respondent were

compulsory in nature, as they arose out of or were connected with the transaction or

occurrence constituting the subject matter of the opposing party’s claim and did not

require for its adjudication the presence of third parties of whom the court could not

acquire jurisdiction. The Court of Appeals ruled that respondent was the rightful owner

of the subject property and as such, it had the right to recover its possession from any

other person to whom the owner has not transmitted the property, including petitioner.

The dispositive portion of the Court of Appeals’ decision reads:

WHEREFORE, the assailed decision dated February 13, 2004 of the Regional Trial Court of Laoag City, Branch 13 is hereby AFFIRMED in toto. SO ORDERED.[11]

Thus, the petition before this Court.

The Issues

Petitioner raises the following issues in his Memorandum:[12]

1. Whether respondent’s counterclaim is compulsory; and

2. Whether summary judgment is appropriate in this case.

The Ruling of this Court

The petition has merit.

Compulsory Counterclaim

A compulsory counterclaim is any claim for money or any relief, which a defending

party may have against an opposing party, which at the time of suit arises out of, or is

necessarily connected with, the same transaction or occurrence that is the subject

matter of the plaintiff’s complaint.[13] It is compulsory in the sense that it is within the

jurisdiction of the court, does not require for its adjudication the presence of third

parties over whom the court cannot acquire jurisdiction, and will be barred in the future

if not set up in the answer to the complaint in the same case.[14] Any other counterclaim

is permissive.[15]

The Court has ruled that the compelling test of compulsoriness characterizes a

counterclaim as compulsory if there should exist a logical relationship between the main

claim and the counterclaim.[16] The Court further ruled that there exists such a

relationship when conducting separate trials of the respective claims of the parties

would entail substantial duplication of time and effort by the parties and the court; when

the multiple claims involve the same factual and legal issues; or when the claims are

offshoots of the same basic controversy between the parties.[17]

The criteria to determine whether the counterclaim is compulsory or

permissive are as follows:

(a) Are issues of fact and law raised by the claim and by the counterclaim largely the same?

(b) Would res judicata bar a subsequent suit on defendant’s claim, absent the compulsory rule? (c) Will substantially the same evidence support or refute plaintiff’s claim as well as defendant’s counterclaim? (d) Is there any logical relations between the claim and the counterclaim?

A positive answer to all four questions would indicate that the

counterclaim is compulsory.[18]

In this case, the only issue in the complaint is whether Manuel, Jr. is authorized to

sign the Deed of Assignment, Release, Waiver and Quitclaim in favor of respondent

without petitioner’s express approval and authority. In an Order dated 6 November

2003, the trial court confirmed the agreement of the parties to cancel the Deed of

Assignment, Release, Waiver and Quitclaim and the return of P400,000 to

respondent. The only claim that remained was the claim for damages against

respondent. The trial court resolved this issue by holding that any damage suffered by

Manuel, Jr. was personal to him. The trial court ruled that petitioner could not have

suffered any damage even if Manuel, Jr. entered into an agreement with respondent

since the agreement was null and void.

Respondent filed three counterclaims. The first was for recovery of the P400,000

given to Manuel, Jr.; the second was for recovery of possession of the subject property;

and the third was for damages. The first counterclaim was rendered moot with the

issuance of the 6 November 2003 Order confirming the agreement of the parties to

cancel the Deed of Assignment, Release, Waiver and Quitclaim and to return

the P400,000 to respondent. Respondent waived and renounced the third counterclaim

for damages.[19] The only counterclaim that remained was for the recovery of possession

of the subject property. While this counterclaim was an offshoot of the same basic

controversy between the parties, it is very clear that it will not be barred if not set up in

the answer to the complaint in the same case. Respondent’s second counterclaim,

contrary to the findings of the trial court and the Court of Appeals, is only a permissive

counterclaim. It is not a compulsory counterclaim. It is capable of proceeding

independently of the main case.

The rule in permissive counterclaim is that for the trial court to acquire jurisdiction,

the counterclaimant is bound to pay the prescribed docket fees.[20] Any decision

rendered without jurisdiction is a total nullity and may be struck down at any time, even

on appeal before this Court.[21] In this case, respondent did not dispute the non-

payment of docket fees. Respondent only insisted that its claims were all compulsory

counterclaims. As such, the judgment by the trial court in relation to the second

counterclaim is considered null and void[22] without prejudice to a separate action which

respondent may file against petitioner.

Summary Judgment

Section 1, Rule 35 of the 1997 Rules of Civil Procedure provides:

Section 1. Summary Judgment for claimant. - A party seeking to recover upon a claim, counterclaim, or cross-claim or to obtain a declaratory relief may, at any time after the pleading in answer thereto has been served, move with supporting affidavits, depositions or admissions for a summary judgment in his favor upon all or any part thereof.

Summary judgment has been explained as follows:

Summary judgment is a procedural device resorted to in order to avoid long drawn out litigations and useless delays. When the pleadings on file show that there are no genuine issues of fact to be tried, the Rules allow a party to obtain immediate relief by way of summary judgment, that is, when the facts are not in dispute, the court is allowed to decide the case summarily by applying the law to the material facts. Conversely, where the pleadings tender a genuine issue, summary judgment is not proper. A “genuine issue” is such issue of fact which requires the presentation of evidence as distinguished from a sham, fictitious, contrived or false claim. Section 3 of the said rule provides two (2) requisites for summary judgment to be proper: (1) there must be no genuine issue as to any material fact, except for the amount of damages; and (2) the party presenting the motion for summary judgment must be entitled to a judgment as a matter of law. A summary judgment is permitted only if there is no genuine issue as to any material fact and a moving party is entitled to a judgment as a matter of law. A summary judgment is proper if, while the pleadings on their face appear to raise issues, the affidavits, depositions, and admissions presented by the moving party show that such issues are not genuine.[23]

Since we have limited the issues to the damages claimed by the parties, summary

judgment has been properly rendered in this case.

WHEREFORE, we MODIFY the 21 November 2005 Decision of the Court of

Appeals in CA-G.R. CV No. 82415 which affirmed the 13 February 2004 Decision of the

Regional Trial Court of Laoag City, Branch 13, insofar as it ruled that respondent’s

counterclaim for recovery of possession of the subject property is compulsory in

nature. WeDISMISS respondent’s permissive counterclaim without prejudice to filing a

separate action against petitioner.

SO ORDERED.

G.R. No. 166330 September 11, 2013

SMART COMMUNICATIONS, INC., Petitioner, vs.ARSENIO ALDECOA, JOSE B. TORRE, CONRADO U. PUA, GREGORIO V. MANSANO, JERRY CORPUZ and ESTELITAACOSTA, Respondents.

D E C I S I O N

LEONARDO-DE CASTRO, J.:

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court filed by petitioner Smart Communications, Inc., seeking the reversal of the Decision1 dated July 16, 2004 and Resolution2 dated December 9, 2004 of the Court of Appeals in CA-G.R. CV No. 71337. The appellate court (I) reversed and set aside the Order3 dated January 16, 2001 of the Regional Trial Court (RTC), Branch 23, of Roxas, Isabela, in Civil Case No. Br. 23-632-2000 dismissing the complaint for abatement of nuisance and injunction against petitioner, and (2) entered a new judgment declaring petitioner's cellular base station located in Barangay Vira, Municipality of Roxas, Province of Isabela, a nuisance and ordering petitioner to cease and desist from operating the said cellular base station.

The instant Petition arose from the following facts:

Petitioner is a domestic corporation engaged in the telecommunications business. On March 9, 2000, petitioner entered into a contract of lease4 with Florentino Sebastian in which the latter agreed to lease to the former a piece of vacant lot, measuring around 300 square meters, located in Barangay Vira, Roxas, Isabela (leased property).Petitioner, through its contractor, Allarilla Construction, immediately constructed and installed a cellular base station on the leased property. Inside the cellular base station is a communications tower, rising as high as150 feet, with antennas and transmitters; as well as a power house open on three sides containing a 25KVA diesel power generator. Around and close to the cellular base station are houses, hospitals, clinics, and establishments, including the properties of respondents Arsenio Aldecoa, Jose B. Torre, Conrado U. Pua, Gregorio V. Mansano, Jerry Corpuz, and Estelita Acosta.

Respondents filed before the RTC on May 23, 2000 a Complaint against petitioner for abatement of nuisance and injunction with prayer for temporary restraining order and writ of preliminary injunction, docketed as Civil Case No. Br. 23-632-2000. Respondents alleged in their Complaint that:

5. Petitioner’s communications tower is 150 feet in height equivalent to a 15-storey building. It is a tripod-type tower made of tubular steel sections and the last section, to which the huge and heavy antenna/transponder array will be attached, about to be bolted on. Weight of the antenna mast is estimated at one (1) to three (3) tons, more or less. As designed, the antenna/transponder array are held only by steel bolts without support of guy wires;

6. This SMART tower is no different from the Mobiline tower constructed at Reina Mercedes, Isabela which collapsed during a typhoon that hit Isabela in October 1998, an incident which is of public knowledge;

7. With its structural design, SMART’s tower being constructed at Vira, Roxas, Isabela, is weak, unstable, and infirm, susceptible to collapse like the Mobiline tower which fell during a typhoon as earlier alleged, and its structural integrity being doubtful, and not earthquake proof, this tower poses great danger to life and limb of persons as well as their property, particularly, the respondents whose houses a but, or are near or within the periphery of the communications tower;

8. This tower is powered by a standby generator that emitsnoxious and deleterious fumes, not to mention the constant noise it produces, hence, a hazard to the health, not only of the respondents, but the residents in the area as well;

9. When in operation, the tower would also pose danger to the life and health of respondents and residents of the barangay, especially children, because of the ultra high frequency (UHF) radio wave emissions it radiates. Only recently, Cable News Network (CNN) reported that cell phones, with minimal radiated power, are dangerous to children, so more it is for this communications tower, whose radiated power is thousands of times more than that of a cellphone;

http://www.lawphil.net/judjuris/juri2013/sep2013/gr_166330_2013.html#fnt4




10. Worse, and in violation of law, petitioner constructed the tower without the necessary public hearing, permit of the barangay, as well as that of the municipality, the Environmental Compliance Certificate of the [Department of Environment and Natural Resources (DENR)],construction permit, and other requirements of the National Telecommunications Commission (NTC), and in fact committed fraud in its application by forging an undated certification " that Barangay Vira does not interpose any objection to the proposed construction of a 150 ft. tower & site development, " as this certification was never issued byrespondent Jose Torre, the Barangay Captain of Vira, Roxas, Isabela, and without the official barangay seal, attached as Annex "A" and Certification of the Barangay Officer of the Day that no public hearing was held, attached as Annex "B" made integral part hereof;

11. Not being armed with the requisite permits/authority as above mentioned, the construction of the tower is illegal and should be abated;

12. Respondents and petitioner should not wait for the occurrence of death, injuries and damage on account of this structure and judicial intervention is needed to ensure that such event will not happen.5

Respondents thus prayed for the RTC to:

1. Issue a temporary restraining order and after due hearing to issue a writ of preliminary mandatory injunction;

2. Render judgment:

- Making the writ of preliminary mandatory injunction permanent;

- Declaring the construction of the SMART tower as a nuisance per se or per accidens;

- Ordering the abatement of this nuisance by ordering the removal and/or demolition of petitioner’s communication tower;

- Condemning petitioner to pay respondents moral damages in the sum of P150,000.00 and exemplary damages in the sum of P30,000.00;

- Ordering petitioner to pay attorney’s fees in the amount of P20,000.00 plus trial honoraria ofP1,000.00 for every appearance in Court;

- Ordering petitioner to refund to respondents litigation expenses in the amount of not less than P10,000.00;

3. And for such other reliefs as are just and equitable in the premises.6

In its Answer/Motion to Oppose Temporary Restraining Order with Compulsory Counterclaim, petitioner raised the following special and affirmative defenses:

13. Petitioner through its contractor, Allarilla Construction(hereafter Allarilla), applied for a Building Permit through the office of Municipal engineer Virgilio A. Batucal on 13 April 2000 and subsequently received its approval 17 April 2000. (a copy of the Official receipt and the Building Permit is hereto attached respectively as Annex "A" and "B" and made an integral part hereof)

14. Petitioner, again through Allarilla applied for an Environmental Compliance Certificate (ECC) the approval of which, at present, remains pending with the DENR-[Environment Management Bureau (EMB)].



15. Petitioner should not in anyway be liable for fraud or bad faith as it had painstakingly secured the consent of majority of the residents surrounding the location of the Tower in order to seek their approval therewith. (a copy of the list of residents who consented there to is attached herewith as Annex "C" and made an integral part hereof)

16. Among the residents who signed the consent list secured by petitioner include the respondent Jose B. Torre and a certain Linaflor Aldecoa, who is related to respondent Arsenio Aldecoa.

17. Petitioner did not forge the Barangay Certification but actually secured the consent of Barangay Captain Jose Torre through the efforts of Sangguniang Bayan (SB) Board Member Florentino Sebastian.(a copy of the Barangay Certification is attached herewith as Annex "D" and made an integral part hereof)

18. Petitioner Tower’s safety has been pre-cleared and is unlikely to cause harm in exposing the members of the public to levels exceeding health limits considering that the antenna height of the Tower is 45.73 meters or equivalent to 150 feet as stated in a Radio Frequency Evaluation report by Elizabeth H. Mendoza health Physicist II, of the Department of Health Radiation Health Service dated 9 May 2000. (a copy is hereto attached as Annex "E" and made an integral part hereof)

19. The structural stability and soundness of the Tower has been certified by Engr. Melanio A. Guillen Jr. of the Engineering Consulting firm Microflect as contained in their Stress Analysis Report (a copy is hereto attached as Annex "F" and made an integral part hereof)

20. petitioner’s impetus to push through with the construction of the Tower is spurred by the Telecommunications Act of 1995 or Republic Act 7925 which states that the "expansion of the telecommunications network shall give priority to improving and extending basic services to areas not yet served." Article II, Sec. 4 par. B.(a copy of RA 7925 is hereto attached as Annex "G" and made an integral part hereof)7

In the end, petitioner sought the dismissal of respondents’ Complaint; the denial of respondents’ prayer for the issuance of a temporary restraining order and writ of preliminary mandatory injunction; the award of moral, nominal, and exemplary damages in the amounts which the court deem just and reasonable; and the award of attorney’s fees in the sum of P500,000.00 and litigation expenses as may be proven at the trial.

Respondents then contested petitioner’s allegations and averred in their Reply and Answer to Counterclaim that:

- Petitioner’s cell site relay antenna operates on the ultra high frequency (UHF) band, or gigabyte band, that is much higher than that of TV and radio broadcasts which operates only on the Very High Frequency (VHF) band, hence, petitioner’s equipment generates dangerously high radiation and emission that is hazardous to the people exposed to it like respondents, whose houses are clustered around petitioner’s cell site antenna/communications tower;

- As admitted, petitioner has not secured the required Environmental Compliance Certificate (ECC). It has not even obtained the initial compliance certificate (ICC). In short,petitioner should have waited for these documents before constructing its tower, hence, it violated the law and such construction is illegal and all the more sustains the assertions of respondents;

- The alleged building permit issued to petitioner is illegal because of the lack of an ECC and that petitioner’s application for a building permit covered only a building and not a cell site antenna tower. Moreover, the petitioner failed to obtain a


National Telecommunications Commission (NTC) Clearance to construct the communications tower. As will be seen in the application and permit, the documents are dated April, 2000 while the construction begun in March, 2000;

- The technical data that served as the basis of the Radio Frequency Radiation Evaluation of petitioner’s mobile telephone base station was provided solely by the petitioner and in fact misled the DOH Radiation Health Service. It states an absurdly low transmitted power of twenty (20) watts for a dual band mobile phone service such as petitioner Smart’s GSM 900/1800 Dual Band which is the standard service it offers to the public;

- The Stress Analysis Report is self-serving and tested against the communications tower, the structural integrity is flawed;

- While respondents may yield to the mandate of Republic Act No.7925, otherwise known as the Telecommunications Act of 1995,extending and improving or upgrading of basic services to are as not yet served, this should not be taken as a license to gamble and/or destroy the health and well-being of the people;

- Petitioner’s alleged certification (Annex "D", should be Annex "4") is the very same certification appended to respondents’ complaint which they have assailed as a forgery and which respondent Jose Torre, the Barangay Captain of Vira, Roxas, Isabela, emphatically denies having signed and/or issued the same. Moreover, the certification gives petitioner away because respondent Jose Torre has no technical education using the telecommunications term "SMART GSM & ETACS project," in said falsified certification;

- Petitioner’s claim that it is not liable for fraud or bad faith, proudly stating that it has painstakingly secured the consent of the majority of the residents surrounding the tower site, is belied by the alleged Conformity of Host Community (Residential) – Annex "C" – should be Annex "3" – where only a handful of residents signed the document prepared by petitioner and the contents of which were misrepresented by a Sangguniang Bayan Member in the person of Nick Sebastian who is an interested party being the owner of the land where the tower is constructed. It was misrepresented to Linaflor Aldecoa, wife of respondent Arsenio Aldecoa that it was already anyway approved and signed by Barangay Captain Jose Torre when in truth his signature was again forged by the petitioner and/or its employees or agents or person working for said company. Also, there are persons who are not residents of Vira, Roxas, Isabela who signed the document such as Melanio C. Gapultos of Rizal, Roxas, Isabela, Carlito Castillo of Nuesa, Roxas, Isabela, and another, Gennie Feliciano from San Antonio, Roxas, Isabela. Certainly six (6) persons do not constitute the conformity of the majority of the residents of Vira, Roxas, Isabela, and those immediately affected by the cellsite tower like respondents. This document is likewise flawed and cannot help petitioner’s cause. Besides, respondents and other residents, sixty-two (62) of them, communicated their protest against the erection of the cell tower specifying their reasons therefor and expressing their sentiments and fears about petitioner’s communications tower, xerox copy attached as Annex "A" and made integral part hereof;

- Respondents likewise specifically deny the truth of the allegation in paragraph 12 of the answer, the truth being that the lot leased to petitioner is owned by SB Member Nick Sebastian and that Florentino Sebastian is dummying for the former in avoidance of possible anti-graft charges against his son concerning this project. It is also further denied for lack of knowledge or information sufficient to form a belief as to the truth thereof. Moreover, the lease contract, copy not annexed to petitioner’s answer, would automatically be terminated or ended in the event of complaints and/or protests from the residents.8

Civil Case No. Br. 23-632-2000 was set for pre-trial on September 28, 2000.9



On September 11, 2000, petitioner filed its Pre-Trial Brief in which it identified the following issues:

4.1. Whether respondents have a cause of action against the petitioner SMART for this Honorable Court to issue a Preliminary Mandatory Injunction over the SMART tower in Roxas, Isabela as it allegedly poses a threat to the lives and safety of the residents within the area and if respondents are entitled to moral and exemplary damages as well as attorney’s fees and expenses of litigation.

4.2 Whether the complaint should be dismissed in that the claim or demand set forth in the Complaint is fictitious, imaginary, sham and without any real basis.

4.3. What petitioner SMART is entitled under its compulsory counterclaim against respondents for moral and exemplary damages, attorney’s fees, and other expenses of litigation.10

On even date, petitioner filed a Motion for Summary Judgment that reads:

Petitioner SMART Communications Inc., thru counsel, respectfully manifests that:

1. There is no need for a full-blown trial as the causes of action and issues have already been identified in all the pleadings submitted to this Honorable court by both respondents and petitioner

2. There is clearly no genuine issue as to any material fact or cause in the action.

3. There is no extreme urgency to issue a Preliminary Mandatory Injunction as stated in an affidavit executed by SMART Senior Supervisor Andres V. Romero in an affidavit hereto attached as Annex "A"

4. Petitioner seeks immediate declaratory relief from respondents’ contrived allegations as set forth in their complaint;

Wherefore, it is most respectfully prayed of this Honorable Court that summary judgment be rendered pursuant to Rule 35 of the Revised Rules of Court.11

Respondents filed their Pre-Trial Brief on September 21, 2000, proposing to limit the issues,

viz:

- Whether petitioner’s communications tower is a nuisance per se/per accidens and together with its standby generator maybe abated for posing danger to the property and life and limb of the residents of Vira, Roxas, Isabela more particularly the respondents and those whose houses are clustered around or in the periphery of the cell site.

- Damages, attorney’s fees, litigation expenses and other claims.12

Respondents likewise filed on September 21, 2000 their Opposition to petitioner’s Motion for Summary Judgment, maintaining that there were several genuine issues relating to the cause of action and material facts of their Complaint. They asserted that there was a need for a full blown trial to prove the allegations in their Complaint, as well as the defenses put up by petitioner.13

In its Order14 dated September 28, 2000, the RTC indefinitely postponed the pre-trial until it has resolved petitioner’s Motion for Summary Judgment. In the same Order, the RTC directed the counsels of both parties to submit their memoranda, including supporting affidavits and other documents within 30 days.






Petitioner submitted its Memorandum15 on October 26, 2000; while respondents, following several motions for extension of time, filed their Memorandum16 on November 22, 2000. In their Memorandum, respondents additionally alleged that:

The cellsite base station is powered by a roaring 25 KVA power generator. Operated 24 hours since it started more than a month ago, it has sent "jackhammers into the brains" of all the inhabitants nearby. Everyone is going crazy. A resident just recently operated for breast cancer is complaining that the noise emanating from the generator is fast tracking her appointment with death. She can no longer bear the unceasing and irritating roar of the power generator.

For this, the residents, led by the respondents, sought a noise emission test of the power generator of petitioner SMART Communications with the DENR. The test was conducted on November 14 and 15, 2000 and the result shows that the petitioner’s power generator failed the noise emission test, day and night time. Result of this test was furnished the Municipal Mayor of Roxas, Isabela (See Communication of DENR Regional Director Lorenzo C. Aguiluz to Mayor Benedicto Calderon dated November 16, 2000 and the Inspection Monitoring Report).

With these findings, the power generator is also a nuisance. It must also be abated.17

On January 16, 2001, the RTC issued its Order granting petitioner’s Motion for Summary Judgment and dismissing respondents’ Complaint. The RTC ruled as follows:

What is of prime importance is the fact that contrary to the respondents’ speculation, the radio frequency radiation as found out by the Department of Health is much lower compared to that of TV and radio broadcast. The respondents’ counter to this claim is that the Department of Health was misled. This is a mere conclusion of the respondents.

The respondents in opposing the Smart’s construction of their cellsite is anchored on the supposition that the operation of said cellsite tower would pose a great hazard to the health of the alleged cluster of residents nearby and the perceived danger that the said tower might also collapse in case of a strong typhoon that fell the Mobiline Cellsite tower of Mobiline (sic). The structured built of the Smart’s Cellsite tower is similar to that of the Mobiline.

Now, as to the Court’s assessment of the circumstances obtaining, we find the claim of the respondents to be highly speculative, if not an isolated one. Elsewhere, we find several cellsite towers scattered (sic) allover, both of the Smart, Globe, and others, nay even in thickly populated areas like in Metro Manila and also in key cities nationwide, yet they have not been outlawed or declared nuisance as the respondents now want this Court to heed. To the thinking of the Court, the respondents are harping imagined perils to their health for reason only known to them perhaps especially were we to consider that the Brgy. Captain of Vira earlier gave its imprimatur to this project. Noteworthy is the fact that the alleged cluster of residential houses that abut the cellsite tower in question might be endangered thereby, the respondents are but a few of those residents. If indeed, all those residents in Vira were adversely affected for the perceived hazards posed by the tower in question, they should also have been joined in as respondents in a class suit. The sinister motive is perhaps obvious.

All the foregoing reasons impel this Court to grant the petitioner’s motion for the dismissal of the complaint, the perceived dangers being highly speculative without any bases in fact. Allegations in the complaint being more imaginary than real, do not constitute factual bases to require further proceeding or a trial. As to the claim that there is no certification or clearance from the DENR for the petitioner to lay in wait before the construction, suffice it to say that no action as yet has been taken by said office to stop the ongoing operation of said cellsite now in operation. There has been no hue and cry from among the greater majority of the people of Roxas, Isabela, against it. Al contrario, it is most welcome to them as this is another landmark towards the progress of this town.18





The dispositive portion of the RTC Order reads:

WHEREFORE, in view of the foregoing considerations, the Court hereby renders judgment dismissing the complaint as the allegations therein are purely speculative and hence no basis in fact to warrant further proceedings of this case.

The Court finds no compelling grounds to award damages.

Without costs.19

In another Order20 dated February 27, 2001, the RTC denied respondents’ Motion for Reconsideration.

Respondents filed an appeal with the Court of Appeals, docketed as CA-G.R. CV No. 71337.

The Court of Appeals rendered its Decision on July 16, 2004. The appellate court declared the cellular base station of petitioner a nuisance that endangered the health and safety of the residents of Barangay Vira, Roxas, Isabela because: (1) the locational clearance granted to petitioner was a nullity due to the lack of approval by majority of the actual residents of the barangay and a barangay resolution endorsing the construction of the cellular base station; and (2) the sound emission of the generator at the cellular base station exceeded the Department of Environment and Natural Resources (DENR) standards. Consequently, the Court of Appeals decreed:

WHEREFORE, the appealed decision is hereby REVERSED and SET ASIDE. A new one is entered declaring the communications tower or base station of petitioner Smart Communications, Inc. located at Brigido Pascual Street in Vira, Municipality of Roxas, Province of Isabela, a nuisance. Petitioner is ordered to cease and desist from operating the said tower or station.21

Petitioner filed its Motion for Reconsideration arguing that: (1) the basis for the judgment of the appellate court that the cellular base station was a nuisance had been extinguished as the generator subject of the Complaint was already removed; and (2) there had been substantial compliance in securing all required permits for the cellular base station.22

The Court of Appeals, in a Resolution dated December 9, 2004,refused to reconsider its earlier Decision, reasoning that:

Petitioner principally anchors its pleas for reconsideration on the Certification issued by Roxas, Isabela Municipal Engineer Virgilio Batucal, declaring that upon actual inspection, no Denyo Generator Set has been found in the company’s cell site in Roxas, Isabela. We hold, however, that the certification dated August 12, 2004, taken on its own, does not prove Smart’s allegation that it has abandoned using diesel- powered generators since January 2002. Respondents’ current photographs of the cell site clearly shows (sic) that Smart continues to use a mobile generator emitting high level of noise and fumes.

We have gone over [petitioner’s] other arguments and observed that they are merely repetitive of previous contentions which we have judiciously ruled upon.23 (Citations omitted.)

Petitioner seeks recourse from the Court through the instant Petition, assigning the following errors on the part of the Court of Appeals:

21.0 The Court of Appeals erred when it encroached upon an executive function of determining the validity of a locational clearance when it declared, contrary to the administrative findings of the Housing Land Use and Regulatory Board ("HLURB"), that the locational clearance of Petitioner was void.






22.0 The Court of Appeals erred when it resolved an issue that was not submitted to it for resolution and in the process had usurped a purely executive function.

23.0 The Court of Appeals erred in declaring Petitioner’s entire base station a nuisance considering that it was only a small part of the base station, a generator that initially powered the base station, that was reportedly producing unacceptable levels of noise.

24.0 The Court of Appeals erred in not considering that the supervening event of shut down and pull out of the generator in the base station, the source of the perceived nuisance, made the complaint for abatement of nuisance academic.24

The Petition is partly meritorious. While the Court agrees that the Court of Appeals should not have taken cognizance of the issue of whether the locational clearance for petitioner’s cellular base station is valid, the Court will still not reinstate the RTC Order dated January 16, 2001 granting petitioner’s Motion for Summary Judgment and entirely dismissing Civil Case No. Br. 23-632-2000. The issues of (1) whether petitioner’s cellular base station is a nuisance, and (2) whether the generator at petitioner’s cellular base station is, by itself, also a nuisance, ultimately involve disputed or contested factual matters that call for the presentation of evidence at a full-blown trial.

On the finding of the Court ofAppeals that petitioner’s locationalclearance for its cellular base stationis a nullity

Based on the principle of exhaustion of administrative remedies and its corollary doctrine of primary jurisdiction, it was premature for the Court of Appeals to take cognizance of and rule upon the issue of the validity or nullity of petitioner’s locational clearance for its cellular base station.

The principle of exhaustion of administrative remedies and the doctrine of primary jurisdiction were explained at length by the Court in Province of Zamboanga del Norte v. Court of Appeals,25 as follows:

The Court in a long line of cases has held that before a party is allowed to seek the intervention of the courts, it is a pre-condition that he avail himself of all administrative processes afforded him. Hence, if a remedy within the administrative machinery can be resorted to by giving the administrative officer every opportunity to decide on a matter that comes within his jurisdiction, then such remedy must be exhausted first before the court's power of judicial review can be sought. The premature resort to the court is fatal to one's cause of action. Accordingly, absent any finding of waiver or estoppel, the case may be dismissed for lack of cause of action.

The doctrine of exhaustion of administrative remedies is not without its practical and legal reasons. Indeed, resort to administrative remedies entails lesser expenses and provides for speedier disposition of controversies. Our courts of justice for reason of comity and convenience will shy away from a dispute until the system of administrative redress has been completed and complied with so as to give the administrative agency every opportunity to correct its error and to dispose of the case.

x x x x

The doctrine of primary jurisdiction does not warrant a court to arrogate unto itself the authority to resolve a controversy the jurisdiction over which is initially lodged with an administrative body of special competence.

We have held that while the administration grapples with the complex and multifarious problems caused by unbridled exploitation of our resources, the judiciary will stand clear. A long line of cases establishes the basic rule that the court will not interfere in matters which are addressed to the sound discretion of government agencies entrusted with the



regulation of activities coming under the special technical knowledge and training of such agencies.

In fact, a party with an administrative remedy must not merely initiate the prescribed administrative procedure to obtain relief, but also pursue it to its appropriate conclusion before seeking judicial intervention. The underlying principle of the rule on exhaustion of administrative remedies rests on the presumption that when the administrative body, or grievance machinery, is afforded a chance to pass upon the matter, it will decide the same correctly. (Citations omitted.)

The Court again discussed the said principle and doctrine in Addition Hills Mandaluyong Civic & Social Organization, Inc. v. Megaworld Properties & Holdings, Inc., et al.,26 citing Republic v. Lacap,27 to wit:

We have consistently declared that the doctrine of exhaustion of administrative remedies is a cornerstone of our judicial system. The thrust of the rule is that courts must allow administrative agencies to carry out their functions and discharge their responsibilities within the specialized areas of their respective competence. The rationale for this doctrine is obvious. It entails lesser expenses and provides for the speedier resolution of controversies. Comity and convenience also impel courts of justice to shy away from a dispute until the system of administrative redress has been completed.

In the case of Republic v. Lacap, we expounded on the doctrine of exhaustion of administrative remedies and the related doctrine of primary jurisdiction in this wise:

The general rule is that before a party may seek the intervention of the court, he should first avail of all the means afforded him by administrative processes. The issues which administrative agencies are authorized to decide should not be summarily taken from them and submitted to a court without first giving such administrative agency the opportunity to dispose of the same after due deliberation.

Corollary to the doctrine of exhaustion of administrative remedies is the doctrine of primary jurisdiction; that is, courts cannot or will not determine a controversy involving a question which is within the jurisdiction of the administrative tribunal prior to the resolution of that question by the administrative tribunal, where the question demands the exercise of sound administrative discretion requiring the special knowledge, experience and services of the administrative tribunal to determine technical and intricate matters of fact. (Citations omitted.)

The Housing and Land Use Regulatory Board (HLURB)28 is the planning, regulatory, and quasi-judicial instrumentality of government for land use development.29 In the exercise of its mandate to ensure rational land use by regulating land development, it issued HLURB Resolution No.R-626, series of 1998, Approving the Locational Guidelines for Base Stations of Cellular Mobile Telephone Service, Paging Service, Trunking Service, Wireless Loop Service and Other Wireless Communication Services (HLURB Guidelines). Said HLURB Guidelines aim to protect" providers and users, as well as the public in general while ensuring efficient and responsive communication services."

Indeed, the HLURB Guidelines require the submission of several documents for the issuance of a locational clearance for a cellular base station, including:

IV. Requirements and Procedures in Securing Locational Clearance

A. The following documents shall be submitted in duplicate:

x x x x

g. Written Consent:

g.1 Subdivisions





x x x x

g. 1.2 In the absence of an established Homeowners Association, consent/affidavit of non-objection from majority of actual occupants and owners of properties within a radial distance equivalent to the height of the proposed base station measured from its base, including all those whose properties is adjoining the proposed site of the base station.(Refer to Figure 2)

x x x x

h. Barangay Council Resolution endorsing the base station.

Correlatively, the HLURB provides administrative remedies for non-compliance with its requirements.

In 2000, when factual precedents to the instant case began to take place, HLURB Resolution No. R-586, series of 1996, otherwise known as the 1996 HLURB Rules of Procedure, as amended, was in effect. The original 1996 HLURB Rules of Procedure was precisely amended by HLURB Resolution No. R-655, series of 1999, "so as to afford oppositors with the proper channel and expeditious means to ventilate their objections and oppositions to applications for permits, clearances and licenses, as well as to protect the rights of applicants against frivolous oppositions that may cause undue delay to their projects. "Under the 1996 HLURB Rules of Procedure, as amended, an opposition to an application for a locational clearance for a cellular base station or a complaint for the revocation of a locational clearance for a cellular base station already issued, is within the original jurisdiction of the HLURB Executive Committee. Relevant provisions read:

RULE III

Commencement of Action, Summons and Answer

x x x x

SECTION 2. Opposition to Application for Permit/License/ Clearance. – When an opposition is filed to an application for a license, permit or clearance with the Board or any of its Regional Field Office, the Regional Officer shall make a preliminary evaluation and determination whether the case is impressed with significant economic, social, environmental or national policy implications. If he/she determines that the case is so impressed with significant economic, social, environmental or national policy implications, such as, but not limited to:

1) Projects of national significance, for purposes of this rule, a project is of national significance if it is one or falls under any of those enumerated in Rule III, Section 3 of these Rules, as amended;

2) Those involving zoning variances and exceptions;

3) Those involving significant public interest or policy issues;

4) Those endorsed by the zoning administrators of local government units.

The Regional Officer shall cause the records of the case to be transmitted to the Executive Committee which shall assume original jurisdiction over the case, otherwise, the Regional Officer shall act on and resolve the Opposition.

SECTION 3. A project is of national significance if it involves any of the following:

a) Power generating plants (e.g., coal-fired thermal plants)and related facilities (e.g., transmission lines);

b) Airport/seaports; dumping sites/sanitary landfills; reclamation projects;

c) Large-scale piggery and poultry projects;

d) Mining/quarrying projects;

e) National government centers;

f) Golf courses;

g) Fish ponds and aqua culture projects;

h) Cell sites and telecommunication facilities;

i) Economic zones, regional industrial centers, regional agro-industrial centers, provincial industrial centers;

j) All other industrial activities classified as high-intensity uses (1-3 Projects).

SECTION 4. Any party aggrieved, by reason of the elevation or non-elevation of any contested application by the Regional Officer, may file a verified petition for review thereof within thirty (30) days from receipt of the notice of elevation or non-elevation of the contested application with the Executive Committee which shall resolve whether it shall assume jurisdiction thereon.

The contested application for clearance, permit or license shall be treated as a complaint and all other provisions of these rules on complaints not inconsistent with the preceding section shall, as far as practicable, be made applicable to oppositions except that the decision of the Board en banc on such contested applications shall be final and executory as provided in Rule XIX, Section 2 of these Rules, as amended.

The Rules pertaining to contested applications for license, permit or clearance shall, by analogy, apply to cases filed primarily for the revocation thereof.

x x x x

RULE XVIIProceedings Before the Board of Commissioners

x x x x

SECTION 15. The Executive Committee. – The Executive Committee shall be composed of the four regular Commissioners and the Ex-Officio Commissioner from the Department of Justice.

x x x x

The Executive Committee shall act for the Board on policy matters, measures or proposals concerning the management and substantive administrative operations of the Board subject to ratification by the Board en banc, and shall assume original jurisdiction over cases involving opposition to an application for license, permit or clearance for projects or cases impressed with significant economic, social, environmental or national policy implications or issues in accordance with Section 2, Rule II of these Rules, as amended. It shall also approve the proposed agenda of the meetings of the Board en banc. (Emphases supplied.)

After the HLURB Executive Committee had rendered its Decision, the aggrieved party could still avail itself of a system of administrative appeal, also provided in the 1996 HLURB Rules of Procedure, as amended:

RULE XIIPetition for Review

SECTION 1. Petition for Review. – Any party aggrieved by the Decision of the Regional Officer, on any legal ground and upon payment of the review fee may file with the Regional Office a verified Petition for Review of such decision within thirty (30) calendar days from receipt thereof.

In cases decided by the Executive Committee pursuant to Rule II, Section 2 of these Rules, as amended, the verified Petition shall be filed with the Executive Committee within thirty (30) calendar days from receipt of the Committee’s Decision. Copy of such petition shall be furnished the other party and the Board of Commissioners. No motion for reconsideration or mere notice of petition for review of the decision shall be entertained.

Within ten (10) calendar days from receipt of the petition, the Regional Officer, or the Executive Committee, as the case may be, shall elevate the records to the Board of Commissioner together with the summary of proceedings before the Regional Office. The Petition for Review of a decision rendered by the Executive Committee shall betaken cognizance of by the Board en banc.

RULE XVIIIAppeal from Board Decisions

SECTION 1.

Motion for Reconsideration. – Within the period for filing an appeal from a Board decision, order or ruling of the Board of Commissioners, any aggrieved party may file a motion for reconsideration with the Board only on the following grounds: (1) serious errors of law which would result in grave injustice if not corrected; and (2) newly discovered evidence.

Only one (1) motion for reconsideration shall be entertained.

Motions for reconsideration shall be assigned to the division from which the decision, order or ruling originated.

SECTION 2. Appeal. – Any party may upon notice to the Board and the other party appeal a decision rendered by the Board of Commissioners en banc or by one of its divisions to the Office of the President within fifteen (15) calendar days from receipt thereof, in accordance with P.D. No. 1344 and A.O. No. 18 Series of 1987.

RULE XIXEntry of Judgment

x x x x

SECTION 2. Rules on Finality. – For purposes of determining when a decision or order has become final and executory for purposes of entry in the Book of Judgment, the following shall be observed:

a. Unless otherwise provided in a decision or resolution rendered by the Regional Officer, the Executive Committee, or the Board of Commissioners, as the case may be, the orders contained therein shall become final as regards a party thirty (30) calendar days after the date of receipt thereof and no petition for review or appeal therefrom has been filed within the said period. (Emphases supplied.)

There is no showing that respondents availed themselves of the afore-mentioned administrative remedies prior to instituting Civil Case No. Br. 23-632-2000 before the RTC. While there are accepted exceptions to the principle of exhaustion of administrative remedies and the doctrine of primary jurisdiction,30 respondents never asserted nor argued any of them. Thus, there is no cogent reason for the Court to apply the exceptions instead of the general rule to this case.


Ordinarily, failure to comply with the principle of exhaustion of administrative remedies and the doctrine of primary jurisdiction will result in the dismissal of the case for lack of cause of action. However, the Court herein will not go to the extent of entirely dismissing Civil Case No. Br. 23-632-2000. The Court does not lose sight of the fact that respondents’ Complaint in Civil Case No. Br. 23-632-2000 is primarily for abatement of nuisance; and respondents alleged the lack of HLURB requirements for the cellular base station, not to seek nullification of petitioner’s locational clearance, but to support their chief argument that said cellular base station is a nuisance which needs to be abated. The issue of whether or not the locational clearance for said cellular base station is valid is actually separate and distinct from the issue of whether or not the cellular base station is a nuisance; one is not necessarily determinative of the other. While the first is within the primary jurisdiction of the HLURB and, therefore, premature for the courts to rule upon in the present case, the latter is within the jurisdiction of the courts to determine but only after trial proper.

On the declaration of the Court ofAppeals that petitioner’s cellularbase station is a nuisance that mustbe abated

Article 694 of the Civil Code defines nuisance as:

ART. 694. A nuisance is any act, omission, establishment, business, condition of property, or anything else which:

(1) Injures or endangers the health or safety of others; or

(2) Annoys or offends the senses; or

(3) Shocks, defies or disregards decency or morality; or

(4) Obstructs or interferes with the free passage of any public highway or street, or any body of water; or

(5) Hinders or impairs the use of property.

The term "nuisance" is so comprehensive that it has been applied to almost all ways which have interfered with the rights of the citizens, either in person, property, the enjoyment of his property, or his comfort.31

The Court, in AC Enterprises, Inc. v. Frabelle Properties Corporation,32 settled that a simple suit for abatement of nuisance, being incapable of pecuniary estimation, is within the exclusive jurisdiction of the RTC. Although respondents also prayed for judgment for moral and exemplary damages, attorney’s fees, and litigation expenses, such claims are merely incidental to or as a consequence of, their principal relief.

Nonetheless, while jurisdiction over respondents’ Complaint for abatement of nuisance lies with the courts, the respective judgments of the RTC and the Court of Appeals cannot be upheld.

At the outset, the RTC erred in granting petitioner’s Motion for Summary Judgment and ordering the dismissal of respondents’ Complaint in Civil Case No. Br. 23-632-2000.

Summary judgments are governed by Rule 35 of the Rules of Court, pertinent provisions of which state:

SEC. 2. Summary judgment for defending party. – A party against whom a claim, counterclaim, or cross-claim is asserted or a declaratory relief is sought may, at any time, move with supporting affidavits, depositions or admissions for a summary judgment in his favor as to all or any part thereof.



SEC. 3. Motion and proceedings thereon. – The motion shall be served at least ten (10) days before the time specified for the hearing. The adverse party may serve opposing affidavits, depositions, or admissions at least three (3) days before the hearing. After the hearing, the judgment sought shall be rendered forthwith if the pleadings, supporting affidavits, depositions, and admissions on file, show that, except as to the amount of damages, there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. (Emphases supplied.)

In Rivera v. Solidbank Corporation,33 the Court discussed extensively when a summary judgment is proper:

For a summary judgment to be proper, the movant must establish two requisites: (a) there must be no genuine issue as to any material fact, except for the amount of damages; and (b) the party presenting the motion for summary judgment must be entitled to a judgment as a matter of law. Where, on the basis of the pleadings of a moving party, including documents appended thereto, no genuine issue as to a material fact exists, the burden to produce a genuine issue shifts to the opposing party. If the opposing party fails, the moving party is entitled to a summary judgment.

A genuine issue is an issue of fact which requires the presentation of evidence as distinguished from an issue which is a sham, fictitious, contrived or a false claim.

The trial court can determine a genuine issue on the basis of the pleadings, admissions, documents, affidavits or counter affidavits submitted by the parties. When the facts as pleaded appear uncontested or undisputed, then there is no real or genuine issue or question as to any fact and summary judgment called for. On the other hand, where the facts pleaded by the parties are disputed or contested, proceedings for a summary judgment cannot take the place of a trial. The evidence on record must be viewed in light most favorable to the party opposing the motion who must be given the benefit of all favorable inferences as can reasonably be drawn from the evidence.

Courts must be critical of the papers presented by the moving party and not of the papers/documents in opposition thereto. Conclusory assertions are insufficient to raise an issue of material fact. A party cannot create a genuine dispute of material fact through mere speculations or compilation of differences. He may not create an issue of fact through bald assertions, unsupported contentions and conclusory statements. He must do more than rely upon allegations but must come forward with specific facts in support of a claim. Where the factual context makes his claim implausible, he must come forward with more persuasive evidence demonstrating a genuine issue for trial. (Emphases supplied; citations omitted.)

Judging by the aforequoted standards, summary judgment cannot be rendered in this case as there are clearly factual issues disputed or contested by the parties. As respondents correctly argued in their Opposition to petitioner’s Motion for Summary Judgment:

1. Contrary to the claim of petitioner, there are several genuine issues as to the cause of action and material facts related to the complaint. For one there is an issue on the structural integrity of the tower, the ultra high frequency (UHF) radio wave emission radiated by the communications tower affecting the life, health and well being of the[respondents] and the barangay residents, especially their children. Also, the noxious/deleterious fumes and the noise produce[d] by the standby generator and the danger posted by the tower if it collapses in regard to life and limb as well as the property of the [respondents] particularly those whose houses abut, or are near/within the periphery of the communications tower. x x x34

Likewise constituting real or genuine issues for trial, which arose from subsequent events, are the following: whether the generator subject of respondents’ Complaint had been removed; whether said generator had been replaced by another that produces as much or even more noise and fumes; and whether the generator is a nuisance that can be abated separately from the rest of the cellular base station.



Furthermore, the Court demonstrated in AC Enterprises, Inc. the extensive factual considerations of a court before it can arrive at a judgment in an action for abatement of nuisance:

Whether or not noise emanating from a blower of the air conditioning units of the Feliza Building is nuisance is to be resolved only by the court in due course of proceedings.1âwphi1 The plaintiff must prove that the noise is a nuisance and the consequences thereof. Noise is not a nuisance per se. It may be of such a character as to constitute a nuisance, even though it arises from the operation of a lawful business, only if it affects injuriously the health or comfort of ordinary people in the vicinity to an unreasonable extent. Injury to a particular person in a peculiar position or of especially sensitive characteristics will not render the noise an actionable nuisance. In the conditions of present living, noise seems inseparable from the conduct of many necessary occupations. Its presence is a nuisance in the popular sense in which that word is used, but in the absence of statute, noise becomes actionable only when it passes the limits of reasonable adjustment to the conditions of the locality and of the needs of the maker to the needs of the listener. What those limits are cannot be fixed by any definite measure of quantity or quality; they depend upon the circumstances of the particular case. They may be affected, but are not controlled, by zoning ordinances. The delimitation of designated areas to use for manufacturing, industry or general business is not a license to emit every noise profitably attending the conduct of any one of them.

The test is whether rights of property, of health or of comfort are so injuriously affected by the noise in question that the sufferer is subjected to a loss which goes beyond the reasonable limit imposed upon him by the condition of living, or of holding property, in a particular locality in fact devoted to uses which involve the emission of noise although ordinary care is taken to confine it within reasonable bounds; or in the vicinity of property of another owner who, though creating a noise, is acting with reasonable regard for the rights of those affected by it.

Commercial and industrial activities which are lawful in themselves may become nuisances if they are so offensive to the senses that they render the enjoyment of life and property uncomfortable. The fact that the cause of the complaint must be substantial has often led to expressions in the opinions that to be a nuisance the noise must be deafening or loud or excessive and unreasonable. The determining factor when noise alone is the cause of complaint is not its intensity or volume. It is that the noise is of such character as to produce actual physical discomfort and annoyance to a person of ordinary sensibilities, rendering adjacent property less comfortable and valuable. If the noise does that it can well be said to be substantial and unreasonable in degree, and reasonableness is a question of fact dependent upon all the circumstances and conditions. There can be no fixed standard as to what kind of noise constitutes a nuisance.

The courts have made it clear that in every case the question is one of reasonableness. What is a reasonable use of one’s property and whether a particular use is an unreasonable invasion of another’s use and enjoyment of his property so as to constitute a nuisance cannot be determined by exact rules, but must necessarily depend upon the circumstances of each case, such as locality and the character of the surroundings, the nature, utility and social value of the use, the extent and nature of the harm involved, the nature, utility and social value of the use or enjoyment invaded, and the like.

Persons who live or work in thickly populated business districts must necessarily endure the usual annoyances and of those trades and businesses which are properly located and carried on in the neighborhood where they live or work. But these annoyances and discomforts must not be more than those ordinarily to be expected in the community or district, and which are incident to the lawful conduct of such trades and businesses. If they exceed what might be reasonably expected and cause unnecessary harm, then the court will grant relief.

A finding by the LGU that the noise quality standards under the law have not been complied with is not a prerequisite nor constitutes indispensable evidence to prove that

the defendant is or is not liable for a nuisance and for damages. Such finding is merely corroborative to the testimonial and/or other evidence to be presented by the parties. The exercise of due care by the owner of a business in its operation does not constitute a defense where, notwithstanding the same, the business as conducted, seriously affects the rights of those in its vicinity.35(Citations omitted.)

A reading of the RTC Order dated January 16, 2001 readily shows that the trial court did not take into account any of the foregoing considerations or tests before summarily dismissing Civil Case No. Br. 23-632-2000. The reasoning of the RTC that similar cellular base stations are scattered in heavily populated areas nationwide and are not declared nuisances is unacceptable. As to whether or not this specific cellular base station of petitioner is a nuisance to respondents is largely dependent on the particular factual circumstances involved in the instant case, which is exactly why a trial for threshing out disputed or contested factual issues is indispensable. Evidently, it was the RTC which engaged in speculations and unsubstantiated conclusions.

For the same reasons cited above, without presentation by the parties of evidence on the contested or disputed facts, there was no factual basis for declaring petitioner's cellular base station a nuisance and ordering petitioner to cease and desist from operating the same.

Given the equally important interests of the parties in this case, i.e., on one hand, respondents' health, safety, and property, and on the other, petitioner's business interest and the public's need for accessible and better cellular mobile telephone services, the wise and prudent course to take is to remand the case to the RTC for trial and give the parties the opportunity to prove their respective factual claims.

WHEREFORE, premises considered, the instant Petition is PARTIALLY GRANTED. The Decision dated July 16, 2004 and Resolution dated December 9, 2004 of the Court of Appeals in CA-G.R. CV No. 71337 are REVERSED and SET ASIDE. Let the records of the case be REMANDED to the Regional Trial Court, Branch 23, of Roxas, Isabela, which is DIRECTED to reinstate Civil Case No. Br. 23-632-2000 to its docket and proceed with the trial and adjudication thereof with appropriate dispatch in accordance with this Decision.

SO ORDERED.


Rule 35 (Summary Judgment) Cases

Documents

Transcript of Rule 35 (Summary Judgment) Cases