1.G.R. No. 186597, June 17, 2015

PEOPLE OF THE PHILIPPINES, Petitioner, v. VICTORIA R. ARAMBULO AND MIGUEL ARAMBULO, JR., Respondents.

D E C I S I O N

PEREZ, J.:

This Petition for Review on Certiorari seeks to annul the Decision1 and Resolution2 dated 5 February 2008 and 27 February 2009, respectively of the Court of Appeals, Seventeenth Division in CA-G.R. SP No. 86353 which effectively suspended the criminal proceedings in Criminal Case No. C-62784, an estafa case against respondents before the Regional Trial Court (RTC), Branch 121, Caloocan City.

Records show that respondent Victoria R. Arambulo (Victoria), ET., AL Emerenciana R. Gungab, Reynaldo Reyes (Reynaldo), Domingo Reyes (Domingo), Rodrigo Reyes and Oscar Reyes (Oscar) are the heirs of Spouses Pedro C. Reyes and Anastacia Reyes. Anaped Estate Inc. (Anaped) was incorporated as part of the estate planning or as conduit to hold the properties of the estate of Pedro Reyes for and in behalf of his heirs.

Jose Buban (Buban), as Vice-President and General Manager of Anaped Estate Inc. (Anaped), filed a complaint for estafa against Victoria and her husband Miguel Arambulo, Jr. (Miguel) before the Office of the City Prosecutor of Caloocan City. He alleged that Victoria failed to remit the rentals collected from the time the ownership of the commercial apartments was transferred to Anaped.

On 24 April 2001, Assistant City Prosecutor Alvin A. Almora recommended the filing of an Information against respondents. On 1 June 2001, respondents were charged with estafa committed as follow:chanRoblesvirtualLawlibraryThat on [or] about the period from December, 1994 to June, 1997, in the City of Caloocan, Philippines, and within the jurisdiction of the Honorable Court, the said accused, conspiring together and mutually helping one another, and with unfaithfulness or abuse of confidence, after having received rentals from IMF International Corporation, in the total amount of THREE HUNDRED NINETEEN THOUSAND EIGHT HUNDRED EIGHTY-EIGHT (P319,888.00) PESOS, under the express obligation of turning over or remitting the same to ANAPED ESTATE INCORPORATED, once in possession of the said amount and far from complying with their obligation aforesaid and despite notice [to] that effect, the said accused did then and there willfully, unlawfully and feloniously misappropriate, misapply, and convert the said amount to their own personal use and benefit to the damage and prejudice of ANAPED ESTATE, INC., in the sum above-aforementioned.3

On 14 April 2003, respondents filed a Motion to Suspend Proceedings on the ground of a prejudicial question in view of the pendency of two intra-corporate cases pending before the RTC of Quezon City and Makati City. SEC Case No. 05-97-5659 is a petition filed by Victoria’s brother Oscar for accounting of all corporate funds and assets of Anaped, annulment of sale, injunction, receivership and damages.4 SEC Case No. 03-99-6259 is a petition filed by Victoria and her brothers Reynaldo and Domingo questioning the authority of their elder sibling Rodrigo Reyes and Emerenciana R. Gungab, as well as the Anaped Board of Directors and officers, including private complainant Buban to act for and in behalf of the corporation.5chanrobleslaw

In their motion to suspend proceedings, respondents asserted that the resolution of the SEC cases in

their favor particularly the issues of whether of the group of Rodrigo and Buban are the lawful representatives of the corporation and whether they are duly authorized to make a demand for remittance would necessarily result in their acquittal in the criminal case.

On 28 August 2003, the trial court, through Presiding Judge Adoracion G. Angeles, granted the motion for suspension of the proceedings. The trial court reasoned that the issue in the SEC cases, i.e., who between the groups has the right to act for and in behalf of the corporation, has a direct link to the issue of the culpability of the accused for estafa, thus:chanRoblesvirtualLawlibraryFor indeed, if the aforesaid issues are resolved in the [respondent’s] favor, they cannot be held liable for misappropriation for they possess the authority to collect rentals and hold the same on behalf of the firm. They would then be justified in not remitting the collections to the group of Jose Buban who would be then deemed as mere usurpers of authority.6

Acting on the Motion for Reconsideration filed by petitioner, the trial court issued an Order dated 19 February 2004 setting aside its 28 August 2003 Order and setting the case for pre-trial. The trial court noted that respondents failed to file an opposition to the motion for reconsideration.

Respondents filed an Omnibus Motion praying that they be allowed to file their Comment/Opposition to the motion for reconsideration and that the pre-trial be held in abeyance. Respondents claimed that the Order of the trial court to file comment/opposition was served on respondents themselves and not on their counsel.

On 23 June 2004, the trial court denied respondents’ Omnibus Motion. The trial court stressed that even if the order was served upon respondents and not upon their counsel, records show that a copy of the motion for reconsideration was served by registered mail upon counsel. Thus, the trial court stated that respondents’ counsel was well aware of the existence of the motion for reconsideration, thus he could have taken the initiative to file his comment thereto without waiting for any directive from the court.

Aggrieved, respondents filed a petition for certiorari before the Court of Appeals asserting that the trial court committed grave abuse of discretion when it denied them the opportunity to file their comment; when it ruled that respondents’ counsel should have filed the comment as he was furnished a copy of the motion for reconsideration; and when it granted petitioner’s motion for reconsideration.

On 5 February 2008, the Court of Appeals granted the petition. The dispositive portion reads:chanRoblesvirtualLawlibraryWHEREFORE, the assailed Orders of the respondent Judge dated February 19, 2004 and July 23, 2004 are REVERSED and SET ASIDE and she is hereby enjoined from hearing the Criminal Case No. C-62784 until the termination of the SEC Case No. 03-99-6259. The August 28, 2003 Order of the respondent Judge is hereby REINSTATED.7

Preliminarily, on the procedural question, the Court of Appeals pointed out that respondents were given the opportunity to present their side in their motion to suspend proceedings. The appellate court treated respondents’ arguments in said motion as their Comment/Opposition to the Motion for Reconsideration filed by petitioner. That is correct.

The appellate court ruled that in SEC Case No. 03-99-6259:chanRoblesvirtualLawlibrary[T]he issue is the legality of the election of Anaped Board of Directors, as well as the authority of its officers, which include private complainant Jose Buban, to act for and in behalf of the corporation. Clearly, it involves facts that are intimately related to those upon which the criminal case is based. The resolution of the issues raised in this intra-corporate dispute will ultimately determine the guilt or

innocence of [respondents] in the crime of estafa initiated by Jose Buban. It must be remembered that one of the elements of the crime of estafa with abuse of confidence under paragraph 1 (b) of Article 315 of the Revised Penal Code is a demand made by the offended party to the offender. A valid demand must therefore be made by an offended party to the offender.8

The appellate court added that since respondents are challenging the authority of Buban, then the validity of Buban’s demand to turn over or remit the rentals is put in question. The appellate court concluded that if the supposed authority of Buban is found to be defective, it is as if no demand was ever made, hence the prosecution for estafa cannot prosper.

Petitioner filed a motion for reconsideration but it was denied in a Resolution dated 27 February 2009.

In this petition for review on certiorari, petitioner raises the lone ground of whether the Court of Appeals erred in declaring that there exists a prejudicial question which calls for the suspension of the criminal proceedings before the trial court.

Petitioner argues that any decision of the trial court in the SEC cases with respect to the question of who are the lawful officers or directors of Anaped is not determinative of the liability of respondents to remit the rental collections in favor of Anaped. Petitioner proffers that a corporation has a personality distinct and separate from its individual stockholders. Petitioner emphasizes that at the time the demand for remittance of the rental collections was made against respondents, Buban was an officer of Anaped and until such time that his authority is validly revoked, all his previous acts are valid and binding. Moreover, petitioner avers that the duty of respondents to remit the collection still subsists even during the pendency of the SEC cases as the money remitted goes directly to the corporation and not to the person who demanded the remittance. Finally, petitioner opines that question pertaining to the authority of Buban to demand remittance may only be considered as a defense in the estafa case and not as a ground to suspend the proceedings.

A prejudicial question is one that arises in a case the resolution of which is a logical antecedent of the issue involved therein, and the cognizance of which pertains to another tribunal. It is a question based on a fact distinct and separate from the crime but so intimately connected with it that it determines the guilt or innocence of the accused, and for it to suspend the criminal action, it must appear not only that said case involves facts intimately related to those upon which the criminal prosecution would be based but also that in the resolution of the issue or issues raised in the civil case, the guilt or innocence of the accused would necessarily be determined.9chanrobleslaw

Section 7, Rule 111 of the 2000 Rules of Criminal Procedure prescribes the elements that must concur in order for a civil case to be considered a prejudicial question, to wit:chanRoblesvirtualLawlibrarySection 7. Elements of prejudicial question. – The elements of a prejudicial question are: (a) the previously instituted civil action involves an issue similar or intimately related to the issue raised in the subsequent criminal action, and (b) the resolution of such issue determines whether or not the criminal action may proceed.chanroblesvirtuallawlibraryAptly put, the following requisites must be present for a civil action to be considered prejudicial to a criminal case as to cause the suspension of the criminal proceedings until the final resolution of the civil case: (1) the civil case involves facts intimately related to those upon which the criminal prosecution would be based; (2) in the resolution of the issue or issues raised in the civil action, the guilt or innocence of the accused would necessarily be determined; and (3) jurisdiction to try said question must be lodged in another tribunal.10chanrobleslaw

As correctly stated by the Court of Appeals, SEC Case No. 05-97-5659 does not present a prejudicial question to the criminal case for estafa. It is an action for accounting of all corporate funds and assets of Anaped, annulment of sale, injunction, receivership and damages. Even if said case will be decided against respondents, they will not be adjudged free from criminal liability. It also does not automatically follow that an accounting of corporate funds and properties and annulment of fictitious sale of corporate assets would result in the conviction of respondents in the estafa case.

With respect to SEC Case No. 03-99-6259, however, we affirm the Court of Appeals’ finding that a prejudicial question exists. The Complaint in SEC Case No. 03-99-6259 prays for the nullification of the election of Anaped directors and officers, including Buban. Essentially, the issue is the authority of the aforesaid officers to act for and behalf of the corporation.

On the other hand, the issue in the criminal case pertains to whether respondents committed estafa. Under Article 315, paragraph 1(b) of the RPC, the elements of estafa with abuse of confidence are as follows: (1) that the money, goods or other personal property is received by the offender in trust or on commission, or for administration, or under any other obligation involving the duty to make delivery of, or to return, the same; (2) that there be misappropriation or conversion of such money or property by the offender, or denial on his part of such receipt; (3) that such misappropriation or conversion or denial is to the prejudice of another; and (4) that there is demand by the offended party to the offender.11chanrobleslaw

The elements of demand and misappropriation bear relevance to the validity or invalidity of the authority of Anaped directors and officers. In Omictin v. Court of Appeals,12 we held that since the alleged offended party is the corporation, the validity of the demand for the delivery rests upon the authority of the person making such a demand on the company’s behalf. If the supposed authority of the person making the demand is found to be defective, it is as if no demand was ever made, hence the prosecution for estafa cannot prosper. The Court added that mere failure to return the thing received for administration or under any other obligation involving the duty to deliver or return the same or deliver the value thereof to the owner could only give rise to a civil action and does not constitute the crime of estafa.13chanrobleslaw

It is true that the accused may be convicted of the felony under Article 315, paragraph 1(b) of the Revised Penal Code if the prosecution proves misappropriation or conversion by the accused of the money or property subject of the Information. In a prosecution for estafa, demand is not necessary where there is evidence of misappropriation or conversion.14 The phrase, “to misappropriate to one’s own use” has been said to include “not only conversion to one’s personal advantage, but also every attempt to dispose of the property of another without right.”15 In this case, the resolution of the issue of misappropriation by respondents depends upon the result of SEC Case No. 03-99-6259. If it is ruled in the SEC case that the present Anaped directors and officers were not validly elected, then respondent Victoria may have every right to refuse remittance of rental to Buban. Hence, the essential element of misappropriation in estafa may be absent in this case.

In this connection, we find important the fact, noted by the CA, that:chanRoblesvirtualLawlibraryIt appears from the record of the case that Victoria Arambulo for the last twenty (20) years had been tasked with the management and collection of rentals of the real properties the Reyes siblings inherited from their parents, Ana and Pedro Reyes.16

As earlier mentioned, SEC Case No. 03-99-6259 is a petition filed by Victoria and her brothers Domingo and Reynaldo questioning the very authority of their elder siblings Rodrigo and Emerenciana, as well as

the Anaped Board of Directors and Officers, including Buban to act for and in behalf of the corporation. We find this issue consonant with the provisions of the Corporation Code which provides in Section 23 that:chanRoblesvirtualLawlibrarySec. 23. The Board of Directors or Trustees. - Unless otherwise provided in this Code, the corporate powers of all corporations formed under this Code shall be exercised, all business conducted and all property of such corporations controlled and held by the board of directors or trustees to be elected from among the holders of stocks, or where there is no stock, from among the members of the corporation, who shall hold office for one (1) year and until their successors are elected and qualified.chanroblesvirtuallawlibraryIn Valle Verde Country Club, Inc. v. Africa,17 we said that:chanRoblesvirtualLawlibraryThe underlying policy of the Corporation Code is that the business and affairs of the corporation must be governed by a board of directors whose members have stood for election, and who have actually been elected by the stockholders, on an annual basis. Only in that way can the directors’ continued accountability to shareholders, and the legitimacy of their decisions that bind the corporation’s stockholders, be assured. The shareholder vote is critical to the theory that legitimizes the exercise of power by the directors or officers over properties that they do not own.chanroblesvirtuallawlibraryFrom the foregoing, it is clear that, should respondents herein prevail in SEC Case No. 03-99-6259, then Buban, who does not own either by himself or in behalf of Anaped which is the owner, the property heretofore managed by Victoria, cannot demand remittance of the rentals on the property and Victoria does not have the obligation to turn over the rentals to Buban.

Verily, the result of SEC Case No. 03-99-6259 will determine the innocence or guilt of respondents in the criminal case for estafa.

WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of Appeals dated 5 February 2008 and 27 February 2009 enjoining the Regional Trial Court of Caloocan City, Branch 121 from hearing Criminal Case No. C-62784 until the termination of SEC Case No. 03-99-6259, are AFFIRMED.

SO ORDERED.cralawlawlibrary

2.Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 188767 July 24, 2013

SPOUSES ARGOVAN AND FLORIDA GADITANO, Petitioners, vs.SAN MIGUEL CORPORATION, Respondent.

D E C I S I O N

PEREZ, J.:

For review on certiorari are the Decision dated 11 March 2008 and Resolution dated 16 July 2009 of the Court of Appeals in CA-G.R. SP No. 88431 which reversed the Resolutions issued by the Secretary of Justice, suspending the preliminary investigation of I.S. No. 01-4205 on the ground of prejudicial question.

Petitioner Spouses Argovan Gaditano (Argovan) and Florida Gadiano (Florida), who were engaged in the business of buying and selling beer and softdrinks products, purchased beer products from San Miguel Corporation (SMC) in the amount of P285, 504.00 on 7 April 2000. Petitioners paid through a check signed by Florida and drawn against Argovan’s Asia Trust Bank Current Account. When said check was presented for payment on 13 April 2000, the check was dishonored for having been drawn against insufficient funds. Despite three (3) written demands,1 petitioner failed to make good of the check. This prompted SMC to file a criminal case for violation of Batas Pambansa Blg. 22 and estafa against petitioners, docketed as I.S. No. 01-4205 with the Office of the Prosecutor in Quezon City on 14 March 2001.

In their Counter-Affidavit, petitioners maintained that their checking account was funded under an automatic transfer arrangement, whereby funds from their joint savings account with AsiaTrust Bank were automatically transferred to their checking account with said bank whenever a check they issued was presented for payment. Petitioners narrated that sometime in 1999, Fatima Padua (Fatima) borrowed P30,000.00 from Florida. On 28 February 2000, Fatima delivered Allied Bank Check No. 82813 dated 18 February 2000 payable to Florida in the amount of P378,000.00. Said check was crossed and issued by AOWA Electronics. Florida pointed out that the amount of the check was in excess of the loan but she was assured by Fatima that the check was in order and the proceeds would be used for the payroll of AOWA Electronics. Thus, Florida deposited said check to her joint AsiaTrust Savings Account which she maintained with her husband, Argovan. The check was cleared on 6 March 2000 and petitioners’ joint savings account was subsequently credited with the sum of P378,000.00. Florida initially paid P83,000.00 to Fatima. She then withdrew P295,000.00 from her joint savings account and turned over the amount to Fatima. Fatima in turn paid her loan to Florida.

Petitioners claimed that on 7 April 2000, the date when they issued the check to SMC, their joint savings account had a balance of P330,353.17.2 As of 13 April 2000, petitioners’ balance even amounted to P412,513.17.3

On 13 April 2000, Gregorio Guevarra (Guevarra), the Bank Manager of AsiaTrust Bank, advised Florida that the Allied Bank Check No. 82813 for P378,000.00, the same check handed to her by Fatima, was not cleared due to a material alteration in the name of the payee. Guevarra explained further that the check was allegedly drawn payable to LG Collins Electronics, and not to her, contrary to Fatima’s representation. AsiaTrust Bank then garnished the P378,000.00 from the joint savings account of petitioners without any court order. Consequently, the check issued by petitioners to SMC was dishonored having been drawn against insufficient funds.

On 23 October 2000, petitioners filed an action for specific performance and damages against AsiaTrust Bank, Guevarra, SMC and Fatima, docketed as Civil Case No. Q-00-42386. Petitioners alleged that AsiaTrust Bank and Guevarra unlawfully garnished and debited their bank accounts; that their obligation to SMC had been extinguished by payment; and that Fatima issued a forged check.

Petitioners assert that the issues they have raised in the civil action constitute a bar to the prosecution of the criminal case for violation of Batas Pambansa Blg. 22 and estafa.

On 29 January 2002, the Office of the Prosecutor recommended that the criminal proceedings be suspended pending resolution of Civil Case No. Q-00-42386. SMC thereafter filed a motion for reconsideration before the Office of the Prosecutor but it was denied for lack of merit on 19 September 2002.

SMC filed with the Department of Justice (DOJ) a petition for review challenging the Resolutions of the Office of the Prosecutor. In a Resolution dated 3 June 2004, the DOJ dismissed the petition. SMC filed a motion for reconsideration, which the DOJ Secretary denied in a Resolution dated 15 December 2004.

Undaunted, SMC went up to the Court of Appeals by filling a petition for certiorari, docketed as CA-G.R. SP No. 88431. On 11 March 2008, the Court of Appeals rendered a Decision granting the petition as follows:

IN THE LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The Resolutions of the Department of Justice dated June 3, 2004 and December 15, 2004 are SET ASIDE. In view thereof, let the suspension of the preliminary investigation of the case docketed as I.S. No. 01-4205 with the Office of the Prosecutor of Quezon City be LIFTED. Accordingly, the continuation of the preliminary investigation until completed is ordered and if probable cause exists, let the corresponding information against the respondents be filed.4

The Court of Appeals drew a distinction between the civil case which is an action for specific performance and damages involving petitioners’ joint savings account, and the criminal case which is an action for estafa/violation of Batas Pambansa Blg. 22 involving Argovan’s current account. The Court of Appeals belied the claim of petitioners about an automatic fund transfer arrangement from petitioners’ joint savings account to Argovan’s current account.

By petition for review, petitioners assail the ruling of the Court of Appeals on the following grounds:

I. THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR AND EXCEEDED THE BOUNDS OF ITS JURISDICTION IN GIVING DUE COURSE TO RESPONDENT’S PETITION FOR CERTIORARI.

II. THE COURT OF APPEALS ERRED IN REVERSING THE RESOLUTIONS DATED JUNE 3, 2004 AND DECEMBER 15, 2004 OF THE DOJ, THERE BEING NO GRAVE ABUSE OF DISCRETION.

III. THE COURT OF APPEALS ERRED IN RULING THAT THERE WAS NO PREJUDICIAL QUESTION BELOW BECAUSE TWO DIFFERENT BANK ACCOUNTS ARE INVOLVED IN THE CIVIL AND CRIMINAL CASES.

IV. THE APPELLATE COURT ERRED IN REQUIRING PETITIONERS TO PRESENT EVIDENCE TO PROVE THE PREJUDICIAL QUESTION DURING THE PRELIMINARY INVESTIGATION.5

The issues raised by petitioners are divided into the procedural issue of whether certiorari is the correct mode of appeal to the Court of Appeals and the substantive issue of whether a prejudicial question exists to warrant the suspension of the criminal proceedings.

On the procedural issue, petitioners contend that SMC’s resort to certiorari under Rule 65 was an improper remedy because the DOJ’s act of sustaining the investigating prosecutor’s resolution to suspend the criminal proceedings due to a valid prejudicial question was an error in judgment and not of jurisdiction. Petitioners further assert that nevertheless, an error of judgment is not correctible by certiorari when SMC had a plain, speedy and adequate remedy, which was to file an appeal to the Office of the President.

The procedure taken up by petitioner was correct.

The Court of Appeals is clothed with jurisdiction to review the resolution issued by the Secretary of the DOJ through a petition for certiorari under Rule 65 of the Rules of Court albeit solely on the ground that the Secretary of Justice committed grave abuse of his discretion amounting to excess or lack of jurisdiction.6

In Alcaraz v. Gonzalez,7 we stressed that the resolution of the Investigating Prosecutor is subject to appeal to the Justice Secretary who exercises the power of control and supervision over said Investigating Prosecutor; and who may affirm, nullify, reverse, or modify the ruling of such prosecutor. Thus, while the Court of Appeals may review the resolution of the Justice Secretary, it may do so only in a petition for certiorari under Rule 65 of the Rules of Court, solely on the ground that the Secretary of Justice committed grave abuse of his discretion amounting to excess of lack of jurisdiction.8

Also, in Tan v. Matsuura,9 we held that while the findings of prosecutors are reviewable by the DOJ, this does not preclude courts from intervening and exercising our own powers of review with respect to the DOJ’s findings. In the exceptional case in which grave abuse of discretion is committed, as when a clear sufficiency or insufficiency of evidence to support a finding of probable cause is ignored, the Court of Appeals may take cognizance of the case via a petition under Rule 65 of the Rules of Court.10

We agree with the Court of Appeals that the DOJ abused its discretion when it affirmed the prosecutor’s suspension of the criminal investigation due to the existence of an alleged prejudicial question.

We expound.

Petitioners insist that the Court of Appeals erroneously ruled against the existence of a prejudicial question by separately treating their joint savings account and Argovan’s current account, and concluding therefrom that the civil and criminal cases could proceed independently of each other.

It is argued that the appellate court overlooked the fact that petitioners had an automatic transfer arrangement with AsiaTrust Bank, such that funds from the savings account were automatically transferred to their checking account whenever a check they issued was presented for payment.

Petitioners maintain that since the checking account was funded by the monies deposited in the savings account, what mattered was the sufficiency of the funds in the savings account. Hence, petitioners’ separate action against AsiaTrust Bank for unlawfully garnishing their savings account, which eventually resulted in the dishonor of their check to SMC, poses a prejudicial question in the instant criminal proceedings.

Moreover, petitioners argue that they were not required to fully and exhaustively present evidence to prove their claims. The presentation of their passbook, which confirmed numerous withdrawals made on the savings account and indicated as "FT" or "Fund Transfer," proved the existence of fund transfer from their savings account to the checking account.

A prejudicial question generally comes into play in a situation where a civil action and a criminal action are both pending and there exists in the former an issue which must be preemptively resolved before the latter may proceed, because howsoever the issue raised in the civil action is resolved would be determinative juris et de jure of the guilt or innocence of the accused in the criminal case. The rationale behind the principle of prejudicial question is to avoid two conflicting decisions.11

Section 7, Rule 111 of the 2000 Rules of Criminal Procedure states the two elements necessary for a civil case to be considered a prejudicial question, to wit:

Section 7. Elements of prejudicial question. – The elements of a prejudicial question are: (a) the previously instituted civil action involves an issue similar or intimately related to the issue raised in the subsequent criminal action, and (b) the resolution of such issue determines whether or not the criminal action may proceed. (Emphasis supplied).

If both civil and criminal cases have similar issues, or the issue in one is intimately related to the issues raised in the other, then a prejudicial question would likely exist, provided that the other element or characteristic is satisfied. It must appear not only that the civil case involves the same facts upon which the criminal prosecution would be based, but also that the resolution of the issues raised in the civil action would be necessarily determinative of the guilt or innocence of the accused. If the resolution of the issue in the civil action will not determine the criminal responsibility of the accused in the criminal action based on the same facts, or if there is no necessity that the civil case be determined first before taking up the criminal case, the civil case does not involve a prejudicial question. Neither is there a prejudicial question if the civil and the criminal action can, according to law, proceed independently of each other.12

The issue in the criminal case is whether the petitioner is guilty of estafa and violation of Batas Pambansa Blg. 22, while in the civil case, it is whether AsiaTrust Bank had lawfully garnished the P378,000.00 from petitioners’ savings account.

The subject of the civil case is the garnishment by AsiaTrust Bank of petitioner’s savings account.1âwphi1 Based on petitioners’ account, they deposited the check given to them by Fatima in their savings account. The amount of said check was initially credited to petitioners’ savings account but the Fatima check was later on dishonored because there was an alleged alteration in the name of the payee. As a result, the bank debited the amount of the check from petitioners’ savings account. Now, petitioners seek to persuade us that had it not been for the unlawful garnishment, the funds in their savings account would have been sufficient to cover a check they issued in favor of SMC.

The material facts surrounding the civil case bear no relation to the criminal investigation being conducted by the prosecutor. The prejudicial question in the civil case involves the dishonor of another check. SMC is not privy to the nature of the alleged materially altered check leading to its dishonor and the eventual garnishment of petitioners’ savings account. The source of the funds of petitioners’ savings account is no longer SMC’s concern. The matter is between petitioners and Asia Trust Bank. On the other hand, the issue in the preliminary investigation is whether petitioners issued a bad check to SMC for the payment of beer products.

The gravamen of the offense punished by Batas Pambansa Blg. 22 is the act of making and issuing a worthless check or a check that is dishonored upon its presentation for payment.13 Batas Pambansa Blg. 22 punishes the mere act of issuing a worthless check. The law did not look either at the actual ownership of the check or of the account against which it was made, drawn, or issued, or at the intention of the drawee, maker or issuer.14 The thrust of the law is to prohibit the making of worthless checks and putting them into circulation.15

Even if the trial court in the civil case declares Asia Trust Bank liable for the unlawful garnishment of petitioners’ savings account, petitioners cannot be automatically adjudged free from criminal liability for violation of Batas Pambansa Blg. 22, because the mere issuance of worthless checks with knowledge of the insufficiency of funds to support the checks is in itself the offense.16

Furthermore, three notices of dishonor were sent to petitioners, who then, should have immediately funded the check. When they did not, their liabilities under the bouncing checks law attached. Such liability cannot be affected by the alleged prejudicial question because their failure to fund the check upon notice of dishonour is itself the offense.

In the crime of estafa under Article 315, paragraph 2(d) of the Revised Penal Code, deceit and damage are additional and essential elements of the offense. It is the fraud or deceit employed by the accused in issuing a worthless check that is penalized.17 A prima facie presumption of deceit arises when a check is dishonored for lack or insufficiency of funds.18 Records show that a notice of dishonor as well as demands for payment, were sent to petitioners. The presumption of deceit applies, and petitioners must overcome this presumption through substantial evidence. These issues may only be threshed out in a criminal investigation which must proceed independently of the civil case.

Based on the foregoing, we rule that the resolution or the issue raised in the civil action is not determinative or the guilt or innocence of the accused in the criminal investigation against them. There is no necessity that the civil case be determined firrst before taking up the criminal complaints.

WHEREFORE, the petition is DENIED. The assailed Decision of the Court of Appeals dated 11 March 2008 and its Resolution dated 16 July 2000, in CA-G.R. SP No. 88431, are hereby AFFIRMED.

SO ORDERED.

3.Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 159823 February 18, 2013

TEODORO A. REYES, Petitioner, vs.ETTORE ROSSI, Respondent.

D E C I S I O N

BERSAMIN, J.:

The rescission of a contract of sale is not a prejudicial question that will warrant the suspension of the criminal proceedings commenced to prosecute the buyer for violations of the Bouncing Checks Law (Batas Pambansa Blg. 22) arising from the dishonor of the checks the buyer issued in connection with the sale.

Antecedents

On October 31, 1997, petitioner Teodoro A. Reyes (Reyes) and Advanced Foundation Construction Systems Corporation (Advanced Foundation), represented by its Executive Project Director, respondent Ettore Rossi (Rossi), executed a deed of conditional sale involving the purchase by Reyes of equipment consisting of a Warman Dredging Pump HY 300A worth P10,000,000.00. The parties agreed therein that Reyes would pay the sum of P3,000,000.00 as downpayment, and the balance of P7,000,000.00 through four post-dated checks. Reyes complied, but in January 1998, he requested the restructuring of his obligation under the deed of conditional sale by replacing the four post-dated checks with nine post-dated checks that would include interest at the rate of P25,000.00/month accruing on the unpaid portion of the obligation on April 30, 1998, June 30, 1998, July 31, 1998, September 30, 1998 and October 31, 1998.1

Advanced Foundation assented to Reyes’ request, and returned the four checks. In turn, Reyes issued and delivered the following nine postdated checks in the aggregate sum of P7,125,000.00 drawn against the United Coconut Planters Bank,2 to wit:

Check No. Date Amount

72807 April 30, 1998 P 25,000.00

79125 May 1, 1998 1,000,000.00

72802 May 30, 1998 2,000,000.00

72808 June 30, 1998 25,000.00

72809 July 31, 1998 25,000.00

72801 August 31, 1998 2,000,000.00

72810 September 30, 1998 25,000.00

72811 October 31, 1998 25,000.00

72903 November 30, 1998 2,000,000.00

Rossi deposited three of the post-dated checks (i.e., No. 72807, No. 79125 and No. 72808) on their maturity dates in Advanced Foundation’s bank account at the PCI Bank in Makati. Two of the checks were denied payment ostensibly upon Reyes’ instructions to stop their payment, while the third (i.e., No. 72802) was dishonored for insufficiency of funds.3

Rossi likewise deposited two more checks (i.e., No. 72809 and No. 72801) in Advanced Foundation’s account at the PCI Bank in Makati, but the checks were returned with the notation Account Closed stamped on them. He did not anymore deposit the three remaining checks on the assumption that they would be similarly dishonored.4

In the meanwhile, on July 29, 1998, Reyes commenced an action for rescission of contract and damages in the Regional Trial Court in Quezon City (RTC). His complaint, docketed as Civil Case No. Q98-35109 and entitled Teodoro A. Reyes v. Advanced Foundation Construction Systems Corporation, sought judgment declaring the deed of conditional sale "rescinded and of no further force and effect," and ordering Advanced Foundation to return the P3,000,000.00 downpayment with legal interest from June 4, 1998 until fully paid; and to pay to him attorney’s fees, and various kinds and amounts of damages.5

On September 8, 1998, Rossi charged Reyes with five counts of estafa and five counts of violation of Batas Pambansa Blg. 22 in the Office of the City Prosecutor of Makati for the dishonor of Checks No. 72807, No. 72808, No. 72801, No. 72809 and No. 79125. Another criminal charge for violation of Batas Pambansa Blg. 22 was lodged against Reyes in the Office of the City Prosecutor of Quezon City for the dishonor of Check No. 72802.6

On September 29, 1998, Reyes submitted his counter-affidavit in the Office of the City Prosecutor of Makati,7 claiming that the checks had not been issued for any valuable consideration; that he had discovered from the start of using the dredging pump involved in the conditional sale that the Caterpillar diesel engine powering the pump had been rated at only 560 horsepower instead of the 1200 horsepower Advanced Foundation had represented to him; that welding works on the pump had neatly concealed several cracks; that on May 6, 1998 he had written to Advanced Foundation complaining about the misrepresentations on the specifications of the pump and demanding documentary proof of Advanced Foundation’s ownership of the pump; that he had caused the order to stop the payment of three checks (i.e., No. 72806, No. 72807 and No. 79125); that Advanced Foundation had replied to his letter on May 8, 1998 by saying that the pump had been sold to him on an as is, where is basis; that he had then sent another letter to Advanced Foundation on May 18, 1998 to reiterate his complaints and the request for proper documentation of ownership; that he had subsequently discovered other hidden defects, prompting him to write another letter; and that instead of attending to his complaints and request, Advanced Foundation’s lawyers had threatened him with legal action.

At the same time, Reyes assailed the jurisdiction of the Office of the City Prosecutor of Makati over the criminal charges against him on the ground that he had issued the checks in Quezon City; as well as

argued that the Office of the City Prosecutor of Makati should suspend the proceedings because of the pendency in the RTC of the civil action for rescission of contract that posed a prejudicial question as to the criminal proceedings.8

On November 20, 1998, the Assistant City Prosecutor handling the preliminary investigation recommended the dismissal of the charges of estafa and the suspension of the proceedings relating to the violation of Batas Pambansa Blg. 22 based on a prejudicial question.9

On January 5, 1999, the City Prosecutor of Makati approved the recommendation of the handling Assistant City Prosecutor,10 stating:

WHEREFORE, premises considered, the complaint for Estafa is respectfully recommended to be dismissed, as upon approval, it is hereby dismissed.

Further, it is respectfully recommended that the proceedings in the charge for Violation of Batas Pambansa Bilang 22 against the respondent be suspended until the prejudicial question raised in Civil Case Q-98-35109 for Rescission of Contract and Damages which is now pending with the RTC of Quezon City, Branch 224, has been duly resolved.

Rossi appealed the resolution of the City Prosecutor to the Department of Justice, but the Secretary of Justice, by resolution of July 24, 2001, denied Rossi’s petition for review.

After the denial of his motion for reconsideration on April 29, 2002, Rossi challenged the resolutions of the Secretary of Justice by petition for certiorari in the CA.

Ruling of the CA

In the petition for certiorari, Rossi insisted that the Secretary of Justice had committed grave abuse of discretion amounting to lack or excess of jurisdiction in upholding the suspension of the criminal proceedings by the City Prosecutor of Makati on account of the existence of a prejudicial question, and in sustaining the dismissal of the complaints for estafa.

On May 30, 2003, the CA promulgated its assailed decision,11 to wit:

WHEREFORE, the foregoing considered, the assailed resolution is hereby MODIFIED and the instant petition is GRANTED in so far as the issue of the existence of prejudicial question is concerned. Accordingly, the order suspending the preliminary investigation in I.S. No. 98-40024-29 is REVERSED and SET ASIDE, and the dismissal of the complaint for estafa is AFFIRMED.

SO ORDERED.

Issues

Hence, this appeal by Reyes.

Reyes asserts that the CA erred in ruling that there was no prejudicial question that warranted the suspension of the criminal proceedings against him; that the petition suffered fatal defects that merited

its immediate dismissal; that the CA was wrong in relying on the pronouncements in Balgos, Jr. v. Sandiganbayan12 and Umali v. Intermediate Appellate Court13 because the factual backgrounds thereat were not similar to that obtaining here; and that the Secretary of Justice did not commit any grave abuse of discretion amounting to lack or excess of jurisdiction.

In his comment,14 Rossi counters that the petition for review should be outrightly dismissed because of its fatal defect; that the CA did not err in ruling that the action for rescission of contract did not pose a prejudicial question that would suspend the criminal proceedings.

Reyes submitted a reply,15 declaring that the defect in the affidavit of service attached to his petition for review had been due to oversight; that he had substantially complied with the rules; that there existed a prejudicial question that could affect the extent of his liability in light of Supreme Court Administrative Circular No. 12-2000; and that the CA erred in finding that the Secretary of Justice committed grave abuse of discretion.

To be resolved is whether or not the civil action for rescission of the contract of sale raised a prejudicial question that required the suspension of the criminal prosecution for violation of Batas Pambansa Blg. 22.

Ruling

The petition for review is without merit.

A prejudicial question generally comes into play in a situation where a civil action and a criminal action are both pending, and there exists in the former an issue that must first be determined before the latter may proceed, because howsoever the issue raised in the civil action is resolved would be determinative juris et de jure of the guilt or innocence of the accused in the criminal case.16 The rationale for the suspension on the ground of a prejudicial question is to avoid conflicting decisions.17

Two elements that must concur in order for a civil case to be considered a prejudicial question are expressly stated in Section 7, Rule 111 of the 2000 Rules of Criminal Procedure, to wit:

Section 7. Elements of prejudicial question. – The elements of a prejudicial question are: (a) the previously instituted civil action involves an issue similar or intimately related to the issue raised in the subsequent criminal action, and (b) the resolution of such issue determines whether or not the criminal action may proceed.

In Sabandal v. Tongco,18 the concept of prejudicial question is explained in this wise:

For a civil action to be considered prejudicial to a criminal case as to cause the suspension of the criminal proceedings until the final resolution of the civil, the following requisites must be present: (1) the civil case involves facts intimately related to those upon which the criminal prosecution would be based; (2) in the resolution of the issue or issues raised in the civil action, the guilt or innocence of the accused would necessarily be determined; and (3) jurisdiction to try said question must be lodged in another tribunal.

If both civil and criminal cases have similar issues or the issue in one is intimately related to the issues raised in the other, then a prejudicial question would likely exist, provided the other element or characteristic is satisfied. It must appear not only that the civil case involves the same facts upon which the criminal prosecution would be based, but also that the resolution of the issues raised in the civil action would be necessarily determinative of the guilt or innocence of the accused. If the resolution of the issue in the civil action will not determine the criminal responsibility of the accused in the criminal action based on the same facts, or there is no necessity "that the civil case be determined first before taking up the criminal case," therefore, the civil case does not involve a prejudicial question. Neither is there a prejudicial question if the civil and the criminal action can, according to law, proceed independently of each other.

Contending that the rescission of the contract of sale constitutes a prejudicial question, Reyes posits that the resolution of the civil action will be determinative of whether or not he was criminally liable for the violations of Batas Pambansa Blg. 22. He states that if the contract would be rescinded, his obligation to pay under the conditional deed of sale would be extinguished, and such outcome would necessarily result in the dismissal of the criminal proceedings for the violations of Batas Pambansa Blg. 22.

The action for the rescission of the deed of sale on the ground that Advanced Foundation did not comply with its obligation actually seeks one of the alternative remedies available to a contracting party under Article 1191 of the Civil Code, to wit:

Article 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him.

The injured party may choose between the fulfilment and the rescission of the obligation, with the payment of damages in either case. He may also seek rescission, even after he has chosen fulfilment, if the latter should become impossible.

The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period.

This is understood to be without prejudice to the rights of third persons who have acquired the thing, in accordance with Articles 1385 and 1388 and the Mortgage Law.

Article 1191 of the Civil Code recognizes an implied or tacit resolutory condition in reciprocal obligations. The condition is imposed by law, and applies even if there is no corresponding agreement thereon between the parties. The explanation for this is that in reciprocal obligations a party incurs in delay once the other party has performed his part of the contract; hence, the party who has performed or is ready and willing to perform may rescind the obligation if the other does not perform, or is not ready and willing to perform.19

It is true that the rescission of a contract results in the extinguishment of the obligatory relation as if it was never created, the extinguishment having a retroactive effect. The rescission is equivalent to invalidating and unmaking the juridical tie, leaving things in their status before the celebration of the contract.20 However, until the contract is rescinded, the juridical tie and the concomitant obligations subsist.

To properly appreciate if there is a prejudicial question to warrant the suspension of the criminal actions, reference is made to the elements of the crimes charged. The violation of Batas Pambansa Blg. 22 requires the concurrence of the following elements, namely: (1) the making, drawing, and issuance of any check to apply for account or for value; (2) the knowledge of the maker, drawer, or issuer that at the time of issue he does not have sufficient funds in or credit with the drawee bank for the payment of the check in full upon its presentment; and (3) the subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit or dishonor for the same reason had not the drawer, without any valid cause, ordered the bank to stop payment.21 The issue in the criminal actions upon the violations of Batas Pambansa Blg. 22 is, therefore, whether or not Reyes issued the dishonoured checks knowing them to be without funds upon presentment. On the other hand, the issue in the civil action for rescission is whether or not the breach in the fulfilment of Advanced Foundation’s obligation warranted the rescission of the conditional sale. If, after trial on the merits in the civil action, Advanced Foundation would be found to have committed material breach as to warrant the rescission of the contract, such result would not necessarily mean that Reyes would be absolved of the criminal responsibility for issuing the dishonored checks because, as the aforementioned elements show, he already committed the violations upon the dishonor of the checks that he had issued at a time when the conditional sale was still fully binding upon the parties. His obligation to fund the checks or to make arrangements for them with the drawee bank should not be tied up to the future event of extinguishment of the obligation under the contract of sale through rescission. Indeed, under Batas Pambansa Blg. 22, the mere issuance of a worthless check was already the offense in itself. Under such circumstances, the criminal proceedings for the violation of Batas Pambansa Blg. 22 could proceed despite the pendency of the civil action for rescission of the conditional sale.

Accordingly, we agree with the holding of the CA that the civil action for the rescission of contract was not determinative of the guilt or innocence of Reyes. We consider the exposition by the CA of its reasons to be appropriate enough, to wit:

x x x x

We find merit in the petition.

A careful perusal of the complaint for rescission of contract and damages reveals that the causes of action advanced by respondent Reyes are the alleged misrepresentation committed by the petitioner and AFCSC and their alleged failure to comply with his demand for proofs of ownership. On one hand, he posits that his consent to the contract was vitiated by the fraudulent act of the company in misrepresenting the condition and quality of the dredging pump. Alternatively, he claims that the company committed a breach of contract which is a ground for the rescission thereof. Either way, he in effect admits the validity and the binding effect of the deed pending any adjudication which nullifies the same.

Indeed, under the Jaw on contracts, vitiated consent does not make a contract unenforceable but merely voidable, the remedy of which would be to annul the contract since voidable contracts produce legal effects until they are annulled. On the other hand, rescission of contracts in case of breach pursuant to Article 1191 of the Civil Code of the Philippines also presupposes a valid contract unless rescinded or annulled.

As defined, a prejudicial question is one that arises in a case, the resolution of which is a logical antecedent of the issue involved therein, and the cognizance of which pertains to another tribunal. The prejudicial question must be determinative of the case before the court but the jurisdiction to try and resolve the question must be lodged in another court or tribunal.

It is a question based on a fact distinct and separate from the crime but so intimately connected with it that it determines the guilt or innocence of the accused, and for it to suspend the criminal action, it must appear not only that said case involves facts intimately related to those upon which the criminal prosecution would be based but also that in the resolution of the issue or issues raised in the civil case, the guilt or innocence of the accused would necessarily be determined. It comes into play generally in a situation where a civil action and a criminal action are both pending and there exists in the former an issue which must be preemptively resolved before the criminal action may proceed, because howsoever the issue raised in the civil action is resolved would be determinative juris et de jure of the guilt or innocence of the accused in the criminal case.

In this light, it is clear that the pendency of the civil case does not bar the continuation of the proceedings in the preliminary investigation on the ground that it poses a prejudicial question. Considering that the contracts are deemed to be valid until rescinded, the consideration and obligatory effect thereof are also deemed to have been validly made, thus demandable. Consequently, there was no failure of consideration at the time when the subject checks were dishonored. (Emphasis supplied)

x x x x

WHEREFORE, the Court DENIES the petition for review; AFFIRMS the decision the Court of Appeals promulgated on May 30, 2003; and DIRECTS the petitioner to pay the costs of suit.

SO ORDERED.

4.Republic of the PhilippinesSUPREME COURTManila

FIRST DIVISION

G.R. No. 161075               July 15, 2013

RAFAEL JOSE-CONSING, JR., Petitioner, vs.PEOPLE OF THE PHILIPPINES, Respondent.

D E C I S I O N

BERSAMIN, J.:

An independent civil action based on fraud initiated by the defrauded party does not raise a prejudicial question to stop the proceedings in a pending criminal prosecution of the defendant for estafa through falsification. This is because the result of the independent civil action is irrelevant to the issue of guilt or innocence of the accused.

The Case

On appeal is the amended decision promulgated on August 18, 2003,1 whereby the Court of Appeals (CA) granted the writ of certiorari upon petition by the State in C.A.-G.R. No. 71252 entitled People v. Han. Winlove M Dumayas, Presiding Judge, Branch 59, Regional Trial Court, Makati City and Rafael Consing, Jr., and set aside the assailed order issued on November 26, 2001 by the Regional Trial Court (RTC), Branch 59, in Makati City deferring the arraignment of petitioner in Criminal Case No. 00-120 entitled People v. Rafael Consing, Jr. upon his motion on the ground of the existence of a prejudicial question in the civil cases pending between him and the complainant in the trial courts in Pasig City and Makati City.

Antecedents

Petitioner negotiated with and obtained for himself and his mother, Cecilia de la Cruz (de la Cruz) various loans totaling P18,000,000.00 from Unicapital Inc. (Unicapital). The loans were secured by a real estate mortgage constituted on a parcel of land (property) covered by Transfer Certificate of Title (TCT) No. T-687599 of the Registry of Deeds for the Province of Cavite registered under the name of de la Cruz.2 In accordance with its option to purchase the mortgaged property, Unicapital agreed to purchase one-half of the property for a total consideration of P21,221,500.00. Payment was effected by off-setting the amounts due to

Unicapital under the promissory notes of de la Cruz and Consing in the amount of P18,000,000.00 and paying an additional amount of P3,145,946.50. The other half of the property was purchased by Plus Builders, Inc. (Plus Builders), a joint venture partner of Unicapital.3

Before Unicapital and Plus Builders could develop the property, they learned that the title to the property was really TCT No. 114708 in the names of Po Willie Yu and Juanito Tan Teng, the parties from whom the property had been allegedly acquired by de la Cruz. TCT No. 687599 held by De la Cruz appeared to be spurious.4

On its part, Unicapital demanded the return of the total amount of P41,377,851.48 as of April 19, 1999 that had been paid to and received by de la Cruz and Consing, but the latter ignored the demands.5

On July 22, 1999, Consing filed Civil Case No. 1759 in the Pasig City Regional Trial Court (RTC) (Pasig civil case) for injunctive relief, thereby seeking to enjoin Unicapital from proceeding against him for the collection of the P41,377,851.48 on the ground that he had acted as a mere agent of his mother.

On the same date, Unicapital initiated a criminal complaint for estafa through falsification of public document against Consing and de la Cruz in the Makati City Prosecutor’s Office.6

On August 6, 1999, Unicapital sued Consing in the RTC in Makati City (Civil Case No. 99-1418) for the recovery of a sum of money and damages, with an application for a writ of preliminary attachment (Makati civil case).7

On January 27, 2000, the Office of the City Prosecutor of Makati City filed against Consing and De la Cruz an information for estafa through falsification of public document in the RTC in Makati City (Criminal Case No. 00-120), which was assigned to Branch 60 (Makati criminal case).8

On February 15, 2001, Consing moved to defer his arraignment in the Makati criminal case on the ground of existence of a prejudicial question due to the pendency of the Pasig and Makati civil cases. On September 25, 2001, Consing reiterated his motion for deferment of his arraignment, citing the additional ground of pendency of CA-G.R. SP No. 63712 in the CA. On November 19, 2001, the Prosecution opposed the motion.9

On November 26, 2001, the RTC issued an order suspending the proceedings in the Makati criminal case on the ground of the existence of a prejudicial question, and on March 18, 2001, the RTC denied the Prosecution’s motion for reconsideration.10

The State thus assailed in the CA the last two orders of the RTC in the Makati criminal case via petition for certiorari (C.A.-G.R. SP No. 71252).

On May 20, 2003, the CA promulgated its decision in C.A.-G.R. SP No. 71252,11 dismissing the petition for certiorari and upholding the RTC’s questioned orders, explaining:

Is the resolution of the Pasig civil case prejudicial to the Cavite and Makati criminal cases?

We hold that it is. The resolution of the issue in the Pasig case, i.e. whether or not private respondent may be held liable in the questioned transaction, will determine the guilt or innocence of private respondent Consing in both the Cavite and Makati criminal cases.

The analysis and comparison of the Pasig civil case, Makati criminal case, Makati civil case and Cavite criminal case show that: (1) the parties are identical; (2) the transactions in controversy are identical; (3) the Transfer Certificate of Titles (TCT) involved are identical; (4) the questioned Deeds of Sale/Mortgage are identical; (5) the dates in question are identical; and (6) the issue of private respondent’s culpability for the questioned transactions is identical in all the proceedings.

As discussed earlier, not only was the issue raised in the Pasig civil case identical to or intimately related to the criminal cases in Cavite and Makati. The similarities also extend to the parties in the cases and the TCT and Deed of Sale/ Mortgage involved in the questioned transactions.

The respondent Judge, in ordering the suspension of the arraignment of private respondent in the Makati case, in view of CA-G.R. SP No. 63712, where Unicapital was not a party thereto, did so pursuant to its mandatory power to take judicial notice of an official act of another judicial authority. It was also a better legal tack to prevent multiplicity of action, to which our legal system abhors.

Applying the Tuanda ruling, the pendency of CA-G.R. SP No. 63712 may be validly invoked to suspend private respondent’s arraignment in the Makati City criminal case, notwithstanding the fact that CA-G.R. SP No. 63712 was an offshoot, merely, in the Cavite criminal case.12

In the meanwhile, on October 13, 1999, Plus Builders commenced its own suit for damages against Consing (Civil Case No. 99-95381) in the RTC in Manila (Manila civil case).13

On January 21, 2000, an information for estafa through falsification of public document was filed against Consing and De la Cruz in the RTC in Imus, Cavite, docketed as Criminal Case No. 7668-00 and assigned to Branch 21 (Cavite criminal case). Consing filed a motion to defer the arraignment on the ground of the existence of a prejudicial question, i.e., the pendency of the Pasig and Manila civil cases. On January 27, 2000, however, the RTC handling the Cavite criminal case denied Consing’s motion. Later on, it also denied his motion for reconsideration. Thereafter, Consing commenced in the CA a special civil action for certiorari with prayer for the issuance of a temporary restraining order (TRO) and/or writ of preliminary injunction (C.A.-G.R. SP No. 63712), seeking to enjoin his arraignment and trial in the Cavite criminal case. The CA granted the TRO on March 19, 2001, and later promulgated its decision on May 31, 2001, granting Consing’ petition for certiorari and setting aside the January 27, 2000 order of the RTC, and permanently enjoining the RTC from proceeding with the arraignment and trial until the Pasig and Manila civil cases had been finally decided.

Not satisfied, the State assailed the decision of the CA in this Court (G.R. No. 148193), praying for the reversal of the May 31, 2001 decision of the CA. On January 16, 2003, the Court granted the petition for review in G.R. No. 148193, and reversed and set aside the May 31, 2001 decision of the CA,14 viz:

In the case at bar, we find no prejudicial question that would justify the suspension of the proceedings in the criminal case (the Cavite criminal case). The issue in Civil Case No. SCA 1759 (the Pasig civil case) for Injunctive Relief is whether or not respondent (Consing) merely acted as an agent of his mother, Cecilia de la Cruz; while in Civil Case No. 99-95381 (the Manila civil case), for Damages and Attachment, the question is whether respondent and his mother are liable to pay damages and to return the amount paid by PBI for the purchase of the disputed lot. Even if respondent is declared merely an agent of his mother in the transaction involving the sale of the questioned lot, he cannot be adjudged free from criminal liability. An agent or any person may be held liable for conspiring to falsify public documents. Hence, the determination of the issue involved in Civil Case No. SCA 1759 for Injunctive Relief is irrelevant to the guilt or innocence of the respondent in the criminal case for estafa through falsification of public document.

Likewise, the resolution of PBI’s right to be paid damages and the purchase price of the lot in question will not be determinative of the culpability of the respondent in the criminal case for even if PBI is held entitled to the return of the purchase price plus damages, it does not ipso facto follow that respondent should be held guilty of estafa through falsification of public document. Stated differently, a ruling of the court in the civil case that PBI should not be paid the purchase price plus damages will not necessarily absolve respondent of liability in the criminal case where his guilt may still be established under penal laws as determined by other evidence.

Moreover, neither is there a prejudicial question if the civil and the criminal action can, according to law, proceed independently of each other. Under Rule 111, Section 3 of the Revised Rules on Criminal Procedure, in the cases provided in Articles 32, 33, 34 and 2176 of the Civil Code, the independent civil action may be brought by the offended party. It shall proceed independently of the criminal action and shall require only a preponderance of evidence. In no case, however, may the offended party recover damages twice for the same act or omission charged in the criminal action.

Thus, in Rojas v. People, the petitioner was accused in a criminal case for violation of Article 319 of the Revised Penal Code, for executing a new chattel mortgage on personal property in favor of another party without consent of the previous mortgagee. Thereafter, the offended party filed a civil case for termination of management contract, one of the causes of action of which consisted of petitioner having executed a chattel mortgage while the previous chattel mortgage was still valid and subsisting. Petitioner moved that the arraignment and trial of the criminal case be held in abeyance on the ground that the civil case was a prejudicial question, the resolution of which was necessary before the criminal proceedings could proceed. The trial court denied the suspension of the criminal case on the ground that no prejudicial question exist. We affirmed the order of the trial court and ruled that:

… the resolution of the liability of the defendant in the civil case on the eleventh cause of action based on the fraudulent misrepresentation that the chattel mortgage the defendant executed in favor of the said CMS Estate, Inc. on February 20, 1957, that his D-6 "Caterpillar" Tractor with Serial No. 9-U-6565 was "free from all liens and encumbrances" will not determine the criminal liability of the accused in the said Criminal Case No. 56042 for violation of paragraph 2 of Article 319 of the Revised Penal Code. . . . (i) That, even granting for the sake of argument, a

prejudicial question is involved in this case, the fact remains that both the crime charged in the information in the criminal case and the eleventh cause of action in the civil case are based upon fraud, hence both the civil and criminal cases could proceed independently of the other pursuant to Article 33 of the new Civil Code which provides: "In cases of defamation, fraud and physical injuries, a civil action for damages, entirely separate and distinct from the criminal action shall proceed independently of the criminal prosecution, and shall require only a preponderance of evidence." (j) That, therefore, the act of respondent judge in issuing the orders referred to in the instant petition was not made with "grave abuse of discretion."

In the instant case, Civil Case No. 99-95381, for Damages and Attachment on account of the alleged fraud committed by respondent and his mother in selling the disputed lot to PBI is an independent civil action under Article 33 of the Civil Code. As such, it will not operate as a prejudicial question that will justify the suspension of the criminal case at bar.15

Turning back to the Makati criminal case, the State moved for the reconsideration of the adverse decision of the CA, citing the ruling in G.R. No. 148193, supra, to the effect that the Pasig and Manila civil cases did not present a prejudicial question that justified the suspension of the proceedings in the Cavite criminal case, and claiming that under the ruling in G.R. No. 148193, the Pasig and Makati civil cases did not raise a prejudicial question that would cause the suspension of the Makati criminal case.

In his opposition to the State’s motion for reconsideration, Consing contended that the ruling in G.R. No. 148193 was not binding because G.R. No. 148193 involved Plus Builders, which was different from Unicapital, the complainant in the Makati criminal case. He added that the decision in G.R. No. 148193 did not yet become final and executory, and could still be reversed at any time, and thus should not control as a precedent to be relied upon; and that he had acted as an innocent attorney-in-fact for his mother, and should not be held personally liable under a contract that had involved property belonging to his mother as his principal.

On August 18, 2003, the CA amended its decision, reversing itself. It relied upon the ruling in G.R. No. 148193, and held thusly:

CA-G.R. SP No. 63712 is similar with the case at bench. The transactions in controversy, the documents involved; the issue of the respondent’s culpability for the questioned transactions are all identical in all the proceedings; and it deals with the same parties with the exception of private complainant Unicapital.

However, the Supreme Court, upon review of CA-G.R. SP No. 63712, People of the Philippines vs. Rafael Jose Consing, Jr. (G.R. No. 148193, January 16, 2003) held that "Civil Case No. 99-95381, for Damages and attachment on account of alleged fraud committed by respondent and his mother in selling the disputed lot to Plus Builders, Inc. is an independent civil action under Article 33 of the Civil Code. As such, it will not operate as a prejudicial question that will justify the suspension of the criminal case at bar." In view of the aforementioned decision of the Supreme Court, We are thus amending Our May 20, 2003 decision.

WHEREFORE, the petitioner’s motion for reconsideration is GRANTED. The Orders dated November 26, 2001 and March 18, 2002 issued by the respondent Judge are hereby REVERSED and SET ASIDE. Respondent Judge is hereby ordered to proceed with the hearing of Criminal Case No. 00-120 with dispatch.

SO ORDERED.16

Consing filed a motion for reconsideration,17 but the CA denied the motion through the second assailed resolution of December 11, 2003.18

Hence, this appeal by petition for review on certiorari.

Issue

Petitioner reiterates his contention that the decision in G.R. No. 148193 was not controlling in relation to C.A.-G.R. No. 71252, which involved Plus Builders, not Unicapital, the complainant in Criminal Case No. 00-120. He posits that in arriving at its amended decision, the CA did not consider the pendency of the Makati civil case (Civil Case No. 99-1418), which raised a prejudicial question, considering that the resolution of such civil action would include the issue of whether he had falsified a certificate of title or had willfully defrauded Unicapital, the resolution of either of which would determine his guilt or innocence in Criminal Case No. 00-120.

In its comment,19 the Office of the Solicitor General (OSG) counters that Unicapital brought the Makati civil case as an independent civil action intended to exact civil liability separately from Criminal Case No. 00-120 in a manner fully authorized under Section 1(a) and Section 2, Rule 111 of the Rules of Court.20 It argues that the CA correctly took cognizance of the ruling in G.R. No. 148193, holding in its challenged amended decision that the Makati civil case, just like the Manila civil case, was an independent civil action instituted by virtue of Article 33 of the Civil Code; that the Makati civil case did not raise a prejudicial question that justified the suspension of Criminal Case No. 00-120; and that as finally settled in G.R. No. 148193, the Pasig civil case did not also raise any prejudicial question, because the sole issue thereat was whether Consing, as the mere agent of his mother, had any obligation or liability toward Unicapital.

In his reply,21 Consing submits that the Pasig civil case that he filed and Unicapital’s Makati civil case were not intended to delay the resolution of Criminal Case No. 00-120, nor to pre-empt such resolution; and that such civil cases could be validly considered determinative of whether a prejudicial question existed to warrant the suspension of Criminal Case No. 00-120.

Did the CA err in reversing itself on the issue of the existence of a prejudicial question that warranted the suspension of the proceedings in the Makati criminal case?

Ruling

The petition for review on certiorari is absolutely meritless.

Consing has hereby deliberately chosen to ignore the firm holding in the ruling in G.R. No. 148193 to the effect that the proceedings in Criminal Case No. 00-120 could not be suspended because the Makati civil case was an independent civil action, while the Pasig civil case raised no prejudicial question. That was wrong for him to do considering that the ruling fully applied to him due to the similarity between his case with Plus Builders and his case with Unicapital.

A perusal of Unicapital’s complaint in the Makati civil case reveals that the action was predicated on fraud. This was apparent from the allegations of Unicapital in its complaint to the effect that Consing and de la Cruz had acted in a "wanton, fraudulent, oppressive, or malevolent manner in offering as security and later object of sale, a property which they do not own, and foisting to the public a spurious title."22 As such, the action was one that could proceed independently of Criminal Case No. 00-120 pursuant to Article 33 of the Civil Code, which states as follows:

Article 33. In cases of defamation, fraud, and physical injuries a civil action for damages, entirely separate and distinct from the criminal action, may be brought by the injured party. Such civil action shall proceed independently of the criminal prosecution, and shall require only a preponderance of evidence.

It is well settled that a civil action based on defamation, fraud and physical injuries may be independently instituted pursuant to Article 33 of the Civil Code, and does not operate as a prejudicial question that will justify the suspension of a criminal case.23 This was precisely the Court’s thrust in G.R. No. 148193, thus:

Moreover, neither is there a prejudicial question if the civil and the criminal action can, according to law, proceed independently of each other. Under Rule 111, Section 3 of the Revised Rules on Criminal Procedure, in the cases provided in Articles 32, 33, 34 and 2176 of the Civil Code, the independent civil action may be brought by the offended party. It shall proceed independently of the criminal action and shall require only a preponderance of evidence. In no case, however, may the offended party recover damages twice for the same act or omission charged in the criminal action.

x x x x

In the instant case, Civil Case No. 99-95381, for Damages and Attachment on account of the alleged fraud committed by respondent and his mother in selling the disputed lot to PBI is an independent civil action under Article 33 of the Civil Code. As such, it will not operate as a prejudicial question that will justify the suspension of the criminal case at bar.24

Contrary to Consing’s stance, it was not improper for the CA to apply the ruling in G.R. No. 148193 to his case with Unicapital, for, although the Manila and Makati civil cases involved different complainants (i.e., Plus Builders and Unicapital), the civil actions Plus Builders and Unicapital had separately instituted against him were undeniably of similar mold, i.e., they were both based on fraud, and were thus covered by Article 33 of the Civil Code. Clearly, the Makati criminal case could not be suspended pending the resolution of the Makati civil case that Unicapital had filed.

As far as the Pasig civil case is concerned, the issue of Consing’s being a mere agent of his mother who should not be criminally liable for having so acted due to the property involved having belonged to his mother as principal has also been settled in G.R. No. 148193, to wit:

In the case at bar, we find no prejudicial question that would justify the suspension of the proceedings in the criminal case (the Cavite criminal case). The issue in Civil Case No. SCA 1759 (the Pasig civil case) for Injunctive Relief is whether or not respondent (Consing) merely acted as an agent of his mother, Cecilia de la Cruz; while in Civil Case No. 99-95381 (the Manila civil case), for Damages and Attachment, the question is whether respondent and his mother are liable to pay damages and to return the amount paid by PBI for the purchase of the disputed lot. Even if respondent is declared merely an agent of his mother in the transaction involving the sale of the questioned lot, he cannot be adjudged free from criminal liability. An agent or any person may be held liable for conspiring to falsify public documents. Hence, the determination of the issue involved in Civil Case No. SCA 1759 for Injunctive Relief is irrelevant to the guilt or innocence of the respondent in the criminal case for estafa through falsification of public document.25 (Words in parentheses supplied; bold underscoring supplied for emphasis)

WHEREFORE, the Court AFFIRMS the amended decision promulgated on August 18, 2003; and ORDERS petitioner to pay the costs of suit.

SO ORDERED.

Digest ng Facts: SUMMARIZED NG FACTS.

On February 15, 2001, Consing moved to defer his arraignment in the Makati criminal case on the ground of existence of a prejudicial question due to the pendency of the Pasig and Makati civil cases.

The analysis and comparison of the Pasig civil case, Makati criminal case, Makati civil case and Cavite criminal case show that: the parties are identical; the transactions in controversy are identical; the Transfer Certificate of Titles involved are identical; the questioned Deeds of Sale/Mortgage are identical; the dates in question are identical; and the issue of private respondents culpability for the questioned transactions is identical in all the proceedings.

Thereafter, the offended party filed a civil case for termination of management contract, one of the causes of action of which consisted of petitioner having executed a chattel mortgage while the previous chattel mortgage was still valid and subsisting.

Petitioner moved that the arraignment and trial of the criminal case be held in abeyance on the ground that the civil case was a prejudicial question, the resolution of which was necessary before the criminal proceedings could proceed.

That, even granting for the sake of argument, a prejudicial question is involved in this case, the fact remains that both the crime charged in the information in the criminal case and the eleventh cause of action in the civil case are based upon fraud, hence both the civil and criminal cases could proceed

independently of the other pursuant to Article 33 of the new Civil Code which provides: In cases of defamation, fraud and physical injuries, a civil action for damages, entirely separate and distinct from the criminal action shall proceed independently of the criminal prosecution, and shall require only a preponderance of evidence.

Turning back to the Makati criminal case, the State moved for the reconsideration of the adverse decision of the CA, citing the ruling in G.R. No. 148193, supra, to the effect that the Pasig and Manila civil cases did not present a prejudicial question that justified the suspension of the proceedings in the Cavite criminal case, and claiming that under the ruling in G.R. No. 148193, the Pasig and Makati civil cases did not raise a prejudicial question that would cause the suspension of the Makati criminal case.

5. Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 166836               September 4, 2013

SAN MIGUEL PROPERTIES, INC., PETITIONER, vs.SEC. HERNANDO B. PEREZ, ALBERT C. AGUIRRE, TEODORO B. ARCENAS, JR., MAXY S. ABAD, JAMES G. BARBERS, STEPHEN N. SARINO, ENRIQUE N. ZALAMEA, JR., MARIANO M. MARTIN, ORLANDO O. SAMSON, CATHERINE R. AGUIRRE, AND ANTONIO V. AGCAOILI, RESPONDENTS.

D E C I S I O N

BERSAMIN, J.:

The pendency of an administrative case for specific performance brought by the buyer of residential subdivision lots in the Housing and Land Use Regulatory Board (HLURB) to compel the seller to deliver the transfer certificates of title (TCTs) of the fully paid lots is properly considered a ground to suspend a criminal prosecution for violation of Section 25 of Presidential Decree No. 9571 on the ground of a prejudicial question. The administrative determination is a logical antecedent of the resolution of the criminal charges based on non-delivery of the TCTs.

Antecedents

Petitioner San Miguel Properties Inc. (San Miguel Properties), a domestic corporation engaged in the real estate business, purchased in 1992, 1993 and April 1993 from B.F. Homes, Inc. (BF Homes), then represented by Atty. Florencio B. Orendain (Orendain) as its duly authorized rehabilitation receiver appointed by the Securities and Exchange Commission (SEC),2 130 residential lots situated in its subdivision BF Homes Parañaque, containing a total area of 44,345 square meters for the aggregate price of P106,248,000.00. The transactions were embodied in three separate deeds of sale.3 The TCTs covering the lots bought under the first and second deeds were fully delivered to San Miguel Properties, but 20 TCTs covering 20 of the 41 parcels of land with a total area of 15,565 square meters purchased under the third deed of sale, executed in April 1993 and for which San Miguel Properties paid the full price of P39,122,627.00, were not delivered to San Miguel Properties.

On its part, BF Homes claimed that it withheld the delivery of the 20 TCTs for parcels of land purchased under the third deed of sale because Atty. Orendain had ceased to be its rehabilitation receiver at the time of the transactions after being meanwhile replaced as receiver by FBO Network Management, Inc. on May 17, 1989 pursuant to an order from the SEC.4

BF Homes refused to deliver the 20 TCTs despite demands. Thus, on August 15, 2000, San Miguel Properties filed a complaint-affidavit in the Office of the City Prosecutor of Las Piñas City (OCP Las Piñas) charging respondent directors and officers of BF Homes with non-delivery of titles in violation of Section 25, in relation to Section 39, both of Presidential Decree No. 957 (I.S. No. 00-2256).5

At the same time, San Miguel Properties sued BF Homes for specific performance in the HLURB (HLURB Case No. REM-082400-11183),6 praying to compel BF Homes to release the 20 TCTs in its favor.

In their joint counter-affidavit submitted in I.S. No. 00-2256,7 respondent directors and officers of BF Homes refuted San Miguel Properties’ assertions by contending that: (a) San Miguel Properties’ claim was not legally demandable because Atty. Orendain did not have the authority to sell the 130 lots in 1992 and 1993 due to his having been replaced as BF Homes’ rehabilitation receiver by the SEC on May 17, 1989; (b) the deeds of sale conveying the lots were irregular for being undated and unnotarized; (c) the claim should have been brought to the SEC because BF Homes was under receivership; (d) in receivership cases, it was essential to suspend all claims against a distressed corporation in order to enable the receiver to effectively exercise its powers free from judicial and extra-judicial interference that could unduly hinder the rescue of the distressed company; and (e) the lots involved were under custodia legis in view of the pending receivership proceedings, necessarily stripping the OCP Las Piñas of the jurisdiction to proceed in the action.

On October 10, 2000, San Miguel Properties filed a motion to suspend proceedings in the OCP Las Piñas,8 citing the pendency of BF Homes’ receivership case in the SEC. In its comment/opposition, BF Homes opposed the motion to suspend. In the meantime, however, the SEC terminated BF Homes’ receivership on September 12, 2000, prompting San Miguel Properties to file on October 27, 2000 a reply to BF Homes’ comment/opposition coupled with a motion to withdraw the sought suspension of proceedings due to the intervening termination of the receivership.9

On October 23, 2000, the OCP Las Piñas rendered its resolution,10 dismissing San Miguel Properties’ criminal complaint for violation of Presidential Decree No. 957 on the ground that no action could be filed by or against a receiver without leave from the SEC that had appointed him; that the implementation of the provisions of Presidential Decree No. 957 exclusively pertained under the jurisdiction of the HLURB; that there existed a prejudicial question necessitating the suspension of the criminal action until after the issue on the liability of the distressed BF Homes was first determined by the SEC en banc or by the HLURB; and that no prior resort to administrative jurisdiction had been made; that there appeared to be no probable cause to indict respondents for not being the actual signatories in the three deeds of sale.

On February 20, 2001, the OCP Las Piñas denied San Miguel Properties’ motion for reconsideration filed on November 28, 2000, holding that BF Homes’ directors and officers could not be held liable for the non-delivery of the TCTs under Presidential Decree No. 957 without a definite ruling on the legality of Atty. Orendain’s actions; and that the criminal liability

would attach only after BF Homes did not comply with a directive of the HLURB directing it to deliver the titles.11

San Miguel Properties appealed the resolutions of the OCP Las Piñas to the Department of Justice (DOJ), but the DOJ Secretary denied the appeal on October 15, 2001, holding:

After a careful review of the evidence on record, we find no cogent reason to disturb the ruling of the City Prosecutor of Las Piñas City. Established jurisprudence supports the position taken by the City Prosecutor concerned.

There is no dispute that aside from the instant complaint for violation of PD 957, there is still pending with the Housing and Land Use Resulatory Board (HLURB, for short) a complaint for specific performance where the HLURB is called upon to inquire into, and rule on, the validity of the sales transactions involving the lots in question and entered into by Atty. Orendain for and in behalf of BF Homes.

As early as in the case of Solid Homes, Inc. vs. Payawal, 177 SCRA 72, the Supreme Court had ruled that the HLURB has exclusive jurisdiction over cases involving real estate business and practices under PD 957. This is reiterated in the subsequent cases of Union Bank of the Philippines versus HLURB, G.R. [No.] 953364, June 29, 1992 and C.T. Torres Enterprises vs. Hilionada, 191 SCRA 286.

The said ruling simply means that unless and until the HLURB rules on the validity of the transactions involving the lands in question with specific reference to the capacity of Atty. Orendain to bind BF Homes in the said transactions, there is as yet no basis to charge criminally respondents for non-delivery of the subject land titles. In other words, complainant cannot invoke the penal provision of PD 957 until such time that the HLURB shall have ruled and decided on the validity of the transactions involving the lots in question.

WHEREFORE, the appeal is hereby DENIED.

SO ORDERED.12 (Emphasis supplied)

The DOJ eventually denied San Miguel Properties’ motion for reconsideration.13

Ruling of the CA

Undaunted, San Miguel Properties elevated the DOJ’s resolutions to the CA on certiorari and mandamus (C.A.-G.R. SP No. 73008), contending that respondent DOJ Secretary had acted with grave abuse in denying their appeal and in refusing to charge the directors and officers of BF Homes with the violation of Presidential Decree No. 957. San Miguel Properties submitted the issue of whether or not HLURB Case No. REM-082400-11183 presented a prejudicial question that called for the suspension of the criminal action for violation of Presidential Decree No. 957.

In its assailed decision promulgated on February 24, 2004 in C.A.-G.R. SP No. 73008,14 the CA dismissed San Miguel Properties’ petition, holding and ruling as follows:

From the foregoing, the conclusion that may be drawn is that the rule on prejudicial question generally applies to civil and criminal actions only.

However, an exception to this rule is provided in Quiambao vs. Osorio cited by the respondents. In this case, an issue in an administrative case was considered a prejudicial question to the resolution of a civil case which, consequently, warranted the suspension of the latter until after termination of the administrative proceedings.

Quiambao vs. Osorio is not the only instance when the Supreme Court relaxed the application of the rule on prejudicial question.

In Tamin vs. CA involving two (2) civil actions, the Highest Court similarly applied the rule on prejudicial question when it directed petitioner therein to put up a bond for just compensation should the demolition of private respondents’ building proved to be illegal as a result of a pending cadastral suit in another tribunal.

City of Pasig vs. COMELEC is yet another exception where a civil action involving a boundary dispute was considered a prejudicial question which must be resolved prior to an administrative proceeding for the holding of a plebiscite on the affected areas.

In fact, in Vidad vs. RTC of Negros Oriental, Br. 42, it was ruled that in the interest of good order, courts can suspend action in one case pending determination of another case closely interrelated or interlinked with it.

It thus appears that public respondent did not act with grave abuse of discretion x x x when he applied the rule on prejudicial question to the instant proceedings considering that the issue on the validity of the sale transactions x x x by x x x Orendain in behalf of BF Homes, Inc., is closely intertwined with the purported criminal culpability of private respondents, as officers/directors of BF Homes, Inc., arising from their failure to deliver the titles of the parcels of land included in the questioned conveyance.

All told, to sustain the petitioner’s theory that the result of the HLURB proceedings is not determinative of the criminal liability of private respondents under PD 957 would be to espouse an absurdity. If we were to assume that the HLURB finds BFHI under no obligation to delve the subject titles, it would be highly irregular and contrary to the ends of justice to pursue a criminal case against private respondents for the non-delivery of certificates of title which they are not under any legal obligation to turn over in the first place. (Bold emphasis supplied)

On a final note, absent grave abuse of discretion on the part of the prosecutorial arm of the government as represented by herein public respondent, courts will not interfere with the discretion of a public prosecutor in prosecuting or dismissing a complaint filed before him. A public prosecutor, by the nature of his office, is under no compulsion to file a criminal information where no clear legal justification has been shown, and no sufficient evidence of guilt nor prima facie case has been established by the complaining party.

WHEREFORE, premises considered, the instant Petition for Certiorari and Mandamus is hereby DENIED. The Resolutions dated 15 October 2001 and 12 July 2002 of the Department of Justice are AFFIRMED.

SO ORDERED. 15

The CA denied San Miguel Properties’ motion for reconsideration on January 18, 2005.16

Issues

Aggrieved, San Miguel Properties is now on appeal, raising the following for consideration and resolution, to wit:

THE COURT OF APPEALS COMMITTED GRAVE, SERIOUS AND REVERSIBLE ERRORS WHEN IT DISMISSED PETITIONER’S CERTIORARI AND MANDAMUS PETITION TO ORDER AND DIRECT RESPONDENT SECRETARY TO INDICT RESPONDENTS FOR VIOLATION OF SECTION 25, PD. 957 IN THAT:

THE OBLIGATION OF PRIVATE RESPONDENTS TO DELIVER TO PETITIONER THE TITLES TO 20 FULLY-PAID LOTS IS MANDATED BY SECTION 25, PD 957. IN FACT, THE OFFICE OF THE PRESIDENT HAD DULY CONFIRMED THE SAME PER ITS DECISION DATED 27 JANUARY 2005 IN O.P. CASE NO. 03-E-203, ENTITLED "SMPI V. BF HOMES, INC.".

A FORTIORI, PRIVATE RESPONDENTS’ FAILURE AND/OR REFUSAL TO DELIVER TO PETITIONER THE SUBJECT TITLES CONSTITUTES CRIMINAL OFFENSE PER SECTIONS 25 AND 39, PD 957 FOR WHICH IT IS THE MINISTERIAL DUTY OF RESPONDENT SECRETARY TO INDICT PRIVATE RESPONDENTS THEREFOR.

IN ANY EVENT, THE HLURB CASE DOES NOT PRESENT A "PREJUDICIAL QUESTION" TO THE SUBJECT CRIMINAL CASE SINCE THE FORMER INVOLVES AN ISSUE SEPARATE AND DISTINCT FROM THE ISSUE INVOLVED IN THE LATTER. CONSEQUENTLY, THE HLURB CASE HAS NO CORRELATION, TIE NOR LINKAGE TO THE PRESENT CRIMINAL CASE WHICH CAN PROCEED INDEPENDENTLY THEREOF.

IN FACT, THE CRIMINAL CULPABILITY OF PRIVATE RESPONDENTS EMANATE FROM THEIR MALA PROHIBITA NON-DELIVERY OF THE TITLES TO TWENTY (20) FULLY-PAID PARCELS OF LAND TO PETITIONER, AND NOT FROM THEIR NON-COMPLIANCE WITH THE HLURB’S RULING IN THE ADMINISTRATIVE CASE.

NONETHELESS, BY DECREEING THAT PETITIONER’S CRIMINAL COMPLAINT IS PREMATURE, BOTH THE COURT OF APPEALS AND RESPONDENT SECRETARY HAD IMPLIEDLY ADMITTED THE EXISTENCE OF SUFFICIENT PROBABLE CAUSE AGAINST PRIVATE RESPONDENTS FOR THE CRIME CHARGED.17

It is relevant at this juncture to mention the outcome of the action for specific performance and damages that San Miguel Properties instituted in the HLURB simultaneously with its filing of the complaint for violation of Presidential Decree No. 957. On January 25, 2002, the HLURB Arbiter ruled that the HLURB was inclined to suspend the proceedings until the SEC resolved the issue of Atty. Orendain’s authority to enter into the transactions in BF Homes’ behalf, because the final resolution by the SEC was a logical antecedent to the determination of the issue involved in the complaint before the HLURB. Upon appeal, the HLURB Board of Commissioners (HLURB Board), citing the doctrine of primary jurisdiction, affirmed the HLURB Arbiter’s decision, holding that although no prejudicial question could arise, strictly speaking, if one case was civil and the other administrative, it nonetheless opted to suspend its action on the cases pending the final outcome of the administrative proceeding in the interest of good order.18

Not content with the outcome, San Miguel Properties appealed to the Office of the President (OP), arguing that the HLURB erred in suspending the proceedings. On January 27, 2004, the OP reversed the HLURB Board’s ruling, holding thusly:

The basic complaint in this case is one for specific performance under Section 25 of the Presidential Decree (PD) 957 – "The Subdivision and Condominium Buyers’ Protective."

As early as August 1987, the Supreme Court already recognized the authority of the HLURB, as successor agency of the National Housing Authority (NHA), to regulate, pursuant to PD 957, in relation to PD 1344, the real estate trade, with exclusive original jurisdiction to hear and decide cases "involving specific performance of contractual and statutory obligation filed by buyers of subdivision lots … against the owner, developer, dealer, broker or salesman," the HLURB, in the exercise of its adjudicatory powers and functions, "must interpret and apply contracts, determine the rights of the parties under these contracts and award[s] damages whenever appropriate."

Given its clear statutory mandate, the HLURB’s decision to await for some forum to decide – if ever one is forthcoming – the issue on the authority of Orendain to dispose of subject lots before it peremptorily resolves the basic complaint is unwarranted, the issues thereon having been joined and the respective position papers and the evidence of the parties having been submitted. To us, it behooved the HLURB to adjudicate, with the usual dispatch, the right and obligation of the parties in line with its own appreciation of the obtaining facts and applicable law. To borrow from Mabubha Textile Mills Corporation vs. Ongpin, it does not have to rely on the finding of others to discharge this adjudicatory functions.19

After its motion for reconsideration was denied, BF Homes appealed to the CA (C.A.-G.R. SP No. 83631), raising as issues: (a) whether or not the HLURB had the jurisdiction to decide with finality the question of Atty. Orendain’s authority to enter into the transaction with San Miguel Properties in BF Homes’ behalf, and rule on the rights and obligations of the parties to the contract; and (b) whether or not the HLURB properly suspended the proceedings until the SEC resolved with finality the matter regarding such authority of Atty. Orendain.

The CA promulgated its decision in C.A.-G.R. SP No. 83631,20 decreeing that the HLURB, not the SEC, had jurisdiction over San Miguel Properties’ complaint. It affirmed the OP’s decision

and ordered the remand of the case to the HLURB for further proceedings on the ground that the case involved matters within the HLURB’s competence and expertise pursuant to the doctrine of primary jurisdiction, viz:

[T]he High Court has consistently ruled that the NHA or the HLURB has jurisdiction over complaints arising from contracts between the subdivision developer and the lot buyer or those aimed at compelling the subdivision developer to comply with its contractual and statutory obligations.

Hence, the HLURB should take jurisdiction over respondent’s complaint because it pertains to matters within the HLURB’s competence and expertise. The proceedings before the HLURB should not be suspended.

While We sustain the Office of the President, the case must be remanded to the HLURB. This is in recognition of the doctrine of primary jurisdiction. The fairest and most equitable course to take under the circumstances is to remand the case to the HLURB for the proper presentation of evidence.21

Did the Secretary of Justice commit grave abuse of discretion in upholding the dismissal of San Miguel Properties’ criminal complaint for violation of Presidential Decree No. 957 for lack of probable cause and for reason of a prejudicial question?

The question boils down to whether the HLURB administrative case brought to compel the delivery of the TCTs could be a reason to suspend the proceedings on the criminal complaint for the violation of Section 25 of Presidential Decree No. 957 on the ground of a prejudicial question.

Ruling of the Court

The petition has no merit.

1.

Action for specific performance, even if pending in the HLURB, an administrative agency, raises a prejudicial question BF Homes’ posture that the administrative case for specific performance in the HLURB posed a prejudicial question that must first be determined before the criminal case for violation of Section 25 of Presidential Decree No. 957 could be resolved is correct.

A prejudicial question is understood in law to be that which arises in a case the resolution of which is a logical antecedent of the issue involved in the criminal case, and the cognizance of which pertains to another tribunal. It is determinative of the criminal case, but the jurisdiction to try and resolve it is lodged in another court or tribunal. It is based on a fact distinct and separate from the crime but is so intimately connected with the crime that it determines the guilt or innocence of the accused.22 The rationale behind the principle of prejudicial question is to avoid conflicting decisions.23 The essential elements of a prejudicial question are provided in Section 7, Rule 111 of the Rules of Court, to wit: (a) the previously instituted civil action involves an issue

similar or intimately related to the issue raised in the subsequent criminal action, and (b) the resolution of such issue determines whether or not the criminal action may proceed.

The concept of a prejudicial question involves a civil action and a criminal case. Yet, contrary to San Miguel Properties’ submission that there could be no prejudicial question to speak of because no civil action where the prejudicial question arose was pending, the action for specific performance in the HLURB raises a prejudicial question that sufficed to suspend the proceedings determining the charge for the criminal violation of Section 2524 of Presidential Decree No. 957. This is true simply because the action for specific performance was an action civil in nature but could not be instituted elsewhere except in the HLURB, whose jurisdiction over the action was exclusive and original.25

The determination of whether the proceedings ought to be suspended because of a prejudicial question rested on whether the facts and issues raised in the pleadings in the specific performance case were so related with the issues raised in the criminal complaint for the violation of Presidential Decree No. 957, such that the resolution of the issues in the former would be determinative of the question of guilt in the criminal case. An examination of the nature of the two cases involved is thus necessary.

An action for specific performance is the remedy to demand the exact performance of a contract in the specific form in which it was made, or according to the precise terms agreed upon by a party bound to fulfill it.26 Evidently, before the remedy of specific performance is availed of, there must first be a breach of the contract.27 The remedy has its roots in Article 1191 of the Civil Code, which reads:

Article 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him.

The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible. x x x (Emphasis supplied)

Accordingly, the injured party may choose between specific performance or rescission with damages. As presently worded, Article 1191 speaks of the remedy of rescission in reciprocal obligations within the context of Article 1124 of the former Civil Code which used the term resolution. The remedy of resolution applied only to reciprocal obligations, such that a party’s breach of the contract equated to a tacit resolutory condition that entitled the injured party to rescission. The present article, as in the former one, contemplates alternative remedies for the injured party who is granted the option to pursue, as principal actions, either the rescission or the specific performance of the obligation, with payment of damages in either case.28

On the other hand, Presidential Decree No. 957 is a law that regulates the sale of subdivision lots and condominiums in view of the increasing number of incidents wherein "real estate subdivision owners, developers, operators, and/or sellers have reneged on their representations and obligations to provide and maintain properly" the basic requirements and amenities, as well as of reports of alarming magnitude of swindling and fraudulent manipulations perpetrated by

unscrupulous subdivision and condominium sellers and operators,29 such as failure to deliver titles to the buyers or titles free from liens and encumbrances. Presidential Decree No. 957 authorizes the suspension and revocation of the registration and license of the real estate subdivision owners, developers, operators, and/or sellers in certain instances, as well as provides the procedure to be observed in such instances; it prescribes administrative fines and other penalties in case of violation of, or non-compliance with its provisions.

Conformably with the foregoing, the action for specific performance in the HLURB would determine whether or not San Miguel Properties was legally entitled to demand the delivery of the remaining 20 TCTs, while the criminal action would decide whether or not BF Homes’ directors and officers were criminally liable for withholding the 20 TCTs. The resolution of the former must obviously precede that of the latter, for should the HLURB hold San Miguel Properties to be not entitled to the delivery of the 20 TCTs because Atty. Orendain did not have the authority to represent BF Homes in the sale due to his receivership having been terminated by the SEC, the basis for the criminal liability for the violation of Section 25 of Presidential Decree No. 957 would evaporate, thereby negating the need to proceed with the criminal case.

Worthy to note at this juncture is that a prejudicial question need not conclusively resolve the guilt or innocence of the accused. It is enough for the prejudicial question to simply test the sufficiency of the allegations in the information in order to sustain the further prosecution of the criminal case. A party who raises a prejudicial question is deemed to have hypothetically admitted that all the essential elements of the crime have been adequately alleged in the information, considering that the Prosecution has not yet presented a single piece of evidence on the indictment or may not have rested its case. A challenge to the allegations in the information on the ground of prejudicial question is in effect a question on the merits of the criminal charge through a non-criminal suit.30

2.

Doctrine of primary jurisdiction is applicable

That the action for specific performance was an administrative case pending in the HLURB, instead of in a court of law, was of no consequence at all. As earlier mentioned, the action for specific performance, although civil in nature, could be brought only in the HLURB. This situation conforms to the doctrine of primary jurisdiction. There has been of late a proliferation of administrative agencies, mostly regulatory in function. It is in favor of these agencies that the doctrine of primary jurisdiction is frequently invoked, not to defeat the resort to the judicial adjudication of controversies but to rely on the expertise, specialized skills, and knowledge of such agencies in their resolution. The Court has observed that one thrust of the proliferation is that the interpretation of contracts and the determination of private rights under contracts are no longer a uniquely judicial function exercisable only by the regular courts.31

The doctrine of primary jurisdiction has been increasingly called into play on matters demanding the special competence of administrative agencies even if such matters are at the same time within the jurisdiction of the courts. A case that requires for its determination the expertise, specialized skills, and knowledge of some administrative board or commission because it

involves technical matters or intricate questions of fact, relief must first be obtained in an appropriate administrative proceeding before a remedy will be supplied by the courts although the matter comes within the jurisdiction of the courts. The application of the doctrine does not call for the dismissal of the case in the court but only for its suspension until after the matters within the competence of the administrative body are threshed out and determined.32

To accord with the doctrine of primary jurisdiction, the courts cannot and will not determine a controversy involving a question within the competence of an administrative tribunal, the controversy having been so placed within the special competence of the administrative tribunal under a regulatory scheme. In that instance, the judicial process is suspended pending referral to the administrative body for its view on the matter in dispute. Consequently, if the courts cannot resolve a question that is within the legal competence of an administrative body prior to the resolution of that question by the latter, especially where the question demands the exercise of sound administrative discretion requiring the special knowledge, experience, and services of the administrative agency to ascertain technical and intricate matters of fact, and a uniformity of ruling is essential to comply with the purposes of the regulatory statute administered, suspension or dismissal of the action is proper.33

3.

Other submissions of petitioner are unwarranted

It is not tenable for San Miguel Properties to argue that the character of a violation of Section 25 of Presidential Decree No. 957 as malum prohibitum, by which criminal liability attached to BF Homes’ directors and officers by the mere failure to deliver the TCTs, already rendered the suspension unsustainable.34 The mere fact that an act or omission was malum prohibitum did not do away with the initiative inherent in every court to avoid an absurd result by means of rendering a reasonable interpretation and application of the procedural law. Indeed, the procedural law must always be given a reasonable construction to preclude absurdity in its application.35 Hence, a literal application of the principle governing prejudicial questions is to be eschewed if such application would produce unjust and absurd results or unreasonable consequences.

San Miguel Properties further submits that respondents could not validly raise the prejudicial question as a reason to suspend the criminal proceedings because respondents had not themselves initiated either the action for specific performance or the criminal action.1âwphi1 It contends that the defense of a prejudicial question arising from the filing of a related case could only be raised by the party who filed or initiated said related case.

The submission is unfounded. The rule on prejudicial question makes no distinction as to who is allowed to raise the defense. Ubi lex non distinguit nec nos distinguere debemos. When the law makes no distinction, we ought not to distinguish.36

WHEREFORE, the Court AFFIRMS the decision promulgated on February 24, 2004 by the Court of Appeals in CA-G.R. SP NO. 73008; and ORDERS petitioner to pay the costs of suit.

SO ORDERED.

6. G.R. No. 183805 July 3, 2013 JAMES WALTER P. CAPILI, Petitioner,vs. PEOPLE OF THE PHILIPPINES AND SHIRLEY TISMO-CAPILI, Respondents.

In September 1999, James Capili married Karla Medina. But then, just three months later in December 1999, he married another woman named Shirley Tismo.

In 2004, Karla Medina filed an action for declaration of nullity of the second marriage between Capili and Tismo. In June 2004, Tismo filed a bigamy case against Capili.

Before a decision can be had in the bigamy case, the action filed by Karla Medina was granted and Capili’s marriage with Tismo was declared void by reason of the subsisting marriage between Medina and Capili. Thereafter, Capili filed a motion to dismiss in the bigamy case. He alleged that since the second marriage was already declared void ab initio that marriage never took place and that therefore, there is no bigamy to speak of.

The trial court agreed with Capili and it dismissed the bigamy case. On appeal, the Court of Appeals reversed the dismissal and remanded the case to the trial court.

ISSUE: Whether or not a declaration of nullity of the second marriage avoids a prosecution for bigamy.

HELD: No. The elements of bigamy are:

1. That the offender has been legally married;

2. That the first marriage has not been legally dissolved or, in case his or her spouse is absent, the absent spouse could not yet be presumed dead according to the Civil Code;

3. That he contracts a second or subsequent marriage;

4. That the second or subsequent marriage has all the essential requisites for validity.

When Capili married Tismo, all the above elements are present. The crime of bigamy was already consummated. It is already immaterial if the second (or first marriage, see Mercado vs Tan) was subsequently declared void. The outcome of the civil case filed by Karla Medina had no bearing to the determination of Capili’s guilt or innocence in the bigamy case because all that is required for the charge of bigamy to prosper is that the first marriage be subsisting at the time the second marriage is contracted. He who contracts a second marriage before the judicial declaration of the first marriage assumes the risk of being prosecuted for bigamy.

The Supreme Court also notes that even if a party has reason to believe that his first marriage is void, he cannot simply contract a second marriage without having such first marriage be judicially declared as void. The parties to the marriage should not be permitted to judge for themselves its nullity, for the same must be submitted to the judgment of competent courts and only when the nullity of the marriage is so declared can it be held as void, and so long as there is no such declaration the presumption is that the marriage exists.

7. Republic of the Philippines Supreme Court Manila THIRD DIVISION

JESSE Y. YAP,Petitioner,- versus - HON. MONICO G. CABALES, Presiding Judge, Regional Trial Court, Branch 35, General Santos City; MUNICIPAL TRIAL COURT, Branch 1, General Santos City; COURT OF APPEALS, PEOPLE OF THE PHILIPPINES, JOVITA DIMALANTA and MERGYL MIRABUENO,

Respondents.

G.R. No. 159186Present:YNARES-SANTIAGO, J.,Chairperson,CARPIO,* CORONA,** NACHURA, andPERALTA, JJ.

Promulgated:

June 5, 2009

DECISION

PERALTA, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court with prayer for the issuance of a writ of preliminary injunction and/or issuance of status quo order seeking to annul and set aside the Resolution [1] of the Court of Appeals (CA) dated July 17, 2003 denying petitioner's motion for reconsideration of the Decision [2] dated April 30, 2003 in CA-G.R. SP No. 68250.

The facts of the case are as follows:

Petitioner Jesse Y. Yap and his spouse Bessie Yap are engaged in the real estate business through their company Primetown Property Group.

Sometime in 1996, petitioner purchased several real properties from a certain Evelyn Te (Evelyn). In consideration of said purchases, petitioner issued several Bank of the Philippine Islands (BPI) postdated checks to Evelyn. Thereafter, spouses Orlando and Mergyl Mirabueno and spouses Charlie and Jovita Dimalanta, rediscounted the checks from Evelyn.

In the beginning, the first few checks were honored by the bank, but in the early part of 1997, when the remaining checks were deposited with the drawee bank, they were dishonored for the reason that the Account is Closed. Demands were made by Spouses Mirabueno and Spouses Dimalanta to the petitioner to make good the checks. Despite this, however, the latter failed to pay the amounts represented by the said checks.

On December 8, 1997, Spouses Mirabueno filed a civil action for collection of sum of money, damages and attorney's fee with prayer for the issuance of a writ of preliminary attachment against petitioner before the Regional Trial Court (RTC) of General Santos City, docketed as Civil Case No. 6231. [3] On December 15, 1997, Spouses Dimalanta followed suit and instituted a similar action, which was docketed as Civil Case No. 6238. [4]

Subsequently, on various dates, the Office of the City Prosecutor of General Santos City filed several informations for violation of Batas Pambansa Bilang (B.P. Blg.) 22 against the petitioner with the Municipal Trial Court in Cities (MTCC), General Santos City. The criminal complaints were docketed as Criminal Case Nos. 34873, 34874, 34862 to 34869, and Criminal Case No. 35522-I. [5]

In the criminal cases, petitioner filed separate motions to suspend proceedings on account of the existence of a prejudicial question and motion to exclude the private prosecutor from participating in the proceedings. [6] Petitioner prayed that the proceedings in the criminal cases be suspended until the civil cases pending before the RTC were finally resolved.

The MTCC, in its Orders [7] dated June 21, 2000 and July 4, 2000, denied the motions for lack of merit. Petitioner filed a Partial Motion for Reconsideration [8] relative to Criminal Case Nos. 34873, 34874, 34862 to 34869 and a Motion for Reconsideration of the Part of the Order Denying the Motion to Suspend Proceedings on Account of the Existence of a Prejudicial Question relative to Criminal Case No. 35522-I. [9] The subsequent motions were denied in the Order [10] dated October 18, 2000.

Aggrieved, petitioner filed a Petition for Certiorari with a Prayer for the Issuance of a Writ of Preliminary Injunction [11] before the RTC, docketed as SPL. Civil Case No. 539, imputing grave abuse of discretion on the part of the MTCC Judge. On July 2, 2001, the RTC issued an Order [12] denying the petition.

Petitioner then filed a Motion for Reconsideration, [13] which was denied in an Order dated October 18, 2001. [14]

Thereafter, petitioner filed with the CA a Petition for Certiorari Prohibition and Mandamus with Urgent Prayer for the Issuance of Status Quo Order and Writ of Preliminary Injunction, [15] docketed as CA-G.R. SP No. 68250.

On April 30, 2003, the CA rendered a Decision [16] dismissing the petition for lack of merit. The CA opined that Civil Case Nos. 6231 and 6238 did not pose a prejudicial question to the prosecution of the petitioner for violation of B.P. Blg. 22.

The CA ruled:

In the instant case, a careful perusal of Civil Cases Nos. 6231 and 6238 reveals that the issue involved therein is not the validity of the sale as incorrectly pointed out by the petitioner, but it is, whether or not the complainants therein are entitled to collect from the petitioner the sum or the value of the checks which they have rediscounted from Evelyn Te. It behooves this Court to state that the sale and the rediscounting of the checks are two transactions, separate and distinct from each other. It so

happened that in the subject civil cases it is not the sale that is in question, but rather the rediscounting of the checks. Therefore, petitioner's contention that the main issue involved in said civil cases is the validity of the sale stands on hollow ground. Furthermore, if it is indeed the validity of the sale that is contested in the subject civil cases, then, We cannot fathom why the petitioner never contested such sale by filing an action for the annulment thereof or at least invoked or prayed in his answer that the sale be declared null and void. Accordingly, even if Civil Cases Nos. 6231 and 6238 are tried and the resolution of the issues therein is had, it cannot be deduced therefrom that the petitioner cannot be held liable anymore for violation of B.P. Blg. 22. [17]

Petitioner filed a Motion for Reconsideration, [18] which was denied in the Order [19] dated July 17, 2003.

Hence, the petition assigning the following errors:

1. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THERE IS NO PREJUDICIAL QUESTION IN THE CIVIL CASES (FOR COLLECTION OF SUMS OF MONEY INSTITUTED BY PRIVATE RESPONDENTS OVER CHECKS ISSUED BY THE PETITIONER, CIVIL CASE NOS. 6238 AND 6231) THAT WOULD WARRANT SUSPENSION OF THE CRIMINAL CASES (CASE NO. 35522-1, FOR VIOLATION OF B.P. 22, SUBJECT OF WHICH ARE THE VERY SAME CHECKS).

2. THE HONORABLE COURT OF APPEALS ERRED IN NOT GRANTING THE PRAYER FOR THE ISSUANCE OF A WRIT OF PRELIMINARY INJUNCTION AND/OR STATUS QUO ORDER. [20]

The main contention of the petitioner is that a prejudicial question, as defined by law and jurisprudence, exists in the present case. It is the petitioner's assertion that Civil Case Nos. 6231 and 6238 for collection of sum of money and damages were filed ahead of the criminal cases for violation of B.P. Blg. 22. He further alleged that, in the pending civil cases, the issue as to whether private respondents are entitled to collect from the petitioner despite the lack of consideration, is an issue that is a logical antecedent to the criminal cases for violation of B.P. Blg. 22. For if the court rules that there is no valid consideration for the check's issuance, as petitioner contends, then it necessarily follows that he could not also be held liable for violation of B.P. Blg. 22.

Petitioner further avers that B.P. Blg. 22 specifically requires, among other elements, that the check should have been issued for account or for value. There must be a valid consideration; otherwise, no violation of the said law could be rightfully pursued. Petitioner said that the reason for the dishonor of the checks was his order to the drawee bank to stop payment and to close his account in order to avoid necessary penalty from the bank. He made this order due to the failure of Evelyn to deliver to him the titles to the purchased properties to him.

On the other hand, the Office of the Solicitor General (OSG) contends that there is no prejudicial question in Civil Case Nos. 6231 and 6238 which would warrant the suspension of the proceedings in the criminal cases for violation of B.P. Blg. 22 against the petitioner. The issue in the civil cases is not the validity of the sale between the petitioner and Evelyn, but whether the complainants therein are entitled to damages arising from the checks. These checks were issued by the petitioner in favor of

Evelyn, who, thereafter, negotiated the same checks to private complainants. The checks were subsequently dishonored due to insufficiency of funds. The OSG maintains that the resolution of such issue has absolutely no bearing on the issue of whether petitioner may be held liable for violation of B.P. Blg. 22. [21]

The present case hinges on the determination of whether there exists a prejudicial question that necessitates the suspension of the proceedings in the MTCC.

We find that there is none and, thus, we resolve to deny the petition.

A prejudicial question generally exists in a situation where a civil action and a criminal action are both pending, and there exists in the former an issue that must be preemptively resolved before the latter may proceed, because howsoever the issue raised in the civil action is resolved would be determinative juris et de jure of the guilt or innocence of the accused in the criminal case. The rationale behind the principle of prejudicial question is to avoid two conflicting decisions. It has two essential elements: (i) the civil action involves an issue similar or intimately related to the issue raised in the criminal action; and (ii) the resolution of such issue determines whether or not the criminal action may proceed. [22]

If both civil and criminal cases have similar issues, or the issue in one is intimately related to the issues raised in the other, then a prejudicial question would likely exist, provided the other element or characteristic is satisfied. It must appear not only that the civil case involves the same facts upon which the criminal prosecution would be based, but also that the resolution of the issues raised in the civil action would be necessarily determinative of the guilt or innocence of the accused. If the resolution of the issue in the civil action will not determine the criminal responsibility of the accused in the criminal action based on the same facts, or if there is no necessity that the civil case be determined first before taking up the criminal case, the civil case does not involve a prejudicial question. [23] Neither is there a prejudicial question if the civil and the criminal action can, according to law, proceed independently of each other. [24]

The issue in the criminal cases is whether the petitioner is guilty of violating B.P. Blg. 22, while in the civil case, it is whether the private respondents are entitled to collect from the petitioner the sum or the value of the checks that they have rediscounted from Evelyn.

The resolution of the issue raised in the civil action is not determinative of the guilt or innocence of the accused in the criminal cases against him, and there is no necessity that the civil case be determined first before taking up the criminal cases.

In the aforementioned civil actions, even if petitioner is declared not liable for the payment of the value of the checks and damages, he cannot be adjudged free from criminal liability for violation of B.P. Blg. 22. The mere issuance of worthless checks with knowledge of the insufficiency of funds to support the checks is in itself an offense. [25]

In Jose v. Suarez, [26] the prejudicial question under determination was whether the daily interest rate of 5% was void, such that the checks issued by respondents to cover said interest were likewise void for being contra bonos mores, and thus the cases for B.P. Blg. 22 will no longer prosper. In resolving the issue, We ruled that whether or not the interest rate imposed by petitioners is eventually declared void for being contra bonos mores will not affect the outcome of the BP Blg. 22 cases because what will ultimately be penalized is the mere issuance of bouncing checks. In fact, the primordial question posed before the court hearing the B.P. Blg. 22 cases is whether the law has been breached; that is, if a bouncing check has been issued.

Further, We held in Ricaforte v. Jurado, [27] that:

The gravamen of the offense punished by B.P. Blg. 22 is the act of making and issuing a worthless check; that is, a check that is dishonored upon its presentation for payment. In Lozano v. Martinez, we have declared that it is not the non-payment of an obligation which the law punishes. The law is not intended or designed to coerce a debtor to pay his debt. The thrust of the law is to prohibit, under pain of penal sanctions, the making and circulation of worthless checks. Because of its deleterious effects on the public interest, the practice is proscribed by the law. The law punishes the act not as an offense against property, but an offense against public order. In People v. Nitafan, we said that a check issued as an evidence of debt - though not intended to be presented for payment - has the same effect as an ordinary check and would fall within the ambit of B.P. Blg. 22.

x x x x

x x x The mere act of issuing a worthless check - whether as a deposit, as a guarantee or even as evidence of pre-existing debt - is malum prohibitum.

To determine the reason for which checks are issued, or the terms and conditions for their issuance, will greatly erode the faith the public reposes in the stability and commercial value of checks as currency substitutes, and bring about havoc in trade and in banking communities. So what the law punishes is the issuance of a bouncing check and not the purpose for which it was issued or the terms and conditions relating to its issuance. The mere act of issuing a worthless check is malum prohibitum. [28]

Moreover, petitioner's reliance on Ras v. Rasul [29] is misplaced. The case of Ras involves a complaint for nullification of a deed of sale on the ground of an alleged double sale. While the civil case was pending, an information for estafa was filed against Ras (the defendant in the civil case) arising from the same alleged double sale, subject matter of the civil complaint. The Court ruled that there was a prejudicial question considering that the defense in the civil case was based on the very same facts that would be determinative of the guilt or innocence of the accused in the estafa case.

The instant case is different from Ras, inasmuch as the determination of whether the petitioner is liable to pay the private respondents the value of the checks and damages, will not affect the guilt or innocence of the petitioner because the material question in the criminal cases is whether petitioner had issued bad checks, regardless of the purpose or condition of its issuance.

Guided by the following legal precepts, it is clear that the determination of the issues involved in Civil Case Nos. 6231 and 6238 for collection of sum of money and damages is irrelevant to the guilt or innocence of the petitioner in the criminal cases for violation of B.P. Blg. 22.

In addition, petitioner's claim of lack of consideration may be raised as a defense during the trial of the criminal cases against him. The validity and merits of a partys defense and accusation, as well as the admissibility and weight of testimonies and evidence brought before the court, are better ventilated during trial proper.

Precisely, the reason why a state has courts of law is to ascertain the respective rights of the parties, to examine and to put to test all their respective allegations and evidence through a well designed machinery termed trial. Thus, all the defenses available to the accused should be invoked in the trial of the criminal cases. This court is not the proper forum that should ascertain the facts and decide the case for violation of B.P. Blg. 22 filed against the petitioner.

In fine, the CA committed no reversible error in affirming the decision of the RTC.

WHEREFORE, the petition is DENIED and the Decision dated April 30, 2003 and the Resolution dated July 17, 2003 of the Court of Appeals in CA-G.R. SP No. 68250 are AFFIRMED.

SO ORDERED.

8. FIRST DIVISION sta. lucia realty & development, inc., Petitioner, - versus - city of pasig, Respondent,

MUNICIPALITY OF CAINTA, PROVINCE OF RIZAL,

Intervenor.

G.R. No. 166838

Present:

VELASCO, JR .,*

Acting Chairperson,

LEONARDO-DE CASTRO,

BERSAMIN,**

DEL CASTILLO, and

PEREZ, JJ.

Promulgated:

June 15, 2011

D E C I S I O N

LEONARDO-DE CASTRO, J.:

FACTS NA SUMMARIZED:

Lucia, in its Answer, alleged that it had been religiously paying its real estate taxes to Cainta, just like what its predecessors-in-interest did, by virtue of the demands and assessments made and the Tax Declarations issued by Cainta on the claim that the subject properties were within its territorial jurisdiction.

Lucia and Cainta thereafter moved for the suspension of the proceedings, and claimed that the pending petition in the Antipolo RTC, for the settlement of boundary dispute between Cainta and Pasig, presented a prejudicial question to the resolution of the case.

Lucia and Cainta filed their Notices of Appeal, Pasig, on September 11, 1998, filed a Motion for Reconsideration of the RTCs August 10, 1998 Decision.

Lucia filed a Petition for Certiorari under Rule 65 of the Rules of Court with the Court of Appeals to assail the RTCs order granting the execution.

The assailed Order dated April 15, 1999 in Civil Case No. 65420 granting the motion for execution pending appeal and ordering the issuance of a writ of execution pending appeal is hereby SET ASIDE and declared NULL and VOID.

For review is the June 30, 2004 Decision[1] and the January 27, 2005 Resolution[2] of the Court of Appeals in CA-G.R. CV No. 69603, which affirmed with modification the August 10, 1998 Decision[3] and October 9, 1998 Order[4] of the Regional Trial Court (RTC) of Pasig City, Branch 157, in Civil Case No. 65420.

Petitioner Sta. Lucia Realty & Development, Inc. (Sta. Lucia) is the registered owner of several parcels of land with Transfer Certificates of Title (TCT) Nos. 39112, 39110 and 38457, all of which indicated that the lots were located in Barrio Tatlong Kawayan, Municipality of Pasig[5] (Pasig).

The parcel of land covered by TCT No. 39112 was consolidated with that covered by TCT No. 518403, which was situated in Barrio Tatlong Kawayan, Municipality of Cainta, Province of Rizal (Cainta). The two combined lots were subsequently partitioned into three, for which TCT Nos. 532250, 598424, and 599131, now all bearing the Cainta address, were issued.

TCT No. 39110 was also divided into two lots, becoming TCT Nos. 92869 and 92870.

The lot covered by TCT No. 38457 was not segregated, but a commercial building owned by Sta. Lucia East Commercial Center, Inc., a separate corporation, was built on it.[6]

Upon Pasigs petition to correct the location stated in TCT Nos. 532250, 598424, and 599131, the Land Registration Court, on June 9, 1995, ordered the amendment of the TCTs to read that the lots with respect to TCT No. 39112 were located in Barrio Tatlong Kawayan, Pasig City.[7]

On January 31, 1994, Cainta filed a petition[8] for the settlement of its land boundary dispute with Pasig before the RTC, Branch 74 of Antipolo City (Antipolo RTC). This case, docketed as Civil Case No. 94-3006, is still pending up to this date.

On November 28, 1995, Pasig filed a Complaint,[9] docketed as Civil Case No. 65420, against Sta. Lucia for the collection of real estate taxes, including penalties and interests, on the lots covered by TCT Nos. 532250, 598424, 599131, 92869, 92870 and 38457, including the improvements thereon (the subject properties).

Sta. Lucia, in its Answer, alleged that it had been religiously paying its real estate taxes to Cainta, just like what its predecessors-in-interest did, by virtue of the demands and assessments made and the Tax Declarations issued by Cainta on the claim that the subject properties were within its territorial jurisdiction. Sta. Lucia further argued that since 1913, the real estate taxes for the lots covered by the above TCTs had been paid to Cainta.[10]

Cainta was allowed to file its own Answer-in-Intervention when it moved to intervene on the ground that its interest would be greatly affected by the outcome of the case. It averred that it had been collecting the real property taxes on the subject properties even before Sta. Lucia acquired them. Cainta further asseverated that the establishment of the boundary monuments would show that the subject properties are within its metes and bounds.[11]

Sta. Lucia and Cainta thereafter moved for the suspension of the proceedings, and claimed that the pending petition in the Antipolo RTC, for the settlement of boundary dispute between Cainta and Pasig, presented a prejudicial question to the resolution of the case.[12]

The RTC denied this in an Order dated December 4, 1996 for lack of merit. Holding that the TCTs were conclusive evidence as to its ownership and location,[13] the RTC, on August 10, 1998, rendered a Decision in favor of Pasig:

WHEREFORE, in view of the foregoing, judgment is hereby rendered in favor of [Pasig], ordering Sta. Lucia Realty and Development, Inc. to pay [Pasig]:

1) P273,349.14 representing unpaid real estate taxes and penalties as of 1996, plus interest of 2% per month until fully paid;

2) P50,000.00 as and by way of attorneys fees; and

3) The costs of suit.

Judgment is likewise rendered against the intervenor Municipality of Cainta, Rizal, ordering it to refund to Sta. Lucia Realty and Development, Inc. the realty tax payments improperly collected and received by the former from the latter in the aggregate amount of P358, 403.68.[14]

After Sta. Lucia and Cainta filed their Notices of Appeal, Pasig, on September 11, 1998, filed a Motion for Reconsideration of the RTCs August 10, 1998 Decision.

The RTC, on October 9, 1998, granted Pasigs motion in an Order[15] and modified its earlier decision to include the realty taxes due on the improvements on the subject lots:

WHEREFORE, premises considered, the plaintiffs motion for reconsideration is hereby granted. Accordingly, the Decision, dated August 10, 1998 is hereby modified in that the defendant is hereby ordered to pay plaintiff the amount of P5,627,757.07 representing the unpaid taxes and penalties on the improvements on the subject parcels of land whereon real estate taxes are adjudged as due for the year 1996.[16]

Accordingly, Sta. Lucia filed an Amended Notice of Appeal to include the RTCs October 9, 1998 Order in its protest.

On October 16, 1998, Pasig filed a Motion for Execution Pending Appeal, to which both Sta. Lucia and Cainta filed several oppositions, on the assertion that there were no good reasons to warrant the execution pending appeal.[17]

On April 15, 1999, the RTC ordered the issuance of a Writ of Execution against Sta. Lucia.

On May 21, 1999, Sta. Lucia filed a Petition for Certiorari under Rule 65 of the Rules of Court with the Court of Appeals to assail the RTCs order granting the execution. Docketed as CA-G.R. SP No. 52874, the petition was raffled to the First Division of the Court of Appeals, which on September 22, 2000, ruled in favor of Sta. Lucia, to wit:

WHEREFORE, in view of the foregoing, the instant petition is hereby GIVEN DUE COURSE and GRANTED by this Court. The assailed Order dated April 15, 1999 in Civil Case No. 65420 granting the motion for execution pending appeal and ordering the issuance of a writ of execution pending appeal is hereby SET ASIDE and declared NULL and VOID.[18]

The Court of Appeals added that the boundary dispute case presented a prejudicial question which must be decided before x x x Pasig can collect the realty taxes due over the subject properties.[19]

Pasig sought to have this decision reversed in a Petition for Certiorari filed before this Court on November 29, 2000, but this was denied on June 25, 2001 for being filed out of time.[20]

Meanwhile, the appeal filed by Sta. Lucia and Cainta was raffled to the (former) Seventh Division of the Court of Appeals and docketed as CA-G.R. CV No. 69603. On June 30, 2004, the Court of Appeals rendered its Decision, wherein it agreed with the RTCs judgment:

WHEREFORE, the appealed Decision is hereby AFFIRMED with the MODIFICATION that the award of P50,000.00 attorneys fees is DELETED.[21]

In affirming the RTC, the Court of Appeals declared that there was no proper legal basis to suspend the proceedings.[22] Elucidating on the legal meaning of a prejudicial question, it held that there can be no prejudicial question when the cases involved are both civil.[23] The Court of Appeals further held that the elements of litis pendentia and forum shopping, as alleged by Cainta to be present, were not met.

Sta. Lucia and Cainta filed separate Motions for Reconsideration, which the Court of Appeals denied in a Resolution dated January 27, 2005.

Undaunted, Sta. Lucia and Cainta filed separate Petitions for Certiorari with this Court. Caintas petition, docketed as G.R. No. 166856 was denied on April 13, 2005 for Caintas failure to show any reversible error. Sta. Lucias own petition is the one subject of this decision.[24]

In praying for the reversal of the June 30, 2004 judgment of the Court of Appeals, Sta. Lucia assigned the following errors:

ASSIGNMENT OF ERRORS

I

THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING [WITH MODIFICATION] THE DECISION OF THE REGIONAL TRIAL COURT IN PASIG CITY

II.

THE HONORABLE COURT OF APPEALS ERRED IN NOT SUSPENDING THE CASE IN VIEW OF THE PENDENCY OF THE BOUNDARY DISPUTE WHICH WILL FINALLY DETERMINE THE SITUS OF THE SUBJECT PROPERTIES

III.

THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE PAYMENT OF REALTY TAXES THROUGH THE MUNICIPALITY OF CAINTA WAS VALID PAYMENT OF REALTY TAXES

IV.

THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING THAT IN THE MEANTIME THAT THE BOUNDARY DISPUTE CASE IN ANTIPOLO CITY REGIONAL TRIAL COURT IS BEING FINALLY RESOLVED, THE PETITIONER STA. LUCIA SHOULD BE PAYING THE REALTY TAXES ON THE SUBJECT PROPERTIES THROUGH THE INTERVENOR CAINTA TO PRESERVE THE STATUS QUO.[25]

Pasig, countering each error, claims that the lower courts correctly decided the case considering that the TCTs are clear on their faces that the subject properties are situated in its territorial jurisdiction. Pasig contends that the principles of litis pendentia, forum shopping, and res judicata are all inapplicable, due to the absence of their requisite elements. Pasig maintains that the boundary dispute case before the Antipolo RTC is independent of the complaint for collection of realty taxes which was filed before the

Pasig RTC. It avers that the doctrine of prejudicial question, which has a definite meaning in law, cannot be invoked where the two cases involved are both civil. Thus, Pasig argues, since there is no legal ground to preclude the simultaneous hearing of both cases, the suspension of the proceedings in the Pasig RTC is baseless.

Cainta also filed its own comment reiterating its legal authority over the subject properties, which fall within its territorial jurisdiction. Cainta claims that while it has been collecting the realty taxes over the subject properties since way back 1913, Pasig only covered the same for real property tax purposes in 1990, 1992, and 1993. Cainta also insists that there is a discrepancy between the locational entries and the technical descriptions in the TCTs, which further supports the need to await the settlement of the boundary dispute case it initiated.

The errors presented before this Court can be narrowed down into two basic issues:

1) Whether the RTC and the CA were correct in deciding Pasigs Complaint without waiting for the resolution of the boundary dispute case between Pasig and Cainta; and

2) Whether Sta. Lucia should continue paying its real property taxes to Cainta, as it alleged to have always done, or to Pasig, as the location stated in Sta. Lucias TCTs.

We agree with the First Division of the Court of Appeals in CA-G.R. SP No. 52874 that the resolution of the boundary dispute between Pasig and Cainta would determine which local government unit is entitled to collect realty taxes from Sta. Lucia.[26]

The Local Government Unit entitled

To Collect Real Property Taxes

The Former Seventh Division of the Court of Appeals held that the resolution of the complaint lodged before the Pasig RTC did not necessitate the assessment of the parties evidence on the metes and bounds of their respective territories. It cited our ruling in Odsigue v. Court of Appeals[27] wherein we said that a certificate of title is conclusive evidence of both its ownership and location.[28] The Court of Appeals even referred to specific provisions of the 1991 Local Government Code and Act. No. 496 to support its ruling that Pasig had the right to collect the realty taxes on the subject properties as the titles of the subject properties show on their faces that they are situated in Pasig.[29]

Under Presidential Decree No. 464 or the Real Property Tax Code, the authority to collect real property taxes is vested in the locality where the property is situated:

Sec. 5. Appraisal of Real Property. All real property, whether taxable or exempt, shall be appraised at the current and fair market value prevailing in the locality where the property is situated.

x x x x

Sec. 57. Collection of tax to be the responsibility of treasurers. The collection of the real property tax and all penalties accruing thereto, and the enforcement of the remedies provided for in this Code or any applicable laws, shall be the responsibility of the treasurer of the province, city or municipality where the property is situated. (Emphases ours.)

This requisite was reiterated in Republic Act No. 7160, also known as the 1991 the Local Government Code, to wit:

Section 201. Appraisal of Real Property. All real property, whether taxable or exempt, shall be appraised at the current and fair market value prevailing in the locality where the property is situated. The Department of Finance shall promulgate the necessary rules and regulations for the classification, appraisal, and assessment of real property pursuant to the provisions of this Code.

Section 233. Rates of Levy. A province or city or a municipality within the Metropolitan Manila Area shall fix a uniform rate of basic real property tax applicable to their respective localities as follows: x x x. (Emphases ours.)

The only import of these provisions is that, while a local government unit is authorized under several laws to collect real estate tax on properties falling under its territorial jurisdiction, it is imperative to first show that these properties are unquestionably within its geographical boundaries.

Accentuating on the importance of delineating territorial boundaries, this Court, in Mariano, Jr. v. Commission on Elections[30] said:

The importance of drawing with precise strokes the territorial boundaries of a local unit of government cannot be overemphasized. The boundaries must be clear for they define the limits of the territorial

jurisdiction of a local government unit. It can legitimately exercise powers of government only within the limits of its territorial jurisdiction. Beyond these limits, its acts are ultra vires. Needless to state, any uncertainty in the boundaries of local government units will sow costly conflicts in the exercise of governmental powers which ultimately will prejudice the people's welfare. This is the evil sought to be avoided by the Local Government Code in requiring that the land area of a local government unit must be spelled out in metes and bounds, with technical descriptions.[31] (Emphasis ours.)

The significance of accurately defining a local government units boundaries was stressed in City of Pasig v. Commission on Elections,[32] which involved the consolidated petitions filed by the parties herein, Pasig and Cainta, against two decisions of the Commission on Elections (COMELEC) with respect to the plebiscites scheduled by Pasig for the ratification of its creation of two new Barangays. Ruling on the contradictory reliefs sought by Pasig and Cainta, this Court affirmed the COMELEC decision to hold in abeyance the plebiscite to ratify the creation of Barangay Karangalan; but set aside the COMELECs other decision, and nullified the plebiscite that ratified the creation of Barangay Napico in Pasig, until the boundary dispute before the Antipolo RTC had been resolved. The aforementioned case held as follows:

1. The Petition of the City of Pasig in G.R. No. 125646 is DISMISSED for lack of merit; while

2. The Petition of the Municipality of Cainta in G.R. No. 128663 is GRANTED. The COMELEC Order in UND No. 97-002, dated March 21, 1997, is SET ASIDE and the plebiscite held on March 15, 1997 to ratify the creation of Barangay Napico in the City of Pasig is declared null and void. Plebiscite on the same is ordered held in abeyance until after the courts settle with finality the boundary dispute between the City of Pasig and the Municipality of Cainta, in Civil Case No. 94-3006.[33]

Clearly therefore, the local government unit entitled to collect real property taxes from Sta. Lucia must undoubtedly show that the subject properties are situated within its territorial jurisdiction; otherwise, it would be acting beyond the powers vested to it by law.

Certificates of Title as

Conclusive Evidence of Location

While we fully agree that a certificate of title is conclusive as to its ownership and location, this does not preclude the filing of an action for the very purpose of attacking the statements therein. In De Pedro v. Romasan Development Corporation,[34] we proclaimed that:

We agree with the petitioners that, generally, a certificate of title shall be conclusive as to all matters contained therein and conclusive evidence of the ownership of the land referred to therein. However, it bears stressing that while certificates of title are indefeasible, unassailable and binding against the whole world, including the government itself, they do not create or vest title. They merely confirm or record title already existing and vested. They cannot be used to protect a usurper from the true owner, nor can they be used as a shield for the commission of fraud; neither do they permit one to enrich himself at the expense of other.[35]

In Pioneer Insurance and Surety Corporation v. Heirs of Vicente Coronado,[36] we set aside the lower courts ruling that the property subject of the case was not situated in the location stated and described in the TCT, for lack of adequate basis. Our decision was in line with the doctrine that the TCT is conclusive evidence of ownership and location. However, we refused to simply uphold the veracity of the disputed TCT, and instead, we remanded the case back to the trial court for the determination of the exact location of the property seeing that it was the issue in the complaint filed before it.[37]

In City Government of Tagaytay v. Guerrero,[38] this Court reprimanded the City of Tagaytay for levying taxes on a property that was outside its territorial jurisdiction, viz:

In this case, it is basic that before the City of Tagaytay may levy a certain property for sale due to tax delinquency, the subject property should be under its territorial jurisdiction. The city officials are expected to know such basic principle of law. The failure of the city officials of Tagaytay to verify if the property is within its jurisdiction before levying taxes on the same constitutes gross negligence.[39] (Emphasis ours.)

Although it is true that Pasig is the locality stated in the TCTs of the subject properties, both Sta. Lucia and Cainta aver that the metes and bounds of the subject properties, as they are described in the TCTs, reveal that they are within Caintas boundaries.[40] This only means that there may be a conflict between the location as stated and the location as technically described in the TCTs. Mere reliance therefore on the face of the TCTs will not suffice as they can only be conclusive evidence of the subject properties locations if both the stated and described locations point to the same area.

The Antipolo RTC, wherein the boundary dispute case between Pasig and Cainta is pending, would be able to best determine once and for all the precise metes and bounds of both Pasigs and Caintas respective territorial jurisdictions. The resolution of this dispute would necessarily ascertain the extent and reach of each local governments authority, a prerequisite in the proper exercise of their powers, one of which is the power of taxation. This was the conclusion reached by this Court in City of Pasig v. Commission on Elections,[41] and by the First Division of the Court of Appeals in CA-G.R. SP No. 52874. We do not see any reason why we cannot adhere to the same logic and reasoning in this case.

The Prejudicial Question Debate

It would be unfair to hold Sta. Lucia liable again for real property taxes it already paid simply because Pasig cannot wait for its boundary dispute with Cainta to be decided. Pasig has consistently argued that the boundary dispute case is not a prejudicial question that would entail the suspension of its collection case against Sta. Lucia. This was also its argument in City of Pasig v. Commission on Elections,[42] when it sought to nullify the COMELECs ruling to hold in abeyance (until the settlement of the boundary dispute case), the plebiscite that will ratify its creation of Barangay Karangalan. We agreed with the COMELEC therein that the boundary dispute case presented a prejudicial question and explained our statement in this wise:

To begin with, we agree with the position of the COMELEC that Civil Case No. 94-3006 involving the boundary dispute between the Municipality of Cainta and the City of Pasig presents a prejudicial

question which must first be decided before plebiscites for the creation of the proposed barangays may be held.

The City of Pasig argues that there is no prejudicial question since the same contemplates a civil and criminal action and does not come into play where both cases are civil, as in the instant case. While this may be the general rule, this Court has held in Vidad v. RTC of Negros Oriental, Br. 42, that, in the interest of good order, we can very well suspend action on one case pending the final outcome of another case closely interrelated or linked to the first.

In the case at bar, while the City of Pasig vigorously claims that the areas covered by the proposed Barangays Karangalan and Napico are within its territory, it can not deny that portions of the same area are included in the boundary dispute case pending before the Regional Trial Court of Antipolo. Surely, whether the areas in controversy shall be decided as within the territorial jurisdiction of the Municipality of Cainta or the City of Pasig has material bearing to the creation of the proposed Barangays Karangalan and Napico. Indeed, a requisite for the creation of a barangay is for its territorial jurisdiction to be properly identified by metes and bounds or by more or less permanent natural boundaries. Precisely because territorial jurisdiction is an issue raised in the pending civil case, until and unless such issue is resolved with finality, to define the territorial jurisdiction of the proposed barangays would only be an exercise in futility. Not only that, we would be paving the way for potentially ultra vires acts of such barangays. x x x.[43] (Emphases ours.)

It is obvious from the foregoing, that the term prejudicial question, as appearing in the cases involving the parties herein, had been used loosely. Its usage had been more in reference to its ordinary meaning, than to its strict legal meaning under the Rules of Court.[44] Nevertheless, even without the impact of the connotation derived from the term, our own Rules of Court state that a trial court may control its own proceedings according to its sound discretion:

POWERS AND DUTIES OF COURTS AND JUDICIAL OFFICERS

Rule 135

SEC. 5. Inherent powers of courts. Every court shall have power:

x x x x

(g) To amend and control its process and orders so as to make them comformable to law and justice.

Furthermore, we have acknowledged and affirmed this inherent power in our own decisions, to wit:

The court in which an action is pending may, in the exercise of a sound discretion, upon proper application for a stay of that action, hold the action in abeyance to abide the outcome of another pending in another court, especially where the parties and the issues are the same, for there is power inherent in every court to control the disposition of causes (sic) on its dockets with economy of time and

effort for itself, for counsel, and for litigants. Where the rights of parties to the second action cannot be properly determined until the questions raised in the first action are settled the second action should be stayed.

The power to stay proceedings is incidental to the power inherent in every court to control the disposition of the cases on its dockets, considering its time and effort, that of counsel and the litigants. But if proceedings must be stayed, it must be done in order to avoid multiplicity of suits and prevent vexatious litigations, conflicting judgments, confusion between litigants and courts. It bears stressing that whether or not the RTC would suspend the proceedings in the SECOND CASE is submitted to its sound discretion.[45]

In light of the foregoing, we hold that the Pasig RTC should have held in abeyance the proceedings in Civil Case No. 65420, in view of the fact that the outcome of the boundary dispute case before the Antipolo RTC will undeniably affect both Pasigs and Caintas rights. In fact, the only reason Pasig had to file a tax collection case against Sta. Lucia was not that Sta. Lucia refused to pay, but that Sta. Lucia had already paid, albeit to another local government unit. Evidently, had the territorial boundaries of the contending local government units herein been delineated with accuracy, then there would be no controversy at all.

In the meantime, to avoid further animosity, Sta. Lucia is directed to deposit the succeeding real property taxes due on the subject properties, in an escrow account with the Land Bank of the Philippines.

WHEREFORE, the instant petition is GRANTED. The June 30, 2004 Decision and the January 27, 2005 Resolution of the Court of Appeals in CA-G.R. CV No. 69603 are SET ASIDE. The City of Pasig and the Municipality of Cainta are both directed to await the judgment in their boundary dispute case (Civil Case No. 94-3006), pending before Branch 74 of the Regional Trial Court in Antipolo City, to determine which local government unit is entitled to exercise its powers, including the collection of real property taxes, on the properties subject of the dispute. In the meantime, Sta. Lucia Realty and Development, Inc. is directed to deposit the succeeding real property taxes due on the lots and improvements covered by TCT Nos. 532250, 598424, 599131, 92869, 92870 and 38457 in an escrow account with the Land Bank of the Philippines.

SO ORDERED.

9.PIMENTEL v. PIMENTEL G.R. No. 172060, September 13, 2010

On 25 October 2004, Maria Pimentel y Lacap (private respondent) filed an action for frustrated parricide against Joselito Pimentel (petitioner) before the Regional Trial Court of Quezon City.

On 7 February 2005, petitioner received summons to appear before the Regional Trial Court of Antipolo City for the pre-trial and trial of a civil case (Maria Pimentel v. Joselito Pimentel) for Declaration of Nullity of Marriage under Article 36 of the Family Code on the ground of psychological incapacity.

 

On 11 February 2005, petitioner filed an urgent motion to suspend the proceedings before the RTC Quezon City on the ground of the existence of a prejudicial question.

ISSUE: Whether the resolution of the action for annulment of marriage is a prejudicial question that warrants the suspension of the criminal case for frustrated parricide against petitioner.

The issue in the civil case for annulment of marriage under Article 36 is whether petitioner is psychologically incapacitated to comply with the essential marital obligations. The issue in parricide is whether the accused killed the victim. In this case, since petitioner was charged with frustrated parricide, the issue is whether he performed all the acts of execution which would have killed respondent as a consequence but which, nevertheless, did not produce it by reason of causes independent of petitioner’s will. At the time of the commission of the alleged crime, petitioner and respondent were married. The subsequent dissolution of their marriage will have no effect on the alleged crime that was committed at the time of the subsistence of the marriage. In short, even if the marriage between petitioner and respondent is annulled, petitioner could still be held criminally liable since at the time of the commission of the alleged crime, he was still married to respondent.

 

We cannot accept petitioner’s reliance on Tenebro v. CA that “the judicial declaration of the nullity of a marriage on the ground of psychological incapacity retroacts to the date of the celebration of the marriage insofar as the vinculum between the spouses is concerned x x x.” First, the issue in Tenebro is the effect of the judicial declaration of nullity of a second or subsequent marriage on the ground of psychological incapacity on a criminal liability for bigamy. There was no issue of prejudicial question in that case. Second, the Court ruled in Tenebro that “[t]here is x x x a recognition written into the law itself that such a marriage, although void ab initio, may still produce legal consequences.” In fact, the Court declared in that case that “a declaration of the nullity of the second marriage on the ground of psychological incapacity is of absolutely no moment insofar as the State’s penal laws are concerned.”

10.Republic of the PhilippinesSUPREME COURTManila

SECOND DIVISION

G.R. No. 173183               November 18, 2013

SYCAMORE VENTURES CORPORATION and SPOUSES SIMON D. PAZ AND LENG LENG PAZ, Petitioners, vs.METROPOLITAN BANK AND TRUST COMPANY, Respondent.

D E C I S I O N

BRION, J.:

We are once more faced by a petition filed by debtors who could not pay their indebtedness and who, at the point of foreclosure, sought judicial recourse to delay the inevitable. In this case, the issue used as anchor is the valuation of the mortgage property s appraised value – an issue that hardly carries any significant consequence in extrajudicial foreclosure proceedings. How the delay in the foreclosure has affected the parties is a matter that is not in the record before us, but delay, if it had been the objective sought, came as it has come in many other similar cases. To be sure, the Judiciary has been affected by these cases as they have unnecessarily clogged the dockets of our courts, to the detriment of more important cases equally crying for attention.

The petitioners, Sycamore Ventures Corporation (Sycamore) and the spouses Simon D. Paz and Leng Leng Paz, challenge the decision1 dated May 3, 2006 and the resolution2 dated June 19, 2006 of the Court of Appeals (CA) in CA-G.R. SP No. 88463. The CA reversed and set aside the orders3 dated August 5, 2004 and November 22, 2004 of the Regional Trial Court (RTC), Branch 43, San Fernando, Pampanga, in Civil Case No. 12569.

The Factual Antecedents

Sixteen years ago (or sometime in 1997), Sycamore and the spouses Paz obtained from respondent Metropolitan Bank and Trust Company (Metrobank) a credit line of P180,000,000.00, secured by 10 real estate mortgages4 over Sycamore’s 11 parcels of land,5 together with their improvements.6 Sycamore and the spouses Paz withdrew from the credit line the total amount of P65,694,914.26, evidenced by 13 promissory notes.7

Because the petitioners failed to pay their loan obligations and for violations of the terms and conditions of their 13 promissory notes, Metrobank instituted extrajudicial foreclosure proceedings over the six real estate mortgages, pursuant to Act No. 3135, as amended.8 The public auction sale was set for various dates – March 22, 2000, April 23, 2000 and May 23, 2000 – but the sale did not take place because Sycamore and the spouses Paz asked for postponements.

Metrobank subsequently restructured Sycamore and the spouses Paz’s loan, resulting in the issuance of one promissory note denominated as PN No. 751622 736864.92508.000.99, in lieu of the 13 promissory notes9 previously issued, and the execution of a single real estate mortgage covering the 12 parcels of land.10

Application for ExtrajudicialForeclosure

Despite reminders, Sycamore and the spouses Paz still failed to settle their loan obligations, compelling Metrobank to file a second petition for auction sale, which was set for October 25, 2002.

On October 16, 2002, Sycamore and the spouses Paz once again asked for the postponement of the October 25, 2002 public auction sale; they asked that the sale be moved to November 26, 2002, but this time Metrobank refused to give in.11

Civil Case No. 12569 for Annulment ofContract and Real Estate Mortgage withTemporary Restraining Order andInjunction

Decision G.R. No. 173183 3

Application for Extrajudicial Foreclosure

Despite reminders, Sycamore and the spouses Paz still failed to settle their loan obligations, compelling Metrobank to file a second petition for auction sale, which was set for October 25, 2002. On October 16, 2002, Sycamore and the spouses Paz once again asked for the postponement of the October 25, 2002 public auction sale; they asked that the sale be moved to November 26, 2002, but this time Metrobank refused to give in.11

Civil Case No. 12569 for Annulment ofContract and Real Estate Mortgage withTemporary Restraining Order andInjunction

On November 25, 2002, Sycamore and the spouses Paz filed before the RTC, Branch 43, San Fernando Pampanga, a complaint for the annulment of the contract and of the real estate mortgage. They likewise asked for the issuance of a temporary restraining order (TRO).

The petitioners disputed Metrobank’s alleged unilateral and arbitrary reduction of the mortgaged properties’ appraisal value from P1,200.00 to P300.00-P400.00 per square meter. They likewise sought the maintenance of the status quo, to enjoin Metrobank, and to prevent it from proceeding with the extrajudicial foreclosure.

On the same day, the Executive Judge issued a 72-hour TRO, directing the sheriff to cease and desist from proceeding with the scheduled public auction.12 After summary hearing, Judge Carmelita S. Gutierrez-Fruelda, RTC, San Fernando Pampanga, ordered the extension of the TRO to its full 20-day term.13

On December 17, 2002, Judge Fruelda issued a writ of preliminary injunction which Metrobank unsuccessfully resisted through a motion for reconsideration that was denied.14 Thus, Metrobank ran to the CA on a petition for certiorari15 to question the RTC orders for grave abuse of discretion.

The CA dismissed Metrobank’s petition for lack of merit and upheld the RTC’s issued injunction.

Order for Appointment ofIndependent Commissioners

Meanwhile, the proceedings in the main case continued. At the trial, Sycamore and the spouses Paz moved for the appointment of independent commissioners to determine the mortgaged properties’ appraisal value.16 They mainly alleged that Metrobank arbitrarily and unilaterally reduced the mortgaged properties’ appraisal value; hence, the need for their reappraisal to determine their true value.

In an order dated August 5, 2004, the RTC granted the petitioners’ motion, and again Metrobank was unsuccessful in securing a reconsideration.

Metrobank thus again went to the CA on a petition for certiorari under Rule 65, imputing grave abuse of discretion on the RTC for issuing the questioned order. The bank alleged that the appraisal value of the mortgaged properties is not an issue in the proceedings because their value is already a matter of record.

On May 3, 2006, the CA this time granted Metrobank’s petition for certiorari and set aside the RTC’s orders. It found that the appraisal value of the mortgaged properties was not an issue since the real estate mortgage and the promissory note already indicated with certainty the amount of the loan obligation.

It was Sycamore and the spouses Paz this time who filed their motion for reconsideration which the CA denied. Significantly, the CA noted that the determination of the properties’ appraisal value has nothing to do with the question of whether the foreclosure proceeding will proceed.

The CA’s denial gave rise to the present petition for review on certiorari.

The Petition

Sycamore and the spouses Paz contend that the CA erred in setting aside the RTC’s order granting their motion for appointment of independent commissioners. They argue that it had the effect of preventing the RTC’s determination of a critical question of fact – i.e., the determination of the mortgaged properties’ true valuation – which, they insist, is an issue that needs to be resolved prior to the determination of the foreclosure’s validity.

They claim that before resolving the said issue, the RTC has to decide the following prejudicial questions, namely:

(1) Whether Metrobank validly reduced the mortgaged properties’ valuation; and

(2) Whether Metrobank can validly foreclose the mortgaged properties at a further reduced valuation.17

Lastly, Sycamore and the spouses Paz invoke this Court’s intervention to prevent an unfair situation where the mortgage foreclosure, based on Metrobank’s arbitrary and unilateral

reduction of the properties’ appraisal value, would deprive them of all their properties and, at the same time, leave a deficiency of P500,000,000.00.

The Issue

The core issue for our determination is whether the determination of the mortgaged properties’ appraisal value constitutes a prejudicial question that warrants the suspension of the foreclosure proceedings.

Simply put, is the appraisal value of the mortgaged properties material in the mortgage foreclosure’s validity?

The Court’s Ruling

We deny the petition for lack of merit. The CA did not err when it set aside the RTC’s order granting the motion for appointment of independent commissioners.

Remedies of a secured creditor

A secured creditor may institute against the mortgage debtor either a personal action for the collection of the debt, a real action to judicially foreclose the real estate mortgage, or an extrajudicial judicial foreclosure of the mortgage. The remedies, however, are alternative, not cumulative, and the election or use of one remedy operate as a waiver of the others.18

We discussed these legal points in Bachrach Motor Co., Inc. v. Icarangal19 and ruled that:

[I]n the absence of express statutory provisions, a mortgage creditor may institute against the mortgage debtor either a personal action for debt or a real action to foreclose the mortgage. In other words, he may pursue either of the two remedies, but not both. By such election, his cause of action can by no means be impaired, for each of the two remedies is complete in itself. Thus, an election to bring a personal action will leave open to him all the properties of the debtor for attachment and execution, even including the mortgaged property itself. And, if he waives such personal action and pursues his remedy against the mortgaged property, an unsatisfied judgment thereon would still give him the right to sue for a deficiency judgment, in which case, all the properties of the defendant, other than the mortgaged property, are again open to him for the satisfaction of the deficiency. In either case, his remedy is complete, his cause of action undiminished, and any advantages attendant to the pursuit of one or the other remedy are purely accidental and are all under his right of election.

In the present case, Metrobank elected the third remedy – the extrajudicial foreclosure of the real estate mortgage.

Extrajudicial foreclosure under Act No. 3135

Extrajudicial foreclosure is governed by Act No. 3135, as amended by Act No. 4118.

It provides in its Section 1 that:

SECTION 1. When a sale is made under a special power inserted in or attached to any real-estate mortgage hereafter made as security for the payment of money or the fulfillment of any other obligation, the provisions of the following election shall govern as to the manner in which the sale and redemption shall be effected, whether or not provision for the same is made in the power.

In brief, Act No. 3135 recognizes the right of a creditor to foreclose a mortgage upon the mortgagor’s failure to pay his/her obligation. In choosing this remedy, the creditor enforces his lien through the sale on foreclosure of the mortgaged property. The proceeds of the sale will then be applied to the satisfaction of the debt. In case of a deficiency, the mortgagee has the right to recover the deficiency resulting from the difference between the amount obtained in the sale at public auction, and the outstanding obligation at the time of the foreclosure proceedings.20

Certain requisites must be established before a creditor can proceed to an extrajudicial foreclosure, namely: first, there must have been the failure to pay the loan obtained from the mortgagee-creditor; second, the loan obligation must be secured by a real estate mortgage; and

third, the mortgagee-creditor has the right to foreclose the real estate mortgage either judicially or extrajudicially.

Act No. 3135 outlines the notice and publication requirements and the procedure for the extrajudicial foreclosure which constitute a condition sine qua non for its validity. Specifically, Sections 2, 3 and 4 of the law prescribe the formalities of the extrajudicial foreclosure proceeding, which we quote:

SECTION 2. Said sale cannot be made legally outside of the province in which the property sold is situated; and in case the place within said province in which the sale is to be made is subject to stipulation, such sale shall be made in said place or in the municipal building of the municipality in which the property or part thereof is situated.

SECTION 3. Notice shall be given by posting notices of the sale for not less than twenty days in at least three public places of the municipality or city where the property is situated, and if such property is worth more than four hundred pesos, such notice shall also be published once a week for at least three consecutive weeks in a newspaper of general circulation in the municipality or city.

SECTION 4. The sale shall be made at public auction, between the hours or nine in the morning and four in the afternoon; and shall be under the direction of the sheriff of the province, the justice or auxiliary justice of the peace of the municipality in which such sale has to be made, or a notary public of said municipality, who shall be entitled to collect a fee of five pesos each day of actual work performed, in addition to his expenses.

Act No. 3135 does not requiredetermination of appraised value

All the above provisions are quoted verbatim to stress that Act No. 3135 has no requirement for the determination of the mortgaged properties’ appraisal value. Nothing in the law likewise indicates that the mortgagee-creditor’s appraisal value shall be the basis for the bid price. Neither is there any rule nor any guideline prescribing the minimum amount of bid, nor that the bid should be at least equal to the properties’ current appraised value. What the law only provides are the requirements, procedure, venue and the mortgagor’s right to redeem the property. When the law does not provide for the determination of the property’s valuation, neither should the courts so require, for our duty limits us to the interpretation of the law, not to its augmentation.

Under the circumstances, we fail to see the necessity of determining the mortgaged properties’ current appraised value.1âwphi1 We likewise do not discern the existence of any prejudicial question, anchored on the mortgaged properties’ appraised value, that would warrant the suspension of the foreclosure proceedings.

For greater certainty, a prejudicial question is a prior issue whose resolution rests with another tribunal, but at the same time is necessary in the resolution of another issue in the same case.21 For example, there is a prejudicial question where there is a civil action involving an issue similar or intimately related to the issue raised in a criminal action, and the resolution of the issue in the civil action is determinative of the outcome of the criminal action.

As so defined, we do not see how the motion for the appointment of independent commissioners can serve as a prejudicial question. It is not a main action but a mere incident of the main proceedings; it does not involve an issue that is intimately related to the foreclosure proceedings; and lastly, the motion’s resolution is not determinative of the foreclosure’s outcome.

On this point alone, the petition should be denied. But even if Metrobank’s reduced appraised value were lesser than the mortgaged properties’ current valuation, the petition would still fail. There is no question in this case that Sycamore and the spouses Paz failed to settle their loan obligations to Metrobank as they fell due. (In fact, there were multiple or repeated failures to pay.) There is likewise no dispute on the total amount of their outstanding loan obligation. Sycamore and the spouses Paz also acknowledged Metrobank’s right to foreclose when they asked for the sale’s postponement, to quote:The undersigned mortgagor(s) hereby acknowledged(s) that the publication and posting of the Notice of Auction Sale have been completely and regularly complied with the request(s) that republication and reposting of the same be dispensed with at the discretion of the mortgagee bank and agreed that all expenses incurred by the said mortgagee bank in connection herewith shall be chargeable to his/her/their account(s) and secured by the said mortgage(s).

The undersigned mortgagor(s) likewise stipulate(s) that, in consideration of the mortgagee’s having acceded and agreed to this postponement, he/she/they hereby waive(s), forego(es), quitclaim(s) and set(s) over unto the said mortgagee any and all his/her/their cause or causes of action, claims or demands arising out of or necessarily connected with the Promissory Note(s),

Real Estate Mortgage Contract(s) and other credit documents mentioned in the above entitled Petition for Foreclosure of Real Estate Mortgage.22 [emphases supplied]

What Sycamore and the spouses Paz only assail in the present petition is the validity of Metrobank’s appraisal of the mortgaged properties. Even that issue, if the quoted terms above were to be considered, appears to have been waived "in consideration of the mortgagee’s having acceded and agreed to this postponement."23

Under these facts, how and why to petitioners would still insist on the appraisal valuation as an issue boggles the mind and this is a puzzle that only they have a key to. But whatever may that key or answer be, it is not one that is material to the case below or to the present petition.

Determination of mortgagedproperties’ appraisal value is notmaterial to the foreclosure’s validity

We have held in a long line of cases that mere inadequacy of price per se will not invalidate a judicial sale of real property. It is only when the inadequacy of the price is grossly shocking to the conscience or revolting to the mind, such that a reasonable man would neither directly nor indirectly be likely to consent to it, that the sale shall be declared null and void. This rule, however, does not strictly apply in the case of extrajudicial foreclosure sales where the right of redemption is available.

In Bank of the Philippine Islands v. Reyes,24 involving a similar question arising from the correctness of the mortgaged properties’ valuation, we held that the inadequacy of the price at which the mortgaged property was sold does not invalidate the foreclosure sale.

In that case, the winning bid price was P9,032,960.00 or merely 19% of the alleged current appraisal value of the property pegged at P47,536,000.00. Despite the relatively sizeable discrepancy, the Court ruled that the level of the bid price is immaterial in a forced sale because a low price is more beneficial to the mortgage debtor.

We quote from the relevant portion of this decision:

In the case at bar, the winning bid price of P9,032,960.00 is nineteen percent (19%) of the appraised value of the property subject of the extrajudicial foreclosure sale that is pegged at P47,536,000.00 which amount, notably, is only an arbitrary valuation made by the appraising officers of petitioner’s predecessor-in-interest ostensibly for loan purposes only. Unsettled questions arise over the correctness of this valuation in light of conflicting evidence on record. xxxx

xxx. In the case at bar, other than the mere inadequacy of the bid price at the foreclosure sale, respondent did not allege any irregularity in the foreclosure proceedings nor did she prove that a better price could be had for her property under the circumstances.

Thus, even if we assume that the valuation of the property at issue is correct, we still hold that the inadequacy of the price at which it was sold at public auction does not invalidate the foreclosure sale."25 (emphasis ours)

In Hulst v. PR Builders, Inc.,26 we explained that when there is a right of redemption, the inadequacy of the price becomes immaterial because the judgment debtor may still re-acquire the property or even sell his right to redeem and thus recover the loss he might have suffered by reason of the "inadequate price" obtained at the execution sale. In this case, the judgment debtor even stands to gain rather than be harmed.1âwphi1

These rulings were also applied in Rabat v. Philippine National Bank,27 where the Court used the same reasoning and arrived at the same conclusion:

It bears also to stress that the mode of forced sale utilized by petitioner was an extrajudicial foreclosure of real estate mortgage which is governed by Act No. 3135, as amended.

An examination of the said law reveals nothing to the effect that there should be a minimum bid price or that the winning bid should be equal to the appraised value of the foreclosed property or to the amount owed by the mortgage debtor. What is clearly provided, however, is that a mortgage debtor is given the opportunity to redeem the foreclosed property "within the term of one year from and after the date of sale." In the case at bar, other than the mere inadequacy of the bid price at the foreclosure sale, respondent did not allege any irregularity in the foreclosure proceedings nor did she prove that a better price could be had for her property under the circumstances.

At any rate, we consider it notable enough that PNB’s bid price of P3,874,800.00 might not even be said to be outrageously low as to be shocking to the conscience. As the CA cogently noted in the second amended decision,20 that bid price was almost equal to both the P4,000,000.00 applied for by the Spouses Rabat as loan, and to the total sum of P3,517,380.00 of their actual availment from PNB. [emphasis ours]

We find no reason to depart from these sound and established rulings. We also need not rule on the validity of Metrobank’s valuation. Whether Metrobank’s reduced valuation is valid or not, or whether the valuation is outrageously lower than its current value, has nothing to do with the foreclosure proceedings. From this perspective, we cannot but conclude that that the recourses sought in this case have been intended solely to delay the inevitable – the foreclosure sale and the closure of the collection action -and are an abuse of the processes of this Court. Under these circumstances the maximum allowable triple costs should be imposed on the petitioners for this abuse in accordance with Section 3 Rule 142 of the Rules of Court to be paid by counsel for the petitioners. Let counsel also be warned that what happened in this case is a practice that in a proper administrative proceeding may be found violative of their duties to the Court. WHEREFORE, the petition is DENIED for lack of merit; the appealed decision of the Court of Appeals dated May 3, 2006 is AFFIRMED. Let a copy of this Decision be furnished the Board of Governors Integrated Bar of the Philippines for its information. Triple costs against the petitioners Sycamore Ventures Corporation and the spouses Simon D. Paz and Leng Leng Paz to be paid by their counsel of record.

SO ORDERED.