BOBIE ROSE V. FRIAS, Complainant, vs. ATTY. CARMELITA S. BAUTISTA-LOZADA,* Respondent.

Respondent Atty. Carmelita Bautista-Lozada seeks reconsideration of our December 13, 2005 resolution finding her guilty of violating Rules 15.03 and 16.04 of the Code of Professional Responsibility and of willfully disobeying a final and executory decision of the Court of Appeals and suspending her from the practice of law for two years.

Respondent contends that, pursuant to Rule VIII of the Rules of Procedure of the Commission on Bar Discipline (CBD) of the Integrated Bar of the Philippines (IBP), the complaint against her was already barred by prescription. She also asserts that her December 7, 1990 loan agreement with complainant complied with Rule 16.04 because the interest of complainant was fully protected.

Respondent’s contentions have no merit.

Respondent anchors her defense of prescription on Rule VIII, Section 1 of the Rules of Procedure of the CBD-IBP which provides:

SECTION 1. Prescription. A complaint for disbarment, suspension or discipline of attorneys prescribes in two (2) years from the date of the professional misconduct.

However, as early as 1967, we have held that the defense of prescription does not lie in administrative proceedings against lawyers.1 And in the 2004 case of Heck v. Santos,2 we declared that an administrative complaint against a member of the bar does not prescribe.

If the rule were otherwise, members of the bar would be emboldened to disregard the very oath they took as lawyers, prescinding from the fact that as long as no private complainant would immediately come forward, they stand a chance of being completely exonerated from whatever administrative liability they ought to answer for. It is the duty of this Court to protect the integrity of the practice of law as well as the administration of justice. No matter how much time has elapsed from the time of the commission of the act complained of and the time of the institution of the complaint, erring members of the bench and bar cannot escape the disciplining arm of the Court. This categorical pronouncement is aimed at unscrupulous members of the bench and bar, to deter them from committing acts which violate the Code of Professional Responsibility, the Code of Judicial Conduct, or the Lawyer’s Oath. x x x

Thus, even the lapse of considerable time from the commission of the offending act to the institution of the administrative complaint will not erase the administrative culpability of a lawyer.3 (emphasis supplied)

The CBD-IBP derives its authority to take cognizance of administrative complaints against lawyers from this Court which has the inherent power to regulate, supervise and control the practice of law in the Philippines. Hence, in the exercise of its delegated power to entertain administrative complaints against lawyers, the CBD-IBP should be guided by the doctrines and principles laid down by this Court.

Regrettably, Rule VIII, Section 1 of the Rules of Procedure of the CBD-IBP which provides for a prescriptive period for the filing of administrative complaints against lawyers runs afoul of the settled ruling of this Court. It should therefore be struck down as void and of no legal effect for being ultra vires.

Moreover, assuming that prescription is a valid defense, respondent raised it only at this late stage. We presume she was familiar with that rule yet she failed to invoke it at the earliest opportunity. Instead she opted to insist on her innocence.

On the other ground raised by respondent, we have sufficiently discussed the implications of her loan agreement with complainant in relation to Rule 16.04 of the Code of Professional Responsibility in our December 13, 2005 resolution. Considering the fiduciary character of respondent’s relationship with complainant, the nature of their agreement and complainant’s lack of independent advice when she entered into it, there is neither sufficient ground nor compelling reason to reconsider our earlier resolution.

WHEREFORE, respondent’s motion for reconsideration is hereby DENIED WITH FINALITY.

Rule VIII, Section 1 of the Rules of Procedure of the Commission on Bar Discipline of the Integrated Bar of the Philippines is hereby declared null and void.

Let copies of this resolution be furnished the Integrated Bar of the Philippines and the Office of the Bar Confidant for their information and guidance.

SO ORDERED.

LETTER OF ATTY. CECILIO Y. AREVALO, JR., REQUESTING EXEMPTION FROM PAYMENT OF IBP DUES.

This is a request for exemption from payment of the Integrated Bar of the Philippines (IBP) dues filed by petitioner Atty. Cecilio Y. Arevalo, Jr.

In his letter,1 dated 22 September 2004, petitioner sought exemption from payment of IBP dues in the amount of P12,035.00 as alleged unpaid accountability for the years 1977-2005. He alleged that after being admitted to the Philippine Bar in 1961, he became part of the Philippine Civil Service from July 1962 until 1986, then migrated to, and worked in, the USA in December 1986 until his retirement in the year 2003. He maintained that he cannot be assessed IBP dues for the years that he was working in the Philippine Civil Service since the Civil Service law prohibits the practice of one's profession while in government service, and neither can he be assessed for the years when he was working in the USA.

On 05 October 2004, the letter was referred to the IBP for comment.2

On 16 November 2004, the IBP submitted its comment3 stating inter alia: that membership in the IBP is not based on the actual practice of law; that a lawyer continues to be included in the Roll of Attorneys as long as he continues to be a member of the IBP; that one of the obligations of a member is the payment of annual dues as determined by the IBP Board of Governors and duly approved by the Supreme Court as provided for in Sections 9 and 10, Rule 139-A of the Rules of Court; that the validity of imposing dues on the IBP members has been upheld as necessary to defray the cost of an Integrated Bar Program; and that the policy of the IBP Board of Governors of no exemption from payment of dues is but an implementation of the Court's directives for all members of the IBP to help in defraying the cost of integration of the bar. It maintained that there is no rule allowing the exemption of payment of annual dues as requested by respondent, that what is allowed is voluntary termination and reinstatement of membership. It asserted that what petitioner could have done was to inform the secretary of the IBP of his intention to stay abroad, so that his membership in the IBP could have been terminated, thus, his obligation to pay dues could have been stopped. It also alleged that the IBP Board of Governors is in the process of discussing proposals for the creation of an inactive status for its members, which if approved by the Board of Governors and by this Court, will exempt inactive IBP members from payment of the annual dues.

In his reply4 dated 22 February 2005, petitioner contends that what he is questioning is the IBP Board of Governor's Policy of Non-Exemption in the payment of annual membership dues of lawyers regardless of whether or not they are engaged in active or inactive practice. He asseverates that the Policy of Non-Exemption in the payment of annual membership dues suffers from constitutional infirmities, such as equal protection clause and the due process clause. He also posits that compulsory payment of the IBP annual membership dues would indubitably be oppressive to him considering that he has been in an inactive status and is without income derived from his law practice. He adds that his removal from nonpayment of annual membership dues would constitute deprivation of property right without due process of law. Lastly, he claims that non-practice of law by a lawyer-member in inactive status is neither injurious to active law practitioners, to fellow lawyers in inactive status, nor to the community where the inactive lawyers-members reside.

Plainly, the issue here is: whether or nor petitioner is entitled to exemption from payment of his dues during the time that he was inactive in the practice of law that is, when he was in the Civil Service from 1962-1986 and he was working abroad from 1986-2003?

We rule in the negative.

An "Integrated Bar" is a State-organized Bar, to which every lawyer must belong, as distinguished from bar association organized by individual lawyers themselves, membership in which is voluntary. Integration of the Bar is essentially a process by which every member of the Bar is afforded an opportunity to do his shares in carrying out the objectives of the Bar as well as obliged to bear his portion of its responsibilities. Organized by or under the direction of the State, an Integrated Bar is an official national body of which all lawyers are required to be members. They are, therefore, subject to all the rules prescribed for the governance of the Bar, including the requirement of payment of a reasonable annual fee for the effective discharge of the purposes of the Bar, and adherence to a code of professional ethics or professional responsibility, breach of which constitutes sufficient reason for investigation by the Bar and, upon proper cause appearing, a recommendation for discipline or disbarment of the offending member.5

The integration of the Philippine Bar means the official unification of the entire lawyer population. This requires membership and financial support of every attorney as condition sine qua non to the practice of law and the retention of his name in the Roll of Attorneys of the Supreme Court.6

Bar integration does not compel the lawyer to associate with anyone. He is free to attend or not to attend the meetings of his Integrated Bar Chapter or vote or refuse to vote in its elections as he chooses. The only compulsion to which he is subjected is the payment of his annual dues. The Supreme Court, in order to foster the State's legitimate interest in elevating the quality of professional legal services, may require that the cost of improving the profession in this fashion be shared by the subjects and beneficiaries of the regulatory program – the lawyers.7

Moreover, there is nothing in the Constitution that prohibits the Court, under its constitutional power and duty to promulgate rules concerning the admission to the practice of law and in the integration of the Philippine Bar8 - which power required members of a privileged class, such as lawyers are, to pay a reasonable fee toward defraying the expenses of regulation of the profession to which they belong. It is quite apparent that the fee is, indeed, imposed as a regulatory measure, designed to raise funds for carrying out the noble objectives and

purposes of integration.

The rationale for prescribing dues has been explained in the Integration of the Philippine Bar,9 thus:

For the court to prescribe dues to be paid by the members does not mean that the Court is attempting to levy a tax.

A membership fee in the Bar association is an exaction for regulation, while tax purpose of a tax is a revenue. If the judiciary has inherent power to regulate the Bar, it follows that as an incident to regulation, it may impose a membership fee for that purpose. It would not be possible to put on an integrated Bar program without means to defray the expenses. The doctrine of implied powers necessarily carries with it the power to impose such exaction.

The only limitation upon the State's power to regulate the privilege of law is that the regulation does not impose an unconstitutional burden. The public interest promoted by the integration of the Bar far outweighs the slight inconvenience to a member resulting from his required payment of the annual dues.

Thus, payment of dues is a necessary consequence of membership in the IBP, of which no one is exempt. This means that the compulsory nature of payment of dues subsists for as long as one's membership in the IBP remains regardless of the lack of practice of, or the type of practice, the member is engaged in.

There is nothing in the law or rules which allows exemption from payment of membership dues. At most, as correctly observed by the IBP, he could have informed the Secretary of the Integrated Bar of his intention to stay abroad before he left. In such case, his membership in the IBP could have been terminated and his obligation to pay dues could have been discontinued.

As abovementioned, the IBP in its comment stated that the IBP Board of Governors is in the process of discussing the situation of members under inactive status and the nonpayment of their dues during such inactivity. In the meantime, petitioner is duty bound to comply with his obligation to pay membership dues to the IBP.

Petitioner also contends that the enforcement of the penalty of removal would amount to a deprivation of property without due process and hence infringes on one of his constitutional rights.

This question has been settled in the case of In re Atty. Marcial Edillon,10 in this wise:

. . . Whether the practice of law is a property right, in the sense of its being one that entitles the holder of a license to practice a profession, we do not here pause to consider at length, as it [is] clear that under the police power of the State, and under the necessary powers granted to the Court to perpetuate its existence, the respondent's right to practice law before the courts of this country should be and is a matter subject to regulation and inquiry. And, if the power to impose the fee as a regulatory measure is recognize[d], then a penalty designed to enforce its payment, which penalty may be avoided altogether by payment, is not void as unreasonable or arbitrary.

But we must here emphasize that the practice of law is not a property right but a mere privilege, and as such must bow to the inherent regulatory power of the Court to exact compliance with the lawyer's public responsibilities.

As a final note, it must be borne in mind that membership in the bar is a privilege burdened with conditions,11 one of which is the payment of membership dues. Failure to abide by any of them entails the loss of such privilege if the gravity thereof warrants such drastic move.

WHEREFORE, petitioner's request for exemption from payment of IBP dues is DENIED. He is ordered to pay P12,035.00, the amount assessed by the IBP as membership fees for the years 1977-2005, within a non-extendible period of ten (10) days from receipt of this decision, with a warning that failure to do so will merit his suspension from the practice of law.

SO ORDERED.

GUENTER BACH, petitioner, vs. ONGKIKO KALAW MANHIT & ACORDA LAW OFFICES,

This Petition for Review on Certiorari seeks to reverse the Decision1 dated 8 October 2003 of the Court of Appeals in CA-G.R. CV No. 74445, entitled, "Ongkiko Kalaw Manhit & Accorda Law Offices v. Guenter Bach."

The facts as culled from the records of the case are as follows:

On 7 November 1994, petitioner Guenter Bach engaged the services of respondent law firm Ongkiko Kalaw Manhit & Accorda Law Offices to represent him in a Petition for Declaration of Nullity of Marriage filed before the Regional Trial Court (RTC) of Makati City, Branch 143, docketed as Civil Case No. 95-224. The parties signed a "Fee Agreement," for the legal services to be rendered by respondent. The provision for payment of the legal services

reads:

(a) seven and one-half (7 ½ % ) of all cash recoveries, including damages, interests, attorney's fees and costs; as well as

(b) five percent (5 %) of the market value of all properties awarded to [the petitioner] by the court or obtained through the compromise agreement, valued at the time of recovery.2

However, on 5 December 1995, respondent withdrew its appearance as counsel of petitioner, due to policy differences. On 18 December 1995, respondent sent the termination billing3 for the services they rendered and billed petitioner the total amount of P1,000,000.00 plus 2% interest for every month of delay in payment, based on the provision for termination of services stated in their Fee Agreement, thus:

(C) Interest for late payment

All fees mentioned herein are payable within seven (7) days from receipt of our statement of account. It is understood that all late payments shall be subject to interest payment at the rate of 2 % per month of delay, a fraction of a month being considered as one month, counted from the date the fees shall fall due, without need of prior demand.

(F) Termination Clause

It is understood that you may terminate our services at any time. In such an event, we shall be entitled to collect fees for legal services already performed and results obtained based on quantum meruit."4

On 7 March 1996, respondent filed with the RTC a Notice5 of Charging Lien over the properties of the spouses Bach.

On 5 February 1997, the RTC issued an Order6 directing the annotation of the charging lien in the amount of P1,000,000.00 on all the titles of the spouses Bach's personal and real properties enumerated in the notice of charging lien.

On 11 February 1999, respondent received a copy of the Order7 dated 8 June 1998, granting petitioner's Motion to Withdraw his petition in Civil Case No. 95-224.

Despite respondent's demands for his legal fees, petitioner failed and refused to pay. Thus, respondent filed a Complaint8 for a sum of money also before the RTC of Makati, Branch 148, docketed as Civil Case No. 99-514. Respondent prayed for the payment of the following: P1,000,000.00 as the latter's lawful fees for services rendered in Civil Case No. 95-224, plus 2% interest from date of final demand until paid; P250,000.00 as exemplary damages; P200,000.00 representing billable time spent in prosecuting the case, plus another P150,000.00 for any appeal taken; and P50,000.00 as litigation expenses and the cost of suit.

Within the period for filing an Answer, petitioner filed a Motion9 to dismiss on the ground that respondent's claim had already been paid, waived, abandoned or otherwise extinguished. Petitioner contended that prior to respondent's withdrawal as counsel in Civil Case No. 95-224, petitioner had already paid respondent's services in the total amount of P200,000.00. On 9 August 1999, the Motion to Dismiss was denied10 by the RTC for lack of merit. Petitioner failed to file his Answer; thus, he was declared in default and respondent was allowed to present its evidence ex parte.11

On 24 January 2002, the RTC rendered its judgment in favor of the respondent, the dispositive portion of which reads:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against the defendant and the latter is hereby ordered to pay the following:

1. The amount of P750,000.00 as plaintiff's lawful fees for services rendered under Civil Case No. 95-224, plus interest at the rate of 2% per month from the date of demand until paid;

2. P700,000.00 representing billable time which was spent in prosecuting this case;

3. P50,000.00 as and litigation expenses, and

4. Costs of suit.12

Not satisfied, petitioner appealed to the Court of Appeals, which modified the RTC Decision, thus:

WHEREFORE, Based on the foregoing premises, the instant appeal is PARTLY GRANTED and the appealed January 24, 2002 Decision of the Regional Trial Court of Makati City-Branch 148 in Civil Case No. 99-514 is hereby MODIFIED. Accordingly, the award of P700,000.00 representing billable time allegedly spent in the prosecution of the case a quo is hereby DELETED. All other aspects of the appealed

DECISION are UPHELD.13

Hence, this Petition filed by petitioner Guenter Bach raising the following issues to wit:

WHETHER OR NOT UNDER THE CONCEPT OF QUANTUM MERUIT, THE AMOUNT OF P750,000.00 AS FEES FOR SERVICES RENDERED WITH INTEREST PEGGED AT 2% A MONTH FROM DATE OF DEMAND UNTIL FULLY PAID IS REASONABLE

WHETHER OR NOT THERE IS LEGAL BASIS TO AWARD P50,000.00 AS AND FOR LITIGATION EXPENSES AND COSTS OF SUIT.14

On the first issue, petitioner contends that the P750,000.00 awarded to the respondent by way of quantum meruit, with interest of 2% a month from date of demand until fully paid, is excessive, unreasonable and confiscatory. Thus, petitioner prays for reduction of the same.

Both the Court of Appeals and the trial court approved the attorney's fees in the total amounts of P750,000.00 plus 2 % interest for the services rendered by respondent in Civil Case No. 95-224. In this regard, the rule is that the issue of the reasonableness of attorney's fees based on quantum meruit is a question of fact, and well-settled is the rule that conclusions and findings of fact by the lower courts are entitled to great weight on appeal and will not be disturbed except for strong and cogent reasons. The findings of the Court of Appeals by itself, which are supported by substantial evidence, are almost beyond the power of review by the Supreme Court.15 Thus, in the exercise of the Supreme Court's power of review the findings of facts of the Court of Appeals are conclusive and binding on the Supreme Court. There are, however, recognized exceptions to this rule, namely: (1) when the findings are grounded entirely on speculation, surmises or conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on misapprehension of facts; (5) when the findings of facts are conflicting; (6) when in making the findings the Court of Appeals went beyond the issues of the case, or its findings are contrary to the admissions of both the appellee and the appellant; (7) when the findings are contrary to the trial court; (8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioner's main and reply briefs are not disputed by the respondent; (10) when the findings of facts are premised on the supposed absence of evidence and contradicted by the evidence on record; and (11) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties, which if properly considered, would justify a different conclusion.16 Exceptions (4) and (11) are present in the case at bar, and so this Court shall make its own determination of the facts relevant for the resolution of the case.

Ordinarily, therefore, we would have remanded this case for further reception of evidence as to the extent and value of the services rendered by respondent to petitioner. However, so as not to needlessly prolong the resolution of a comparatively simple controversy, we deem it just and equitable to fix in the present recourse a reasonable amount of attorney's fees in favor of respondent.

There are two concepts of attorney's fees. In the ordinary sense, attorney's fees represent the reasonable compensation paid to a lawyer by his client for the legal services rendered to the latter. On the other hand, in its extraordinary concept, attorney's fees may be awarded by the court as indemnity for damages to be paid by the losing party to the prevailing party.17

The issue in this case concerns attorney's fees in the ordinary concept. Generally, the amount of attorney's fees due is that stipulated in the retainer agreement which is conclusive as to the amount of the lawyer's compensation. In the absence thereof, the amount of attorney's fees is fixed on the basis of quantum meruit, i.e., the reasonable worth of the attorney's services. Courts may ascertain also if the attorney's fees are found to be excessive, what is reasonable under the circumstances.18 In no case, however, must a lawyer be allowed to recover more than what is reasonable, pursuant to Section 24, Rule 138 of the Rules of Court, which provides:

SEC. 24. Compensation of attorney's fees; agreement as to fees.- An attorney shall be entitled to have and recover from his client no more than a reasonable compensation for his services, with a view to the importance of the subject - matter of the controversy, the extent of the services rendered, and the professional standing of the attorney. No court shall be bound by the opinion of attorneys as expert witnesses as to the proper compensation, but may disregard such testimony and base its conclusion on its own professional knowledge. A written contract for services shall control the amount to be paid therefor unless found by the court to be unconscionable or unreasonable. (Underscoring supplied.)

We have identified the circumstances to be considered in determining the reasonableness of a claim for attorney's fees as follows: (1) the amount and character of the service rendered; (2) labor, time, and trouble involved; (3) the nature and importance of the litigation or business in which the services were rendered; (4) the responsibility imposed; (5) the amount of money or the value of the property affected by the controversy or involved in the employment; (6) the skill and experience called for in the performance of the services; (7) the professional character and social standing of the attorney; (8) the results secured; and (9) whether the fee is absolute or contingent, it being recognized that an attorney may properly charge a much larger fee when it is contingent than when it is not.19

Rule 20.1, Canon 20 of the Code of Professional Responsibility enumerates the following factors which should guide a lawyer in determining his fees:

(a) the time spent and extent of services rendered or required;(b) the novelty and difficulty of the questions involved;(c) the importance of the subject matter;(d) the skill demanded; (e) the probability of losing other

employment as a result of the acceptance of the proffered case; (f) the customary charges for similar services and the schedule of fees of the IBP Chapter to which he belongs;(g) the amount involved in the controversy and the benefits resulting to the client from the service; (h) the contingency or certainty of compensation; (i) the character of the employment, whether occasional or established; and (j) the professional standing of the lawyer.

In determining a reasonable fee to be paid to respondent as compensation for their services on quantum meruit, based on the factors abovequoted, it is proper to consider all the facts and circumstances obtaining in this case.

It is undisputed that respondent firm had rendered services as counsel for the petitioners in Civil Case No. 95-244. The services rendered consist of the following:

1. Respondent was able to annotate a notice20 of lis pendens on the property of Spouses Bach in Caloocan City covered by TCT No. C-12112, thereby preventing easy disposition of the property by Luzviminda Bach;2. Respondent was likewise able to annotate a notice21 of lis pendens on the property of Spouses Bach in Pasig City covered by TCT No. 48223, thereby preventing disposition of the property by Luzviminda Bach;3. Further, respondent annotated a notice22 of lis pendens on the property of Spouses Bach in Dasmarinas, Cavite covered by TCT No. T-339282, thereby preventing disposition of the property by Luzviminda Bach;4. Additionally, respondent annotated a notice23 of lis pendens on the property of Spouses Bach in Tanza, Cavite, covered by TCT No. T-255263, thereby preventing disposition of the property by Luzviminda Bach;5. Respondent also worked on the annotation of the notice24 of lis pendens on the property of Spouses Bach in Makati, covered by TCT No. S-62541, thereby preventing disposition of the property by Luzviminda Bach;6. Respondent worked on the annotation of a notice of lis pendens on the property of Spouses Bach in Dasmariñas, Cavite, covered by TCT No. T-380848, thereby preventing disposition of the property by Luzviminda Bach;7. Respondent annotated a notice25 of lis pendens on the property of Spouses Bach situated in Tagaytay City, covered by TCT No. P-705, thereby preventing disposition of the property by Luzviminda Bach;8. Respondent filed the Petition26 for Declaration of Nullity of Marriage and Dissolution of the Conjugal Partnership of Gains of petitioner with his wife;9. Respondent prepared an affidavit27 in favor of petitioner attesting to the fact of petitioner's marriage and their properties acquired during his marriage with Luzviminda Bach: 10. Respondent prepared an ex parte motion28 to declare petitioner's wife to have waived her right to file answer for failure to file the same within the period granted by law and to direct the public prosecutor to determine whether or not a collusion exist;11. Respondent prepared a Petition29 for appointment of a receiver and to compel petitioner's wife to render an accounting;12. Other services included the filling of several oppositions30 to certain motions filed by petitioner's wife;13. Respondent filed a motion31 to set the case for preliminary investigation;14. Respondent filed an ex parte motion32 to declare petitioner's wife in default;15. Respondent submitted a supplemental comment33 on the motion for leave to withdraw funds from Certificate of Participation filed by petitioner's wife; 16. Respondent filed a manifestation and motion34 praying the court to direct petitioner's wife to designate her lead counsel in the case;17. Respondent prepared a Reply35 to comments on opposition of petitioner;18. Respondent was able to secure an Order36 from the said court freezing the United Coconut Planters Bank (UCPB) account in the name of petitioner's wife, Luzviminda Bach, containing about P6,500,000.00, representing the balance of the proceeds from the sale of their conjugal property in Pasig City;19. Respondent represented petitioner in numerous hearings in Civil Case No. 95-224, evidenced by the signatures of the lawyers of respondent Law Firm in the minutes dated 25 April 1995, 27 April, 1995, 14 June 1995, 27 June 1995, 1 August 1995, 11 August 1995, 22 September 1995,10 October 1995, 17 October 1995, 1 December 1995, 7 December 1995, 29 March 1996 and 16 January 1997;3720. Conducted several preliminary and post litigation conferences in the proceedings for preliminary injunction leading to the freezing of the bank account of the parties; and21. Prepared and sent out numerous letters to third parties and entities to protect the interest of petitioner and notices to petitioner updating him of the status of the case and the courses of action taken by respondent Law Firm.38

In sum, the services rendered by the respondent as enumerated above and as admitted39 by Atty. Mario Ongkiko during the ex parte hearing, consist of annotating notice of lis pendens on the conjugal properties of petitioner and his wife; filing the Petition for Declaration of Nullity of Marriage; preparing and filing various pleadings and documents relevant to the case; obtaining a freeze order of petitioner's funds in the UCPB; attending hearings in Civil Case No. 05-224, and sending notices to petitioner updating the latter of the status of the case. Nothing in Civil Case No. 95-224 so far appears complicated and no extra ordinary skill was needed for lawyers of respondent Law Firm to accomplish what they had done in the case before they withdrew their appearance. We do not find herein a situation so intricate that demands more than a careful scrutiny of the legal matters involved. These are simply the normal duties of a lawyer that he is bound by law to render to his clients with utmost fidelity for which his client must not be burdened to pay an extra price. It bears stressing that at the time respondent firm withdrew their appearance due to policy differences with petitioner, the case was still in its initial stage.

Guided by the above yardstick and so much of the pertinent data as are extant in the records of this case and in the exercise of our sound discretion, we hold that the amount of P500,000.00 is a reasonable and fair compensation for the legal services rendered by respondent to the petitioner.

The imposition of legal interest on the amount payable to private respondent as attorney's fees is unwarranted. Even as we agree that parties can freely stipulate on the terms of payment, still the imposition of interest in the payment of attorney's fees is not justified. In the case of Cortes v. Court of Appeals,40 we ruled that Article 220941 of the Civil Code does not even justify the imposition of legal interest on the payment of attorney's fees as it is a provision of law governing ordinary obligations and contracts. It deleted the 6% interest imposed by the appellate court on the payment of attorney's fees. It ratiocinated by citing Mambulao Lumber Co. v. Philippine National

Bank,42 thus:

Contracts for attorney's services in this jurisdiction stands upon an entirely different footing from contracts for the payment of compensation for any other services. x x x [A]n attorney is not entitled in the absence of express contract to recover more than a reasonable compensation for his services; and even when an express contract is made, the court can ignore it and limit the recovery to reasonable compensation if the amount of the stipulated fee is found by the court to be unreasonable. This is a very different rule from that announced in section 1091 of the Civil Code with reference to the obligation of contracts in general, where it is said that such obligation has the force of law between the contracting parties. Had the plaintiff herein made an express contract to pay his attorney an uncontingent fee of P2,115.25 for the services to be rendered in reducing the note here in suit to judgment, it would not have been enforced against him had he seen fit to oppose it, as such a fee is obviously far greater than is necessary to remunerate the attorney for the work involved and is therefore unreasonable. In order to enable the court to ignore an express contract for attorney's fees, it is necessary to show, as in other contracts, that it is contrary to morality or public policy (Art.1255, Civil Code). It is enough that it is unreasonable or unconscionable. (Emphases supplied.)

We have held that lawyering is not a moneymaking venture and lawyers are not merchants.43 Law advocacy, it has been stressed, is not capital that yields profits. The returns it births are simple rewards for a job done or service rendered. It is a calling that, unlike mercantile pursuits which enjoy a greater deal of freedom from governmental interference, is impressed with a public interest, for which it is subject to State regulation.44

A lawyer is not merely the defender of his client's cause and a trustee of his client's cause of action and assets; he is also, and first and foremost, an officer of the court and participates in the fundamental function of administering justice in society.45 It follows that a lawyer's compensation for professional services rendered are subject to the supervision of the court, not just to guarantee that the fees he charges and receives remain reasonable and commensurate with the services rendered, but also to maintain the dignity and integrity of the legal profession to which he belongs. Upon taking his attorney's oath as an officer of the court, a lawyer submits himself to the authority of the courts to regulate his right to charge professional fees.46

Though we reduced the award of attorney's fees and disallowed the imposition of interest thereon, the fact that an attorney plays a vital role in the administration of justice underscores the need to secure to him his honorarium lawfully earned as a means to preserve the decorum and respectability of the legal profession. A lawyer is as much entitled to judicial protection against injustice, imposition of fraud on the part of his client as the client against abuse on the part of his counsel. The duty of the court is not alone to see that a lawyer acts in a proper and lawful manner; it is also its duty to see that a lawyer is paid his just fees. With his capital consisting only of his brains and with his skill acquired at tremendous cost not only in money but in expenditure of time and energy, he is entitled to the protection of any judicial tribunal against any attempt on the part of his client to escape payment of his just compensation. It would be ironic if after putting forth the best in him to secure justice for his client, he himself would not get his due.47

Thus, the Court of Appeals did not err in awarding expenses of litigation. Article 2208, paragraphs 2, 5 and 11, of the Civil Code, authorize the recovery of such fees "(2) When the defendant's act or omission has compelled the plaintiff to litigate x x x or to incur expenses to protect his interest; x x x (5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff's plainly valid, just and demandable claim; x x x and (11) In any other case where the court deems it just and equitable that attorney's fees and expenses of litigation should be recovered." Considering the fact that respondent was drawn into this litigation by petitioner to protect and defend their interest and taking into account the services already rendered by respondent to petitioner, the sum of P30,000.00 as expenses of litigation and cost of suit would be reasonable under the premises.

WHEREFORE, the Decision appealed from is AFFIRMED WITH MODIFICATIONS to the effect that the attorney's fees awarded to respondent is REDUCED to P500,000.00, the legal interest of 2% on the amount due to respondent is DELETED, and the award of litigation expenses is REDUCED to P30,000.00.

SO ORDERED.

ANGELA DELA ROSA and CORAZON MEDINA, petitioners, vs.ORFELINA D. ROLDAN, LORNA SAN DIEGO, FLORDELIZA D. CATACUTAN, NORMA Y. LACUESTA, and ARSENIO DULAY, respondents.

This is a Petition for Review on Certiorari of the Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 45560 affirming, on a petition for review, the Decision of the Regional Trial Court (RTC) of Tarlac in Civil Case No. 8396, which in turn reversed on appeal the decision of the Municipal Trial Court (MTC) of Tarlac, Tarlac in Civil Case No. 6089 for unlawful detainer.

The Antecedents

The spouses Adriano Rivera and Aurora Mercado were the owners of two (2) parcels of land located in Tarlac, Tarlac, both covered by respective titles; the 261-square-meter lot was covered by Transfer Certificate of Title (TCT) No. 7225, while the 772 sq. m. was covered by TCT No. 7226.

Sometime in 1957, the spouses Rivera executed a deed of sale2 over the properties in favor of the spouses Arsenio Dulay and Asuncion dela Rosa. Gideon dela Rosa, one of Asuncion's brothers, was one of the instrumental witnesses in the deed. To pay for the property, the spouses Dulay, who were members of the Government Service Insurance System (GSIS), secured a P9,500.00 loan and executed a real estate mortgage

over the two lots as security therefor. On September 16, 1957, the Register of Deeds issued TCT Nos. 29040 and 29041 in the names of the spouses Dulay.

The spouses Dulay forthwith took possession of the lots, except a 500-square-meter portion which was then occupied by Gideon dela Rosa and his wife Angela and the portion where the house of Corazon Medina stood. The spouses Dulay declared the property for taxation purposes in their names and paid the realty taxes therefor.

Sometime in 1982, the spouses Dulay made demands on Gideon, Angela and Corazon to vacate the premises, as their three daughters would be constructing their respective houses thereon. Gideon, Angela and Corazon refused to do so, prompting the spouses to file a complaint for recovery of possession (accion publiciana) against them with the then Court of First Instance (CFI) of Tarlac. The spouses Dulay alleged, inter alia, that they bought the lots from the spouses Rivera in 1957; defendants occupied a 370-square-meter portion on the western side, and were claiming ownership over one-half of the property, as shown by their letter to plaintiffs appended to their complaint; and they needed the property so that their daughters, who already had their respective families, could build houses thereon. The spouses Dulay prayed that defendants be evicted from the property and be required to pay reasonable compensation for their use of the premises.3 The case was docketed as Civil Case No. 6261.

In their answer to the complaint, defendants alleged the following by way of special and affirmative defenses: Gideon and his sister Asuncion contributed equally to the purchase price of the property; plaintiffs secured a GSIS loan of P9,500.00, out of which P6,500.00 was paid to the vendors; Gideon and Asuncion verbally agreed that plaintiffs would be indicated as the sole vendees in the deed of sale as they were the GSIS members; defendants had already paid their share of the purchase price of the property as of 1978, except for the amount of P332.00; and, insofar as the one-half portion on the western side of the property was concerned, plaintiffs were trustees for defendants, who likewise owned the same. Defendants interposed counterclaims for damages and prayed that the said one-half portion be reconveyed to them.4

During the trial, the spouses Dulay adduced in evidence the following: the Deed of Absolute Sale dated January 16, 1957, with Gideon as an instrumental witness;5 the tax declarations in their names covering the property; and receipts of realty tax payments made over the property.6

Defendants spouses Dela Rosa adduced in evidence a small notebook containing therein an alleged list of payments to the spouses Dulay of their share in the purchase price of the property.7 They presented an NBI Questioned Documents Expert to prove the authenticity of the signature of Asuncion Dulay on one of the receipts.8 However, Asuncion denied that she bought the property with her brother Gideon, and that she received any amount from him and his wife as part of the purchase price of the property. She likewise denied that it was her signature that appeared on the purported receipt.

On July 17, 1987, the trial court rendered judgment in Civil Case No. 6261 in favor of the spouses Dulay and ordered the spouses Dela Rosa and Corazon Medina to vacate the property and turn over possession to plaintiffs.9 The trial court declared:

ANALYZING THE EVIDENCE, there is no doubt that the registered owners of the lots in question are the plaintiffs-spouses Arsenio Dulay and Asuncion dela Rosa (Exhibits "A" and "B"). They bought these lots from the spouses Adriano Rivera and Aurora Mercado (Exhibits "D" and "D-1").

Defendants' claim that they bought from the plaintiffs one-half (1/2) portion of the lots in question is untenable. Firstly, if it is true as claimed by them that there was such an agreement to purchase from the plaintiffs a portion of the lots in question, why did they not reduce [the] same in writing? In fact, it's the defendants, particularly Gideon dela Rosa, who induced and accompanied the plaintiffs to go to a Notary Public for the execution of Exhibit "D." The amounts mentioned in Exhibit "5" does (sic) not clearly indicate whether they were payments made for the purchase price in installment or for monthly rentals for their occupation of Lot 3-B-2. The defendants were the only ones who made entries; and a perusal of such entries were not recorded in sequence of alleged monthly payment but merely entries dictated and/or written at will.

Regarding Exhibit 6 and the alleged signature of plaintiff Asuncion dela Rosa, the report (Exhibit "7," "7-A" and "7-B") and the testimony of the Chief NBI handwriting expert when presented by the defendants themselves is very emphatic. Thus:

"However, the question signature was signed over a typewritten carbon or duplicate…."

What we mean by that, Sir, is that there is here a purported receipt with the body typewritten underlining below the supposed signature Asuncion R. Dulay, it is a little surprising because if a document is prepared in one occasion, then the body should be in ribbon impression and the underlining should be in ribbon. The supposed typewritten body above the signature is an original ribbon impression, that is, it is direct from the typewritten with the ribbon striking the sheet of paper, the underlining, however, on which the signature is signed is a carbon impression, that means it is a duplicate impression. (pp. 8-9, tsn., Oct. 30/85).10

The spouses Dela Rosa and Corazon Medina appealed to the CA. The case was docketed as CA-G.R. CV No. 15455. On June 29, 1990, the appellate court rendered judgment granting the appeal and reversed the trial court's ruling. According to the appellate court, the complaint was premature on account of plaintiffs' failure to allege, in their complaint, that there had been earnest efforts to have the case amicably settled as mandated under Article

222 of the New Civil Code.11

The spouses Dulay filed a Motion for Extension of Time to File a Petition for Review on Certiorari with this Court which was granted. The motion was recorded as UDK-10069. However, the spouses Dulay failed to file their petition. Thus, on November 19, 1990, the Court resolved to declare final and executory the decision of the CA in CA-G.R. CV No. 15455 for failure of plaintiffs-appellees to file their petition for review.12 The resolution of the Court became final and executory.13

In the meantime, Gideon died. His wife Angela and Corazon Medina continued residing in the property without paying any rentals therefor. Asuncion Dulay passed away on June 26, 1995, survived by her husband Arsenio and their children: Orfelina Roldan, Lorna San Diego, Flordeliza Catacutan, and Norma Lacuesta.

In a letter dated October 2, 1995, Arsenio and his children, through counsel, made demands on Corazon and Angela to vacate the property within 30 days from receipt thereof, with a warning that failure to do so would impel them to file the necessary legal action.14 Nevertheless, they suggested a conference to discuss the amicable settlement of the matter. Corazon and Angela ignored the letter. This prompted Arsenio and his children to file a complaint for eviction against Angela and Corazon in the Office of the Barangay Captain. The parties did not arrive at a settlement, and on December 1, 1995, the Pangkat Secretary issued a certification to file action.15

On January 29, 1996, Arsenio and his children, as plaintiffs, filed a complaint for unlawful detainer against Corazon and Angela, as defendants, in the MTC of Tarlac, Tarlac. Plaintiffs alleged the following:

3. Plaintiffs are the co-owners of two adjoining parcels of residential land located at Tarlac, Tarlac, and more particularly described as follows:

Transfer Certificate of Title No. 29040

"A parcel of land (Lot "B" of the subdivision plan Psd-2284, being a portion of the land described on the original plan II-5215, G.L.R.O. Record No. 7962), situated in the Barrio of San Roque, Municipality of Tarlac, Province of Tarlac. Bounded on the N.E., by Lot "C" of the subdivision plan; on the S.E., by Lot No. "3-B-2" of the subdivision plan and property of Concepcion Cider; on the W., by property of Timotea Mercado; and on the N.W., by Lot "A" of the subdivision plan, containing an area of TWO HUNDRED SIXTY-ONE (261) SQUARE METERS, more or less."

Transfer Certificate of Title No. 29041

"A parcel of land (Lot No. "3-B-2" of the subdivision plan Psd-2284, being a portion of Lot No. "3-B," plan II-2977-Amd., G.L.R.O. Record No. 1955), situated in the Barrio of San Roque, Municipality of Tarlac, Province of Tarlac. Bounded on the N.E., by Lot 87-C of the subdivision plan; on the S.E., by Lot No. 3-B-1 of the subdivision plan; on the S.W., by property of Concepcion Cider; and on the N.W., by Lot B of the subdivision plan, containing an area of SEVEN HUNDRED SEVENTY-TWO (772) SQUARE METERS, more or less."

Copies of the transfer certificates of title are attached as Annexes "A" and "B," respectively. The total assessed value of said lands does not exceed Twenty Thousand Pesos (P20,000.00).

4. Said parcels of land were formerly owned by the spouses Asuncion dela Rosa and Arsenio Dulay. Plaintiffs Orfelina Roldan, Lorna San Diego, Flordeliza Catacutan, and Norma Lacuesta are the children of the spouses Asuncion dela Rosa and plaintiff Arsenio Dulay. Upon the death of Asuncion dela Rosa on 26 June 1995, said parcels of land became jointly owned by herein plaintiffs. A copy of Asuncion dela Rosa's certificate of death is attached as Annex "C."

5. The spouses Dulay bought said parcels of land sometime in 1957. Defendants and their predecessors-in-interest have occupied and are continuously occupying about five hundred (500) square meters, more or less, of said parcels of land. Defendants and their predecessors-in-interest have occupied said parcels of land since 1957 without paying any rent.

6. The occupation by defendants of said parcels of land were at the mere tolerance of the spouses Dulay and, thereafter, of the plaintiffs. Defendants have promised to vacate the premises if and when needed by the spouses Dulay and plaintiffs.

7. Demands were made on defendants to vacate the premises, which demands, however, were ignored and not heeded. Defendants refused and continues to refuse to vacate the premises. A copy of the final demand letters sent to Angela dela Rosa and Corazon Medina are attached as Annexes "D" and "E," respectively.

8. In an attempt to arrive at an amicable settlement and in recognition of their being blood relatives, plaintiffs exerted earnest efforts towards a compromise with defendants. Defendants were invited to discuss and settle the matter amicably. Defendants, however, refused to meet and discuss any settlement and ignored the invitation extended by plaintiffs.

9. In compliance with Section 412 of the Local Government Code (R.A. No. 7160) and as a further attempt to settle the dispute amicably, plaintiffs brought the matter to the lupong tagapamayapa of their barangay.

Defendants, however, refused to discuss an amicable settlement. The certification to file action issued by the lupon chairman is attached and made an integral part hereof as Annex "F."

10. Defendants have been occupying and using the premises without paying any rent therefor. The present reasonable rental value of the premises is Fifty Pesos (P50.00) per month, which amount defendants should be made to pay from September 1957 until possession is restored to plaintiffs.

11. By reason of the unjustifiable refusal to vacate and the unlawful detainer of the subject property by defendants and all persons claiming rights under them, plaintiffs were constrained to seek redress in court to protect their own rights and interests, thereby causing them to incur litigation expenses in the amount of not less than Fifty Thousand Pesos (P50,000.00), for which amount the defendant should be made liable to plaintiffs.16

Plaintiffs therein prayed that, after due proceedings, judgment be rendered in their favor as follows:

WHEREFORE, premises considered, plaintiffs most respectfully pray that, after trial, judgment be rendered by this Honorable Court in favor of plaintiffs and ordering as follows:

1. Defendants and all persons claiming rights under them to immediately vacate the premises;2. Defendants to pay all rental arrears at the monthly rate of P50.00 from September 1957 until possession is restored or a total of P23,000.00;3. Defendants to pay litigation expenses in the amount of P50,000.00; and4. Defendants to pay the costs of this suit.

Plaintiffs pray for such other and further reliefs just and equitable under the premises.17

The case was docketed as Civil Case No. 6089.

In their answer, defendants reiterated their allegations in their answer to the complaint in Civil Case No. 6261 in the CFI of Tarlac.

On April 30, 1996, Angela filed a complaint against Arsenio and his children in the MTC of Tarlac, Tarlac for recovery of ownership, reconveyance, cancellation of title, and damages. The case was docketed as Civil Case No. 6154. Angela, as plaintiff, reiterated her allegations in her answer and counterclaim in Civil Case No. 6261 as allegations comprising her causes of action. She prayed that, after due proceedings, judgment be rendered in their favor, thus:

WHEREFORE, it is most respectfully prayed of this Hon. Court that judgment shall issue:

1. Ordering that an immediate temporary restraining order restraining the defendants from disturbing the possession of the Plaintiff over the property in question until the case is finally dissolved;

2. Declaring the Plaintiff as owner of the one-half (1/2) property in question, thereby reconveying the ownership thereof and cancelling the title;

3. Ordering the defendants, jointly and severally, to pay Plaintiff the amount of P30,000.00 as attorney's fee, plus P1,000.00 per hearing;

4. Ordering the defendants, jointly and severally, to pay Plaintiff the amount of P10,000.00 as acceptance fee, plus P20,000.00 as litigation expenses;

5. Ordering the defendants, jointly and severally, to pay Plaintiff the amount of P20,000.00 as exemplary damages;

6. Ordering the defendants, jointly and severally, to pay Plaintiff the amount of P10,000.00 as moral damages;

7. And granting such other reliefs and remedies just and equitable in the premises.18

On July 17, 1996, the MTC issued a pre-trial order in Civil Case No. 6089 defining the issue, thus:

Whether or not Unlawful Detainer is proper in the premises considering the claim of ownership by defendants from the beginning of these litigations sometime in 1982 followed by this case at bench. Otherwise stated, is the occupation of the land in dispute by the defendants by tolerance of plaintiffs.19

On September 25, 1996, the MTC rendered judgment in Civil Case No. 6089 in favor of Corazon and Angela and ordered the dismissal of the complaint on the ground of lack of jurisdiction.20 The court held that the issue between the parties was one of ownership and not merely possession de facto. Thus, the possession of the property by defendants was not by mere tolerance, but by virtue of a claim of ownership; in fact, defendants never recognized the plaintiffs' claim of ownership over the property. In ruling against Arsenio and his children, the trial court relied on their pleadings, the decision of the CFI in Civil Case No. 6261, the ruling of the CA in CA-G.R. CV No. 15455, and the resolution of this Court in UDK-10069.21 It declared that, although the CA reversed the decision of the CFI in Tarlac, the facts show that the dispute between the parties constitutes possession de jure; the action of the

spouses Dulay in Civil Case No. 6261 which was an accion publiciana cannot be converted into one for unlawful detainer in Civil Case No. 6089.

Arsenio and his children appealed to the RTC. The case was docketed as Civil Case No. 8396. On June 25, 1997, it reversed the decision of the MTC and ordered the eviction of defendants, holding that the issue was the entitlement to the physical possession de facto of the property, an issue within the exclusive jurisdiction of the MTC;22 in contrast, the issue between the parties in Civil Case No. 6261 was possession de jure and not possession de facto. The RTC further declared that the spouses Dulay had a torrens title over the property which was conclusive against the whole world; as such, they were entitled to the possession of the property as owners thereof. Citing the ruling of this Court in Peran v. Espera,23 the RTC ruled that Corazon and Angela possessed the property for a considerable length of time only through mere tolerance of plaintiffs.

Corazon and Angela moved to reconsider the decision, which the RTC denied in an Order24 dated September 22, 1997. They filed a petition for review in the CA, praying that the RTC decision be reversed and the decision of the MTC be affirmed. Angela claimed that she owned one-half of the property as co-owner of the spouses Dulay. The case was docketed as CA-G.R. SP No. 45560.

On March 16, 1998, the CA rendered judgment in CA-G.R. SP No. 45560 affirming the decision of the RTC and dismissing the petition. The CA ruled that, contrary to the claim of Angela, there was no trust created over one-half of the property in her favor. Since the complaint against Angela and Corazon in the MTC was one for unlawful detainer, the MTC had exclusive jurisdiction over the case. Moreover, they had been in possession of the property by tolerance. In any case, their action was barred by prescription and laches.

Angela and Corazon filed a motion for reconsideration, which the CA denied.

Angela and Corazon, now petitioners, filed the instant petition for review on certiorari, claiming that the CA erred as follows:

THE HON. COURT OF APPEALS, WITH DUE RESPECT, ERRED IN CONSIDERING THAT THE CASE AT BAR IS ONE OF UNLAWFUL DETAINER, WHEN IT IS ONE OF RECOVERY OF OWNERSHIP AND POSSESSION.

THE HON. COURT OF APPEALS, WITH DUE RESPECT, ERRED IN CONSIDERING THAT THERE WAS NO TRUST CREATED BY AGREEMENT OF THE PARTIES.

THE HON. COURT OF APPEALS, WITH DUE RESPECT, ERRED IN CONSIDERING THAT THE PETITIONERS' CLAIM HAS BEEN BARRED BY PRESCRIPTION OR LACHES.

THE HON. COURT OF APPEALS, WITH DUE RESPECT, ERRED IN AWARDING ATTORNEY'S FEE FOR RESPONDENTS.25

According to petitioners, during the pre-trial in the MTC, the parties stipulated on the following issues to be resolved by the court: whether or not the action for unlawful detainer of respondents was proper considering that petitioners claimed ownership over the property in their answer to the complaint; and whether petitioners possessed the property by mere tolerance of respondents. Petitioners insist that during the pre-trial conference, respondents admitted that they had filed a complaint for recovery of possession of property against petitioners in the CFI of Tarlac, docketed as Civil Case No. 6261.

Petitioners maintain that the principal issue is one of ownership over the property and not merely whether or not respondents, as plaintiffs, were entitled to possession de facto as the registered owners thereof; hence, the MTC had no jurisdiction over the action of respondents.

Petitioners are of the view that the trial court and the CA erred in declaring that there was no trust created over the property. They maintain that there was a verbal agreement between Gideon and his sister Asuncion that the property would be purchased by them; that the purchase price thereof would be advanced by Asuncion; that Asuncion would be indicated as the vendee in the deed of absolute sale to enable her to secure a GSIS loan to pay for the property, with the concomitant agreement that Gideon would pay one-half of the purchase price for the property; and that the property will be titled in their name as trustees for the spouses Gideon and Angela dela Rosa over one-half portion of the lots. They insist that they are not barred from assailing the deed of absolute sale executed in favor of the spouses Dulay by the spouses Rivera. There is likewise no factual and legal basis for the award of attorney's fees.

In their comment on the petition, respondents aver that the stay of petitioners in the property after 1982 was by mere tolerance. The MTC had exclusive jurisdiction over their action because it was filed within one year from petitioners' last demand to vacate the property. The CA correctly ruled that no trust was created over the property, with petitioners as trustors and respondents as trustees; whether a trust agreement was created is a question of fact which cannot be raised in this Court in a petition for review on certiorari.

In any event, petitioners' claim of a constructive trust was barred by prescription since more than ten years had elapsed from the time the titles over the properties in favor of respondents were issued on September 16, 1957.

Respondents further point out that the MTC of Tarlac rendered judgment in Civil Case No. 6154 dismissing the complaint on the ground of prescription or laches; on April 6, 2000, the RTC affirmed the decision on appeal; the

CA affirmed the decision in CA-G.R. SP No. 58857 on February 14, 2002; and on January 22, 2003, this Court denied petitioners' petition for review of the decision of the CA in G.R. No. 155599.26 Thus, the fact that no constructive trust existed in favor of petitioners has been laid to rest by the Court.

The Ruling of the Court

The threshold issues are: (1) whether the MTC had jurisdiction over the action of respondents (plaintiffs therein); (2) whether the CA erred in declaring that there was no trust relationship between petitioners as trustors and respondents as trustees; (3) whether the appellate court erred in ruling that the action of petitioners to enforce the trust against respondents had prescribed; and (4) whether respondents are entitled to attorney's fees.

On the first issue, we agree with the decision of the CA that the action of respondents against petitioners was one for unlawful detainer, and that the MTC had jurisdiction over the same. Indeed, petitioners claimed ownership over one-half of the property in their answer to the complaint and alleged that respondents were merely trustees thereof for their benefit as trustors; and, during the pre-trial, respondents admitted having filed their complaint for recovery of possession of real property (accion publiciana) against petitioners before the CFI of Tarlac, docketed as Civil Case No. 6261. However, these did not divest the MTC of its inceptial jurisdiction over the complaint for unlawful detainer of respondents.

It is settled jurisprudence that what determines the nature of an action as well as which court or body has jurisdiction over it are the allegations of the complaint and the character of the relief sought, whether or not plaintiff is entitled to any and all of the reliefs prayed for.27 The jurisdiction of the court or tribunal over the nature of the action cannot be made to depend upon the defenses set up in the court or upon a motion to dismiss, for otherwise, the question of jurisdiction would depend almost entirely on defendant. Once jurisdiction is vested, the same is retained up to the end of the litigation.28

Jurisdiction cannot be conferred by the voluntary act or agreement of the parties; it cannot be acquired through or waived, enlarged or diminished by their act or omission. Neither is it conferred by the acquiescence of the court. It is neither for the court nor the parties to violate or disregard the rule, this matter being legislative in character. Thus, the jurisdiction over the nature of an action and the subject matter thereof is not affected by the theories set up by defendant in an answer or motion to dismiss.29

Section 3 of Republic Act No. 7691, amending Section 33(2) of Batas Pambansa Blg. 129, which was the law in effect when respondents filed their complaint against petitioners, provides that "Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts exercise exclusive original jurisdiction over cases of forcible entry and unlawful detainer; provided that, when, in such cases, defendant raises the questions of ownership in his pleadings and the question of possession cannot be resolved without deciding the issue of ownership, the issue of ownership shall be resolved only to determine the issues of possession."

As gleaned from the averments of the complaint, respondents, as plaintiffs below, alleged that they were the owners of parcels of land covered by TCT Nos. 29040 and 29041, hence, entitled to the possession of the property; petitioners (defendants therein) and their predecessors-in-interest had occupied the said parcels of land since 1957 without paying any rent; their possession over the property continued even after the spouses Dulay purchased the property; and that their occupation of the property was by mere tolerance of the spouses Dulay and, after Asuncion died on June 26, 1995, by respondents; petitioners promised to vacate the premises when respondents needed the property; demands were made by respondents on October 2, 1995 for petitioners to vacate the property but the latter refused, prompting an action to be filed in the Office of the Pangkat; and, on December 1, 1995, the Pangkat Secretary issued a certification to file action. As gleaned from the petitory portion of the complaint, respondents likewise prayed for the eviction of petitioners from the property with a plea for judgment for reasonable compensation for petitioners' occupation of the premises. Respondents filed their complaint on January 29, 1996 in the MTC, within the period of one year from the final demand made against petitioners to vacate the property.

It is true that during the pre-trial, the MTC issued an order defining the issue to be litigated by the parties – whether or not unlawful detainer is proper in the premises considering defendants' claim of ownership from 1982; otherwise stated, whether petitioners' occupation of the land in dispute was by mere tolerance of respondents. As framed by the MTC, the issue before it was basically one of physical or material possession of the property, although petitioners raised ownership as an issue. Thus, the MTC erred when it declared that, since defendants claimed ownership over the property, it was divested of its jurisdiction to take cognizance of and decide the case on its merits.

It bears stressing that in unlawful detainer cases, the only issue for resolution, independent of any claim of ownership by any party litigant, is: who is entitled to the physical and material possession of the property involved? The mere fact that defendant raises the defense of ownership of the property in the pleadings does not deprive the MTC of its jurisdiction to take cognizance of and decide the case. In cases where defendant raises the question of ownership in the pleadings and the question of possession cannot be resolved without deciding the issue of ownership, the court may proceed and resolve the issue of ownership but only for the purpose of determining the issue of possession. However, the disposition of the issue of ownership is not final, as it may be the subject of separate proceeding specifically brought to settle the issue. Hence, the bare fact that petitioners, in their answer to the complaint, raised the issue of whether they owned the property as trustors of a constructive trust (with the spouses Dulay as the trustees), did not divest the MTC of its jurisdiction to take cognizance of the case and decide the same on its merits.30

Petitioners were well aware that the issue of ownership over the property had to be resolved in a proper action for the purpose, separate from and independent of Civil Case No. 6089 in the MTC of Tarlac. It is for this reason that

petitioner Angela filed a complaint for recovery of ownership, reconveyance, cancellation of title and damages against respondents, docketed as Civil Case No. 6154, wherein she prayed that respondents, as defendants, be ordered to convey to her one-half portion of the property. However, her claim was rejected by the trial court, which ordered the complaint dismissed; the RTC likewise dismissed the case on appeal. In affirming this dismissal in CA-G.R. SP No. 58857 promulgated on February 14, 2002, the CA ratiocinated as follows:

Nevertheless, notwithstanding the foregoing, this Court finds that petitioner's complaint should be dismissed. This is so because petitioner miserably failed to establish her claim to the property. It must be stressed that while an implied trust may be established by parol evidence, such evidence must be as fully convincing as if the acts giving rise to the trust obligation are proven by an authentic document. (Heirs of Lorenzo Yap v. Court of Appeals, 312 SCRA 603 [1999], at page 609). An implied trust cannot be made to rest on vague and inconclusive proof. (Ibid.)

Unfortunately for petitioner, the evidence she presented in her attempt to establish their so-called trust agreement is not sufficient or convincing. The list of dates and amounts written by her purportedly showing payments made to the late Asuncion dela Rosa Dulay cannot even be given credence as appreciation of such list can be equivocal (see Exhibit "H," page 152, Original Records). The list was made in petitioner's handwriting and there was no counter-signature made by Dulay showing acknowledgment of such listing. At best, the list can merely be appreciated as it is, a list, but definitely, it does not prove payments made on the purchase price of the ½ portion of the property.

Also, the Court notes the NBI's Questioned Documents Report No. 316-884 (dated Nov. 14, 1984) finding that the signature of Asuncion Dulay in the receipt allegedly acknowledging partial payment in the amount of P500.00 was signed over a typewritten carbon or duplicate impression which is not part of the main entries in the receipt (see Exhibit "7," page 154, Original Records). Such conclusion shows that the entries made on the receipt were not written on a single occasion but rather separately executed. Thus, the Court cannot give any evidentiary value on said receipt considering that its credibility is suspect.

Meanwhile, private respondents have in their favor TCT Nos. 29040 and 29041 in the name of the spouses Arsenio Dulay and Asuncion dela Rosa (see Exhibits "1" and "2," pages 181-182, Original Records); the Deed of Absolute Sale executed in 1957 by the spouses Adriano Rivera and Aurora Mercado (petitioner's paternal grandparents) conveying the entire property to the spouses Dulay for the price of P7,000 (see Exhibit "3," page 148, Original Records); the tax declaration receipts showing tax payments made by private respondents on the property (see Exhibits "3" to "3-b," pages 183-185, Original Records); and the tax declaration of real property for the year 1974 in the name of the spouses Dulay (see Exhibit "C" to "C-1," pages 150-151, Original Records).

All told, petitioner failed to discharge that onus incumbent upon her to prove her claim over the property.31

Angela assailed the decision of the CA in this Court in G.R. No. 155599, and this Court resolved to deny the petition as follows:

G.R. No. 155599 (Angela dela Rosa v. Orfelina Roldan, et al.). – Considering the allegations, issues, and arguments adduced in the petition for review on certiorari of the decision and resolution of the Court of Appeals dated February 14, 2002 and October 14, 2002, respectively, the Court Resolves to DENY the petition for failure of the petitioner to sufficiently show that the Court of Appeals committed any reversible error in the challenged decision and resolution as to warrant the exercise by this Court of its discretionary appellate jurisdiction in this case.32

The resolution of the Court became final and executory on May 20, 2003.33 Thus, the issue of whether or not respondents were trustees of one-half of the property had been finally resolved by this Court in favor of respondents; in fine, the validity of TCT Nos. 29040 and 29041 in the names of the spouses Dulay had been affirmed by the trial court, the MTC, the CA and this Court. The claim of co-ownership of petitioner Angela and possession over the western portion of the property thus have no factual and legal basis.

We agree with petitioners that the complaint of the spouses Dulay filed in 1982 docketed as Civil Case No. 6261 was one for recovery of possession of the property (accion publiciana) and that they likewise later filed a complaint with the MTC, on January 29, 1996, for unlawful detainer in Civil Case No. 6089 instead of an accion publiciana. However, respondents were not proscribed from filing a complaint for unlawful detainer five (5) or six (6) years from the dismissal of their complaint for recovery of possession of real property. The dismissal of respondents' complaint in Civil Case No. 6261 by the CA was not based on the merits of the case, but solely because it was premature on account of the failure to allege that earnest efforts were made for the amicable settlement of the cases as required by Article 222 of the New Civil Code. The dismissal of the complaint was thus without prejudice.34

It bears stressing that, after the Court declared in UDK-10069 on November 19, 1990 that the decision of the CA in CA-G.R. CV No. 15455 was final and executory, respondents did not immediately file their complaint for unlawful detainer against petitioners for their eviction. Respondents filed their complaint only on January 29, 1996, or after the lapse of almost six (6) years, but barely four (4) months after respondents' final demand to vacate the property on October 2, 1995 and the issuance of the certification of the Pangkat Secretary on December 1, 1995.

We agree with the contention of petitioners that for an action for unlawful detainer based on possession by mere tolerance to prosper, the possession of the property by defendant must be legal from the very beginning.35 In this case, petitioners' possession of the property was tolerated by the former owners, the spouses Rivera, and by the spouses Dulay after they purchased the property. After all, Angela was the granddaughter of Consolacion Rivera,

the sister of Adriano Rivera, and Gideon was the brother of Asuncion. However, when the spouses Dulay needed the property for their children's use and requested petitioners to vacate the property, the latter refused. From then on, petitioners' possession of the property became deforciant. A person who occupies the land of another on the latter's tolerance, without any contract between them, is necessarily barred by an implied provision that he will vacate the same upon demand.36 Respondents thus had the option to file a complaint for unlawful detainer within one year therefrom, or an accion publiciana beyond the one-year period from the demand of respondents as plaintiffs for petitioners to vacate the property.

The Court notes that the property was sold to respondents, and that it was titled in their names (TCT Nos. 29040 and 29041). The said deed and titles support the right of respondents to the material possession of the property.37 Under all the circumstances and facts in this case, petitioners' claim, that they had the right to the material possession of the property, has no factual and legal basis. We quote with approval the decision of the CA in CA-G.R. SP No. 45560:

Private respondents are entitled to its possession from the time title was issued in their favor as registered owners. "An action for unlawful detainer may be filed when possession by a landlord, vendor, vendee or other person against whom the possession of any land or building is unlawfully withheld after the expiration or termination of their right to hold possession, by virtue of a contract, express or implied."

Second. "The age-old rule is that 'the person who has a torrens title over a land is entitled to possession thereof'." Except for the claim that the title of private respondents is not conclusive proof of ownership, petitioners have shown no right to justify their continued possession of the subject premises.38

On the issue of whether the RTC acted in excess of its appellate jurisdiction in awarding P50,000.00 as attorney's fees in favor of respondents, petitioners aver that under the Rules on Summary Procedure, respondents are entitled to a maximum amount of only P20,000.00; hence, the RTC acted in excess of its jurisdiction when it awarded P50,000.00 as attorney's fees, as it is in excess of the maximum amount under the said Rules. Besides, petitioners aver, the amount of P50,000.00 is unjust and inequitable. Moreover, the RTC ordered petitioners to pay attorney's fees of P50,000.00 without even supporting the award with its finding and citing legal provisions or case law.

For its part, the CA ruled that the award of P50,000.00 as attorney's fees under the Rules on Summary Procedure does not apply in a case where the decision of the MTC is appealed to the RTC. The latter court may award an amount beyond the maximum amount of P20,000.00 under the Rules on Summary Procedure as attorney's fees for the reason that, on appeal in the RTC, the regular rules of civil procedure apply. According to the CA, there was factual and legal basis for the award of P50,000.00 as respondents' attorney's fees:

Second. Decisional law states –

"There is no question that a court may, whenever it deems just and equitable, allow the recovery by the prevailing party of attorney's fees. In determining the reasonableness of such fees, this Court in a number of cases has provided various criteria which, for convenient guidance, we might collate, thusly: a) the quantity and character of the services rendered; b) the labor, time and trouble involved; c) the nature and importance of the litigation; d) the amount of money or the value of the property affected by the controversy; e) the novelty and difficulty of questions involved; f) the responsibility imposed on counsel; g) the skill and experience called for in the performance of the service; h) the professional character and social standing of the lawyer; i) the customary charges of the bar for similar services; j) the character of employment, whether casual or for established client; k) whether the fee is absolute or contingent (it being the rule that an attorney may properly charge a higher fee when it is contingent than when it is absolute; and l) the results secured."

In view thereof, the award of attorney's fees is justified. That is, in addition to the provisions of Article 2208 of the New Civil Code which reads –

"In the absence of stipulation, attorney's fees and expenses of litigation, other than judicial costs, cannot be recovered, except:

(2) When the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest;"

considering that petitioners refused to vacate the subject premises despite demands by the private respondents.

Finally, the Supreme Court has explained –

"The Rule on Summary Procedure applies only in cases filed before the Metropolitan Trial Court and Municipal Trial Courts pursuant to Section 36 of Batas Pambansa Blg. 129. x x x Hence, when the respondents appealed the decision of the Municipal Trial Court to the Regional Trial Court, the applicable rules are those of the latter court."

Thus, the award of the amount of fifty thousand pesos (P50,000.00) as attorney's fees is justified considering that the jurisdictional amount of twenty thousand pesos (P20,000.00) under Section 1,

paragraph (A), subparagraph (1) of the Revised Rule on Summary Procedure applies only to the Metropolitan Trial Courts, Municipal Trial Courts in Cities, Municipal Trial Courts and Municipal Circuit Trial Courts.39

We agree with the ruling of the CA. The ceiling of P20,000.00 applies only in the MTC where the Rules on Summary Procedure are applied. On appeal to the RTC, the RTC may affirm, modify or even reverse the decision of the MTC; as such, the RTC may increase the award for attorney's fees in excess of P20,000.00 if there is factual basis therefor.

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. Costs against the petitioners.

SO ORDERED.

DANTE SARRAGA, SR. and MARIA TERESA SARRAGA, petitioners, vs.BANCO FILIPINO SAVINGS AND MORTGAGE BANK, respondent.

Spouses Dante Sarraga, Sr. and Maria Teresa Sarraga, petitioners, were the absolute owners of three (3) parcels of land, one of which is Lot 416-B, situated in Poblacion, Cagayan de Oro City, and the other two, Lots 1053-A and 1053-B, in Lapasan, same city.

Sometime in the early 1980’s, petitioners mortgaged their lots to Banco Filipino Savings and Mortgage Bank (Banco Filipino), respondent, as security for a loan in the amount of P3,618,714.59.

Petitioners defaulted in the payment of their loan. Consequently, Banco Filipino foreclosed the mortgage.

On June 29, 1984, Banco Filipino was placed in conservatorship by the Central Bank of the Philippines. On January 25, 1985, it was ordered closed and placed under receivership and liquidation.

On April 9, 1985, or before the expiration of the period for the redemption of the lots, petitioner Dante P. Sarraga sent a letter to Banco Filipino’s receiver-liquidator offering to redeem the same.

On July 2, 1985, Deputy Receiver Arnulfo B. Aurellano wrote petitioners that "at this stage of the liquidation of the bank, we are not yet selling the aforesaid properties."

Since petitioners were not allowed to redeem their lots within the period prescribed by law, titles thereto were consolidated in the name of Banco Filipino.

On October 10, 1986, petitioners received a letter from Banco Filipino recognizing their intention to redeem their lots. Later, Banco Filipino, through its liquidators, started negotiating with petitioners on the terms of redemption.

Finally, on October 30, 1990, Mr. Renan Santos, then Banco Filipino’s liquidator, wrote petitioners allowing them to repurchase the lots for P8,506,597.73, with 12% interest per annum, under the terms stipulated therein.1 The terms include, among others, that petitioners may pay by installments and that upon full payment of the repurchase price, Banco Filipino shall execute the corresponding deed of sale for the three (3) lots in their favor.2 They were likewise granted the power to manage and administer the building located in Lot 416-B. The terms were later embodied in a Memorandum of Agreement3 (MOA) signed by the parties.

On May 16, 1991, Banco Filipino formally conveyed to petitioners the two (2) lots (Lots 1053-A and 1053-B) located in Lapasan, Cagayan de Oro City.

On October 30, 1992, petitioners paid in full the total repurchase price for the three (3) lots. However, Banco Filipino refused to execute the corresponding deed of sale and turn over Lot 416-B to petitioners.

Instead, Banco Filipino, on April 5, 1993, filed with the Regional Trial Court, Branch 38, Cagayan de Oro City, a complaint4 against petitioners for quieting of title, recovery of ownership and possession, accounting and damages, docketed as Civil Case No. 93-186.

On April 27, 1993, petitioners filed their answer with counterclaim.5 They were represented by Atty. Florentino G. Dumlao, Jr. who formally entered his appearance as their counsel of record.

However, prior to the pre-trial, Atty. Dumlao suffered a mild stroke, incapacitating him from participating actively in

the proceedings, prompting petitioners to hire the services of another counsel, Atty. Rogelio Bagabuyo. While the latter appeared for the petitioners during the hearing and signed pleadings for them, Atty. Dumlao remained petitioners’ counsel of record. As such, the trial court continued to serve pleadings, motions, processes, and other documents upon Atty. Dumlao.

On June 1, 1998, the trial court rendered a decision,6 the dispositive portion of which states:

"Wherefore, judgment is hereby rendered, as follows:

1. Declaring the sale and conveyance of the two (2) parcels of land (denominated as Lots 1035-A and 1053-B) situated in Barangay Lapasan, Cagayan de Oro, as valid and title thereto shall pertain to defendant spouses Sarraga;

2. Declaring plaintiff Banco Filipino to be the true and lawful owners of Lot 416-B and the building therein (formerly known as the Lucar Building but now as Executive Centrum) situated along J.R. Borja Street, Cagayan de Oro City;

3. Ordering defendant spouses Sarraga to immediately relinquish and surrender possession of Lot No. 416-B and the building thereon to plaintiff Bank; and

4. All other claims of plaintiff Bank as well as counterclaims by the defendants are dismissed.

"No pronouncement as to costs.

"SO ORDERED."7

On July 1, 1998. petitioners filed a motion for reconsideration,8 signed by both Attys. Dumlao and Bagabuyo.

On September 3, 1998, the trial court issued an order9 denying petitioners’ motion. On September 10, 1998, the order was received by Ms. Llerna Guligado, a newly-hired clerk at the office of Atty. Bagabuyo. Owing to her lack of work experience in a law office, she merely left the court order on her desk and eventually it was misplaced. She failed to bring the matter to the attention of Atty. Bagabuyo when she resigned on September 15, 1998. The day before, or on September 14, 1998, Atty. Bagabuyo was appointed Senior State Prosecutor in the Department of Justice. Due to his excitement and relocation to Manila, he failed to apprise Atty. Dumlao on the status of the case.

Concerned that no action had been taken on their motion for reconsideration of the Decision, petitioners, on December 7, 1998, verified its status. In the trial court, they found that the records of the case were already transmitted to the Court of Appeals due to a partial appeal interposed by Banco Filipino.

This prompted petitioners to file with the trial court a notice of appeal which was denied for being late.

Eventually, they filed a petition for relief from judgment.10 During the hearing, they came to know that the order dated September 3, 1998 denying their motion for reconsideration was served upon Atty. Bagabuyo only.

On February 12, 1999, the trial court issued an order11 dismissing the petition for relief on the ground that it was filed out of time. Petitioners filed a motion for reconsideration but was denied.12

They then filed a petition for certiorari with the Court of Appeals, docketed as CA GR-SP No. 53765, ascribing to the trial court grave abuse of discretion for dismissing their petition for relief from judgment.

On June 20, 2000, the Appellate Court rendered a Decision13 dismissing the petition, thus:

"WHEREFORE, foregoing premises considered, we hold that public respondent did not err much less act with grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the disputed orders, for which reason, the herein petition has to be, as it is hereby DISMISSSED.

"SO ORDERED."14

Hence this petition for review on certiorari.

The fundamental issues for our resolution are: 1) whether there was a valid service of the trial court’s order denying petitioners’ motion for reconsideration upon Atty. Bagabuyo; 2) whether Atty. Bagabuyo was negligent which prevented petitioners from filing a timely notice of appeal; and 3) if so, whether such negligence is binding upon petitioners.

Petitioners maintain that Atty. Bagabuyo is not their counsel of record since he did not file with the trial court a formal appearance. Consequently, the service upon him of the trial court’s order denying their motion for reconsideration is not valid.

Such posture is untenable. It is undisputed that petitioners were represented by two (2) lawyers, Attys. Dumlao and Bagabuyo. Pursuant to Section 2, Rule 13 of the 1997 Rules of Civil Procedure, as amended,15 service of the trial

court’s order denying petitioners’ motion for reconsideration may be made upon either counsel.16

The Court of Appeals correctly found that indeed petitioners’ counsel was Atty. Bagabuyo, thus:

"We find no merit in the first ground invoked by petitioners. As explained by the court a quo in its May 24, 1999 order-

"The records of this case show that Atty. Rogelio Zosa B. Bagabuyo did not ‘merely enter his appearance orally at every hearing which he attended.’ He filed several pleadings in this case as ‘counsel for the defendants’ in which he indicated his address. The first pleading that he filed x x x was a MOTION TO HEAR SPECIAL AND AFFIRMATIVE DEFENSES AS IF A MOTION TO DISMISS HAD BEEN FILED, dated November 28, 1994, which he signed alone as ‘counsel for Defendants’ and in which he indicated his address as ‘Suite 201, Travellers Life Building, corners Tiano & J.R. Borja Streets, City of Cagayan de Oro.’ Atty. Bagabuyo, since he started appearing in this case, acted alone, signed pleadings alone, made decisions alone, without in any way indicating to the court and the adverse party that he had to defer to the judgment of Atty. Dumlao on any matter pertaining to the instant case. He presented the defendant Dante Sarraga and the latter’s witness, Mr. Gaudencio Beduya, at the trial of this case and terminated the presentation of the defendant’s evidence without consulting, or intimating to the court and the adverse party that he had to consult Atty. Dumlao on the matter. The MEMORANDUM FOR THE DEFENDANTS dated April 8, 1996 was signed by him alone as counsel for the defendants. Atty. Rogelio Zosa Bagabuyo signed as lead counsel the defendants’ Motion for Reconsideration dated 26 June 1998 and the Urgent Rejoinder to Plaintiff’s Opposition To Our Motion for Reconsideration dated 03 August 1998, in which he indicated his address as 14th-10th Streets, Macasandig, City of Cagayan de Oro.’ He signed alone as counsel for the defendants an URGENT MOTION TO CANCEL SCHEDULED HEARING ON 31 July 1998 dated 28 July 1998 in which he indicated his address as ‘72 corners 14th-10th Streets, Macasandig, City of Cagayan de Oro.’ (Annex "F," Petition, pp. 196-197, rollo).

"Given the foregoing circumstances and the court a quo’s further observation that Atty. Bagabuyo ‘had been the one actively handling the case for the defendants since the pre-trial stage,’ x x x it is simply absurd for petitioners to even suggest that service upon Atty. Bagabuyo of a copy of the Order dated September 3, 1998 which denied their Motion for Reconsideration of the judgment was ineffective or did not bind them. To be sure, Section 2, Rule 13 of the 1997 Rules of Civil Procedure explicitly provides that ‘(i)f any party has appeared by counsel, service upon him shall be made upon his counsel or one of them x x x.’ The obvious meaning of said rule is that if a party is represented by more than one lawyer, service of pleadings, judgments and other papers may be made on any one of them.

Obviously, Atty. Bagabuyo was negligent which prevented petitioners from filing a timely notice of appeal. Atty. Bagabuyo knew that his clerk has no work experience in a law firm. He should have supervised her office performance very closely considering the importance of his legal calling. Time and again this Court has admonished law offices to adopt a system of distributing and receiving pleadings and notices, so that the lawyers will be promptly informed of the status of their cases. Thus, the negligence of clerks which adversely affect the cases handled by lawyers is binding upon the latter.17

Nothing is more settled than the rule that the negligence of counsel binds the client. However, the application of the general rule to a given case should be looked into and adopted according to the surrounding circumstances.18 Thus, exceptions to the said rule have been recognized by this Court: (1) where reckless or gross negligence of counsel deprives the client of due process of law; (2) when its application will result in outright deprivation of the client’s liberty or property; or (3) where the interests of justice so require.19 In such cases, courts must step in and accord relief to a client who suffered thereby.

Here, we find that the negligence of Atty. Bagabuyo falls under the said exceptions. Indeed, he committed gross negligence. Petitioners were deprived of their right to appeal when he failed to inform them immediately of the denial of their motion for reconsideration of the trial court’s decision. Ultimately, this will result in the deprivation of their property, specifically Lot 416-B.

In Apex Mining, Inc. vs. Court of Appeals,20 this Court ruled:

"If the incompetence, ignorance or inexperience of counsel is so great and the error committed as a result thereof is so serious that the client, who otherwise has a good cause, is prejudiced and denied his day in court, the litigation may be reopened to give the client another chance to present his case. Similarly, when an unsuccessful party has been prevented from fully and fairly presenting his case as a result of his lawyer’s professional delinquency or infidelity the litigation may be reopened to allow the party to present his side. Where counsel is guilty of gross ignorance, negligence and dereliction of duty, which resulted in the client’s being held liable for damages in a damage suit, the client is deprived of his day in court and the judgment may be set aside on such ground.

"In view of the foregoing circumstances, higher interests of justice and equity demand that petitioners be allowed to present evidence on their defense. Petitioners may not be made suffer for the lawyer’s mistakes and should be afforded another opportunity, at least, to introduce evidence on their behalf. To cling to the general rule in this case is only to condone rather than rectify a serious injustice to a party whose only fault was to repose his faith and entrust his innocence to his previous lawyers."

Petitioners cannot be faulted for failing to verify the status of their case with the trial court since a client has the right to expect that his lawyer will protect his interest during the hearing of his case.

"A client may reasonably expect that his counsel will make good his representations and has the right to expect that his lawyer will protect his interests during the trial of his case. For the general employment of an attorney to prosecute or defend a case or proceeding ordinarily vests in a plaintiffs attorney the implied authority to take all steps or do all acts necessary or incidental to the regular and orderly prosecution and management of the suit, and in a defendant’s attorney, the power to take such steps as he deems necessary to defend the suit and protect the interests of the defendant."21

Undoubtedly, the trial court gravely abused its discretion when it denied the petition for relief. Considering the circumstances obtaining here, petitioners should not be made to suffer the consequences of their counsel’s negligence. Hence, the period within which to file their petition for relief should be reckoned from their actual receipt of the order denying their motion for reconsideration, which is December 7, 1998. Accordingly, the petition for relief filed on December 16, 1998 was well within the sixty-day period prescribed in Section 3, Rule 38, of the 1997 Rules of Civil Procedure, as amended.

Both lower courts actually sacrificed justice for technicality. This Court has consistently ruled that it is a far better and more prudent course of action for a court to excuse a technical lapse and afford the parties a review of the case on the merits to attain the ends of justice rather than dispose of the case on technicality and cause a grave injustice to the parties, giving a false impression of speedy disposal of cases while actually resulting in more delay, if not a miscarriage of justice.22 Hence, it would be more in accord with justice and equity to allow the appeal by petitioners to enable the Court of Appeals to review the trial court’s decision.

The fundamental purpose of procedural rules is to afford each litigant every opportunity to present evidence in their behalf in order that substantial justice is achieved. Court litigations are primarily for the search of truth, and a liberal interpretation of the rules by which both parties are given the fullest opportunity to adduce proofs is the best way to ferret out such truth. The dispensation of justice and vindication of legitimate grievances should not be barred by technicalities.23

Hence, in cases where a party was denied this right, we have relaxed the stringent application of procedural rules in order to allow a party the chance to be heard. This policy applies with equal force in case of appeals. It has been consistently held that the dismissal of appeal on purely technical grounds is frowned upon.24

"x x x, dismissal of appeals purely on technical grounds is frowned upon and the rules of procedure ought not to be applied in a very rigid, technical sense, for they are adopted to help secure, not override, substantial justice, and thereby defeat their very aims. Verily, this Court, in the exercise of its equity jurisdiction, may even stay the dismissal of appeals grounded merely on technicalities, especially in this case where petitioners’ appeal appears prima facie worthy of the CA’s full consideration on the merits."25

WHEREFORE, the petition is GRANTED. The challenged Decision of the Court of Appeals dated June 20, 2000 in CA-GR SP No. 53765 is SET ASIDE. The Regional Trial Court, Branch 38, Cagayan de Oro City is DIRECTED to grant the petition for relief filed by petitioners and to GIVE DUE COURSE to their notice of appeal in Civil Case No. 93-186.

SO ORDERED.

HENRY L. MON, petitioner, vs.COURT OF APPEALS, HON. LEOPOLDO SERRANO, JR., DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD and SPOUSES LARRY and JOVITA VELASCO, respondents.

The Case

This is a petition for review assailing the Decision1 of the Court of Appeals in CA-G.R. SP No. 31763, which affirmed in toto the decision of the Department of Agrarian Reform Adjudication Board Central Office2 ("DARAB") in DARAB Case No. 0274. In its decision, the DARAB reversed the ruling of the DARAB Regional Adjudication Office3

("Regional Office") in favor of petitioner Henry L. Mon ("petitioner") in DARAB Case No. LU-043-89.

The Facts

The petition stems from an affidavit-complaint for ejectment filed on 4 December 1989 by petitioner against private respondents Jovita and Larry Velasco ("Spouses Velasco") with the Regional Office in San Fernando, La Union. In his complaint, petitioner alleged that he is the owner-administrator of a parcel of land ("land") planted to rice and tobacco in Sitio Torite, Barangay San Cristobal, Bangar, La Union. Petitioner further alleged that the Spouses Velasco, who cultivate the land, stole one sack of palay from the land’s harvest and subleased the land to a certain Boy or Ansong Maala during the last tobacco season.

In their Answer with Counterclaim, the Spouses Velasco denied petitioner’s allegations as fabricated to achieve his long desired objective to possess and cultivate the land. As affirmative and special defenses, the Spouses Velasco countered that they do not have the slightest intention to cheat petitioner and that the alleged hidden palay represented their lawful share of the harvest for the agricultural year 1988-1989. As counterclaim, the Spouses Velasco pointed out that since the beginning of their tenancy, petitioner had imposed on them a 50-50 sharing agreement, with the Spouses Velasco shouldering all expenses of production. Hence, the Spouses Velasco sought a reliquidation of the previous palay harvests to determine their just share.

After several hearings, the Regional Office required both parties to submit their respective position papers and exhibits. The Spouses Velasco submitted their position paper on 9 May 1990, while petitioner submitted his

position paper on 29 June 1990. The parties submitted supporting exhibits on later dates.

On 20 February 1991, the Regional Office issued an Order disposing as follows:

WHEREFORE, judgment is issued in favor of the complainant and against the respondents:

1. ORDERING the respondents to vacate and turn-over possession and cultivation to the complainant;

2. No pronouncement as to cost.

SO ORDERED.4

In arriving at its decision, the Regional Office found that Larry Velasco subleased the land to a certain Francisco Maala as shown by the affidavit of one Camilo Moskito. The Regional Office ruled that Section 27(2) of Republic Act No. 3844 ("RA 3844") prohibits subleasing and violation of this provision constitutes a ground for ejectment. On the other charge that the Spouses Velasco stole a sack of palay, the Regional Office held that there was no convincing evidence to support this accusation.

Aggrieved, the Spouses Velasco appealed under Section 2, Rule XIII, of the DARAB Revised Rules of Procedure. On 12 July 1993, the DARAB rendered a Decision reversing the Order of the Regional Office as follows:

WHEREFORE, premises considered, the appealed Order dated February 20, 1991, of the Regional Adjudication Officer at (sic) San Fernando, La Union, is hereby SET ASIDE and the instant case is hereby remanded to the DAR Provincial Adjudicator, DAR Provincial Adjudication Office, San Fernando, La Union, for:

1. Determination of the lease rentals to be paid by the defendants-tenants, spouses Larry and Jovita Velasco, to the plaintiff-landowner, Henry Mon; and

2. Reliquidation of the crop harvests from 1986 up to the time the lease rentals shall have been determined by the Provincial Adjudicator as above ordered; and ordering the plaintiff-landowner Henry Mon to return to the defendants-tenants spouses Larry and Jovita Velasco, the quantity of palay (or its equivalent value in cash) which may have been collected by the said plaintiff-landowner over and above the legal lease rentals as determined by the Provincial Adjudicator.

SO ORDERED.5

Unsatisfied with the DARAB Decision, petitioner filed an appeal with the Court of Appeals. On 9 December 1994, the Court of Appeals affirmed in toto the DARAB’s Decision thus:

WHEREFORE, premises considered, this Court AFFIRMS IN TOTO the appealed decision (dated July 12, 1993) of the Department of Agrarian Reform Adjudication Board (Central Office) in DARAB Case No. 0274. No pronouncement as to costs.

SO ORDERED.6

Hence, the instant petition.

The DARAB and the Court of Appeals’ Rulings

In reversing the Regional Office’s Order, the DARAB noted that both the Hearing Officer and the Regional Adjudicator overlooked that the agrarian laws had long abolished and declared illegal share tenancy. The Spouses Velasco had raised in their pleadings before the Regional Adjudication Office the validity of the share tenancy relationship that petitioner imposed on them. The DARAB held that share tenancy can no longer exist between landowner and tenant on rice lands. What the law allows is only a leasehold relationship, under which the tenant shall pay only a fixed rental to the landowner. The DARAB further held that petitioner has made much ado over the supposed "theft" of one sack of palay by Jovita Velasco. However, the DARAB pointed out that petitioner’s insistence on the outlawed 50-50 division of the net harvest deprives the tenants of an even larger amount corresponding to the portion of the harvest legally due to them under leasehold tenancy. The DARAB held that the parties must comply with the requirements of the law governing the leasehold system particularly on the payment of a fixed rental by the tenant-lessee to the landowner-lessor. However, the records do not contain sufficient data covering the gross harvests and the deductible expenses, which could serve as legal basis for the DARAB to compute the fixed rental the Spouses Velasco should pay petitioner. For this reason, the DARAB remanded the case to the DAR Provincial Adjudicator assigned in San Fernando, La Union. The DARAB ordered the Provincial Adjudicator to reliquidate the crop harvests, determine the gross harvests and compute the lease rental after due notice to the parties and reception of evidence on the matter.

In affirming in toto the DARAB’s Decision, the Court of Appeals simply held that there could be no change of theory when a case is already on appeal. The Court of Appeals referred to petitioner’s claim that the relationship involved in the case is not that of landlord-tenant under agrarian laws but that of lessor-lessee under the lease provisions of

the Civil Code.

The Issues

In his memorandum, petitioner raises the following issues:

THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN ADOPTING THE POSTURE OF PUBLIC RESPONDENTS THAT PETITIONER CHANGED THE THEORY OF THE CASE ON THE CAUSE OF ACTION AT THIS STAGE OF THE PROCEEDINGS;

THE COURT OF APPEALS ERRED IN AFFIRMING IN TOTO THE DECISION OF THE DARAB CENTRAL OFFICE, DILIMAN, QUEZON CITY AND IN DISMISSING THE FINDINGS OF FACT AND THE ORDER OF THE DARAB REGIONAL ADJUDICATION OFFICE OF SAN FERNANDO, LA UNION DATED FEBRUARY 20, 1991, WHICH IS SUPPORTED BY SUBSTANTIAL EVIDENCE.7

The Court’s Ruling

The petition is bereft of merit.

Changing Theory of the Case

Petitioner argues that from the beginning, the arrangement between him and the Spouses Velasco - that of sharecropping as a means to pay the lease of the land - did not result in an agricultural leasehold contract. Petitioner contends that the Spouses Velasco are civil law lessees, which did not give them the right to be tenants under the agricultural leasehold system. Petitioner insists that since the Regional Office found that the Spouses Velasco sublet the land in violation of Section 27(2) of RA 3844, he has the right under the same RA 3844 to evict the Spouses Velasco from his land.

Petitioner’s stance before the Court of Appeals is that the lease provisions in the Civil Code apply to the present case. On the contrary, we find that this is not an ejectment case between a civil law lessor and lessee but a dispute between an agricultural landlord and tenant. If this were an ejectment case between a civil law lessor and lessee, petitioner should have brought his action to the appropriate trial court instead of the DARAB Regional Adjudication Office. Petitioner should also not have invoked subletting as a prohibited act under RA 3844. Obviously, petitioner is clutching at straws in changing his theory of the case on appeal.

The settled rule in this jurisdiction is that a party cannot change his theory of the case or his cause of action on appeal. We have previously held that "courts of justice have no jurisdiction or power to decide a question not in issue."8 A judgment that goes outside the issues and purports to adjudicate something on which the court did not hear the parties, is not only irregular but also extra-judicial and invalid.9 The rule rests on the fundamental tenets of fair play. In the present case, the Court must stick to the issue litigated in the DARAB and in the Court of Appeals, which is whether petitioner has the right to eject the Spouses Velasco from the land under RA 3844.

Furthermore, petitioner’s insistence on his new theory is fatal to his cause. This is because in a lease contract under the Civil Code,10 the rule is that the lessee can sublease the leased property, unless there is an express prohibition against subletting in the contract itself. To bar the lessee from subletting, the contract of lease must expressly stipulate the prohibition on subletting.11 Petitioner did not allege nor present any contract that prohibited subletting.

Disregarding Issue of Ejectment

Petitioner contends that the Spouses Velasco tried to evade the issue of ejectment by raising the issue of share tenancy and praying for reliquidation of the sharing agreement between them. Petitioner is puzzled that on appeal, the DARAB altogether ignored the issue of ejectment and ruled solely on the issue of share tenancy. Petitioner further argues that the issue of share tenancy does not preclude in any way petitioner from exercising his right to eject his tenants for valid grounds. Petitioner insists that the Spouses Velasco committed theft and subleased the land they were tilling in violation of RA 3844. With these illegal acts of the Spouses Velasco, petitioner claims he could not maintain the relationship knowing that there is always a possibility the Spouses Velasco might commit these illegal acts again. Petitioner asserts that the DARAB justified the "theft" by stating that petitioner’s imposition of share tenancy may have deprived the Spouses Velasco of an even larger amount corresponding to the harvest legally due them. Petitioner counters that landowners also deserve protection from the commission of illegal acts by their tenants.

Section 3 of Republic Act No. 1199 or The Agricultural Tenancy Act of the Philippines ("RA 1199") defines "agricultural tenancy" as the "physical possession by a person of land devoted to agriculture belonging to, or legally possessed by, another for the purpose of production through the labor of the former and of the members of his immediate farm household, in consideration of which the former agrees to share the harvest with the latter, or to pay a price certain or ascertainable, either in produce or in money, or in both." Under RA 1199, there are two systems of agricultural tenancy established: (1) the share tenancy and (2) the leasehold tenancy.12

"Share tenancy" exists whenever "two persons agree on a joint undertaking for agricultural production wherein one party furnishes the land and the other his labor, with either or both contributing any one or several of the items of production, the tenant cultivating the land with the aid of labor available from members of his immediate farm household, and the produce thereof to be divided between the landholder and the tenant in proportion to their

respective contributions."13 On the other hand, "leasehold tenancy" exists "when a person who, either personally or with the aid of labor available from members of his immediate farm household, undertakes to cultivate a piece of agricultural land susceptible of cultivation by a single person together with members of his immediate farm household, belonging to or legally possessed by, another in consideration of a price certain or ascertainable to be paid by the person cultivating the land either in percentage of the production or in a fixed amount in money, or in both."14

On 8 August 1963, RA 3844 or the Agricultural Land Reform Code abolished and outlawed share tenancy and put in its stead the agricultural leasehold system. On 10 September 1971, Republic Act No. 6389 ("RA 6389") amending RA 3844 declared share tenancy relationships as contrary to public policy. RA 6389 did not entirely repeal RA 1199 and RA 3844 even if RA 6389 substantially modified them.15 Thus, RA 3844 as amended by RA 6389 ("RA 3844 as amended") is the governing statute in this case. Petitioner filed his complaint on 8 December 1989 or long after the approval of RA 6389 but before Republic Act No. 6657 or the Comprehensive Agrarian Reform Law of 1988 ("RA 6657"). Notably, RA 6657 only expressly repealed Section 35 of RA 3844 as amended.

Section 4 of RA 3844 as amended provides:

SECTION. 4. Automatic Conversion to Agricultural Leasehold. — Agricultural share tenancy throughout the country, as herein defined, is hereby declared contrary to public policy and shall be automatically converted to agricultural leasehold upon the effectivity of this section.

The credit assistance traditionally extended by a land-owner and a local lender to a tenant under the share tenancy systems in agriculture for production loans and loans for the purchase of work animals, tillage equipment, seeds, fertilizers, poultry, livestock feed and other similar items, and advances for the subsistence of a lease and his family, may be continued by said landowner and local lender: Provided, That the total charges on these loans, including interest and service, inspection and issuance fees, shall not exceed fourteen per cent per calendar year and the principal thereof shall not be subject to upward adjustment even in case of extraordinary inflation and/or devaluation: Provided, further, That on all loans or advances other than money, the interest shall be computed on the basis of current price of the goods at the time when the loans or advances were made.

Any work animal and tillage equipment in the possession of a share tenant but owned by a landowner shall automatically be sold to said tenant on installment for a period not exceeding five years and at a price agreed upon by the parties: Provided, however, That the tenant shall pay in advance ten per cent of the price agreed upon.

Existing share tenancy contracts may continue in force and effect in any region or locality, to be governed in the meantime by the pertinent provisions of Republic Act Numbered Eleven hundred and ninety-nine, as amended, until the end of the agricultural year when the President of the Philippines shall have organized by executive order the Department of Agrarian Reform in accordance with the provisions of this amendatory Act, unless such contracts provide for a shorter period or the tenant sooner exercises his option to elect the leasehold system: Provided, That in order not to jeopardize international commitments, lands devoted to crops covered by marketing allotments shall be made the subject of a separate proclamation by the President upon the recommendation of the department head that adequate provisions, such as the organization of cooperatives, marketing agreement, or other similar workable arrangements, have been made to insure efficient management on all matters requiring synchronization of the agricultural with the processing phases of such crops.

In case some agricultural share tenants do not want to become agricultural lessees of their respective landholding, they shall, with the assistance of the Bureau of Agrarian Legal Assistance, notify in writing the landowners concerned. In such a case, they shall have one agricultural year from the date of the notice to accept leasehold relationship, otherwise the landowner may proceed to their ejectment. (Emphasis supplied)

Section 5 of RA 3844 as amended reiterated the automatic conversion of share tenancy to agricultural leasehold thus -

SECTION 5. Establishment of Agricultural Leasehold Relation. — The agricultural leasehold relation shall be established by operation of law in accordance with Section four of this Code and, in other cases, either orally or in writing, expressly or impliedly. (Emphasis supplied)

An agricultural leasehold relationship exists by operation of law when there is concurrence of an agricultural lessor (one who furnishes the land as owner, civil law lessee, usufructuary or legal possessor) and agricultural lessee (the person who personally cultivates the land). This is clearly stated in Section 6 of RA 3844 as amended, which reads:

SECTION 6. Parties to Agricultural Leasehold Relation. — The agricultural leasehold relation shall be limited to the person who furnishes the landholding, either as owner, civil law lessee, usufructuary, or legal possessor, and the person who personally cultivates the same.

The essential requisites of tenancy relationship are: (1) the parties are the landholder and the tenant; (2) the subject is agricultural land; (3) there is consent; (4) the purpose is agricultural production; and (5) there is consideration.16 The records establish that the Spouses Velasco are agricultural tenants of petitioner under the legal definitions. There is no dispute that petitioner is the owner-administrator of agricultural land planted to rice and tobacco by the Spouses Velasco who petitioner himself referred to as his "tenants." There is also no dispute

that the "50-50 share cropping system between them was agreed upon by their predecessors and was subsequently carried by consensual agreement of the parties up to the present." Taken together, all these clearly establish the status of the Spouses Velasco as agricultural tenants. Moreover, whether a person is an agricultural tenant or not is basically a question of fact. As a rule, this Court does not disturb the findings of fact of the DARAB when affirmed by the Court of Appeals as in the present case.17

Section 7 of RA 3844 as amended provides that once there is a leasehold relationship, as in the present case, the landowner cannot eject the agricultural tenant from the land unless authorized by the court for causes provided by law. RA 3844 as amended expressly recognizes and protects an agricultural leasehold tenant’s right to security of tenure, as follows:

SECTION 7. Tenure of Agricultural Leasehold Relation. — The agricultural leasehold relation once established shall confer upon the agricultural lessee the right to continue working on the landholding until such leasehold relation is extinguished. The agricultural lessee shall be entitled to security of tenure on his landholding and cannot be ejected therefrom unless authorized by the Court for causes herein provided. (Emphasis supplied)

RA 3844 as amended vests the Spouses Velasco, as agricultural leasehold tenants, certain specific rights. These rights include the right to continue working the land as well as the right against ejectment from the land except for causes provided by law as determined by the courts. This is the clear import of Section 36 of RA 3844 as amended:

SECTION 36. Possession of Landholding; Exceptions. — Notwithstanding any agreement as to the period or future surrender, of the land, an agricultural lessee shall continue in the enjoyment and possession of his landholding except when his dispossession has been authorized by the Court in a judgment that is final and executory if after due hearing it is shown that:

(1) The agricultural lessor-owner or a member of his immediate family will personally cultivate the landholding or will convert the landholding, if suitably located, into residential, factory, hospital or school site or other useful non-agricultural purposes: Provided; That the agricultural lessee shall be entitled to disturbance compensation equivalent to five years rental on his landholding in addition to his rights under Sections twenty-five and thirty-four, except when the land owned and leased by the agricultural lessor, is not more than five hectares, in which case instead of disturbance compensation the lessee may be entitled to an advanced notice of at least one agricultural year before ejectment proceedings are filed against him: Provided, further, That should the landholder not cultivate the land himself for three years or fail to substantially carry out such conversion within one year after the dispossession of the tenant, it shall be presumed that he acted in bad faith and the tenant shall have the right to demand possession of the land and recover damages for any loss incurred by him because of said dispossessions.

(2) The agricultural lessee failed to substantially comply with any of the terms and conditions of the contract or any of the provisions of this Code unless his failure is caused by fortuitous event or force majeure;

(3) The agricultural lessee planted crops or used the landholding for a purpose other than what had been previously agreed upon;

(4) The agricultural lessee failed to adopt proven farm practices as determined under paragraph 3 of Section twenty-nine;

(5) The land or other substantial permanent improvement thereon is substantially damaged or destroyed or has unreasonably deteriorated through the fault or negligence of the agricultural lessee;

(6) The agricultural lessee does not pay the lease rental when it falls due: Provided, That if the non-payment of the rental shall be due to crop failure to the extent of seventy-five per centum as a result of a fortuitous event, the non-payment shall not be a ground for dispossession, although the obligation to pay the rental due that particular crop is not thereby extinguished; or

(7) The lessee employed a sub-lessee on his landholding in violation of the terms of paragraph 2 of Section twenty-seven.

Under Section 37 of the same RA 3844, the burden of proving lawful cause for ejecting the lessee falls on the lessor-landowner, thus -

SECTION 37. Burden of Proof . — The burden of proof to show the existence of a lawful cause for the ejectment of an agricultural lessee shall rest upon the agricultural lessor.

The Regional Office found the allegation of theft unsupported by evidence while that of subleasing as proven by the statement of a certain Francisco Maala and affidavit of one Camilo Moskito. Both the DARAB and the Court of Appeals did not make a finding on this point. Not being a trier of facts, this Court cannot pass upon these factual issues. It is futile to determine the truth or falsity of these accusations in view of the equity principle that the DARAB applied. In reversing the Regional Office’s decision to turn over possession of the land to petitioner, the DARAB

applied the equity principle that he who comes to court must come with clean hands.18 Otherwise, he not only taints his name, but also ridicules the very structure of established authority.19 A court may deny a litigant relief on the ground that his conduct has been inequitable, unfair, dishonest, fraudulent, or deceitful as to the controversy in issue.20 We agree with the DARAB that we cannot close our eyes and remain indifferent to the perpetuation of an act that the law has long ago declared illegal and contrary to public policy. The Court cannot allow petitioner to invoke Section 27(2) of RA 3844 prohibiting subletting when he himself violated Sections 4 and 5 of the same RA 3844 outlawing share tenancy.

We uphold the remand of the case to the DAR Provincial Adjudicator to determine and fix the rentals in accordance with Section 34 of RA 3844 as amended. The law mandates that not more than 25% of the average normal harvest shall constitute the just and fair rental rate for leasehold.21 Section 34 of RA 3844 as amended reads:

SECTION 34. Consideration for the Lease of Riceland and Lands Devoted to Other Crops. — The consideration for the lease of riceland and lands devoted to other crops shall not be more than the equivalent of twenty-five per centum of the average normal harvest or if there have been no normal harvests, then the estimated normal harvest during the three agricultural years immediately preceding the date the lease-hold was established after deducting the amount used for seeds and the cost of harvesting, threshing, loading, hauling and processing, whichever are applicable: Provided, That if the land has been cultivated for a period of less than three years, the initial consideration shall be based on the average normal harvest, or if there have been no normal harvests, then the estimated normal harvest during the preceding years when the land was actually cultivated, or on the harvest of the first year in the case of newly cultivated lands, if that harvest is normal harvest, the final consideration shall be based on the average normal harvest during these three preceding agricultural years.

In the absence of any agreement between the parties as to the rental, the Court of Agrarian Relations shall summarily determine a provisional rental in pursuance of existing laws, rules and regulations and production records available in the different field units of the department, taking into account the extent of the development of the land at the time of the conversion into leasehold and the participation of the lessee in the development thereof. This provisional rental shall continue in force and effect until a fixed rental is finally determined. The court shall determine the fixed rental within thirty days after the petition is submitted for decision.

If capital improvements are introduced on the farm not by the lessee to increase its productivity, the rental shall be increased proportionately to the consequent increase in production due to said improvements. In case of disagreement, the Court shall determine the reasonable increase in rental.

WHEREFORE, we DENY the petition and AFFIRM the assailed Decision dated 9 December 1994 of the Court of Appeals in CA-G.R. SP No. 31763. Costs against petitioner.

SO ORDERED.

NOE TOLEDO y TAMBOONG, petitioner, vs.PEOPLE OF THE PHILIPPINES, respondent.

This is a petition for review of the Decision1 of the Court of Appeals (CA) in CA-G.R. CR No. 23742 affirming on appeal, the Decision2 of the Regional Trial Court (RTC) of Odiongan, Romblon, Branch 82, in Criminal Case No. OD-861, convicting the petitioner of homicide.

In an Information filed in the RTC of Romblon, the petitioner was charged with homicide allegedly committed as follows:

That on or about the 16th day of September 1995, at around 9:30 o’clock in the evening, in Barangay Libertad, municipality of Odiongan, province of Romblon, Philippines, and within the jurisdiction of this Honorable Court, the said accused, with intent to kill, did then and there, willfully, unlawfully and feloniously attack, assault and stab with a bolo, one RICKY F. GUARTE, which causes (sic) his untimely death.

Contrary to law.3

In due course, the prosecution adduced evidence against the petitioner which was synthesized by the appellate court as follows:

On September 16, 1995, appellant went to a black-smith who made the design of his bolo. When he went home to Tuburan, Odiongan, Romblon late in the afternoon (TSN, September 4, 1998, p. 2), appellant saw the group of Lani Famero, Michael Fosana, Rex Cortez and Ricky Guarte drinking gin at the house of the Spouses Manuel and Eliza Guarte, Ricky’s parents. Appellant’s house is about five (5) meters away from the house of Spouses Guarte. Appellant requested the group of Ricky to refrain from making any noise. Thereupon, appellant proceeded inside his house and went to sleep (ibid., p. 3). Around 9:00 p.m., Gerardo Faminia, Eliza Guarte’s brother arrived at the Guarte house and asked for any left-over food (TSN, August 5, 1998, p. 3). Eliza prepared dinner for him and after Gerardo finished eating, he went home accompanied by Ricky (TSN, April 26, 1996, p. 5). Gerardo’s home is about twelve (12) meters away from the Guarte home (TSN, February 17, 1997, p. 11). Minutes later, Ricky came back and together with Lani, Rex and Michael, went to sleep at the Guarte house. They had not laid down for long when they heard stones being hurled at the roof of the house. The stoning was made three (3) times (TSN, August 5, 1998, pp. 2-3). Ricky rose from bed and peeped through a window. He saw appellant stoning their house. Ricky went out of the house and proceeded to appellant’s house. Ricky asked appellant, his uncle, why he

was stoning their house. Appellant did not answer but met Ricky at the doorstep of his (appellant’s) house (TSN, April 26, 1996, p. 6; August 5, 1998, pp. 4-5) and, without any warning, stabbed Ricky on the abdomen with a bolo (TSN, August 5, 1998, p. 8). Eliza had followed his son Ricky and upon seeing that Ricky was stabbed, shouted for help (TSN, February 17, 1997, p. 13). Lani heard Eliza’s cry for help and immediately rushed outside the house. Lani saw Ricky leaning on the ground and supporting his body with his hands. Lani helped Ricky stand up and brought him to the main road. Lani asked Ricky who stabbed him and Ricky replied that it was appellant who stabbed him. Then Docloy Cortez arrived at the scene on board his tricycle. Accordingly, Ricky was put on the tricycle and taken to the Romblon Provincial Hospital (TSN, January 19, 1998, pp. 4-6).

At the Romblon Provincial Hospital, Dr. Noralie Fetalvero operated on Ricky that very night. Ricky had sustained one (1) stab wound but due to massive blood loss, he died while being operated on (TSN, November 24, 1997, pp. 2, 6-7). Dr. Fetalvero issued a Medico-Legal Certificate showing the injuries sustained by Ricky, thus:

Stab wound, left chest with gastric & transverse colon evisceration measuring 6 cms. long, irregular-edged at 8th ICS, left penetrating (operative findings):

(1) abdominal cavity perforating the stomach (thru & thru) and the left lobe of the liver

(2) thoracic cavity thru the left dome of the diaphragm perforating the lower lobe of the left lung.

The Certificate of Death issued by Dr. Fetalvero stated the cause of Ricky’s death as:

CAUSES OF DEATH:

Immediate cause : a. Cardiorespiratory Arrest

Antecedent cause : b. Hypovolemic shock

Underlying cause : c. Multiple thoraco-abdominal

injury 2º to stab wound

The Evidence of the Petitioner

The petitioner adduced evidence that at around 5:00 p.m. on September 16, 1995, he was on his way home at Tuburan, Odiongan, Romblon. He saw his nephew, Ricky Guarte, and the latter’s friends, Michael Fosana, Rex Cortez, and Lani Famero, about five meters away from his house, having a drinking spree. He ordered them not to make loud noises, and they obliged. He then went to his house, locked the door with a nail, and went to sleep. However, he was awakened at around 9:30 p.m. by loud noises coming from Ricky and his three companions. He peeped through the window grills of his house and admonished them not to make any loud noises. Ricky, who was then already inebriated, was incensed; he pulled out a balisong, pushed the door, and threatened to stab the petitioner. The petitioner pushed their sala set against the door to block the entry of Ricky, but the latter continued to push the door open with his hands and body. The petitioner ran to the upper portion of their house and got his bolo.5 He returned to the door and pushed it with all his might using his left hand. He then pointed his bolo, which was in his right hand, towards Ricky. The bolo accidentally hit Ricky on the stomach, and the latter lost his balance and fell to the floor. The petitioner, thereafter, surrendered to the barangay captain at 11:00 a.m. on September 17, 1995.

After trial, the court rendered judgment finding the petitioner guilty as charged. The fallo of the decision reads:

WHEREFORE, premises considered, NOE TOLEDO is hereby found GUILTY beyond reasonable doubt of homicide with the mitigating circumstance of voluntary surrender and is meted the indeterminate penalty of from six (6) years and one (1) day of prision mayor minimum, as minimum, to twelve (12) years and one (1) day of reclusion temporal minimum, as maximum.

Accused is condemned to pay the amount of P50,000.00 as civil liability to the heirs of the victim.6

The trial court did not give credence and probative weight to the testimony of the petitioner that his bolo accidentally hit the victim on the stomach.

On appeal in the CA, the petitioner raised the following issue in his brief as appellant:

WHETHER OR NOT ACCUSED-APPELLANT CAN BE CRIMINALLY HELD LIABLE FOR THE ACCIDENTAL DEATH OF RICKY GUARTE7

Invoking Article 12, paragraph 4 of the Revised Penal Code, the petitioner claimed that he stabbed the victim by accident; hence, he is exempt from criminal liability for the death of the victim.

The CA rendered judgment affirming the assailed decision with modifications. The CA also denied the petitioner’s motion for reconsideration thereof. The appellate court ruled that the petitioner failed to prove that he acted in self-

defense.

Aggrieved, the petitioner filed the instant petition for review, contending that the CA erred in not finding that he acted in self-defense when he stabbed the victim by accident and prays that he be acquitted of the crime charged.

The sole issue in this case is whether or not the petitioner is guilty beyond reasonable doubt of homicide based on the evidence on record.

The petitioner contends that the CA committed a reversible error when it affirmed the decision of the RTC convicting him of homicide, on its finding that he failed to prove that he acted in complete self-defense when the victim was hit by his bolo. The petitioner insists that he acted in complete self-defense when his bolo accidentally hit the victim on the stomach.

For its part, the Office of the Solicitor General asserts that the petitioner failed to prove self-defense with clear and convincing evidence. Hence, the decision of the CA affirming, on appeal, the decision of the RTC is correct.

The contention of the petitioner has no merit.

The petitioner testified that his bolo hit the victim accidentally. He asserted in the RTC and in the CA that he is exempt from criminal liability for the death of the victim under Article 12, paragraph 4 of the Revised Penal Code which reads:

4. Any person who, while performing a lawful act with due care, causes an injury by mere accident without fault or intention of causing it.

In his brief in the CA, the petitioner argued that:

In the case at bar, with all due respect, contrary to the findings of the lower court, it is our humble submission that the death of Ricky Guarte was merely a sad and unwanted result of an accident without fault or intention of causing it on the part of accused-appellant. We submit, there were clear and indubitable factual indicators overlooked by the lower court, bolstering the theory of the defense on accidental death.8

However, the petitioner changed gear, so to speak, and now alleges that he acted in self-defense when he stabbed the victim. As such, he contends, he is not criminally liable under Article 11, paragraph 1 of the Revised Penal Code which reads:

Art. 11. Justifying circumstances. – The following do not incur any criminal liability:

1. Anyone who acts in defense of his person or rights, provided that the following circumstances concur:

First. Unlawful aggression;

Second. Reasonable necessity of the means employed to prevent or repel it:

Third. Lack of sufficient provocation on the part of the person defending himself.

The petitioner avers that he was able to prove the essential elements of complete self-defense, thus:

A close scrutiny of the records of the case would show that the petitioner acted in self-defense.

The essential requisites of self-defense are: (1) unlawful aggression on the part of the victim; (2) reasonable scrutiny of the means employed to prevent or repel it; and (3) lack of sufficient provocation on the part of the person defending himself (People vs. Silvano, 350 SCRA 650)9

However, the petitioner also claims that his bolo accidentally hit the stomach of the victim.

It is a matter of law that when a party adopts a particular theory and the case is tried and decided upon that theory in the court below, he will not be permitted to change his theory on appeal. The case will be reviewed and decided on that theory and not approached and resolved from a different point of view. To permit a party to change his theory on appeal will be unfair to the adverse party.10

The petitioner is proscribed from changing in this Court, his theory of defense which he adopted in the trial court and foisted in the CA – by claiming that he stabbed and killed the victim in complete self-defense. The petitioner relied on Article 12, paragraph 4 of the Revised Penal Code in the trial and appellate courts, but adopted in this Court two divergent theories – (1) that he killed the victim to defend himself against his unlawful aggression; hence, is justified under Article 11, paragraph 1 of the Revised Penal Code; (2) that his bolo accidentally hit the victim and is, thus, exempt from criminal liability under Article 12, paragraph 4 of the Revised Penal Code.

It is an aberration for the petitioner to invoke the two defenses at the same time because the said defenses are

intrinsically antithetical.11 There is no such defense as accidental self-defense in the realm of criminal law.

Self-defense under Article 11, paragraph 1 of the Revised Penal Code necessarily implies a deliberate and positive overt act of the accused to prevent or repel an unlawful aggression of another with the use of reasonable means. The accused has freedom of action. He is aware of the consequences of his deliberate acts. The defense is based on necessity which is the supreme and irresistible master of men of all human affairs, and of the law. From necessity, and limited by it, proceeds the right of self-defense. The right begins when necessity does, and ends where it ends.12 Although the accused, in fact, injures or kills the victim, however, his act is in accordance with law so much so that the accused is deemed not to have transgressed the law and is free from both criminal and civil liabilities.13 On the other hand, the basis of exempting circumstances under Article 12 of the Revised Penal Code is the complete absence of intelligence, freedom of action, or intent, or the absence of negligence on the part of the accused.14 The basis of the exemption in Article 12, paragraph 4 of the Revised Penal Code is lack of negligence and intent. The accused does not commit either an intentional or culpable felony. The accused commits a crime but there is no criminal liability because of the complete absence of any of the conditions which constitute free will or voluntariness of the act.15 An accident is a fortuitous circumstance, event or happening; an event happening wholly or partly through human agency, an event which under the circumstances is unusual or unexpected by the person to whom it happens.16

Self-defense, under Article 11, paragraph 1, and accident, under Article 12, paragraph 4 of the Revised Penal Code, are affirmative defenses which the accused is burdened to prove, with clear and convincing evidence. Such affirmative defenses involve questions of facts adduced to the trial and appellate courts for resolution. By admitting killing the victim in self-defense or by accident without fault or without intention of causing it, the burden is shifted to the accused to prove such affirmative defenses. He should rely on the strength of his own evidence and not on the weakness of that of the prosecution. If the accused fails to prove his affirmative defense, he can no longer be acquitted.

The petitioner failed to prove that the victim was killed by accident, without fault or intention on his part to cause it. The petitioner was burdened to prove with clear and convincing evidence, the essential requisites for the exempting circumstance under Article 12, paragraph 4, viz:

1. A person is performing a lawful act;

2. With due care;

3. He causes an injury to another by mere accident;

4. Without fault or intention of causing it.

To prove his affirmative defense, the petitioner relied solely on his testimony, thus:

First. If the testimony of the petitioner is to be believed, the force of the struggle between him and the victim would have caused the door to fall on the petitioner. However, the petitioner failed to adduce real evidence that the door of his house was destroyed and that he sustained any physical injuries,20 considering that he was only five inches away from the door.

Second. If the door fell to the sala of the house of the petitioner, the victim must have fallen on top of the door. It is incredible that the bolo of the petitioner could have hit the stomach of the victim. The claim of the petitioner that he managed to step aside and avoid being crushed by the door belies his claim that the bolo accidentally hit the victim on the stomach.

Third. When he surrendered to the barangay captain and to the policemen, he failed to relate to them that his bolo accidentally hit the stomach of the victim:

Fourth. There is no evidence that the petitioner surrendered either the bolo that accidentally hit the victim or the balisong held by the deceased to the barangay captain or the police authorities. Such failure of the petitioner negates his claim that his bolo accidentally hit the stomach of the victim and that he acted in self-defense.22

Fifth. To prove self-defense, the petitioner was burdened to prove the essential elements thereof, namely: (1) unlawful aggression on the part of the victim; (2) lack of sufficient provocation on the part of the petitioner; (3) employment by him of reasonable means to prevent or repel the aggression. Unlawful aggression is a condition sine qua non for the justifying circumstances of self-defense, whether complete or incomplete.23 Unlawful aggression presupposes an actual, sudden, and unexpected attack, or imminent danger thereof, and not merely a threatening or intimidating attitude.24 We agree with the ruling of the CA that the petitioner failed to prove self-defense, whether complete or incomplete:

The evidence on record revealed that there is no unlawful aggression on the part of Ricky. While it was established that Ricky was stabbed at the doorstep of appellant’s house which would give a semblance of verity to appellant’s version of the incident, such view, however, is belied by the fact that Ricky arrived at appellant’s house unarmed and had only one purpose in mind, that is, to ask appellant why he threw stones at his (Ricky’s) house. With no weapon to attack appellant, or defend himself, no sign of hostility may be deduced from Ricky’s arrival at appellant’s doorstep. Ricky was not threatening to attack nor in any manner did he manifest any aggressive act that may have imperiled appellant’s well-being. Ricky’s want of any weapon when he arrived at appellant’s doorstep is supported by the fact that only one weapon was

presented in court, and that weapon was the bolo belonging to appellant which he used in stabbing Ricky. Thus, appellant’s version of the events does not support a finding of unlawful aggression. In People vs. Pletado, the Supreme Court held:

"xxx (F) or aggression to be appreciated, there must be an actual, sudden, [un]expected attack or imminent danger thereof, and not merely a threatening or intimidating attitude (People vs. Pasco, Jr., supra, People vs. Rey, 172 SCRA 149 [1989]) and the accused must present proof of positively strong act of real aggression (Pacificar vs. Court of Appeals, 125 SCRA 716 [1983]). Unlawful aggression must be such as to put in real peril the life or personal safety of the person defending himself or of a relative sought to be defended and not an imagined threat."

Appellant was not justified in stabbing Ricky. There was no imminent threat to appellant’s life necessitating his assault on Ricky. Unlawful aggression is a condition sine qua non for the justifying circumstance of self-defense. For unlawful aggression to be appreciated, there must be an actual, sudden, unexpected attack or imminent danger thereof, not merely a threatening or intimidating attitude. In the absence of such element, appellant’s claim of self-defense must fail.

Further, appellant’s plea of self-defense is not corroborated by competent evidence. The plea of self-defense cannot be justifiably entertained where it is not only uncorroborated by any separate competent evidence but is in itself extremely doubtful.25

Sixth. With the failure of the petitioner to prove self-defense, the inescapable conclusion is that he is guilty of homicide as found by the trial court and the CA. He cannot even invoke Article 12, paragraph 4 of the Revised Penal Code.26

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The assailed decision of the Court of Appeals is AFFIRMED. Costs against the petitioner.

SO ORDERED.

SIXTO M. BAYAS and ERNESTO T. MATUDAY, petitioners, vs.THE SANDIGANBAYAN (FIRST DIVISION), THE PEOPLE OF THE PHILIPPINES and THE OFFICE OF THE SPECIAL PROSECUTOR, respondents.

May pretrial stipulations duly signed by the accused and their counsel be unilaterally withdrawn before the commencement of the trial? To this main issue, the answer is "No." Stipulations freely and voluntarily made are valid and binding and will not be set aside unless for good cause. The Rules of Court mandate parties in a criminal case to stipulate facts. Once they have validly and voluntarily signed the stipulations, the accused and their counsel may not set these aside on the mere pretext that they may be placed at a disadvantage during the trial.

Statement of the Case

Before us is a Petition for Certiorari under Rule 65 of the Rules of Court, praying for the setting aside of the April 28, 2000[1] and the May 26, 2000[2] Orders of the Sandiganbayan[3] (SBN) in Criminal Case Nos. 25280-82. The first Order denied petitioners’ Motion to Withdraw the Joint Stipulation of Facts and Documents,[4] while the second denied reconsideration.[5]

The Facts

On May 6, 1999, three Informations[6] were filed before the SBN, charging Petitioners Ernesto T. Matuday and Sixto M. Bayas with violation of Section 3(e) of RA No. 3019, as amended; and two counts of malversation through falsification penalized under Article 217, in relation to Article 171, of the Revised Penal Code. They were charged in their capacities as municipal mayor and municipal treasurer, respectively, of the Municipality of Kabayan, Province of Benguet.

During their arraignment on September 21, 1999, petitioners pled "not guilty." The pretrial conference scheduled on October 15, 1999 was cancelled and reset to November 5, 1999, because the counsel for the accused, Atty. Jose M. Molintas, was not prepared.[7] On November 5, 1999, the pretrial was again cancelled because of the absence of Atty. Molintas, who was allegedly "suffering from the flu." Nonetheless, the Sandiganbayan urged the accused to discuss with their counsel the stipulation of facts drafted by Ombudsman Prosecutor II Evelyn T. Lucero. They were asked to do so, so that at the resumption of the pretrial on December 10, 1999, they could expeditiously pass upon all other matters that still remained to be resolved.[8]

On December 10, 1999, the parties submitted a "Joint Stipulation of Facts and Documents," which had been duly signed by the two accused (herein petitioners), Atty. Molintas and Prosecutor Lucero. It is reproduced hereunder:

"JOINT STIPULATION OF FACTS AND DOCUMENTS

"COME NOW the accused, counsel for the accused and the Prosecution, by and through the undersigned Special Prosecution Officer, Office of the Special Prosecutor, unto the Honorable Court, most respectfully aver: THAT -

"1. After a conference the Defense and the Prosecution admitted the following facts as follows:

"a. Accused Ernesto Matuday was then the Municipal Mayor and accused Sixto Bayas was and [is] still the Municipal Treasurer and designated Municipal Accountant both of Kabayan, Benguet during the period relevant to this case;

"b. Both of the accused admit the disbursement of the amount of P510,000.00 and P55,000.00.

"2. The Prosecution and Defense jointly admit the following documents as their respective documentary exhibits x x x ([with] reservation to mark additional exhibits during the trial of the case) as follows:

On January 14, 2000, the pretrial conference was again scuttled due to the absence of Atty. Molintas. The hearing was rescheduled for February 14, 2000. However, on February 7, 2000, he moved to withdraw as counsel for the accused. His motion was granted by the anti-graft court in an Order dated February 14, 2000. In the same Order, the pretrial was rescheduled for March 31, 2000, to give the accused ample time to employ a new counsel.

On April 26, 2000, the accused, represented by their new counsel, Atty. Cecilia M. Cinco, moved to withdraw the Joint Stipulation of Facts and Documents. Specifically, they sought to withdraw, first, Stipulation 1(b) which states that "Both the accused admit the disbursement of the amount of P510,000.00 and P55,000.00"; and second, Exhibits "1" to "8-a". They invoked their constitutional right to be presumed innocent until proven guilty.

Ruling of the Sandiganbayan

The Sandiganbayan justified its denial of petitioners’ Motion to Withdraw Joint Stipulation of Facts and Documents in this wise:

"x x x. [For] the fact that there [was] express statement from Atty. Rogelio A. Cortes this morning that neither fraud nor any other mistake of a serious character vitiated the consent of the parties when they affixed their conformity to the stipulations of facts, the reason put forth by the accused or movant’s counsel at this time, is that if these stipulations were to remain, then the accused might as well not present any evidence on the entire accusation against him as this will already be supported by the evidence on record. While the court, indeed, sees this as a possibility, that, by itself, is not a ground for withdrawing any stipulation freely and knowingly made and given."[10]

In the second assailed Order, the anti-graft court denied reconsideration and reiterated its previous stand, as follows:

"x x x. The fact that the stipulation of facts leaves less or no room for the accused to defend himself is not a ground for setting aside a pre-trial order; in fact, an accused can plead guilty if he so desires or make admissions as he deems appropriate and truthful, even if in the mind of the new counsel, it gave very few opportunities to present contesting evidence."[11]

It then added that "the pre-trial order shall remain. The admissions therein contained can be used in this case and for whatever purpose the Rules on Evidence will allow."

Hence, this Petition.[12]

In their Memorandum, petitioners raise the following issues for the Court’s consideration:

Whether or not respondent Sandiganbayan committed grave abuse of discretion amounting to lack or excess of jurisdiction in denying petitioners’ Motion to Withdraw the Joint Stipulation of Facts and Documents, considering the relevant facts and applicable laws and rules.

Whether or not the denial by respondent Sandiganbayan of the withdrawal of the Joint Stipulation of Facts and Documents would result in manifest injustice and impairment of the constitutional rights of the petitioners.

Whether or not there is a law or rule which would bar petitioners from withdrawing their Joint Stipulation of Facts and Documents from the respondent Sandiganbayan."[13]

Plainly put, the issue raised by petitioners is whether they may be allowed to withdraw unilaterally from the Joint Stipulation of Facts and Documents.

The Court’s Ruling

The Petition has no merit.

Main Issue:

Withdrawal from the Joint Stipulation

Petitioners contend that pretrial stipulations may be unilaterally withdrawn by the accused because allegedly, they are not binding until after the trial court has issued a pretrial order approving them. We are not persuaded.

Petitioners fail to appreciate the indispensable role of stipulations in the speedy disposition of cases. The new

Rules on Criminal Procedure mandate parties to agree on matters of facts, issues and evidence. Such stipulations are greatly favored because they simplify, shorten or settle litigations in a faster and more convenient manner. They save costs, time and resources of the parties and, at the same time, help unclog court dockets.

Once validly entered into, stipulations will not be set aside unless for good cause.[14] They should be enforced especially when they are not false, unreasonable or against good morals and sound public policy.[15] When made before the court, they are conclusive. And the party who validly made them can be relieved therefrom only upon a showing of collusion, duress, fraud, misrepresentation as to facts, and undue influence;[16] or upon a showing of sufficient cause on such terms as will serve justice in a particular case.[17] Moreover, the power to relieve a party from a stipulation validly made lies in the court’s sound discretion which, unless exercised with grave abuse, will not be disturbed on appeal.[18]

Validity of the Joint Stipulations

While petitioners wish to be relieved from the stipulations, they, however, do not allege that these were false or misleading or were obtained through force or fraud. On the contrary, they do not dispute the finding of the anti-graft court that no fraud or serious mistake vitiated their and their counsel’s consent to the signing of these stipulations. They even admitted, in answer to its query, that they had freely given their consent.

Nonetheless, in a desperate bid to strengthen their position, petitioners lay the blame on the alleged incompetence of their former counsel. They claim that, in agreeing to the Joint Stipulation, he failed to consider their legal interests.

To be a ground for relief against a stipulation, a mistake must be one of fact -- not, as in this case, a mere lack of full knowledge of fact because of failure to exercise due diligence in ascertaining it.[19]

Moreover, it is hornbook doctrine that parties are bound by the action or the inaction of their counsel. To all intents and purposes, the acts of a lawyer in the defense or the prosecution of a case are the acts of the client. The rule extends even to the mistakes and the simple negligence committed by the counsel.[20]

Presumption of Innocence

In their effort to withdraw from the Joint Stipulation, petitioners argue that the two questioned items impair their constitutional right to be presumed innocent, violate their right against self-incrimination, and deny them due process in the sense that the trial would be a "useless formality, an idle ceremony."[21]

Other than by generalized argumentation, petitioners have not convinced us that the aforementioned constitutional rights would be violated. True, the old Rules of Court frowned upon stipulations of facts in criminal cases because of a perceived danger -- that by the mere expedient of stipulating with the defense counsel the elements of the crime charged, the prosecution would relieve itself of its duty to prove the guilt of the accused beyond reasonable doubt.[22] However, the Rules were amended in 1985, precisely to enable parties to stipulate facts. The amendment was carried over to the 2000 Revised Rules on Criminal Procedure. [23]

The acceptability of stipulating facts has long been established in our jurisprudence. In a case involving illegal possession of firearms,[24] the prosecution and the defense stipulated the fact that the accused had been found in possession of a gun without the required permit or license. In People v. Bocar,[25] the Court considered as valid the admission by the accused of the existence of certain affidavits and exhibits, which the prosecution had presented to dispense with oral testimonies on the matter contained therein. In People v. Hernandez,[26] which involved illegal recruitment, the Court upheld the joint stipulation that the accused had not been licensed or authorized by the Philippine Overseas Employment Agency to recruit workers for overseas jobs.

There is nothing irregular or unlawful in stipulating facts in criminal cases. The policy encouraging it is consistent with the doctrine of waiver, which recognizes that "x x x everyone has a right to waive and agree to waive the advantage of a law or rule made solely for the benefit and protection of the individual in his private capacity, if it can be dispensed with and relinquished without infringing on any public right and without detriment to the community at large."[27]

In the present case, the Joint Stipulation made by the prosecution and petitioners was a waiver of the right to present evidence on the facts and the documents freely admitted by them. There could have been no impairment of petitioners’ right to be presumed innocent, right to due process or right against self-incrimination because the waiver was voluntary, made with the assistance of counsel and is sanctioned by the Rules on Criminal Procedure.

Necessity of a Pretrial Order

Petitioners further contend that the law on pretrial requires the issuance of a pretrial order to make pretrial stipulations binding. We do not agree.

Section 2 of Rule 118 of the Rules of Court states:

"Sec. 2. Pre-trial agreement. -- All agreements or admissions made or entered [into] during the pre-trial conference shall be reduced in writing and signed by the accused and counsel, otherwise, they cannot be used against the accused. The agreements covering the matters referred to in section 1 of this Rule shall be approved by the

court."[28]

Based on the foregoing provision, for a pretrial agreement to be binding on the accused, it must satisfy the following conditions: (1) the agreement or admission must be in writing, and (2) it must be signed by both the accused and their counsel. The court’s approval, mentioned in the last sentence of the above-quoted Section, is not needed to make the stipulations binding on the parties. Such approval is necessary merely to emphasize the supervision by the court over the case and to enable it to control the flow of the proceedings.

Once the stipulations are reduced into writing and signed by the parties and their counsels, they become binding on the parties who made them. They become judicial admissions of the fact or facts stipulated.[29] Even if placed at a disadvantageous position, a party may not be allowed to rescind them unilaterally; it must assume the consequences of the disadvantage.[30] If the accused are allowed to plead guilty under appropriate circumstances, by parity of reasoning, they should likewise be allowed to enter into a fair and true pretrial agreement under appropriate circumstances.

There is another cogent reason why the Joint Stipulation should be binding. It must be noted that the SBN could not fully act on the matter, not through its fault, but because of the continued absence of petitioners’ counsel. Verily, the records reveal that at the intended completion of the pretrial on January 14, 2000, it could not pass upon the Joint Stipulation because he was absent. Also, the pretrial conference had to be re-scheduled six times, just to ensure the attendance of the parties and their counsels and to prepare them for the conference.

Therefore, under these circumstances, the SBN cannot be faulted for its failure to approve expressly the stipulations. It had the opportunity to rule on the matter only when the accused, through their new counsel, Atty. Cecilia L. Cinco, moved to withdraw their stipulations. In its first assailed Order, the SBN upheld their validity, thereby effectively approving the submitted Joint Stipulation of Facts and Documents. The assent of the court to agreements of the parties, assisted by their counsel, is assumed until they indicate a dissent.[31] Thus, the stipulations freely made by the latter are to be respected as their true will and intention with regard to the facts and evidence of the case, especially if the anti-graft court has not struck them down for being violative of the law.

Role of Lawyers in Pretrials

Pretrial is meant to simplify, if not fully dispose of, the case at its early stage. It is therefore important that the parties take active roles in the proceedings. The Rules on Criminal Procedure provide that if the counsel for the accused and/or the prosecutor do not appear at the pretrial and do not offer an acceptable excuse for their lack of cooperation, the court may impose proper sanctions or penalties.[32]

Verily, during pretrial, attorneys must make a full disclosure of their positions as to what the real issues of the trial would be. They should not be allowed to embarrass or inconvenience the court or injure the opposing litigant by their careless preparation for a case; or by their failure to raise relevant issues at the outset of a trial; or, as in this case, by their unilateral withdrawal of valid stipulations that they signed and that their clients fully assented to.[33]

The records reveal that the parties were the ones who volunteered to make the Joint Stipulation of the facts of the case. Thus, the anti-graft court can rightfully expect that both parties arrived upon it with fairness and honesty. Therefore, petitioners may not assail it on the mere ground that it would allegedly put the accused at a disadvantage. Furthermore, a new counsel cannot justify such withdrawal by the simple expedient of passing the blame on the previous counsel, who had supposedly not sufficiently discharged his duty to the client.

If we allow parties to renege on stipulations they validly entered into during the course of pretrial proceedings, there would be no end to litigations.[34] Lawyers can wiggle in and out of agreements the moment they are disadvantaged. Lawyers should remember, however, that they are not merely representatives of the parties but, first and foremost, officers of the court. As such, one of their duties -- assisting in the speedy and efficient administration of justice[35] -- is more significant than that of acquitting their client,[36] rightly or wrongly.

We stress that candor in all dealings is the very essence of membership in the legal profession. Lawyers are obliged to observe rules of procedure in good faith, not to misuse them to defeat the ends of justice.[37] They should realize that the earlier they dispose of their cases, especially at the pretrial stage, the better for them. In doing so, they can now concentrate and work more efficiently on their other cases.[38]

Grave Abuse of Discretion

As already discussed, the power to relieve a party from a stipulation validly made lies at the sound discretion of the court. Unless exercised with grave abuse, this discretion will not be disturbed on appeal.[39] There is "grave abuse of discretion" where "a power is exercised in an arbitrary, capricious, whimsical or despotic manner by reason of passion or personal hostility, so patent and so gross as to amount to evasion of positive duty or virtual refusal to perform a duty enjoined by, or in contemplation of law."[40]

Petitioners in this case failed to prove that the Sandiganbayan committed grave abuse of discretion in disallowing them to withdraw the stipulations that they had freely and voluntarily entered into. Also, no bad faith or malice was or can be imputed to the anti-graft court for failing to immediately act upon the Joint Stipulation. The delay was due, not to its deliberate evasion of its duty, but to the continued absence of petitioners’ counsel.

WHEREFORE, the Petition is DENIED, and the assailed Orders AFFIRMED. Costs against petitioners.

SO ORDERED.

SPOUSES ANTONIO MARTINEZ AND BENEDICTA BALATBAT MARTINEZ, petitioners, vs.THE HONORABLE JUDGE EUFROCINIO S. DE LA MERCED, BIENVENIDO U. JUAN and SACRED HEART SCHOOL MALABON, INC., respondents.

Raised in this petition for review on certiorari is a novel issue in procedural law. More particularly, the question posed by petitioners is whether or not the preliminary conference under the Rules of Summary Procedure 1 can be waived, albeit impliedly, by failing to object to its non-observance in the proceedings had before the inferior court.

The subject provision is contained in Section 6 of the abovementioned rule which states:

SEC. 6. Preliminary Conference.-Not later than thirty (30) days after the last answer is filed, the case shall be calendared for a preliminary conference. Among other matters, should the parties fail to arrive at an amicable settlement, the court must clarify and define the issues of the case, which must be clearly and distinctly set forth in the order to be issued immediately after such preliminary conference, together with other matters taken up during the same.

The facts of the case as found by the Court of Appeals are as follows: 2 On August 24, 1979, petitioners instituted before the Metropolitan Trial Court an unlawful detainer case against the herein private respondents Bienvenido Juan and Sacred Heart School of Malabon, Inc., for the recovery of possession of the premises being used by the latter as school building. For their causes of action, they claimed that the contract of lease has expired, and the terms and conditions of the contract of lease were violated.

Private respondents filed their answer to the complaint alleging, among others, that the period of the contract of lease is for 25 years from November 8, 1973 which has not expired, and that its terms have not been violated.

On December 13, 1979, private respondents filed a motion to suspend proceedings because of the pendency of their interpleader case, Civil Case No. C-8046, with the Regional Trial Court of Caloocan City, against the petitioners and their predecessors-in- interest, the estates of Ricardo and Soledad Balatbat, who were all claiming

to be the owners of the leased premises. This motion was granted.

About five years thereafter or on August 17, 1984, petitioners filed a motion to lift the said order of suspension alleging therein that the pendency of the interpleader case is not a bar to its trial. Private respondents opposed the motion by asserting that the petitioners in Civil Case No. C-8046 were ordered to recover (sic) the titles of the leased premises to the estates of Ricardo and Soledad Balatbat. Consequently, the motion was denied by the court.

On June 5, 1985, petitioners filed a Second Motion to Lift Order of Suspension invoking the same ground. This time, however, the court, in an order dated July 11, 1985, lifted the suspension in view of the absence of any opposition and that there was no showing as to the progress of Civil Case No. C-8046.

On October 24, 1985, the Metropolitan Trial Court denied the motion for reconsideration and set the case for trial on the merits. On November 23, 1985, private respondents filed a motion to implead necessary and/or indispensable parties inasmuch as the estates of Ricardo and Soledad Balatbat or their lawful heirs have an interest over the leased premises.

In its order dated March 31, 1986, the Metropolitan Trial Court denied the motion. In the same order, the court ordered the case to be tried under the Rules on Summary Procedure and, without setting the case for pre-trial conference, required the parties to submit the affidavits of their witnesses with supporting documents and position papers within ten (10) days from receipt thereof.

On April 23, 1986, private respondents filed a motion for extension of time to file the required pleadings for the reason that their counsel was still recuperating from a recent major operation. The motion was granted in another order dated April 23, 1986, which reads as follows:

As prayed for in the "Motion for Extension of time to file Defendant's Position Paper" ... the same is hereby granted and the said counsel is hereby given an extension of twenty (20) days from April 24, 1986 ... provided that he submit before this court a medical certificate from the hospital attesting to the fact that he has recently underwent a major surgical operation. (Emphasis supplied.)

SO ORDERED. 3

On May 14, 1986 or within the given period, private respondents filed their position paper. However, the required medical certificate was posted by registered mail only on May 18, 1986 and received by the court on May 21, 1986.

Earlier, on May 20, 1986, the court issued the following order:

Considering that no hospital record whatsoever ... was submitted by counsel for the defendants when he filed their position paper and counter-affidavit ..., a condition given (by) the court when it granted defendant's Motion for Extension of Time to File Defendants' Position Paper, the said position paper and counter-affidavit writs of the defendant Bienvenido U. Juan which constitutes their evidence should be, as they are hereby, ordered stricken off the record as they were clearly filed out of time, the last day of the filing the same being on April 24, 1986 (sic).

WHEREFORE, this case is now submitted for decision and let a judgment be rendered in accordance with Section 6 of the Rules on Summary Procedure based on evidence submitted by the plaintiff.

IT IS SO ORDERED. 4 (Emphasis supplied.)

On the basis of petitioners' evidence, on May 26, 1986, the lower court rendered an ex parte decision in favor of the petitioners, the dispositive part of which reads as follows:

WHEREFORE, judgment is hereby rendered for the plaintiffs, ordering the defendants and all those claiming right under them, to:

1. vacate the premises in question and restore complete and peaceful possession thereof to the plaintiffs;

2. pay the plaintiffs the sum of P10,000.00 as and by way of attorney's fees; and

3. pay the costs of the suit.

IT IS SO ORDERED. 5

This decision was appealed to the Regional Trial Court presided by respondent Judge Eufrocinio de la Merced. On August 13, 1986, said respondent judge rendered a decision declaring the judgment of the inferior court "null and void" on the ground that a preliminary conference under the Rules on Summary Procedure is a jurisdictional requirement, the non-observance of which constitutes reversible error. 6

From this appealed decision, a petition for review was filed with the Court of Appeals. In a decision promulgated on November 25, 1987, 7 the appellate court affirmed the decision of the Regional Trial Court on two grounds: first, that the preliminary conference under the Rule on Summary Procedure is mandatory and jurisdictional and second, that the order of the Metropolitan Trial Court dated May 20, 1986, ordering private respondents' evidence expunged from the record, illegally denied them their day in court. 8

The petition is impressed with merit.

The Rules on Summary Procedure in Special Cases are designed primarily to achieve an expeditious and inexpensive determination of particular cases to which it applies. To achieve this goal, the Rules adopted, among others, simplified procedures without regard to technical rules; abbreviated periods of time to file responsive pleadings; certain pleadings and motions are expressly prohibited from its application; and the Rules likewise provide for a "preliminary conference" by which parties are admonished to settle their dispute amicably, and if this is not possible, to narrow, clarify and define the issues of the case. 9

At the outset, the issue appears simple.

Petitioners claim that the failure of private respondents to raise the matter of lack of preliminary conference during the proceedings in the lower court effectively estops them from raising the same on appeal. 10

On the other hand the respondents seek the dismissal of the petition on the ground that both the Regional Trial Court and the Court of Appeals, correctly ruled that the proceedings in the inferior court are illegal and, therefore, null and void, there being no preliminary conference conducted. 11

While the Court of Appeals is correct in its view that Section 6 of the Rules on Summary Procedure is made mandatory by the use of the auxiliary verbs "shall" and "must" instead of the permissive "may," it does not, however, logically follow that the absence of a preliminary conference would necessarily render nugatory the proceedings had in the court below. 12

While termed a "preliminary conference," a closer look thereat would reveal that the provision is akin and similar to the provision on "pre-trial" under Rule 20 of the Revised Rules of Court. 13 Both provisions are essentially designed to promote amicable settlement or to avoid or simplify the trial.

An analysis of existing jurisprudence on the matter reveals that proceedings undertaken without first conducting a pretrial or with a legally defective pre-trial is voided because either of the parties thereto suffered substantial prejudice thereby or they were denied their right to due process. 14 Be that as it may, petitioners cite as exceptions to the foregoing rule Santamaria vs. Court of appeals 15 ; Insurance Company of North America vs. Republic 16 ; and Trocio vs. Labayo. 17 Notable in these cases is the fact that the issue of pre-trial did not affect the trial court's jurisdiction because no injury was caused to any party therein. Additionally, facts and circumstances dictate that to conduct another pre-trial would only be a superfluity, its purpose of expediting the proceedings having been attained otherwise.

Thus, unless there is a showing of substantial prejudice caused to a party, the trial court's inadvertent failure to calendar the case for a pre-trial or a preliminary conference cannot render the proceedings illegal or void ab initio. A party's failure to object to the absence of a pre-trial is deemed a waiver of his right thereto. This observation holds with more reason in the case at hand where private respondents have already submitted to the jurisdiction of the trial court.

As pointed out by petitioners, private respondents had at least three opportunities to raise the question of lack of preliminary conference first, when private respondents filed a motion for extension of time to file their position paper; second, at the time when they actually filed their position paper in which they sought native relief from the Metropolitan Trial Court; and third; when they filed a motion for reconsideration of the order of the Metropolitan Trial Court expunging from the records the position paper of private respondents, in which motion private respondents even urged the court to sustain their position paper. And yet, in none of these instances was the issue of lack of preliminary conference raised or even hinted at by private respondents. 18 In fine, these are acts amounting to a waiver of the irregularity of the proceedings. For it has been consistently held by this Court that while lack of jurisdiction may be assailed at any stage, a party's active participation in the proceedings before a court without jurisdiction will estop such party from assailing such lack of jurisdiction. 19

Private respondents claim that their failure to raise the issue at hand before the Metropolitan Trial Court is by reason of a legal impediment. They argue that they could not raise the issue in the said court because a motion for reconsideration is one of the prohibited motions under Sec. 15 of the Rules on Summary Procedure. 20 This argument is specious. Private respondents filed a motion for extension of time to file their position paper and a motion for reconsideration of the order expunging from the record their position paper. These two pleadings are also disallowed in summary proceedings. 21 Obviously, the failure of private respondent to raise the issue was occasioned by negligence on their part, if not a belief that it was not vital for their cause, and not because filing a motion for reconsideration invoking this ground was prohibited by the rules.

The Court of Appeals observed that private respondents were illegally denied their day in court. Thus, it set aside the order of the Metropolitan Trial Court expunging from the records the position paper of private respondents.

This is erroneous. The order of the Metropolitan Trial Court dated April 23, 1988 granting private respondents' motion for extension of time to file position paper is conditioned upon the timely submission of the medical certificate to support the motion. We see no reversible error in the order of the Metropolitan Trial Court in ordering

private respondents' position paper stricken from the record for their failure to submit the medical certificate with the position paper.

Nevertheless, while we hold in this case that the right to a preliminary conference under the Rules on Summary Procedure is deemed waived by a party's failure to invoke the same before the trial court, this is not in the least to suggest that the trial courts may dispense with such a preliminary conference. Courts should make full use of the pre-trial proceedings primarily so that all issues necessary to the early disposition of a cause are properly determined and to explore all avenues towards a compromise or settlement of the case.

WHEREFORE, the petition is hereby GRANTED. The appealed decision is hereby SET ASIDE and the decision of the Metropolitan Trial Court dated May 26, 1986 in Civil Case No. 4526 is hereby AFFIRMED in toto. No costs.

SO ORDERED.

HYATT INDUSTRIAL MANUFACTURING CORP., and YU HE CHING, Petitioners, vs. LEY CONSTRUCTION AND DEVELOPMENT CORP., and PRINCETON DEVELOPMENT CORP., Respondents.

Before the Court is a petition for review on certiorari seeking the nullification of the Decision dated May 4, 2000 of the Court of Appeals’ (CA) then Seventh Division in CA-G.R. CV No. 57119, which remanded Civil Case No. 94-1429 to the trial court and directed the latter to allow the deposition-taking without delay;1 and the CA Resolution dated February 13, 2001 which denied petitioners’ motion for reconsideration.2

The facts are as follows:

On April 8, 1994, respondent Ley Construction and Development Corporation (LCDC) filed a complaint for specific performance and damages with the Regional Trial Court of Makati, Branch 62 (RTC), docketed as Civil Case No. 94-1429, against petitioner Hyatt Industrial Manufacturing Corporation (Hyatt) claiming that Hyatt reneged in its obligation to transfer 40% of the pro indiviso share of a real property in Makati in favor of LCDC despite LCDC’s full payment of the purchase price of P2,634,000.00; and that Hyatt failed to develop the said property in a joint venture, despite LCDC’s payment of 40% of the pre-construction cost.3 On April 12, 1994, LCDC filed an amended complaint impleading Princeton Development Corporation (Princeton) as additional defendant claiming that Hyatt sold the subject property to Princeton on March 30, 1994 in fraud of LCDC.4 On September 21, 1994, LCDC filed a second amended complaint adding as defendant, Yu He Ching (Yu), President of Hyatt, alleging that LCDC paid the purchase price of P2,634,000.00 to Hyatt through Yu.5

Responsive pleadings were filed and LCDC filed notices to take the depositions of Yu; Pacita Tan Go, Account Officer of Rizal Commercial Banking Corporation (RCBC); and Elena Sy, Finance Officer of Hyatt. Hyatt also filed notice to take deposition of Manuel Ley, President of LCDC, while Princeton filed notice to take the depositions of Manuel and Janet Ley.6

On July 17, 1996, the RTC ordered the deposition-taking to proceed.7

At the scheduled deposition of Elena Sy on September 17, 1996, Hyatt and Yu prayed that all settings for depositions be disregarded and pre-trial be set instead, contending that the taking of depositions only delay the resolution of the case. The RTC agreed and on the same day ordered all depositions cancelled and pre-trial to take place on November 14, 1996.8

LCDC moved for reconsideration9 which the RTC denied in its October 14, 1996 Order, portion of which reads:

This Court has to deny the motion, because: 1) as already pointed out by this Court in the questioned Order said depositions will only delay the early termination of this case; 2) had this Court set this case for pre-trial conference and trial thereafter, this case would have been terminated by this time; 3) after all, what the parties would like to elicit from their deponents would probably be elicited at the pre-trial conference; 4) no substantial rights of the parties would be prejudiced, if pre-trial conference is held, instead of deposition.10

On November 14, 1996, the scheduled date of the pre-trial, LCDC filed an Urgent Motion to Suspend Proceedings Due to Pendency of Petition for Certiorari in the Court of Appeals.11 The petition, which sought to annul the Orders of the RTC dated September 17, 1996 and October 14, 1996, was docketed as CA-G.R. SP No. 4251212 and assigned to the then Twelfth Division of the CA.

Meanwhile, pre-trial proceeded at the RTC as scheduled13 and with the refusal of LCDC to enter into pre-trial, Hyatt, Yu and Princeton moved to declare LCDC non-suited which the RTC granted in its Order dated December 3, 1996, thus:

On September 17, 1996, this Court noticing that this case was filed as early (as) April 4, 199414 and has not reached the pre-trial stage because of several depositions applied for by the parties, not to mention that the records of this case has reached two (2) volumes, to avoid delay, upon motion, ordered the cancellation of the depositions.

On September 24, 1996, plaintiff filed a motion for reconsideration, seeking to reconsider and set aside the order dated September 17, 1996, which motion for reconsideration was denied in an order dated October 14, 1996, ruling among others that "after all, what the parties would like to elicit from these deponents would probably be elicited at

the pre-trial conference", and, reiterated the order setting this case for pre-trial conference on November 14, 1996.

On the scheduled pre-trial conference on November 14, 1996, a petition for certiorari was filed with the Court of Appeals, seeking to annul the Order of this Court dated September 17, 1996 and October 14, 1996, furnishing this Court with a copy on the same date.

At the scheduled pre-trial conference on November 14, 1996, plaintiff orally moved the Court to suspend pre-trial conference alleging pendency of a petition with the Court of Appeals and made it plain that it cannot proceed with the pre-trial because the issue on whether or not plaintiff may apply for depositions before the pre-trial conference is a prejudicial question. Defendants objected, alleging that even if the petition is granted, pre-trial should proceed and that plaintiff could take deposition after the pre-trial conference, insisting that defendants are ready to enter into a pre-trial conference.

This Court denied plaintiff’s motion to suspend proceedings and ordered plaintiff to enter into pre-trial conference. Plaintiff refused. Before this Court denied plaintiff’s motion to suspend, this Court gave Plaintiff two (2) options: enter into a pre-trial conference, advising plaintiff that what it would like to obtain at the deposition may be obtained at the pre-trial conference, thus expediting early termination of this case; and, terminate the pre-trial conference and apply for deposition later on. Plaintiff insisted on suspension of the pre-trial conference alleging that it is not ready to enter into pre-trial conference in view of the petition for certiorari with the Court of Appeals. Defendants insisted that pre-trial conference proceed as scheduled, manifesting their readiness to enter into a pre-trial conference.

When plaintiff made it clear that it is not entering into the pre-trial conference, defendants prayed that plaintiff be declared non-suited. In the light of the foregoing circumstances, this Court is compelled to dismiss plaintiff’s complaint.

WHEREFORE, for failure of plaintiff to enter into pre-trial conference without any valid reason, plaintiff’s complaint is dismissed. Defendants’ counterclaims are likewise dismissed.

SO ORDERED.15

LCDC filed a motion for reconsideration16 which was denied however by the trial court in its Order dated April 21, 1997.17 LCDC went to the CA on appeal which was docketed as CA-G.R. CV No. 57119 and assigned to the then Seventh Division of the CA.18

On July 24, 1997, the CA’s then Twelfth Division,19 in CA-G.R. SP No. 42512 denied LCDC’s petition for certiorari declaring that the granting of the petition and setting aside of the September 17, 1996 and October 14, 1996 Orders are manifestly pointless considering that the complaint itself had already been dismissed and subject of the appeal docketed as CA-G.R. CV No. 57119; that the reversal of the said Orders would have practical effect only if the dismissal were also set aside and the complaint reinstated; and that the dismissal of the complaint rendered the petition for certiorari devoid of any practical value.20 LCDC’s motion for reconsideration of the CA-G.R. SP No. 42512 decision was denied on March 4, 1998.21 LCDC then filed with this Court, a petition for certiorari, docketed as G.R. No. 133145 which this Court dismissed on August 29, 2000.22

On May 4, 2000, the CA’s then Seventh Division issued in CA-G.R. CV No. 57119 the herein assailed decision, the fallo of which reads:

WHEREFORE, premises considered, finding the appeal meritorious, this case is remanded to the court a quo for further hearing and directing the latter to allow the deposition taking without delay.

SO ORDERED.23

The CA reasoned that: LCDC complied with Section 1, Rule 23 of the 1997 Rules of Civil Procedure which expressly sanctions depositions as a mode of discovery without leave of court after the answer has been served; to unduly restrict the modes of discovery during trial would defeat the very purpose for which it is intended which is a pre-trial device, and at the time of the trial, the issues would already be confined to matters defined during pre-trial; the alleged intention of expediting the resolution of the case is not sufficient justification to recall the order to take deposition as records show that the delay was brought about by postponement interposed by both parties and other legal antecedents that are in no way imputable to LCDC alone; deposition-taking, together with the other modes of discovery are devised by the rules as a means to attain the objective of having all the facts presented to the court; the trial court also erred in dismissing the complaint as LCDC appeared during the pre-trial conference and notified it of the filing of a petition before the CA; such is a legitimate justification to stall the pre-trial conference, as the filing of the petition was made in good faith in their belief that the court a quo erred in canceling the deposition scheduled for no apparent purpose.24

Hyatt and Princeton filed their respective motions for reconsideration which the CA denied on February 13, 2001.25

Hyatt and Yu now come before the Court via a petition for review on certiorari, on the following grounds:

THE COURT OF APPEALS, SEVENTH DIVISION, COMMITTED GRAVE ABUSE OF DISCRETION, ACTUALLY AMOUNTING TO LACK OF JURISDICTION, IN HOLDING IN EFFECT INVALID THE ORDERS OF THE LOWER COURT DATED SEPTEMBER 17, 1996 AND OCTOBER 14, 1996 WHICH ARE NOT RAISED OR PENDING BEFORE IT, BUT IN ANOTHER CASE (CA-G.R. SP. No. 42512) PENDING BEFORE ANOTHER DIVISION OF

THE COURT OF APPEALS, TWELFTH DIVISION, AND WHICH CASE WAS DISMISSED BY THE SAID DIVISION OF THE COURT OF APPEALS AND FINALLY BY THE HONORABLE SUPREME COURT IN G.R. NO. 133145.

THE COURT OF APPEALS, SEVENTH DIVISION, COMMITTED GRAVE ABUSE OF DISCRETION AND SERIOUS ERRORS OF LAW IN REVERSING THE LOWER COURT’S ORDER DATED DECEMBER 3, 1996 AND APRIL 21, 1997 HOLDING RESPONDENT NON-SUITED FOR FAILURE TO ENTER INTO PRE-TRIAL.26

Anent the first issue, petitioners claim that: the validity of the RTC Order dated September 17, 1996 which set the case for pre-trial, as well as its Order dated October 14, 1996 denying LCDC’s motion for partial reconsideration are not involved in CA-G.R. CV No. 57119 but were the subject of CA-G.R. SP No. 42512, assigned to the then Twelfth Division, which dismissed the same on July 24, 1997 and which dismissal was affirmed by this Court in G.R. No. 133145; in passing upon the validity of the Orders dated September 17, 1996 and October 14, 1996, the CA’s then Seventh Division in CA-G.R. CV No. 57119 exceeded its authority and encroached on issues taken cognizance of by another Division.27

On the second issue, petitioners claim that: the CA’s then Seventh Division should have outrightly dismissed the appeal of LCDC as the same did not involve any error of fact or law but pertains to a matter of discretion which is properly a subject of certiorari under Rule 65 of the Revised Rules of Court; conducting discovery thru deposition is not a condition sine qua non to the holding of a pre-trial and the fact that LCDC wanted to take the deposition of certain persons is not a valid ground to suspend the holding of pre-trial and subsequently the trial on the merits; the persons whose depositions were to be taken were listed as witnesses during the trial; to take their depositions before the lower court and to present them as witnesses during the trial on the merits would result in unnecessary duplicity; the fact that LCDC has a pending petition for certiorari with the CA’s then Twelfth Division docketed as CA-G.R. SP No. 42512 is not a ground to cancel or suspend the scheduled pre-trial on November 14, 1996 as there was no restraining order issued; LCDC’s availment of the discovery procedure is causing the undue delay of the case; it is only after LCDC has filed its complaint that it started looking for evidence to support its allegations thru modes of discovery and more than two years has already passed after the filing of the complaint yet LCDC still has no documentary evidence to present before the lower court to prove its allegations in the complaint.28

Petitioners then pray that the Decision dated May 4, 2000 and the Resolution dated February 13, 2001 of the CA’s then Seventh Division in CA-G.R. CV No. 57119 be annulled and set aside and the validity of the Orders dated December 3, 1996 and April 21, 1997 of the RTC of Makati, Branch 62 in Civil Case No. 94-1429 be sustained.29

In its Comment, LCDC argues that the petitioners erred in claiming that the CA’s then Seventh Division overstepped its authority as this Court has ruled in G.R. No. 133145 that the issue of whether LCDC has been denied its right to discovery is more appropriately addressed in the appeal before the then Seventh Division in CA-G.R. CV No. 57119 below rather than by the then Twelfth Division in the certiorari proceeding in CA-G.R. SP No. 42512; and while the appeal of the final Order of the RTC dated December 3, 1996 also questioned the Orders dated September 17, 1996 and October 14, 1996, it does not render the appeal improper as this Court in G.R. No. 133145 held that the subsequent appeal constitutes an appropriate remedy because it assails not only the Order dated December 3, 1996, but also the two earlier orders.30

On the second issue, LCDC contends that: the mere fact that a deponent will be called to the witness stand during trial is not a ground to deny LCDC the right to discovery and does not cause "unnecessary duplicity", otherwise no deposition can ever be taken; a deposition is for the purpose of "discovering" evidence while trial is for the purpose of "presenting" evidence to the court; if petitioners’ concern was the delay in the disposition of the case, the remedy is to expedite the taking of the depositions, not terminate them altogether; petitioners have nothing to fear from discovery unless they have in their possession damaging evidence; the parties should be allowed to utilize the discovery process prior to conducting pre-trial since every bit of relevant information unearthed through the discovery process will hasten settlement, simplify the issues and determine the necessity of amending the pleadings; the trial court erred in not suspending the pre-trial conference pending the petition for certiorari before the then Twelfth Division of the CA since considerations of orderly administration of justice demanded that the trial court accord due deference to the CA; not only was LCDC’s petition for certiorari filed in good faith, the CA found it meritorious, vindicating LCDC’s insistence that the pre-trial be suspended; the undue delay in the disposition of the case was not attributable to LCDC’s deposition-taking but to the flurry of pleadings filed by defendants below to block LCDC’s depositions and prevent it from gaining access to critical evidence; the critical evidence that LCDC needs to obtain through discovery is evidence that is totally within the knowledge and possession of petitioners and defendant Princeton and is not available elsewhere.31

On September 17, 2001, the Court required the parties to file their respective memoranda.32 Hyatt and Yu on the one hand and LCDC on the other filed their respective memoranda reiterating their positions.33

On January 2, 2002, Princeton filed a "Comment" which this Court considered as its Memorandum in the Resolution dated January 30, 2002.34

In said memorandum, Princeton averred that: it is not true that Princeton failed to comply with any discovery orders as all information requested of Princeton was duly furnished LCDC and there are no pending discovery orders insofar as Princeton is concerned; LCDC is seeking to dictate its procedural strategies on the RTC and the opposing parties; LCDC was not deprived due process as it was given all the opportunity to prepare for its case and to face its opponents before the court; LCDC admits to the probability of forum shopping as it filed a petition for certiorari with the then Twelfth Division of the CA and later an appeal with the then Seventh Division of the CA; the RTC did not bar LCDC from presenting witnesses or discovering any evidence, as all it did was to transfer the venue of the testimony and discovery to the courtroom and get on with the case which LCDC did not want to do; that discovery proceedings need not take place before pre-trial conference; trial court judges are given discretion

over the right of parties in the taking of depositions and may deny the same for good reasons in order to prevent abuse; the trial court did not err in not granting LCDC’s motion to suspend proceedings due to the pendency of a petition for certiorari with the CA since there was no order from said court and there was no merit in the petition for certiorari as shown by the dismissal thereof by the then Twelfth Division; there was proper and legal ground for the trial court to declare LCDC non-suited; appearance at the pre-trial is not enough; there is no evidence to support LCDC’s claim that Hyatt surreptitiously transferred title to Princeton.35

The Court is in a quandary why Hyatt and Yu included Princeton as respondent in the present petition when Princeton was their co-defendant below and the arguments they raised herein pertain only to LCDC. With the failure of petitioners to raise any ground against Princeton in any of its pleadings before this Court, we shall treat Princeton’s inclusion as respondent in the present petition as mere inadvertence on the part of petitioners.

Now to the merits. The issues that need to be resolved in this case may be simplified as follows: (1) Whether the CA’s then Seventh Division exceeded its authority in ruling upon the validity of the Orders dated September 17, 1996 and November 14, 1996; and (2) Whether the CA erred in remanding the case to the trial court and order the deposition-taking to proceed.

We answer both questions in the negative.

Petitioners assert that the CA’s then Twelfth Division in CA-GR SP No. 42512 and this Court in G.R. No. 133145 already ruled upon the validity of the Orders dated September 17, 1996 and November 14, 1996, thus the CA’s then Seventh Division in CA G.R. CV No. 57119 erred in ruling upon the same.

A cursory reading of the decisions in CA-GR SP No. 42512 and G.R. No. 133145, however, reveals otherwise. The CA’s then Twelfth Division in CA-G.R. SP No. 42512 was explicit in stating thus:

Any decision of ours will not produce any practical legal effect. According to the petitioner, if we annul the questioned Orders, the dismissal of its Complaint by the trial [court] will have to be set aside in its pending appeal. That assumes that the division handling the appeal will agree with Our decision. On the other hand, it may not. Also other issues may be involved therein than the validity of the herein questioned orders.

We cannot pre-empt the decision that might be rendered in such appeal. The division to [which] it has been assigned should be left free to resolve the same. On the other hand, it is better that this Court speak with one voice.36

This Court in G.R. No. 133145 also clearly stated that:

First, it should be stressed that the said Petition (CA-G.R. SP No. 42512) sought to set aside only the two interlocutory RTC Orders, not the December 3, 1996 Resolution dismissing the Complaint. Verily, the Petition could not have assailed the Resolution, which was issued after the filing of the former.

Under the circumstances, granting the Petition for Certiorari and setting aside the two Orders are manifestly pointless, considering that the Complaint itself had already been dismissed. Indeed, the reversal of the assailed Orders would have practical effect only if the dismissal were also set aside and the Complaint reinstated. In other words, the dismissal of the Complaint rendered the Petition for Certiorari devoid of any practical value.

Second, the Petition for Certiorari was superseded by the filing, before the Court of Appeals, of a subsequent appeal docketed as CA-G.R. CV No. 57119, questioning the Resolution and the two Orders. In this light, there was no more reason for the CA to resolve the Petition for Certiorari.

In this case, the subsequent appeal constitutes an adequate remedy. In fact, it is the appropriate remedy, because it assails not only the Resolution but also the two Orders.

WHEREFORE, the Petition is DENIED and the assailed Resolutions AFFIRMED.

With the pronouncements of the CA in CA-G.R. SP No. 42512 and by this Court in G.R. No. 133145 that the subsequent appeal via CA-G.R. CV No. 57119 constitutes as the adequate remedy to resolve the validity of the RTC Orders dated September 17, 1996 and November 14, 1996, the arguments of petitioners on this point clearly have no leg to stand on and must therefore fail.

On the second issue, the Court finds that the CA was correct in remanding the case to the RTC and ordering the deposition-taking to proceed.

A deposition should be allowed, absent any showing that taking it would prejudice any party.38 It is accorded a broad and liberal treatment and the liberty of a party to make discovery is well-nigh unrestricted if the matters inquired into are otherwise relevant and not privileged, and the inquiry is made in good faith and within the bounds of law.39 It is allowed as a departure from the accepted and usual judicial proceedings of examining witnesses in open court where their demeanor could be observed by the trial judge, consistent with the principle of promoting just, speedy and inexpensive disposition of every action and proceeding;40 and provided it is taken in accordance with the provisions of the Rules of Court, i.e., with leave of court if summons have been served, and without such leave if an answer has been submitted; and provided further that a circumstance for its admissibility exists (Section 4, Rule 23, Rules of Court).41 The rules on discovery should not be unduly restricted, otherwise, the advantage of a

liberal discovery procedure in ascertaining the truth and expediting the disposal of litigation would be defeated.42

Indeed, the importance of discovery procedures is well recognized by the Court. It approved A.M. No. 03-1-09-SC on July 13, 2004 which provided for the guidelines to be observed by trial court judges and clerks of court in the conduct of pre-trial and use of deposition-discovery measures. Under A.M. No. 03-1-09-SC, trial courts are directed to issue orders requiring parties to avail of interrogatories to parties under Rule 45 and request for admission of adverse party under Rule 26 or at their discretion make use of depositions under Rule 23 or other measures under Rule 27 and 28 within 5 days from the filing of the answer. The parties are likewise required to submit, at least 3 days before the pre-trial, pre-trial briefs, containing among others a manifestation of the parties of their having availed or their intention to avail themselves of discovery procedures or referral to commissioners.43

Since the pertinent incidents of the case took place prior to the effectivity of said issuance, however, the depositions sought by LCDC shall be evaluated based on the jurisprudence and rules then prevailing, particularly Sec. 1, Rule 23 of the 1997 Rules of Court which provides as follows:

SECTION 1. Depositions pending action, when may be taken.--- By leave of court after jurisdiction has been obtained over any defendant or over property which is the subject of the action, or without such leave after an answer has been served, the testimony of any person, whether a party or not, may be taken, at the instance of any party, by deposition upon oral examination or written interrogatories. The attendance of witnesses may be compelled by the use of a subpoena as provided in Rule 21. Depositions shall be taken only in accordance with these Rules. The deposition of a person confined in prison may be taken only by leave of court on such terms as the court prescribes. (Emphasis supplied).

As correctly observed by the CA, LCDC complied with the above quoted provision as it made its notice to take depositions after the answers of the defendants have been served. LCDC having complied with the rules then prevailing, the trial court erred in canceling the previously scheduled depositions.

While it is true that depositions may be disallowed by trial courts if the examination is conducted in bad faith; or in such a manner as to annoy, embarrass, or oppress the person who is the subject of the inquiry, or when the inquiry touches upon the irrelevant or encroaches upon the recognized domains of privilege,44 such circumstances, however are absent in the case at bar.

The RTC cites the delay in the case as reason for canceling the scheduled depositions. While speedy disposition of cases is important, such consideration however should not outweigh a thorough and comprehensive evaluation of cases, for the ends of justice are reached not only through the speedy disposal of cases but more importantly, through a meticulous and comprehensive evaluation of the merits of the case.45 Records also show that the delay of the case is not attributable to the depositions sought by LCDC but was caused by the many pleadings filed by all the parties including petitioners herein.

The argument that the taking of depositions would cause unnecessary duplicity as the intended deponents shall also be called as witnesses during trial, is also without merit.

The case of Fortune Corp. v. Court of Appeals46 which already settled the matter, explained that:

The availability of the proposed deponent to testify in court does not constitute "good cause" to justify the court’s order that his deposition shall not be taken. That the witness is unable to attend or testify is one of the grounds when the deposition of a witness may be used in court during the trial. But the same reason cannot be successfully invoked to prohibit the taking of his deposition.

The right to take statements and the right to use them in court have been kept entirely distinct. The utmost freedom is allowed in taking depositions; restrictions are imposed upon their use. As a result, there is accorded the widest possible opportunity for knowledge by both parties of all the facts before the trial. Such of this testimony as may be appropriate for use as a substitute for viva voce examination may be introduced at the trial; the remainder of the testimony, having served its purpose in revealing the facts to the parties before trial, drops out of the judicial picture.

x x x [U]nder the concept adopted by the new Rules, the deposition serves the double function of a method of discovery - with use on trial not necessarily contemplated - and a method of presenting testimony. Accordingly, no limitations other than relevancy and privilege have been placed on the taking of depositions, while the use at the trial is subject to circumscriptions looking toward the use of oral testimony wherever practicable.47

Petitioner also argues that LCDC has no evidence to support its claims and that it was only after the filing of its Complaint that it started looking for evidence through the modes of discovery.

On this point, it is well to reiterate the Court’s pronouncement in Republic v. Sandiganbayan48:

What is chiefly contemplated is the discovery of every bit of information which may be useful in the preparation for trial, such as the identity and location of persons having knowledge of relevant facts; those relevant facts themselves; and the existence, description, nature, custody, condition, and location of any books, documents, or other tangible things. Hence, "the deposition-discovery rules are to be accorded a broad and liberal treatment. No longer can the time-honored cry of ‘fishing expedition’ serve to preclude a party from inquiring into the facts underlying his opponent’s case. Mutual knowledge of all the relevant facts gathered by both parties is essential to proper litigation. To that end, either party may compel the other to disgorge whatever facts he has in his

possession. The deposition-discovery procedure simply advances the stage at which the disclosure can be compelled from the time of trial to the period preceding it, thus reducing the possibility, of surprise.49

It also does not escape this Court’s attention that the trial court, before dismissing LCDC’s complaint, gave LCDC two options: (a) enter into a pre-trial conference, advising LCDC that what it would like to obtain at the deposition may be obtained at the pre-trial conference, thus expediting early termination of the case; and (b) terminate the pre-trial conference and apply for deposition later on. The trial court erred in forcing LCDC to choose only from these options and in dismissing its complaint upon LCDC’s refusal to choose either of the two.

The information LCDC seeks to obtain through the depositions of Elena Sy, the Finance Officer of Hyatt and Pacita Tan Go, an Account Officer of RCBC, may not be obtained at the pre-trial conference, as the said deponents are not parties to the pre-trial conference.

As also pointed out by the CA:

x x x To unduly restrict the modes of discovery during trial, would defeat the very purpose for which it is intended, as a pre-trial device. By then, the issues would have been confined only on matters defined during pre-trial. The importance of the modes of discovery cannot be gainsaid in this case in view of the nature of the controversy involved and the conflicting interest claimed by the parties.50

Deposition is chiefly a mode of discovery, the primary function of which is to supplement the pleadings for the purpose of disclosing the real matters of dispute between the parties and affording an adequate factual basis during the preparation for trial.51

Further, in Republic v. Sandiganbayan52 the Court explained that:

The truth is that "evidentiary matters" may be inquired into and learned by the parties before the trial. Indeed, it is the purpose and policy of the law that the parties - before the trial if not indeed even before the pre-trial - should discover or inform themselves of all the facts relevant to the action, not only those known to them individually, but also those known to their adversaries; in other words, the desideratum is that civil trials should not be carried on in the dark; and the Rules of Court make this ideal possible through the deposition- discovery mechanism set forth in Rules 24 to 29. The experience in other jurisdictions has been the ample discovery before trial, under proper regulation, accomplished one of the most necessary ends of modern procedure; it not only eliminates unessential issues from trials thereby shortening them considerably, but also requires parties to play the game with the cards on the table so that the possibility of fair settlement before trial is measurably increased.

As just intimated, the deposition-discovery procedure was designed to remedy the conceded inadequacy and cumbersomeness of the pre-trial functions of notice-giving, issue-formulation and fact revelation theretofore performed primarily by the pleadings.

The various modes or instruments of discovery are meant to serve (1) as a device, along with the pre-trial hearing under Rule 20, to narrow and clarify the basic issues between the parties, and (2) as a device for ascertaining the facts relative to those issues. The evident purpose is, to repeat, to enable the parties, consistent with recognized privileges, to obtain the fullest possible knowledge of the issues and facts before civil trials and thus prevent that said trials are carried on in the dark.53 (emphasis supplied)

In this case, the information sought to be obtained through the depositions of Elena and Pacita are necessary to fully equip LCDC in determining what issues will be defined at the pre-trial. Without such information before pre-trial, LCDC will be forced to prosecute its case in the dark --- the very situation which the rules of discovery seek to prevent. Indeed, the rules on discovery seek to make trial less a game of blind man’s bluff and more a fair contest with the basic issues and facts disclosed to the fullest practicable extent. 54

Considering the foregoing, the Court finds that the CA was correct in remanding the case to the trial court and ordering the depositions to proceed.

WHEREFORE, the petition is denied for lack of merit.

Costs against petitioner.

SO ORDERED.

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs.JOSE ECHALUCE, BONIFACIA ECHALUCE, and JOSE SABAS, defendants, JOSE SABAS defendant-appellant.

 In Criminal Case No. 1895 of the Court of First Instance of Catanduanes, Jose Echaluce, Bonifacia Echaluce and Jose Sabas were charged with the crime of parricide in an information filed against them by the Assistant Provincial Fiscal, which reads as follows:

That on or about the 25th day of April, 1968, at around 10:00 o'clock in the evening, in the barrio of Salvacion, Municipality of Bagamanoc Province of Catanduanes, Philippines and within the jurisdiction of this Honorable Court, the above-mentioned accused, conspiring, confederating and helping together for a common purpose did then and there wilfully, unlawfully and feloniously, with

treachery and evident premeditation, that is, having conceived and deliberated to kill one Severiano Echaluce, with whom accused Bonifacia Echaluce was united in lawful wedlock, Jose Echaluce, being the son of the victim and Jose Sabas as stranger in the execution of the crime, cooperating as principal, armed with a piece of wood (bogus) hammered the victim with the said piece of wood several times on the head, throat, knee and other parts of the body, employing means, manner and form in the execution of the crime, which tended directly and specially to insure its commission without danger to the persons of the aforementioned accused and as a result of which attack, the said Severiano Echaluce received several mortal injuries which directly caused his death.

That in the commission of the offense the aggravating circumstances of nighttime and dwelling were present.

Upon arraignment on August 23, 1968, the three defendants, with the assistance of counsel, entered a plea of not guilty. On the same day defendant Jose Sabas filed a motion to quash the information as against him on the ground that the facts charged with respect to him did not constitute the offense of parricide since he was not related in anyway to the victim as provided in Article 246 of the Revised Penal Code. In its order issued also on the same day the trial court denied the motion, holding that "the allegations in the information, if substantiated beyond reasonable doubt, would be sufficient to sustain a finding of ... murder as against Jose Sabas." It also set the hearing on the merits for September 2, 3 and 4, 1968.

On August 28, 1968 defendant Jose Sabas was re-arraigned. With the assistance of counsel, he pleaded guilty to the charge.

On October 2, 1968 the trial court rendered judgment finding defendant Jose Sabas guilty of murder, with the attendant aggravating circumstances of nighttime and dwelling, of which one was offset by the mitigating circumstance of plea of guilty. Accordingly, the Court sentenced said defendant to death, but With a recommendation for executive clemency on the ground that "there is a fair chance that the accused may be rehabilitated and in time reinstated as a useful member of society."

On the other hand, Jose Echaluce, who pleaded guilty after the information was amended by striking out the aggravating circumstances of nighttime and dwelling, was sentenced to reclusion perpetua in a separate decision. As to the third defendant, Bonifacia Echaluce, the information was provisionally dismissed upon motion of the prosecution for insufficiency of evidence.

The case is now before this Court for mandatory review insofar as defendant Jose Sabas is concerned.

The appellant, through his counsel de oficio Jose S. Brillantes, contends that the trial court erred in considering the aggravating circumstances of nocturnity and dwelling against him, in not appreciating the mitigating circumstance of passion in his favor, and consequently, in imposing upon him the death penalty.

As regards nighttime, the Solicitor General agrees with the appellant that said aggravating circumstance, the presence of which was admitted when the plea of guilty was entered, is nevertheless absorbed by the qualifying circumstance of treachery and therefore should have not been considered by the trial court in imposing the penalty. We find their position on the point to be correct and justified by decisions of this Court. 1

With respect to the aggravating circumstance of dwelling, the trial court did not err in appreciating it against the appellant. Contrary to the appellant's claim, dwelling was clearly alleged in the information to which he pleaded guilty, thus: "That in the commission of the offense the aggravating circumstance of nighttime and dwelling were present." (Emphasis supplied)

Regarding the alleged mitigating circumstance of passion or obfuscation, it is not true that the trial court admitted the presence of said circumstance in the commission of the crime when it made the observation "that the crime is one of passion." What the trial court obviously meant to convey was that the crime involved a love triangle. Moreover, passion may be considered mitigating only when it arose from legitimate feelings, 2 which is evidently not the case here.

There is no question that the crime committed is murder. Since only the aggravating circumstance of dwelling may be properly appreciated against the appellant, and the same is offset by the mitigating circumstance of plea of guilty, the penalty for the crime in its medium period, which is reclusion perpetua, should have been imposed by the trial court.

We agree with the Solicitor General that in addition to the foregoing, provision for indemnification of the heirs of the victim in the amount of P12,000.00 should have been included in the judgment. However, Jose Echaluce, who has been convicted of parricide for the murder of his father, should be excluded as beneficiary of this indemnification.

WHEREFORE, modified as to the penalty, which is reduced to reclusion perpetua and as to the indemnification of the heirs of the victim, except Jose Echaluce, in the sum of P12,000.00, the judgment under review is hereby affirmed.

B.M. No. 850     August 22, 2000

MANDATORY CONTINUING LEGAL EDUCATION (MCLE)

ADOPTING THE RULES ON MANDATORY CONTINUING LEGAL EDUCATION FOR MEMBERS OF THE INTEGRATED BAR OF THE PHILIPPINES

EN BANC

R E S O L U T I O N

Considering the Rules on Mandatory Continuing Legal Education (MCLE) for members of the Integrated Bar of the Philippines (IBP), recommended by the IBP, endorsed by the Philippine Judicial Academy, and reviewed and passed upon by the Supreme Court Committee on Legal Education, the Court hereby resolves to adopt, as it hereby adopts, the following rules for proper implementation:

RULE 1PURPOSE

Section 1. Purpose of the MCLE

Continuing legal education is required of members of the Integrated Bar of the Philippines (IBP) to ensure that throughout their career, they keep abreast with law and jurisprudence, maintain the ethics of the profession and enhance the standards of the practice of law.

RULE 2MANDATORY CONTINUING LEGAL EDUCATION

Section 1. Constitution of the MCLE Committee

Within two (2) months from the approval of these Rules by the Supreme Court En Banc, the MCLE Committee shall be constituted in accordance with these Rules.

Section 2. Requirements of completion of MCLE

Members of the IBP not exempt under Rule 7 shall complete, every three (3) years, at least thirty-six (36) hours of continuing legal education activities approved by the MCLE Committee. Of the 36 hours:

(a) At least six (6) hours shall be devoted to legal ethics.

(b) At least (4) hours shall be devoted to trial and pretrial skills.

(c) At least five (5) hours shall be devoted to alternative dispute resolution.

(d) At least nine (9) hours shall be devoted to updates on substantive and procedural laws, and jurisprudence.

(e) At least four (4) hours shall be devoted to legal writing and oral advocacy.

(f) At least two (2) hours shall be devoted to international law and international conventions.

(g) The remaining six (6) hours shall be devoted to such subjects as may be prescribed by the MCLE Committee.

RULE 3COMPLIANCE PERIOD

Section 1. Initial compliance period

The initial compliance period shall begin not later than three (3) months from the constitution of the MCLE Committee. Except for the initial compliance period for members admitted or readmitted after the establishment of the program, all compliance periods shall be for thirty-six (36) months and shall begin the day after the end of the previous compliance period.

Section 2. Compliance Group 1.

Members in the National Capital Region (NCR) or Metro Manila shall be permanently assigned to Compliance Group 1.

Section 3. Compliance Group 2.

Members in Luzon outside NCR shall be permanently assigned to Compliance Group 2.

Section 4. Compliance Group 3.

Members in Visayas and Mindanao shall be permanently assigned to Compliance Group 3.

Section 5. Compliance period for members admitted or readmitted after establishment of the program.

Members admitted or readmitted to the Bar after the establishment of the program shall be permanently assigned to the appropriate Compliance Group based on their Chapter membership on the date of admission or readmission.

The initial compliance period after admission or readmission shall begin on the first day of the month of admission or readmission and shall end on the same day as that of all other members in the same Compliance Group.

(a) Where four (4) months or less remain of the initial compliance period after admission or readmission, the member is not required to comply with the program requirement for the initial compliance.

(b) Where more than four (4) months remain of the initial compliance period after admission or readmission, the member shall be required to complete a number of hours of approved continuing legal education activities equal to the number of months remaining in the compliance period in which the member is admitted or readmitted. Such member shall be required to complete a number of hours of education in legal ethics in proportion to the number of months remaining in the compliance period. Fractions of hours shall be rounded up to the next whole number.

RULE 4COMPUTATION OF CREDIT UNITS

Section 1. Guidelines

The following are the guidelines for computation of credit units (CU):

PROGRAMS CREDIT UNITS SUPPORTING DOCUMENTS

1. SEMINARS, CONVENTIONS, CONFERENCES, SYMPOSIA, IN-HOUSE EDUCATION PROGRAMS, WORKSHOPS, DIALOGUES, ROUND TABLE DISCUSSIONS BY APPROVED PROVIDERS UNDER RULE 7 AND OTHER RELATED RULES

1.1 PARTICIPANT 1 CU PER HOUR CERTIFICATE OF ATTENDANCE WITH NUMBER OF HOURS

1.2 LECTURER 5 CU PER HOUR PHOTOCOPY OF PLAQUE OR SPONSOR'S CERTIFICATION

1.3 RESOURCE 3 CU PER HOUR PHOTOCOPY OF PLAQUE OR SPONSOR'S SPEAKER CERTIFICATION

1.4 ASSIGNED 2 CU PER HOUR CERTIFICATION FROM SPONSORING PENALIST/ ORGANIZATION REACTOR/COMMENTATOR

1.5 MODERATOR/ 2 CU PER HOUR CERTIFICATION FROM SPONSORING COORDINATOR/ ORGANIZATION FACILITATOR

2. AUTHORSHIP, EDITING AND REVIEW

2.1 RESEARCH/ 5-10 CREDIT UNITS DULY CERTIFIED/PUBLISHED INNOVATIVE TECHNICAL REPORT/PAPER PROGRAM/CREATIVE PROJECT

2.2 BOOK 50-100 PP 101+ PUBLISHED BOOK SINGLE AUTHOR 12-16 CU 17-20 CU2 AUTHORS 10-12 CU 13-16 CU3 OR MORE 5-6 CU 7-11 CU

2.3 BOOK EDITOR 1/2 OF THE CU OF PUBLISHED BOOK WITH PROOF AUTHORSHIP AS EDITOR CATEGORY

2.4 LEGAL ARTICLE 5-10 PP 11+ PUBLISHED ARTICLE SINGLE AUTHOR 6 CU 8 CU2 AUTHORS 4 CU 6 CU3 OR MORE 2 CU 4 CU

2.5 LEGAL 3-6 CU PER ISSUE PUBLISHED NEWSLETTER/JOURNAL NEWSLETTER/LAW JOURNAL EDITOR

3. PROFESSIONAL 6 CU PER CHAIR CERTIFICATION OF LAW DEAN CHAIR/BAR 1 CU PER

LECTURE OR BAR REVIEW DIRECTOR REVIEW/ HOUR LECTURE/LAW TEACHING

Section 2. Limitation on certain credit units

In numbers 2 and 3 of the guidelines in the preceding Section, the total maximum credit units shall not exceed twenty (20) hours per three (3) years.

RULE 5CATEGORIES OF CREDIT

Section 1. Classes of credits

The credits are either participatory or non-participatory.

Section 2. Claim for participatory credit

Participatory credit may be claimed for:

(a) Attending approved education activities like seminars, conferences, symposia, in-house education programs, workshops, dialogues or round table discussions.

(b) Speaking or lecturing, or acting as assigned panelist, reactor, commentator, resource speaker, moderator, coordinator or facilitator in approved education activities.

(c) Teaching in a law school or lecturing in a bar review class.

Section 3. Claim for non-participatory credit

Non-participatory credit may be claimed per compliance period for:

(a) Preparing, as an author or co-author, written materials published or accepted for publication, e.g., in the form of an article, chapter, book, or book review which contribute to the legal education of the author member, which were not prepared in the ordinary course of the member's practice or employment.

(b) Editing a law book, law journal or legal newsletter.

RULE 6COMPUTATION OF CREDIT HOURS

Section 1. Computation of credit hours

Credit hours are computed based on actual time spent in an activity (actual instruction or speaking time), in hours to the nearest one-quarter hour.

RULE 7EXEMPTIONS

Section 1. Parties exempted from the MCLE

The following members of the Bar are exempt from the MCLE requirement:

(a) The President and the Vice President of the Philippines, and the Secretaries and Undersecretaries of Executives Departments;

(b) Senators and Members of the House of Representatives;

(c) The Chief Justice and Associate Justices of the Supreme Court, incumbent and retired members of the judiciary, incumbent members of the Judicial and Bar Council and incumbent court lawyers covered by the Philippine Judicial Academy program of continuing judicial education;

(d) The Chief State Counsel, Chief State Prosecutor and Assistant Secretaries of the Department of Justice;

(e) The Solicitor General and the Assistant Solicitor General;

(f) The Government Corporate Counsel, Deputy and Assistant Government Corporate Counsel;

(g) The Chairmen and Members of the Constitutional Commissions;

(h) The Ombudsman, the Overall Deputy Ombudsman, the Deputy Ombudsmen and the Special Prosecutor of the Office of the Ombudsman;

(i) Heads of government agencies exercising quasi-judicial functions;

(j) Incumbent deans, bar reviews and professors of law who have teaching experience for at least 10 years accredited law schools;

(k) The Chancellor, Vice-Chancellor and members of the Corps of Professors and Professorial Lectures of the Philippine Judicial Academy; and

(l) Governors and Mayors.

Section 2. Other parties exempted from the MCLE

The following Members of the Bar are likewise exempt:

(a) Those who are not in law practice, private or public.

(b) Those who have retired from law practice with the approval of the IBP Board of Governors.

Section 3. Good cause for exemption from or modification of requirement

A member may file a verified request setting forth good cause for exemption (such as physical disability, illness, post graduate study abroad, proven expertise in law, etc.) from compliance with or modification of any of the requirements, including an extension of time for compliance, in accordance with a procedure to be established by the MCLE Committee.

Section 4. Change of status

The compliance period shall begin on the first day of the month in which a member ceases to be exempt under Sections 1, 2, or 3 of this Rule and shall end on the same day as that of all other members in the same Compliance Group.

Section 5. Proof of exemption

Applications for exemption from or modification of the MCLE requirement shall be under oath and supported by documents.

RULE 8STANDARDS FOR APPROVAL OF EDUCATION ACTIVITIES

Section 1. Approval of MCLE program

Subject to the rules as may be adopted by the MCLE Committee, continuing legal education program may be granted approval in either of two (2) ways: (1) the provider of the activity is an approved provider and certifies that the activity meets the criteria of Section 3 of this Rules; and (2) the provider is specially mandated by law to provide continuing legal education.

Section 2. Standards for all education activities

All continuing legal education activities must meet the following standards:

(a) The activity shall have significant current intellectual or practical content.

(b) The activity shall constitute an organized program of learning related to legal subjects and the legal profession, including cross profession activities (e.g., accounting-tax or medical-legal) that enhance legal skills or the ability to practice law, as well as subjects in legal writing and oral advocacy.

(c) The activity shall be conducted by a provider with adequate professional experience.

(d) Where the activity is more than one (1) hour in length, substantive written materials must be distributed to all participants. Such materials must be distributed at or before the time the activity is offered.

(e) In-house education activities must be scheduled at a time and location so as to be free from interruption like telephone calls and other distractions.

RULE 9APPROVAL OF PROVIDERS

Section 1. Approval of providers

Approval of providers shall be done by the MCLE Committee.

Section 2. Requirements for approval of providers

Any persons or group may be approved as a provider for a term of two (2) years, which may be renewed, upon written application. All providers of continuing legal education activities, including in-house providers, are eligible to be approved providers. Application for approval shall:

(a) Be submitted on a form provided by the IBP;

(b) Contain all information requested on the form;

(c) Be accompanied by the approval fee;

Section 3. Requirements of all providers

All approved providers shall agree to the following:

(a) An official record verifying the attendance at the activity shall be maintained by the provider for at least four (4) years after the completion date. The provider shall include the member on the official record of attendance only if the member's signature was obtained at the time of attendance at the activity. The official record of attendance shall contain the member's name and number in the Roll of Attorneys and shall identify the time, date, location, subject matter, and length of the education activity. A copy of such record shall be furnished the IBP.

(b) The provider shall certify that:

(1) This activity has been approved for MCLE by the IBP in the amount of ________ hours of which hours will apply in (legal ethics, etc.), as appropriate to the content of the activity;

(2) The activity conforms to the standards for approved education activities prescribed by these Rules and such regulations as may be prescribed by the IBP pertaining to MCLE.

(c) The provider shall issue a record or certificate to all participants identifying the time, date, location, subject matter and length of the activity.

(d) The provider shall allow in-person observation of all approved continuing legal education activities by members of the IBP Board of Governors, the MCLE Committee, or designees of the Committee and IBP staff for purposes of monitoring compliance with these Rules.

(e) The provider shall indicate in promotional materials, the nature of the activity, the time devoted to each devoted to each topic and identify of the instructors. The provider shall make available to each participant a copy of IBP-approved Education Activity Evaluation Form.

(f) The provider shall maintain the completed Education Activity Evaluation Forms for a period of not less than one (1) year after the activity, copy furnished the IBP.

(g) Any person or group who conducts an unauthorized activity under this program or issues a spurious certificate in violation of these Rules shall be subject to appropriate sanctions.

Section 4. Renewal of provider approval

The approval of a provider may be renewed every two (2) years. It may be denied if the provider fails to comply with any of the requirements of these Rules or fails to provide satisfactory education activities for the preceding period.

Section 5. Revocation of provider approval

The approval of any provider referred to in Rule 9 may be revoked by a majority vote of the IBP Board of Governors, upon recommendation of the MCLE Committee, after notice and hearing and for good cause.

RULE 10ACTIVITY AND PROVIDER APPROVAL FEE

Section 1. Payment of fees

Application for approval of an education activity or as a provider requires payment of an appropriate fee.

RULE 11GENERAL COMPLIANCE PROCEDURES

Section 1. Compliance card

Each member shall secure from the MCLE Committee a Compliance Card before the end of his compliance period. He shall complete the card by attesting under oath that he has complied with the education requirement or that he is exempt, specifying the nature of the exemption. Such Compliance Card must be returned to the address indicated therein not later than the day after the end of the member's compliance period.

Section 2. Member record keeping requirement

Each member shall maintain sufficient record of compliance or exemption, copy furnished the MCLE Committee. The record required to be provided to the members by the provider pursuant to Section 3(c) of Rule 9 should be sufficient record of attendance at a participatory activity. A record of non-participatory activity shall also be maintained by the member, as referred to in Section 3 of Rule 5.

RULE 12NON-COMPLIANCE PROCEDURES

Section 1. What constitutes non-compliance

The following shall constitute non-compliance

(a) Failure to complete the education requirement within the compliance period;

(b) Failure to provide attestation of compliance or exemption;

(c) Failure to provide satisfactory evidence of compliance (including evidence of exempt status) within the prescribed period;

(d) Failure to satisfy the education requirement and furnish evidence of such compliance within sixty (60) days from receipt of a non-compliance notice;

(e) Any other act or omission analogous to any of the foregoing or intended to circumvent or evade compliance with the MCLE requirements.

Section 2. Non-compliance notice and 60-day period to attain compliance

A member failing to comply will receive a Non-Compliance Notice stating the specific deficiency and will be given sixty (60) days from the date of notification to explain the deficiency or otherwise show compliance with the requirements. Such notice shall contain, among other things, the following language in capital letters:

YOUR FAILURE TO PROVIDE ADEQUATE JUSTIFICATION FOR NON-COMPLIANCE OR PROOF OF COMPLIANCE WITH THE MCLE REQUIREMENT BY (INSERT DATE 60 DAYS FROM THE DATE OF NOTICE), SHALL BE A CAUSE FOR LISTING AS A DELINQUENT MEMBER.

The Member may use this period to attain the adequate number of credit hours for compliance. Credit hours earned during this period may only be counted toward compliance with the prior compliance period requirement unless hours in excess of the requirement are earned, in which case, the excess hours may be counted toward meeting the current compliance period requirement.lawphil.net

RULE 13CONSEQUENCES OF NON-COMPLIANCE

Section 1. Non-compliance fee

A member who, for whatever reason, is in non-compliance at the end of the compliance period shall pay a non-compliance fee.

Section 2. Listing as delinquent member

Any member who fails to satisfactorily comply with Section 2 of Rule 12 shall be listed as a delinquent member by the IBP Board of Governors upon the recommendation of the MCLE Committee, in which case, Rule 139-A of the Rules of Court shall apply.

RULE 14REINSTATEMENT

Section 1. Process

The involuntary listing as a delinquent member shall be terminated when the member provides proof of compliance with the MCLE requirement, including payment of non-compliance fee. A member may attain the necessary credit hours to meet the requirement for the period of non-compliance during the period the member is on inactive status. These credit hours may not be counted toward meeting the current compliance period requirement. Credit hours attained during the period of non-compliance in excess of the number needed to satisfy the prior compliance period requirement may be counted toward meeting the current compliance period requirement.lawphil.net

Section 2. Termination of delinquent listing administrative process

The termination of listing as a delinquent member is administrative in nature but it shall be made with notice and hearing by the MCLE Committee.

RULE 15MANDATORY CONTINUING LEGAL EDUCATION COMMITTEE

Section 1. Composition

The MCLE Committee shall be composed of five (5) members, namely: a retired Justice of the Supreme Court, as Chair, and four (4) members, respectively, nominated by the IBP, the Philippine Judicial Academy, a law center designated by the Supreme Court and associations of law schools and/or law professors.

The members of the Committee shall be of proven probity and integrity. They shall be appointed by the Supreme Court for a term of three (3) years and shall receive such compensation as may be determined by the Court.

Section 2. Duty of the Committee

The MCLE Committee shall administer and adopt such implementing rules as may be necessary subject to the approval by the Supreme Court. It shall, in consultation with the IBP Board of Governors, prescribe a schedule of MCLE fees with the approval of the Supreme Court.

Section 3. Staff of the IBP

The IBP shall employ such staff as may be necessary to perform the record-keeping, auditing, reporting, approval and other necessary functions.

Section 4. Submission of annual budget

The IBP shall submit to the Supreme Court an annual budget for a subsidy to establish, operate and maintain the MCLE Program.

This resolution shall take effect in October 2000, following its publication in two (2) newspaper of general circulation in the Philippines.

Adopted this 22nd day of August, 2000.

BAR MATTERNO. 1922

Sirs/Mesdames:

Quoted hereunder, for your information, is a resolution of the Court En Banc dated June 3, 2008.

"Bar Matter No. 1922 - Re: Recommendation of the Mandatory Continuing Legal Education (MCLE) Board to Indicate in All Pleadings Filed with the Courts the Counsel's MCLE Certificate of Compliance or Certificate of Exemption. - The Court Resolved to NOTE the Letter, dated May 2, 2008, of Associate Justice Antonio Eduardo B. Nachura, Chairperson, Commitee on Legal Education and Bar Matters, informing the Court of the diminishing interest of the members of the Bar in the MCLE requirement program.

The Court further Resolved, upon the recommendation of the Committee on Legal Education and Bar Matters, to REQUIRE practicing members of the bar to INDICATE in all pleadings filed before the courts of quasi-judicial bodies, the number and date of issue of their MCLE Certificate of Compliance or Certificate of Exemption, as may be applicable, for the immediately preceding compliance period.  Failure to disclose the required information would cause the dismissal of the case and the expunction of the pleadings from the records.

The New Rule shall take effect sixty (60) days after its publication in a newspaper of general circulation."