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Prof. Joselito Guianan Chan's The Labor Code of the Philippines, Annotated Labor Standards & Social Legislation Volume I of a 3-Volume Series 2019 Edition (3rd Revised Edition)
 

 
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UNITED STATES SUPREME COURT JURISPRUDENCE
 

 
PHILIPPINE SUPREME COURT JURISPRUDENCE
 

   
August-2009 Jurisprudence                 

  • A.C. No. 7399 - Antero J. Pobre v. Sen. Miriam Defensor-Santiago

  • A.M. No. 08-6-352-RTC - Query of Atty. Karen M. Silverio-Buffe, former Clerk of Court, Branch 81, Romblon, Romblon, on the prohibition from engaging in the private practice of law

  • A.M. No. 08-11-7-SC - Re: Request of National Committee on Legal Aid to exempt legal aid clients from paying filing, docket and other fees.

  • A.M. No. 09-6-9-SC - Query of Mr. Roger C. Prioreschi re exemption from legal and filing fees of the Good Shperd Foundation, Inc.

  • A.M. No. P-06-2282 - Lolita S. Regir v. Joel Regir

  • A.M. No. P-07-2390 - Office of the Court Administrator v. Lyndon L. Isip, Sheriff IV, RTC, OCC, City of San Fernando, Pampanga

  • A.M. No. P-08-2436 Formerly OCA I.P.I. No. 06-2394-P - Teopicio Tan v. Salvacion D. Sermonia, Clerk IV, MTCC, Iloilo City

  • A.M. No. P-08-2501 - Wilson B. Tan v. Jesus F. Hernando

  • A.M. No. P-08-2553 Formerly A.M. OCA IPI No. 98-455-P - Leo Mendoza v. Prospero V. Tablizo

  • A.M. No. P-08-2571 Formerly OCA I.P.I. No. 07-2651-P - Simeon Guari o, et al. v. Cesar F. Ragsac, et al.

  • A.M. No. P-09-2610 Formerly A.M. OCA IPI No. 09-3072-P - Hector P. Teodosio v. Rolando R. Somosa, et al.

  • A.M. No. P-09-2665 - Judge Alma Crispina B. Collado-Lacorte v. Eduardo Rabena

  • A.M. No. RTJ-07-2031 Formerly OCA IPI No. 06-2484-RTJ - Adelpha E. Malabed v. Judge Enrique C. Asis, RTC, Br. 16, Naval Biliran

  • A.M. No. RTJ-08-2124 Formerly A.M. OCA IPI No. 07-2631-RTJ and A.M. NO. RTJ-08-2125 Formerly A.M. OCA IPI No. 07-2632-RTJ - Judge Rizalina T. Capco-Umali, RTC, Br. 212, Mandaluyong City v. Judge Paulita B. Acosta-Villarante, RTC, Br. 211, Mandaluyong City

  • A.M. No. RTJ-08-2138 - Olga M. Samson v. Judge Virgilio G. Caballero

  • G.R. No. 130223 - Rural Bank of Sta. Barbara (Pangasinan), Inc. v. The Manila mission of the church of Jesus Christ of latter day saints, Inc.

  • G.R. No. 130371 & G.R. No. 130855 - Repbulic of the Philippines v. Ferdinand R. Marcos II and Imelda R. Marcos

  • G.R. No. 149241 - Dart Philippines, Inc. v. Spouses Francisco and Erlinda Calogcog

  • G.R. No. 149988 - Ramie Velenzuela v. People of the Philippines

  • G.R. No. 150887 - Francisco Madrid and Edgardo Bernardo v. Spouses Bonifacio Mapoy and Felicidad Martinez

  • G.R. No. 151932 - Henry Ching Tiu, et al. v. Philippine Bank of Communications

  • G.R. No. 152579 - Sameer Overseas Placement Agency, Inc. v. Mildred R. Santos, etc. et al.

  • G.R. No. 153690, G.R. No. 157381 and G.R. No. 170889 - David Lu v. Paterno Lu Ym, Sr., et al.

  • G.R. No. 154652 - Prudencio M. Reyes, Jr. v. Simplicio C. Belisario and Emmanuel S. Malicdem

  • G.R. No. 155174 - D.M. Consunji, Inc. v. Duvaz Corporation

  • G.R. No. 156660 - Ormoc Sugarcane Planters' Association, Inc. (OSPA), Occidental Leyte Farmer's Multi-Purpose Cooperative Inc., et al. v. The Court of Appeals (Special Former Sixth Division), et al.

  • G.R. No. 157374 - Heirs of Cayetano Pangan and Consuelo Pangan v. Spouses Rogelio Perreras and Priscilla G. Perreras

  • G.R. No. 160346 - Purita A. Pahud, et al. v. Court of Appeals, et al.

  • G.R. No. 160379 - Republic of the Philippines through the Department of Public Works and Highways v. Court of Appeals and Rosario Rodriguez Reyes

  • G.R. No. 160610 - Judelio Cobarrubias v. People of the Philippines

  • G.R. No. 160743 - Cornelia Baladad (Represented by Heinrich M. Angeles and Rex Aaron A. Baladad) v. Sergio A. Rublico and Spouses Laureano E. Yupano

  • G.R. No. 161042 - Republic of the Philippines v. Agripina Dela Raga

  • G.R. No. 161419 - Eugenio Encinares v. Dominga Achero

  • G.R. No. 162355 - Sta. Lucia East Commercial Corporation v. Hon. Secretary of Labor and Employment, et al.

  • G.R. No. 162518 - Rodrigo Sumiran v. Spouses Generoso Damaso and Eva Damaso

  • G.R. No. 163505 - Gualberto Aguanza v. Asian Terminal, Inc., et al.

  • G.R. No. 163788 - Ester B. Maralit v. Philippine National Bank

  • G.R. No. 164324 - Tanduay Distillers, Inc. v. Ginebra San Miguel, Inc.

  • G.R. No. 164789 - Christian Assembly, Inc. v. Sps. Avelino C. Ignacio and Priscilla R. Ignacio

  • G.R. NOS. 164813 & G.R. No. 174590 - Lowe, Inc., et al. v. Court of Appeals and Irma Mutuc

  • G.R. No. 165116 - Maria Soledad Tomimbang v. Atty. Jose Tomimbang

  • G.R. No. 165450 and G.R. No. 165452 - Francis F. Yenko, et al., (etc.) v. Raul Nestor C. Gungon

  • G.R. No. 165697 & G.R. No. 166481 - Antonio Navarro v. Metropolitan Bank & Trust Company

  • G.R. No. 166470 & G.R. No. 169217 - Cecilio C. Hernandez, Ma, Victoria C. Hernandez-Sagun, Teresa C. Hernandez-Villa Abrille and Natividad Cruz-Hernandez v. Jovita San Juan-Santos

  • G.R. No. 166738 - Rowena Padilla-Rumbaua v. Eduardo Rumbaua

  • G.R. No. 166879 - A. Soriano Aviation v. Employees Association of A. Soriano Aviation, et al.

  • G.R. No. 167230 - Spouses Dante and Ma. Teresa Galura v. Math-Agro Corporation

  • G.R. No. 167304 - People of the Philippines v. Sandiganbayan (Third Division) and Victoria Amante

  • G.R. No. 168910 - Republic Cement Corporation v. Peter Guinmapang

  • G.R. No. 168982 - People of the Philippines v. Dir. Cesar P. Nazareno, Dir. Evelino Nartatez, Dir. Nicasio Ma. S. Custodio and The Sandiganbayan

  • G.R. No. 169870 - People of the Philippines v. Elegio An

  • G.R. No. 170137 - People of the Philippines v. Randy Magbanua alias "Boyung" and Wilson Magbanua.

  • G.R. No. 170672 - Judge Felimon Abelita, III v. P/Supt. German Doria and SPO3 Cesar Ramirez

  • G.R. No. 170674 - Foundation Specialist, Inc. v. Betonval Ready Concrete, Inc., et al.

  • G.R. No. 171035 - William Ong Genato v. Benjamin Bayhon, et al.

  • G.R. No. 171169 - GC Dalton Industries, Inc. v. Equitable PCI Bank

  • G.R. No. 171313 - People of the Philippines v. Edgar Trayco y Masola

  • G.R. No. 171674 - Department of Agrarian Reform (etc.) v. Carmen S. Tongson

  • G.R. No. 171732 - People of the Philippines v. Edgar Denoman y Acurda

  • G.R. No. 171951 - Amado Alvarado Garcia v. People of the Philippines

  • G.R. No. 172537 - Jethro Intelligence & Security Corporation and Yakult, Inc. v. The Hon. Secretary of Labor and Employment, et al.

  • G.R. No. 172680 - The Heirs of the Late Fernando S. Falcasantos, etc., et al. v. Spouses Fidel Yeo Tan and Sy Soc Tiu, et al.

  • G.R. No. 174209 - Philippine Long Distance Telephone Company v. Rizalina Raut, et al.

  • G.R. No. 175345 - Baltazar L. Payno v. Orizon Trading Corp./ Orata Trading and Flordeliza Legaspi

  • G.R. No. 175605 - People of the Philippines v. Arnold Garchitorena Y Camba a.k.a. Junior, Joey Pamplona a.k.a. Nato, and Jessie Garcia y Adorino

  • G.R. No. 176487 - Republic of the Philippines, represented by the Department of Public Works and Highways v. Far East Enterprises, Inc., et al.

  • G.R. No. 176511 - Spouses Obdulia H. Espejo and Hildelberto T. Espejo v. Geraldine Coloma Ito

  • G.R. No. 176906 - Andrew B. Nudo v. Hon. Amado S. Caguioa, et al.

  • G.R. No. 176917 & G.R. No. 176919 - Continental Cement Corp., v. Filipinas (PREFAB) Systems, Inc.

  • G.R. No. 177134 - People of the Philippines v. Rachel Angeles y Naval Alias Russel Angeles y Cabal

  • G.R. No. 177508 - Barangay Association for National Advancement and Transparency (BANAT) Partylist represented by Salvador B. Britanico v. Commission on Elections

  • G.R. No. 177741 - People of the Philippines v. Willie Rivera

  • G.R. NOS. 178188, 181141, 181141 and 183527 - Olympic Mines and Development Corp., v. Platinum Group Metals Corporation

  • G.R. No. 178797 - Metropolitan Bank and Trust Co., v. Commissioner of Internal Revenue

  • G.R. No. 178984 - Erlinda Mapagay v. People of the Philippines

  • G.R. No. 179280 - People of the Philippines v. Pedro Calangi alias Haplas

  • G.R. No. 179293 - Eden Llamas v. Ocean Gateway Maritime and Management, Inc.

  • G.R. No. 179905 - Republic of the Philippines v. Neptuna G. Javier

  • G.R. No. 179941 - People of the Philippines v. Lito Macabare y Lopez

  • G.R. No. 180357 - Pioneer Insurance and Surety Corporation v. Heirs of Vicente Coronado, et al.

  • G.R. No. 180380 - Raymund Madali and Rodel Madali v. People of the Philippines

  • G.R. No. 180594 - People of the Philippines v. Ismael Mokammad, et al.

  • G.R. No. 180824 - Urban Consolidated Constructors Philippines, Inc. v. The Insular Life Assurance Co., Inc.

  • G.R. No. 180921 - People of the Philippines v. Bernardo Rimando, Jr. y Basilio alias "JOJO"

  • G.R. No. 180988 - Julie's Franchise Corporation, et al. v. Hon. Chandler O. Ruiz, in his capacity as Presiding Judge of the Regional Trial Court, Branch 10, Dipolog City, et al.

  • G.R. No. 181516 - Cesario L. Del Rosario v. Philippine Journalists, Inc.

  • G.R. No. 181845 - The City of Manila, Liberty M. Toledo in her capacity as the Treasurer of Manila, et al. v. Coca-Cola Bottlers Philippines, Inc.

  • G.R. No. 181972 - Philippine Hoteliers, Inc./Dusit Hotel Nikko-Manila v. National Union of Workers in Hotel, Restaurant, and Allied Industries (NUWHARAIN-APL-IUF) Dusit Hotel Nikko Chapter

  • G.R. No. 182267 - Pagayanan R. Hadji-Sirad v. Civil Service Commission

  • G.R. No. 182311 - Fidel O. Chua and Filiden Realty and Development Corporation v. Metropolitan Bank and Trust Company, et al.

  • G.R. No. 182380 - Robert P. Guzman v. Commission on Elections, Mayor Randolph S. Ting and Salvacion Garcia

  • G.R. No. 182528 - People of the Philippines v. Marian Coroche y Caber

  • G.R. No. 182792 - People of the Philippines v. Pepito Neverio

  • G.R. No. 183059 - Ely Quilatan & Rosvida Quilatan-Elias v. Heirs of Lorenzo Quilatan, et al.

  • G.R. No. 183196 - Chona Estacio and Leopoldo Manliclic v. Pampanga I, Electric Cooperative, Inc. and Loliano E. Allas

  • G.R. No. 183329 - Rufino C. Montoya v. Transmed Manila Corporation Mr. Edilberto Ellena and Great Lake Navigation Co., Ltd.

  • G.R. No. 183366 - Ricardo C. Duco v. The Hon. Commission on Elections, First Division, and Narciso B. Avelino

  • G.R. No. 183526 - Violeta R. Lalican v. The Insular Life Assurance Company Limited, as represented by the President Vicente R. Avilon

  • G.R. No. 184005 - Top Art Shirt Manufacturing Inc., Maximo Arejola and Tan Shu Keng v. Metropolitan Bank and Trust Inc., and the Court of the Appeals

  • G.R. No. 184337 - Heirs of Federico C. Delgado and Annalisa Pesico v. Luisito Q. Gonzales and Antonio T. Buenaflor

  • G.R. No. 184905 - Lambert S. Ramos v. C.O.L. Realty Corporation

  • G.R. No. 185004 - People of the Philippines v. Armando Ferasol

  • G.R. No. 185711 - People of the Philippines v. Reynaldo Sanz Laboa

  • G.R. No. 185712 - People of the Philippines v. Lilio U. Achas

  • G.R .No. 185723 - People of the Philippines v. Edwin Mejia

  • G.R .No. 185841 - People of the Philippines v. Ismael Diaz @ Maeng and Rodolfo Diaz @ Nanding

  • G.R. No. 186080 - Julius Amanquiton v. People of the Philippines

  • G.R. No. 186129 - People of the Philippines v. Jesus Paragas Cruz

  • G.R. No. 186224 - Constancio D. Pacanan, Jr. v. Commission on Elections and Francisco M. Langi, Sr.

  • G.R. No. 186379 - People of the Philippines v. Bienvenido Lazaro @ Bening

  • G.R. No. 186381 - People of the Philippines v. Clemencia Arguelles y Talacay

  • G.R. No. 186420 - People of the Philippines v. Samuel Anod

  • G.R. No. 186496 - People of the Philippines v. Dante Gragasin Y Par

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    G.R. No. 151932 - Henry Ching Tiu, et al. v. Philippine Bank of Communications

      G.R. No. 151932 - Henry Ching Tiu, et al. v. Philippine Bank of Communications

    PHILIPPINE SUPREME COURT DECISIONS

    THIRD DIVISION

    [G.R. NO. 151932 : August 19, 2009]

    HENRY CHING TIU, CHRISTOPHER HALIN GO, and GEORGE CO, Petitioners, v. PHILIPPINE BANK OF COMMUNICATIONS, Respondent.

    D E C I S I O N

    PERALTA, J.:

    This is a Petition for Review on Certiorari, under Rule 45 of the Rules of Court, seeking to annul and set aside the Decision1 dated September 28, 2001, rendered by the Court of Appeals (CA) in CA-G.R. SP No. 57732, dismissing the petition and affirming the assailed Orders of the Regional Trial Court (RTC) of Cagayan de Oro City, Branch 21 in Civil Case No. 99-352, dated December 14, 1999 and January 11, 2000.

    The factual and procedural antecedents are as follows:

    In June 1993, Asian Water Resources, Inc. (AWRI), represented by herein petitioners, applied for a real estate loan with the Philippine Bank of Communications (PBCOM) to fund its purified water distribution business. In support of the loan application, petitioners submitted a Board Resolution2 dated June 7, 1993. The loan was guaranteed by collateral over the property covered by Transfer Certificate of Title No. T-13020.3 The loan was eventually approved.4

    In August 1996, AWRI applied for a bigger loan from PBCOM for additional capitalization using the same Board Resolution, but without any additional real estate collateral. Considering that the proposed additional loan was unsecured, PBCOM required all the members of the Board of Directors of AWRI to become sureties. Thus, on August 16, 1996, a Surety Agreement5 was executed by its Directors and acknowledged by a notary public on the same date. All copies of the Surety Agreement, except two, were kept by PBCOM. Of the two copies kept by the notary public, one copy was retained for his notarial file and the other was sent to the Records Management and Archives Office, through the Office of the RTC Clerk of Court.6

    Thereafter, on December 16, 1998, AWRI informed the bank of its desire to surrender and/or assign in its favor, all the present properties of the former to apply as dacion en pago for AWRI's existing loan obligation to the bank.7 On January 11, 1999, PBCOM sent a reply denying the request. On May 12, 1999, PBCOM sent a letter to petitioners demanding full payment of its obligation to the bank.8

    Its demands having remained unheeded, PBCOM instructed its counsel to file a complaint for collection against petitioners. The case was docketed as Civil Case No. 99-352.

    On July 3, 1999, petitioners filed their Answer. It alleged, among other things, that they were not personally liable on the promissory notes, because they signed the Surety Agreement in their capacities as officers of AWRI. They claimed that the Surety Agreement attached to the complaint as Annexes "A" to "A-2"9 were falsified, considering that when they signed the same, the words "In his personal capacity" did not yet appear in the document and were merely intercalated thereon without their knowledge and consent.10

    In support of their allegations, petitioners attached to their Answer a certified photocopy of the Surety Agreement issued on March 25, 1999 by the Records Management and Archives Office in Davao City,11 showing that the words "In his personal capacity" were not found at the foot of page two of the document where their signatures appeared.12

    Because of this development, PBCOM's counsel searched for and retrieved the file copy of the Surety Agreement. The notarial copy showed that the words "In his personal capacity" did not appear on page two of the Surety Agreement.13

    Petitioners' counsel then asked PBCOM to explain the alteration appearing on the agreement. PBCOM subsequently discovered that the insertion was ordered by the bank auditor. It alleged that when the Surety Agreement was inspected by the bank auditor, he called the attention of the loans clerk, Kenneth Cabahug, as to why the words "In his personal capacity" were not indicated under the signature of each surety, in accordance with bank standard operating procedures. The auditor then ordered Mr. Cabahug to type the words "In his personal capacity" below the second signatures of petitioners. However, the notary public was never informed of the insertion.14 Mr. Cabahug subsequently executed an affidavit15 attesting to the circumstances why the insertion was made.

    PBCOM then filed a Reply and Answer to Counterclaim with Motion for Leave of Court to Substitute Annex "A" of the Complaint,16 wherein it attached the duplicate original copy retrieved from the file of the notary public. PBCOM also admitted its mistake in making the insertion and explained that it was made without the knowledge and consent of the notary public. PBCOM maintained that the insertion was not a falsification, but was made only to speak the truth of the parties' intentions. PBCOM also contended that petitioners were already primarily liable on the Surety Agreement whether or not the insertion was made, having admitted in their pleadings that they voluntarily executed and signed the Surety Agreement in the original form. PBCOM, invoking a liberal application of the Rules, emphasized that the motion incorporated in the pleading can be treated as a motion for leave of court to amend and admit the amended complaint pursuant to Section 3, Rule 10 of the Rules of Court.

    On December 14, 1999, the RTC issued an Order17 allowing the substitution of the altered document with the original Surety Agreement, the pertinent portion of which reads:

    August 16, 1996 attached as Annexes "A" to "A-2" of the reply and answer Resolving the Motion to Substitute Annexes "A" to "A-2" of the complaint and the opposition thereto by the defendant, this Court, in the interest of justice, hereby allows the substitution of said Annexes "A" to "A-2" of the complaint with the duplicate original of notarial copy of the Agreement dated to counter-claim.

    SO ORDERED.

    Petitioners filed a motion for reconsideration,18 but it was denied in the Order19 dated January 11, 2000, to wit:

    Resolving the motion for reconsideration and the opposition thereto, the Court finds the motion substantially a reiteration of the opposition to plaintiff's motion.

    Additionally, the instant motion for reconsideration treats on evidentiary matter which can be properly ventilated in the trial proper, hence, there is no cogent reason to disturb the Court's order of December 14, 1999.

    SO ORDERED.

    Aggrieved, petitioners sought recourse before the CA via a petition for certiorari under Rule 65 of the Rules of Court, docketed as CA-G.R. SP No. 57732.

    Petitioners claimed that the RTC acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction in denying their motion for reconsideration and in allowing PBCOM to substitute the altered copy of the Surety Agreement with the duplicate original notarial copy thereof considering that the latter's cause of action was solely and principally founded on the falsified document marked as Annexes "A" to "A-2."20

    On September 28, 2001, the CA rendered a Decision dismissing the petition for lack of merit, the decretal portion of which reads:

    WHEREFORE, foregoing considered, the instant petition is hereby DENIED DUE COURSE and, accordingly, DISMISSED for lack of merit. The assailed Orders dated December 14, 1999 and January 11, 2000 of the Regional Trial Court of Cagayan de Oro City, Branch 21, are hereby AFFIRMED in toto.

    SO ORDERED.21

    Hence, the petition assigning the following errors:

    I

    The COURT committed a reversible error in affirming in toto the order of the lower court allowing the substitution of the falsified document by relying on the provision of section 3, rule 10 of the rules of Court.

    II

    Acting as the court on the petition for certiorari, the court committed a reversible error having no jurisdiction to rule on the obligation of the petitioners based on the falsified document

    III

    The court erred in giving credence to the allegation of respondent bank that from August 15 to December 9, 1997 asian water resources inc. obtained several availments of new bigger and additional loans totalLing p2,030,000.00 evidenced by 4 promissory notes marked as annexes "B," "B-1," "B-2" and "B-3."

    IV

    The court failed to consider the misapplication of the principle of equity committed by the lower court in ordering the substitution of the falsified document.22

    Petitioners argue that the CA committed a reversible error in affirming the Order of the RTC allowing the substitution of the document by relying on Section 3, Rule 10 of the Rules of Court. Petitioners assert that the Rules do not allow the withdrawal and substitution of a "falsified document" once discovered by the opposing party.

    Petitioners maintain that PBCOM's cause of action was solely and principally founded on the alleged "falsified document" originally marked as

    Annexes "A" to "A-2." Thus, the "withdrawal" of the document results in the automatic withdrawal of the whole complaint on the ground that there is no more cause of action to be maintained or enforced by plaintiff against petitioners. Also, petitioners argue that if the substitution will be allowed, their defenses that were anchored on Annexes "A" to "A-2" would be gravely affected. Moreover, considering that the said document was already removed, withdrawn, and disregarded by the RTC, the withdrawal and substitution of the document would prevent petitioners from introducing the falsified documents during the trial as part of their evidence.23

    Petitioners submit that the RTC misapplied the principle of equity when it allowed PBCOM to substitute the document with the original agreement. Petitioners also claim that the remedy of appeal after the termination of the case in the RTC would become ineffective and inadequate if the Order of the RTC allowing the "withdrawal" and "substitution" of the document would not be nullified, because the falsified document would no longer be found in the records of the case during the appeal.24

    Petitioners contend that the CA went beyond the issue raised before it when it interpreted the provisions of the Surety Agreement, particularly paragraph 4 thereof, and then ruled on the obligations of the parties based on

    the document. Petitioners posit that the CA prematurely ruled on petitioners' obligations, considering that their obligations should be determined during trial on the merits, after the parties have been given the opportunity to present their evidence in support of their respective claims. Petitioners stress that the CA went into the merit of the case when it gave credence to the statement of fact of PBCOM that "From August 15 to December 9, 1997, Asian Water Resources, Inc. obtained several availments on its additional loans totalling P2,030,000.00 as evidenced by 4 promissory notes marked as Annexes B, B-1, B-2, and B-3. Thus, the conclusion of the CA in declaring the petitioners liable as sureties violated their right to due process.25

    For its part, PBCOM argues that since the complaint is based on an actionable document, i.e., the surety agreement, the original or a copy thereof should be attached to the pleading as an exhibit, which shall be deemed part of the pleading. Considering that the surety agreement is annexed to the complaint, it is an integral part thereof and its substitution with another copy is in the nature of a substantial amendment, which is allowed by the Rules, but with prior leave of court.

    Moreover, PBCOM alleges that since the Rules provides that substantial amendments may be made upon leave of court, the authority of the RTC to allow the amendment is discretionary. Thus, the CA correctly held that the act of granting the said substitution was within the clear and proper discretion of the RTC.

    The petition is without merit.

    As to the substitution of the earlier surety agreement that was annexed to the complaint with the original thereof, this Court finds that the RTC did not err in allowing the substitution.

    The pertinent rule on actionable documents is found in Section 7, Rule 8 of the Rules of Court, which provides that when the cause of action is anchored on a document, its substance must be set forth, and the original or a copy thereof "shall" be attached to the pleading as an exhibit and deemed a part thereof, to wit:

    Section 7. Action or defense based on document. - Whenever an action or defense is based upon a written instrument or document, the substance of such instrument or document shall be set forth in the pleading, and the original or a copy thereof shall be attached to the pleading as an exhibit, which shall be deemed to be a part of the pleading, or said copy may with like effect be set forth in the pleading.

    With respect to PBCOM's right to amend its complaint, including the documents annexed thereto, after petitioners have filed their answer, Section 3, Rule 10 of the Rules of Court specifically allows amendment by leave of court. The said Section states:

    SECTION 3. Amendments by leave of court. Except as provided in the next preceding section, substantial amendments may be made only upon leave of court. But such leave may be refused if it appears to the court that the motion was made with intent to delay. Orders of the court upon the matters provided in this section shall be made upon motion filed in court, and after notice to the adverse party, and an opportunity to be heard.

    This Court has emphasized the import of Section 3, Rule 10 of the 1997 Rules of Civil Procedure in Valenzuela v. Court of Appeals,26 thus:

    Interestingly, Section 3, Rule 10 of the 1997 Rules of Civil Procedure amended the former rule in such manner that the phrase "or that the cause of action or defense is substantially altered" was stricken-off and not retained in the new rules. The clear import of such amendment in Section 3, Rule 10 is that under the new rules, "the amendment may (now) substantially alter the cause of action or defense." This should only be true, however, when despite a substantial change or alteration in the cause of action or defense, the amendments sought to be made shall serve the higher interests of substantial justice, and prevent delay and equally promote the laudable objective of the rules which is to secure a "just, speedy and inexpensive disposition of every action and proceeding."27

    The granting of leave to file amended pleading is a matter particularly addressed to the sound discretion of the trial court; and that discretion is broad, subject only to the limitations that the amendments should not substantially change the cause of action or alter the theory of the case, or that it was not made to delay the action.28 Nevertheless, as enunciated in Valenzuela, even if the amendment substantially alters the cause of action or defense, such amendment could still be allowed when it is sought to serve the higher interest of substantial justice; prevent delay; and secure a just, speedy and inexpensive disposition of actions and proceedings.

    The courts should be liberal in allowing amendments to pleadings to avoid a multiplicity of suits and in order that the real controversies between the parties are presented, their rights determined, and the case decided on the merits without unnecessary delay. This liberality is greatest in the early stages of a lawsuit, especially in this case where the amendment was made before the trial of the case, thereby giving the petitioners all the time allowed by law to answer and to prepare for trial.29

    Furthermore, amendments to pleadings are generally favored and should be liberally allowed in furtherance of justice in order that every case, may so far as possible, be determined on its real facts and in order to speed up the trial of the case or prevent the circuity of action and unnecessary expense. That is, unless there are circumstances such as inexcusable delay or the taking of the adverse party by surprise or the like, which might justify a refusal of permission to amend.30

    In the present case, there was no fraudulent intent on the part of PBCOM in submitting the altered surety agreement. In fact, the bank admitted that it was a mistake on their part to have submitted it in the first place instead of the original agreement. It also admitted that, through inadvertence, the copy that was attached to the complaint was the copy wherein the words "IN HIS PERSONAL CAPACITY" were inserted to conform to the bank's standard practice. This alteration was made without the knowledge of the notary public. PBCOM's counsel had no idea that what it submitted was the altered document, thereby necessitating the substitution of the surety agreement with the original thereof, in order that the case would be judiciously resolved.

    Verily, it is a cardinal rule of evidence, not just one of technicality but of substance, that the written document is the best evidence of its own contents. It is also a matter of both principle and policy that when the written contract is established as the repository of the parties' stipulations, any other evidence is excluded, and the same cannot be used to substitute for such contract, or even to alter or contradict the latter.31 The original surety agreement is the best evidence that could establish the parties' respective rights and obligations. In effect, the RTC merely allowed the amendment of the complaint, which consequently included the substitution of the altered surety agreement with a copy of the original.

    It is well to remember at this point that rules of procedure are but mere tools designed to facilitate the attainment of justice. Their strict and rigid application that would result in technicalities that tend to frustrate rather than promote substantial justice must always be avoided.32 Applied to the instant case, this not only assures that it would be resolved based on real facts, but would also aid in the speedy disposition of the case by utilizing the best evidence possible to determine the rights and obligations of the party - litigants.

    Moreover, contrary to petitioners' contention, they could not be prejudiced by the substitution since they can still present the substituted documents, Annexes "A" to A-2," as part of the evidence of their affirmative defenses. The substitution did not prejudice petitioners or delay the action. On the contrary, it tended to expedite the determination of the controversy. Besides, the petitioners are not precluded from filing the appropriate criminal action against PBCOM for attaching the altered copy of the surety agreement to the complaint. The substitution of the documents would not, in any way, erase the existence of falsification, if any. The case before the RTC is civil in nature, while the alleged falsification is criminal, which is separate and distinct from another. Thus, the RTC committed no reversible error when it allowed the substitution of the altered surety agreement with that of the original.

    A Petition for Certiorari under Rule 65 of the Rules of Court is intended for the correction of errors of jurisdiction only or grave abuse of discretion amounting to lack or excess of jurisdiction. Its principal office is only to keep the inferior court within the parameters of its jurisdiction or to prevent it from committing such a grave abuse of discretion amounting to lack or excess of jurisdiction.33

    For a Petition for Certiorari to prosper, the essential requisites that have to concur are: (1) the writ is directed against a tribunal, a board or any officer exercising judicial or quasi-judicial functions; (2) such tribunal, board or officer has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy and adequate remedy in the ordinary course of law.34 ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

    The phrase without jurisdiction means that the court acted with absolute lack of authority or want of legal power, right or authority to hear and determine a cause or causes, considered either in general or with reference to a particular matter. It means lack of power to exercise authority. Excess of jurisdiction occurs when the court transcends its power or acts without any statutory authority; or results when an act, though within the general power of a tribunal, board or officer (to do) is not authorized, and is invalid with respect to the particular proceeding, because the conditions which alone authorize the exercise of the general power in respect of it are wanting. Grave abuse of discretion implies such capricious and whimsical exercise of judgment as to be equivalent to lack or excess of jurisdiction; simply put, power is exercised in an arbitrary or despotic manner by reason of passion, prejudice, or personal hostility; and such exercise is so patent or so gross as to amount to an evasion of a positive duty or to a virtual refusal either to perform the duty enjoined or to act at all in contemplation of law.35

    The present case failed to comply with the above-stated requisites. In the instant case, the soundness of the RTC's Order allowing the substitution of the document involves a matter of judgment and discretion, which cannot be the proper subject of a petition for certiorari under Rule 65. This rule is only intended to correct defects of jurisdiction and not to correct errors of procedure or matters in the trial court's findings or conclusions.

    However, this Court agrees with the petitioners' contention that the CA should not have made determinations as regards the parties' respective rights based on the surety agreement. The CA went beyond the issues brought before it and effectively preempted the RTC in making its own determinations. It is to be noted that the present case is still pending determination by the RTC. The CA should have been more cautious and not have gone beyond the issues submitted before it in the petition for certiorari; instead, it should have squarely addressed whether or not there was grave abuse of discretion on the part of the RTC in issuing the Orders dated December 14, 1999 and January 11, 2000.

    WHEREFORE, premises considered, the petition is DENIED. Subject to the above disquisitions, the Decision of the Court of Appeals in CA-G.R. SP No. 57732, dated September 28, 2001, and the Orders of the Regional Trial Court of Cagayan de Oro City, Branch 21, in Civil Case No. 99-352, dated December 14, 1999 and January 11, 2000, are AFFIRMED.

    SO ORDERED.

    Endnotes:


    * Designated as an additional member in lieu of Associate Justice Consuelo Ynares-Santiago per Special Order No. 679 dated August 3, 2009]

    ** Per Special Order No. 678 dated August 3, 2009.

    1 Penned by Associate Justice B. A. Adefuin-De la Cruz, with Associate Justices Andres B. Reyes, Jr. and Amelita G. Tolentino, concurring, rollo, pp. 25-30.

    2 CA rollo, p. 113.

    3 Id. at 114.

    4 Rollo, p. 26.

    5 CA rollo, pp. 116-118.

    6 Rollo, p. 26.

    7 CA rollo, p. 122.

    8 Id. at 37.

    9 Id. at 55-58.

    10 Rollo, p. 26.

    11 CA rollo, pp. 38-40.

    12 Id.

    13 Rollo, p. 27.

    14 Id. at 26.

    15 CA rollo, p. 115.

    16 Id. at 50-57.

    17 Id. at 68.

    18 Id. at 69-72.

    19 Id. at 81.

    20 Rollo, p. 28.

    21 Id. at 30.

    22 Id. at 60-61.

    23 Id. at 61-64.

    24 Id. at 71-73.

    25 Id. at 64-71.

    26 416 Phil. 289 (2001).

    27 Id. at 297.

    28 Refugia v. Alejo, 389 Phil. 568, 576 (200).

    29 Id. at 576-577.

    30 Philippine National Bank v. Court of Appeals, G.R. No. L-45770, March 30, 1988, 159 SCRA 433, 444.

    31 ACI Philippines, Inc. v. Coquia, G.R. No. 174466, July 14, 2008, 558 SCRA 300, 309-310.

    32 Philippine National Bank v. Sanao Marketing Corporation, G.R. No. 153951, July 29, 2005, 465 SCRA 287, 307.

    33 People of the Philippines v. Court of Appeals, 468 Phil. 1, 10 (2004).

    34 Rules of Court, Rule 65, Sec. 1.

    35 Tagle v. Equitable PCI Bank, G.R. No. 172299, April 22, 2008, 552 SCRA 424, 437.

    G.R. No. 151932 - Henry Ching Tiu, et al. v. Philippine Bank of Communications


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