G.R. No.

152239

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 152239 August 17, 2011

MAKING ENTERPRISES, INC. AND SPOUSES JOAQUIN TAMANO

AND ANGELITA TAMANO, Petitioners,
vs.
JOSE MARFORI AND EMERENCIANA MARFORI, Respondents.

DECISION

VILLARAMA, JR., J.:

Before us is a petition for review on certiorari assailing the July 24,

2000 Decision1 of the Court of Appeals (CA) in CA-G.R. SP No.
43076. The CA had ordered the issuance of writs of certiorari and
prohibition permanently enjoining the prosecution of Jose Marfori in
Criminal Case Nos. 170660 to 170676 before the Metropolitan Trial
Court (MeTC) of Caloocan City, and ordered the appointment of a
receiver in Civil Case No. 94-70092, pending before the Regional
Trial Court (RTC) of Manila. Likewise assailed is the appellate court’s
Resolution2 dated February 12, 2002, denying petitioners’ motion for
reconsideration.
:
 The antecedent facts follow:

On June 4, 1984, Jose F. Marfori acquired a five-storey commercial

building, known as the Marsman Building, from the Development
Bank of the Philippines. As the land on which the building stood was
owned by the Philippine Ports Authority (PPA), Marfori entered into a
contract of lease of the said lot with the PPA. The contract was for a
period of twenty-five (25) years, renewable for a similar period, and
was subject to the condition that upon the expiration of lease, the
building and all other improvements found on the leased premises
shall become the PPA’s sole property. Marfori then incurred huge
expenses for the rehabilitation of the building and leased some
portions of the building to the PPA.

Thereafter, on April 10, 1987, Marfori executed a dacion en pago and

assignment of rights transferring the ownership of the Marsman
Building to Making Enterprises, Inc. (Making), on the condition that
Making would assume all of Marfori’s obligations.3 Making was
represented by its General Manager, Cristina Lee, and Executive
Vice-President, Angelita Ma. Tamano, in the said transaction.

Marfori’s wife, Emerenciana, alleged that she did not consent to the
transfer of the Marsman Building to Making. She claimed that the
building is part of their conjugal property as it was acquired during
their marriage.4 On April 12, 1994, she filed with the RTC of Manila a
complaint against Making, the spouses Joaquin and Angelita
Tamano, the spouses Lester and Cristina Lee, and the PPA for
Recovery of Ownership, Annulment of Contract with Damages,
Receivership, Accounting and Preliminary Injunction with Prayer for
Restraining Order.5 She sought, among others, to annul the dacion
en pago and assignment of rights and prayed for the appointment of
:
 a receiver to preserve the rentals of the building. She also prayed for
the issuance of a writ of preliminary injunction to enjoin the PPA from
paying its rentals to Making and from approving the transfer of the
Marsman Building.

In an Order6 dated October 18, 1995, Judge Catalino Castañeda, Jr.

of the RTC, Branch 17, of Manila denied the prayer for the issuance
of a writ of preliminary injunction and the application for
receivership.

The RTC noted that in 1987, Emerenciana’s complaint for the same
cause of action was dismissed by the RTC, Branch 51, of Manila for
improper venue.7 The RTC was not convinced that she would indeed
suffer grave injustice and irreparable damages if a writ of injunction
enjoining the PPA from paying rentals to Making and approving the
transfer of the Marsman Building is not issued considering that she
re-filed her complaint only on April 12, 1994, or more than six years
after her first complaint was dismissed. As regards her prayer for the
appointment of a receiver, the RTC held that the appointment of a
receiver is an equitable relief and a court of equity will not ordinarily
appoint a receiver where the rights of the parties depend on the
determination of adverse claims of legal title to real property and
one party is in possession.

Emerenciana moved for reconsideration of the order. However, the

RTC denied the motion.8

Not satisfied, Emerenciana filed before the CA a petition for

certiorari and receivership with prayer for preliminary injunction,
which was docketed as CA-G.R. SP No. 39161. On March 29, 1996,
however, the CA dismissed the petition for being insufficient in form
:
 and substance.9 Reconsideration of the dismissal was likewise
denied in a Resolution dated November 29, 1996.10

Meanwhile, with regard to the criminal cases mentioned at the

outset, records show that in 1987, Marfori issued twenty-two (22)
checks in favor of Cristina Lee. Lee deposited the checks to her
account with the Philippine Bank of Communications, but the same
were dishonored for the reason of "Account Closed." Thus, she filed
complaints against Marfori for estafa and violation of Batas
Pambansa Blg. 22 with the Prosecutor's Office of Caloocan City.11

Before he could be arraigned, Marfori sought reinvestigation of the

criminal cases against him, arguing that he was not given the
opportunity to present controverting evidence to prove that the
checks were already paid or liquidated.12 The RTC granted Marfori’s
motion and ordered the Office of the City Prosecutor to conduct a
reinvestigation. Upon reinvestigation, Assistant City Prosecutor
Afable E. Cajigal rendered a joint resolution,13 which was later
approved by City Prosecutor Gabriel N. Dela Cruz, finding cause to
dismiss the criminal complaints against Marfori. On August 11, 1995,
Asst. City Prosecutor Cajigal filed a motion to dismiss before the
RTC of Caloocan City, which motion was granted by Judge Emilio L.
Leachon, Jr. on the same date.14

Claiming that she was not notified of the order for reinvestigation,
Angelita Ma. Tamano moved to set aside the joint resolution.15
Prosecutor Cajigal then reversed his previous findings and
recommended the setting aside of the joint resolution and dismissal
order.16 Said resolution was approved by 1st Assistant City
Prosecutor Rosauro Silverio. Thus, Asst. City Prosecutor Cajigal filed
seventeen (17) informations for violation of B.P. 22 against Marfori
:
 before the MeTC of Caloocan City.17 Warrants for Marfori’s arrest
were also issued by Judge Marcelino L. Sayo.

Aggrieved, Marfori filed with the Caloocan City RTC a petition18 for
certiorari and injunction with prayer for temporary restraining order
against Judge Sayo; Asst. City Prosecutors Cajigal, Silverio and Dela
Cruz; and Making, who was represented by Tamano. Marfori
maintained that all the checks were drawn in favor of Cristina Lee,
but the prosecutors deliberately made it appear in the new
informations that the checks were drawn in favor of Making. He
prayed that Judge Sayo be enjoined from proceeding with the trial of
the criminal cases and that the informations for violation of B.P. 22,
as well as the warrants of arrest, be declared void.

Making, represented by Tamano, filed a motion to dismiss arguing

that the general rule is that a criminal prosecution may not be
restrained by injunction.19

In an Order dated April 18, 1997, the RTC granted Making’s motion
and dismissed Marfori's petition.20

Meanwhile, on November 27, 1996, Marfori and his wife had filed
with this Court a Consolidated Petition21 docketed as G.R. No.
126841 asking among others, for the appointment of a receiver to
preserve the rentals collected from the Marsman Building and the
issuance of an injunction to enjoin the implementation of the
warrants of arrest issued against him. Respondents argued that the
filing of the criminal cases against Marfori had no factual and legal
justification and hence, should be enjoined.

The Court, after finding no special and important reasons for it to

:
 take cognizance of the case in the first instance, referred the
petition to the CA for consideration and adjudication on the merits.22

On February 16, 1998, respondents filed an Amended Consolidated

Petition23 with the CA. They added that Judge Castañeda, Jr.
likewise erred in denying in Civil Case No. 94-70092 their motion to
present crucial documents wherein Tamano allegedly made a
declaration against her interest. They likewise reiterated in their
amended petition their prayer for the appointment of a receiver to
take over, manage, and administer the Marsman Building.

In their Comment, petitioners countered that respondents had lost

all their rights to the building after they ceded it to Making in 1987.
Petitioners also charged respondents with forum shopping.24 They
argued that when Emerenciana’s application for a writ of preliminary
injunction and receivership was denied by the RTC, she appealed
the denial to the CA. When she failed to obtain a favorable action,
she and her husband filed a petition with the Supreme Court
involving the same subject matter and the same issues as in
Emerenciana’s earlier petition in CA-G.R. SP No. 39161. Petitioners
alleged that respondents hid the real purpose of their action by
cleverly lumping together the civil and the criminal cases in their
Consolidated Petition.

On July 24, 2000, the CA rendered the assailed Decision, to wit:

WHEREFORE, premises considered, the petition filed by petitioners

Jose and Emerenciana Marfori is hereby GRANTED, and judgment
rendered as follows:

1) That writs of certiorari and prohibition be issued permanently

:
 enjoining the further prosecution of Criminal Case Nos. 170660
to 170676, inclusive, against petitioner Jose Marfori; and

2) That, after posting of a bond in an amount to be determined

by the Trial Court, let a receiver be appointed in Civil Case No.
94-70092, to take custody, manage, and administer the
Marsman Building and all rents collected therefrom, during the
pendency of the proceedings.

SO ORDERED.25

The CA brushed aside petitioners' argument that respondents were

guilty of forum shopping, holding that technical rules of procedure
must be relaxed in the interest of substantial justice.

As to the order granting the prayer for the appointment of a receiver,

the CA ruled that respondents have sufficiently proven their interest
in the Marsman Building. The CA found that unless a receiver is
appointed, there is a danger of loss or material injury considering
that petitioners possess absolute control of the building.

Meanwhile, as to the criminal cases, the CA ruled that the public

prosecutors gravely abused their discretion when they set aside the
earlier resolution recommending the dismissal of the criminal cases
against Marfori based solely on the ground that Tamano was not
given the chance to comment on Marfori’s motion for
reinvestigation. The CA noted that in the joint resolution, the
prosecutors thoroughly studied the case and concluded that the
checks subject of the criminal cases were not issued with valuable
consideration since it was impossible for Marfori to have been
indebted or for petitioners to lend the amount of ₱4,051,518.08
:
 stated in the checks because the complainants/Making Enterprises
only earned ₱49,352.95 in 1987.

Petitioners filed motions for reconsideration questioning the

appointment of a receiver26 and the order permanently enjoining the
further prosecution of Marfori in Criminal Case Nos. 170660 to
170676.27 However, the CA denied both motions in its Resolution of
February 12, 2002 as follows:

WHEREFORE, the motions are hereby DENIED. However, in order to

ensure that the objectives of Sec. 1 (a) Rule 59, the basis of Our
decision, will be carried out effectively, the trial court is DIRECTED to
appoint [as] a receiver, after compliance of the bond requirement, a
private banking institution which shall exercise…powers as such
pursuant to Sec. 6, Rule 59 of the Rules of Court.

SO ORDERED.28

Hence, the present petition.

Essentially, petitioners present the following issues: (1) Whether the

CA erred in granting the application for the appointment of a
receiver for the Marsman Building; and (2) Whether the CA erred in
permanently enjoining the criminal prosecution of Jose Marfori.

We grant the petition.

At the outset, we note that the CA erred in taking cognizance of

respondents’ consolidated petition as respondents are guilty of
deliberate forum shopping. We note that the petition for
appointment of a receiver for the Marsman Building was originally
filed by Emerenciana before the RTC of Manila in Civil Case No. 94-
:
 70092. The RTC denied the prayer for the issuance of a writ of
preliminary injunction and the application for receivership.
Emerenciana filed a motion for reconsideration, which was denied by
the RTC. She then filed a petition for certiorari and receivership with
prayer for preliminary injunction before the CA docketed as CA-G.R.
SP No. 39161. In a Resolution dated March 29, 1996, the petition
was dismissed for being insufficient in form and substance. She
sought reconsideration of the dismissal, and her motion was likewise
denied by the CA on November 29, 1996.

However, records show that two days earlier, or on November 27,

1996, while her motion for reconsideration of the CA resolution
dismissing her petition was still pending resolution before the CA,
she and her husband filed with this Court a consolidated petition,
praying for the appointment of a receiver over the Marsman Building.
Clearly, CA-G.R. SP No. 39161 was still pending with the CA when
respondents filed their consolidated petition with this Court.

Moreover, we note that respondents were not candid when they

stated in their certification of non-forum shopping that there is no
other action or proceeding involving the same issues that is pending
before this Court, the CA, or any other tribunal or agency.29

There is forum-shopping when as a result of an adverse decision in

one forum, or in anticipation thereof, a party seeks a favorable
opinion in another forum through means other than appeal or
certiorari. Forum-shopping exists when two or more actions involve
the same transactions, essential facts, and circumstances; and raise
identical causes of action, subject matter, and issues. Forum-
shopping exists when the elements of litis pendentia are present or
where a final judgment in one case will amount to res judicata in the
:
 other.30 Thus, there is forum-shopping when, between an action
pending before this Court and another one, there exist: (1) identity of
parties, or at least such parties as represent the same interests in
both actions, (2) identity of rights asserted and relief prayed for, the
relief being founded on the same facts, and (3) the identity of the
two preceding particulars is such that any judgment rendered in the
other action will, regardless of which party is successful, amount to
res judicata in the action under consideration; said requisites also
constitutive of the requisites for auter action pendant or lis
pendens.31

Applying the above test, there is no question that there is identity of

parties, cause of action and reliefs sought between the consolidated
petition in G.R. No. 126841 and the petition in CA-G.R. SP No. 39161.
For resorting to forum shopping, the consolidated petition of the
spouses Marfori should have been dismissed with prejudice.

But even on the merits, the application for an appointment of a

receiver must be denied.

An application for the appointment of a receiver under Section 1(a),

Rule 59 of the 1997 Rules of Civil Procedure, as amended, requires
that the property or fund subject of the action is in danger of being
lost, removed, or materially injured, necessitating its protection or
preservation. Section 1 provides,

SECTION 1. Appointment of receiver.—Upon a verified application,

one or more receivers of the property subject of the action or
proceeding may be appointed by the court where the action is
pending, or by the Court of Appeals or by the Supreme Court, or a
member thereof, in the following cases:
:
 (a) When it appears from the verified application, and such other
proof as the court may require, that the party applying for the
appointment of a receiver has an interest in the property or fund
which is the subject of the action or proceeding, and that such
property or fund is in danger of being lost, removed, or materially
injured unless a receiver be appointed to administer and preserve it;

xxxx

Here, respondents submit that they have satisfactorily established

their legal right over the Marsman Building. They alleged that the
building and the income and rentals thereof are in danger of being
lost, removed or materially injured by the apathy, neglect and
fraudulent design of petitioners thereby rendering the appointment
of a receiver both urgent and imperative.32 However, they failed to
show how the building as well as the income thereof would
disappear or be wasted if not entrusted to a receiver. They were not
able to prove that the property has been materially injured,
necessitating its protection and preservation. Because receivership
is a harsh remedy that can be granted only in extreme situations,33
respondents must prove a clear right to its issuance. This they failed
to do.

We furthermore observe that in granting the appointment of a

receiver, the CA merely concluded that respondents have
sufficiently proven that they have an interest in the Marsman
Building. It further held that unless a receiver is appointed, there is a
danger of loss or material injury, considering that petitioners
presently possess absolute control of the building and the rentals
accruing thereof. However, there was no justification on how the CA
arrived at its conclusion.
:
 It must be stressed that the issue of the validity of the dacion en
pago and assignment of rights executed by Marfori in favor of
Making still has to be resolved in Civil Case No. 94-70092. Until the
contract is rescinded or nullified, the same remains to be valid and
binding. Thus, we agree with the RTC when it held that courts of
equity will not ordinarily appoint a receiver where the rights of the
parties depend on the determination of adverse claims of legal title
to real property and one party is in possession.

As regards the second issue, the Court finds no longer necessary to

pass upon the correctness of the order of the CA permanently
enjoining the prosecution of Jose Marfori in Criminal Case Nos.
170660 to 170676 before the MeTC of Caloocan City. The Court
notes that during the pendency of this petition, Jose Marfori passed
away on October 2, 2004.34 Pursuant to Article 89, paragraph 135 of
the Revised Penal Code, as amended, the death of Marfori totally
extinguished his criminal liability. Because Marfori died even before
arraignment and trial, there is no relevance in declaring the
extinction as well of civil liability that was based exclusively on the
crime for which an accused is convicted (i.e., ex delicto). Only civil
liability predicated on a source of obligation other than the delict, if
any, survived the death of the accused, which the offended party
can recover by means of a separate civil action.36 1avvphi1

WHEREFORE, the petition for review on certiorari is PARTLY

GRANTED. The July 24, 2000 Decision and February 12, 2002
Resolution of the Court of Appeals in CA-G.R. SP No. 43076, insofar
as they ordered the appointment of a receiver in Civil Case No. 94-
70092, are hereby REVERSED and SET ASIDE. In view of the death
of Jose Marfori, Criminal Case Nos. 170660 to 170676 before the
:
 Metropolitan Trial Court of Caloocan City are hereby ordered
DISMISSED.

No pronouncement as to costs.

SO ORDERED.

MARTIN S. VILLARAMA, JR.

Associate Justice

WE CONCUR:

RENATO C. CORONA
Chief Justice
Chairperson

TERESITA J. LEONARDO-DE
LUCAS P. BERSAMIN
CASTRO
Associate Justice
Associate Justice

MARIANO C. DEL CASTILLO

Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the 1987 Constitution, I certify

that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the
opinion of the Court’s Division.

RENATO C. CORONA
Chief Justice
:
 Footnotes

1 Rollo, pp. 65-75. Penned by Associate Justice Demetrio G.

Demetria, with Associate Justices Ramon Mabutas, Jr. and Jose
L. Sabio, Jr. concurring.

2Id. at 78-79. Penned by Associate Justice Jose L. Sabio, Jr.,

with Associate Justices Oswaldo D. Agcaoili and Sergio L.
Pestaño concurring.

3 CA rollo, Vol. I, pp. 504-508.

4Jose Marfori and Emerenciana Calma-Marfori were married on

June 28, 1970 as evidenced by a copy of their marriage
contract; Records, Vol. I, p. 13.

5 Docketed as Civil Case No. 94-70092; id. at 1-12.

6 Rollo, pp. 80-86.

7 Civil Case No. 87-42132.

8 CA rollo, Vol. I, pp. 163-164.

9 Rollo, p. 90. Resolution dated March 29, 1996, penned by

Associate Justice Jaime M. Lantin, with Associate Justices
Eduardo G. Montenegro and Jose C. dela Rama concurring;

10 Id. at 88.

11 CA rollo, Vol. I, pp. 76-77.

12 Id. at 96-97.
:
 13 Id. at 99-103.

14 Order dated August 11, 1995; id. at 105.

15 Id. at 106-112.

16 Id. at 116.

17 Id. at 117-133.

18 Rollo, pp. 252-263.

19 Id. at 264-267.

20 Id. at 268-269.

21Id. at 91-123. Petition for Certiorari, Prohibition, Receivership

and Injunction with prayer for Preliminary Injunction and
Temporary Restraining Order.

22 Id. at 270-271.

23 Id. at 172-204.

24 Id. at 205-210.

25 Id. at 74-75.

26 Id. at 224-241.

27 Id. at 304-326.

28 Id. at 78-79.

29 CA rollo, Vol. I, p. 38.

:
 30Polanco v. Cruz, G.R. No. 182426, February 13, 2009, 579
SCRA 489, 495-496.

31San Juan v. Arambulo, Sr., G.R. No. 143217, December 14,

2005, 477 SCRA 725, 729.

32 CA rollo, Vol. I, p. 316.

33Vivares v. Reyes, G.R. No. 155408, February 13, 2008, 545

SCRA 80, 87.

34 See rollo, pp. 533-537. Attached to the Manifestation is a

copy of Marfori’s Certificate of Death issued by the Office of the
City Civil Registrar in Angeles City, Pampanga. Id. at 538.

35 Article 89(1) of the Revised Penal Code, as amended,

provides that criminal liability is totally extinguished:

1. By the death of the convict, as to the personal penalties;

and as to pecuniary penalties, liability therefor is
extinguished only when the death of the offender occurs
before final judgment.

xxxx

36See People v. Bunay, G.R. No. 171268, September 14, 2010,

630 SCRA 445, 448, citing People v. Bayotas, G.R. No. 102007,
September 2, 1994, 236 SCRA 239.

The Lawphil Project - Arellano Law Foundation

: