1.

STRICT CONSTRUCTION

PHILIPPINE NATIONAL BANK and NATIONAL INVESTMENT DEVELOPMENT

CORPORATION, petitioners,
vs.
HON. COURT OF APPEALS, HON. RODOLFO A. ORTIZ, Presiding Judge of the Regional Trial
Court of Quezon City, Branch 89, CLARA REYES PASTOR and OTHER STOCKHOLDERS OF
C & C COMMERCIAL CORPORATION and C & C COMMERCIAL CORPORATION, respondents.

RESOLUTION

DAVIDE, JR., J.:

The petitioners ask this Court to reconsider the decision of 3 March 19941 which upheld the Court of
Appeals2 in sustaining the order of the Regional Trial Court (RTC), Branch 89, Quezon City,
disallowing the petitioners' appeal.3

The petitioners allege in their motion for reconsideration that:

I. PETITIONERS' RIGHT TO APPEAL IS AN ESSENTIAL PART OF OUR JUDICIAL

SYSTEM AND MAY NOT BE DENIED OR FORFEITED FOR A MERE 3-DAY
DELAY (ASSUMING THERE IS SUCH A DELAY) IN FILING THE NOTICE OF
APPEAL, ESPECIALLY SINCE PRIVATE RESPONDENTS' SUBSTANTIAL RIGHTS
HAVE NOT BEEN PREJUDICED BY SUCH DELAY.

II. PLDT V. NLRC (128 SCRA 402 [1984]) APPLIES TO THE CASE AT BAR, AS
RULED BY THE SAME SECOND DIVISION OF THIS HONORABLE SUPREME
COURT IN ITS DECEMBER 15, 1993 RESOLUTION IN PNB V. COURT OF
APPEALS (G.R. NO. 111305) INVOLVING THE SAME FACTUAL MILIEU; IN PNB'S
CASE AS WELL AS THOSE OF OTHER PARTIES MAINTAINING OFFICES IN
MULTI-STORIED BUILDINGS, NO BETTER RULE CAN SERVE JUSTICE AND
FAIR PLAY IN THESE COMPLICATED AND CHANGING TIMES THAN THE
RUDIMENTARY AND WISE PRECEPT THAN WHEN PARTY IS REPRESENTED
BY COUNSEL NOTICES BE SENT TO THE LATTER.

III. JUSTICE AND EQUITY FOR ALL OF THE PARTIES,

ASSUMING ARGUENDO THAT PNB'S NOTICE OF APPEAL WAS THREE (3)
DAYS LATE, DEMAND THAT THIS 19-YEAR P20 MILLION CASE BE DECIDED
ON THE MERITS NOT ON TECHNICALITY.

IV. PETITIONERS' APPEAL CAN BE GIVEN DUE COURSE UNDER THE

DOCTRINE IN PHHC V. TIONGCO (12 SCRA 471 [1964]), ABSOLVING A PARTY
FROM THE EFFECTS OF THE NEGLIGENCE OF ITS COUNSEL.

The private respondents countered by filing a motion to expunge the motion for reconsideration on
the ground that the same is frivolous and dilatory being a rehash of arguments previously raised.
The petitioners then filed a motion for leave to admit supplemental motion for reconsideration and
opposition to the private respondents' motion to expunge. The supplemental motion touches on the
alleged "fundamentally grave and reversible errors of the 20 January 1992 decision of the trial court,
which warrant a review on its merits by the appellate court." The private respondents moved to strike
it out, reiterating for that purpose their motion to expunge.

Pursuant to the resolution of the Court en banc of 4 October 1994, a Special Second Division was
created to resolve the motion for reconsideration.

On 21 November 1994, the Special Second Division heard the parties in oral arguments on the
motion for reconsideration and the opposition thereto. The parties were, thereafter, granted fifteen
days within which to settle the case and to inform the Court of the settlement, if any, and, in any
event, to submit simultaneous memoranda within the said period.

In view of the importance of the issue involved, the Special Second Division referred this case to the
Court En Banc which accepted it on 27 June 1995.

The core issue in the motion for reconsideration remains to be that as explicitly defined in the
decision of 3 March 1994:

[W]hether herein petitioners . . . are deemed to have received a copy of the decision
of the trial court on January 23, 1992 when the mail containing the decision was
received by the PNB mailing clerk from the post office or only on January 28, 1992
when the mail was delivered by said clerk to the Legal Department of the PNB.

The mail containing the trial court's decision was addressed to the petitioners' counsel, Atty. Avamor
Perez, whose address is entered in the record as the "6th Floor, PNB Bldg., Escolta Manila." The
PNB mailing clerk is Catalino M. Sandoval, who is with the PNB Mailing Division, General Services
Department.

The trial court held that the petitioners are, on the ground of estoppel, deemed to have received a
copy of the decision on 23 January 1992 when the registered mail containing it was received by Mr.
Sandoval. It reasoned thus:

This Court is not persuaded by the submission of defendant PNB that this Court's
decision dated January 20, 1992, is not yet final and executory when it filed, thru
counsel, its notice of appeal therefrom on February 10, 1992, for the reason that the
date to be considered as the receipt by defendants' counsel is January 28, 1992,
when the registered letter containing the decision was actually received at the
Litigation and Collection Division of the Legal Department of defendant PNB, and not
on January 23, 1992, when it was received and signed for by the PNB employee of
the Mailing Division.

For, during the oral arguments pertaining to this incident on March 17, 1992,
defendants' counsel admitted that all the previous orders of this Court in this case
and all notices to him were also received by him through defendant PNB's Mailing
Division and all these orders and notices were honored by him.

Defendants' counsel also admitted in open court that he never questioned before the
validity of the service of these previous orders and notices in this case, to him, as
defendants' counsel, although not received in the first instance by the litigation
 division of defendant PNB, since it is through the Mailing Division that all officials in
defendant PNB receive their mails.

He likewise admitted that the PNB employee detailed at its Mailing Division who
received the mails for the different departments and employees of defendant PNB,
that day, January 23, 1992, was duly authorized to do so. In fact, according to him,
this PNB employee detailed at the Mailing Division had been signing registry return
receipts for orders and notices sent to defendants' counsel, without any complaint
from the litigation division.

Under these circumstance, this Court holds that defendants' counsel cannot now be
validly heard to complain, apparently for the first time, against the regularity of the
service on him of the decision of this Court dated January 20, 1992, by registered
letter, received and signed for by the PNB employee of its Mailing Division, since he
is already estopped from questioning the validity of the service of the decision to him,
thru the Mailing Division, not having questioned before the validity and efficacy of the
service to him of the prior orders and notices of this Court in this case all of which he
has honored without any complaint whatsoever, especially, as it appears, that the
Litigation and Collection Division of the Legal Department of defendant PNB and its
Mailing Division of its General Services Department, are housed and located at the
same PNB Building at Escolta, Manila. 4

In the challenged decision of 3 March 1994, this Court agreed with the trial court and quoted
extensively portions of the transcripts of the stenographic notes of the oral arguments held before
the trial court on 17 March 1992 to support the conclusion that Catalino Sandoval was authorized to
receive the registered mail containing the trial court's decision.

After an assiduous re-examination of this case, the Court is of the considered view that the
challenged decision should be reconsidered.

It is undisputed that Catalino Sandoval is not connected with the Office of Atty. Avamor Perez in the
Litigation and Collection Division of the Legal Department of the PNB either as his clerk or as a
person-in-charge of the office. He is admittedly an ordinary employee of the PNB detailed at the
Mailing Division of the General Services Department "authorized to receive the mails of defendant
PNB."5

In their Precis of Comment,6 the private respondents state that:

Petitioners, all throughout the nineteen-year period of trial, have been collecting,
receiving and signing for receipt of their notices and/or mail matters in Civil Case No.
Q-18176 from the trial court and the private respondents, through PNB's Mailing
Division which, under the internal rules and procedures of PNB, is "in charge of
collecting all PNB mail matters." (emphasis supplied).

In paragraphs 3 to 6 of their comment (with opposition to injunction), the private respondents

repeatedly assert that Sandoval was in charge of collecting all PNB mail matters. Thus:

3. The PNB Mailing Division, admittedly "in charge of collecting all PNB mail matters"
. . . claimed, collected and received the decision from the post office and signed the
registry return card to acknowledge receipt thereof on 23 January 1992 — this has
been the practice of [petitioners] in regard to mail matters of the PNB, inclusive of all
 notices, pleadings, motions, and other processes in connection with Civil Case No.
RQ-18176 a quo. . . .

4. From 23 January 1992 onwards, therefore, the copy of the subject decision thus
collected and received by petitioners passed into petitioners' complete control and
disposition — in fine, officials/employees handled/disposed of the same is petitioners'
sole business to the exclusion of the whole world, knowledge and/or participation-
wise.

5. And the fact is the envelope, addressed to petitioner's legal counsel of record,
gave out in print reasonable notice as to the nature of its contents and to whom
specifically it must
go . . . . Consonant as aforesaid with petitioners' internal rules and practice, not Atty.
Avamor Perez of petitioners, but petitioners' own Mailing Division — "in charge of
collecting [all] PNB mail matters" — went to the post office to collect and receive and
sign for the same. No third party intervened in the collection, receipt and signing for
this PNB mail.

6. Thus, anent the self-serving claim that petitioners' Legal Department received
subject decision only on 28 January 1992 (a matter incapable of verification by
anyone) is petitioners' own responsibility as employer for all PNB officers and
employees — the procedures and men of the Mailing Division, as the designated "in
charge of collecting all PNB mail matters," are after all petitioners' own making,
exclusively within petitioners' supervision and control, and in petitioners'
pay. 7 (emphasis supplied)

At the hearing on 17 March 1992, it was established on questions by the trial court that the authority
of Sandoval was limited to mails for the PNB. Thus:

COURT:

He was duly authorized to get the mails for the PNB?

ATTY. PEREZ:

Yes, your Honor.

COURT:

Alright.

ATTY. PEREZ:

Just mail matters. But the fact that he received the registry return
receipt of that decision he was not authorized to do so. He was not
authorized to do so. He should have received, just receive, your
Honor, the registry return card of that decision inasmuch as he does
not understand the import of such a thing.

COURT:
 He was not authorized to receive the what?

ATTY. PEREZ:

Your Honor, he was authorized. . . .

COURT:

He was authorized to receive mail for the PNB. . . .

ATTY. PEREZ:

Yes. 8

The registered mail containing the trial court's decision of 20 January 1992 was not a mail matter for
the PNB or for petitioner National Investment Development Corporation (NIDC). It was
a registered mail matter addressed to and exclusively intended for Atty. Avamor Perez, in his
capacity as counsel for the petitioners, and not as an official or employee of the PNB.

Service of final orders and judgments can only be made either by personal service or by registered
mail, or in special cases by publication. Section 7, Rule 13 of the Rules of Court expressly provides:

Sec. 7. Service of final orders or judgments. — Final orders or judgments shall be

served either personally or by registered mail. When a party summoned by
publication has failed to appear in the action, final orders or judgments against him
shall be served upon him also by publication at the expense of the prevailing party.

Personal service shall be done in the manner set forth in Section 4 of the said Rule:

Sec. 4. Personal service. — Service of the papers may be made by delivering

personally a copy to the party or his attorney, or by leaving it in his office with his
clerk or with a person having charge thereof. If no person is found in his office, or his
office is not known, then by leaving the copy, between the hours of eight in the
morning and six in the evening, the party's or attorney's residence, if known, with a
person of sufficient discretion to receive the same.

Service to a party is allowed only if the party is not represented by counsel. If he is, then, pursuant to
Section 2 of Rule 13, service shall be made upon the attorney, unless service upon the party himself
is ordered by the court. Unless so ordered, service on the party himself who is represented by
counsel is not notice in law and is invalid.9The term "every written notice" in Section 2 includes
notices of decisions or orders. 10 It follows that even granting that the registered mail containing a
copy of the trial court's decision was served upon the petitioners through Sandoval, the service was
still invalid and without any legal effect because the petitioners were represented by counsel and the
trial court did not specifically order that the decision be served on them.

Under Section 8 of the same Rule, personal service is complete upon actual delivery, while service
by registered mail is complete upon actual receipt by the addressee. Section 8 reads:

Sec. 8. Completeness of service. — Personal service is complete upon actual

delivery. Service by ordinary mail is complete upon the expiration of five (5) days
after mailing, unless the court otherwise provides. Service by registered mail is
 complete upon actual receipt by the addressee; but if he fails to claim his mail from
the post office within five (5) days from the date of first notice of the postmaster,
service shall take effect at the expiration of such time. (emphasis supplied).

Thus, the general rule is that service by registered mail is complete upon actual receipt by the
addressee. The express exception is when the addressee does not claim his mail within five days
from the date of the first notice of the postmaster, in which case the service is deemed complete at
the expiration of such time. 11 An implied exception is where the addressee has authorized another to
receive the registered mail matter, in which case the service shall take effect upon receipt thereof by
the latter.

The issue then is whether Atty. Avamor Perez may be deemed to have authorized Sandoval to claim
and receive the registered mail containing the decision.

This Court resolves the issue in the affirmative. Atty. Avamor Perez admitted that he had received all
the previous notices and orders of the court in Civil Case No. RQ-18176 through Sandoval, who had
been signing the registry receipts therefor. He had not questioned the validity of such service.
Estoppel will thus bar him from denying Sandoval's authority and from questioning the validity of the
service of the decision.

The rule laid down in Philippine Commercial and Industrial Bank vs. Ortiz 12 is worth noting. Speaking
through then Associate Justice, now Chief Justice, Andres R. Narvasa, this Court held:

The chief issue is indeed simple, as petitioner intimates, and is quickly resolved.
While it is true that the address of record of PCIB's counsel is entered as the "3rd
Floor, LRT Building," which is different from that of COMMEX, which is on the
"Ground Floor, LRT Building," it is equally true that notices served on the latter had
been reaching the former and that, in any event, the PCIB lawyers had never
protested such service on them "thru COMMEX." The only single instance of protest
was as regards the particular instance of service of notice of the judgment on
COMMEX on July 15, 1978. Thus, as shown by the record and not at all disputed by
PCIB, service was accepted by its lawyers "thru COMMEX" without demur of the
court notices for (1) the hearing of January 3, 1978, (2) the hearing of June 23, 1978.

It is of course the rule that notices, pleadings, motions and papers should be served
on a party's counsel of record, at the latter's given address. But it is certain that the
counsel is entirely at liberty to change his address, for purposes of service, or
expressly or impliedly adopt one different from that initially entered in the record.
When he does this, he cannot afterwards complain that the person who received the
notice, pleading, motion or paper at such new address did not promptly deliver the
same to him or bring it to his attention. This is what happened in this case. PCIB's
attorney's had acquiesced to and impliedly adopted a different address for service of
notices to them. They had accepted service at this place, three floors down from the
address originally given by them, without objection of any sort. They cannot now
disown this adopted address to relieve them from the effects of their negligence,
complacency or inattention. Service, therefore, on July 15, 1978 of the notice of
judgment at the Ground Floor, LRT Building, should be deemed as effective service
on PCIB's attorneys. The failure of the receiving clerk to deliver the notice to them on
the same day, and what is worse, the lawyers omission to inquire of said receiving
clerk exactly when the notice was received, and their blithe assumption that service
was effected on July 17, 1978 since this was the day that the notice was handed
over to them, is arrant imprudence and cannot in any sense be deemed to constitute
 that excusable negligence as would warrant reconsideration under Section 1 [a],
Rule 37 of the Rules of Court. 13

The effort of the petitioners to show that the Legal Department of the PNB had authorized only
Antonio Peñalosa, Danilo Masajo, and Dominador de los Reyes to claim and receive mail matters
addressed to it or its lawyers pursuant to a written authority, which was duly received by the Central
Post Office on 28 October 1986, does not persuade and even fails to evoke sympathy. This fact was
revealed for the first time only in their Memorandum filed on 16 January 1995. 14 They should have
presented that authority to the trial court at the hearing on 17 March 1992. In any event, the
execution of that authority did not prevent Atty. Avamor Perez from thereafter authorizing Sandoval,
even if impliedly, to claim and receive for him registered mails containing notices and orders in Civil
Case No. RQ-18176.

Hence, Atty. Avamor Perez is deemed to have received the decision of the trial court on 23 January
1992 when the registered mail containing it was picked up by Sandoval from the Post Office. The 15-
day reglemetary period should be counted from that date. The last day, therefore, was 7 February
1992. Clearly, the appeal filed on 10 February 1992 is three days late.

It has been said this time and again that the perfection of an appeal within the period fixed by the
rules is mandatory and jurisdictional. 15 But, it is always in the power of this Court to suspend its own
rules, or to except a particular case from its operation, whenever the purposes of justice require
it. 16 Strong compelling reasons such as serving the ends of justice and preventing a grave
miscarriage thereof warrant the suspension of the rules. 17

Thus, in Republic vs. Court of Appeals,18 although the appeal was perfected six days after the
expiration of the reglementary period, this Court ordered the Court of Appeals to entertain the same,
as the Republic stood to lose close to 300 hectares of land already titled in its name and used
exclusively for educational purposes.

In Siguenza vs. Court of Appeals, 19 the appeal which was perfected thirteen days late was permitted,
"since on its face the appeal appeared to be impressed with merit." Instead of remanding the case to
the lower court, however, this Court forthwith decided the case on the merits and modified the trial
court's decision by setting aside, for lack of basis, the award of P100,000.00 compensatory damages
and by reducing the awards of P50,000.00 moral damages to P10,000.00 and the P25,000.00
exemplary damages to P5,000.00.

In Pacific Asia Overseas Shipping Corporation vs. NLRC, 20 this Court held that, in view of the factual
circumstances and legal merits of the case, the respondent Commission should have accepted the
appeal from the decision of the Philippine Overseas Employment Administration (POEA), albeit filed
a day after the reglementary period for filing appeals. After a deliberation on the merits of the case,
this Court found that the POEA had no jurisdiction indeed to entertain the action for the enforcement
of a foreign judgment, the said action being cognizable by the regular courts.

In Cortes vs. Court of Appeals,21 the counsel of record of a party failed to withdraw his appearance
as such when he was appointed as Judge of the RTC of Dumaguete City. Thus, the copy of the
adverse decision was still served at his address of record in Cebu City on 28 February 1983. He was
at the time in Dumaguete City and learned of the decision only on 8 March 1983 when he came
home to Cebu City. He right away informed his client through a telegram, which reached the latter's
office in Zamboanga City at a time when he was out on official business and which came to his
knowledge only a few days later. It was only on 22 March 1983 that a notice of appeal was filed by
his new lawyer. This Court held that the seven-day delay is excusable, and that the appeal, being
ostensibly meritorious, deserves to be given due course.
Likewise, in Olacao vs. NLRC, 22 this Court sustained the respondent Commission in entertaining a
tardy appeal "to forestall the grant of separation pay twice" in favor of the 170 petitioners, since the
issue of separation pay had been judicially settled with finality in another case.

In Legasto vs. Court of Appeals, 23 the respondent Court initially dismissed an appeal for being filed
two days after the 15-day reglementary period but, on a motion for reconsideration, decided to give it
due course considering the counsel's explanation that the preparation of the petition was continually
interrupted by brownouts. This Court agreed and allowed the appeal which "raised an important legal
question affecting many tenants and landlords similarly situated all over the country."

Just recently, this Court, in the case of City Fair Corporation vs. NLRC, 24 upheld the respondent
Commission in taking cognizance of a tardy appeal, and affirmed the Commission's decision which,
among others, deleted the award of damages in the amount of P820,000.00 representing the alleged
losses incurred by the petitioner company as a result of the respondent sales employees' strike that
paralyzed the petitioner's business operation for two months. In upholding the Commission, this
Court said:

The facts and circumstances of the case warrant liberality considering the amount
and the issue involved.

xxx xxx xxx

Considering that the private respondents in the instant case are mere salesgirls who
were trying to obtain better working benefits for themselves, we find no grave abuse
of discretion on the part of NLRC when it entertained their appeal from the award of
an enormous sum in damages to their employer by the Labor Arbiter.

Similarly, this Court shall, in the higher interest of justice, allow the appeal of the petitioners which
was filed three days late. For, to bar the appeal would be inequitable and unjust when viewed in the
light of the trial court's decision (1) ordering the petitioners to pay the private respondents the sum of
P19,985,848.00 as actual damages, plus interest thereon at the rate of six percent from the date of
the judgment until it is fully paid; P1 million as exemplary damages; and P0.5 million as attorney's
fees; and (2) declaring that the private respondents' secured loans of P490,000.00 and P796,00.00
obtained from the Development Bank of the Philippines (DBP) in 1960 and 1961, respectively, and
later assigned to the PNB are deemed fully paid by reason of set-off with the award of damages and
attorney's fees.

The petitioners' detailed demonstration of the merits of the appeal convinces us that they deserve
the amplest opportunity for the proper and just determination of the controversy and that the ends of
justice would best be served if the appeal be given due course.

WHEREFORE, the Motion for Reconsideration is GRANTED and the decision of 3 March 1994 is
hereby RECONSIDERED, and another is hereby rendered ORDERING the Regional Trial Court,
Branch 89, Quezon City, to GIVE DUE COURSE to the appeal of the petitioners from its decision of
20 January 1992 in Civil Case No. RQ-18176 entitled "Clara Reyes Pastor, et al. vs. Philippine
National Bank, et. al." and, forthwith, to transmit the records to the Court of Appeals pursuant to the
Rules of Court.

No costs.
 2. Requisites of Permissive Joinder of Parties

MANILA BAY CLUB CORPORATION, petitioner,

vs.
THE COURT OF APPEALS, MODESTA SABENIANO and MIRIAM SABENIANO, JUDITH SABENIANO, JOY DENNIS
SABENIANO, et. al., respondents.

FACTS:

A ten-year lease contract, commencing on March 4, 1988 and set to expire on March 4, 1998, over the subject
building, was executed by and between the private respondents Sabenianos as owners-lessors, and petitioner Manila
Bay Club Corporation as lessee. The lease agreement, however, was short-lived because private respondents,
unilaterally terminated the lease on the following grounds:

1. Failure on the part of the LESSEE to insure the building

2. For unpaid accumulated rentals in arrears and to issue all the postdated checks agreed upon
3. For failure on the part of the LESSEE to pay the fees, taxes and other assessments on the improvements
Feeling aggrieved by the premature termination of the lease, petitioner filed a complaint with the Makati RTC for
"Specific Performance with Prayer for Preliminary Injunction and Damages" against private respondents on the ground
that the cancellation of the lease contract was arbitrary and capricious, for petitioner did not violate any of its
provisions.

The RTC held that petitioner was not in default nor in arrears in payment of rentals. However, it found that petitioner
violated the "insurance clause" of the contract. Consequently, RTC dismissed the complaint, declared the lease
contract terminated and ordered petitioner to immediately return possession of the leased premises to private
respondents. Petitioner appealed to respondent Court of Appeals which affirmed with modification RTC’s decision.

ISSUE:

Whether or not the question involve is a question of law or a question of fact.

HELD:

Petitioner on the other hand strongly maintains that it is a question of law reviewable and reversible by the Court.

On this particular point, the court agrees with petitioner. What a question of law or a question of fact is has been
consistently defined by the Court in this wise:

For a question to be one of law it must involve no examination of the probative value of the evidence
presented by the litigants or any of them. And the distinction is well-known: There is a question of law in a
given case when the doubt or difference arises as to what the law is on a certain state of facts; there is a
question of fact when the doubt arises as to the truth or the falsehood of alleged facts. 8

Here, petitioner has made it very clear that it is not disputing respondent Court of Appeals' and the trial court's
findings vis-a-vis its failure to designate private respondents as beneficiaries in the insurance policies it procured on
the leased building at the inception of the lease contract. And from the arguments raised herein by petitioner, this
Court is indeed not called upon to reexamine and appreciate anew any evidence presented below, and thereafter
arrive at a contrary finding. What petitioner is challenging is solely the respondent Court of Appeals' conclusion drawn
from these undisputed facts. This Court in the early case of "Cunanan vs. Lazatin" (74 Phil. 719) has ruled that:
 There is no question of fact here because the facts are admittedly proven. Whether or not the conclusion
drawn by the Court of Appeals from those facts is correct, is a question of law which this Court is authorized
to pass upon.

3.BENECO VS NEA, FORUM SHOPPING

BENGUET ELECTRlC COOPERATIVE, INC., petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, PETER COSALAN and BOARD OF
DIRECTORS OF BENGUET ELECTRIC COOPERATIVE, INC., * respondents.

Raymundo W. Celino for respondent Peter Cosalan.

Reenan Orate for respondent Board of Directors of BENECO.

FELICIANO, J.:

Private respondent Peter Cosalan was the General Manager of Petitioner Benguet
Electric Cooperative, Inc. ("Beneco"), having been elected as such by the Board of
Directors of Beneco, with the approval of the National Electrification Administrator, Mr.
Pedro Dumol, effective 16 October 1982.

On 3 November 1982, respondent Cosalan received Audit Memorandum No. 1 issued

by the Commission on Audit ("COA"). This Memorandum noted that cash advances
received by officers and employees of petitioner Beneco in the amount of P129,618.48
had been virtually written off in the books of Beneco. In the Audit Memorandum, the
COA directed petitioner Beneco to secure the approval of the National Electrification
Administration ("NEA") before writing off or condoning those cash advances, and
recommended the adoption of remedial measures.

On 12 November 1982, COA issued another Memorandum — Audit Memorandum No.

2 –– addressed to respondent Peter Cosalan, inviting attention to the fact that the audit
of per diems and allowances received by officials and members of the Board of
Directors of Beneco showed substantial inconsistencies with the directives of the NEA.
The Audit Memorandum once again directed the taking of immediate action in
conformity with existing NEA regulations.

On 19 May 1983, petitioner Beneco received the COA Audit Report on the financial
status and operations of Beneco for the eight (8) month period ended 30 September
1982. This Audit Report noted and enumerated irregularities in the utilization of funds
amounting to P37 Million released by NEA to Beneco, and recommended that
appropriate remedial action be taken.
Having been made aware of the serious financial condition of Beneco and what
appeared to be mismanagement, respondent Cosalan initiated implementation of the
remedial measures recommended by the COA. The respondent members of the Board
of Beneco reacted by adopting a series of resolutions during the period from 23 June to
24 July 1984. These Board Resolutions abolished the housing allowance of respondent
Cosalan; reduced his salary and his representation and commutable allowances;
directed him to hold in abeyance all pending personnel disciplinary actions; and struck
his name out as a principal signatory to transactions of petitioner Beneco.

During the period from 28 July to 25 September 1984, the respondent Beneco Board
members adopted another series of resolutions which resulted in the ouster of
respondent Cosalan as General Manager of Beneco and his exclusion from
performance of his regular duties as such, as well as the withholding of his salary and
allowances. These resolutions were as follows:

1. Resolution No. 91-4 dated 28 July 1984:

. . . that the services of Peter M. Cosalan as General Manager of

BENECO is terminated upon approval of the National Electrification
Administration;

2. Resolution No. 151-84 dated September 15, 1984;

. . . that Peter M. Cosalan is hereby suspended from his position as

General Manager of the Benguet Electric Cooperative, Inc. (BENECO)
effective as of the start of the office hours on September 24, 1984, until a
final decision has been reached by the NEA on his dismissal;

. . . that GM Cosalan's suspension from office shall remain in full force

and effect until such suspension is sooner lifted, revoked or rescinded by
the Board of Directors; that all monies due him are withheld until cleared;

3. Resolution No. 176-84 dated September 25, 1984;

. . . that Resolution No. 151-84, dated September 15, 1984 stands as

preventive suspension for GM Peter M. Cosalan. 1

Respondent Cosalan nevertheless continued to work as General Manager of Beneco, in

the belief that he could be suspended or removed only by duly authorized officials of
NEA, in accordance with provisions of P.D. No, 269, as amended by P.D. No. 1645 (the
statute creating the NEA, providing for its capitalization, powers and functions and
organization), the loan agreement between NEA and petitioner Beneco 2 and the NEA
Memorandum of 2 July 1980. 3 Accordingly, on 5 October and 10 November 1984,
respondent Cosalan requested petitioner Beneco to release the compensation due him.
Beneco, acting through respondent Board members, denied the written request of
respondent Cosalan.

Respondent Cosalan then filed a complaint with the National Labor Relations
Commission ("NLRC") on 5 December 1984 against respondent members of the
Beneco Board, challenging the legality of the Board resolutions which ordered his
suspension and termination from the service and demanding payment of his salaries
and allowances. On 18 February 1985, Cosalan amended his complaint to implead
petitioner Beneco and respondent Board members, the latter in their respective dual
capacities as Directors and as private individuals.

In the course of the proceedings before the Labor Arbiter, Cosalan filed a motion for
reinstatement which, although opposed by petitioner Beneco, was granted on 23
October 1987 by Labor Arbiter Amado T. Adquilen. Petitioner Beneco complied with the
Labor Arbiter's order on 28 October 1987 through Resolution No. 10-90.

On 5 April 1988, the Labor Arbiter rendered a decision (a) confirming Cosalan's
reinstatement; (b) ordering payment to Cosalan of his backwages and allowances by
petitioner Beneco and respondent Board members, jointly and severally, for a period of
three (3) years without deduction or qualification, amounting to P344,000.00; and (3)
ordering the individual Board members to pay, jointly and severally, to Cosalan moral
damages of P50,000.00 plus attorney's fees of ten percent (10%) of the wages and
allowances awarded him.

Respondent Board members appealed to the NLRC, and there filed a Memorandum on
Appeal. Petitioner Beneco did not appeal, but moved to dismiss the appeal filed by
respondent Board members and for execution of judgment. By this time, petitioner
Beneco had a new set of directors.

In a decision dated 21 November 1988, public respondent NLRC modified the award
rendered by the Labor Arbiter by declaring that petitioner Beneco alone, and not
respondent Board members, was liable for respondent Cosalan's backwages and
allowances, and by ruling that there was no legal basis for the award of moral damages
and attorney's fees made by the Labor Arbiter.

Beneco, through its new set of directors, moved for reconsideration of the NLRC
decision, but without success.

In the present Petition for Certiorari, Beneco's principal contentions are two-fold: first,
that the NLRC had acted with grave abuse of discretion in accepting and giving due
course to respondent Board members' appeal although such appeal had been filed out
of time; and second, that the NLRC had acted with grave abuse of discretion amounting
to lack of jurisdiction in holding petitioner alone liable for payment of the backwages and
allowances due to Cosalan and releasing respondent Board members from liability
therefor.

We consider that petitioner's first contention is meritorious. There is no dispute about

the fact that the respondent Beneco Board members received the decision of the labor
Arbiter on 21 April 1988. Accordingly, and because 1 May 1988 was a legal holiday,
they had only up to 2 May 1988 within which to perfect their appeal by filing their
memorandum on appeal. It is also not disputed that the respondent Board members'
memorandum on appeal was posted by registered mail on 3 May 1988 and received by
the NLRC the following day. 4 Clearly, the memorandum on appeal was filed out of time.

Respondent Board members, however, insist that their Memorandum on Appeal was
filed on time because it was delivered for mailing on 1 May 1988 to the Garcia
Communications Company, a licensed private letter carrier. The Board members in
effect contend that the date of delivery to Garcia Communications was the date of filing
of their appeal memorandum.

Respondent Board member's contention runs counter to the established rule that
transmission through a private carrier or letter-forwarder –– instead of the Philippine
Post Office –– is not a recognized mode of filing pleadings. 5 The established rule is that
the date of delivery of pleadings to a private letter-forwarding agency is not to be
considered as the date of filing thereof in court, and that in such cases, the date of
actual receipt by the court, and not the date of delivery to the private carrier, is deemed
the date of filing of that pleading. 6

There, was, therefore, no reason grounded upon substantial justice and the prevention
of serious miscarriage of justice that might have justified the NLRC in disregarding the
ten-day reglementary period for perfection of an appeal by the respondent Board
members. Accordingly, the applicable rule was that the ten-day reglementary period to
perfect an appeal is mandatory and jurisdictional in nature, that failure to file an appeal
within the reglementary period renders the assailed decision final and executory and no
longer subject to review. 7 The respondent Board members had thus lost their right to
appeal from the decision of the Labor Arbiter and the NLRC should have forthwith
dismissed their appeal memorandum.

There is another and more compelling reason why the respondent Board members'
appeal should have been dismissed forthwith: that appeal was quite bereft of merit.
Both the Labor Arbiter and the NLRC had found that the indefinite suspension and
termination of services imposed by the respondent Board members upon petitioner
Cosalan was illegal. That illegality flowed, firstly, from the fact that the suspension of
Cosalan was continued long after expiration of the period of thirty (30) days, which is
the maximum period of preventive suspension that could be lawfully imposed under
Section 4, Rule XIV of the Omnibus Rules Implementing the Labor Code. Secondly,
Cosalan had been deprived of procedural due process by the respondent Board
members. He was never informed of the charges raised against him and was given no
opportunity to meet those charges and present his side of whatever dispute existed; he
was kept totally in the dark as to the reason or reasons why he had been suspended
and effectively dismissed from the service of Beneco Thirdly, respondent Board
members failed to adduce any cause which could reasonably be regarded as lawful
cause for the suspension and dismissal of respondent Cosalan from his position as
General Manager of Beneco. Cosalan was, in other words, denied due process both
procedural and substantive. Fourthly, respondent Board members failed to obtain the
prior approval of the NEA of their suspension now dismissal of Cosalan, which prior
approval was required, inter alia, under the subsisting loan agreement between the NEA
and Beneco. The requisite NEA approval was subsequently sought by the respondent
Board members; no NEA approval was granted.

In reversing the decision of the Labor Arbiter declaring petitioner Beneco and
respondent Board members solidarily liable for the salary, allowances, damages and
attorney's fees awarded to respondent Cosalan, the NLRC said:

. . . A perusal of the records show that the members of the Board never acted in their
individual capacities. They were acting as a Board passing resolutions affecting their
general manager. If these resolutions and resultant acts transgressed the law, to then
BENECO for which the Board was acting in behalf should bear responsibility. The
records do not disclose that the individual Board members were motivated by malice or
bad faith, rather, it reveals an intramural power play gone awry and misapprehension of
its own rules and regulations. For this reason, the decision holding the individual board
members jointly and severally liable with BENECO for Cosalan's backwages is
untenable. The same goes for the award of damages which does not have the proverbial
leg to stand on.

The Labor Arbiter below should have heeded his own observation in his decision —

Respondent BENECO as an artificial person could not have, by itself,

done anything to prevent it. But because the former have acted while in
office and in the course of their official functions as directors of
BENECO, . . .

Thus, the decision of the Labor Arbiter should be modified conformably with all the
foregoing holding BENECO solely liable for backwages and releasing the appellant board
members from any individual liabilities. 8 (Emphasis supplied)

The applicable general rule is clear enough. The Board members and officers of a
corporation who purport to act for and in behalf of the corporation, keep within the lawful
scope of their authority in so acting, and act in good faith, do not become liable, whether
civilly or otherwise, for the consequences of their acts, Those acts, when they are such
a nature and are done under such circumstances, are properly attributed to the
corporation alone and no personal liability is incurred by such officers and Board
members. 9

The major difficulty with the conclusion reached by the NLRC is that the NLRC clearly
overlooked or disregarded the circumstances under which respondent Board members
had in fact acted in the instant case. As noted earlier, the respondent Board members
responded to the efforts of Cosalan to take seriously and implement the Audit
Memoranda issued by the COA explicitly addressed to the petitioner Beneco, first by
stripping Cosalan of the privileges and perquisites attached to his position as General
Manager, then by suspending indefinitely and finally dismissing Cosalan from such
position. As also noted earlier, respondent Board members offered no suggestion at all
of any just or lawful cause that could sustain the suspension and dismissal of Cosalan.
They obviously wanted to get rid of Cosalan and so acted, in the words of the NLRC
itself, "with indecent haste" in removing him from his position and denying him
substantive and procedural due process. Thus, the record showed strong indications
that respondent Board members had illegally suspended and dismissed Cosalan
precisely because he was trying to remedy the financial irregularities and violations of
NEA regulations which the COA had brought to the attention of Beneco. The conclusion
reached by the NLRC that "the records do not disclose that the individual Board
members were motivated by malice or bad faith" flew in the face of the evidence of
record. At the very least, a strong presumption had arisen, which it was incumbent upon
respondent Board members to disprove, that they had acted in reprisal against
respondent Cosalan and in an effort to suppress knowledge about and remedial
measures against the financial irregularities the COA Audits had unearthed. That
burden respondent Board members did not discharge.

The Solicitor General has urged that respondent Board members may be held liable for
damages under the foregoing circumstance under Section 31 of the Corporation Code
which reads as follows:

Sec. 31. Liability of directors, trustees or officers. — Directors or trustees who willfully
and knowingly vote for or assent to patently unlawful acts of the corporation or who are
guilty of gross negligence or bad faith in directing the affairs of the corporation or acquire
any personal or pecuniary interest in conflict with their duty as such directors or trustees
shall be jointly liable and severally for all damages resulting therefrom suffered by the
corporation, its stockholders or members and other persons . . . (Emphasis supplied)

We agree with the Solicitor General, firstly, that Section 31 of the Corporation Code is
applicable in respect of Beneco and other electric cooperatives similarly situated.
Section 4 of the Corporation Code renders the provisions of that Code applicable in a
supplementary manner to all corporations, including those with special or individual
charters so long as those provisions are not inconsistent with such charters. We find no
provision in P.D. No. 269, as amended, that would exclude expressly or by necessary
implication the applicability of Section 31 of the Corporation Code in respect of
members of the boards of directors of electric cooperatives. Indeed, P.D. No. 269
expressly describes these cooperatives as "corporations:"

Sec. 15. Organization and Purpose. — Cooperative non-stock, non-profit membership

corporations may be organized, and electric cooperative corporations heretofore formed
or registered under the Philippine non-Agricultural Co-operative Act may as hereinafter
provided be converted, under this Decree for the purpose of supplying, and of promoting
and encouraging-the fullest use of, service on an area coverage basis at the lowest cost
consistent with sound economy and the prudent management of the business of such
corporations. 10 (Emphasis supplied)

We agree with the Solicitor General, secondly, that respondent Board members were
guilty of "gross negligence or bad faith in directing the affairs of the corporation" in
enacting the series of resolutions noted earlier indefinitely suspending and dismissing
respondent Cosalan from the position of General Manager of Beneco. Respondent
Board members, in doing so, acted belong the scope of their authority as such Board
members. The dismissal of an officer or employee in bad faith, without lawful cause and
without procedural due process, is an act that is contra legem. It cannot be supposed
that members of boards of directors derive any authority to violate the express
mandates of law or the clear legal rights of their officers and employees by simply
purporting to act for the corporation they control.

We believe and so hold, further, that not only are Beneco and respondent Board
members properly held solidarily liable for the awards made by the Labor Arbiter, but
also that petitioner Beneco which was controlled by and which could act only through
respondent Board members, has a right to be reimbursed for any amounts that Beneco
may be compelled to pay to respondent Cosalan. Such right of reimbursement is
essential if the innocent members of Beneco are not to be penalized for the acts of
respondent Board members which were both done in bad faith and ultra vires. The
liability-generating acts here are the personal and individual acts of respondent Board
members, and are not properly attributed to Beneco itself.

WHEREFORE, the Petition for Certiorari is GIVEN DUE COURSE, the comment filed
by respondent Board members is TREATED as their answer, and the decision of the
National Labor Relations Commission dated 21 November 1988 in NLRC Case No.
RAB-1-0313-84 is hereby SET ASIDE and the decision dated 5 April 1988 of Labor
Arbiter Amado T. Adquilen hereby REINSTATED in toto. In addition, respondent Board
members are hereby ORDERED to reimburse petitioner Beneco any amounts that it
may be compelled to pay to respondent Cosalan by virtue of the decision of Labor
Arbiter Amado T. Adquilen. No pronouncement as to costs.

SO ORDERED.

4.VIRATA VS. CA RULE 12

CESAR E. A. VIRATA, petitioner,

vs.
THE HONORABLE SANDIGANBAYAN and THE REPUBLIC OF THE PHILIPPINES, respondents.

TORRES, JR., J.:

In times past, when due process was more of a myth — empty accusations have had its day. In a
more enlightened age, a sage was heard to say — "Strike me if you must, but hear me first!" We
have come a long way, indeed, for in our time one who is required to answer for an alleged wrong
must at least know what is it all about.

This is the case before Us.

In this case, petitioner Cesar E. A. Virata (Virata, for brevity) is one of the defendants in Civil Case
No. 0035, entitled Republic of the Philippines versus Benjamin (Kokoy) Romualdez, et. al.. The
case, which was filed by the Presidential Commission on Good Government in behalf of the
Republic of the Philippines (Republic, for brevity) against fifty three persons (53) 1 including Virata,
involves the recovery of ill-gotten wealth amassed by the defendants during the twenty year reign of
former President Ferdinand Marcos.

The complaint against the defendants was amended three times. The last amended complaint filed
with the Sandiganbayan, hereafter known as the expanded Second Amended Complaint,
states, inter alia, the following relevant allegations against petitioner Virata:

V. SPECIFIC AVERMENTS OF DEFENDANTS' ILLEGAL ACTS

xxx xxx xxx

14. Defendants Benjamin (Kokoy) Romualdez and Juliette Gomez Romualdez,

acting by themselves and/or in unlawful concert with Defendants Ferdinand E.
Marcos and Imelda R. Marcos, and taking undue advantage of their relationship,
influence and connection with the latter Defendant spouses, engaged in devises,
schemes and strategems to unjustly enrich themselves at the expense of plaintiff and
the Filipino people, among others:

xxx xxx xxx

(b) gave MERALCO undue advantage (i) by effecting the increase of

power rates with automatic authority to tack into the consumers'
electric bills the so-called purchase and currency adjustment, and. (ii)
with the active collaboration of Defendant Cesar E. A. Virata, by
reducing the electric franchise tax from 5% to 2% of gross receipts
and the tariff duty on fuel oil imports by public utilities from 20% to
10%, resulting in substantial savings for MERALCO but without any
significant benefit to the consumers of electric power and loss of
millions of pesos in much needed revenues to the government;

xxx xxx xxx

(g) secured, in a veiled attempt to justify MERALCO's anomalous

acquisition of the electric cooperatives, with the active collaborations
of Defendants Cesar E. A. Virata, Juanito R. Remulla, Isidro
Rodriguez, Jose C. Hernandez, Pedro Dumol, Ricardo C. Galing,
Francisco C. Gatmaitan, Mario D. Camacho and the rest of the
Defendants, the approval by Defendant Ferdinand E. Marcos and his
cabinet of the so-called "Three-Year Program for the Extension of
MERALCO's Services to Areas Within the 60-Kilometer Radius of
Manila," which required government capital investment amounting to
millions of pesos;

xxx xxx xxx

(m) manipulated, with the support, assistance and collaboration of

Philguarantee officials led by Chairman Cesar E. A. Virata and the
senior managers of FMMC/PNI Holdings Incorporated led by Jose S.
Sandejas, Jr., Jose M. Mantecon and Kurt S. Bachman, Jr., among
others, the formation of Erecton Holdings, Inc. without infusing
additional capital solely for the purpose of making it assume the
obligation of Erectors Incorporated with Philguarantee in the amount
 of P527,387,440.71 with insufficient Securities/collaterals just to
enable Erectors Inc. to appear viable and to borrow more capitals, so
much so that its obligation with Philguarantee has reached a total of
more than P2 Billion as of June 30, 1987.

xxx xxx xxx

17. The following Defendants acted as dummies, nominees and/or agents by

allowing themselves (i) to be used as instruments in accumulating ill-gotten wealth
through government concessions, orders and/or policies prejudicial to plaintiff, or (ii)
to be incorporators, directors or members of corporations beneficially held and/or
controlled by Defendants Ferdinand E. Marcos, Imelda R. Marcos, Benjamin (Kokoy)
T. Romualdez and Julliette Gomez Ramualdez in order (to) conceal and prevent
recovery of assets illegally obtained: . . . Cesar E. A. Virata . . . .

xxx xxx xxx

18. The acts of Defendants, singly or collectively, and/or in unlawful concern with one
another, constitute gross abuse of official position and authority, flagrant breach of
public trust and fiduciary obligations, acquisition of unexplained wealth, brazen abuse
of right and power, unjust enrichment, violation of the Constitution and laws of the
Republic of the Philippines, to the grave and irreparable damage of Plaintiff and the
Filipino people. 2

Asserting that the foregoing allegations are vague and are not averred with sufficient definiteness as
to enable him to effectively prepare his responsive pleading, petitioner Virata filed a motion for a bill
of particulars on January 31, 1992.

In a Resolution promulgated on 4 August 1992, the Sandiganbayan partially granted the said motion
by requiring the Republic to submit a bill of particulars concerning the charges against petitioner
Virata stated only in paragraph 17 (acting as dummy, nominee and/or agent) and paragraph 18
(gross abuse of authority and violation of laws and the Constitution) of the expanded Second
Amended Complaint. However, as to the other charges, namely: 1) Virata's alleged active
collaboration in the reduction of electric franchise tax and the tariff duty on fuel oil imports, as stated
in paragraph 14 b (ii), 2) his active collaboration in securing the approval by Ferdinand Marcos of the
"Three Year Program for the Extension of MERALCO's Services to Areas within the 60 Kilometer
Radius of Manila," mentioned in paragraph 14 g, and 3) his support, assistance and collaboration in
the formation of Erectors Holdings Incorporated as reflected in paragraph 14 m of the expanded
Second Amended Complaint, the Sandiganbayan declared that these accusations are clear and
specific enough to allow Virata to submit an intelligent responsive pleading, hence, the motion for a
bill of particulars respecting the foregoing three charges was denied.

In view of the Sandiganbayan's order of August 4, 1992 requiring the Republic to amplify the
charges in paragraphs 17 and 18 of the expanded Second Amended Complaint, the Republic
through the Office of the Solicitor General submitted the bill of particulars dated October 22, 1992,
hereafter called as the Limited Bill of Particulars, which was signed by a certain Ramon A. Felipe IV,
who was designated in the bill of particulars as "private counsel", the relevant portion of which
provides that:

xxx xxx xxx

 1. Defendant Virata, while being one of the members of the Central Bank's Monetary
Board, approved Resolution No. 2320 dated December 14, 1973, allowing the
Benpres Corporation, Meralco Securities Corporation (MSC) and Manila Electric
Company (MERALCO) to refinance/restructure their outstanding loan obligations, a
"sweetheart" or "behest" accommodation which enabled Meralco Foundation, Inc. to
acquire ownership and control of Manila Electric Company. Meralco Foundation, Inc.
was then controlled by the Marcos-Romualdez Group with Benjamin (Kokoy)
Romualdez being the beneficial owner and, thereby, expanding the said group's
accumulation of ill-gotten wealth.

2. On July 11, 1973 defendant Virata representing the Republic of the Philippines as
Finance Minister, executed an Agreement with the Manila Electric Company
(MERALCO) whereby the government agreed to buy the parcels of land,
improvements and facilities known as Gardner Station Unit No. 1, Gardner Station
Unit No. 2, Snyder Station Unit No. 1, Snyder Station Unit No. 2 and Malaya Station
Unit No. 1 for One Billion One Hundred Million Pesos (P1,100,000,000.00), a
transaction which was so disadvantageous to the government and most favorable to
MERALCO which gained a total of P206.2 million. As a result of this transaction,
MERALCO is relieved of its heavy burden in servicing its foreign loans which were
assumed by the government. Furthermore, the agreement clearly showed the
"sweetheart" deal and favors being given by the government to MERALCO which
was then owned/and or controlled by Benjamin Romualdez representing the Marcos-
Romualdez group, when it provided that the "sale is subject to the reservation of
rights, leases and easements in favor of Philippine Petroleum Corp., First Philippine
Industrial Corp. (formerly MERALCO Securities Industrial Corp.) and Pilipinas Shell
Petroleum Corp. insofar as the same are presently in force and applicable." This
enabled the Marcos-Romualdez Group to further accumulate and expand the ill-
gotten wealth and plunder the nation.

3. At the meeting of the Board of Directors of the Philippine Export and Foreign Loan
Guarantee Corp. held on September 16, 1983 defendant Virata acting as Chairman,
together with the other members of the board, approved the request of Erectors, Inc.,
a Benjamin Romualdez owned and/or controlled corporation, for a guarantee to
cover 100% of its proposed behest loan of US $33.5 Million under the Central Bank
Consolidated Foreign Borrowing Program with the Philippine National Bank,
Development Bank of the Philippines, Interbank, Philippine Commercial International
Bank and Associated Bank as conduit banks, to refinance Erectors, Inc.'s short term
loans guaranteed by Philguarantee, which at present forms part of the government's
huge foreign debt. Such act of defendant Virata was a flagrant breach of public trust
as well as a violation of his duty to protect the financial condition and economy of the
country against, among others, abuses and corruption. 3

On 3 December 1992, a motion to strike out the Limited Bill of Particulars and to defer the filing of
the answer was filed by Virata on the grounds that the Limited Bill of Particulars avers for the first
time new actionable wrongs allegedly committed by him in various official capacities and that the
allegations therein do not indicate that Virata acted as dummy, nominee or agent but rather as a
government officer, acting as such in his own name. This motion was not acted upon by the
Sandiganbayan.

Way back on September 1, 1992, Virata, who was dissatisfied with the Sandiganbayan Resolution of
August 4, 1992, filed a petition for certiorari (G.R. No. 106527) with this Court questioning the
Sandiganbayan's denial of his motion for a bill of particulars as regards the first three charges stated
in paragraph 14 b(ii), paragraph 14g and paragraph 14m of the expanded Second Amended
Complaint. The petition was granted by this Court in our decision promulgated on April 6, 1993.
Accordingly, the Sandiganbayan Resolution of August 4, 1992 to the extent that it denied the motion
for a bill of particulars with respect to the first three (3) charges was set aside and the Republic was
required by this Court to submit to Virata a bill of particulars containing the facts prayed for by the
latter insofar as to these first three (3) 'actionable wrongs' are concerned. 4

On August 20, 1993, the Office of the Solicitor General (OSG) filed a manifestation and motion dated
August 18, 1993 alleging, inter alia, that the OSG and PCGG agreed that the required bill of
particulars would be filed by the PCGG since the latter is the investigating body which has the
complete records of the case, hence, in a better position to supply the required pleading. The
Sandiganbayan took note of this manifestation in a Resolution dated August 26, 1993. On the basis
of this arrangement, the PCGG submitted the bill of particulars dated November 3, 1993, which was
apparently signed by a certain Reynaldo G. Ros, who was named in the bill of particulars as
"deputized prosecutor" of the PCGG. This bill of particulars, which incorporates by reference the
Limited Bill of Particulars of October 22, 1992, states, inter alia:

xxx xxx xxx

1. On the "Specific Averments of Defendant's Illegal Acts a (i)" [paragraph 14 b (ii) of

the expanded Second Amended Complaint]

Immediately after defendants Ferdinand E. Marcos and Benjamin "Kokoy"

Romualdez took complete control of Meralco and its subsidiaries, defendant
Ferdinand E. Marcos issued Presidential Decree No. 551 on September 11, 1974
which effected the reduction of electric franchise tax being paid by Meralco from 5%
to 2% as well as lowered tariff duty of fuel oil imports from 20% to 10 % and allowed
Meralco to retain 3% reduction in franchise tax rates thereby allowing it to save as
much as P258 million as of December 31, 1992.

Defendant Cesar Virata then Minister of Finance, supported PD 551 and in fact
issued the guidelines on its implementation which were heavily relied upon by the
Board of Energy in its questioned ruling dated 25 November 1982 by allowing
Meralco to continue charging higher electric consumption rates despite their savings
from the aforesaid reduction of franchise tax without any significant benefit to the
consumers of electric power and resulting in the loss of millions of pesos in much
needed revenues to the government.

2. On the "Specific Averments of Defendant's Illegal Acts a (ii)" [par. 14g of the
expended Second Amended Complaint].

Defendant Cesar E.A. Virata, then Prime Minester [sic], caused the issuance of a
confidential memorandum dated October 12, 1982 to then President Ferdinand E.
Marcos informing the latter of the recommendation of the cabinet of the so called
Three Year Program for the Extension of Meralco Services of Areas within the 60
Kilometer Radius of Manila in order to justify Meralco's anomalous acquisition of
electric cooperatives and which later required the Monetary Board and Philguarantee
then headed by defendant Virata to recommend the restructuring of Meralco's foreign
and local obligation which led to the extending of loan accommodations by the
Development Bank of the Philippines and Philippine National Bank in favor of
Meralco.
 3. On the "Specific Averments of Defendant's Illegal Acts a (iii)" [par. 14m of the
expanded Second Amended Complaint].

Defendant Cesar Virata, as Chairman of Philguarantee and the Senior Managers of

FMMC/PNI Holdings Inc. led by Jose S. Sandejas, J. Jose N. Mantecon and Kurt S.
Bachmann, Jr., supported and assisted the formation of Erectors Holdings, Inc. for
the purpose of making it assume the obligation of Erectors Inc. with Philguarantee in
the amount of P527,387,440.71 without sufficient securities/collateral and despite
this outstanding obligation, defendant Virata, as Chairman of Philguarantee,
approved the Erectors Inc. Applications for loan guarantees that reached more than
P2 Billion as of June 30, 1987.

4. On the "Specific Averments of Defendant's Illegal Acts a (iv) [par. 17 of the

expanded Second Amended Complaint]

Plaintiff, hereby incorporates by reference plaintiff's Limited Bill of Particulars

previously submitted to this Honorable Court with the qualification that defendant
Cesar Virata merely acted as agent. 5

Consequently, Virata filed on November 23, 1993 his comment on the bill of particulars with motion
to dismiss the expanded Second Amended Complaint. He alleges that both the bills of particulars
dated October 22, 1992 and November 3, 1993 are pro forma and should be stricken off the records.
According to him, the bill of particulars dated November 3, 1993 is merely a rehash of the assertions
made in the expanded Second Amended Complaint, hence, it is not the bill of particulars that is
required by this Court in the previous case of Virata vs. Sandiganbayan, et. al. (G.R. No. 106527).
Furthermore, a reading of the Limited Bill of Particulars dated October 22, 1992 shows that it alleges
new imputations which are immaterial to the charge of being a dummy, nominee or agent, and that
Virata acted, not as a dummy, nominee or agent of his co-defendants as what is charged in the
complaint, but as a government officer of the Republic. Virata also questions the authority of PCGG
ad its deputized prosecutor to file the bill of particulars in behalf of the Republic. He asserts that the
legal representation of the Republic by the OSG is mandated by law and that the Sandiganbayan,
through its Resolution dated August 26, 1993, should not have allowed the OSG to abdicate its duty
as the counsel of record for the Republic.

The Republic filed its Opposition to Virata's Comment to Bill of Particulars on December 17, 1993.
Subsequently, Virata filed his Reply to Opposition on January 18, 1994.

After considering the relevant pleadings and motions submitted by the parties, the Sandiganbayan,
in a Resolution of February 16, 1994, admitted the bill of particulars submitted by the Republic and
ordered Virata to file his responsive pleading to the expanded Second Amended Complaint. The
relevant portion of the Resolution states as follows:

In the resolution of this incident, We find that the bill of particulars, filed by the plaintiff
on November 3, 1993 in compliance with the Supreme Court's directive, appears to
have substantially set out additional averments and particulars which were not
previously alleged in the Expanded Amended Complaint. We likewise consider these
additional averments and particulars to be sufficient enough to enable defendant
Virata to frame his responsive pleading or answer and that what he feels are still
necessary in preparing for trial should be obtained by various modes of discovery,
such as interrogatories, depositions, etc. A bill of particulars is sufficient if matters
constituting the causes of action have already been specified with sufficient
 particularity and which matters are within the moving party's knowledge. It cannot be
utilized to challenge the sufficiency of the claim asserted.

Simplicity of pleading is the idea of modern procedure, hence, evidentiary facts and
details should not be allowed to clutter a complaint as much as possible, consistent
with the right of the moving party to compel disclosure in instances where it is
beyond cavil that He cannot adequately frame a responsive pleading. In the instant
case, the bill of particulars submitted by the plaintiff, in Our considered opinion, is
sufficient and adequate enough to fulfill its mission. 6

Dissatisfied, Virata filed this instant petition for certiorari under Rule 65 of the Rules of Court to
challenge the foregoing Resolution of the Sandiganbayan.

The issues to be resolved in the instant case are as follows:

1. WHETHER OR NOT THE SANDIGANBAYAN COMMITTED GRAVE ABUSE OF DISCRETION

AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN ADMITTING THE BILL OF
PARTICULARS SUBMITTED BY THE REPUBLIC.

2. WHETHER OR NOT THE OFFICE OF THE SOLICITOR GENERAL AND THE PCGG ARE
AUTHORIZED BY LAW TO DEPUTIZE A COUNSEL TO FILE THE BILL OF PARTICULARS IN
BEHALF OF THE REPUBLIC.

Petitioner maintains the view that the allegations in the bill of particulars of November 3, 1993
remain vague, general and ambiguous, and the purported illegal acts imputed to Virata have not
been averred with sufficient definiteness so as to inform Virata of the factual and legal basis thereof.

Respecting the Limited Bill of Particulars dated October 22, 1992, which amplifies paragraphs 17
and 18 of the expanded Second Amended Complaint, Virata reiterates his basic arguments that the
Limited Bill of Particulars fails to provide the relevant and material averments sought to be clarified
by him and that it asserts for the first time new matters allegedly committed by him in different official
capacities, to wit: a) as a member of the Central Bank Monetary Board, he, with the other Monetary
Board members, approved Resolution No. 2320 dated December 14, 1973 regarding the
restructuring of the loans of Benpres Corporation, Meralco Securities Corporation, and the Manila
Electric Company, b) as Finance Minister, he executed an agreement with Manila Electric Company
in connection with the sale of lands and facilities of the Gardner Station Unit No. 1, Gardner Station
Unit No. 2, Snyder Station Unit No. 1, Snyder Station Unit No. 2, and Malaya Station Unit No. 1, and,
c) as Chairman of the Board of Directors of the Philippine Export and Foreign Loan Guarantee
Corporation, approved the request of Erector, Incorporated, for a guarantee to cover 100 % of its
proposed behest loan of US $ 33.5 Million under the Central Bank Consolidated Foreign Borrowing
Program. He argues that the thrust of paragraphs 17 and 18 of the expanded Second Amended
Complaint is the charge that Virata acted as "dummy, nominee and/or agent," however, the
foregoing allegations in the Limited Bill of Particulars do not indicate that he acted as dummy,
nominee or agent, but rather, as a government officer.

Invoking Section 3, Rule 17 of the Rules of Court, Virata argued that both the bills of particulars
submitted by the Republic did not follow the Rules of Court and the orders of the Sandiganbayan
and this Honorable Court, as such, the failure to comply with these legal orders is a ground for
dismissal of the action. Additionally, it is asserted that under Rule 12, Section 1(c) of the Rules of
Court, if an order of the court for a bill of particulars is not obeyed, it may order the striking out of the
pleading to which the motion was directed. Accordingly, Virata prayed for the striking out of the bills
of particulars dated October 22, 1992 and November 3, 1993 and the dismissal of the expanded
Second Amended Complaint in so far as he is concerned.

We find the instant petition meritorious.

The rule is that a complaint must contain the ultimate facts constituting plaintiff's cause of action. A
cause of action has the following elements, to wit: (1) a right in favor of the plaintiff by whatever
means and under whatever law it arises or is created; (2) an obligation on the part of the named
defendant to respect or not to violate such right; and (3) an act or omission on the part of such
defendant violative of the right of the plaintiff or constituting a breach of the obligation of the
defendant to the plaintiff for which the latter may maintain an action for recovery of damages. 7As
long as the complaint contains these three elements, a cause of action exists even though the
allegations therein are vague, and dismissal of the action is not the proper remedy when the
pleading is ambiguous because the defendant may ask for more particulars. As such, Section 1,
Rule 12 of the Rules of Court, provides, inter alia, that a party may move for more definite statement
or for a bill of particulars of any matter which is not averred with sufficient definiteness or particularity
to enable him properly to prepare his responsive pleading or to prepare for trial. Such motion shall
point out the defects complained of and the details desired. Under this Rule, the remedy available to
a party who seeks clarification of any issue or matter vaguely or obscurely pleaded by the other
party, is to file a motion, either for a more definite statement or for a bill of particulars. 8 An order
directing the submission of such statement or bill, further, is proper where it enables the party
movant intelligently to prepare a responsive pleading, or adequately to prepare for trial. 9

A bill of particulars is a complementary procedural document consisting of an amplification or more

particularized outline of a pleading, and being in the nature of a more specific allegation of the facts
recited in the pleading. 10 It is the office of the bill of particulars to inform the opposite party and the
court of the precise nature and character of the cause of action or defense which the pleader has
attempted to set forth and thereby to guide his adversary in his preparations for trial, and reasonably
to protect him against surprise at the
trial. 11 It gives information of the specific proposition for which the pleader contends, in respect to
any material and issuable fact in the case, and it becomes a part of the pleading which it
supplements. 12 It has been held that a bill of particulars must inform the opposite party of the nature
of the pleader's cause of action or defense, and it must furnish the required items of the claim with
reasonable fullness and precision. 13 Generally, it will be held sufficient if it fairly and substantially
gives the opposite party the information to which he is entitled, as required by the terms of the
application and of the order therefor. It should be definite and specific and not contain general
allegations and conclusions. It should be reasonably certain and as specific as the circumstances
will allow. 14

Guided by the foregoing rules and principles, we are convinced that both the bill of particulars dated
November 3, 1993 and the Limited Bill of Particulars of October 22, 1992 are couched in such
general and uncertain terms as would make it difficult for petitioner to submit an intelligent
responsive pleading to the complaint and to adequately prepare for trial.

Let us examine the bill of particulars dated November 3, 1993:

1. The first paragraph of the foregoing bill of particulars provides that "(I)mmediately after defendants
Ferdinand E. Marcos and Benjamin 'Kokoy' Romualdez took control of Meralco and its subsidiaries,
defendant Ferdinand E. Marcos issued Presidential Decree No. 551 on September 11, 1974 which
effected the reduction of electric franchise tax being paid by Meralco from 5% to 2% as well as
lowered tariff duty of fuel oil imports from 20% to 10% and allowed Meralco to retain the 3%
reduction in franchise tax rates thereby allowing it to save as much as P258 million as of December
31, 1992." Further, it is stated that "(D)efendant Cesar Virata then Minister of Finance, supported PD
551 and in fact issued the guidelines on its implementation which were heavily relied upon by the
Board of Energy in its questioned ruling dated 25 November 1982 by allowing Meralco to continue
charging higher electric consumption rates despite their savings from the aforesaid reduction of
franchise tax without any significant benefit to the consumers of electric power and resulting in the
loss of millions of pesos in much needed revenues to the government."

The abovequoted paragraph of the said bill of particulars is supposed to be the amplification of the
charge against Virata stated in paragraph 14(b) of the expanded Second Amended Complaint-which
is his alleged active collaboration in the reduction of electric franchise tax and tariff duty of fuel oil
imports. Yet, a careful perusal of the said paragraph shows that nothing is said about his alleged
active collaboration in reducing the taxes. Aside from the bare assertion that he "supported PD 551"
and "issued the guidelines on its implementation," the bill of particulars is disturbingly silent as to
what are the particular acts of Virata that establish his active collaboration in the reduction of taxes.
The allegation that he supported PD 551 and issued its implementing guidelines is an insufficient
amplification of the charge because the same is but a general statement bereft of any particulars. It
may be queried-how did Virata support PD 551? What were the specific acts indicating his support?
What were these implementing guidelines issued by him and when were they issued? In supporting
PD 551 and in issuing its implementing guidelines, what law or right, if there is any, is violated by
Virata? It is worthy to note that, until now, PD 551 has not been declared unconstitutional. In fact,
this Court upheld its validity in the case of Philippine Consumer Foundation, Inc. vs. Board of Energy
and Meralco. 15

2. In the second paragraph of the said bill of particulars, it is alleged that "(D)efendant Cesar E.A.
Virata, then Prime Minester [sic], caused the issuance of a confidential memorandum dated October
12, 1982 to then President Ferdinand E. Marcos informing the latter of the recommendation of the
cabinet of the so called Three Year Program for the Extension of Meralco Services of Areas within
the 60 Kilometer Radius of Manila in order to justify Meralco's anomalous acquisition of electric
cooperatives and which later required the Monetary Board and Philguarantee then headed by
defendant Virata to recommend the restructuring of Meralco's foreign and local obligation which led
to the extending of loan accommodation by the Development Bank of the Philippines and Philippine
National Bank in favor of Meralco."

The foregoing allegation purportedly amplifies the charge stated in paragraph 14 (g) of the expanded
Second Amended Complaint, that is-Virata's active collaboration in securing the approval by
Ferdinand Marcos and his cabinet of the Three Year Program for the Extension of Meralco's
Services within the Manila Area. However, just like the first paragraph of the said bill of particulars,
this Court finds that the second paragraph failed to set forth particularly or specifically the charge
against Virata. It is an incomplete or floating disclosure of material facts replete with generalizations
and indefinite statements which seemingly ends to nowhere. There are certain matters alleged that
need to be clarified and filled up with details so that Virata can intelligently and fairly contest them
and raise them as cogent issues, to wit: a) In causing the issuance of the said memorandum, what
law, duty or right, if there is any, is violated by Virata?; b) What was the recommendation of the
cabinet regarding the Three Year Program? The Republic should have at least furnish the
substantial or important features of the recommendation; c) What were these electric cooperatives?
Were these cooperatives the same as those enumerated in paragraph 14(e) of the expanded
Second Amended Complaint? 16 Why was the acquisition of these cooperatives anomalous?; and d)
What were Virata's specific acts as the head of Philguarantee which led to the restructuring of
Meralco's obligation? What was his participation in recommending the restructuring of Meralco's
obligation? What were these foreign and local obligations? How much of the obligation was
recommended for restructuring? What were the loan accommodations given in favor of Meralco?
When were they given and how much were involved in the transaction?
3. Regarding the third paragraph of the said bill of particulars, We find the same as a mere recast or
restatement of the charge set forth in paragraph 14 (m) of the expanded Second Amended
Complaint, which is Virata's alleged support, assistance and collaboration in the formation of
Erectors Holding, Incorporated. The said paragraph of the bill of particulars states that "(D)efendant
Cesar Virata, as Chairman of Philguarantee and the Senior Managers of FMMC/PNI Holdings Inc.
led by Jose S. Sandejas, J. Jose N. Mantecon and Kurt S. Bachmann, Jr. supported and assisted
the formation of Erectors Holdings, Inc. for the purpose of making it assume the obligation of
Erectors Inc. with Philguarantee in the amount of P527,387,440.71 without sufficient
securities/collateral and despite this outstanding obligation, defendant Virata, as Chairman of
Philguarantee, approved the Erectors Inc. Applications for loan guarantees that reached more than
P2 Billion as of June 30, 1987."

Clearly from the foregoing allegation, the Republic failed miserably to amplify the charge against
Virata because, instead of supplying the pertinent facts and specific matters that form the basis of
the charge, it only made repetitive allegations in the bill of particulars that Virata supported and
assisted the formation of the corporation concerned, which is the very same charge or allegation in
paragraph 14 (m) of the expanded Second Amended Complaint which requires specifications and
unfailing certainty. As such, the important question as to what particular acts of Virata that constitute
support and assistance in the formation of Erectors Holding, Incorporated is still left unanswered, a
product of uncertainty.

We now take a closer look at the Limited Bill of Particulars dated October 22, 1992.

The said bill of particulars was filed by the Republic to amplify the charge of Virata's being a dummy,
nominee or agent stated in paragraphs 17 and 18 of the expanded Second Amended Complaint. In
the subsequent bill of particulars dated November 3, 1993 the said charge was qualified by the
Republic in the sense that Virata allegedly acted only as an agent. Let us consider each paragraph
of the said bill of particulars:

1. The first paragraph of the Limited Bill of Particulars states that "(D)efendant Virata, while being
one of the members of the Central Bank's Monetary Board, approved Resolution No. 2320 dated
December 14, 1973, allowing the Benpres Corporation, Meralco Securities Corp. (MSG) and Manila
Electric Company (MERALCO) to refinance/restructure their outstanding loan obligations, a
'sweetheart' or 'behest' accommodation which enabled Meralco Foundation, Inc. to acquire
ownership and control of Manila Electric Company." It is stated further that "Meralco Foundation, Inc.
was then controlled by the Marcos-Romualdez Group with Benjamin (Kokoy) Romualdez being the
beneficial owner and, thereby, expanding the said group's accumulation of ill gotten wealth."

It is apparent from the foregoing allegations that the Republic did not furnish Virata the following
material matters which are indispensable for him to be placed in such a situation wherein he can
properly be informed of the charges against him: a) Did Virata, who was only one of the members of
the Board, act alone in approving the Resolution? Who really approved the Resolution, Virata or the
Monetary Board?; b) What were these outstanding loan obligations of the three corporations
concerned? Who were the creditors and debtors of these loan obligations? How much were involved
in the restructuring of the loan obligations? What made the transaction a 'sweetheart' or 'behest'
accommodation?; and c) How was the acquisition of MERALCO by Meralco Foundation, Inc. related
to the Resolution restructuring the loan obligations of the three corporations?

2 The second paragraph provides that "(O)n July 11, 1978 defendant Virata representing the
Republic of the Philippines as Finance Minister, executed an Agreement with the Manila Electric Co.
(MERALCO) whereby the government agreed to buy the parcels of land, improvements and facilities
known as Gardner Station Unit No. 1, Gardner Station Unit No. 2, Snyder Station Unit No. 1, Snyder
Station Unit No. 2 and Malaya Station Unit No. 1 for One Billion One Hundred Million Pesos
(P1,100,000,000.00), a transaction which was so disadvantageous to the government and most
favorable to MERALCO which gained a total of P206.2 million;" that "(A)s a result of this transaction,
MERALCO was relieved of its heavy burden in servicing its foreign loans which were assumed by
the government;" that ". . ., the agreement clearly showed the 'sweetheart' deal and favors being
given by the government to MERALCO which was then owned and/or controlled by Benjamin
Romualdez representing the Marcos-Romualdez group, when it provided that the 'sale is subject to
the reservation of rights, leases and easements in favor of Philippine Petroleum Corp., First
Philippine Industrial Corp. (formerly MERALCO Securities Industrial Corp.) and Pilipinas Shell
Petroleum Corp. insofar as the same are presently in force and applicable'."

There are certain matters in the foregoing allegations which lack in substantial particularity. They are
broad and definitely vague which require specifications in order that Virata can properly define the
issues and formulate his defenses. The following are the specific matters which the Republic failed
to provide, to wit: a) What made the transaction 'disadvantageous' to the government? The
allegation that it was disadvantageous is a conclusion of law that lacks factual basis. How did
MERALCO gain the P206.2 million? The Republic should have provided for more specifics how was
the transaction favorable to MERALCO?; b) What were these foreign obligations of MERALCO
which were assumed by the government? Who were the creditors in these obligations? When were
these obligations contracted? How much were involved in the assumption of foreign obligations by
the government?; and c) By the presence of the provision of the contract quoted by the Republic,
what made the agreement a 'sweetheart' deal? The allegation that the agreement is a 'sweetheart
deal' is a general statement that needs further amplification.

3. The third paragraph states that "(A)t the meeting of the Board of Directors of the Philippine Export
and Foreign Loan Guarantee Corp. held on September 16, 1983 defendant Virata acting as
Chairman, together with the other members of the board, approved the request of Erectors Inc., a
Benjamin Romualdez owned and/or controlled corporation, for a guarantee to cover 100% of its
proposed behest loan of US$ 33.5 Million under the Central Bank Consolidated Foreign Borrowing
Program with the Philippine National Bank, Development Bank of the Philippines, Interbank,
Philippine Commercial International Bank and Associated Bank as conduit banks, to refinance
Erectors, Inc.'s short term loans guaranteed by Philguarantee, which at present forms part of the
government's huge foreign debt; that "(S)uch act of defendant Virata was a flagrant breach of public
trust as well as a violation of his duty to protect the financial condition and economy of the country
against, among others, abuses and corruption".

In like manner, the foregoing paragraph contains incomplete and indefinite statement of facts
because it fails to provide the following relevant matters: a) What was this $33.5 million proposed
behest loan? What were its terms? Who was supposed to be the grantor of this loan?; b) What were
these short term loans? Who were the parties to these transactions? When were these transacted?
How was this $ 33.5 million behest loan related to the short term loans?

Furthermore, as correctly asserted by petitioner Virata, the Limited Bill of Particulars contains new
matters which are not covered by the charge that Virata acted as agent of his co-defendants in the
expanded Second Amended Complaint. Apparently, as may be examined from the three paragraphs
of the Limited Bill of Particulars, Virata, in so doing the acts; can not be considered as an agent of
any of his co-defendants, on the contrary, the factual circumstances stated in the said bill of
particulars indicate that Virata acted on behalf of the government, in his official capacity as a
government officer. This observation is established by the allegations that Virata acted as a member
of the Central Bank Monetary Board, as chairman of the Board of Directors of the Philippine Export
and Foreign Loan Guarantee Corporation, and, when he executed the Agreement with Meralco on
July 7, 1978 concerning the sale of certain properties, he acted as the Finance Minister of the
government and as a representative of the Republic in the contract. In performing the said acts, he,
therefore, acted as an agent of the government, not as an agent of his co-defendants, which is the
charge against him in the expanded Second Amended Complaint. Accordingly, the allegations in the
Limited Bill of Particulars are irrelevant and immaterial to the charge that Virata acted as an agent of
his co-defendants.

As clearly established by the foregoing discussion, the two bills of particulars filed by the Republic
failed to properly amplify the charges leveled against Virata because, not only are they mere
reiteration or repetition of the allegations set forth in the expanded Second Amended Complaint, but,
to the large extent, they contain vague, immaterial and generalized assertions which are
inadmissible under our procedural rules.

It must be remembered that in our decision promulgated on April 6, 1993 (G.R. No. 106527), We
required the Republic to submit a bill of particulars concerning the first three charges against Virata
averred in paragraphs 14 b(ii), 14g, and 14m of the expanded Second Amended Complaint, on the
other hand, as regards the charges stated in paragraphs 17 and 18 of the said complaint, the
Republic was ordered to file the required bill of particulars by the Sandiganbayan through its
Resolution dated August 4, 1992. The Republic purportedly complied with these orders by filing the
questioned bill of particulars dated November 3, 1993 and the Limited Bill of Particulars of October
22, 1992. However, as shown by the above discussion, the two bills of particulars were not the bills
of particulars which fully complied with the Rules of Court and with the orders of the Sandiganbayan
and this Court.

As such, in view of the Republic's failure to obey this Court's directive of April 6, 1993 (G.R. No.
106527) and the Sandiganbayan's order of August 4, 1992 to file the proper bill of particulars which
would completely amplify the charges against Virata, this Court deems it just and proper to order the
dismissal of the expanded Second Amended Complaint, in so far as the charges against Virata are
concerned. This action is justified by Section 3, Rule 17 of the Rules of Court, which provides that:

Sec. 3. Failure to prosecute. — If plaintiff fails to appear at the time of the trial, or to
prosecute his action for an unreasonable length of time, or to comply with these rules
or any order of the court, the action may be dismissed upon motion of the defendant
or upon the court's own motion. This dismissal shall have the effect of an
adjudication upon the merits, unless otherwise provided by court. (emphasis ours)

Regarding the second issue of the instant case, Virata contends that the Presidential Commission
on Good Government is not authorized by law to deputize a counsel to prepare and file pleadings in
behalf of the Republic. Neither can the Office of the Solicitor General validly deputize an outside
counsel to completely take over the case for the Republic. According to petitioner, only the Office of
the Solicitor General is mandated by law to act counsel for the Republic. Thus, the bill of particulars
filed for the Republic by "private counsel" or "deputized prosecutor" of the PCGG is unauthorized.

This contention is devoid of merit.

We are of the opinion that the Limited Bill of Particulars dated October 22, 1992 signed by Ramon
Felipe IV and the Bill of Particulars dated November 3, 1993 signed by Reynaldo Ros are valid
pleadings which are binding upon the Republic because the two lawyer-signatories are legally
deputized and authorized by the Office of the Solicitor General and the Presidential Commission on
Good Government to sign and file the bills of particulars concerned.

Realizing that it can not adequately respond to this Court's order of April 6, 1993 (G.R. No. 106527)
requiring the Republic to submit the bill of particulars concerning the first three charges against
Virata, the Office of the Solicitor deemed it better to seek the help of the Presidential Commission on
Good Government by availing the services of the latter's lawyer who would directly file the required
bill of particulars in behalf of the Republic. This circumstance prompted the Office of the Solicitor
General to manifest before the Sandiganbayan on August 20, 1993 that it would be the PCGG which
would file the required bill of particulars and move that it be excused from doing so as the PCGG,
being in-charge of investigating the case, was in a better position than the OSG. Armed with this
authority given by the OSG, the PCGG, through one of its deputized prosecutors, Reynaldo Ros,
filed the bill of particulars dated November 3, 1993 to amplify the first three charges against Virata
stated in paragraphs 14 b(ii), 14g, and 14m of the expanded Second Amended Complaint.

The action of the OSG in seeking the assistance of the PCGG is not without legal basis. The
Administrative Code of 1987, which virtually reproduces the powers and functions of the OSG
enumerated in P.D. No. 478 (The Law Defining the Powers and Functions of the Office of the
Solicitor General), provides, inter alia, that:

Sec. 35. Powers and Functions, . . . .

It (the OSG) shall have the following specific powers and functions:

xxx xxx xxx

(8) Deputize legal officers of government departments, bureaus, agencies and offices
to assist the Solicitor General and appear or represent the Government in cases
involving their respective offices, brought before the courts and exercise supervision
and control over such legal officers with respect to such cases.

(9) Call on any department, bureau, office, agency, or instrumentality of the

Government for such service assistance and cooperation as may be necessary in
fulfilling its functions and responsibilities and for this purpose enlist the services of
any government official or employee in the pursuit of his task. . . . . 17

Contrary to Virata's contention, the Solicitor General did not abdicate his function and turn over the
handling of the instant case to the PCGG. Nowhere in the manifestation and motion filed by the OSG
on August 20, 1993 is there an iota or indication that the OSG is withdrawing from the case and that
the PCGG is taking over its prosecution. What the OSG did was merely to call the PCGG for
assistance and authorize it to respond to the motion for a bill of particulars filed by Virata. The OSG
was impelled to act this way because of the existence of the special circumstance that the PCGG,
which has the complete records of the case and being in charge of its investigation, was more
knowledgeable and better informed of the facts of the case than the OSG.

The authority, therefore, of Attorney Reynaldo Ros to sign and submit in behalf of the Republic the
bill of particulars dated November 3, 1993 is beyond dispute because 1) he was duly deputized by
the PCGG in pursuance to its power to prosecute cases of ill-gotten wealth under Executive Order
No. 14 of May 14, 1986, 2) the OSG empowered the PCGG to file the bill of particulars as evidenced
by the OSG's manifestation and motion filed on August 20, 1993, and 3) there was no abdication of
OSG's duty by giving the PCGG the authority to file the bill of particulars.

On the other hand, the deputation of Ramon Felipe IV by the Solicitor General to sign and file the
Limited Bill of Particulars is based on Section 3 of Presidential Decree No. 478, which provides that:

Sec. 3. The Solicitor General may, when necessary and after consultation with the
Government entity concerned, employ, retain, and compensate on a contractual
basis, in the name of the Government, such attorneys and experts or technical
 personnel as he may deem necessary, to assist him in the discharge of his duties.
The compensation and expenses may be charged to the agency or office in whose
behalf the services have to be rendered. (emphasis ours)

The Solicitor General is mandated by law to act as the counsel of the Government and its agencies
in any litigation and matter requiring the services of a lawyer. In providing the legal representation for
the Government, he is provided with vast array of powers, which includes the power to retain and
compensate lawyers on contractual basis, necessary to fulfill his sworn duty with the end view of
upholding the interest of the Government. Thus, the Solicitor General acted within the legal bounds
of its authority when it deputized Attorney Felipe IV to file in behalf of the Republic the bill of
particulars concerning the charges stated in paragraph 17 and 18 of the expanded Second
Amended Complaint.

At any rate, whether or not the lawyer-signatories are duly deputized would not be decisive in the
resolution of this case considering that the two bills of particulars filed by the Republic are mere
scraps of paper which miserably failed to amplify the charges against Virata. For the Republic's
failure to comply with the court's order to file the required bill of particulars that would completely and
fully inform Virata of the charges against him, the dismissal of the action against him is proper based
on Section 3, Rule 17 of the Revised Rules of Court and the relevant jurisprudence
thereon. 18 Simple justice demands that as stated earlier, petitioner must know what the complaint is
all about. The law requires no less.

Although this Court is aware of the Government's laudable efforts to recover ill-gotten wealth
allegedly taken by the defendants, this Court, however, cannot shrink from its duty of upholding the
supremacy of the law under the aegis of justice and fairness. This Court in dismissing the action
against the petitioner has rightfully adhered in the unyielding tenet — principia, non homines — the
rule of law, not of men.

ACCORDINGLY, the instant petition is hereby GRANTED and the expanded Second Amended
Complaint, in so far as petitioner Virata is concerned, is hereby ordered DISMISSED.

SO ORDERED.

5.CHUA VS. CA – RULE 15 MOTION