Armed Forces of the Philippines Retirement and Separation Benefits System vs. Republic of the Philippines

A complaint may be dismissed for failure to prosecute only in the three instances enumerated in Rule 17, Section 3 of the 1997 Rules of Civil Procedure — the plaintiff's failure to appear at the presentation of his evidence in chief, failure to prosecute the action for an unreasonable length of time, or failure to comply with the Rules or any order of the court — and the absence of a witness's written authorization to testify is not among them. A witness's competence is determined exclusively by the qualifications and disqualifications under Rule 130 of the Rules on Evidence, and no substantive or procedural rule requires a witness to present an authorization to testify on behalf of the party presenting him or her.

The Armed Forces of the Philippines Retirement and Separation Benefits System (AFPRSBS) was created under Presidential Decree No. 361, as amended, to establish a separate fund guaranteeing continuous financial support to the AFP military retirement system as provided for in Republic Act No. 340. Three parcels of land in West Bicutan, Taguig City were granted to it by virtue of Presidential Proclamation No. 1218, issued by then President Fidel V. Ramos on May 8, 1998. The application for registration was signed and filed by Mr. Honorio S. Azcueta, then Executive Vice President and Chief Operating Officer of AFPRSBS, who was authorized by the corporation's Board of Trustees through a notarized Secretary's Certificate dated August 18, 2003.

The Armed Forces of the Philippines Retirement and Separation Benefits System (AFPRSBS) was created under Presidential Decree No. 361, as amended, to establish a separate fund guaranteeing continuous financial support to the AFP military retirement system under Republic Act No. 340. On September 29, 2003, it filed an Application for Registration of Title over three parcels of land located in West Bicutan, Taguig City before the Regional Trial Court of Pasig City, where the case was docketed as LRC Case No. N-11517 and raffled to Branch 68. The three parcels constituted a land grant by virtue of Presidential Proclamation No. 1218, issued by then President Fidel V. Ramos on May 8, 1998. The application was signed and filed by Mr. Honorio S. Azcueta, the then Executive Vice President and Chief Operating Officer of AFPRSBS, who was duly authorized to do so by the corporation's Board of Trustees, as evidenced by a notarized Secretary's Certificate dated August 18, 2003.

After due posting and publication of the requisite notices, and since no oppositor registered any opposition after the petitioner met the jurisdictional requirements, the trial court issued an order of general default against the whole world and allowed AFPRSBS to present its evidence ex-parte. AFPRSBS presented as its sole witness Ms. Alma P. Aban, its Vice President and Head of its Asset Enhancement Office. Aban testified that among her main duties was ensuring that the corporation's properties and assets, especially real property, were legally titled and freed of liens and encumbrances; that the subject properties were acquired by AFPRSBS through the land grant under Presidential Proclamation No. 1218; that prior to that proclamation, the Republic of the Philippines had been in open, continuous, exclusive, notorious, and peaceful possession and occupation of the properties in the concept of an owner to the exclusion of the world since time immemorial; that AFPRSBS, after the Republic transferred ownership of the properties to it, assumed open, continuous, exclusive, notorious, and peaceful possession and occupation of them, exercised control over them in the concept of owner, and likewise assumed the obligations of an owner; that it had been paying the real estate taxes on the properties; and that the properties were not mortgaged, encumbered, or tenanted. AFPRSBS thereafter submitted its Formal Offer of Evidence.

On April 21, 2008, the trial court granted the application, declaring, confirming, and ordering the registration of AFPRSBS's title over the three parcels and directing that the corresponding decree issue in its name once the decision became final and the required fees were paid. The Office of the Solicitor General moved for reconsideration on May 12, 2008, arguing that AFPRSBS had failed to prove that it had the personality to own property in its own name and had failed to show that the witness it presented was duly authorized to appear for and in its behalf. AFPRSBS filed its Comment/Opposition on June 2, 2008.

On February 17, 2009, the trial court granted the motion for reconsideration, reconsidered and recalled its April 21, 2008 Decision, and issued a new one dismissing the application for registration of title for failure to prosecute. The court reasoned that AFPRSBS had not presented its duly authorized representative to prosecute the case, since it presented only one witness, Aban. AFPRSBS's Motion for Reconsideration was denied in an Order dated July 9, 2009, prompting the present petition.

The trial court's factual premises, as carried into the assailed Orders, were that AFPRSBS presented only one witness and that this witness was not shown to have been authorized to prosecute the case on the corporation's behalf. The Supreme Court's analysis turned on those two premises, both of which it found unsupported by the Rules and by the records.

• Lack of Personality to Own Property: The Office of the Solicitor General argued, in its Motion for Reconsideration of the April 21, 2008 Decision, that AFPRSBS failed to prove that it has personality to own property in its own name.
• Lack of Authority of the Witness: The Office of the Solicitor General further argued that AFPRSBS failed to show that the witness it presented was duly authorized to appear for and in its behalf.
• Concession on Appeal: In the present petition, the respondent itself agreed with the petitioner that the dismissal of the subject application by the court a quo on the ground of failure to prosecute due to the lack of authority of the petitioner's sole witness was unfounded and without legal basis.

• Failure to Prosecute: Whether the court a quo acted contrary to law and jurisprudence when it dismissed petitioner's application for land registration on the ground that petitioner failed to prosecute the subject case.
• Qualifications of a Witness: Whether a witness for a party must present some form of authorization to testify for the party presenting him or her, such that its absence may be treated as a failure to prosecute.
• Authority to Prosecute: Whether the subject case was prosecuted by a duly authorized representative of the petitioner.

• Failure to Prosecute: No. Dismissal for failure to prosecute lies only in the three instances enumerated in Rule 17, Section 3 of the 1997 Rules of Civil Procedure, none of which was present.
• Qualifications of a Witness: No. No substantive or procedural rule requires a witness to present an authorization to testify; competence is governed exclusively by the qualifications and disqualifications under Rule 130 of the Rules on Evidence.
• Authority to Prosecute: Yes. The application was signed and filed by Mr. Azcueta in his capacity as Executive Vice President and Chief Operating Officer, as authorized by the Board of Trustees and evidenced by a Secretary's Certificate.

• Failure to Prosecute: Section 3, Rule 17 of the 1997 Rules of Civil Procedure, as amended, permits dismissal of a complaint for failure to prosecute in only three instances: (1) the plaintiff fails to appear on the date of the presentation of his evidence in chief on the complaint; (2) he fails to prosecute his action for an unreasonable length of time; or (3) he fails to comply with the Rules or any order of the court. De Knecht vs. CA confirmed this enumeration and added that such a dismissal operates as an adjudication on the merits and is with prejudice to the filing of another action unless the order of dismissal provides otherwise. None of the three grounds existed. First, the petitioner did not fail to appear at the time of trial; the April 21, 2008 Decision ordering registration shows that it appeared before the court and was represented by counsel, and the records show that it was able to present its evidence, as a result of which the RTC rendered judgment in its favor. Second, the petitioner did not fail to prosecute the case for an unreasonable length of time, having appeared during trial and presented Aban, who gave competent testimony on the titling of the subject lots, and the trial court never held the petitioner liable for any delay in prosecuting the case. Third, the records demonstrate that the petitioner did not fail to comply with the Rules or with any order of the trial court, there being no ruling to that effect. The dismissal was therefore highly irregular, having been issued after the petitioner had presented all its evidence and after the court had already rendered a decision in its favor.

• Qualifications of a Witness: The trial court's stated basis for finding a failure to prosecute — the alleged lack of authority of Aban to testify on behalf of the petitioner — supplied no legal ground for dismissal. There is no substantive or procedural rule requiring a witness for a party to present some form of authorization to testify for the party presenting him or her, and no law or jurisprudence supports the conclusion that such an omission may be considered a failure to prosecute on the part of the party presenting the witness. Rule 130, Section 20 of the Rules on Evidence provides that, except as provided in the next succeeding section, all persons who can perceive, and perceiving, can make known their perception to others, may be witnesses. Cavili vs. Judge Florendo, construing Sections 19, 20, and 21 of Rule 130, held that the specific enumeration of disqualified witnesses excludes the operation of causes of disability other than those mentioned in the Rules, an express exception excluding other exceptions. Aban was qualified to testify for the petitioner: she possessed the qualifications of being able to perceive and of making her perceptions known to others, and she possessed none of the disqualifications described in the Rules.

• Authority to Prosecute: The conclusion that the subject case was not prosecuted by a duly authorized representative of the petitioner was likewise unfounded. Neither the OSG nor the trial court questioned the Verification/Certification accompanying the application, nor did either question the authority of Mr. Azcueta to file the subject application on behalf of the petitioner. The records show that the application was signed and filed by Azcueta in his capacity as Executive Vice President and Chief Operating Officer of the petitioner, as authorized by the petitioner's Board of Trustees, and that his authority was established by a Secretary's Certificate attached to the application. The respondent itself conceded that the dismissal on the ground of failure to prosecute due to the lack of authority of the petitioner's sole witness was unfounded and without legal basis.

• Dismissal for Failure to Prosecute (Rule 17, Section 3) — Under the 1997 Rules of Civil Procedure, a complaint may be dismissed for failure to prosecute only in three instances: (1) the plaintiff fails to appear on the date of the presentation of his evidence in chief on the complaint; (2) he fails to prosecute his action for an unreasonable length of time; or (3) he fails to comply with the Rules or any order of the court. The dismissal operates as an adjudication upon the merits unless otherwise declared by the court. The Court applied the rule strictly, holding that a dismissal ordered after the plaintiff had presented all its evidence and after judgment had been rendered in its favor was highly irregular because none of the three grounds was present.
• Qualifications of Witnesses (Rule 130, Section 20) — All persons who can perceive, and perceiving, can make known their perception to others, may be witnesses, subject only to the disqualifications provided by the succeeding sections. The Court held that Ms. Aban satisfied this standard and that a witness's competence does not depend on any showing of authority from the party presenting her.
• Exclusivity of Witness Disqualifications (Expressio Unius Est Exclusio Alterius) — The specific enumeration of disqualified witnesses in Rule 130 excludes the operation of causes of disability other than those mentioned in the Rules; an express exception, exemption, or saving clause excludes other exceptions, and the Rules should not be interpreted to include an exception not embodied therein. The Court applied this maxim to reject the notion that lack of authorization to testify is a disqualification or a ground for dismissal.
• No Authorization Required for a Witness to Testify — There is no substantive or procedural rule requiring a witness for a party to present some form of authorization to testify for the party presenting him or her, and no law or jurisprudence supports treating such an omission as a failure to prosecute on the part of that party.
• Authority of a Corporate Officer to File and Prosecute — The authority of a corporate officer to file an application on the corporation's behalf may be established by a Secretary's Certificate attached to the application, and where the opposing party and the trial court do not question the verification/certification or the officer's authority, the claim that the case was not prosecuted by a duly authorized representative is unfounded.

• "Sec. 3. Dismissal due to fault of plaintiff.–If, for no justifiable cause, the plaintiff fails to appear on the date of the presentation of his evidence in chief on the complaint, or to prosecute his action for an unreasonable length of time, or to comply with these Rules or any order of the court, the complaint may be dismissed upon motion of the defendant or upon the court's own motion, without prejudice to the right of the defendant to prosecute his counterclaim in the same or in a separate action. This dismissal shall have the effect of an adjudication upon the merits, unless otherwise declared by the court." — The Court's verbatim reproduction of Rule 17, Section 3, which supplies the exclusive and controlling enumeration of the grounds for dismissal for failure to prosecute and anchors the entire ruling.
• "However, there is no substantive or procedural rule which requires a witness for a party to present some form of authorization to testify as a witness for the party presenting him or her. No law or jurisprudence would support the conclusion that such omission can be considered as a failure to prosecute on the part of the party presenting such witness." — The ratio decidendi on the evidentiary issue; it rejects the trial court's sole basis for dismissal and is the passage most likely to be cited for the proposition that a witness need not be authorized in writing to testify.
• "The specific enumeration of disqualified witnesses excludes the operation of causes of disability other than those mentioned in the Rules. It is a maxim of recognized utility and merit in the construction of statutes that an express exception, exemption, or saving clause excludes other exceptions." — The Court's adoption of the Cavili formulation on the exclusivity of Rule 130 disqualifications, which forecloses the implication of additional grounds of witness incompetence.
• "That the RTC dismissed the application for land registration of the petitioner for failure to prosecute after the petitioner presented all its evidence and after said court has rendered a decision in its favor, is highly irregular." — The Court's characterization of the procedural posture, underscoring that a dismissal for failure to prosecute cannot issue where the plaintiff has already completed its evidence and obtained a favorable judgment.

• De Knecht vs. Court of Appeals, 352 Phil. 833, 849 (1998) — Controlling precedent; cited for the enumeration of the three instances in which an action may be dismissed for failure to prosecute and for the rule that such a dismissal is an adjudication on the merits and with prejudice unless otherwise provided in the order of dismissal.
• Cavili vs. Judge Florendo, 238 Phil. 597, 602-603 (1987) — Followed; cited for the rule that the specific enumeration of disqualified witnesses in Rule 130 excludes the operation of causes of disability other than those mentioned in the Rules, an express exception excluding other exceptions.
• Ramiscal, Jr. vs. Sandiganbayan, 487 Phil. 384, 390 (2004) — Cited for the description of AFPRSBS as created under Presidential Decree No. 361, as amended, and designed to establish a separate fund guaranteeing continuous financial support to the AFP military retirement system under Republic Act No. 340.

• Rule 17, Section 3, 1997 Rules of Civil Procedure (as amended) — Governs dismissal due to the fault of the plaintiff. The Court held that the provision enumerates only three instances for dismissal for failure to prosecute and that none was present, rendering the trial court's dismissal contrary to law.
• Rule 130, Section 20, Rules on Evidence — Provides that all persons who can perceive, and perceiving, can make known their perception to others, may be witnesses, except as provided in the next succeeding section. Applied to hold that Ms. Aban was qualified to testify for the petitioner.
• Rule 130, Sections 19 and 21, Rules on Evidence — Referred to through Cavili vs. Judge Florendo as the source of the specific disqualifications for witnesses (mental incapacity and tender age; conflict of interest or relationship; privileged communications), which the Court held to be exclusive.
• Presidential Decree No. 361 (as amended) — The law creating AFPRSBS and establishing a separate fund to guarantee continuous financial support to the AFP military retirement system.
• Republic Act No. 340 — The law providing for the AFP military retirement system, which P.D. No. 361 was designed to support.
• Presidential Proclamation No. 1218 — Issued by then President Fidel V. Ramos on May 8, 1998; the source of the land grant over the three parcels of land in West Bicutan, Taguig City that were the subject of the registration application.

• Maria Lourdes P. A. Sereno (Chief Justice, Chairperson)
• Teresita J. Leonardo-De Castro
• Lucas P. Bersamin
• Bienvenido L. Reyes