CONDUCT AND CHARACTER AS EVIDENCE BOSTON BANK OF THE G. R. No.

158149 PHILIPPINES, (formerly BANK OF COMMERCE), Petitioner, Present: PANGANIBAN, J., Chairperson, YNARES-SANTIAGO, AUSTRIA-MARTINEZ, CALLEJO, SR., and CHICO-NAZARIO, JJ.

- versus -

PERLA P. MANALO and CARLOS MANALO, JR., Promulgated: Respondents. February 9, 2006

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

DECISION

CALLEJO, SR., J.: Before us is a Petition for Review on Certiorari of the Decision[1] of the Court of Appeals (CA) in CA-G.R. CV No. 47458 affirming, on appeal, the Decision[2] of the Regional Trial Court (RTC) of Quezon City, Branch 98, in Civil Case No. Q-89-3905.

The Antecedents The Xavierville Estate, Inc. (XEI) was the owner of parcels of land in Quezon City, known as the Xavierville Estate Subdivision, with an area of 42 hectares. XEI caused the subdivision of the property into residential lots, which was then offered for sale to individual lot buyers.[3] On September 8, 1967, XEI, through its General Manager, Antonio Ramos, as vendor, and The Overseas Bank of Manila (OBM), as vendee, executed a Deed of Sale of Real Estate over some residential lots in the subdivision, including Lot 1, Block 2, with an area of 907.5 square meters, and Lot 2, Block 2, with an area of 832.80 square meters. The transaction was subject to the approval of the Board of Directors of OBM, and was covered by real estate mortgages in favor of the Philippine National Bank as security for its account amounting to P5,187,000.00, and the Central Bank of the Philippines as security for advances amounting to P22,185,193.74.[4] Nevertheless, XEI continued selling the residential lots in the subdivision as agent of OBM.[5] Sometime in 1972, then XEI president Emerito Ramos, Jr. contracted the services of Engr. Carlos Manalo, Jr. who was in business of drilling deep water wells and installing pumps under the business name Hurricane Commercial, Inc. For P34,887.66, Manalo, Jr. installed a water pump at Ramos residence at the corner of Aurora Boulevard andKatipunan Avenue, Quezon City. Manalo, Jr. then proposed to XEI, through Ramos, to purchase a lot in the Xavierville subdivision, and offered as part of the downpayment theP34,887.66 Ramos owed him. XEI, through Ramos, agreed. In a letter dated February 8, 1972, Ramos requested Manalo, Jr. to choose which lots he wanted to buy so that the price of the lots and the terms of payment could be fixed and incorporated in the conditional sale.[6] Manalo, Jr. met with Ramos and informed him that he and his wife Perla had chosen Lots 1 and 2 of Block 2 with a total area of 1,740.3 square meters. In a letter dated August 22, 1972 to Perla Manalo, Ramos confirmed the reservation of the lots. He also pegged the price of the lots at P200.00 per square meter, or a total ofP348,060.00, with a 20% down payment of the purchase price amounting to P69,612.00 less the P34,887.66 owing from Ramos, payable on or before December 31, 1972; the corresponding Contract of Conditional Sale would then be signed on or before the same date, but if the selling operations of XEI resumed after December 31, 1972, the balance of the downpayment would fall due then, and the spouses would sign the aforesaid contract within five (5) days from receipt of the notice of resumption of such selling operations. It was also stated in the letter that, in the

meantime, the spouses may introduce improvements thereon subject to the rules and regulations imposed by XEI in the subdivision. Perla Manalo conformed to the letter agreement.[7] The spouses Manalo took possession of the property on September 2, 1972, constructed a house thereon, and installed a fence around the perimeter of the lots. In the meantime, many of the lot buyers refused to pay their monthly installments until they were assured that they would be issued Torrens titles over the lots they had purchased.[8] The spouses Manalo were notified of the resumption of the selling operations of XEI.[9] However, they did not pay the balance of the downpayment on the lots because Ramos failed to prepare a contract of conditional sale and transmit the same to Manalo for their signature. On August 14, 1973, Perla Manalo went to the XEI office and requested that the payment of the amount representing the balance of the downpayment be deferred, which, however, XEI rejected. On August 10,

1973, XEI furnished her with a statement of their account as of July 31, 1973, showing that they had a balance of P34,724.34 on the downpayment of the two lots after deducting the account of Ramos, plus P3,819.68[10] interest thereon from September 1, 1972 to July 31, 1973, and that the interests on the unpaid balance of the purchase price ofP278,448.00 from September 1, 1972 to July 31, 1973 amounted to P30,629.28.[11] The spouses were informed that they were being billed for said unpaid interests.[12] On January 25, 1974, the spouses Manalo received another statement of account from XEI, inclusive of interests on the purchase price of the lots.[13] In a letter dated April 6, 1974 to XEI, Manalo, Jr. stated they had not yet received the notice of resumption of Leis selling operations, and that there had been no arrangement on the payment of interests; hence, they should not be charged with interest on the balance of the downpayment on the property.[14] Further, they demanded that a deed of conditional sale over the two lots be transmitted to them for their signatures. However, XEI ignored the demands. Consequently, the spouses refused to pay the balance of the downpayment of the purchase price.[15] Sometime in June 1976, Manalo, Jr. constructed a business sign in the sidewalk near his house. In a letter dated June 17, 1976, XEI informed Manalo, Jr. that business signs were not allowed along the sidewalk. It demanded that he remove the same, on the ground, among others, that the sidewalk was not part of the land which he had purchased on installment basis from XEI.[16] Manalo, Jr. did not respond. XEI reiterated its demand on September 15, 1977.[17] Subsequently, XEI turned over its selling operations to OBM, including the receivables for lots already contracted and those yet to be sold.[18] On December 8, 1977, OBM warned Manalo, Jr., that putting up of a business sign is specifically prohibited by their contract of conditional sale and that his failure to comply with its demand would impel it to avail of the remedies as provided in their contract of conditional sale.[19] Meanwhile, on December 5, 1979, the Register of Deeds issued Transfer Certificate of Title (TCT) No. T-265822 over Lot 1, Block 2, and TCT No. T-265823 over Lot 2, Block 2, in favor of the OBM.[20] The lien in favor of the Central Bank of the Philippines was annotated at the dorsal portion of said title, which was later cancelled on August 4, 1980.[21] Subsequently, the Commercial Bank of Manila (CBM) acquired the Xavierville Estate from OBM. CBM wrote Edilberto Ng, the president of Xavierville Homeowners Association that, as of January 31, 1983, Manalo, Jr. was one of the lot buyers in the subdivision.[22] CBM

reiterated in its letter to Ng that, as of January 24, 1984, Manalo was a homeowner in the subdivision.[23] In a letter dated August 5, 1986, the CBM requested Perla Manalo to stop any on-going construction on the property since it (CBM) was the owner of the lot and she had no permission for such construction.[24] She agreed to have a conference meeting with CBM officers where she informed them that her husband had a contract with OBM, through XEI, to purchase the property. When asked to prove her claim, she promised to send the documents to CBM. However, she failed to do so.[25] On September 5, 1986, CBM reiterated its demand that it be furnished with the documents promised,[26] but Perla Manalo did not respond. On July 27, 1987, CBM filed a complaint[27] for unlawful detainer against the spouses with the Metropolitan Trial Court of Quezon City. The case was docketed as Civil Case No. 51618. CBM claimed that the spouses had been unlawfully occupying the property without its consent and that despite its demands, they refused to vacate the property. The latter alleged that they, as vendors, and XEI, as vendee, had a contract of sale over the lots which had not yet been rescinded.[28] While the case was pending, the spouses Manalo wrote CBM to offer an amicable settlement, promising to abide by the purchase price of the property (P313,172.34), per agreement with XEI, through Ramos. However, on July 28, 1988, CBM wrote the spouses, through counsel, proposing that the price of P1,500.00 per square meter of the property was a reasonable starting point for negotiation of the settlement.[29] The spouses rejected the counter proposal,[30] emphasizing that they would abide by their original agreement with XEI. CBM moved to withdraw its complaint[31] because of the issues raised.[32] In the meantime, the CBM was renamed the Boston Bank of the Philippines. After CBM filed its complaint against the spouses Manalo, the latter filed a complaint for specific performance and damages against the bank before the Regional Trial Court (RTC) of Quezon City on October 31, 1989. The plaintiffs alleged therein that they had always been ready, able and willing to pay the installments on the lots sold to them by the defendants remote predecessor-in-interest, as might be or stipulated in the contract of sale, but no contract was forthcoming; they constructed their house worth P2,000,000.00 on the property in good faith; Manalo, Jr., informed the defendant, through its counsel, on October 15, 1988 that he would abide by the terms and conditions of his original agreement with the defendants predecessor-in-interest; during the hearing of the

ejectment case on October 16, 1988, they offered to pay P313,172.34 representing the balance on the purchase price of said lots; such tender of payment was rejected, so that the subject lots could be sold at considerably higher prices to third parties. Plaintiffs further alleged that upon payment of the P313,172.34, they were entitled to the execution and delivery of a Deed of Absolute Sale covering the subject lots, sufficient in form and substance to transfer title thereto free and clear of any and all liens and encumbrances of whatever kind and nature.[33] The plaintiffs prayed that, after due hearing, judgment be rendered in their favor, to wit: WHEREFORE, it is respectfully prayed that after due hearing: (a) The defendant should be ordered to execute and deliver a Deed of Absolute Sale over subject lots in favor of the plaintiffs after payment of the sum of P313,172.34, sufficient in form and substance to transfer to them titles thereto free and clear of any and all liens and encumbrances of whatever kind or nature; (b) The defendant should be held liable for moral and exemplary damages in the amounts of P300,000.00 and P30,000.00, respectively, for not promptly executing and delivering to plaintiff the necessary Contract of Sale, notwithstanding repeated demands therefor and for having been constrained to engage the services of undersigned counsel for which they agreed to pay attorneys fees in the sum of P50,000.00 to enforce their rights in the premises and appearance fee of P500.00; (c) And for such other and further relief as may be just and equitable in the premises.[34]

In its Answer to the complaint, the defendant interposed the following affirmative defenses: (a) plaintiffs had no cause of action against it because the August 22, 1972 letter agreement between XEI and the plaintiffs was not binding on it; and (b) it had no record of any contract to sell executed by it or its predecessor, or of any statement of accounts from its predecessors, or records of payments of the plaintiffs or of any documents which entitled them to the possession of the lots.[35] The defendant, likewise, interposed counterclaims for damages and attorneys fees and prayed for the eviction of the plaintiffs from the property.[36] Meanwhile, in a letter dated January 25, 1993, plaintiffs, through counsel, proposed an amicable settlement of the case by paying P942,648.70, representing the balance of the purchase price of the two lots based on the current market value.[37] However, the defendant rejected the

same and insisted that for the smaller lot, they pay P4,500,000.00, the current market value of the property.[38] The defendant insisted that it owned the property since there was no contract or agreement between it and the plaintiffs relative thereto. During the trial, the plaintiffs adduced in evidence the separate Contracts of Conditional Sale executed between XEI and Alberto Soller;[39] Alfredo Aguila,[40] and Dra. Elena SantosRoque[41] to prove that XEI continued selling residential lots in the subdivision as agent of OBM after the latter had acquired the said lots. For its part, defendant presented in evidence the letter dated August 22, 1972, where XEI proposed to sell the two lots subject to two suspensive conditions: the payment of the balance of the downpayment of the property, and the execution of the corresponding contract of conditional sale. Since plaintiffs failed to pay, OBM consequently refused to execute the corresponding contract of conditional sale and forfeited the P34,877.66 downpayment for the two lots, but did not notify them of said forfeiture.[42] It alleged that OBM considered the lots unsold because the titles thereto bore no annotation that they had been sold under a contract of conditional sale, and the plaintiffs were not notified of XEIs resumption of its selling operations. On May 2, 1994, the RTC rendered judgment in favor of the plaintiffs and against the defendant. The fallo of the decision reads: WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendant (a) Ordering the latter to execute and deliver a Deed of Absolute Sale over Lot 1 and 2, Block 2 of the Xavierville Estate Subdivision after payment of the sum of P942,978.70 sufficient in form and substance to transfer to them titles thereto free from any and all liens and encumbrances of whatever kind and nature. (b) Ordering the defendant to pay moral and exemplary damages in the amount of P150,000.00; and (c) To pay attorneys fees in the sum of P50,000.00 and to pay the costs. SO ORDERED.[43]

The trial court ruled that under the August 22, 1972 letter agreement of XEI and the plaintiffs, the parties had a complete contract to sell over the lots, and that they had already partially consummated the same. It declared that the failure of the defendant to notify the

plaintiffs of the resumption of its selling operations and to execute a deed of conditional sale did not prevent the defendants obligation to convey titles to the lots from acquiring binding effect. Consequently, the plaintiffs had a cause of action to compel the defendant to execute a deed of sale over the lots in their favor. Boston Bank appealed the decision to the CA, alleging that the lower court erred in (a) not concluding that the letter of XEI to the spouses Manalo, was at most a mere contract to sell subject to suspensive conditions, i.e., the payment of the balance of the downpayment on the property and the execution of a deed of conditional sale (which were not complied with); and (b) in awarding moral and exemplary damages to the spouses Manalo despite the absence of testimony providing facts to justify such awards.[44] On September 30, 2002, the CA rendered a decision affirming that of the RTC with modification. The fallo reads: WHEREFORE, the appealed decision is AFFIRMED with MODIFICATIONS that (a) the figure P942,978.70 appearing [in] par. (a) of the dispositive portion thereof is changed to P313,172.34 plus interest thereon at the rate of 12% per annum from September 1, 1972 until fully paid and (b) the award of moral and exemplary damages and attorneys fees in favor of plaintiffs appellees is DELETED. SO ORDERED.[45]

The appellate court sustained the ruling of the RTC that the appellant and the appellees had executed a Contract to Sell over the two lots but declared that the balance of the purchase price of the property amounting to P278,448.00 was payable in fixed amounts, inclusive of precomputed interests, from delivery of the possession of the property to the appellees on a monthly basis for 120 months, based on the deeds of conditional sale executed by XEI in favor of other lot buyers.[46] The CA also declared that, while XEI must have resumed its selling operations before the end of 1972 and the downpayment on the property remained unpaid as of December 31, 1972, absent a written notice of cancellation of the contract to sell from the bank or notarial demand therefor as required by Republic Act No. 6552, the spouses had, at the very least, a 60day grace period from January 1, 1973 within which to pay the same. Boston Bank filed a motion for the reconsideration of the decision alleging that there was no perfected contract to sell the two lots, as there was no agreement between XEI and the respondents on the manner of payment as well as the other terms and conditions of the sale. It

further averred that its claim for recovery of possession of the aforesaid lots in its Memorandum dated February 28, 1994 filed before the trial court constituted a judicial demand for rescission that satisfied the requirements of the New Civil Code. However, the appellate court denied the motion. Boston Bank, now petitioner, filed the instant petition for review on certiorari assailing the CA rulings. It maintains that, as held by the CA, the records do not reflect any schedule of payment of the 80% balance of the purchase price, or P278,448.00. Petitioner insists that unless the parties had agreed on the manner of payment of the principal amount, including the other terms and conditions of the contract, there would be no existing contract of sale or contract to sell.[47] Petitioner avers that the letter agreement to respondent spouses dated August 22, 1972 merely confirmed their reservation for the purchase of Lot Nos. 1 and 2, consisting of 1,740.3 square meters, more or less, at the price of P200.00 per square meter (or P348,060.00), the amount of the downpayment thereon and the application of the P34,887.00 due from Ramos as part of such downpayment. Petitioner asserts that there is no factual basis for the CA ruling that the terms and conditions relating to the payment of the balance of the purchase price of the property (as agreed upon by XEI and other lot buyers in the same subdivision) were also applicable to the contract entered into between the petitioner and the respondents. It insists that such a ruling is contrary to law, as it is tantamount to compelling the parties to agree to something that was not even discussed, thus, violating their freedom to contract. Besides, the situation of the respondents cannot be equated with those of the other lot buyers, as, for one thing, the respondents made a partial payment on the downpayment for the two lots even before the execution of any contract of conditional sale. Petitioner posits that, even on the assumption that there was a perfected contract to sell between the parties, nevertheless, it cannot be compelled to convey the property to the respondents because the latter failed to pay the balance of the downpayment of the property, as well as the balance of 80% of the purchase price, thus resulting in the extinction of its obligation to convey title to the lots to the respondents. Another egregious error of the CA, petitioner avers, is the application of Republic Act No. 6552. It insists that such law applies only to a perfected agreement or perfected contract to sell, not in this case where the downpayment on the purchase price of the property was not completely paid, and no installment payments were made by the buyers.

Petitioner also faults the CA for declaring that petitioner failed to serve a notice on the respondents of cancellation or rescission of the contract to sell, or notarial demand therefor. Petitioner insists that its August 5, 1986 letter requiring respondents to vacate the property and its complaint for ejectment in Civil Case No. 51618 filed in the Metropolitan Trial Court amounted to the requisite demand for a rescission of the contract to sell. Moreover, the action of the respondents below was barred by laches because despite demands, they failed to pay the balance of the purchase price of the lots (let alone the downpayment) for a considerable number of years. For their part, respondents assert that as long as there is a meeting of the minds of the parties to a contract of sale as to the price, the contract is valid despite the parties failure to agree on the manner of payment. In such a situation, the balance of the purchase price would be payable on demand, conformably to Article 1169 of the New Civil Code. They insist that the law does not require a party to agree on the manner of payment of the purchase price as a prerequisite to a valid contract to sell. The respondents cite the ruling of this Court in Buenaventura v. Court of Appeals[48] to support their submission. They argue that even if the manner and timeline for the payment of the balance of the purchase price of the property is an essential requisite of a contract to sell, nevertheless, as shown by their letter agreement of August 22, 1972 with the OBM, through XEI and the other letters to them, an agreement was reached as to the manner of payment of the balance of the purchase price. They point out that such letters referred to the terms of the

terms of the deeds of conditional sale executed by XEI in favor of the other lot buyers in the subdivision, which contained uniform terms of 120 equal monthly installments (excluding the downpayment, but inclusive of pre-computed interests). The respondents assert that XEI was a real estate broker and knew that the contracts involving residential lots in the subdivision contained uniform terms as to the manner and timeline of the payment of the purchase price of said lots. Respondents further posit that the terms and conditions to be incorporated in the corresponding contract of conditional sale to be executed by the parties would be the same as those contained in the contracts of conditional sale executed by lot buyers in the subdivision. After all, they maintain, the contents of the corresponding contract of conditional sale referred to in the August 22, 1972 letter agreement envisaged those contained in the contracts of conditional sale that XEI and other lot buyers executed. Respondents cite the ruling of this Court in Mitsui Bussan Kaisha v. Manila E.R.R. & L. Co.[49] The respondents aver that the issues raised by the petitioner are factual, inappropriate in a petition for review on certiorari under Rule 45 of the Rules of Court. They assert that petitioner adopted a theory in litigating the case in the trial court, but changed the same on appeal before the CA, and again in this Court. They argue that the petitioner is estopped from adopting a new theory contrary to those it had adopted in the trial and appellate courts. Moreover, the existence of a contract of conditional sale was admitted in the letters of XEI and OBM. They aver that they became owners of the lots upon delivery to them by XEI. The issues for resolution are the following: (1) whether the factual issues raised by the petitioner are proper; (2) whether petitioner or its predecessors-in-interest, the XEI or the OBM, as seller, and the respondents, as buyers, forged a perfect contract to sell over the property; (3) whether

petitioner is estopped from contending that no such contract was forged by the parties; and (4) whether respondents has a cause of action against the petitioner for specific performance. The rule is that before this Court, only legal issues may be raised in a petition for review on certiorari. The reason is that this Court is not a trier of facts, and is not to review and calibrate the evidence on record. Moreover, the findings of facts of the trial court, as affirmed on appeal by the Court of Appeals, are conclusive on this Court unless the case falls under any of the following exceptions: (1) when the conclusion is a finding grounded entirely on speculations, surmises and conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible; (3) where there is a grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of fact are conflicting; (6) when the Court of Appeals, in making its findings went beyond the issues of the case and the same is contrary to the admissions of both appellant and appellee; (7) when the findings are contrary to those of the trial court; (8) when the findings of fact are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioners main and reply briefs are not disputed by the respondents; and (10) when the findings of fact of the Court of Appeals are premised on the supposed absence of evidence and contradicted by the evidence on record.[50] We have reviewed the records and we find that, indeed, the ruling of the appellate court dismissing petitioners appeal is contrary to law and is not supported by evidence. A careful examination of the factual backdrop of the case, as well as the antecedental proceedings constrains us to hold that petitioner is not barred from asserting that XEI or OBM, on one hand, and the respondents, on the other, failed to forge a perfected contract to sell the subject lots. It must be stressed that the Court may consider an issue not raised during the trial when there is plain error.[51] Although a factual issue was not raised in the trial court, such issue may still be considered and resolved by the Court in the interest of substantial justice, if it finds that to do so is necessary to arrive at a just decision,[52] or when an issue is closely related to an issue raised in the trial court and the Court of Appeals and is necessary for a just and complete resolution of the case.[53] When the trial court decides a case in favor of a party on certain grounds, the Court may base its decision upon some other points, which the trial court or appellate court ignored or erroneously decided in favor of a party.[54] In this case, the issue of whether XEI had agreed to allow the respondents to pay the purchase price of the property was raised by the parties. The trial court ruled that the parties had

perfected a contract to sell, as against petitioners claim that no such contract existed. However, in resolving the issue of whether the petitioner was obliged to sell the property to the respondents, while the CA declared that XEI or OBM and the respondents failed to agree on the schedule of payment of the balance of the purchase price of the property, it ruled that XEI and the respondents had forged a contract to sell; hence, petitioner is entitled to ventilate the issue before this Court. We agree with petitioners contention that, for a perfected contract of sale or contract to sell to exist in law, there must be an agreement of the parties, not only on the price of the property sold, but also on the manner the price is to be paid by the vendee. Under Article 1458 of the New Civil Code, in a contract of sale, whether absolute or conditional, one of the contracting parties obliges himself to transfer the ownership of and deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent. A contract of sale is perfected at the moment there is a meeting of the minds upon the thing which is the object of the contract and the price. From the averment of perfection, the parties are bound, not only to the fulfillment of what has been

expressly stipulated, but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law.[55] On the other hand, when the contract of sale or to sell is not perfected, it cannot, as an independent source of obligation, serve as a binding juridical relation between the parties.[56] A definite agreement as to the price is an essential element of a binding agreement to sell personal or real property because it seriously affects the rights and obligations of the parties. Price is an essential element in the formation of a binding and enforceable contract of sale. The fixing of the price can never be left to the decision of one of the contracting parties. But a price fixed by one of the contracting parties, if accepted by the other, gives rise to a perfected sale.[57] It is not enough for the parties to agree on the price of the property. The parties must also agree on the manner of payment of the price of the property to give rise to a binding and enforceable contract of sale or contract to sell. This is so because the agreement as to the manner of payment goes into the price, such that a disagreement on the manner of payment is tantamount to a failure to agree on the price.[58] In a contract to sell property by installments, it is not enough that the parties agree on the price as well as the amount of downpayment. The parties must, likewise, agree on the manner of payment of the balance of the purchase price and on the other terms and conditions relative to the sale. Even if the buyer makes a downpayment or portion thereof, such payment cannot be considered as sufficient proof of the perfection of any purchase and sale between the parties. Indeed, this Court ruled in Velasco v. Court of Appeals[59]that: It is not difficult to glean from the aforequoted averments that the petitioners themselves admit that they and the respondent still had to meet and agree on how and when the down-payment and the installment payments were to be paid. Such being the situation, it cannot, therefore, be said that a definite and firm sales agreement between the parties had been perfected over the lot in question. Indeed, this Court has already ruled before that a definite agreement on the manner of payment of the purchase price is an essential element in the formation of a binding and enforceable contract of sale. The fact, therefore, that the petitioners delivered to the respondent the sum of P10,000.00 as part of the downpayment that they had to pay cannot be considered as sufficient proof of the perfection of any purchase and sale agreement between the parties herein under article 1482 of the New Civil Code, as the petitioners themselves admit that some essential matter the terms of payment still had to be mutually covenanted.[60]

We agree with the contention of the petitioner that, as held by the CA, there is no showing, in the records, of the schedule of payment of the balance of the purchase price on the property amounting to P278,448.00. We have meticulously reviewed the records, including Ramos February 8, 1972 and August 22, 1972 letters to respondents,[61] and find that said parties confined themselves to agreeing on the price of the property (P348,060.00), the 20% downpayment of the purchase price (P69,612.00), and credited respondents for the P34,887.00 owing from Ramos as part of the 20% downpayment. The timeline for the payment of the balance of the downpayment (P34,724.34) was also agreed upon, that is, on or before XEI resumed its selling operations, on or before December 31, 1972, or within five (5) days from written notice of such resumption of selling operations. The parties had also agreed to incorporate all the terms and conditions relating to the sale, inclusive of the terms of payment of the balance of the purchase price and the other substantial terms and conditions in the corresponding contract of conditional sale, to be later signed by the parties, simultaneously with respondents settlement of the balance of the downpayment. The February 8, 1972 letter of XEI reads: Mr. Carlos T. Manalo, Jr. Hurricane Rotary Well Drilling Rizal Avenue Ext.,Caloocan City Dear Mr. Manalo: We agree with your verbal offer to exchange the proceeds of your contract with us to form as a down payment for a lot in our Xavierville Estate Subdivision. Please let us know your choice lot so that we can fix the price and terms of payment in our conditional sale. Sincerely yours, XAVIERVILLE ESTATE, INC. (Signed) EMERITO B. RAMOS, JR. President CONFORME: (Signed) CARLOS T. MANALO, JR. Hurricane Rotary Well Drilling[62]

The August 22, 1972 letter agreement of XEI and the respondents reads: Mrs. Perla P. Manalo 1548 Rizal Avenue Extension Caloocan City Dear Mrs. Manalo: This is to confirm your reservation of Lot Nos. 1 and 2; Block 2 of our consolidation-subdivision plan as amended, consisting of 1,740.3 square meters more or less, at the price of P200.00 per square meter or a total price of P348,060.00. It is agreed that as soon as we resume selling operations, you must pay a down payment of 20% of the purchase price of the said lots and sign the corresponding Contract of Conditional Sale, on or before December 31, 1972, provided, however, that if we resume selling after December 31, 1972, then you must pay the aforementioned down payment and sign the aforesaid contract within five (5) days from your receipt of our notice of resumption of selling operations. In the meanwhile, you may introduce such improvements on the said lots as you may desire, subject to the rules and regulations of the subdivision. If the above terms and conditions are acceptable to you, please signify your conformity by signing on the space herein below provided. Thank you.

Very truly yours, XAVIERVILLE ESTATE, INC. By: (Signed) EMERITO B. RAMOS, JR. President CONFORME:

(Signed) PERLA P. MANALO Buyer[63]

Based on these two letters, the determination of the terms of payment of the P278,448.00 had yet to be agreed upon on or before December 31, 1972, or even afterwards, when the parties sign the corresponding contract of conditional sale.

Jurisprudence is that if a material element of a contemplated contract is left for future negotiations, the same is too indefinite to be enforceable.[64] And when an essential element of a contract is reserved for future agreement of the parties, no legal obligation arises until such future agreement is concluded.[65] So long as an essential element entering into the proposed obligation of either of the parties remains to be determined by an agreement which they are to make, the contract is incomplete and unenforceable.[66] The reason is that such a contract is lacking in the necessary qualities of definiteness, certainty and mutuality.[67] There is no evidence on record to prove that XEI or OBM and the respondents had agreed, after December 31, 1972, on the terms of payment of the balance of the purchase price of the property and the other substantial terms and conditions relative to the sale. Indeed, the parties are in agreement that there had been no contract of conditional sale ever executed by XEI, OBM or petitioner, as vendor, and the respondents, as vendees.[68] The ruling of this Court in Buenaventura v. Court of Appeals has no bearing in this case because the issue of the manner of payment of the purchase price of the property was not raised therein. We reject the submission of respondents that they and Ramos had intended to incorporate the terms of payment contained in the three contracts of conditional sale executed by XEI and other lot buyers in the corresponding contract of conditional sale, which would later be signed by them.[69] We have meticulously reviewed the respondents complaint and find no such allegation therein.[70] Indeed, respondents merely alleged in their complaint that they were bound to pay the balance of the purchase price of the property in installments. When respondent Manalo, Jr. testified, he was never asked, on direct examination or even on crossexamination, whether the terms of payment of the balance of the purchase price of the lots under the contracts of conditional sale executed by XEI and other lot buyers would form part of the corresponding contract of conditional sale to be signed by them simultaneously with the payment of the balance of the downpayment on the purchase price. We note that, in its letter to the respondents dated June 17, 1976, or almost three years from the execution by the parties of their August 22, 1972 letter agreement, XEI stated, in part, that respondents had purchased the property on installment basis.[71] However, in the said letter, XEI failed to state a specific amount for each installment, and whether such payments

were to be made monthly, semi-annually, or annually. Also, respondents, as plaintiffs below, failed to adduce a shred of evidence to prove that they were obliged to pay the P278,448.00 monthly, semi-annually or annually. The allegation that the payment of the P278,448.00 was to be paid in installments is, thus, vague and indefinite. Case law is that, for a contract to be enforceable, its terms must be certain and explicit, not vague or indefinite.[72] There is no factual and legal basis for the CA ruling that, based on the terms of payment of the balance of the purchase price of the lots under the contracts of conditional sale executed by XEI and the other lot buyers, respondents were obliged to pay the P278,448.00 with precomputed interest of 12% per annum in 120-month installments. As gleaned from the ruling of the appellate court, it failed to justify its use of the terms of payment under the three contracts of conditional sale as basis for such ruling, to wit: On the other hand, the records do not disclose the schedule of payment of the purchase price, net of the downpayment. Considering, however, the Contracts of Conditional Sale (Exhs. N, O and P) entered into by XEI with other lot buyers, it would appear that the subdivision lots sold by XEI, under contracts to sell, were payable in 120 equal monthly installments (exclusive of the downpayment but including pre-computed interests) commencing on delivery of the lot to the buyer.[73]

By its ruling, the CA unilaterally supplied an essential element to the letter agreement of XEI and the respondents. Courts should not undertake to make a contract for the parties, nor can it enforce one, the terms of which are in doubt.[74] Indeed, the Court emphasized in Chua v. Court of Appeals[75] that it is not the province of a court to alter a contract by construction or to make a new contract for the parties; its duty is confined to the interpretation of the one which they have made for themselves, without regard to its wisdom or folly, as the court cannot supply material stipulations or read into contract words which it does not contain. Respondents, as plaintiffs below, failed to allege in their complaint that the terms of payment of the P278,448.00 to be incorporated in the corresponding contract of conditional sale were those contained in the contracts of conditional sale executed by XEI and Soller, Aguila and Roque.[76] They likewise failed to prove such allegation in this Court. The bare fact that other lot buyers were allowed to pay the balance of the purchase price of lots purchased by them in 120 or 180 monthly installments does not constitute evidence that XEI also agreed to give the respondents the same mode and timeline of payment of the P278,448.00.

Under Section 34, Rule 130 of the Revised Rules of Court, evidence that one did a certain thing at one time is not admissible to prove that he did the same or similar thing at another time, although such evidence may be received to prove habit, usage, pattern of conduct or the intent of the parties. Similar acts as evidence. Evidence that one did or did not do a certain thing at one time is not admissible to prove that he did or did not do the same or a similar thing at another time; but it may be received to prove a specific intent or knowledge, identity, plan, system, scheme, habit, custom or usage, and the like. However, respondents failed to allege and prove, in the trial court, that, as a matter of business usage, habit or pattern of conduct, XEI granted all lot buyers the right to pay the balance of the purchase price in installments of 120 months of fixed amounts with pre-computed interests, and that XEI and the respondents had intended to adopt such terms of payment relative to the sale of the two lots in question. Indeed, respondents adduced in evidence the three contracts of conditional sale executed by XEI and other lot buyersmerely to prove that XEI continued to sell lots in the subdivision as sales agent of OBM after it acquired said lots, not to prove usage, habit or pattern of conduct on the part of XEI to require all lot buyers in the subdivision to pay the balance of the purchase price of said lots in 120 months. It further failed to prive that the trial court admitted the said deeds[77] as part of the testimony of respondent Manalo, Jr.[78] Habit, custom, usage or pattern of conduct must be proved like any other facts. Courts must contend with the caveat that, before they admit evidence of usage, of habit or pattern of conduct, the offering party must establish the degree of specificity and frequency of uniform response that ensures more than a mere tendency to act in a given manner but rather, conduct that is semi-automatic in nature. The offering party must allege and prove specific, repetitive conduct that might constitute evidence of habit. The examples offered in evidence to prove habit, or pattern of evidence must be numerous enough to base on inference of systematic conduct. Mere similarity of contracts does not present the kind of sufficiently similar circumstances to outweigh the danger of prejudice and confusion. In determining whether the examples are numerous enough, and sufficiently regular, the key criteria are adequacy of sampling and uniformity of response. After all, habit means a course of behavior of a person regularly represented in like circumstances.[79] It is only when examples offered to establish pattern of conduct or habit are numerous enough to lose an inference of

systematic conduct that examples are admissible. The key criteria are adequacy of sampling and uniformity of response or ratio of reaction to situations.[80] There are cases where the course of dealings to be followed is defined by the usage of a particular trade or market or profession. As expostulated by Justice Benjamin Cardozo of the United States Supreme Court: Life casts the moulds of conduct, which will someday become fixed as law. Law preserves the moulds which have taken form and shape from life.[81] Usage furnishes a standard for the measurement of many of the rights and acts of men.[82] It is also wellsettled that parties who contract on a subject matter concerning which known usage prevail, incorporate such usage by implication into their agreement, if nothing is said to be contrary.[83] However, the respondents inexplicably failed to adduce sufficient competent evidence to prove usage, habit or pattern of conduct of XEI to justify the use of the terms of payment in the contracts of the other lot buyers, and thus grant respondents the right to pay the P278,448.00 in 120 months, presumably because of respondents belief that the manner of payment of the said amount is not an essential element of a contract to sell. There is no evidence that XEI or OBM and all the lot buyers in the subdivision, including lot buyers who pay part of the downpayment of the property purchased by them in the form of service, had executed contracts of conditional sale containing uniform terms and conditions. Moreover, under the terms of the contracts of conditional sale executed by XEI and three lot buyers in the subdivision, XEI agreed to grant 120 months within which to pay the balance of the purchase price to two of them, but granted one 180 months to do so.[84] There is no evidence on record that XEI granted the same right to buyers of two or more lots. Irrefragably, under Article 1469 of the New Civil Code, the price of the property sold may be considered certain if it be so with reference to another thing certain. It is sufficient if it can be determined by the stipulations of the contract made by the parties thereto[85] or by reference to an agreement incorporated in the contract of sale or contract to sell or if it is capable of being ascertained with certainty in said contract;[86] or if the contract contains express or implied provisions by which it may be rendered certain;[87] or if it provides some method or criterion by which it can be definitely ascertained.[88] As this Court held in Villaraza v. Court of Appeals,[89] the price is considered certain if, by its terms, the contract furnishes a basis or measure for ascertaining the amount agreed upon. We have carefully reviewed the August 22, 1972 letter agreement of the parties and find no direct or implied reference to the manner and schedule of payment of the balance of the

purchase price of the lots covered by the deeds of conditional sale executed by XEI and that of the other lot buyers[90] as basis for or mode of determination of the schedule of the payment by the respondents of the P278,448.00. The ruling of this Court in Mitsui Bussan Kaisha v. Manila Electric Railroad and Light Company[91] is not applicable in this case because the basic price fixed in the contract was P9.45 per long ton, but it was stipulated that the price was subject to modification in proportion to variations in calories and ash content, and not otherwise. In this case, the parties did not fix in their letters-agreement, any method or mode of determining the terms of payment of the balance of the purchase price of the property amounting toP278,448.00. It bears stressing that the respondents failed and refused to pay the balance of the downpayment and of the purchase price of the property amounting to P278,448.00 despite notice to them of the resumption by XEI of its selling operations. The respondents enjoyed possession of the property without paying a centavo. On the other hand, XEI and OBM failed and refused to transmit a contract of conditional sale to the respondents. The respondents could have at least consigned the balance of the downpayment after notice of the resumption of the selling operations of XEI and filed an action to compel XEI or OBM to transmit to them the said contract; however, they failed to do so. As a consequence, respondents and XEI (or OBM for that matter) failed to forge a perfected contract to sell the two lots; hence, respondents have no cause of action for specific performance against petitioner. Republic Act No. 6552 applies only to a perfected contract to sell and not to a contract with no binding and enforceable effect. IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R. CV No. 47458 is REVERSED and SET ASIDE. The Regional Trial Court of Quezon City, Branch 98 is ordered to dismiss the complaint. Costs against the respondents. SO ORDERED.

EN BANC

[G.R. No. 132164. October 19, 2004]

CIVIL SERVICE COMMISSION, petitioner, vs. ALLYSON BELAGAN, respondent. DECISION SANDOVAL-GUTIERREZ, J.: When the credibility of a witness is sought to be impeached by proof of his reputation, it is necessary that the reputation shown should be that which existed before the occurrence of the circumstances out of which the litigation arose,[1] or at the time of the trial and prior thereto, but not at a period remote from the commencement of the suit.[2] This is because a person of derogatory character or reputation can still change or reform himself. For our resolution is the petition for review on certiorari of the Court of Appeals Decision[3] dated January 8, 1998, in CA-G.R. SP. No. 44180, the dispositive portion of which reads: WHEREFORE, Resolution No. 966213 dated September 23, 1996 and Resolution No. 972423 dated April 11, 1997 of the respondent Civil Service Commission are hereby set aside. The complaint against petitioner Allyson Belagan filed by Magdalena Gapuz is hereby DISMISSED. The dismissal of petitioner Belagan is lifted and he is hereby ordered to be immediately reinstated to his position without loss of seniority, retirement, backwages and other rights and benefits. SO ORDERED. The instant case stemmed from two (2) separate complaints filed respectively by Magdalena Gapuz, founder/directress of the Mother and Child Learning Center, and Ligaya Annawi, a public school teacher at Fort Del Pilar Elementary School, against respondent Dr. Allyson Belagan, Superintendent of the Department of Education, Culture and Sports (DECS), all from Baguio City. Magdalena charged respondent with sexual indignities and harassment, while Ligaya accused him of sexual harassment and various malfeasances. Magdalenas sworn complaint alleges that sometime in March 1994, she filed an application with the DECS Office in Baguio City for a permit to operate a preschool. One of the requisites for the issuance of the permit was the inspection of the school premises by the DECS Division Office. Since the officer assigned to conduct the inspection was not present, respondent volunteered his services. Sometime in June 1994, respondent and complainant visited the school. In the course of the inspection,

while both were descending the stairs of the second floor, respondent suddenly placed his arms around her shoulders and kissed her cheek. Dumbfounded, she muttered, Sir, is this part of the inspection? Pati ba naman kayo sa DECS wala ng values? Respondent merely sheepishly smiled. At that time, there were no other people in the area. Fearful that her application might be jeopardized and that her husband might harm respondent, Magdalena just kept quiet. Several days later, Magdalena went to the DECS Division Office and asked respondent, Sir, kumusta yung application ko? His reply was Mag-date muna tayo. She declined, explaining that she is married. She then left and reported the matter to DECS Assistant Superintendent Peter Ngabit. Magdalena never returned to the DECS Division Office to follow up her application. However, she was forced to reveal the incidents to her husband when he asked why the permit has not yet been released. Thereupon, they went to the office of the respondent. He merely denied having a personal relationship with Magdalena. Thereafter, respondent forwarded to the DECS Regional Director his recommendation to approve Magdalenas application for a permit to operate a pre school. Sometime in September 1994, Magdalena read from a local newspaper that certain female employees of the DECS in Baguio City were charging a high-ranking DECS official with sexual harassment. Upon inquiry, she learned that the official being complained of was respondent. She then wrote a letter-complaint for sexual indignities and harassment to former DECS Secretary Ricardo Gloria. On October 4, 1994, respondent was placed under suspension. On the part of Ligaya Annawi, she alleged in her complaint that on four separate occasions, respondent touched her breasts, kissed her cheek, touched her groins, embraced her from behind and pulled her close to him, his organ pressing the lower part of her back. Ligaya also charged respondent with: (1) delaying the payment of the teachers salaries; (2) failing to release the pay differentials of substitute teachers; (3) willfully refusing to release the teachers uniforms, proportionate allowances and productivity pay; and (4) failing to constitute the Selection and Promotion Board, as required by the DECS rules and regulations. The DECS conducted a joint investigation of the complaints of Magdalena and Ligaya. In his defense, respondent denied their charge of sexual harassment. However, he presented evidence to disprove Ligayas imputation of dereliction of duty. On January 9, 1995, the DECS Secretary rendered a Joint Decision [4] finding respondent guilty of four (4) counts of sexual indignities or harassments committed against Ligaya; and two (2) counts of sexual advances or indignities against

Magdalena. He was ordered dismissed from the service. The dispositive portion of the Joint Decision reads: WHEREFORE, foregoing disquisitions duly considered, decision is hereby rendered in the two above-entitled cases, finding: a) Respondent Dr. Allyson Belagan, Superintendent of the DECS Baguio City Schools Division GUILTY of the four counts of sexual indignities or harassments committed against the person and honor of complainant Miss Ligaya Annawi, a Baguio City public school teacher, while in the performance of his official duties and taking advantage of his office. He is, however, ABSOLVED of all the other charges of administrative malfeasance or dereliction of duty. b) Respondent Baguio City Superintendent Allyson Belagan likewise GUILTY of the two counts of sexual advances or indignities committed against the person and honor of complainant Mrs. Magdalena Gapuz, a private school teacher of Baguio City, while in the performance of his official duties and taking advantage of his office.

Consequently, respondent Allyson Belagan is HEREBY ORDERED DISMISSED from the government service, with prejudice to reinstatement and all his retirement benefits and other remunerations due him areHEREBY DECLARED FORFEITED in favor of the government. SO ORDERED.[5] Upon appeal, the Civil Service Commission (CSC), on September 23, 1996, promulgated Resolution No. 966213[6] affirming the Decision of the DECS Secretary in the case filed by Magdalena but dismissing the complaint of Ligaya. The CSC ruled that respondents transgression against Magdalena constitutes grave misconduct. Thus: The acts of Belagan are serious breach of good conduct since he was holding a position which requires the incumbent thereof to maintain a high degree of moral uprightness. As Division Superintendent, Belagan represents an institution tasked to mold the character of children. Furthermore, one of his duties is to ensure that teachers in his division conduct themselves properly and observe the proper discipline. Any improper behavior on his part will seriously impair his moral ascendancy over the teachers and students which can not be tolerated. Therefore, his misconduct towards an applicant for a permit to operate a private pre-school cannot be treated lightly and constitutes the offense of grave misconduct. WHEREFORE, respondent Allyson Belagan is hereby found guilty of grave misconduct and imposed the penalty of DISMISSAL from the service with all the accessory penalties. The decision of the DECS Secretary is modified accordingly.[7] On October 29, 1996, respondent seasonably filed a motion for reconsideration, contending that he has never been charged of any offense in his thirty-seven (37) years

of service. By contrast, Magdalena was charged with several offenses before the Municipal Trial Court (MTC) of Baguio City, thus: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. Criminal Case No. 43416 for LIGHT ORAL DEFAMATION (December 3, 1980) Criminal Case No. 45629 for SLIGHT PHYSICAL INJURIES (May 13, 1982) Criminal Case No. 45630 for GRAVE THREATS (May 13, 1982) Criminal Case No. 45914 for GRAVE THREATS (June 24, 1982) Criminal Case No. 51532 for MALICIOUS MISCHIEF (January 25, 1985) Criminal Case No. 51533 for LIGHT THREATS (January 25, 1985) Criminal Case No. 51556 for GRAVE ORAL DEFAMATION (January 30, 1985) Criminal Case No. 51818 for LIGHT ORAL DEFAMATION (March 18, 1985) Criminal Case No. 51819 for GRAVE ORAL DEFAMATION (March 18, 1985) Criminal Case No. 51820 for MALICIOUS MISCHIEF (March 18, 1985) Criminal Case No. 51821 for UNJUST VEXATION (March 18, 1985) Criminal Case No. 62173 for UNJUST VEXATION (May 29, 1991) Criminal Case No. 62172 for GRAVE ORAL DEFAMATION (May 29, 1991) Criminal Case No. 62754 for GRAVE ORAL DEFAMATION (December 2, 1986) Criminal Case No. 55642 for GRAVE ORAL DEFAMATION (December 2, 1986) Criminal Case No. 55423 for GRAVE ORAL DEFAMATION (October 24, 1986) Criminal Case No. 55846 for GRAVE ORAL DEFAMATION (November 4, 1986) Criminal Case No. 55800 for GRAVE ORAL DEFAMATION (January 7, 1987) Criminal Case No. 57312 for UNJUST VEXATION (November 29, 1987)

20. 21. 22.

Criminal Case No. 55643 for SLIGHT PHYSICAL INJURIES (December 13, 1985) Criminal Case No. 53404 for UNJUST VEXATION (December 13, 1985) Criminal Case No. 55422 for UNJUST VEXATION (October 24, 1986) [8]

In addition, the following complaints against Magdalena were filed with the Barangay Chairmen of Barangay Gabriela Silang and Barangay Hillside, both in Baguio City: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Ordana vs. Gapuz (Brgy. Case No. 11-19-02-A) for GRAVE THREATS, UNJUST VEXATION, RUMOR MONGERING Teresita De Los Santos vs. Gapuz (Brgy. Case No. 86-8-26-8) for GRAVE THREATS & ORAL DEFAMATION Mrs. Conchita Ballesteros vs. Gapuz (Brgy. Case DEFAMATION and FALSE ACCUSATION No. 029) for ORAL

Mrs. Clara Baoas vs. Gapuz (Brgy. Case No. 030) for HARASSMENT and THREATS GABRIELA SILANG TANOD FORCES vs. Gapuz (Case No. 031) for HABITUAL TROUBLE MAKER Pablo Ortiz vs. Gapuz (November 1, 1979) for ORAL DEFAMATION C. Ballesteros vs. Gapuz (September 11, 1978) for ORAL DEFAMATION Mrs. Liza Ancheta vs. Gapuz (September 27, 1978) for RUMOR MONGERING Mr. Pananin (Beneco Personnel) (October 8, 1978) for ORAL DEFAMATION Mrs. Minda Valdez vs. Gapuz (November 6, 1978) for ORAL DEFAMATION WOMENS CLUB vs. GAPUZ (February 9, 1979) for ORAL DEFAMATION Vistro Salcedo case (May 8, 1979) Where Mrs. Gapuz was spreading rumors against Barangay Captain and Police Chief

13.

Demolition Scandal (May 10, 1979) Where she called all the residents of their Barangay for an emergency meeting and where she shouted invectives against the residents

14.

Incident of June 13, 1979

Mrs. Gapuz shouted invectives against the Barangay Sanitary Inspector 15. Incident of August 25, 1979 Mrs. Gapuz shouted invectives against the servants of Mr. De Leon 16. Incident of August 26, 1979 Mrs. Gapuz terrorized the council meeting 17. Incident of September 2, 1978 Mrs. Clara Baoas was harassed by Mrs. Gapuz 18. Incident of September 9, 1979 Mrs. Gapuz quarreled with Mrs. C. Ballesteros during the council meeting 19. Incident of September 10, 1979 Mrs. Gapuz was hurling invectives along her alley in the early morning 20. Incident of September 13, 1979 Mrs. Gapuz tapped electric wire from Mrs. Tessie de los Santos with the latters consent 21. Incident of September 21, 1979 Mrs. Gapuz was shouting and hurling invectives scandalously around her residence 22. Incident of September 21, 1979 Mrs. Gapuz was shouting, complaining about alleged poisoned sardines near the premises of her residence which killed her hen. 23. Incident of September 23, 1979 Mrs. Gapuz was shouting unpleasant words around the neighborhood. She did not like the actuations of a bayanihan group near the waiting shed.[9] Respondent claimed that the numerous cases filed against Magdalena cast doubt on her character, integrity, and credibility. In its Resolution No. 972423[10] dated April 11, 1997, the CSC denied respondents motion for reconsideration, holding that: The character of a woman who was the subject of a sexual assault is of minor significance in the determination of the guilt or innocence of the person accused of having committed the offense. This is so because even a prostitute or a woman of ill repute may become a victim of said offense.

As such, the fact that complainant Magdalena Gapuz is shown to have had cases before the regular courts for various offenses and was condemned by her community for wrongful behavior does not discount the possibility that she was in fact telling the truth when she cried about the lecherous advances made to her by the respondent. x x x Respondent then filed with the Court of Appeals a petition for review. As stated earlier, it reversed the CSC Resolutions and dismissed Magdalenas complaint. The Appellate Court held that Magdalena is an unreliable witness, her character being questionable. Given her aggressiveness and propensity for trouble, she is not one whom any male would attempt to steal a kiss. In fact, her record immediately raises an alarm in any one who may cross her path. [11] In absolving respondent from the charges, the Appellate Court considered his unblemished service record for 37 years. Unsatisfied, the CSC, through the Solicitor General, filed the instant petition raising the following assignments of error: I. The Supreme Court may rule on factual issues raised on appeal where the Court of Appeals misappreciated the facts. Furthermore, where the findings of the Court of Appeals and the trial court are contrary to each other, the Supreme Court may review the record and evidence. The Court of Appeals erred in not giving credence to the testimony of complainant Magdalena Gapuz despite convincing and overwhelming signs of its truthfulness. II. The Court of Appeals committed reversible error when it failed to give due weight to the findings of the DECS, which conducted the administrative investigation, specifically with respect to the credibility of the witnesses presented. III. The Court of Appeals erred in ruling that respondent should be penalized under Sec. 22 (o) of the Omnibus Rules Implementing Book V and not Sec. 22 (e) of said rules.[12] In his comment, respondent maintains that Magdalenas derogatory record undermines the verity of her charge and that the Court of Appeals is correct in dismissing it. The petition is impressed with merit. The pivotal issue before us is whether complaining witness, Magdalena Gapuz, is credible. This is a question of fact which, as a general rule, is not subject to this Courts review. It is a rule of long standing that factual findings of the Court of Appeals, if supported by substantial evidence, are conclusive and binding on the parties and are not reviewable by this Court.[13]This Court is, after all, not a trier of facts. One of the exceptions, however, is when the findings of the Court of Appeals are contrary to those of the trial court or a quasi-judicial body, like petitioner herein.[14]

Here, the Court of Appeals and the CSC are poles apart in their appreciation of Magdalenas derogatory record. While the former considered it of vital and paramount importance in determining the truth of her charge, the latter dismissed it as of minor significance. This contrariety propels us to the elusive area of character and reputation evidence. Generally, the character of a party is regarded as legally irrelevant in determining a controversy.[15] One statutory exception is that relied upon by respondent, i.e., Section 51 (a) 3, Rule 130 of the Revised Rules on Evidence, which we quote here: SEC. 51. Character evidence not generally admissible; exceptions. (a) In Criminal Cases: xxx xxx

(3) The good or bad moral character of the offended party may be proved if it tends to establish in any reasonable degree the probability or improbability of the offense charged. It will be readily observed that the above provision pertains only to criminal cases, not to administrative offenses. And even assuming that this technical rule of evidence can be applied here, still, we cannot sustain respondents posture. Not every good or bad moral character of the offended party may be proved under this provision. Only those which would establish the probability or improbability of the offense charged. This means that the character evidence must be limited to the traits and characteristics involved in the type of offense charged.[16] Thus, on a charge of rape - character for chastity, on a charge of assault - character for peaceableness or violence, and on a charge of embezzlement - character for honesty.[17] In one rape case, where it was established that the alleged victim was morally loose and apparently uncaring about her chastity, we found the conviction of the accused doubtful.[18] In the present administrative case for sexual harassment, respondent did not offer evidence that has a bearing on Magdalenas chastity. What he presented are charges for grave oral defamation, grave threats, unjust vexation, physical injuries, malicious mischief, etc. filed against her. Certainly, these pieces of evidence are inadmissible under the above provision because they do not establish the probability or improbability of the offense charged. Obviously, in invoking the above provision, what respondent was trying to establish is Magdalenas lack of credibility and not the probability or the improbability of the charge. In this regard, a different provision applies. Credibility means the disposition and intention to tell the truth in the testimony given. It refers to a persons integrity, and to the fact that he is worthy of belief.[19] A witness may be discredited by evidence attacking his general reputation for truth,[20] honesty[21] or integrity.[22] Section 11, Rule 132 of the same Revised Rules on Evidence reads:

SEC. 11. Impeachment of adverse partys witness. A witness may be impeached by the party against whom he was called, by contradictory evidence, by evidence that his general reputation for truth, honesty, or integrity is bad, or by evidence that he has made at other times statements inconsistent with his present testimony, but not by evidence of particular wrongful acts, except that it may be shown by the examination of the witness, or the record of the judgment, that he has been convicted of an offense. Although she is the offended party, Magdalena, by testifying in her own behalf, opened herself to character or reputation attack pursuant to the principle that a party who becomes a witness in his own behalf places himself in the same position as any other witness, and may be impeached by an attack on his character or reputation.[23] With the foregoing disquisition, the Court of Appeals is correct in holding that the character or reputation of a complaining witness in a sexual charge is a proper subject of inquiry. This leads us to the ultimate question is Magdalenas derogatory record sufficient to discredit her credibility? A careful review of the record yields a negative answer. First, most of the twenty-two (22) cases filed with the MTC of Baguio City relate to acts committed in the 80s, particularly, 1985 and 1986. With respect to the complaints filed with the Chairmen of Barangay Gabriela Silang and Barangay Hillside, the acts complained of took place in 1978 to 1979. In the instant administrative case, the offense was committed in 1994. Surely, those cases and complaints are no longer reliable proofs of Magdalenas character or reputation. The Court of Appeals, therefore, erred in according much weight to such evidence. Settled is the principle that evidence of ones character or reputation must be confined to a time not too remote from the time in question.[24] In other words, what is to be determined is the character or reputation of the person at the time of the trial and prior thereto, but not at a period remote from the commencement of the suit.[25] Hence, to say that Magdalenas credibility is diminished by proofs of tarnished reputation existing almost a decade ago is unreasonable. It is unfair to presume that a person who has wandered from the path of moral righteousness can never retrace his steps again. Certainly, every person is capable to change or reform. Second, respondent failed to prove that Magdalena was convicted in any of the criminal cases specified by respondent. The general rule prevailing in a great majority of jurisdictions is that it is not permissible to show that a witness has been arrested or that he has been charged with or prosecuted for a criminal offense, or confined in jail for the purpose of impairing his credibility.[26] This view has usually been based upon one or more of the following grounds or theories: (a) that a mere unproven charge against the witness does not logically tend to affect his credibility, (b) that innocent persons are often arrested or accused of a crime, (c) that one accused of a crime is presumed to be innocent until his guilt is legally established, and (d) that a witness may not be impeached or discredited by evidence of particular acts of misconduct.[27] Significantly, the same Section 11, Rule 132 of our Revised Rules on Evidence provides that a witness may not be impeached by evidence of particular

wrongful acts. Such evidence is rejected because of the confusion of issues and the waste of time that would be involved, and because the witness may not be prepared to expose the falsity of such wrongful acts.[28] As it happened in this case, Magdalena was not able to explain or rebut each of the charges against her listed by respondent. But more than anything else, what convinces us to sustain the Resolution of the CSC is the fact that it is supported by substantial evidence. As aptly pointed out by the Solicitor General, Magdalena testified in a straightforward, candid and spontaneous manner. Her testimony is replete with details, such as the number of times she and respondent inspected the pre-school, the specific part of the stairs where respondent kissed her, and the matter about her transient boarders during summer. Magdalena would not have normally thought about these details if she were not telling the truth. We quote her testimony during the cross-examination conducted by DECS Assistant Secretary Romeo Capinpin and Undersecretary Antonio Nachura, thus: Q Was there any conversation between you and Dr. Belagan during the inspection on the first floor and the second floor? A There was, sir. It was a casual conversation that we had with regard to my family, background, how the school came about, how I started with the project. That was all, sir. Nothing about any form of sexual harassment, in words or in deeds? Sir, because he inspected the second floor twice, sir. We went up to the stairs twice, sir. Why? I really dont know what was the reason behind, sir. But on the second inspection, sir, I told him that as of that time I had some transients with me. I was making use of the premises for transients because that was summer then, sir. And I already started paying the place so I said, Sir, I have some transients with me in the evening and he said, You know Mrs. Gapuz, I am interested to stay in one of the rooms as one your boarders. But I respectfully declined saying, Sir, I think for delicadeza I cannot accept you. Not that I dont want you to be here but people might think that I am keeping you here and that would prejudice my permit, sir.

Q A Q A

ASEC R. CAPINPIN: Q A Q A Q A When did the alleged kissing occur? Was it during the first time that you went up with him or the second time? No, sir, on the second time, sir. Second time? Yes, sir. We were going down, sir. And you were going down? Yes, sir.

Q A Q A Q A Q A

Do you recall what portion of the stairs where you were during the alleged kissing? Sir, on the topmost of the stairs. Before you went down? Yes, sir. At the topmost because there is a base floor going up to the stairs and it has 16 steps. So, it was not on the 16th step but still on the topmost? Yes sir. Part of the floor of the building? Yes, sir. Topmost, sir?

ASEC R. CAPINPIN: Q A Will you kindly tell us your relative position at that time? Sir, on the second time that we went up and I mentioned about these transients that I had then and he wanted to stay in the place in one of the rooms and then I declined and I was still showing the rooms simultaneously. On the last, the biggest room that I had, he said, No. Never mind, I am not going to see that anymore. So he waited for me there and upon reaching the place, as I was to step down on the first step going down, he placed his arm and held me tightly and planted the kiss on my cheek, sir. You said that he wanted to stay in one of the rooms? Yes, sir, as a boarder. Is that room used for transients? During that time, sir, during the summertime, I made use of the time to get some transients. And he was telling you that he wanted to occupy one of the rooms? Yes, but I declined, sir for delicadeza. At that time, there were no transients yet. When he came over for the inspection sir, nobody was there.[29]

Q A Q A Q A Q A

The above testimony does not stand in isolation. It is corroborated by Peter Ngabit, DECS Assistant Division Superintendent. Ngabit testified that Magdalena reported to him that respondent kissed her and asked her for a date. Q I would like to call your attention to Exhibit A which is the affidavit of Mrs. Magdalena B. Gapuz, particularly item no. 8, and may I read for your information That the Monday after the incident, I went to the DECS Division Office expecting to get favorable recommendation from the DECS

Regional Office for the issuance of my permit. That I proceeded to the Superintendent and asked him, Sir, kumusta yung application ko and he said, mag date muna tayo but I refused and explained that I am married, after which I proceeded to the Office of Asst. Superintendent Peter Ngabit to relate the incident and then left the Division Office. Do you remember if Mrs. Gapuz went to your Office on the particular day? A Q A Q A Q A Q A Q A Yes, sir. What time was that? I cannot remember, sir. Was it morning, afternoon? I think it was in the morning, sir. Morning. Yes, sir. Early morning? About noon, sir. What transpired between you and Mrs. Gapuz in your office? When she came to my Office, she was relating about that and she was even insulting me saying among others that I was a useless fixture in that Office because I cannot do anything with the processing of her paper or application. It says here that she would relate the incident to you. Did she relate any incident? Yes, she did sir. What was that incident all about? She was saying that when Mr. Belagan went to visit her school, he stole a kiss from her and that she was saying that when she asked Supt. Belagan for her papers, she was asked for a date before the Indorsement. After that, she left.[30]

Q A Q A

With Magdalenas positive testimony and that of Ngabit, how can we disregard the findings of the DECS and the CSC? Surely, we cannot debunk it simply because of the Court of Appeals outdated characterization of Magdalena as a woman of bad reputation. There are a number of cases where the triers of fact believe the testimony of a witness of bad character[31] and refuse to believe one of good character.[32] As a matter of fact, even a witness who has been convicted a number of times is worthy of belief, when he testified in a straightforward and convincing manner.[33] At this juncture, it bears stressing that more than anybody else, it is the DECS investigating officials who are in a better position to determine whether Magdalena is

telling the truth considering that they were able to hear and observe her deportment and manner of testifying.[34] In reversing the CSCs Resolutions, the Court of Appeals ruled that there is ample evidence to show that Magdalena had a motive in a ccusing respondent, i.e., to pressure him to issue a permit. This is unconvincing. The record shows that respondent had already issued the permit when Magdalena filed her letter-complaint. Indeed, she had no more reason to charge respondent administratively, except of course to vindicate her honor. Petitioner prays that we sustain its ruling penalizing respondent for grave misconduct and not merely for disgraceful or immoral conduct which is punishable by suspension for six (6) months and one (1) day to one (1) year for the first offense.[35] Misconduct means intentional wrongdoing or deliberate violation of a rule of law or standard of behavior, especially by a government official.[36] To constitute an administrative offense, misconduct should relate to or be connected with the performance of the official functions and duties of a public officer.[37] In grave misconduct as distinguished from simple misconduct, the elements of corruption, clear intent to violate the law or flagrant disregard of established rule, must be manifest.[38] Corruption as an element of grave misconduct consists in the act of an official or fiduciary person who unlawfully and wrongfully uses his station or character to procure some benefit for himself or for another person, contrary to duty and the rights of others.[39] This is apparently present in respondents case as it concerns not only a stolen kiss but also a demand for a date, an unlawful consideration for the issuance of a permit to operate a pre-school. Respondents act clearly constitutes grave misconduct, punishable by dismissal.[40] We are, however, not inclined to impose the penalty of dismissal from the service. Respondent has served the government for a period of 37 years, during which, he made a steady ascent from an Elementary Grade School Teacher to Schools Division Superintendent. In devoting the best years of his life to the education department, he received numerous awards.[41] This is the first time he is being administratively charged. He is in the edge of retirement. In fact, he had filed his application for retirement when Magdalena filed her complaint. Section 16, Rule XIV, of the Rules Implementing Book V of Executive Order No. 292 provides: SEC. 16. In the determination of penalties to be imposed, mitigating and aggravating circumstances may be considered. x x x. The mitigating circumstances are enumerated in Section 53, Rule IV, of the Uniform Rules on Administrative Cases in the Civil Service,[42] which reads in part: SEC. 53. Extenuating, Mitigating, Aggravating, or Alternative Circumstances. In the determination of the penalties to be imposed, mitigating, aggravating and alternative circumstances attendant to the commission of the offense shall be considered. The following circumstances shall be appreciated:

xxxxxx j. length of service xxxxxx l. and other analogous cases. Conformably with our ruling in a similar case of sexual harassment, [43] and respondents length of service, unblemished record in the past and numerous awards,[44] the penalty of suspension from office without pay for one (1) year is in order. While we will not condone the wrongdoing of public officers and employees, however, neither will we negate any move to recognize and remunerate their lengthy service in the government. WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals dated January 8, 1998 in CA-G.R. SP No. 44180 is REVERSED. The CSC Resolution Nos. 966213 and 972423 are AFFIRMED, subject to the modification that respondent ALLYSON BELAGAN is SUSPENDED from office without pay for ONE (1) YEAR, with full credit of his preventive suspension. SO ORDERED.

THIRD DIVISION

[G.R. No. 120158-59. September 15, 1997]

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. ELESEO CHENG, ALEJANDRO MALUBAY, and SALVADOR SIOCO, accused. ELESEO CHENG, accused-appellant. DECISION MELO, J.: Convicted on two counts of murder are appellant Eleseo Cheng and co-accused Salvador Sioco (who later escaped from detention) in a judgment, the dispositive portion of which reads: WHEREFORE, in the light of the foregoing considerations, the Court finds

1. In Criminal Case No. 89-73804 the accused, ELESEO CHENG and SALVADOR SIOCO, guilty beyond reasonable doubt of the crime of MURDER, as defined and penalized under Article 248, Paragraph 1, Revised Penal Code, and as charged in the aforequoted information and, accordingly, hereby sentences each of them to suffer the penalty of reclusion perpetua with the accessory penalties provided by law, both to pay, subsidiarily and jointly; to the heirs of Esperanza Viterbo represented by her mother, Esperanza Viterbo, Sr., the amount of FIFTY THOUSAND PESOS (P50,000.00) as civil indemnification and the additional amount of TEN THOUSAND PESOS (P10,000.00) as moral damages, without subsidiary imprisonment in case of insolvency; and each to pay one-third (1/3) of the costs. 2. In Criminal Case No. 89-73805 the accused, ELESEO CHENG and SALVADOR SIOCO, guilty beyond reasonable doubt of the crime of MURDER, as defined and penalized under Article 248, Paragraph 1, Revised Penal Code, and as charged in the aforequoted information and, accordingly, hereby sentences each of them to suffer the penalty of reclusion perpetua with the accessory penalties provided by law and each to pay one-third (1/3) of the costs. Because no heir/relative of the deceased, Yehia Aburawash Mohammed was presented to testify on the civil aspect of the case, the Court reserves to his heirs the right to file suit for civil indemnification and/or damages. Finally, in the service of their sentences, the two accused aforenamed shall be credited with the full time during which they underwent preventive imprisonment provided they voluntarily agreed in writing to abide by the same disciplinary rules imposed upon convicted prisoners; otherwise, they shall be credited to only four-fifths (4/5) thereof (Article 29, Revised Penal Code, as amended by Republic Act No. 6127). 3. In both Criminal Cases Nos. 89-73804 & 89-73805 the Court finds the accused, ALEJANDRO MALUBAY, NOT GUILTY of the crime of MURDER, as defined and penalized under Article 248, Paragraph 1, Revised Penal Code, and as charged in the aforequoted two informations and, accordingly, hereby ACQUITS him thereof for insufficiency of evidence, with one-third (1/3) costs de oficio in these two cases. The Prison Officer, City Jail of Manila is ordered immediately upon receipt of a copy of this Decision, to release from his custody the person of accused Alejandro Malubay unless there is other legal ground or cause for his further detention. SO ORDERED. (pp. 68-68a, Rollo.) The herein criminal cases were commenced with the filing of two Informations for the crime of murder against herein accused-appellant Eleseo Cheng, Alejandro Malubay, and Salvador Sioco, pertinently reading as follows: Criminal Case No. 89-73804

That on or about February 21, 1989, in the City of Manila, Philippines, the said accused conspiring and confederating together and helping one another did then and there willfully, unlawfully and feloniously with intent to kill and with treachery and evident premeditation, and with the use of superior strength on the victim who was alone and unarmed, attack, assault and use personal violence upon one Esperanza Viterbo, by then and there shooting her three (3) times with an unknown caliber thereby inflicting upon her mortal and fatal gunshots wounds, which were the direct and immediate cause of her death thereafter. Contrary to law. (p. 2, Rollo.) Criminal Case No. 89-73805 That on or about February 21, 1989, in the City of Manila, Philippines, the said accused conspiring and confederating together and helping one another did then and there willfully, unlawfully and feloniously with intent to kill and with treachery and evident premeditation, and with the use of superior strength on the victim who was alone and unarmed, attack, assault and use personal violence upon one Yehia Abu Rawack Mohamad an Egyptian national, by then and there shooting the latter three (3) times, hitting him in the head with an unknown caliber thereby inflicting upon him mortal and fatal gunshots wounds, which were the direct and immediate cause of his death thereafter. Contrary to law. (p. 3, Rollo.) At the arraignment on August 11, 1989, accused-appellant and his co-accused Salvador Sioco, then assisted by their counsel de parte, Atty. Arsenio de Leon, entered a plea of "not guilty" to the charges against them. Similarly, accused Alejandro Malubay, then assisted by counsel de parte, Atty. Augusto Jimenez, pleaded "not guilty". Thereafter, trial on the merits ensued, following which, judgment was rendered convicting accused-appellant and Salvador Sioco, and acquitting co-accused Alejandro Malubay for insufficiency of evidence. Accused-appellant and Salvador Sioco filed separate motions for reconsideration of said decision, with the former raising the following grounds: (1) that because he was a member of the Integrated National Police on his tour of duty on the date and time of the incident as charged, jurisdiction over the offense and authority to hear, try, and decide the case against him is conferred on a court martial, not a civil court, and (2) in the alternative, that assuming ex gratia that the court has jurisdiction, the prosecution evidence engendered reasonable doubt in many aspects, thus, his conviction is erroneous. The motion, as well as its supplement, were denied by the trial court in its order dated November 7, 1994.

On December 8, 1994, accused-appellant seasonably filed a notice of appeal. Much earlier, however, on January 1, 1993, convicted felon Salvador Sioco escaped from Camp General Ricardo G. Papa, Sr., Bicutan, Taguig, Metro Manila. For this reason, and also because his notice of appeal was filed four days late, the trial court denied his appeal. Now, to the background facts as supported by the record: On February 20, 1989, jail guards Edwin Ramos and Redentor Lamiao were in the night shift at Gate 1 of the Manila City Jail, their tour of duty commencing at 7 P.M. and ending at 7 A.M. the following day. Early in the morning of February 21, 1989, Ramos allowed Yehia Aburawash, an Egyptian national who had been previously detained in the city jail, to enter the premises together with a female companion. Before 4 A.M., Aburawash and his companion went out of the jail and some time thereafter, or at about 4 A.M., accused-appellant who was then on duty on the night shift escorted out coaccused and then a detainee in the said city jail, Patrolman Alex Malubay, without any authorization from the desk officer or platoon commander on duty. Jail Guard Ramos asked accused-appellant to secure the approval of the desk officer but accusedappellant simply ignored Ramos and continued on his way out. At about 4:30 oclock that same morning, Emma Ruth Ilocso and her companions Catalina Balboa, and Marivic Policarpio, having just come from a disco joint, were at the corner of Claro M. Recto Avenue and Quezon Boulevard, right outside the vicinity of Manila City Jail. Ilocso decided to pass by the city jail to see her brother who was detained thereat. She, however, stopped at a nearby Burger Machine stand to have the P100.00 she intended to give her brother broken to smaller denominations. It was while she was at the burger stand that Ilocso witnessed the commission of the crime. Ilocso saw the Egyptian national, Yehia Aburawash, at the center island of Quezon Boulevard. She recognized him because she had previously seen him while the latter was detained at the same city jail for swindling. She also saw Aburawashs female companion who was later identified to be Esperanza Viterbo. Ilocso observed that Aburawash and Viterbo were then engaged in an argument with accused-appellant, Sioco, and a third man. Thereupon, she heard the first gunfire from accused-appellant which caused Aburawash to fall to the ground. Two shots then quickly followed, one from Sioco, and another from accused-appellant. Afterwards, accused-appellant and Sioco went after Viterbo who ran towards the burger stand. Accused-appellant and Sioco told Viterbo that she would be brought to a waiting cab. However, when the two were already beside her, they both shot her, after which the two ran towards the direction of the Central Market. At about 5:20 that morning, Patrolman Nelson Sarsonas, an investigator of the Homicide Section of the Western Police District, received a report from PC/Sgt. Alejandro Lopez of the Criminal Investigation Service that there were two dead bodies found near Quezon Boulevard and Claro M. Recto Avenue. After notifying several other concerned agencies, Pat. Sarsonas proceeded to the scene of the crime to investigate. The two dead bodies were brought to the National Bureau of Investigation for autopsy. Dr. Maximo Reyes, who performed the examination, testified during the trial

that the three gunshot wounds on Aburawash were all fatal as they involved the brain. He likewise testified that the gunshot wounds of Viterbo at the neck, face, and head were all fatal because they involved vital organs. He also observed that the sizes of the wounds concerned were different, prompting him to opine that at least two firearms were used, and that it was possible that more than one assailant was involved. In the appeal now before us, accused-appellant raises as his first issue the question of jurisdiction. He contends that by virtue of Section 1 of Presidential Decree No. 1850, the trial court had no jurisdiction to hear, try, and decide the cases against him. He argues that on the date of the commission of the crimes on February 21, 1989, he was still an active member of the Integrated National Police and assigned as jail guard at the Manila City Jail. He assails the trial courts finding that he was already dismissed from service when the two Informations against him were filed in court on June 6, 1989, claiming that he received the copy of the special order on his dismissal only on June 7, 1989. Besides, he claims that this order of dismissal is still pending appeal before the Office of the Judge Advocate. For want of jurisdiction, he implores that this Court dismiss the cases and declare the judgment of the court a quo to be null and void. We find the argument devoid of merit. While it is true that jurisdiction over the subject matter of a case cannot be waived and may be assailed at any stage in the proceedings, even for the first time on appeal, this ruling presupposes that the factual basis for determining such want of jurisdiction is extant in the record of the case and is borne by the evidence. Should there be nothing on record which may indicate lack of jurisdiction, this Court will sustain the existence thereof. Accused-appellant invokes Section 1, of Presidential Decree No. 1850, as amended, which provides: Section 1. Court-Martial Jurisdiction over Integrated National Police and Members of the Armed Forces. Any provision of law to the contrary notwithstanding - (a) uniformed members of Integrated National Police who commit any crime or offense cognizable by the civil courts shall henceforth be exclusively tried by courts-martial pursuant to and in accordance with Commonwealth Act No. 408, as amended, otherwise known as the Articles of War; (b) all persons subject to military law under Article 2 of the aforecited Articles of War who commit any crime or offense shall be exclusively tried by courts-martial or their case disposed under the said Articles of War. Provided, that, in either of the aforementioned situations, the case shall be disposed of or tried by the proper civil or judicial authorities when court martial jurisdiction over the offense has prescribed under Article 38 of Commonwealth Act Numbered 48, as amended, or court-martial jurisdiction over the person of the accused military or Integrated National Police personnel can no longer be exercised by virtue of their separation from the active service without jurisdiction having duly attached beforehand unless otherwise provided by law. Provided, further, that the president may in the interest of justice, order or direct, at any time before arraignment, that a particular case be tried by the appropriate civil court. The record reveals that on February 21, 1989, when the crimes charged were committed, accused-appellant was undoubtedly in active service. Under Paragraph (a)

of the above-quoted provision, exclusive jurisdiction over accused-appellant and the offense should have pertained to the courts martial save only in the following exceptions, namely: (1) when court martial jurisdiction over the offense has prescribed under Article 38 of Commonwealth Act No. 48, as amended, or (2) court-martial jurisdiction over the person of the accused military or Integrated National Police personnel can no longer be exercised by virtue of his separation from active service without jurisdiction having duly attached beforehand unless otherwise provided by law; or (3) the president, in the interest of justice, orders or directs at any time before arraignment, that the particular case be tried by the appropriate civil court. The evidence on record shows that the cases at bench fall under the second exception. During the hearing conducted on February 15, 1990 when accusedappellant was presented as defense witness, he stated his personal circumstances as follows: Pat. Eleseo Cheng y Bello, 36 years old, married, as of now jobless but before I was with the Western Police District, residing at 870-C Norte Street, Sta. Cruz, Manila. (p. 8, tsn, Feb. 15, 1990) And when the direct examination by his counsel de parte, Atty. Arsenio de Leon, proceeded, the following questions and answers were taken: Q: Mr. Eleseo Cruz. I heard you said that you are now in jobless? A: Yes, sir. Q: Since when? A: May 20, 1989, sir. (Ibid.) There is here an express judicial admission by accused-appellant that as of May 20, 1989, he was already separated from active service in the INP. When accusedappellant raised the issue of jurisdiction for the first time in his motion for reconsideration of the judgment of conviction, he presented no further evidence. In fact, it was the prosecution, during the hearing conducted on June 7, 1991 of said motion for reconsideration, which presented a copy of Special Order No. 65-P to prove that accused-appellant was dismissed from the police service with prejudice to future reentry into the INP effective as of May 18, 1989 (See: Exh. A-Opposition, p. 417, Record). It was only then that accused-appellant began claiming that he received a copy of the special order only on June 7, 1989, or a day after the filing of the Informations in the instant cases. Verily, we find such posture by accused-appellant, who at that stage had already replaced Atty. de Leon with Atty. Renato T. Paguio, as a mere after-thought, to which the trial court correctly accorded no weight. It must be stressed that the burden of proving lack of jurisdiction is upon him who claims such. The Court significantly notes that accused-appellant presented no

competent and admissible evidence to show that as of June 6, 1989, the date of the filing of the Informations, he was still in active service with the INP. Accused-appellants claim that he received his copy of Special Order No. 65-P relative to his summary dismissal only on June 7, 1989 simply remained an allegation. We have consistently ruled that mere allegation is not evidence (Lagasca vs. De Vera, 79 Phil. 376 [1947]), and such unproved allegation may not be given any favorable consideration whatsoever. On the contrary, we have reason to believe that accused-appellant received the copy of said Special Order No. 65-P on May 20, 1989 as he admitted in his direct testimony. In a similar manner, accused-appellants claim that he appealed the order of dismissal to the Judge Advocate General has remained unsupported by any proof. He claimed in his supplemental motion for reconsideration that he wrote the Judge Advocate General asking for certification as to the status of his appeal. No proof was ever presented to show that said letter, if any, was in fact sent to and received by the Judge Advocate General. More significantly, he claimed that the Judge Advocate General sent a reply-letter dated June 5, 1991 to his counsel, Atty. Paguio (See: p. 5 Supplemental Motion for Reconsideration; p. 430, Record) but the entire record is bereft of any copy of the said alleged reply- letter. This being so, accused-appellants claim that his dismissal effective May 18, 1989 had not yet attained finality when the Informations were filed on June 6, 1989 deserves scant consideration. It appears to be another after-thought on the part of accused-appellant. Thus, just like in the case of People vs. Dulos (237 SCRA 141 [1994]) this issue of jurisdiction may be disposed of by stating that while it is true that Section 1, Presidential Decree No. 1850, as amended, vests exclusive jurisdiction upon courts martial to try criminal offenses committed by members of the INP, whether or not done in the actual performance of their official duties, accused-appellants case falls under the second exception contained in the proviso of the section which confers upon civil courts jurisdiction over the person of the accused where he was discharged from active service without military jurisdiction having duly attached over him before his separation. The court, a quo, therefore had jurisdiction over accused-appellant for the offenses charged. Accused-appellant also assails the credibility of Emma Ruth Ilocso who rendered an eyewitness account of the killing of Esperanza Viterbo and Yehia Aburawash Mohammed. Accused-appellant claims that there appear in the record some facts or circumstances of weight and influence which were misappreciated by the trial court. One is the alleged loose morals of Emma Ruth Ilocso. Another such factor would refer to the supposed inconsistencies in some of the details between her declarations during the administrative proceedings and the trial of the criminal case. Accused-appellants efforts to discredit Emma Ruth Ilocso are futile. We stress that in this jurisdiction, loose morals per se is not a ground to discredit a witness. There must be clear indications militating against her credibility other than her being a person of ill repute. Otherwise stated, even a prostitute may be a competent witness to the extent that even with her sole testimony an accused may be duly convicted, provided that such witness is not coached and her testimony is not rehearsed and on all other counts worthy of credence beyond reasonable doubt.

The all too sweeping contention in accused-appellants motion for reconsideration that it is improbable that Ilocso will tell the exact truth where there is the slightest motive for testifying falsely as she would probably be willing to bring her evidence to market as she was ready to offer her person for sale, presents a cynical and too dark an outlook of a human person for acceptance. In the first place, Ilocso has not been shown to be a person of ill repute. Then too, the reputation of this witness is not germane to the case. To further discredit Emma Ruth Ilocso, accused-appellant capitalizes on the supposed discrepancies in her answers as to exactly where she and her companions came from before they came to the city jail, or who her companions were. He also points out her supposed lie concerning her personal circumstances such as her educational background. Ilocso was forthright enough to say that some of her statements in the administrative case are not correct and true. But she ascribes, which reason we believe, the same to her constant fear as she was threatened by accusedappellant, a policeman whom she knows could kill as he did kill the herein victims. In any event, the supposed untrue statements do not deal with Ilocsos positive identification of accused-appellant and his companion, Sioco, both of whom Ilocso had known 2 years previous to the incident. Under the foregoing consideration, there is no cogent reason for the Court to depart from the well established doctrine that on questions of credibility of witnesses, this Court will hold with high respect the factual findings of the trial judge who actually observed the demeanor of the witnesses at the witness stand. Accused-appellants argument that conspiracy has not been established in the instant case with the same quantum of evidence required for conviction does not persuade us. The unity of purpose of accused-appellant and co-accused Sioco was clearly established by the plain and clear testimony of witness Ilocso. She saw the two co-accused engaged in an argument with Aburawash before both accused shot the latter. Immediately thereafter, both accused went after a defenseless woman, Viterbo, who ran towards the burger stand and there they shot her too. There is no indication whatsoever that either of them desisted from executing all the overt acts necessary to perpetrate the two crimes of murder. Clearly, there was conspiracy. Finally, on the last issue involving the existence of the qualifying circumstances, we agree with the Solicitor General that treachery attended the commission of the crime, qualifying the crimes to murder. As correctly pointed out by the Solicitor General: . . . There is treachery when the offender commits any of the crimes against the person employing means, methods and forms in the execution thereof which tend directly and specially to insure its execution without the risk to himself arising from the defense which the offended party might make (Article 14, paragraph 16, Revised Penal Code). For the said circumstance to be present, two conditions must concur, to wit: (a) the employment of a manner of execution which would insure the offenders safety from any defensive or retaliatory act by the offended party such that no opportunity is given the latter to defend himself or retaliate and (b) such means of execution was deliberately or consciously adopted (People vs. Crisostomo, 222 SCRA 93).

Where the victim was without any opportunity to repel the aggression or to escape, treachery can be appreciated to qualify the killing to murder (People vs. Maestro, 222 SCRA 538). In treachery, what is decisive is that the attack was executed in such a manner as to make it impossible for the victim to retaliate (People vs. Buela, 227 SCRA 534). (pp. 37-38, Appellees Brief.) However, the trial court was in error when it took into consideration evident premeditation and abuse of superior strength. Evident premeditation was not proved by the evidence. The trial court erroneously surmised that when accused-appellant followed Aburawash and Viterbo coming from inside the premises of the city jail, co-accused Sioco was already outside waiting for them. From this the court a quo concluded that the act of shooting Aburawash in the head three times and forcibly bringing out Viterbo from the burger stand where she sought refuge, telling her that she will be brought to a waiting taxicab, but instead coldbloodedly shooting her to death, confirmed that their assassinations were well planned. Hence, the conclusion that there was evident premeditation (p. 34 Decision; p. 344, Record). We do not agree. There was no evidence directly showing any preconceived plan to liquidate or kill the victims. What appears on record was that the accused-appellant and Aburawash engaged in a heated argument before the crime was committed. There is the possibility that the decision to shoot the victims was made only there and then. This consideration should at least cast reasonable doubt as to the existence of a plan to kill the victims. For evident premeditation to be appreciated against an accused, the prosecution must prove the following: (1) the time when the offender determined to commit the crime; (2) an act manifestly indicating that the culprit has clung to his determination, and (3) sufficient lapse of time between the determination and execution to allow him to reflect upon the consequences of his act (Par. 13, Art. 14, Revised Penal Code; People vs. Cordero, 217 SCRA 1[1993]). These elements have not been shown in the instant case. The trial court likewise erred in separately appreciating abuse of superior strength which is already absorbed in the qualifying circumstance of alevosia or treachery (People vs. Villanueva,225 SCRA 353 [1993]; People vs. Borja, 91 SCRA 340 [1979]; People vs. Pasilan, 14 SCRA 694 [1965]; People vs. Escalona, 1 SCRA 891 [1961]). In sum, the killings in the instant case were qualified to murder by treachery. The penalty imposed under Article 248 of the Revised Penal Code is reclusion temporal in its maximum period to death. There being no aggravating circumstances present, the imposable penalty is the medium thereof which is reclusion perpetua. The trial court awarded civil indemnity payable jointly and severally by accusedappellant and convicted felon Salvador Sioco to the heirs of Esperanza Viterbo in the amount of P50,000.00 for her death, and the additional amount of P10,000.00 as moral damages. The Court sustains the award of P50,000.00. However, finding no

justification for the additional amount of P10,000.00 from the judgment under review, the Court is inclined to delete the same. WHEREFORE, premises considered, the conviction of accused-appellant by the trial court and the corresponding penalties imposed are hereby AFFIRMED with the MODIFICATION that the award of moral damages is deleted, with no special pronouncement as to costs. SO ORDERED.