Republic of the Philippines

Supreme Court Antecedents

Manila
On September 8, 1979, Margarita Marquez Alma Jose (Margarita)
FIRST DIVISION sold for consideration of P160,000.00 to respondent Ramon Javellana by
deed of conditional sale two parcels of land with areas of 3,675 and 20,936
PRISCILLA ALMA JOSE, G.R. No. 158239 square meters located in Barangay Mallis, Guiguinto, Bulacan. They
Petitioner, agreed that Javellana would pay P80,000.00 upon the execution of the
Present: deed and the balance of P80,000.00 upon the registration of the parcels of
land under the Torrens System (the registration being undertaken by
CORONA, C.J., Chairperson, Margarita within a reasonable period of time); and that should Margarita
LEONARDO-DE CASTRO, become incapacitated, her son and attorney-in-fact, Juvenal M. Alma Jose
- versus - BERSAMIN, (Juvenal), and her daughter, petitioner Priscilla M. Alma Jose, would
*
ABAD, and receive the payment of the balance and proceed with the application for
VILLARAMA, JR., JJ. registration.[3]
Promulgated:
After Margarita died and with Juvenal having predeceased
RAMON C. JAVELLANA, January 25, 2012 Margarita without issue, the vendors undertaking fell on the shoulders of
ET AL., Priscilla, being Margaritas sole surviving heir. However, Priscilla did not
Respondents. comply with the undertaking to cause the registration of the properties
under the Torrens System, and, instead, began to improve the properties by
x----------------------------------------------------------------------------------------
dumping filling materials therein with the intention of converting the
-x
parcels of land into a residential or industrial subdivision. [4] Faced with
Priscillas refusal to comply, Javellana commenced on February 10, 1997
DECISION
an action for specific performance, injunction, and damages against her in
the Regional Trial Court in Malolos, Bulacan (RTC), docketed as Civil
BERSAMIN, J.:
Case No. 79-M-97 entitled Ramon C. Javellana, represented by Atty.
Guillermo G. Blanco v. Priscilla Alma Jose.
The denial of a motion for reconsideration of an order granting the
In Civil Case No. 79-M-97, Javellana averred that upon the
defending partys motion to dismiss is not an interlocutory but a final order
execution of the deed of conditional sale, he had paid the initial amount
because it puts an end to the particular matter involved, or settles definitely
of P80,000.00 and had taken possession of the parcels of land; that he had
the matter therein disposed of, as to leave nothing for the trial court to do
paid the balance of the purchase price to Juvenal on different dates upon
other than to execute the order.[1] Accordingly, the claiming party has a
Juvenals representation that Margarita had needed funds for the expenses
fresh period of 15 days from notice of the denial within which to appeal
of registration and payment of real estate tax; and that in 1996, Priscilla
the denial.[2]
had called to inquire about the mortgage constituted on the parcels of land;
and that he had told her then that the parcels of land had not been
mortgaged but had been sold to him.[5]
Javellana prayed for the issuance of a temporary restraining order
or writ of preliminary injunction to restrain Priscilla from dumping filling
materials in the parcels of land; and that Priscilla be ordered to institute
registration proceedings and then to execute a final deed of sale in his
favor.[6]
sole heir, had inherited from Margarita was the obligation to register them
under the Torrens System.[12]
On June 21, 2000, the RTC denied the motion for reconsideration
for lack of any reason to disturb the order of June 24, 1999. [13]
Accordingly, Javellana filed a notice of appeal from the June 21,
2000 order,[14] which the RTC gave due course to, and the records were
elevated to the Court of Appeals (CA).

Priscilla filed a motion to dismiss, stating that the complaint was In his appeal (C.A.-G.R. CV No. 68259), Javellana submitted the
already barred by prescription; and that the complaint did not state a cause following as errors of the RTC,[15] to wit:
of action.[7]
I
The RTC initially denied Priscillas motion to dismiss on February THE TRIAL COURT GRIEVOUSLY ERRED IN NOT
4, 1998.[8] However, upon her motion for reconsideration, the RTC CONSIDERING THE FACT THAT PLAINTIFF-
reversed itself on June 24, 1999 and granted the motion to dismiss, opining APELLANT HAD LONG COMPLIED WITH THE
that Javellana had no cause of action against her due to her not being FULL PAYMENT OF THE CONSIDERATION OF THE
bound to comply with the terms of the deed of conditional sale for not SALE OF THE SUBJECT PROPERTY AND HAD
being a party thereto; that there was no evidence showing the payment of IMMEDIATELY TAKEN ACTUAL AND PHYSICAL
the balance; that he had never demanded the registration of the land from POSSESSION OF SAID PROPERTY UPON THE
Margarita or Juvenal, or brought a suit for specific performance against SIGNING OF THE CONDITIONAL DEED OF SALE;
Margarita or Juvenal; and that his claim of paying the balance was not
credible.[9] II
THE TRIAL COURT OBVIOUSLY ERRED IN
Javellana moved for reconsideration, contending that the MAKING TWO CONFLICTING INTERPRETATIONS
presentation of evidence of full payment was not necessary at that stage of OF THE PROVISION OF THE CIVIL [CODE],
the proceedings; and that in resolving a motion to dismiss on the ground of PARTICULARLY ARTICLE 1911, IN THE LIGHT OF
failure to state a cause of action, the facts alleged in the complaint were THE TERMS OF THE CONDITIONAL DEED OF
hypothetically admitted and only the allegations in the complaint should SALE;
be considered in resolving the motion. [10]Nonetheless, he attached to the
motion for reconsideration the receipts showing the payments made to
Juvenal.[11] Moreover, he maintained that Priscilla could no longer succeed III
to any rights respecting the parcels of land because he had meanwhile THE TRIAL COURT ERRED IN HOLDING THAT
acquired absolute ownership of them; and that the only thing that she, as DEFENDANT-APPELLEE BEING NOT A PARTY TO
 THE CONDITIONAL DEED OF SALE EXECUTED BY
HER MOTHER IN FAVOR OF PLAINTFF-
APPELLANT IS NOT BOUND THEREBY AND CAN
NOT BE COMPELLED TO DO THE ACT REQUIRED
IN THE SAID DEED OF CONDITIONAL SALE;
IV
THE TRIAL COURT ERRED IN DISMISSING THE
AMENDED COMPLAINT WITHOUT HEARING THE
CASE ON THE MERITS.
Priscilla countered that the June 21, 2000 order was not
appealable; that the appeal was not perfected on time; and that Javellana
was guilty of forum shopping.[16]
It appears that pending the appeal, Javellana also filed a petition
for certiorari in the CA to assail the June 24, 1999 and June 21, 2000
orders dismissing his complaint (C.A.-G.R. SP No. 60455). On August 6,
2001, however, the CA dismissed the petition for certiorari,[17] finding that
the RTC did not commit grave abuse of discretion in issuing the orders,
and holding that it only committed, at most, an error of judgment
correctible by appeal in issuing the challenged orders.
On November 20, 2002, the CA promulgated its decision in C.A.-
G.R. CV No. 68259,[18] reversing and setting aside the dismissal of Civil
Case No. 79-M-97, and remanding the records to the RTC for further
proceedings in accordance with law.[19] The CA explained that the
complaint sufficiently stated a cause of action; that Priscilla, as sole heir,
succeeded to the rights and obligations of Margarita with respect to the
parcels of land; that Margaritas undertaking under the contract was not a
purely personal obligation but was transmissible to Priscilla, who was
consequently bound to comply with the obligation;that the action had not
yet prescribed due to its being actually one for quieting of title that was
imprescriptible brought by Javellana who had actual possession of the
properties; and that based on the
complaint, Javellana had been in actual possession since 1979, and the
cloud on his title had come about only when Priscilla had started dumping
filling materials on the premises.[20]
On May 9, 2003, the CA denied the motion for
reconsideration, [21] stating that it decided to give due course to the appeal
even if filed out of time because Javellana had no intention to delay the
proceedings, as in fact he did not even seek an extension of time to file his
appellants brief; that current jurisprudence afforded litigants the amplest
opportunity to present their cases free from the constraints of
technicalities, such that even if an appeal was filed out of time, the
appellate court was given the discretion to nonetheless allow the appeal for
justifiable reasons.
Issues
Priscilla then brought this appeal, averring that the CA thereby
erred in not outrightly dismissing Javellanas appeal because: (a) the June
21, 2000 RTC order was not appealable; (b) the notice of appeal had been
filed belatedly by three days; and (c) Javellana was guilty of forum
shopping for filing in the CA a petition for certiorari to assail the orders of
the RTC that were the subject matter of his appeal pending in the CA. She
posited that, even if the CAs decision to entertain the appeal was affirmed,
the RTCs dismissal of the complaint should nonetheless be upheld because
the complaint stated no cause of action, and the action had already
prescribed.
On his part, Javellana countered that the errors being assigned by
Priscilla involved questions of fact not proper for the Court to review
through petition for review on certiorari; that the June 21, 2000 RTC
order, being a final order, was appealable; that his appeal was perfected on
time; and that he was not guilty of forum shopping because at the time he
filed the
petition for certiorari the CA had not yet rendered a decision in C.A.-G.R.
CV No. 68259, and because the issue of ownership raised in C.A.-G.R. CV
No. 68259 was different from the issue of grave abuse of discretion raised
in C.A.-G.R. SP No. 60455.
Ruling
The petition for review has no merit.
I And, secondly, whether an order is final or interlocutory
Denial of the motion for reconsideration of the
order of dismissal was a final order and appealable
Priscilla submits that the order of June 21, 2000 was not the proper subject
of an appeal considering that Section 1 of Rule 41 of the Rules of
Court provides that no appeal may be taken from an order denying a
motion for reconsideration.
Priscillas submission is erroneous and cannot be sustained.
First of all, the denial of Javellanas motion for reconsideration left nothing
more to be done by the RTC because it confirmed the dismissal of Civil
Case No. 79-M-97. It was clearly a final order, not an interlocutory one.
The Court has distinguished between final and interlocutory orders
in Pahila-Garrido v. Tortogo,[22] thuswise:
The distinction between a final order and an
interlocutory order is well known. The first disposes of the
subject matter in its entirety or terminates a particular
proceeding or action, leaving nothing more to be done
except to enforce by execution what the court has
determined, but the latter does not completely dispose of
the case but leaves something else to be decided upon. An
interlocutory order deals with preliminary matters and the
trial on the merits is yet to be held and the judgment
rendered. The test to ascertain whether or not an order or a
judgment is
interlocutory or final is: does the order or judgment leave
something to be done in the trial court with respect to the
merits of the case? If it does, the order or judgment is
interlocutory; otherwise, it is final.
determines whether appeal is the correct remedy or not. A final order is
appealable, to accord with the final judgment rule enunciated in Section 1,
Rule 41 of the Rules of Court to the effect that appeal may be taken from a
judgment or final order that completely disposes of the case, or of a
particular matter therein when declared by these Rules to be appealable;
[23]
but the remedy from an interlocutory one is not an appeal but a special
civil action for certiorari. The explanation for the differentiation of
remedies given in Pahila-Garrido v. Tortogo is apt:
xxx The reason for disallowing an appeal from an
interlocutory order is to avoid multiplicity of appeals in a
single action, which necessarily suspends the hearing and
decision on the merits of the action during the pendency
of the appeals. Permitting multiple appeals will
necessarily delay the trial on the merits of the case for a
considerable length of time, and will compel the adverse
party to incur unnecessary expenses, for one of the parties
mayinterpose as many appeals as there are incidental
questions raised by him and as there are interlocutory
orders rendered or issued by the lower court. An
interlocutory order may be the subject of an appeal, but
only after a judgment has been rendered, with the ground
for appealing the order being included in the appeal of the
judgment itself.
 The remedy against an interlocutory order not
subject of an appeal is an appropriate special civil action
under Rule 65, provided that the interlocutory order is
rendered without or in excess of jurisdiction or with grave
abuse of discretion. Then is certiorari under Rule 65
allowed to be resorted to.
Indeed, the Court has held that an appeal from an order denying a motion
for reconsideration of a final order or judgment is effectively an appeal
from the final order or judgment itself; and has expressly clarified
that the prohibition against appealing an order denying a motion for
reconsideration referred only to a denial of a motion for reconsideration of
an interlocutory order.[24]
II
Appeal was made on time pursuant to Neypes v. CA
Priscilla insists that Javellana filed his notice of appeal out of
time. She points out that he received a copy of the June 24, 1999 order on
July 9, 1999, and filed his motion for reconsideration on July 21, 1999 (or
after the lapse of 12 days); that the RTC denied his motion for
reconsideration through the order of June 21, 2000, a copy of which he
received on July 13, 2000; that he had only three days from July 13, 2000,
or until July 16, 2000, within which to perfect an appeal; and that having
filed his notice of appeal on July 19, 2000, his appeal should have been
dismissed for being tardy by three days beyond the expiration of the
reglementary period.
Section 3 of Rule 41 of the Rules of Court provides:
Section 3. Period of ordinary appeal. The appeal
shall be taken within fifteen (15) days from notice of the
judgment or final order appealed from. Where a record on
appeal is required, the appellant shall file a notice of
appeal and a record on appeal within thirty (30) days from
notice of the judgment or final order.
The period of appeal shall be interrupted by a
timely motion for new trial or reconsideration. No
motion for extension of time to file a motion for new
trial or reconsideration shall be allowed. (n)
Under the rule, Javellana had only the balance of three days from
July 13, 2000, or until July 16, 2000, within which to perfect an appeal due
to the timely filing of his motion for reconsideration interrupting the
running of the period of appeal. As such, his filing of the notice of appeal
only on July 19, 2000 did not perfect his appeal on time, as Priscilla
insists.
The seemingly correct insistence of Priscilla cannot be upheld,
however, considering that the Court meanwhile adopted the fresh period
rule in Neypes v. Court of Appeals,[25] by which an aggrieved party
desirous of appealing an adverse judgment or final order is allowed a fresh
period of 15 days within which to file the notice of appeal in the RTC
reckoned from receipt of the order denying a motion for a new trial or
motion for reconsideration, to wit:
The Supreme Court may promulgate procedural
rules in all courts. It has the sole prerogative to amend,
repeal or even establish new rules for a more simplified
and inexpensive process, and the speedy disposition of
cases. In the rules governing appeals to it and to the Court
of Appeals, particularly Rules 42, 43 and 45, the Court
allows extensions of time, based on justifiable and
compelling reasons, for parties to file their appeals. These
extensions may consist of 15 days or more.
To standardize the appeal periods provided in the
Rules and to afford litigants fair opportunity to appeal
 their cases, the Court deems it practical to allow a fresh
period of 15 days within which to file the notice of appeal
in the Regional Trial Court, counted from receipt of the
order dismissing a motion for a new trial or motion for
reconsideration.
Henceforth, this fresh period rule shall also apply to
Rule 40 governing appeals from the Municipal Trial
Courts to the Regional Trial Courts; Rule 42 on petitions
for review from the Regional Trial Courts to the Court of
Appeals; Rule 43 on appeals from quasi-judicial agencies
to the Court of Appeals and Rule 45 governing appeals by
certiorari to the Supreme Court. The new rule aims to
regiment or make the appeal period uniform, to be
counted from receipt of the order denying the motion for
new trial, motion for reconsideration (whether full or
partial) or any final order or resolution. [26]
The fresh period rule may be applied to this case, for the Court has
already retroactively extended the fresh period rule to actions pending and
undetermined at the time of their passage and this will not violate any right
of a person who may feel that he is adversely affected, inasmuch as there
are no vested rights in rules of procedure. [27] According to De los Santos v.
Vda. de Mangubat:[28]
Procedural law refers to the adjective law which
prescribes rules and forms of procedure in order that
courts may be able to administer justice. Procedural laws
do not come within the legal conception of a retroactive
law, or the general rule against the retroactive operation of
statues they may be given retroactive effect on actions
pending and undetermined at the time of their passage and
this will not violate any right of a person who may feel
that he is adversely affected, insomuch as there are no
vested rights in rules of procedure.
The fresh period rule is a procedural law as it
prescribes a fresh period of 15 days within which an
appeal may be made in the event that the motion for
reconsideration is denied by the lower court. Following
the rule on retroactivity of procedural laws, the "fresh
period rule" should be applied to pending actions, such as
the present case.
Also, to deny herein petitioners the benefit of
the fresh period rule will amount to injustice, if not
absurdity, since the subject notice of judgment and final
order were issued two years later or in the year 2000, as
compared to the notice of judgment and final order
in Neypes which were issued in 1998. It will be
incongruous and illogical that parties receiving notices of
judgment and final orders issued in the year 1998 will
enjoy the benefit of the fresh period rule while those later
rulings of the lower courts such as in the instant case, will
not.[29]
Consequently, we rule that Javellanas notice of appeal was timely
filed pursuant to the fresh period rule.
III
No forum shopping was committed
Priscilla claims that Javellana engaged in forum shopping by filing
a notice of appeal and a petition for certiorari against the same orders. As
earlier noted, he denies that his doing so violated the policy against forum
shopping.
 The Court expounded on the nature and purpose of forum
shopping in In Re: Reconstitution of Transfer Certificates of Title Nos.
303168 and 303169 and Issuance of Owners Duplicate Certificates of
Title In Lieu of Those Lost, Rolando Edward G. Lim, Petitioner:[30]
Forum shopping is the act of a party litigant against
whom an adverse judgment has been rendered in one
forum seeking and possibly getting a favorable opinion in
another forum, other than by appeal or the special civil
action of certiorari, or the institution of two or more
actions or proceedings grounded on the same cause or
supposition that one or the other court would make a
favorable disposition. Forum shopping happens when, in
the two or more pending cases, there is identity of parties,
identity of rights or causes of action, and identity of reliefs
sought. Where the elements of litis pendentia are present,
and where a final judgment in one case will amount to res
judicata in the other, there is forum shopping. For litis
pendentia to be a ground for the dismissal of an action,
there must be: (a) identity of the parties or at least such as
to represent the same interest in both actions; (b) identity
of rights asserted and relief prayed for, the relief being
founded on the same acts; and (c) the identity in the two
cases should be such that the judgment which may be
rendered in one would, regardless of which party is
successful, amount to res judicata in the other.
For forum shopping to exist, both actions must
involve the same transaction, same essential facts and
circumstances and must raise identical causes of action,
subject matter and issues. Clearly, it does not exist where
different orders were questioned, two distinct causes of
action and issues were raised, and two objectives were
sought.
Should Javellanas present appeal now be held barred by his filing
of the petition for certiorari in the CA when his appeal in that court was
yet pending?
We are aware that in Young v. Sy,[31] in which the petitioner filed a
notice of appeal to elevate the orders concerning the dismissal of her case
due to non-suit to the CA and a petition for certiorari in the CA assailing
the same orders four months later, the Court ruled that the successive
filings of the notice of appeal and the petition for certiorari to attain the
same objective of nullifying the trial courts dismissal orders constituted
forum shopping that warranted the dismissal of both cases. The Court said:
Ineluctably, the petitioner, by filing an ordinary
appeal and a petition for certiorari with the CA,
engaged in forum shopping. When the petitioner
commenced the appeal, only four months had elapsed
prior to her filing with the CA
the Petition for Certiorari under Rule 65 and which
eventually came up to this Court by way of the instant
Petition (re: Non-Suit). The elements of litis pendentia are
present between the two suits. As the CA, through its
Thirteenth Division, correctly noted, both suits are
founded on exactly the same facts and refer to the same
subject
matterthe RTC Orders which dismissed Civil Case No.
SP-5703 (2000) for
failure to prosecute. In both cases, the petitioner is seeking
the reversal of the RTC orders. The parties, the rights
asserted, the issues professed, and the reliefs prayed for,
are all the same. It is evident that the judgment of one
forum may amount to res judicata in the other.
xxxx
 The remedies of appeal and certiorari under Rule
65 are mutually exclusive and not alternative or
cumulative. This is a firm judicial policy. The petitioner
cannot hedge her case by wagering two or more appeals,
and, in the event that the ordinary appeal lags significantly
behind the others, she cannot post facto validate this
circumstance as a demonstration that the ordinary appeal
had not been speedy or adequate enough, in order to
justify the recourse to Rule 65. This practice, if adopted,
would sanction the filing of multiple suits in multiple fora,
where each one, as the petitioner couches it, becomes a
precautionary measure for the rest, thereby increasing the
chances of a favorable decision. This is the very evil that
the proscription on forum shopping seeks to put right.
In Guaranteed Hotels, Inc. v. Baltao, the Court stated that
the grave evil sought to be avoided by the rule
against forum shopping is the rendition by two competent
tribunals of two separate and contradictory
decisions. Unscrupulous party litigants, taking advantage
of a variety of competent tribunals, may repeatedly try
their luck in several different fora until a favorable result
is reached. To avoid the resultant confusion, the Court
adheres strictly to the rules against forum shopping, and
any violation of these rules results in the dismissal of the
case.[32]
The same result was reached in Zosa v. Estrella,[33] which likewise
involved the successive filing of a notice of appeal and a petition
for certiorari to challenge the same orders, with the Court upholding the
CAs dismissals of the appeal and the petition for certiorari through
separate decisions.
Yet, the outcome in Young v. Sy and Zosa v. Estrella is unjust here
even if the orders of the RTC being challenged through appeal and the
petition for certiorari were the same. The unjustness exists because the
appeal and the petition for certiorari actually sought different objectives.
In his appeal in C.A.-G.R. CV No. 68259, Javellana aimed to undo the
RTCs erroneous dismissal of Civil Case No. 79-M-97 to clear the way for
his judicial demand for specific performance to be tried and determined in
due course by the RTC; but his petition for certiorari had the ostensible
objective to prevent (Priscilla) from developing the subject property and
from proceeding with the ejectment case until his appeal is finally
resolved, as the CA explicitly determined in its decision in C.A.-G.R. SP
No. 60455.[34]
Nor were the dangers that the adoption of the judicial policy
against forum shopping designed to prevent or to eliminate attendant. The
first danger, i.e., the multiplicity of suits upon one and the same cause of
action, would not materialize considering that the appeal was a continuity
of Civil Case No. 79-M-97, whereas C.A.-G.R. SP No. 60455 dealt with
an independent ground of alleged grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of the RTC. The second
danger, i.e., the unethical malpractice of shopping for a friendly court or
judge to ensure a favorable ruling or judgment after not getting it in the
appeal, would not arise because the CA had not yet decided C.A.-G.R. CV
No. 68259 as of the filing of the petition for certiorari.
Instead, we see the situation of resorting to two inconsistent
remedial approaches to be the result of the tactical misjudgment by
Javellanas counsel on the efficacy of the appeal to stave off his caretakers
eviction from the parcels of land and to prevent the development of them
into a residential or commercial subdivision pending the appeal. In the
petition for certiorari, Javellana explicitly averred that his appeal was
inadequate and not speedy to prevent private respondent Alma Jose and
her transferee/assignee xxx from developing and disposing of the subject
property to other parties to the total deprivation of petitioners rights of
possession and ownership over the subject property, and that the dismissal
by the RTC had emboldened private respondents to fully develop the
property and for respondent Alma Jose to file an ejectment case against
petitioners overseer xxx.[35] Thereby, it became far-fetched that Javellana
brought the petition for certiorari in violation of the policy against forum
shopping.

WHEREFORE, the Court DENIES the petition for review

on certiorari; AFFIRMS the decision promulgated on November 20,
2002; and ORDERS the petitioner to pay the costs of suit.

SO ORDERED.
 Republic of the Philippines This is a petition for review on certiorari under Rule 45 of the 1997 Rules
of Civil Procedure, which seeks to annul and set aside the following
Supreme Court
issuances of the Court of Appeals (CA) in the case docketed as CA-G.R.
Manila SP No. 02660, entitled Heirs of the Late Antonio Consing as represented
by Dra. Soledad Consing v. Hon. Renato D. Muez, Presiding Executive
Judge, Regional Trial Court, Branch 60, Cadiz City, Spouses Meritus Rey
Medado, the Sheriff IV, Balbino B. Germinal, Regional Trial Court,
SECOND DIVISION Branch 60, Cadiz City and Land Bank of the Philippines:

ELSA D. MEDADO, G.R. No. 186720

Petitioner, (1) the Decision[1] dated September 26, 2008, reversing and
Present: setting aside the order[2] of the Regional Trial Court (RTC), Branch
- versus - 60, Cadiz City, in Civil Case No. 797-C, an action for
CARPIO, J., injunction; and
Chairperson,
HEIRS OF THE LATE ANTONIO BRION, (2) the Resolution[3] dated January 21, 2009, denying the motion
CONSING, as represented by DR. PEREZ, for reconsideration of the decision dated September 26, 2008.
SOLEDAD CONSING, SERENO, and
Respondents. REYES, JJ. The Factual Antecedents
Promulgated: Sometime in 1996, petitioner Meritus Rey Medado and Elsa Medado
(Spouses Medado) and the estate of the late Antonio Consing (Estate of
February 8, 2012 Consing), as represented by Soledad Consing (Soledad), executed Deeds
of Sale with Assumption of Mortgage for the former's acquisition from the
x---------------------------------------------------------------------------------------- latter of the property in Cadiz City identified as Hacienda Sol. Records
indicate that the sale included the parcels of land covered by OCT No. P-
x
498, TCT No. T-31275, TCT No. T-31276 and TCT No. T-31277. As part
of the deal, Spouses Medado undertook to assume the estate's loan with
Philippine National Bank (PNB).
DECISION
Subsequent to the sale, however, the Estate of Consing offered the subject
REYES, J.:
lots to the government via the Department of Agrarian Reform's Voluntary
Offer to Sell (VOS) program. On November 22, 2000, the Estate of
Consing also instituted with the RTC, Branch 44 of Bacolod City an action
for rescission and damages, docketed as Civil Case No. 00-11320 against
Spouses Medado, PNB and the Register of Deeds of Cadiz City, due to the
alleged failure of the spouses to meet the conditions in their agreement.
In the meantime that Civil Case No. 00-11320 for rescission was pending,
Land Bank of the Philippines (LBP) issued in favor of the Estate of
Consing a certificate of deposit of cash and agrarian reform bonds, as
compensation for the lots covered by the VOS. Spouses Medado feared
that LBP would release the full proceeds thereof to the Estate of Consing.
They claimed to be the ones entitled to the proceeds considering that they
had bought the properties through the Deeds of Sale with Assumption of
Mortgage which they and the Estate of Consing had earlier executed.
The foregoing prompted Spouses Medado to institute Civil Case No. 797-
C, an action for injunction with prayer for the issuance of a temporary
restraining order, with the RTC, Branch 60 of Cadiz City. They asked that
the following be issued by the trial court: (a) writ of prohibitory injunction
to restrain LBP from releasing the remaining amount of the VOS proceeds
of the lots offered by the Estate of Consing, and restraining the Estate of
Consing from receiving these proceeds; and (b) writ of mandatory
injunction to compel LBP to release the remaining amount of the VOS to
the spouses.
[4]
On March 9, 2007, the RTC of Cadiz City issued an Order granting
Spouses Medado's application for the issuance of writs of preliminary
prohibitory and mandatory injunction. The order's dispositive portion
reads:
WHEREFORE, finding the application for the issuance of
a writ of preliminary prohibitory injunction and
preliminary mandatory injunction of the plaintiffs to be
MERITORIOUS, the same is hereby GRANTED.
Let therefore a Writ of Preliminary Prohibitory and
Mandatory Injunction be issued against defendant Land
Bank, its agents, lawyers and all other persons acting in its
behalf to cease and desist from releasing the balance of
the VOS Proceeds to defendant Heirs of the Late Antonio
Consing as represented by Dra. Soledad Consing and
restraining said defendant Consing, her agents, lawyers,
successors-in-interest, and all other persons acting in its
behalf from receiving the same and to maintain the
STATUS QUO ANTE BELLUM while defendant Land
Bank of the Philippines is hereby ordered to release and
pay the whole of the remaining balance of the VOS
Proceeds held by the said defendant to the plaintiffs after
the posting of a bond by the plaintiffs in the amount of
FIVE MILLION PESOS (P5,000,000.00) executed in
favor of the defendants conditioned upon the payment to
the said defendants by the plaintiffs [of] all damages
which the former may sustain by reason of the issuance of
the writ of preliminary prohibitory and mandatory
injunction in case this Court should finally decide that the
plaintiffs are not entitled thereto.
Furnish copies of this Order to all counsels and parties.
SO ORDERED.[5]
Feeling aggrieved, the heirs of the late Antonio Consing (Consing)
questioned the RTC's order via a petition for certiorari filed with the CA,
against Hon. Renato D. Muez, Presiding Executive Judge, RTC, Branch 60
of Cadiz City, Spouses Medado, Sheriff IV Balbino B. Germinal of RTC,
Branch 60 of Cadiz City and LBP. They sought, among other reliefs, the
dismissal of the complaint for injunction for violation of the rules on litis
pendentia and forum shopping. On the matter of the absence of a motion
for reconsideration of the trial court's order before resorting to a petition
for certiorari, the heirs explained that the implementation of the
questioned writs through LBP's release of the VOS proceeds' balance to
the sheriff on March 29, 2007, notwithstanding: (a) the pendency of
motions for reconsideration and dissolution of the writs filed by the heirs,
and (b) the fact that the writs were immediately implemented even if a
hearing on the motions was already scheduled for March 30, 2007,
prompted the heirs' withdrawal of their motions for being already moot
and academic. The heirs argued that their case was within the exceptions
to the general rule that a petition under Rule 65 will not lie unless a motion
for reconsideration is first filed before the lower court.
In their comment on the petition, Spouses Medado questioned, among
other matters, the authority of Soledad to sign the petition's certification of
non-forum shopping on behalf of her co-petitioners.
The Ruling of the CA
On September 26, 2008, the CA rendered the assailed decision, [6] the
dispositive portion of which reads:
WHEREFORE, the petition being impressed with merit
is GRANTED. The assailed Order dated March 9, 2007
is NULLIFIED and SET ASIDE and the complaint in
Civil Case No. 797-C DISMISSED. Private respondents
are directed to return P3,743,825.88 to Land Bank of
the Philippines to await a final ruling in Civil Case No.
00-1320.
No costs.
SO ORDERED.[7]
The CA ruled that the RTC gravely abused its discretion in taking
cognizance of Civil Case No. 797-C for injunction during the pendency of
Civil Case No. 00-11320 for rescission and damages as this violates the
rule against forum shopping.
Spouses Medado's motion for reconsideration of the decision of September
26, 2008 was denied by the CA via its Resolution[8] dated January 21,
2009. Hence, this petition.
The Present Petition
This petition was instituted by petitioner Elsa Medado without naming her
husband as co-petitioner, due to their alleged separation de facto.[9] It
presents the following issues for this Court's determination:
I. Whether or not the CA correctly admitted the petition
for certiorari filed before it, notwithstanding alleged
deficiencies in its verification and certification against forum
shopping;
II. Whether or not the CA correctly admitted the petition
for certiorari filed before it even if no motion for
reconsideration of the RTCs Order dated March 9, 2007 was filed
with the lower court; and
III. Whether or not the CA correctly held that the rule
against forum shopping was violated by the filing of the complaint
for injunction during the pendency of the action for rescission
and damages.
In their comment on the petition, the respondents also raise as an issue the
failure of the petitioner to join her husband as a party to the petition,
considering that the action affects conjugal property.
 To protect, sue, prosecute, defend and
This Court's Ruling adopt whatever action necessary and
proper relative and with respect to our
right, interest and participation over said
After due study, this Court finds the petition bereft of merit. properties, particularly those described in
previous titles under TCT No. T-498, TCT
No. T-31275, TCT No. T-31276 and TCT
The requirements for No. T-31277 of the [R]egister of
verification Deeds, Cadiz City, covering a total area of
and certification against 73.6814 square meters, and declared in
forum shopping in the the name of said Antonio Consing and
CA petition were located in Brgy. Magsaysay, Cadiz City,
substantially complied Negros Occidental, the same parcels of
with, following land are the subject of judicial litigation
settled jurisprudence. before the [R]egional Trial [Court],
Branch 44, Bacolod City, docketed as
Civil [C]ase No. 11320, entitled Soledad
Before us, the petitioner contended that the consolidated verification and T. Consing, for herself and as
certification against forum shopping of the petition filed with the CA was Administratix of the estate of Antonio
defective: first, for being signed only by Soledad, instead of by all the Consing, plaintiffs, versus, Spouses
petitioners, and second, its jurat cites a mere community tax certificate of Meritus Rey and Elsa Medado, et.al.,
Soledad, instead of a government-issued identification card required under defendants, and Regional Trial Court,
the 2004 Rules on Notarial Practice. The second ground was never raised Branch 60, Cadiz City and docketed as
by Civil Case No. 797-C, entitled,
herein petitioner in her comment on the CA petition, thus, it cannot be []Spouse[s] Meritus Rey Medado and
validly raised by the petitioner at this stage. Elsa Medado, plaintiffs, versus, Land
Bank of the Philippines and heirs of the
As regards the first ground, records show that Soledad signed the Late Antonio Consing as represented by
verification and certification against forum shopping on behalf of her co- Dra. Soledad Consing, defendants;
petitioners by virtue of a Special Power of Attorney[10] (SPA) attached to pending in said court and which cases
the petition filed with the CA. The SPA, signed by her co-heirs Ma. Josefa may at anytime be elevated to the Court
Consing Saguitguit, Ma. Carmela Consing Lopez, Ma. Lourdes Consing of Appeals and/or Supreme Court as the
Gonzales and Mary Rose Consing Tuason, provides that their attorney-in- circumstances so warrant;[11]
fact Soledad is authorized:
As may be gleaned from the foregoing, the authority of Soledad includes administration of justice and thus should
the filing of an appeal before the CA, including the execution of a not be interpreted with such absolute
verification and certification against forum shopping therefor, being acts literalness as to subvert its own ultimate
necessary to protect, sue, prosecute, defend and adopt whatever action and legitimate objective. The rule of
necessary and proper in relation to their rights over the subject properties. substantial compliance may be availed of
with respect to the contents of the
In addition, the allegations and contentions embodied in the CA petition do certification. This is because the
not deviate from the claims already made by the heirs in Civil Case Nos. requirement of strict compliance with the
00-11320 and 797-C, both specifically mentioned in the SPA. We provisions regarding the certification of
emphasize that the verification requirement is simply intended to secure an non-forum shopping merely underscores
assurance that the allegations in the pleading are true and correct, and not its mandatory nature in that the
the product of the imagination or a matter of speculation, and that the certification cannot be altogether
pleading is filed in good faith.[12] We rule that there was no deficiency in dispensed with or its requirements
the petition's verification and certification against forum shopping filed completely disregarded. Thus, under
with the CA. justifiable circumstances, the Court has
relaxed the rule requiring the submission
In any case, we reiterate that where the petitioners are immediate relatives, of such certification considering that
who share a common interest in the property subject of the action, the fact although it is obligatory, it is not
that only one of the petitioners executed the verification or certification of jurisdictional.
forum shopping will not deter the court from proceeding with the
action. In Heirs of Domingo Hernandez, Sr. v. Mingoa, Sr.,[13] we held: In HLC Construction and Development
Corporation v. Emily Homes Subdivision
Even if only petitioner Domingo Hernandez, Jr. executed Homeowners Association, it was held that
the Verification/Certification against forum-shopping, this the signature of only one of the petitioners
will not deter us from proceeding with the judicial in the certification against forum
determination of the issues in this petition. As we shopping substantially complied with
ratiocinated in Heirs of Olarte v. Office of the President: [the] rules because all the petitioners
share a common interest and invoke a
The general rule is that the certificate of common cause of action or defense.
non-forum shopping must be signed by all
the plaintiffs in a case and the signature of The same leniency was applied by the
only one of them is insufficient. However, Court in Cavile v. Heirs of
the Court has also stressed that the rules Cavile, because the lone petitioner who
on forum shopping were designed to executed the certification of non-forum
promote and facilitate the orderly shopping was a relative and co-owner of
 the other petitioners with whom he shares
a common interest. x x x
xxx
Here, all the petitioners are immediate relatives who share
a common interest in the land sought to be reconveyed
and a common cause of action raising the same arguments
in support thereof. There was sufficient basis, therefore,
for Domingo Hernandez, Jr. to speak for and in behalf of
his co-petitioners when he certified that they had not filed
any action or claim in another court or tribunal involving
the same issues. Thus, the Verification/Certification that
Hernandez, Jr. executed constitutes substantial compliance
under the Rules.[14] (citations omitted)
Furthermore, we have consistently held that verification of a pleading is a
formal, not a jurisdictional, requirement intended to secure the assurance
that the matters alleged in a pleading are true and correct.Thus, the court
may simply order the correction of unverified pleadings or act on them and
waive strict compliance with the rules. It is deemed substantially complied
with when one who has ample knowledge to swear to the truth of the
allegations in the complaint or petition signs the verification; and when
matters alleged in the petition have been made in good faith or are true and
correct.[15] It was based on this principle that this Court had also allowed
herein petitioner, via our Resolution[16] dated April 22, 2009, a chance to
submit a verification that complied with Section 4, Rule 7 of the Rules of
Court, as amended, instead of us dismissing the petition outright.
There are recognized
exceptions permitting
resort to a special civil
action of certiorari even
without first filing a
motion for
reconsideration.
On the second issue, the CA did not err in accepting the petition
for certiorari even if the motion for reconsideration of the RTC Order of
March 9, 2007 was withdrawn by herein respondents before the RTC
could act thereon. It is settled that the requirement on the filing of a motion
for
reconsideration prior to the institution of a petition for certiorari under
Rule 65 of the Rules of Court admits of several exceptions, such as when
the filing of a motion appears to be useless given the circumstances
attending the action. Thus, we have repeatedly held:
The general rule is that a motion for reconsideration is a
condition sine qua non before a petition for certiorari may
lie, its purpose being to grant an opportunity for the
court a quo to correct any error attributed to it by re-
examination of the legal and factual circumstances of the
case. There are, however, recognized exceptions
permitting a resort to the special civil action
for certiorari without first filing a motion for
reconsideration. In the case of Domdom v. Sandiganbayan,
it was written:
The rule is, however, circumscribed by
well-defined exceptions, such as where
the order is a patent nullity because the
court a quo had no jurisdiction; where the
questions raised in
the certiorari proceeding have been duly
raised and passed upon by the lower
court, or are the same as those raised and
passed upon in the lower court; where
there is an urgent necessity for the
 resolution of the question, and any further
delay would prejudice the interests of the
Government or of the petitioner, or the
subject matter of the action is
perishable; where, under the
circumstances, a motion for
reconsideration would be useless; where
the petitioner was deprived of due process
and there is extreme urgency of relief;
where, in a criminal case, relief from an
order of arrest is urgent and the grant of
such relief by the trial court is
improbable; where the proceedings in the
lower court are a nullity for lack of
due process; where the proceedings
were ex parte or in which the petitioner
had no opportunity to object; and where
the
issue raised is one purely of law or where
public interest is
involved.[17] (emphasis supplied, and
citations and underscoring omitted)
As correctly held by the CA, a motion for reconsideration, or the
resolution of the trial court thereon, had become useless given that the
particular acts which the movants sought to prevent by the filing of the
motion were already carried out. Significantly, the heirs of the late
Consing had filed a motion for reconsideration of the RTC's order, but
withdrew it only after the trial court had decided to implement the writs
notwithstanding the pendency of the motion and just a day before the
scheduled hearing on said motion.
Forum-shopping exists
when the elements
of litis pendentia concur.
On the third issue, there is forum shopping when the elements of litis
pendentia are present, i.e., between actions pending before courts, there
exist: (1) identity of parties, or at least such parties as represent the same
interests in both actions, (2) identity of rights asserted and relief prayed
for, the relief being founded on the same facts, and (3) the identity of the
two preceding particulars is such that any judgment rendered in the other
action will, regardless of which party is successful, amount to res
judicata in the action under consideration; said requisites are also
constitutive of the requisites for auter action pendant or lis pendens.
[18]
Applying the foregoing, there was clearly a violation of the rule against
forum shopping when Spouses Medado instituted Civil Case No. 797-C
for injunction notwithstanding the pendency of Civil Case No. 00-11320
for rescission of contract and damages.
All elements of litis pendentia are present with the filing of the two
cases. There is no dispute that there is identity of parties representing the
same interests in the two actions, both involving the estate and heirs of the
late Consing on one hand, and Spouses Medado on the other. The
rescission case names Soledad T. Consing, for herself and as administratrix
of the estate of Antonio Consing as plaintiff, with Spouses Meritus Rey
and Elsa Medado, [PNB] and the Register of Deeds of Cadiz City as
respondents. The injunction case, on the other hand, was instituted by
Spouses Medado, against (LBP) and the Heirs of the Late Antonio
Consing, as represented by Dra. Soledad Consing. The primary litigants in
the two action, and their interests, are the same.
The two other elements are likewise satisfied. There is an identity of
rights asserted and reliefs prayed for in the two cases, with the reliefs
being founded on the same set of facts. In both cases, the parties claim
their supposed right as owners of the subject properties. They all anchor
their claim of ownership on the deeds of absolute sale which they had
executed, and the law applicable thereto. They assert their respective
rights, with Spouses Medado as buyers and the heirs as sellers, based on
the same set of facts that involve the deeds of sale's contents and their
validity. Both actions necessarily involve a ruling on the validity of the
same contract as against the same parties. Thus, the identity of the two
cases is such as would render the decision in the rescission case res
judicata in the injunction case, and vice versa.
It does not even matter that one action is for the enforcement of the parties'
agreements, while the other action is for the rescission thereof. In the
similar case of Victronics Computers, Inc. v. RTC, Branch 63, Makati,
[19]
we discussed:
Civil Case No. 91-2069 actually involves an action for
specific performance; it thus upholds the contract and
assumes its validity. Civil Case No. 91-2192, on the other
hand, is for the nullification of the contract on the grounds
of fraud and vitiated consent. While ostensibly the cause
of action in one is opposite to that in the other, in the
final analysis, what is being determined is the validity
of the contract. x x x Thus, the identity of rights asserted
cannot be disputed. Howsoever viewed, it is beyond cavil
that regardless of the decision that would be promulgated
in Civil Case No. 91-2069, the same would constitute res
judicata on Civil Case No. 91-2192 and vice versa.[20]
(emphasis supplied)
This was further explained in Casil v. CA,[21] where we ruled:
The Court of Appeals held that there can be no res
adjudicata because there is no identity of causes of action
between the two cases. We do not agree. In the two cases,
both petitioner and private respondent brought to fore the
validity of the agreement dated May 4, 1994. Private
respondent raised this point as an affirmative defense in
her answer in the First Case. She brought it up again in her
complaint in the Second Case. A single issue cannot be
litigated in more than one forum. As held in Mendiola vs.
Court of Appeals:
The similarity between the two causes of
action is only too glaring. The test of
identity of causes of action lies not in the
form of an action but on whether the
same evidence would support and
establish the former and the present
causes of action. The difference of actions
in the aforesaid cases is of no moment. In
Civil Case No. 58713, the action is to
enjoin PNB from foreclosing petitioner's
properties, while in Civil Case No. 60012,
the action is one to annul the auction sale
over the foreclosed properties of
petitioner based on the same
grounds. Notwithstanding a difference in
the forms of the two actions, the doctrine
of res judicata still applies considering
that the parties were litigating for the
same thing, i.e. lands covered by TCT No.
27307, and more importantly, the same
contentions and evidence as advanced by
herein petitioner in this case were in fact
used to support the former cause of
action.[22]
The CA was then correct in ordering the dismissal of the complaint in
Civil Case No. 797-C for violation of the rule against forum shopping. The
issue on the validity of the subject deeds of absolute sale can best be
addressed in the action for rescission, as against the case for injunction
filed by Spouses Medado. In a line of cases, we have set the relevant SO ORDERED.
factors that
courts must consider when they have to determine which case should be
dismissed, given the pendency of two actions, to wit:

(1) the date of filing, with preference generally given to the

first action filed to be retained;

(2) whether the action sought to be dismissed was filed merely

to preempt the latter action or to anticipate its filing and lay
the basis for its dismissal; and

(3) whether the action is the appropriate vehicle for litigating

the issues between the parties.[23]

We emphasize that the rules on forum shopping are meant to prevent such
eventualities as conflicting final decisions. [24] This Court has consistently
held that the costly consequence of forum shopping should remind the
parties to ever be mindful against abusing court processes. [25] In addition,
the principle of res judicata requires that stability be accorded to
judgments. Controversies once decided on the merits shall remain in
repose for there should be an end to litigation which, without the doctrine,
would be endless.[26]

Given the foregoing grounds already warranting the denial of this petition,
we deem it no longer necessary to take any action or to now rule on the
issue of the non-joinder of the petitioner's husband in the petition.

WHEREFORE, premises considered, the instant petition for review

on certiorari is hereby DENIED. Accordingly, the Court of Appeals
Decision dated September 26, 2008, which reversed and set aside the order
of the Regional Trial Court, Branch 60, Cadiz City, dated March 09, 2007,
is perforce AFFIRMED.
EN BANC This is a petition for review under Rule 45 of the Rules of Court
assailing the decision[2] dated December 20, 2005 and resolution dated
COMMISSION ON G.R. No. 172623 April 27, 2005 rendered by the Court of Appeals (CA) in CA-G.R. SP No.
APPOINTMENTS, 90360.
represented herein by its
Secretary HON. ARTURO Present: The facts are undisputed.
L. TIU,
Petitioner, PUNO, C.J., Respondent Celso M. Paler was a Supervising Legislative Staff
CARPIO, Officer II (SG-24)[3] with the Technical Support Service of the
CORONA, Commission on Appointments.[4] On April 8, 2003, he submitted a request
CARPIO for vacation leave for 74 working days from August 1, 2003 to November
MORALES, 14, 2003.[5] In a memorandum dated April 22, 2003, Ramon C. Nghuatco,
VELASCO, JR., Director III of Technical Support Service, submitted to the Commission
NACHURA,* Secretary his comments/recommendation on Paler's application:
- v e r s u s - LEONARDO-DE CASTRO,
BRION, 1. The request to go on leave of Mr. Paler is contingent
PERALTA,** upon the completion of his various Committee
BERSAMIN, assignments.
DEL CASTILLO, 2. We have already acted favorably on his Leave
ABAD, Applications for 09 June 2003 - 30 July 2003, which
VILLARAMA, JR., may already cover his reasons enumerated under
PEREZ and items 1-5.
MENDOZA, JJ. 3. Mr. Paler's Sick Leave Application shall require a
CELSO M. PALER,[1] medical certificate from the attending physician
Respondent. Promulgated: advising him of the need to undergo medical operation
and the treatment and recuperation period therefor.
Mr. Paler's Application for Leave may be acted
March 3, 2010 upon depending on the completion of his work load
x-------------------------------------------------- and submission of the medical certificate.
[6]
(Emphasis supplied)
x

DECISION Since he already had an approved leave from June 9 to July 30,
2003, Paler left for the United States on June 8, 2003, without verifying
CORONA, J.:
whether his application for leave (for August 1 November 14, 2003) was Since Paler had in the meantime already reached the compulsory
approved or denied. age of retirement on July 28, 2005 and was no longer entitled to
reinstatement, the CA affirmed with modification CSC resolution 04-1214
In a letter dated September 16, 2003, the Commission Chairman informed dated November 9, 2004 and resolution No. 050833 dated June 23, 2005.
Paler that he was being dropped from the roll of employees effective said The dispositive portion of the assailed decision dated December 20, 2005
date, due to his continuous 30-day absence without leave and in provided:
accordance with Section 63, Civil Service Commission (CSC)
Memorandum Circular No. 14, s. 1999. [7] Paler's son received the letter on WHEREFORE, the assailed Resolutions of the Civil
September 23, 2003.[8] Service Commission are AFFIRMED with the
MODIFICATION that the order of reinstatement is
Paler moved for reconsideration but this was denied on February 20, 2004, DELETED. In lieu thereof, Paler should be awarded
on the ground that it was filed beyond the 15-day reglementary period. backwages, retirement benefits and other privileges that
[9]
The denial was received by Paler's son on March 18, 2004. accrued to him from the time of his dismissal up to the
date of his retirement.
On appeal, the CSC reversed and set aside the Commission SO ORDERED.[12]
Chairman's decision dated September 16, 2003 per resolution 04-1214
dated November 9, 2004.[10] The dispositive portion of the resolution read:
Petitioner filed a motion for reconsideration but this was denied by the CA
WHEREFORE, the appeal of Celso M. Paler is hereby in the assailed resolution dated April 27, 2005.
GRANTED. Accordingly, the decision dated September
16, 2003 of Commission on Appointments Chairman Hence, this petition based on the following grounds:
Franklin M. Drilon dropping Celso M. Paler from the
rolls; and the decision dated February 20, 2004 denying A. THE HONORABLE COURT OF APPEALS
his motion for reconsideration are REVERSED and SET GRAVELY ERRED IN GIVING DUE COURSE TO
ASIDE. It is directed that Celso M. Paler be immediately THE APPEAL OF RESPONDENT PALER WITH
reinstated as Committee Secretary of the Commission on THE RESPONDENT CIVIL SERVICE
Appointments and shall be considered to be on leave with COMMISSION DESPITE THE FACT THAT IT
pay until the exhaustion of his vacation leave credits. WAS FILED OUT OF TIME.
Quezon City, Nov. 09, 2004.[11] B. THE HONORABLE COURT OF APPEALS
The Commission filed a motion for reconsideration but this was GRAVELY ERRED IN HOLDING THAT THE
denied by the CSC per resolution No. 050833 dated June 23, 2005. LEAVE APPLICATIONS OF RESPONDENT
PALER WAS DEEMED APPROVED ON A
This constrained petitioner to file with the CA a petition for review under MISTAKEN INTERPRETATION OF SEC. 49,
Rule 43 of the Rules of Court. RULE XVI OF THE OMNIBUS RULE ON LEAVE
AS AMENDED.[13]
Petitioner's contentions are basically the same as those it presented to the
CSC[14] and the CA,[15] viz.: (1) the CSC should not have entertained Paler's
appeal since it was filed beyond the 15-day reglementary period; there
were no meritorious reasons to relax the procedural rules, specially since
there was bad faith and misrepresentation on Paler's part in filing
staggered applications for leave; (2) the Commission Chairman's decision
to drop Paler from the roll of employees was in accord with Section 63 of
CSC Memorandum Circular No. 14, series of 1999 and (3) Paler's
application for leave was not deemed approved as petitioner acted on his
application by holding it in abeyance in view of the contingencies of his
work and the submission of a medical certificate. [16]
In his comment, Paler, aside from arguing that the CA did not commit any
error in sustaining the CSC resolutions, also assails Atty. Arturo L. Tiu's
authority to file the petition and sign the verification and certification of
non-forum shopping on behalf of the Commission Chairman.[17]
The CSC, represented by the Office of the Solicitor General (OSG),
maintains the correctness of the CSC and CA judgments.
ISSUES
This petition involves both procedural and substantive issues.
On the procedural aspect, Paler questions the authority of the
Commission Secretary to file the petition and sign the verification and
certification of non-forum shopping in behalf of the Commission
Chairman. On the other hand, the Commission disputes the CSC's grant of
Paler's appeal despite having been filed beyond the reglementary period.
On the substantive aspect, was Paler's application for leave
deemed approved within the purview of Section 49, Rule XVI of the
Omnibus Rules on Leave?
AUTHORITY TO FILE
PETITION
First, we tackle Atty. Tiu's authority to file the petition and sign the
verification and certification of non-forum shopping.
The petitioner in this case is the Commission on Appointments, a
government entity created by the Constitution, and headed by its
Chairman.[18] There was no need for the Chairman himself to sign the
verification. Its representative, lawyer or any person who personally
knew the truth of the facts alleged in the petition could sign
the verification.[19] With regard, however, to the certification of non-
forum shopping, the established rule is that it must be executed by the
plaintiff or any of the principal parties and not by counsel.[20] In this case,
Atty. Tiu failed to show that he was specifically authorized by the
Chairman to sign the certification of non-forum shopping, much less file
the petition in his behalf. There is nothing on record to prove such
authority. Atty. Tiu did not even bother to controvert Palers allegation of
his lack of authority. This renders the petition dismissible. [21]
Furthermore, the petition is bereft of merit as it merely restates the
arguments presented before the CSC and CA. It does not advance any
cogent reason that will convince this Court to deviate from the rulings of
both tribunals.
THE ISSUE OF LATE FILING
Section 72 of CSC Memorandum Circular No. 19, s. 1999,
[22]
provides for the period of appeal for non-disciplinary actions, to wit:
 Section 72. When and Where to File. - A decision or ruling be strictly observed. This principle was
of a department or agency may be appealed within fifteen explained by in the case of Mauna vs. CSC, 232
(15) days from receipt thereof by the party adversely SCRA 388, where the Supreme Court ruled, to
affected to the Civil Service Regional Office and finally, wit:
to the Commission Proper within the same period.
xxx Assuming for the sake of
argument that the petitioners
appeal was filed out of time, it is
Paler's son received the letter from the Commission Chairman denying within the power of this Court
Palers motion for reconsideration on March 18, 2004. Thus, Palers had to temper rigid rules in favor of
until April 2, 2004 within which to file his appeal with the CSC. It was substantial justice. While it is
filed, however, only on April 5, 2004.[23] Nevertheless, the CSC entertained desirable that the Rules of
the appeal in the interest of substantial justice. [24] Court be faithfully and even
meticulously observed, courts
We agree with the CSC. We uphold its decision to relax the should not be so strict about
procedural rules because Paler's appeal was meritorious. This is not the procedural lapses that do not
first time that the Court has upheld such exercise of discretion. In Rosales, really impair the proper
Jr. v. Mijares[25] involving Section 49(a) of the CSC Revised Rules of administration of justice. If the
Procedure, the Court ruled: rules are intended to ensure the
orderly conduct of litigation, it
On the contention of the petitioner that the appeal of the is because of the higher
respondent to the CSC was made beyond the period objective they seek which is the
therefor under Section 49(a) of the CSC Revised Rules of protection of substantive rights
Procedure, the CSC correctly ruled that: of the parties. As held by the
Movant claims that Mijares appeal was filed Court in a number of cases:
way beyond the reglementary period for xxx
filing appeals. He, thus, contends that the
Commission should not have given due course It bears stressing that the case before the CSC involves the
to said appeal. security of tenure of a public officer sacrosanctly
The Commission need not delve much on the protected by the Constitution. Public interest requires a
dates when Mijares was separated from the resolution of the merits of the appeal instead of dismissing
service and when he assailed his the same based on a strained and inordinate application of
separation. Suffice it to state that the Section 49(a) of the CSC Revised Rules of Procedure.
[26]
Commission found his appeal meritorious. (Emphasis supplied)
This being the case, procedural rules need not

Constantino-David v. Pangandaman-Gania[27] likewise sustained the CSC
when it modified an otherwise final and executory resolution and awarded
backwages to the respondent, in the interest of justice and fair play. The
Court stated
No doubt, the Civil Service Commission was in the
legitimate exercise of its mandate under Sec. 3, Rule I, of
the Revised Uniform Rules on Administrative Cases in the
Civil Service that [a]dministrative investigations shall be
conducted without necessarily adhering strictly to the
technical rules of procedure and evidence applicable to
judicial proceedings. This authority is consistent with its
powers and functions to [p]rescribe, amend and enforce
rules and regulations for carrying into effect the provisions
of the Civil Service Law and other pertinent laws being
the central personnel agency of the Government.
Furthermore, there are special circumstances in
accordance with the tenets of justice and fair play that
warrant such liberal attitude on the part of the CSC and a
compassionate like-minded discernment by this Court. x x
x[28]
When substantial justice dictates it, procedural rules may be relaxed in
order to arrive at a just disposition of a case. The purpose behind limiting
the period of appeal is to avoid unreasonable delay in the administration of
justice and to put an end to controversies. A one-day delay, as in this case,
does not justify denial of the appeal where there is absolutely no indication
of intent to delay justice on the part of Paler [29] and the pleading is
meritorious on its face.
Petitioner harps on Paler's alleged bad faith and misrepresentation in filing
his previous applications for leave. However, as correctly found by the
CSC and CA, the basis for Paler's dismissal was his continuous absence
without leave, not bad faith and misrepresentation. The CSC even noted
that Paler never misrepresented or misled petitioner as to where he was
spending his vacation leave. He clearly stated in his application for leave
dated April 17, 2003 that he was spending it not only in the Philippines but
also in the U.S.[30] According to the CA, to utilize Paler's alleged
misrepresentation in his previously approved applications for leave as
basis for his separation from work, even in the absence of opportunity for
him to controvert the matter, would constitute a violation of the
fundamental requirements of fairness and equity and the constitutional
guarantee of due process.[31] The Court finds no reason to deviate from the
findings of both the CSC and CA, given that they concur with each other
and should be accorded great weight and respect. [32]
The CSC and CA were also correct in ruling that Paler could not be
considered absent without leave (AWOL) for the period of August 1, 2003
to November 14, 2003.
Paler was dropped from the roll of employees pursuant to Section 63, Rule
XVI of the Omnibus Rules on Leave:
An official or an employee who is continuously
absent without approved leave for at least thirty (30)
calendar days shall be considered on absence without
official leave (AWOL) and shall be separated from the
service or dropped from the rolls without prior notice. He
shall, however, be informed, at his address appearing on
his 201 files of his separation from the service, not later
than five (5) days from its effectivity. (Emphasis and
underscoring supplied)
AWOL means that the employee has left or abandoned his post for a
continuous period of thirty (30) calendar days or more without any
justifiable reason and notice to his employer.[33]
The bone of contention in this case is whether or not Paler had an
approved leave.
Section 49, Rule XVI of the Omnibus Rules on Leave requires that an
application for leave should be acted upon within 5 working days from
receipt, otherwise, such application is deemed approved. [34] The CSC
interpreted said provision in this wise
It is explicit from the aforequoted rule that an application
for leave of absence which had not been acted upon either
by approving or disapproving by the head of agency or
his/her authorized representative within five (5) working
days from the date of its filing shall be deemed approved.
[35]
(Italics supplied)
The CSC also ruled that Section 49 calls for a specific action to be done by
the head of the agency or his duly authorized representative on the
application for leave filed which is either to approve or to deny the same.
[36]
Being the central agency mandated to prescribe, amend, and enforce rules
and regulations for carrying into effect the provisions of the Civil Service
Law and other pertinent laws, the CSC has the power to interpret its own
rules and any phrase contained in them, with its interpretation significantly
becoming part of the rules themselves.[37] The Court has consistently
yielded and accorded great respect to the interpretation by
administrative agencies of their own rules unless there is an error of law,
abuse of power, lack of jurisdiction or grave abuse of discretion clearly
conflicting with the letter and spirit of the law.[38]
The CA added its own reading of Section 49 which the Court now
sustains:
x x x The action contemplated therein connotes a clear and
explicit exercise of discretion. It pertains to an absolute
and unequivocal approval or disapproval of the request for
leave and not one which is merely recommendatory in
nature. If the rule were otherwise, the authority to act on
the application for leave would not have been vested on
the head of the agency or the CA [Commission on
Appointments] Chairman's authorized
representative. Needless to state, the purpose of the
provision is for the applicant to be immediately informed
of the status of his application, whether it has been
approved or denied, so that he can act accordingly. x x x [39]
Clearly, Atty. Nghuatco's memorandum did not cover the action
contemplated by Section 49. For one, it did not bear the imprimatur of the
Commission Chairman (or his duly authorized representative) who was the
proper party to grant or deny the application, as dictated by Section 52 of
the Omnibus Rules on Leave.[40] For another, it only submitted to the
Commission Secretary Atty. Nghuatco's comments and/or
recommendations on Paler's application. It was merely preliminary and did
not propose any definitive action (i.e., approval or disapproval) on Paler's
application, and simply recommended what action to take. It was
obviously not controlling and the Chairman could have agreed or
disagreed with the recommended action. In fact, the memorandum clearly
provided that Paler's request was still to be referred to the Legal Service
for comment,[41] and that the application (could) be acted upon depending
on the completion of his work load and submission of the medical
certificate.[42] These circumstances plainly meant that further action was
yet to be made on the application. And since there was no final approval or
disapproval of Paler's application within 5 working days from receipt as
required by Section 49, the application was deemed approved. Paler,
therefore, could not be considered on AWOL.
All told, the CA committed no error in affirming, with modification, CSC
Resolution Nos. 04-1214 dated November 9, 2004 and 050833 dated June
23, 2005.
WHEREFORE, the petition is DENIED.

No costs.

SO ORDERED.

SECOND DIVISION

[G.R. No. 117434. February 9, 2001]

BENGUET EXPLORATION, INC., petitioner, vs. COURT OF

APPEALS, SWITZERLAND GENERAL INSURANCE, CO.,
LTD., and SEAWOOD SHIPPING, INC., respondents.
 DECISION
MENDOZA, J.:
This is a petition for review on certiorari of the decision, dated June
30, 1994, and resolution, dated September 29, 1994, of the Court of
Appeals[1] which affirmed the decision of the Regional Trial Court, Branch
149, Makati, dismissing the complaints filed by petitioner against herein
private respondents, and denied petitioners motion for reconsideration,
respectively.
The background of this case is as follows:
On November 29, 1985, petitioner Benguet Exploration, Inc.
(Benguet) filed a complaint for damages against Seawood Shipping, Inc.
(Seawood Shipping) with the Regional Trial Court of Makati, which was
docketed as Civil Case No. 12394 and assigned to Branch 149. [2] On
March 4, 1986, petitioner Benguet filed another complaint for damages
against respondent Switzerland General Insurance, Co., Ltd. (Switzerland
Insurance), which was docketed as Civil Case No. 13085 [3] and assigned to
Branch 148 of the court.
The two cases were consolidated. Switzerland Insurance filed a third-
party complaint against Seawood Shipping, praying that the latter be
ordered to indemnify it for whatever might be adjudged against it in favor
of petitioner.[4] Thereafter, the cases were jointly tried, during which
petitioner Benguet presented its employees, Rogelio Lumibao and Ernesto
Cayabyab, as witnesses.
Rogelio Lumibao, marketing assistant of Benguet, was in charge of
exportation. His responsibilities included the documentation of export
products, presentations with banks, and other duties connected with the
export of products. He explained that private respondent Seawood
Shipping was chartered by petitioner Benguet to transport copper
concentrates. The bill of lading (Exh. A) stated that the cargo, consisting of
2,243.496 wet metric tons of copper concentrates, was loaded on
board Sangkulirang No. 3 at Poro Point, San Fernando, La Union. It was
insured by Switzerland Insurance (marine insurance policy was marked
Exh. C). When the cargo was unloaded in Japan, however, Rogelio
Lumibao received a report (Exh. B), dated August 19, 1985, from a
surveyor in Japan stating that the cargo was 355 metric tons short of the
amount stated in the bill of lading. For this reason, petitioner Benguet
made a claim of the loss to Seawood Shipping and Switzerland Insurance.
In its letter, dated August 21, 1985 (Exh. D), petitioner Benguet made a
formal demand for the value of the alleged shortage. As both Seawood
Shipping and Switzerland Insurance refused the demand, petitioner
Benguet brought these cases against Seawood Shipping and Switzerland
Insurance.[5]
On cross-examination, Lumibao admitted that he did not see the
actual loading of the cargo at Poro Point and that his knowledge was
limited to what was contained in the bill of lading which he received about
two days after the loading.Lumibao testified that at Camp 6, Kennon
Road, Baguio, the copper concentrates were weighed prior to being
transported to Poro Point, where they were once more weighed before
being loaded on the vessel. But again he admitted that he had not seen the
actual weighing and loading of the copper concentrates because he was not
the one in charge of the operation. Nor was he in Japan when the cargo
was unloaded. He also did not know how to perform the procedure for
weighing cargo. Thus, he could not determine the truth or falsity of the
contents of the draft survey. He only knew that there was in fact a shortage
based on his reading of the draft report. [6] Further, Lumibao testified that,
although he prepared the export declaration, he did not prepare the bill of
lading. The bill of lading was made on the basis of the draft survey
conducted by the Overseas Merchandise Inspection Co., Ltd. or OMIC.
[7]
Some other person undertook the weighing of the cargo, and Lumibao
was only informed by telephone of the cargos weight during its loading
and unloading.
Lumibao had nothing to do with the preparation of the bill of lading,
the weighing of the copper concentrates, and the shipment of the cargo. He
did not accompany the trucks which transferred the cargo from Baguio to
Poro Point. He was not on the ship when the cargo was loaded at Poro
Point. Nor did he know if spillage occurred during the loading or
unloading of the copper concentrates.
Lumibao said that the buyer of the copper concentrates was the
Brandeis Intsel Co., Inc. Upon receipt of the cargo, Brandeis Intsel Co.,
Inc. paid for the cargo based on its weight in dry metric tons, or 90 percent
more or less of the price of 2,243.496 tons, the weight of the cargo in wet
metric tons. With regard to the insurance policy, he testified that petitioner
Benguet made no objection to any of the terms stated on the face of the
policy.[8]
Ernesto Cayabyab next testified for petitioner. He had been with
Benguet for 13 years and, at the time of his testimony, he was secretary of
Nil Alejandre, manager of Benguet. According to Cayabyab, on July 28,
1985, he was sent to the warehouse (bodega) at Poro Point, La Union to
assist in the loading of the copper concentrates. These copper concentrates
were to be loaded on the ship Sangkulirang No. 3. Cayabyab said he was
present when the cargo was loaded on the ship, as evidenced by the
Certificate of Loading (Exh. E), Certificate of Weight (Exh. F), and the
Mates Receipt (Exh. G), all dated July 28, 1985. According to Cayabyab,
the Marine Surveyor and the Chief Mate would go around the boat to
determine how much was loaded on the ship. Cayabyab stated that he saw
petitioner Benguets representative and his immediate superior, Mr.
Alejandre, and the Inspector of Customs, Mr. Cardenas, sign the
Certificate of Weight. Cayabyab also witnessed the ship captain sign the
Certificate of Weight,[9] which stated therein that 2,243.496 wet metric tons
of copper concentrates were loaded on the ship. [10] Cayabyab likewise
confirmed the authenticity of the Mates Receipt, saying that he witnessed
the Chief Mate sign the document.[11]
When cross-examined, Cayabyab said that, as a secretary, his duties
included computing the companys daily main production in the mine site
and accompanying his superior, Mr. Alejandre, during shipments. He
explained that the copper concentrates were transported by dump trucks
from the mining site to Poro Point for over a month, possibly even three to
six months. Cayabyab went to Poro Point on July 27, 1985 to witness the
loading of the copper concentrates on the vessel Sangkulirang No. 3. But
the copper concentrates had already been delivered and stored in
a bodega when he arrived. These concentrates were placed on the
cemented ground inside the bodega after their weight was
recorded. Describing the procedure for weighing, he said that the trucks,
without the copper concentrates, were weighed. Then, after they had been
loaded with copper concentrates, the trucks were placed in the bodega and
weighed again. To determine the weight of the copper concentrates, the
weight of the trucks was deducted from the weight of the trucks loaded
with copper concentrates. The copper concentrates were then loaded on the
ship by means of a conveyor at the average rate of 400 tons an
hour.Cayabyab did not know, however, how many trucks were used to load
the entire cargo of the copper concentrates nor did he know exactly how
many hours were spent loading the copper concentrates to the ship. He
could only remember that he reported for work in the morning and that he
worked overtime because he had to wait until the loading of the cargo was
finished before he could leave. During the loading, he moved from place
to place, and his attention was sometimes distracted. Thus, he could not
tell with certainty that no spillage took place during the loading. The figure
of 2,243.496 wet metric tons was computed by the Marine Surveyor and
the Chief Mate.[12]
Respondent Switzerland Insurance then presented its evidence. Three
witnesses, Eduardo Pantoja, Anastacio Fabian, and Edgardo Dio, testified
for it.
Eduardo Pantoja, assistant branch manager of respondent Switzerland
Insurance in the Philippines, testified that he prepared the data and
conditions of the marine insurance policy of petitioner Benguet using
information furnished by the latter, although some of the conditions
attached to the policy were conditions Switzerland Insurance attached to
all the marine policies issued by it. Pantoja stated that the figure of
2,243.496 wet metric tons contained in the policy of Benguet was taken
from the latters declaration. Switzerland Insurance relied on the value of
the cargo declared by the insured on the basis of the principle
of uberrimae fidei, i.e., the insured must act in the utmost good faith.
[13]
One of the conditions set forth in the marine policy (Exh. 8) was that
the [w]arranted vessel is equipped with steel centerline bulk head.
According to Pantoja, this condition was specifically included in the
policy because the nature of the cargo warranted the same, and
Switzerland Insurance would not have accepted the policy had such
condition not been attached. The purpose of the centerline bulkhead was to
prevent the copper concentrates from shifting while being transported on
the ship. Upon verification by Certified Adjusters, Inc., adjusters of
Switzerland Insurance, it was found that the vessel Sangkulirang No. 3 did
not have a steel centerline bulkhead. Pantoja identified a letter, dated
February 13, 1986, sent by his company to petitioner Benguet canceling its
insurance contract because the carrying vessel was not equipped with a
steel centerline bulkhead as warranted under the policy (Exh. 7-a).
Enclosed was Check No. HSBC 419463 for P98,174.43 representing the
refund by Switzerland Insurance of the premium payments, documentary
stamps, and premium taxes paid by petitioner Benguet (Exh. 7). He
testified that Switzerland Insurance paid its legal counsel P40,000.00 as
attorneys fees plus appearance fees.[14]
On cross-examination, Pantoja explained that the company had its
own system of determining various rates of insurance. Several factors were
taken into consideration, such as the nature of the goods, the manner by
which they were packed, and the destination of the cargo. For example,
Switzerland Insurance would anticipate pilferages if the cargo involved
household goods or, in the case of chemicals, it would consider the
possibility of spillage. Pantoja, however, stated that he did not make any
investigation in this case but used only his previous experience and project
knowledge in dealing with similar cases. He admitted that Switzerland
Insurance checked whether the ship had a steel centerline bulkhead only
after a claim had been made by petitioner Benguet. He explained,
however, that it was impossible for them to make the investigation before
the execution of the marine policy because they had only one day to check
whether the ship had a steel centerline bulkhead and the ship at that time
was not in Manila but in Poro Point. He reiterated that good faith dealing
with the insured included relying on the truth of the latters
representations. There was little risk involved in relying on the insureds
representations because the company would not have accepted the risk if it
found that the conditions in the policy had not been complied with.
Switzerland Insurance refused Benguets demand because non-compliance
with the condition that the ship be equipped with a steel centerline
bulkhead rendered the marine insurance policy null and void from the
beginning. This is why Switzerland Insurance refunded the premium paid
by petitioner Benguet. Pantoja stated that petitioner Benguet did not claim
that the loss was caused by the shipping of the cargo because it did not
know the cause of the shortage.[15]
Another witness for Switzerland Insurance was Anastacio Fabian, the
marine manager of Certified Adjusters, Inc. He testified that he went to
Poro Point where the shipment was loaded for transport to Japan. It took
him almost two months to finish his investigation and to come up with a
written report (Exh. 12). He prepared a letter, dated January 31, 1986,
seeking a certification from Capt. Jae Jang of Sangkulirang No. 3 on
whether the ship was equipped with a steel centerline bulkhead (Exh.
5). In response thereto, respondent Seawood Shipping sent a letter, dated
February 1, 1986, stating therein that the vessel was not equipped with a
steel centerline bulkhead (Exh. 6). This steel centerline bulkhead was a
steel separation of a vessel for the purpose of preventing the vessel from
sinking, especially in heavy weather. Pictures of the ship were taken by
Wise Insurance showing that the vessel did not have a steel centerline
bulkhead (Exhs. 15 to 15-H).
Fabian also identified petitioner Benguets export declaration (Exh.
11) which provides therein that the cargo loaded on the ship weighed 2,050
wet metric tons or 1,845 dry metric tons.[16] On further direct examination,
he testified that Certified Adjusters, Inc.s president, Mr. Edgardo Dio,
wrote a letter, dated January 13, 1986, to the shipping company inquiring
as to the circumstances surrounding the loss of the cargo (Exh.
17). Seawood Shipping responded to Certified Adjusters, Inc. in a letter,
dated January 16, 1986, explaining that the weight of the cargo might have
been increased by the rains which occurred during the loading, and that the
shortage upon unloading might be due to the moisture which evaporated
during the voyage from the Philippines to Japan. Fabian testified that the
moisture on the copper concentrates increased the weight of the cargo.
Fabian said that during his investigation he asked how and when the
shipment was loaded in the vessel and where it was loaded. He also
checked records of the loading of the cargo. Although he admitted that the
records show that a shortage of the copper concentrates had occurred when
these reached Japan, he attributed it to the rains which occurred during the
loading of the copper concentrates which increased their weight, although
he conceded that it was not possible that the rains would cause a shortage
of around 300 metric tons. He did not know what could have caused the
shortage.[17]
The last witness to testify for the defense was Edgardo Dio, president
and general manager of Certified Adjusters, Inc. He testified that his
company conducted an investigation and found that the
vessel Sangkulirang No. 3 was not equipped with a steel centerline
bulkhead. The main function of the steel centerline bulkhead was to
prevent shifting of the copper concentrates during transport. If there was
no steel centerline bulkhead, the vessel was liable to sink. He stated that
the ship had two holds, one of which was loaded with petitioner Benguets
copper concentrates and the other with a Lepanto shipment. Dio identified
photographs showing that only a wooden partition separated the two
cargoes on both holds (Exhs. 15-A to 15-G). He testified that his company
wrote a letter to the shipping company inquiring about the shortage which
occurred on petitioner Benguets copper concentrates. He expressed doubt
that the loss of moisture of the copper concentrates caused the shortage
because these were actually mixed with some water to keep them from
heating up or to prevent spontaneous combustion. According to Dio, it was
possible that some shifting of the cargo occurred as indicated by the
photographs of the ship.[18]

Based on the evidence presented, the trial court rendered its decision
on July 2, 1990 dismissing petitioners complaint as well as Switzerland
Insurances third-party complaint against Seawood Shipping.
On appeal, its decision was affirmed by the Court of Appeals.
[19]
Petitioner Benguet moved for reconsideration, but its motion was
denied.[20] Hence this petition.
Petitioner Benguet contends that the Court of Appeals gravely erred
in ruling that it failed to establish the loss or shortage of the subject cargo
because such loss was sufficiently established by documentary and
testimonial evidence, as well as the admissions of private respondents.
[21]
Petitioner argues that documents regarding the tonnage of the copper
concentrates have been properly identified and that the bill of lading (Exh.
A), the Certificate of Weight (Exh. F), and the Mates Receipt (Exh. G), all
of which stated that 2,243.496 wet metric tons of copper concentrates were
loaded on the ship, create a prima facie presumption that such amount was
indeed what was loaded on the vessel. Petitioner asserts that the Draft
Survey Report of OMIC (Exh. B) was sufficient evidence to prove that the
cargo which arrived in Japan had a shortage of 355 wet metric tons.
We find petitioners contentions to be without merit.
First. It is settled that only questions of law may be raised on appeal
by certiorari under Rule 45. The trial court, having heard the witnesses and
observed their demeanor and manner of testifying, is in a better position to
decide the question of their credibility. Hence, unless the factual findings
complained of are not supported by the evidence on record or the assailed
judgment is based on a misapprehension of facts, the findings of the trial
court must be accorded the highest respect, even finality, by this Court.
[22]
It is noteworthy that the Court of Appeals made the same factual
findings as did the trial court.[23]
Contrary to this rule, petitioner is raising questions of facts as it seeks
an evaluation of the evidence presented by the parties. However, we find
no basis for concluding that both the trial court and the Court of Appeals
misappreciated the evidence in this case. To the contrary, we find that
petitioner failed to present evidence to prove that the weight of the copper
concentrates actually loaded on the ship Sangkulirang No. 3 was 2,243.496
wet metric tons and that there was a shortage of 355 metric tons when the
cargo was discharged in Japan.
Petitioners own witness, Rogelio Lumibao, admitted that he was not
present at the actual loading of the cargo at Poro Point, his information
being limited to what was contained in the bill of lading. As he was not in
charge of the operation, he did not see the actual weighing and loading of
the copper concentrates. Nor did he prepare the bill of lading. He only
verified the weight of the cargo, from the time it was loaded on the ship to
the time it was unloaded in Japan, through the telephone. Neither was he
present when the cargo was discharged in Japan. [24] Thus, Lumibao
testified:
Q Now Exhibit A is a bill of lading which you identified?
A Yes, sir.
Q Do you have anything to do in the preparation of this bill of lading?
A None, sir.
Q In other words, you did not verify if the weight stated in the bill of
lading was the actual weight of the copper concentrate loaded in
the ship of the defendant Seawood Shipping Inc.?
....
A The bill of lading is prepared on the basis of the draft survey. That is
the procedure.
Q And who undertakes the draft survey?
A For that particular shipment we required or hired the services of
OMIC.
Q In the Bill of Lading, you identified this document a xerox copy of
the supposed original Bill of Lading and marked as Exh. A, are the
wordings and figures copper concentrate 2,243.496 WMT this
means weight per metric ton?
A Yes, sir.
Q Did you have it [verified] if this was the actual weight loaded on the
ship of the defendant Seawood, Shipping, Inc.?
A We were advised by the OMIC surveyor that the weight was loaded.
Q Did you personally verify if these figures are true?

Q In other words, your draft survey is from the point of origin to Poro A Yes, by phone.
Point up to the point of destination, Onahama, Japan, was done by
OMIC? Q Did you participate in weighing?

A Yes, sir. A No, sir. Just by phone.

Q And you have nothing to do with OMIC? Q In other words somebody else made the weighing not you?

A None, sir. A Yes, sir.

Q You are not an employee of OMIC? Q Did you personally do the verification of the actual weight loaded in
the ship?
A No, sir.
....
Q Are you connected with it in any way?
A Yes, sir by phone.
A No, sir.
Q So you are informed [of] the weight actually loaded by phone?
A Yes, sir.
Q Do you always verify by phone?
A That is only preliminary, while waiting what is the concluding
things. (sic) That is after the surveyor has submitted the report to
us.
Q So in other words, all the time you have been basing your testimony
on reports prepared by other person?
A Yes, sir.
Q In fact, you have nothing to do with the preparation of the Bill of
Lading?
A Yes, sir.
Q You have nothing to do with the weighing of the copper concentrate?
. . . . You have nothing to do [with] the transport of the copper
concentrate from Camp 6, Baguio to Poro Point?
A None, sir.
Q You did not even accompany the truck?
A No, sir.
Q You were not at the shipside when this copper concentrate was
loaded?
A No, sir.
Q You did not know whether there was spillage when or while loading
copper concentrates?
A Yes, sir.
Q Neither were you on the ship on its way to Japan, were you?
A No, sir.
Q You were not at Onahama, Japan, the port of destination?
A No, sir.[25]
On the other hand, Ernesto Cayabyab testified that he was at Poro
Point when the copper concentrates were being loaded on the
ship. Although he was present when the Certificate of Loading (Exh. E),
Certificate of Weight (Exh. F), and the Mates Receipt (Exh. G) were
signed at the loading site, [26] he admitted that he could not say for certain
that no spillage occurred during the loading of the cargo on the ship
because his attention was not on the cargo at all times. [27]
It is evident that petitioners witnesses had no personal knowledge of
the actual weight of copper concentrates loaded on the vessel and
discharged in Japan. Lumibao had no part in the preparation of the bill of
lading (Exh. A) and the Draft Survey Report prepared by OMIC (Exh.
B). Nor was he present when the copper concentrates were loaded on the
vessel or when the cargo was unloaded in Japan. He merely relied on the
declarations made by other persons that 2,243.496 wet metric tons were
indeed loaded on Sangkulirang No. 3 and that the cargo was short by 355
metric tons when unloaded in Japan. The same may be said of witness
Cayabyab. While present at the loading site and familiar with the
procedure followed in loading the cargo, he admitted that he could not
state for certain that no spillage occurred as his attention was not at all
times focused on the loading operation. Moreover, none of the documents
he identified, i.e., Certificate of Loading, Certificate of Weight, and Mates
Receipt, were signed by him. He only witnessed the signing of these
documents by other people. Hence, he was in no position to testify as to
the truth or falsity of the figures contained therein. The testimonies of
these witnesses were thus hearsay. It has been held:
Any evidence, whether oral or documentary, is hearsay if its probative
value is not based on the personal knowledge of the witness but on the
knowledge of another person who is not on the witness stand. Hearsay
evidence, whether objected to or not, has no probative value unless the
proponent can show that the evidence falls within the exceptions to the
hearsay evidence rule.[28]
Second. Petitioner contends that the genuineness and due execution of
the documents presented, i.e., Bill of Lading, Certificate of Loading,
Certificate of Weight, Mates Receipt, were properly established by the
testimony of its witness, Ernesto Cayabyab, and that as a result, there is a
prima facie presumption that their contents are true.
This contention has no merit. The admission of the due execution and
genuineness of a document simply means that the party whose signature it
bears admits that he signed it or that it was signed by another for him with
his authority; that at the time it was signed it was in words and figures
exactly as set out in the pleading of the party relying upon it; that the
document was delivered; and that any formal requisites required by law,
such as a seal, an acknowledgment, or revenue stamp, which it lacks, are
waived by him.[29] In another case, we held that When the law makes use
of the phrase genuineness and due execution of the instrument it means
nothing more than that the instrument is not spurious, counterfeit, or of
different import on its face from the one executed. [30] It is equally true,
however, that
Execution can only refer to the actual making and delivery, but it cannot
involve other matters without enlarging its meaning beyond reason. The
only object of the rule was to enable a plaintiff to make out a prima facie,
not a conclusive case, and it cannot preclude a defendant from introducing
any defense on the merits which does not contradict the execution of the
instrument introduced in evidence.[31]
In this case, respondents presented evidence which casts doubt on the
veracity of these documents. Respondent Switzerland Insurance presented
Export Declaration No. 1131/85 (Exh. 11) [32] which petitioners own
witness, Rogelio Lumibao, prepared,[33] in which it was stated that the
copper concentrates to be transported to Japan had a gross weight of only
2,050 wet metric tons or 1,845 dry metric tons, 10 percent more or less.
[34]
On the other hand, Certified Adjusters, Inc., to which Switzerland
Insurance had referred petitioners claim, prepared a report which showed
that a total of 2,451.630 wet metric tons of copper concentrates were
delivered at Poro Point.[35] As the report stated:
It is to be pointed out that there were no actual weighing made at Benguet
Exploration, Inc.s site. The procedure done was that after weighing the
trucks before and after unloading at Philex Poro Point Installation, the
weight of the load was determined and entered on Philex Trip Ticket
which was later on copied and entered by the truck driver on Benguet at the port of origin and that unloaded at the port of destination, in effect
Exploration, Inc.s Transfer Slip.[36] rebuts the presumption in favor of the figure indicated in the bill of lading.
[37]

Considering the discrepancies in the various documents showing the

actual amount of copper concentrates transported to Poro Point and loaded WHEREFORE, the decision of the Court of Appeals is AFFIRMED.
in the vessel, there is no evidence of the exact amount of copper
concentrates shipped. Thus, whatever presumption of regularity in the SO ORDERED.
transactions might have risen from the genuineness and due execution of
the Bill of Lading, Certificate of Weight, Certificate of Loading, and Mates Bellosillo, (Chairman), Quisumbing, Buena, and De Leon, Jr.,
Receipt was successfully rebutted by the evidence presented by respondent JJ., concur.
Switzerland Insurance which showed disparities in the actual weight of the
cargo transported to Poro Point and loaded on the vessel. This fact is
compounded by the admissions made by Lumibao and Cayabyab that they
had no personal knowledge of the actual amount of copper concentrates
loaded on the vessel. Correctly did the Court of Appeals rule:

In the face of these admissions, appellants claim of loss or shortage is

placed in serious doubt, there being no other way of verifying the accuracy
of the figures indicated in appellants documentary evidence that could
confirm the alleged loss of 355.736 MT. Notwithstanding the figure stated
in Bill of Lading No. PP/0-1 (Exhibit A) that 2,243.496 WMT of copper
concentrates was loaded by appellant at the port of origin, it should be
stressed that this is merely prima facie evidence of the receipt by the
carrier of said cargo as described in the bill of lading. Thus, it has been
held that recitals in the bill of lading as to the goods shipped raise only a
rebuttable presumption that such goods were delivered for shipment and as
between the consignor and a receiving carrier, the fact must outweigh the
recital (Saludo vs. Court of Appeals, 207 SCRA 498, 509
[1992]). Resultingly, the admissions elicited from appellants witnesses that
they could not confirm the accuracy of the figures indicated in their
documentary evidence with regard to the actual weight of the cargo loaded
 CALLEJO, SR., J.:

On March 13, 2001, Monark Equipment Corporation (MEC) filed a

Complaint[1] for a sum of money with damages against the Asian
Construction and Development Corporation (ACDC) with the Regional
Trial Court (RTC) of Quezon City. The complaint alleged the following:
ACDC leased Caterpillar generator sets and Amida mobile floodlighting
systems from MEC during the period of March 13 to July 15, 1998 but
failed, despite demands, to pay the rentals therefor in the total amount
of P4,313,935.00; from July 14 to August 25, 1998, various equipments
from MEC were, likewise, leased by ACDC for the latters power plant in
Mauban, Quezon, and that there was still a balance of P456,666.67; and
ACDC also purchased and took custody of various equipment parts from
MEC for the agreed price of P237,336.20 which, despite demands, ACDC
failed to pay.

MEC prayed that judgment be rendered in its favor, thus:

1. Ordering defendant to pay the plaintiff the total amount of FIVE

MILLION SEVENTY-ONE THOUSAND THREE HUNDRED THIRTY-
FIVE [PESOS] & 86/100 (P5,071,335.86);
SECOND DIVISION
2. Ordering defendant to pay the plaintiff legal interest of 12% per annum
[G.R. No. 160242. May 17, 2005] on the principal obligations in the total amount of FIVE MILLION
SEVENTY-ONE THOUSAND THREE HUNDRED THIRTY-FIVE
ASIAN CONSTRUCTION AND DEVELOPMENT [PESOS] & 86/100 (P5,071,335.86) computed from the date the
CORPORATION, petitioner, vs. COURT OF APPEALS and obligations became due until fully paid;
MONARK EQUIPMENT CORPORATION, respondents.
3. Ordering defendant to pay attorneys fees in the amount equivalent to
DECISION 15% of the amount of claim;
4. Ordering defendant to pay all costs of litigation.
Plaintiff prays for such other reliefs as may be just and equitable under the
premises.[2]
ACDC filed a motion to file and admit answer with third-party
complaint against Becthel Overseas Corporation (Becthel). In its answer,
ACDC admitted its indebtedness to MEC in the amount of P5,071,335.86
but alleged the following special and affirmative defenses:
5. Defendant has incurred an obligation with plaintiff, in the
amount of P5,071,335.86. But third-party defendant fails and
refuses to pay its overdue obligation in connection with the
leased equipment used by defendant to comply with its
contracted services;
6. The equipment covered by the lease were all used in the
construction project of Becthel in Mauban, Quezon, and Expo
in Pampanga and defendant was not yet paid of its services
that resulted to the non-payment of rentals on the leased
equipment.[3]
And by way of third-party complaint against Becthel as third-party
defendant, ACDC alleged that:
7. Third-party plaintiff repleads the foregoing allegations in the
preceding paragraphs as may be material and pertinent
hereto;
8. Third-party BECTHEL OVERSEAS CORPORATION (herein
called Becthel) is a corporation duly organized and existing
under the laws of the United States of America but may be
served with summons at Barangay Cagsiay I, Mauban,
Quezon 4330, Philippines;
9. Third-party defendant Becthel contracted the services of third-
party plaintiff to do construction work at its Mauban,
Quezon project using the leased equipment of plaintiff
Monark;
10. With the contracted work, third-party plaintiff rented the
equipment of the plaintiff Monark;
11. Third-party plaintiff rendered and complied with its
contracted works with third-party defendant using plaintiffs
(Monark) rented equipment. But, third-party defendant
BECTHEL did not pay for the services of third-party
plaintiff ASIAKONSTRUKT that resulted to the non-
payment of plaintiff Monarks claim;
12. Despite repeated demands, third-party defendant failed and
refused to pay its overdue obligation to third-party plaintiff
ASIAKONSTRUKT, and third-party defendant needs to be
impleaded in this case for contribution, indemnity,
subrogation or other reliefs to off-set or to pay the amount
of money claim of plaintiff Monark on the leased equipment
used in the Mauban, Quezon project in the total amount
of P456,666.67;
13. By reason thereof, third-party plaintiff was compelled to
prosecute its claim against third-party defendant and hired
 the services of undersigned counsel for an attorneys fees
of P500,000.00.[4]
ACDC prayed that judgment be rendered in its favor dismissing the
complaint and ordering the third-party defendant (Becthel) to
pay P456,666.67 plus interest thereon and attorneys fees. [5]
MEC opposed the motion of ACDC to file a third-party complaint
against Becthel on the ground that the defendant had already admitted its
principal obligation to MEC in the amount of P5,071,335.86; the
transaction between it and ACDC, on the one hand, and between ACDC
and Becthel, on the other, were independent transactions. Furthermore, the
allowance of the third-party complaint would result in undue delays in the
disposition of the case.[6]
MEC then filed a motion for summary judgment, alleging therein that
there was no genuine issue as to the obligation of ACDC to MEC in the
total amount of P5,071,335.86, the only issue for the trial courts resolution
being the amount of attorneys fees and costs of litigation. [7]
ACDC opposed the motion for summary judgment, alleging that there
was a genuine issue with respect to the amount of P5,071,335.86 being
claimed by MEC, and that it had a third-party complaint against Becthel in
connection with the reliefs sought against it which had to be litigated. [8]
In its reply, MEC alleged that the demand of ACDC in its special and
affirmative defenses partook of the nature of a negative pregnant, and that
there was a need for a hearing on its claim for damages.
On August 2, 2001, the trial court issued a Resolution denying the
motion of ACDC for leave to file a third-party complaint and granting the
motion of MEC, which the trial court considered as a motion for a
judgment on the pleadings. The fallo of the resolution reads:
ACCORDINGLY, this Court finds defendant Asian Construction and
Development Corporation liable to pay plaintiff Monark Equipment
Corporation and is hereby ordered to pay plaintiff the amount of FIVE
MILLION SEVENTY-ONE THOUSAND AND THREE HUNDRED
THIRTY-FIVE & 86/100 PESOS (P5,071,335.86) plus 12% interest from
the filing of the complaint until fully paid.
SO ORDERED.[9]
ACDC appealed the resolution to the Court of Appeals (CA), alleging
that
I. THE LOWER COURT ERRED IN DENYING THE
MOTION TO FILE AND ADMIT ANSWER WITH THIRD-
PARTY COMPLAINT;
II. THE LOWER COURT ERRED IN GRANTING THE
MOTION FOR SUMMARY JUDGMENT;
III. THE LOWER COURT ERRED WHEN IT DENIED THE
THIRD-PARTY COMPLAINT AND ORDERED
DEFENDANT TO PAY THE AMOUNT OF P5,071,335.86
PLUS INTEREST OF 12% PER ANNUM.[10]
On July 18, 2001, the CA rendered judgment dismissing the appeal
and affirming the assailed decision. The appellate court ruled that since
MEC had prayed for judgment on the pleadings, it thereby waived its
claim for damages other than the amount of P5,071,335.86; hence, there
was no longer a genuine issue to be resolved by the court which
necessitated trial. The appellate court sustained the disallowance of the
third-party complaint of ACDC against Becthel on the ground that the
transaction between the said parties did not arise out of the same
transaction on which MECs claim was based.
Its motion for reconsideration of the decision having been denied,
ACDC, now the petitioner, filed the present petition for review
on certiorari, and raises the following issues:
I. WHETHER OR NOT A THIRD-PARTY COMPLAINT IS
PROPER; AND
II. WHETHER OR NOT JUDGMENT ON THE PLEADINGS
IS PROPER.[11]
Citing the rulings of this Court in Allied Banking Corporation v.
Court of Appeals[12] and British Airways v. Court of Appeals,[13] the
petitioner avers that the CA erred in ruling that in denying its motion for
leave to file a third-party complaint, the RTC acted in accordance with the
Rules of Court and case law. The petitioner maintains that it raised genuine
issues in its answer; hence, it was improper for the trial court to render
judgment on the pleadings:
With due respect, the judgment on the pleadings affirmed by the Court of
Appeals is not, likewise, proper considering that the Answer with Third-
Party Complaint, although it admitted the obligation to respondent,
tendered an issue of whether the respondents claim is connected with the
third-party claim.
As alleged in the Answer with Third-Party Complaint, it is admitted then
by respondent, for purposes of judgment on the pleadings, that failure to
pay respondent was in connection of Becthel Overseas Corporations
failure to pay its obligation to petitioner and that the equipment leased was
used in connection with the Becthel Overseas Corporation project.
This tendered issue could not just be disregarded in the light of the third-
party complaint filed by herein petitioner and third-party plaintiff which,
as argued in the first discussion/argument, is proper and should have been
given due course.[14]
The petition is denied for lack of merit.
Section 11, Rule 6 of the Rules of Court provides:
Sec. 11. Third (fourth, etc.)-party complaint. A third (fourth, etc.) party
complaint is a claim that a defending party may, with leave of court, file
against a person not a party to the action, called the third (fourth, etc.)
party defendant, for contribution, indemnity, subrogation or any other
relief, in respect of his opponents claim.
Furthermore, Section 1, Rule 34 of the Rules of Court provides that
the Court may render judgment on the pleadings, as follows:
Section 1. Judgment on the pleadings. Where an answer fails to tender an
issue, or, otherwise, admits the material allegations of the adverse partys
pleading, the court may, on motion of that party, direct judgment on such
pleading. However, in actions for declaration of nullity or annulment of
marriage or for legal separation, the material facts alleged in the complaint
shall always be proved.
 The purpose of Section 11, Rule 6 of the Rules of Court is to permit a
defendant to assert an independent claim against a third-party which he,
otherwise, would assert in another action, thus preventing multiplicity of
suits. All the rights of the parties concerned would then be adjudicated in
one proceeding. This is a rule of procedure and does not create a
substantial right. Neither does it abridge, enlarge, or nullify the substantial
rights of any litigant.[15] This right to file a third-party complaint against a
third-party rests in the discretion of the trial court. The third-party
complaint is actually independent of, separate and distinct from the
plaintiffs complaint, such that were it not for the rule, it would have to be
filed separately from the original complaint. [16]
A prerequisite to the exercise of such right is that some substantive
basis for a third-party claim be found to exist, whether the basis be one of
indemnity, subrogation, contribution or other substantive right. [17] The
bringing of a third-party defendant is proper if he would be liable to the
plaintiff or to the defendant or both for all or part of the plaintiffs claim
against the original defendant, although the third-party defendants liability
arises out of another transaction. [18] The defendant may implead another as
third-party defendant (a) on an allegation of liability of the latter to the
defendant for contribution, indemnity, subrogation or any other relief; (b)
on the ground of direct liability of the third-party defendant to the plaintiff;
or (c) the liability of the third-party defendant to both the plaintiff and the
defendant.[19] There must be a causal connection between the claim of the
plaintiff in his complaint and a claim for contribution, indemnity or other
relief of the defendant against the third-party defendant. In Capayas v.
Court of First Instance,[20] the Court made out the following tests: (1)
whether it arises out of the same transaction on which the plaintiffs claim
is based; or whether the third-party claim, although arising out of another
or different contract or transaction, is connected with the plaintiffs claim;
(2) whether the third-party defendant would be liable to the plaintiff or to
the defendant for all or part of the plaintiffs claim against the original
defendant, although the third-party defendants liability arises out of
another transaction; and (3) whether the third-party defendant may assert
any defenses which the third-party plaintiff has or may have to the
plaintiffs claim.
The third-party complaint does not have to show with certainty that
there will be recovery against the third-party defendant, and it is sufficient
that pleadings show possibility of recovery.[21] In determining the
sufficiency of the third-party complaint, the allegations in the original
complaint and the third-party complaint must be examined. [22] A third-
party complaint must allege facts which prima facie show that the
defendant is entitled to contribution, indemnity, subrogation or other relief
from the third-party defendant.[23]
It bears stressing that common liability is the very essence for
contribution. Contribution is a payment made by each, or by any of several
having a common liability of his share in the damage suffered or in the
money necessarily paid by one of the parties in behalf of the other or
others.[24] The rule on common liability is fundamental in the action for
contribution.[25] The test to determine whether the claim for indemnity in a
third-party complaint is, whether it arises out of the same transaction on
which the plaintiffs claim is based, or the third-party plaintiffs claim,
although arising out of another or different contract or transaction, is
connected with the plaintiffs claim.[26]
In this case, the claims of the respondent, as plaintiff in the RTC,
against the petitioner as defendant therein, arose out of the contracts of
lease and sale; such transactions are different and separate from those
between Becthel and the petitioner as third-party plaintiff for the
construction of the latters project in Mauban, Quezon, where the
equipment leased from the respondent was used by the petitioner. The
controversy between the respondent and the petitioner, on one hand, and
that between the petitioner and Becthel, on the other, are thus entirely
distinct from each other. There is no showing in the proposed third-party
complaint that the respondent knew or approved the use of the leased
equipment by the petitioner for the said project in Quezon. Becthel cannot
invoke any defense the petitioner had or may have against the claims of
the respondent in its complaint, because the petitioner admitted its
liabilities to the respondent for the amount of P5,075,335.86. The
barefaced fact that the petitioner used the equipment it leased from the
respondent in connection with its project with Becthel does not provide a
substantive basis for the filing of a third-party complaint against the latter.
There is no causal connection between the claim of the respondent for the
rental and the balance of the purchase price of the equipment and parts
sold and leased to the petitioner, and the failure of Becthel to pay the
balance of its account to the petitioner after the completion of the project
in Quezon.[27]
We note that in its third-party complaint, the petitioner alleged that
Becthel should be ordered to pay the balance of its account
of P456,666.67, so that the petitioner could pay the same to the
respondent. However, contrary to its earlier plea for the admission of its
third-party complaint against Becthel, the petitioner also sought the
dismissal of the respondents complaint. The amount of P456,666.67 it
sought to collect from Becthel would not be remitted to the respondent
after all.
The rulings of this Court in Allied Banking Corporation and British
Airways are not applicable in this case since the factual backdrops in the
said cases are different.
In Allied Banking Corporation, Joselito Yujuico obtained a loan from
General Bank and Trust Company. The Central Bank of the Philippines
ordered the liquidation of the Bank. In a Memorandum Agreement
between the liquidation of the Bank and Allied Banking Corporation, the
latter acquired the receivables from Yujuico. Allied Banking Corporation
then sued Yujuico for the collection of his loan, and the latter filed a third-
party complaint against the Central Bank, alleging that by reason of its
tortious interference with the affairs of the General Bank and Trust
Company, he was prevented from performing his obligation under the
loan. This Court allowed the third-party complaint based on the claim of
the defendant therein, thus:
In the words of private respondent, he [s]eeks to transfer liability for the
default imputed against him by the petitioner to the proposed third-party
defendants because of their tortious acts which prevented him from
performing his obligations. Thus, if at the outset the issue appeared to be a
simple makers liability on a promissory note, it became complex by the
rendition of the aforestated decision.[28]
In British Airways, the Court allowed the third-party complaint of
British Airways against its agent, the Philippine Airlines, on the plaintiffs
complaint regarding his luggage, considering that a contract of carriage
was involved. The Court ruled, thus:
Undeniably, for the loss of his luggage, Mahtani is entitled to damages
from BA, in view of their contract of carriage. Yet, BA adamantly
disclaimed its liability and instead imputed it to PAL which the latter
naturally denies. In other words, BA and PAL are blaming each other for
the incident.
In resolving this issue, it is worth observing that the contract of air
transportation was exclusively between Mahtani and BA, the latter merely
endorsing the Manila to Hongkong leg of the formers journey to PAL, as
its subcontractor or agent. In fact, the fourth paragraph of the Conditions
of Contracts of the ticket issued by BA to Mahtani confirms that the
contract was one of continuous air transportation from Manila to Bombay.
Considering that the petitioner admitted its liability for the principal
claim of the respondent in its Answer with Third-Party Complaint, the trial
court did not err in rendering judgment on the pleadings against it.
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED
for lack of merit. Costs against the petitioner.

4. xxx carriage to be performed hereunder by several successive carriers is SO ORDERED.

regarded as a single operation.
Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario,
Prescinding from the above discussion, it is undisputed that PAL, in JJ., concur.
transporting Mahtani from Manila to Hongkong acted as the agent of BA.

Parenthetically, the Court of Appeals should have been cognizant of the

well-settled rule that an agent is also responsible for any negligence in the
performance of its function and is liable for damages which the principal
may suffer by reason of its negligent act. Hence, the Court of Appeals
erred when it opined that BA, being the principal, had no cause of action
against PAL, its agent or sub-contractor.

Also, it is worth mentioning that both BA and PAL are members of the
International Air Transport Association (IATA), wherein member airlines
are regarded as agents of each other in the issuance of the tickets and other
matters pertaining to their relationship. Therefore, in the instant case, the
contractual relationship between BA and PAL is one of agency, the former
being the principal, since it was the one which issued the confirmed ticket,
and the latter the agent.[29]

It goes without saying that the denial of the petitioners motion with
leave to file a third-party complaint against Becthel is without prejudice to
its right to file a separate complaint against the latter.
 Present:

- versus - YNARES-SANTIAGO, J.,

Chairperson,

CHICO-NAZARIO,

VELASCO, JR.,

NACHURA, and
JOHN TANSIPEK,
PERALTA, JJ.
Respondent.

Promulgated:
THIRD DIVISION

July 22, 2009

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
-x
BANCO DE ORO-EPCI, INC. (formerly
Equitable PCI Bank), G.R. No. 181235

Petitioner,
 DECISION
CHICO-NAZARIO, J.:
Before Us is a Petition for Review on Certiorari assailing the
Decision[1] of the Court of Appeals in CA-G.R. CV No. 69130 dated 18
August 2006 and the Resolution of the same court dated 9 January 2008.
The facts of the case are as follows:
J. O. Construction, Inc. (JOCI), a domestic corporation engaged in
the construction business in Cebu City, filed a complaint against Philippine
Commercial and Industrial Bank (PCIB) in the Regional Trial Court (RTC)
of Makati City docketed as Civil Case No. 97-508. The Complaint alleges
that JOCI entered into a contract with Duty Free Philippines, Inc. for the
construction of a Duty Free Shop in Mandaue City. As actual construction
went on, progress billings were made. Payments were received by JOCI
directly or through herein respondent John Tansipek, its authorized
collector. Payments received by respondent Tansipek were initially
remitted to JOCI. However, payment through PNB Check No.
0000302572 in the amount of P4,050,136.51 was not turned over to
JOCI. Instead, respondent Tansipek endorsed said check and deposited the
same to his account in PCIB, Wilson Branch, Wilson Street,
Greenhills, San Juan, Metro Manila. PCIB allowed the said deposit,
despite the fact that the check was crossed for the deposit to payees
account only, and despite the alleged lack of authority of respondent
Tansipek to endorse said check. PCIB refused to pay JOCI the full amount
of the check despite demands made by the latter. JOCI prayed for the
payment of the amount of the check (P4,050,136.51), P500,000.00 in
attorneys fees, P100,000.00 in expenses, P50,000.00 for costs of suit,
and P500,000.00 in exemplary damages.
PCIB filed a Motion to Dismiss the Complaint on the grounds that
(1) an indispensable party was not impleaded, and (2) therein plaintiff
JOCI had no cause of action against PCIB. The RTC denied PCIBs Motion
to Dismiss.
PCIB filed its answer alleging as defenses that (1) JOCI had
clothed Tansipek with authority to act as its agent, and was therefore
estopped from denying the same; (2) JOCI had no cause of action against
PCIB ; (3) failure to implead Tansipek rendered the proceedings taken
after the filing of the complaint void; (4) PCIBs act of accepting the
deposit was fully justified by established bank practices; (5) JOCIs claim
was barred by laches; and (6) the damages alleged by JOCI were
hypothetical and speculative. PCIB incorporated in said Answer its
counterclaims for exemplary damages in the amount of P400,000.00, and
litigation expenses and attorneys fees in the amount of P400,000.00.
PCIB likewise moved for leave for the court to admit the formers
third-party complaint against respondent Tansipek. The third-party
complaint alleged that respondent Tansipek was a depositor at its Wilson
Branch, San Juan, Metro Manila, where he maintained Account No. 5703-
03538-3 in his name and/or that of his wife, Anita. Respondent Tansipek
had presented to PCIB a signed copy of the Minutes of the meeting of the
Board of Directors of JOCI stating the resolution that
Checks payable to J.O. Construction, Inc. may be
deposited to Account No. 5703-03538-3 under the name
of John and/or Anita Tansipek, maintained at PCIB,
Wilson Branch.[2]
Respondent Tansipek had also presented a copy of the Articles of
Incorporation of JOCI showing that he and his wife, Anita, were
incorporators of JOCI, with Anita as Treasurer. In the third-party
complaint, PCIB prayed for subrogation and payment of attorneys fees in
the sum of P400,000.00.
PCIB filed a Motion to Admit Amended Third-Party
Complaint. The amendment consisted in the correction of the caption, so
that PCIB appeared as Third-Party Plaintiff and Tansipek as Third-Party
Defendant.
Upon Motion, respondent Tansipek was granted time to file his
Answer to the Third-Party Complaint. He was, however, declared in
default for failure to do so. The Motion to Reconsider the Default Order
was denied.
Respondent Tansipek filed a Petition for Certiorari with the Court
of Appeals assailing the Default Order and the denial of the Motion for
Reconsideration. The Petition was docketed as CA-G.R. SP No.
47727. On 29 May 1998, the Court of Appeals dismissed the Petition for
failure to attach the assailed Orders. On 28 September 1998, the Court of
Appeals denied respondent Tansipeks Motion for Reconsideration for
having been filed out of time.
Pre-trial on the main case ensued, wherein JOCI and PCIB limited
the issues as follows:
1. Whether or not the defendant bank erred in
allowing the deposit of Check No. 0302572 (Exh. A) in the
amount of P4,050,136.51 drawn in favor of plaintiff JO
Construction, Inc. in John Tansipeks account when such
check was crossed and clearly marked for payees account
only.
2. Whether the alleged board resolution and the
articles of Incorporation are genuine and a valid defense
against plaintiffs effort to collect the amount
of P4,050,136.51.
On 14 July 2000, the RTC promulgated its Decision in Civil Case
No. 97-508, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered in
favor of the plaintiff [JOCI] and against the defendant
bank [PCIB] ordering the latter to pay to the plaintiff the
sum of P4,050,136.51 with interest at the rate of twelve
percent (12%) per annum from the filing of this complaint
until fully paid plus costs of suit. The other damages
claimed by the plaintiff are denied for being speculative.
On the third party complaint, third-party
defendant John Tansipek is ordered to pay the third-party
plaintiff Philippine Commercial and Industrial Bank all
amounts said defendant/third-party plaintiff shall have to
pay to the plaintiff on account of this case.[3]
Respondent Tansipek appealed the Decision to the Court of
Appeals. The case was docketed as CA-G.R. CV No. 69130. Respondent
Tansipek assigned the following alleged errors:
a) The trial courts decision upholding the order of
default and the consequent ex-parte reception of appellees
evidence was anchored on erroneous and baseless
conclusion that:
1) The original reglementary period to
plead has already expired.
 2) The ten day extended period to
answer has likewise expired.
3) There is no need to pass upon a
second motion to plead much less,
any need for a new motion for
extended period to plead.
b) The trial court erred in utterly depriving the
appellant of his day in court and in depriving
constitutional, substantive and procedural due process
premised solely on pure and simple technicality which
never existed and are imaginary and illusory.
c) The trial court erred in ordering the third-party
defendant-appellant John Tansipek to pay the third party
plaintiff-appellee PCIBank all amounts said bank shall
have to pay to the plaintiff-appellee by way of subrogation
since appellant if allowed to litigate in the trial court,
would have obtained a favorable judgment as he has good,
valid and meritorious defenses.[4]
On 18 August 2006, the Court of Appeals issued the assailed
Decision finding that it was an error for the trial court to have acted on
PCIBs motion to declare respondent Tansipek in default. The Court of
Appeals thus remanded the case to the RTC for further proceedings, to wit:
WHEREFORE, premises considered, the appeal is
GRANTED. The decision relative to the third party
complaint is REVERSED and SET ASIDE. The case is
ordered REMANDED to the trial court for further
proceedings on the third party complaint.[5]
The Court of Appeals denied the Motion for Reconsideration of PCIB in a
Resolution dated 9 January 2008.
Petitioner Banco de Oro-EPCI, Inc., as successor-in-interest to
PCIB, filed the instant Petition for Review on Certiorari, assailing the
above Decision and Resolution of the Court of Appeals, and laying down a
lone issue for this Courts consideration:
WHETHER OR NOT THE COURT OF APPEALS CAN
REVERSE ITS DECISION HANDED DOWN EIGHT
YEARS BEFORE.[6]
To recapitulate, upon being declared in default, respondent
Tansipek filed a Motion for Reconsideration of the Default Order. Upon
denial thereof, Tansipek filed a Petition for Certiorari with the Court of
Appeals, which was dismissed for failure to attach the assailed
Orders. Respondent Tansipeks Motion for Reconsideration with the Court
of Appeals was denied for having been filed out of time. Respondent
Tansipek did not appeal said denial to this Court.
Respondent Tansipeks remedy against the Order of Default was
erroneous from the very beginning. Respondent Tansipek should have filed
a Motion to Lift Order of Default, and not a Motion for Reconsideration,
pursuant to Section 3(b), Rule 9 of the Rules of Court:
(b) Relief from order of default.A party declared in
default may at any time after notice thereof and before
judgment file a motion under oath to set aside the order of
default upon proper showing that his failure to answer was
due to fraud, accident, mistake or excusable negligence
and that he has a meritorious defense. In such case, the
order of default may be set aside on such terms and
conditions as the judge may impose in the interest of
justice.

A Motion to Lift Order of Default is different from an ordinary
motion in that the Motion should be verified; and must show fraud,
accident, mistake or excusable neglect, and meritorious defenses. [7]The
allegations of (1) fraud, accident, mistake or excusable neglect, and (2) of
meritorious defenses must concur.[8]
Assuming for the sake of argument, however, that respondent
Tansipeks Motion for Reconsideration may be treated as a Motion to Lift
Order of Default, his Petition for Certiorari on the denial thereof has
already been dismissed with finality by the Court of Appeals. Respondent
Tansipek did not appeal said ruling of the Court of Appeals to this
Court. The dismissal of the Petition for Certiorari assailing the denial of
respondent Tansipeks Motion constitutes a bar to the retrial of the same
issue of default under the doctrine of the law of the case.
In People v. Pinuila,[9] we held that:
Law of the case has been defined as the opinion
delivered on a former appeal. More specifically, it means
that whatever is once irrevocably established as the
controlling legal rule of decision between the same parties
in the same case continues to be the law of the case,
whether correct on general principles or not, so long as the
facts on which such decision was predicated continue to
be the facts of the case before the court.
It may be stated as a rule of general application
that, where the evidence on a second or succeeding
appeal is substantially the same as that on the first or
preceding appeal, all matters, questions, points, or
issues adjudicated on the prior appeal are the law of
the case on all subsequent appeals and will not be
considered or readjudicated therein.
xxxx
As a general rule a decision on a prior appeal of
the same case is held to be the law of the case whether that
decision is right or wrong, the remedy of the party
deeming himself aggrieved being to seek a rehearing.
Questions necessarily involved in the decision on
a former appeal will be regarded as the law of the case on
a subsequent appeal, although the questions are not
expressly treated in the opinion of the court, as the
presumption is that all the facts in the case bearing on the
point decided have received due consideration whether all
or none of them are mentioned in the opinion. (Emphasis
supplied.)
The issue of the propriety of the Order of Default had already been
adjudicated in Tansipeks Petition for Certiorari with the Court of
Appeals. As such, this issue cannot be readjudicated in Tansipeks appeal
of the Decision of the RTC on the main case. Once a decision attains
finality, it becomes the law of the case, whether or not said decision is
erroneous.[10] Having been rendered by a court of competent jurisdiction
acting within its authority, the judgment may no longer be altered even at
the risk of legal infirmities and errors it may contain. [11]
Respondent Tansipek counters that the doctrine of the law of the
case is not applicable, inasmuch as a Petition for Certiorari is not an
appeal. Respondent Tansipek further argues that the Doctrine of the Law
of the Case applies only when the appellate court renders a decision on the
merits, and not when such appeal was denied due to technicalities.
We are not persuaded.
 In Buenviaje v. Court of Appeals,[12] therein respondent Cottonway
Marketing Corporation filed a Petition for Certiorari with this Court
assailing the Decision of the National Labor Relations Commission
(NLRC) ordering, inter alia, the reinstatement of therein petitioners and
the payment of backwages from the time their salaries were withheld up to
the time of actual reinstatement. The Petition for Certiorari was dismissed
by this Court. The subsequent Motion for Reconsideration was likewise
denied. However, the Labor Arbiter then issued an Order limiting the
amount of backwages that was due to petitioners. The NLRC reversed this
Order, but the Court of Appeals reinstated the same. This Court, applying
the Doctrine of the Law of the Case, held:
The decision of the NLRC dated March 26, 1996 has
become final and executory upon the dismissal by this
Court of Cottonways petition for certiorari assailing
said decision and the denial of its motion for
reconsideration. Said judgment may no longer be
disturbed or modified by any court or tribunal. It is a
fundamental rule that when a judgment becomes final
and executory, it becomes immutable and unalterable,
and any amendment or alteration which substantially
affects a final and executory judgment is void, including
the entire proceedings held for that purpose. Once a
judgment becomes final and executory, the prevailing
party can have it executed as a matter of right, and the
issuance of a writ of execution becomes a ministerial
duty of the court. A decision that has attained finality
becomes the law of the case regardless of any claim
that it is erroneous. The writ of execution must
therefore conform to the judgment to be executed and
adhere strictly to the very essential particulars.
[13]
(Emphases supplied.)
Furthermore, there is no substantial distinction between an appeal
and a Petition for Certiorari when it comes to the application of the
Doctrine of the Law of the Case. The doctrine is founded on the policy of
ending litigation. The doctrine is necessary to enable the appellate court to
perform its duties satisfactorily and efficiently, which would be impossible
if a question once considered and decided by it were to be litigated anew
in the same case upon any and every subsequent appeal. [14]
Likewise, to say that the Doctrine of the Law the Case applies
only when the appellate court renders a decision on the merits would be
putting a premium on the fault or negligence of the party losing the
previous appeal. In the case at bar, respondent Tansipek would be awarded
(1) for his failure to attach the necessary requirements to his Petition
for Certiorari with the Court of Appeals; (2) for his failure to file a Motion
for Reconsideration in time; and (3) for his failure to appeal the Decision
of the Court of Appeals with this Court. The absurdity of such a situation
is clearly apparent.
It is important to note that a party declared in default respondent
Tansipek in this case is not barred from appealing from the judgment on
the main case, whether or not he had previously filed a Motion to Set
Aside Order of Default, and regardless of the result of the latter and the
appeals therefrom. However, the appeal should be based on the Decisions
being contrary to law or the evidence already presented, and not on the
alleged invalidity of the default order.[15]
WHEREFORE, the Decision of the Court of Appeals in CA-G.R.
CV No. 69130 dated 18 August 2006 and the Resolution of the same court
dated 9 January 2008 are hereby REVERSED and SET ASIDE. The
Decision of the Regional Trial Court of Makati City in Civil Case No. 97-
508 dated 14 July 2000 is hereby REINSTATED. No pronouncement as
to costs.
SO ORDERED.
 EN BANC

[G.R. No. 152154. July 15, 2003]

REPUBLIC OF THE PHILIPPINES, petitioner, vs. HONORABLE

SANDIGANBAYAN (SPECIAL FIRST DIVISION),
FERDINAND E. MARCOS (REPRESENTED BY HIS
ESTATE/HEIRS: IMELDA R. MARCOS, MARIA IMELDA
[IMEE] MARCOS-MANOTOC, FERDINAND R. MARCOS,
JR. AND IRENE MARCOS-ARANETA) AND IMELDA
ROMUALDEZ MARCOS, respondents.

DECISION
CORONA, J.:

This is a petition for certiorari under Rule 65 of the Rules of Court

seeking to (1) set aside the Resolution dated January 31, 2002 issued by
the Special First Division of the Sandiganbayan in Civil Case No. 0141
entitled Republic of the Philippines vs. Ferdinand E. Marcos, et. al., and
(2) reinstate its earlier decision dated September 19, 2000 which forfeited
in favor of petitioner Republic of the Philippines (Republic) the amount
held in escrow in the Philippine National Bank (PNB) in the aggregate
amount of US$658,175,373.60 as of January 31, 2002.

BACKGROUND OF THE CASE

On December 17, 1991, petitioner Republic, through the Presidential

Commission on Good Government (PCGG), represented by the Office of
the Solicitor General (OSG), filed a petition for forfeiture before the
Sandiganbayan, docketed as Civil Case No. 0141 entitled Republic of the
Philippines vs. Ferdinand E. Marcos, represented by his Estate/Heirs and
Imelda R. Marcos, pursuant to RA 1379[1] in relation to Executive Order
Nos. 1,[2] 2,[3] 14[4] and 14-A.[5]
In said case, petitioner sought the declaration of the aggregate amount
of US$356 million (now estimated to be more than US$658 million
inclusive of interest) deposited in escrow in the PNB, as ill-gotten
wealth. The funds were previously held by the following five account
groups, using various foreign foundations in certain Swiss banks:
(1) Azio-Verso-Vibur Foundation accounts;
(2) Xandy-Wintrop: Charis-Scolari-Valamo-Spinus- Avertina
Foundation accounts;
(3) Trinidad-Rayby-Palmy Foundation accounts;
(4) Rosalys-Aguamina Foundation accounts and
(5) Maler Foundation accounts.
In addition, the petition sought the forfeiture of US$25 million and
US$5 million in treasury notes which exceeded the Marcos couples
salaries, other lawful income as well as income from legitimately acquired
property.The treasury notes are frozen at the Central Bank of the
Philippines, now Bangko Sentral ng Pilipinas, by virtue of the freeze order
issued by the PCGG.
On October 18, 1993, respondents Imelda R. Marcos, Maria Imelda
M. Manotoc, Irene M. Araneta and Ferdinand R. Marcos, Jr. filed their
answer.
Before the case was set for pre-trial, a General Agreement and the
Supplemental Agreements[6] dated December 28, 1993 were executed by
the Marcos children and then PCGG Chairman Magtanggol Gunigundo for
a global settlement of the assets of the Marcos family. Subsequently,
respondent Marcos children filed a motion dated December 7, 1995 for the
approval of said agreements and for the enforcement thereof.
The General Agreement/Supplemental Agreements sought to identify,
collate, cause the inventory of and distribute all assets presumed to be
owned by the Marcos family under the conditions contained therein. The
aforementioned General Agreement specified in one of its premises or
whereas clauses the fact that petitioner obtained a judgment from the
Swiss Federal Tribunal on December 21, 1990, that the Three Hundred
Fifty-six Million U.S. dollars (US$356 million) belongs in principle to the
Republic of the Philippines provided certain conditionalities are met x x
x. The said decision of the Swiss Federal Supreme Court affirmed the
decision of Zurich District Attorney Peter Consandey, granting petitioners
request for legal assistance. [7] Consandey declared the various deposits in
the name of the enumerated foundations to be of illegal provenance and
ordered that they be frozen to await the final verdict in favor of the parties
entitled to restitution.
Hearings were conducted by the Sandiganbayan on the motion to
approve the General/Supplemental Agreements. Respondent Ferdinand, Jr.
was presented as witness for the purpose of establishing the partial
implementation of said agreements.
On October 18, 1996, petitioner filed a motion for summary judgment
and/or judgment on the pleadings. Respondent Mrs. Marcos filed her
opposition thereto which was later adopted by respondents Mrs. Manotoc,
Mrs. Araneta and Ferdinand, Jr.
In its resolution dated November 20, 1997, the Sandiganbayan denied
petitioners motion for summary judgment and/or judgment on the
pleadings on the ground that the motion to approve the compromise
agreement (took) precedence over the motion for summary judgment.
Respondent Mrs. Marcos filed a manifestation on May 26, 1998
claiming she was not a party to the motion for approval of the
Compromise Agreement and that she owned 90% of the funds with the
remaining 10% belonging to the Marcos estate.
Meanwhile, on August 10, 1995, petitioner filed with the District
Attorney in Zurich, Switzerland, an additional request for the immediate
transfer of the deposits to an escrow account in the PNB. The request was
granted. On appeal by the Marcoses, the Swiss Federal Supreme Court, in
a decision dated December 10, 1997, upheld the ruling of the District
Attorney of Zurich granting the request for the transfer of the funds. In
1998, the funds were remitted to the Philippines in escrow. Subsequently,
respondent Marcos children moved that the funds be placed in custodia
legis because the deposit in escrow in the PNB was allegedly in danger of
dissipation by petitioner. The Sandiganbayan, in its resolution dated
September 8, 1998, granted the motion.
After the pre-trial and the issuance of the pre-trial order and
supplemental pre-trial order dated October 28, 1999 and January 21, 2000,
respectively, the case was set for trial. After several resettings, petitioner,
on March 10, 2000, filed another motion for summary judgment pertaining
to the forfeiture of the US$356 million, based on the following grounds:
I The Motion for Summary Judgment is hereby granted.
THE ESSENTIAL FACTS WHICH WARRANT THE FORFEITURE OF
THE FUNDS SUBJECT OF THE PETITION UNDER R.A. NO. 1379
ARE ADMITTED BY RESPONDENTS IN THEIR PLEADINGS AND
OTHER SUBMISSIONS MADE IN THE COURSE OF THE
PROCEEDING.
II
RESPONDENTS ADMISSION MADE DURING THE PRE-TRIAL
THAT THEY DO NOT HAVE ANY INTEREST OR OWNERSHIP
OVER THE FUNDS SUBJECT OF THE ACTION FOR FORFEITURE
TENDERS NO GENUINE ISSUE OR CONTROVERSY AS TO ANY
MATERIAL FACT IN THE PRESENT ACTION, THUS WARRANTING
THE RENDITION OF SUMMARY JUDGMENT.[8]
Petitioner contended that, after the pre-trial conference, certain facts
were established, warranting a summary judgment on the funds sought to
be forfeited.
Respondent Mrs. Marcos filed her opposition to the petitioners
motion for summary judgment, which opposition was later adopted by her
co-respondents Mrs. Manotoc, Mrs. Araneta and Ferdinand, Jr.
On March 24, 2000, a hearing on the motion for summary judgment
was conducted.
In a decision[9] dated September 19, 2000, the Sandiganbayan granted
petitioners motion for summary judgment:
CONCLUSION
There is no issue of fact which calls for the presentation of evidence.
The Swiss deposits which were transmitted to and now held in escrow at
the PNB are deemed unlawfully acquired as ill-gotten wealth.
DISPOSITION
WHEREFORE, judgment is hereby rendered in favor of the Republic of
the Philippines and against the respondents, declaring the Swiss deposits
which were transferred to and now deposited in escrow at the Philippine
National Bank in the total aggregate value equivalent to
US$627,608,544.95 as of August 31, 2000 together with the increments
thereof forfeited in favor of the State.[10]
 Respondent Mrs. Marcos filed a motion for reconsideration dated A. PRIVATE RESPONDENTS CATEGORICALLY
September 26, 2000. Likewise, Mrs. Manotoc and Ferdinand, Jr. filed their ADMITTED NOT ONLY THE PERSONAL
own motion for reconsideration dated October 5, 2000. Mrs. Araneta filed CIRCUMSTANCES OF FERDINAND E. MARCOS
a manifestation dated October 4, 2000 adopting the motion for AND IMELDA R. MARCOS AS PUBLIC OFFICIALS
reconsideration of Mrs. Marcos, Mrs. Manotoc and Ferdinand, Jr. BUT ALSO THE EXTENT OF THEIR SALARIES AS
SUCH PUBLIC OFFICIALS, WHO UNDER THE
Subsequently, petitioner filed its opposition thereto. CONSTITUTION, WERE PROHIBITED FROM
In a resolution[11] dated January 31, 2002, the Sandiganbayan reversed ENGAGING IN THE MANAGEMENT OF
its September 19, 2000 decision, thus denying petitioners motion for FOUNDATIONS.
summary judgment:
B. PRIVATE RESPONDENTS ALSO ADMITTED THE
CONCLUSION EXISTENCE OF THE SWISS DEPOSITS AND THEIR
OWNERSHIP THEREOF:
In sum, the evidence offered for summary judgment of the case did not
prove that the money in the Swiss Banks belonged to the Marcos spouses 1. ADMISSIONS IN PRIVATE RESPONDENTS
because no legal proof exists in the record as to the ownership by the ANSWER;
Marcoses of the funds in escrow from the Swiss Banks.
2. ADMISSION IN THE GENERAL / SUPPLEMENTAL
The basis for the forfeiture in favor of the government cannot be deemed AGREEMENTS THEY SIGNED AND SOUGHT
to have been established and our judgment thereon, perforce, must also TO IMPLEMENT;
have been without basis.
3. ADMISSION IN A MANIFESTATION OF PRIVATE
WHEREFORE, the decision of this Court dated September 19, 2000 is RESPONDENT IMELDA R. MARCOS AND IN
reconsidered and set aside, and this case is now being set for further THE MOTION TO PLACE
proceedings.[12] THE RES IN CUSTODIA LEGIS; AND

Hence, the instant petition. In filing the same, petitioner argues that 4. ADMISSION IN THE UNDERTAKING TO PAY THE
the Sandiganbayan, in reversing its September 19, 2000 decision, HUMAN RIGHTS VICTIMS.
committed grave abuse of discretion amounting to lack or excess of
jurisdiction considering that -- C. PETITIONER HAS PROVED THE EXTENT OF THE
LEGITIMATE INCOME OF FERDINAND E. MARCOS
I AND IMELDA R. MARCOS AS PUBLIC OFFICIALS.
PETITIONER WAS ABLE TO PROVE ITS CASE IN ACCORDANCE
WITH THE REQUISITES OF SECTIONS 2 AND 3 OF R.A. NO. 1379:
 D. PETITIONER HAS ESTABLISHED A PRIMA
FACIE PRESUMPTION OF UNLAWFULLY
ACQUIRED WEALTH.
II
SUMMARY JUDGMENT IS PROPER SINCE PRIVATE
RESPONDENTS HAVE NOT RAISED ANY GENUINE ISSUE OF
FACT CONSIDERING THAT:
A. PRIVATE RESPONDENTS DEFENSE THAT SWISS
DEPOSITS WERE LAWFULLY ACQUIRED DOES
NOT ONLY FAIL TO TENDER AN ISSUE BUT IS
CLEARLY A SHAM; AND
B. IN SUBSEQUENTLY DISCLAIMING OWNERSHIP OF
THE SWISS DEPOSITS, PRIVATE RESPONDENTS
ABANDONED THEIR SHAM DEFENSE OF
LEGITIMATE ACQUISITION, AND THIS FURTHER
JUSTIFIED THE RENDITION OF A SUMMARY
JUDGMENT.
III
THE FOREIGN FOUNDATIONS NEED NOT BE IMPLEADED.
IV
THE HONORABLE PRESIDING JUSTICE COMMITTED GRAVE
ABUSE OF DISCRETION IN REVERSING HIMSELF ON THE
GROUND THAT ORIGINAL COPIES OF THE AUTHENTICATED
SWISS DECISIONS AND THEIRAUTHENTICATED TRANSLATIONS
HAVE NOT BEEN SUBMITTED TO THE COURT, WHEN EARLIER
THE SANDIGANBAYAN HAS QUOTED EXTENSIVELY A PORTION
OF THE TRANSLATION OF ONE OF THESE SWISS DECISIONS IN
HIS PONENCIA DATED JULY 29, 1999 WHEN IT DENIED THE
MOTION TO RELEASE ONE HUNDRED FIFTY MILLION US
DOLLARS ($150,000,000.00) TO THE HUMAN RIGHTS VICTIMS.
V
PRIVATE RESPONDENTS ARE DEEMED TO HAVE WAIVED THEIR
OBJECTION TO THE AUTHENTICITY OF THE SWISS FEDERAL
SUPREME COURT DECISIONS.[13]
Petitioner, in the main, asserts that nowhere in the respondents
motions for reconsideration and supplemental motion for reconsideration
were the authenticity, accuracy and admissibility of the Swiss decisions
ever challenged. Otherwise stated, it was incorrect for the Sandiganbayan
to use the issue of lack of authenticated translations of the decisions of the
Swiss Federal Supreme Court as the basis for reversing itself because
respondents themselves never raised this issue in their motions for
reconsideration and supplemental motion for reconsideration.
Furthermore, this particular issue relating to the translation of the Swiss
court decisions could not be resurrected anymore because said decisions
had been previously utilized by the Sandiganbayan itself in resolving a
decisive issue before it.
Petitioner faults the Sandiganbayan for questioning the non-
production of the authenticated translations of the Swiss Federal Supreme
Court decisions as this was a marginal and technical matter that did not
diminish by any measure the conclusiveness and strength of what had been
proven and admitted before the Sandiganbayan, that is, that the funds
deposited by the Marcoses constituted ill-gotten wealth and thus belonged
to the Filipino people.
In compliance with the order of this Court, Mrs. Marcos filed her
comment to the petition on May 22, 2002. After several motions for
extension which were all granted, the comment of Mrs. Manotoc and
Ferdinand, Jr. and the separate comment of Mrs. Araneta were filed on
May 27, 2002.
Mrs. Marcos asserts that the petition should be denied on the
following grounds:
A.
PETITIONER HAS A PLAIN, SPEEDY, AND ADEQUATE REMEDY AT
THE SANDIGANBAYAN.
B.
THE SANDIGANBAYAN DID NOT ABUSE ITS DISCRETION IN
SETTING THE CASE FOR FURTHER PROCEEDINGS.[14]
Mrs. Marcos contends that petitioner has a plain, speedy and adequate
remedy in the ordinary course of law in view of the resolution of the
Sandiganbayan dated January 31, 2000 directing petitioner to submit the
authenticated translations of the Swiss decisions. Instead of availing of
said remedy, petitioner now elevates the matter to this Court. According to
Mrs. Marcos, a petition for certiorari which does not comply with the
requirements of the rules may be dismissed. Since petitioner has a plain,
speedy and adequate remedy, that is, to proceed to trial and submit
authenticated translations of the Swiss decisions, its petition before this
Court must be dismissed. Corollarily, the Sandiganbayans ruling to set the
case for further proceedings cannot and should not be considered a
capricious and whimsical exercise of judgment.
Likewise, Mrs. Manotoc and Ferdinand, Jr., in their comment, prayed
for the dismissal of the petition on the grounds that:
(A)
BY THE TIME PETITIONER FILED ITS MOTION FOR SUMMARY
JUDGMENT ON 10 MARCH 2000, IT WAS ALREADY BARRED
FROM DOING SO.
(1) The Motion for Summary Judgment was based on private
respondents Answer and other documents that had long
been in the records of the case. Thus, by the time the
Motion was filed on 10 March 2000, estoppel by laches
had already set in against petitioner.
(2) By its positive acts and express admissions prior to filing the
Motion for Summary Judgment on 10 March 1990,
petitioner had legally bound itself to go to trial on the
basis of existing issues. Thus, it clearly waived whatever
right it had to move for summary judgment.
(B)
EVEN ASSUMING THAT PETITIONER WAS NOT LEGALLY
BARRED FROM FILING THE MOTION FOR SUMMARY
JUDGMENT, THE SANDIGANBAYAN IS CORRECT IN RULING
THAT PETITIONER HAS NOT YET ESTABLISHED A PRIMA
FACIE CASE FOR THE FORFEITURE OF THE SWISS FUNDS.
(1) Republic Act No. 1379, the applicable law, is a penal statute.
As such, its provisions, particularly the essential elements
stated in section 3 thereof, are mandatory in nature. These
should be strictly construed against petitioner and liberally
in favor of private respondents.
(2) Petitioner has failed to establish the third and fourth essential
elements in Section 3 of R.A. 1379 with respect to the
identification, ownership, and approximate amount of the
property which the Marcos couple allegedly acquired
during their incumbency.
 (a) Petitioner has failed to prove that the Marcos couple
acquired or own the Swiss funds.
(b) Even assuming, for the sake of argument, that the fact of
acquisition has been proven, petitioner has
categorically admitted that it has no evidence
showing how much of the Swiss funds was
acquired during the incumbency of the Marcos
couple from 31 December 1965 to 25 February
1986.
(3) In contravention of the essential element stated in Section 3
(e) of R.A. 1379, petitioner has failed to establish the
other proper earnings and income from legitimately
acquired property of the Marcos couple over and above
their government salaries.
(4) Since petitioner failed to prove the three essential elements
provided in paragraphs (c)[15] (d),[16] and (e)[17] of Section 3,
R.A. 1379, the inescapable conclusion is that the prima
facie presumption of unlawful acquisition of the Swiss
funds has not yet attached. There can, therefore, be no
premature forfeiture of the funds.
(C)
IT WAS ONLY BY ARBITRARILY ISOLATING AND THEN TAKING
CERTAIN STATEMENTS MADE BY PRIVATE RESPONDENTS OUT
OF CONTEXT THAT PETITIONER WAS ABLE TO TREAT THESE AS
JUDICIAL ADMISSIONS SUFFICIENT TO ESTABLISH A PRIMA
FACIE AND THEREAFTER A CONCLUSIVE CASE TO JUSTIFY THE
FORFEITURE OF THE SWISS FUNDS.
(1) Under Section 27, Rule 130 of the Rules of Court, the
General and Supplemental Agreements, as well as the
other written and testimonial statements submitted in
relation thereto, are expressly barred from being
admissible in evidence against private respondents.
(2) Had petitioner bothered to weigh the alleged admissions
together with the other statements on record, there would
be a demonstrable showing that no such judicial
admissions were made by private respondents.
(D)
SINCE PETITIONER HAS NOT (YET) PROVEN ALL THE
ESSENTIAL ELEMENTS TO ESTABLISH A PRIMA FACIE CASE
FOR FORFEITURE, AND PRIVATE RESPONDENTS HAVE NOT
MADE ANY JUDICIAL ADMISSION THAT WOULD HAVE FREED IT
FROM ITS BURDEN OF PROOF, THE SANDIGANBAYAN DID NOT
COMMIT GRAVE ABUSE OF DISCRETION IN DENYING THE
MOTION FOR SUMMARY JUDGMENT. CERTIORARI, THEREFORE,
DOES NOT LIE, ESPECIALLY AS THIS COURT IS NOT A TRIER OF
FACTS.[18]
For her part, Mrs. Araneta, in her comment to the petition, claims that
obviously petitioner is unable to comply with a very plain requirement of
respondent Sandiganbayan. The instant petition is allegedly an attempt to
elevate to this Court matters, issues and incidents which should be
properly threshed out at the Sandiganbayan. To respondent Mrs. Araneta,
all other matters, save that pertaining to the authentication of the translated
Swiss Court decisions, are irrelevant and impertinent as far as this Court is
concerned. Respondent Mrs. Araneta manifests that she is as eager as
respondent Sandiganbayan or any interested person to have the Swiss
Court decisions officially translated in our known language. She says the
authenticated official English version of the Swiss Court decisions should
be presented. This should stop all speculations on what indeed is contained
therein. Thus, respondent Mrs. Araneta prays that the petition be denied
for lack of merit and for raising matters which, in elaborated fashion, are
impertinent and improper before this Court.
PROPRIETY OF PETITIONERS
ACTION FOR CERTIORARI
But before this Court discusses the more relevant issues, the question
regarding the propriety of petitioner Republic's action for certiorari under
Rule 65[19] of the 1997 Rules of Civil Procedure assailing the
Sandiganbayan Resolution dated January 21, 2002 should be threshed out.
At the outset, we would like to stress that we are treating this case as
an exception to the general rule governing petitions for certiorari.
Normally, decisions of the Sandiganbayan are brought before this Court
under Rule 45, not Rule 65.[20] But where the case is undeniably ingrained
with immense public interest, public policy and deep historical
repercussions, certiorari is allowed notwithstanding the existence and
availability of the remedy of appeal.[21]
One of the foremost concerns of the Aquino Government
in February 1986 was the recovery of the unexplained or ill-gotten wealth
reputedly amassed by former President and Mrs. Ferdinand E. Marcos,
their relatives, friends and business associates. Thus, the very first
Executive Order (EO) issued by then President Corazon Aquino upon her
assumption to office after the ouster of the Marcoses was EO No. 1, issued
on February 28, 1986. It created the Presidential Commission on Good
Government (PCGG) and charged it with the task of assisting the President
in the "recovery of all ill-gotten wealth accumulated by former President
Ferdinand E. Marcos, his immediate family, relatives, subordinates and
close associates, whether located in the Philippines or abroad, including
the takeover or sequestration of all business enterprises and entities owned
or controlled by them during his administration, directly or through
nominees, by taking undue advantage of their public office and/or using
their powers, authority, influence, connections or relationship." The
urgency of this undertaking was tersely described by this Court
in Republic vs. Lobregat[22]:
surely x x x an enterprise "of great pith and moment"; it was attended by
"great expectations"; it was initiated not only out of considerations of
simple justice but also out of sheer necessity - the national coffers were
empty, or nearly so.
In all the alleged ill-gotten wealth cases filed by the PCGG, this Court
has seen fit to set aside technicalities and formalities that merely serve to
delay or impede judicious resolution. This Court prefers to have such cases
resolved on the merits at the Sandiganbayan. But substantial justice to the
Filipino people and to all parties concerned, not mere legalisms or
perfection of form, should now be relentlessly and firmly pursued. Almost
two decades have passed since the government initiated its search for and
reversion of such ill-gotten wealth. The definitive resolution of such cases
on the merits is thus long overdue. If there is proof of illegal acquisition,
accumulation, misappropriation, fraud or illicit conduct, let it be brought
out now. Let the ownership of these funds and other assets be finally
determined and resolved with dispatch, free from all the delaying
technicalities and annoying procedural sidetracks. [23]
We thus take cognizance of this case and settle with finality all the
issues therein.
ISSUES BEFORE THIS COURT
The crucial issues which this Court must resolve are: (1) whether or
not respondents raised any genuine issue of fact which would either justify
or negate summary judgment; and (2) whether or not petitioner Republic
was able to prove its case for forfeiture in accordance with Sections 2 and
3 of RA 1379.
(1) THE PROPRIETY OF SUMMARY JUDGMENT
 We hold that respondent Marcoses failed to raise any genuine issue of
fact in their pleadings. Thus, on motion of petitioner Republic, summary
judgment should take place as a matter of right.
In the early case of Auman vs. Estenzo[24], summary judgment was
described as a judgment which a court may render before trial but after
both parties have pleaded. It is ordered by the court upon application by
one party, supported by affidavits, depositions or other documents, with
notice upon the adverse party who may in turn file an opposition supported
also by affidavits, depositions or other documents. This is after the court
summarily hears both parties with their respective proofs and finds that
there is no genuine issue between them. Summary judgment is sanctioned
in this jurisdiction by Section 1, Rule 35 of the 1997 Rules of Civil
Procedure:
SECTION 1. Summary judgment for claimant.- A party seeking to recover
upon a claim, counterclaim, or cross-claim or to obtain a declaratory relief
may, at any time after the pleading in answer thereto has been served,
move with supporting affidavits, depositions or admissions for a summary
judgment in his favor upon all or any part thereof. [25]
Summary judgment is proper when there is clearly no genuine issue
as to any material fact in the action. [26] The theory of summary judgment is
that, although an answer may on its face appear to tender issues requiring
trial, if it is demonstrated by affidavits, depositions or admissions that
those issues are not genuine but sham or fictitious, the Court is justified in
dispensing with the trial and rendering summary judgment for petitioner
Republic.
The Solicitor General made a very thorough presentation of its case
for forfeiture:
xxx
without interruption as Congressman, Senator, Senate President and
President of the Republic of the Philippines from December 31, 1965 up to
his ouster by direct action of the people of EDSA on February 22-25,
1986.
5. Respondent Imelda Romualdez Marcos (Imelda, for short) the former
First Lady who ruled with FM during the 14-year martial law regime,
occupied the position of Minister of Human Settlements from June 1976
up to the peaceful revolution in February 22-25, 1986. She likewise served
once as a member of the Interim Batasang Pambansa during the early
years of martial law from 1978 to 1984 and as Metro Manila Governor in
concurrent capacity as Minister of Human Settlements. x x x
xxx xxx xxx
11. At the outset, however, it must be pointed out that based on the Official
Report of the Minister of Budget, the total salaries of former President
Marcos as President form 1966 to 1976 was P60,000 a year and from 1977
to 1985, P100,000 a year; while that of the former First Lady, Imelda R.
Marcos, as Minister of Human Settlements from June 1976 to February
22-25, 1986 was P75,000 a year xxx.
ANALYSIS OF RESPONDENTS
LEGITIMATE INCOME
xxx
12. Based on available documents, the ITRs of the Marcoses for the years
1965-1975 were filed under Tax Identification No. 1365-055-1. For the
years 1976 until 1984, the returns were filed under Tax Identification No.
M 6221-J 1117-A-9.

4. Respondent Ferdinand E. Marcos (now deceased and represented by his

Estate/Heirs) was a public officer for several decades continuously and
13. The data contained in the ITRs and Balance Sheet filed by the
Marcoses are summarized and attached to the reports in the following
schedules:
Schedule A:
Schedule of Income (Annex T hereof);
Schedule B:
Schedule of Income Tax Paid (Annex T-1 hereof);
Schedule C:
Schedule of Net Disposable Income (Annex T-2 hereof);
Schedule D:
Schedule of Networth Analysis (Annex T-3 hereof).
14. As summarized in Schedule A (Annex T hereof), the Marcoses
reported P16,408,442.00 or US$2,414,484.91 in total income over a period
of 20 years from 1965 to 1984. The sources of income are as follows:
Official Salaries - P 2,627,581.00 - 16.01%
Legal Practice - 11,109,836.00 - 67.71%
Farm Income - 149,700.00 - .91%
Others - 2,521,325.00 - 15.37%
Total P16,408,442.00 - 100.00%
15. FMs official salary pertains to his compensation as Senate President in
1965 in the amount of P15,935.00 and P1,420,000.00 as President of the
Philippines during the period 1966 until 1984. On the other hand, Imelda
reported salaries and allowances only for the years 1979 to 1984 in the
amount of P1,191,646.00. The records indicate that the reported income
came from her salary from the Ministry of Human Settlements and
allowances from Food Terminal, Inc., National Home Mortgage Finance
Corporation, National Food Authority Council, Light Rail Transit
Authority and Home Development Mutual Fund.
16. Of the P11,109,836.00 in reported income from legal practice, the
amount of P10,649,836.00 or 96% represents receivables from prior years
during the period 1967 up to 1984.
17. In the guise of reporting income using the cash method under Section
38 of the National Internal Revenue Code, FM made it appear that he had
an extremely profitable legal practice before he became a President (FM
being barred by law from practicing his law profession during his entire
presidency) and that, incredibly, he was still receiving payments almost 20
years after. The only problem is that in his Balance Sheet attached to his
1965 ITR immediately preceeding his ascendancy to the presidency he did
not show any Receivables from client at all, much less the P10,65-M that
he decided to later recognize as income. There are no documents showing
any withholding tax certificates. Likewise, there is nothing on record that
will show any known Marcos client as he has no known law office. As
previously stated, his networth was a mere P120,000.00 in December,
1965. The joint income tax returns of FM and Imelda cannot, therefore,
conceal the skeletons of their kleptocracy.
18. FM reported a total of P2,521,325.00 as Other Income for the years
1972 up to 1976 which he referred to in his return as Miscellaneous Items
and Various Corporations. There is no indication of any payor of the
dividends or earnings.
19. Spouses Ferdinand and Imelda did not declare any income from any
deposits and placements which are subject to a 5% withholding tax. The
Bureau of Internal Revenue attested that after a diligent search of pertinent
records on file with the Records Division, they did not find any records
involving the tax transactions of spouses Ferdinand and Imelda in Revenue
Region No. 1, Baguio City, Revenue Region No.4A, Manila, Revenue
Region No. 4B1, Quezon City and Revenue No. 8, Tacloban,
Leyte. Likewise, the Office of the Revenue Collector of Batac. Further,
BIR attested that no records were found on any filing of capital gains tax
return involving spouses FM and Imelda covering the years 1960 to 1965.
20. In Schedule B, the taxable reported income over the twenty-year
period was P14,463,595.00 which represents 88% of the gross
income. The Marcoses paid income taxes totaling P8,233,296.00 or
US$1,220,667.59. The business expenses in the amount of P861,748.00
represent expenses incurred for subscription, postage, stationeries and
contributions while the other deductions in the amount of P567,097.00
represents interest charges, medicare fees, taxes and licenses. The total
deductions in the amount of P1,994,845.00 represents 12% of the total
gross income.
21. In Schedule C, the net cumulative disposable income amounts
to P6,756,301.00 or US$980,709.77. This is the amount that represents
that portion of the Marcoses income that is free for consumption, savings
and investments. The amount is arrived at by adding back to the net
income after tax the personal and additional exemptions for the years
1965-1984, as well as the tax-exempt salary of the President for the years
1966 until 1972.
22. Finally, the networth analysis in Schedule D, represents the total
accumulated networth of spouses, Ferdinand and Imelda. Respondents
Balance Sheet attached to their 1965 ITR, covering the year immediately
preceding their ascendancy to the presidency, indicates an ending networth
of P120,000.00 which FM declared as Library and Miscellaneous
assets. In computing for the networth, the income approach was
utilized. Under this approach, the beginning capital is increased or
decreased, as the case may be, depending upon the income earned or loss
incurred. Computations establish the total networth of spouses Ferdinand
and Imelda, for the years 1965 until 1984 in the total amount
of US$957,487.75, assuming the income from legal practice is real and
valid x x x.
G. THE SECRET MARCOS DEPOSITS
IN SWISS BANKS
23. The following presentation very clearly and overwhelmingly show in
detail how both respondents clandestinely stashed away the countrys
wealth to Switzerland and hid the same under layers upon layers of
foundations and other corporate entities to prevent its detection. Through
their dummies/nominees, fronts or agents who formed those foundations
or corporate entities, they opened and maintained numerous bank
accounts. But due to the difficulty if not the impossibility of detecting and
documenting all those secret accounts as well as the enormity of the
deposits therein hidden, the following presentation is confined to five
identified accounts groups, with balances amounting to about $356-M with
a reservation for the filing of a supplemental or separate forfeiture
complaint should the need arise.
H. THE AZIO-VERSO-VIBUR
FOUNDATION ACCOUNTS
24. On June 11, 1971, Ferdinand Marcos issued a written order to Dr. Theo
Bertheau, legal counsel of Schweizeresche Kreditanstalt or SKA, also
known as Swiss Credit Bank, for him to establish the AZIO
Foundation. On the same date, Marcos executed a power of attorney in
favor of Roberto S. Benedicto empowering him to transact business in
behalf of the said foundation. Pursuant to the said Marcos mandate, AZIO
Foundation was formed on June 21, 1971 in Vaduz. Walter Fessler and
Ernst Scheller, also of SKA Legal Service, and Dr. Helmuth Merling from
Schaan were designated as members of the Board of Trustees of the said
foundation. Ferdinand Marcos was named first beneficiary and the Marcos
Foundation, Inc. was second beneficiary. On November 12, 1971, FM
again issued another written order naming Austrahil PTY Ltd. In Sydney,
Australia, as the foundations first and sole beneficiary. This was recorded
on December 14, 1971.
25. In an undated instrument, Marcos changed the first and sole
beneficiary to CHARIS FOUNDATION. This change was recorded on
December 4, 1972.
26. On August 29, 1978, the AZIO FOUNDATION was renamed to
VERSO FOUNDATION. The Board of Trustees remained the same. On
March 11, 1981, Marcos issued a written directive to liquidated VERSO
FOUNDATION and to transfer all its assets to account of FIDES TRUST
COMPANY at Bank Hofman in Zurich under the account Reference
OSER. The Board of Trustees decided to dissolve the foundation on June
25, 1981.
27. In an apparent maneuver to bury further the secret deposits beneath the
thick layers of corporate entities, FM effected the establishment of VIBUR
FOUNDATION on May 13, 1981 in Vaduz. Atty. Ivo Beck and Limag
Management, a wholly-owned subsidiary of Fides Trust, were designated
as members of the Board of Trustees. The account was officially opened
with SKA on September 10, 1981. The beneficial owner was not made
known to the bank since Fides Trust Company acted as
fiduciary. However, comparison of the listing of the securities in the safe
deposit register of the VERSO FOUNDATION as of February 27, 1981
with that of VIBUR FOUNDATION as of December 31, 1981 readily
reveals that exactly the same securities were listed.
28. Under the foregoing circumstances, it is certain that the VIBUR
FOUNDATION is the beneficial successor of VERSO FOUNDATION.
29. On March 18, 1986, the Marcos-designated Board of Trustees decided
to liquidate VIBUR FOUNDATION. A notice of such liquidation was sent
to the Office of the Public Register on March 21, 1986. However, the bank
accounts and respective balances of the said VIBUR FOUNDATION
remained with SKA. Apparently, the liquidation was an attempt by the
Marcoses to transfer the foundations funds to another account or bank but
this was prevented by the timely freeze order issued by the Swiss
authorities. One of the latest documents obtained by the PCGG from the
Swiss authorities is a declaration signed by Dr. Ivo Beck (the trustee)
stating that the beneficial owner of VIBUR FOUNDATION is Ferdinand
E. Marcos. Another document signed by G. Raber of SKA shows that
VIBUR FOUNDATION is owned by the Marcos Familie
30. As of December 31, 1989, the balance of the bank accounts of VIBUR
FOUNDATION with SKA, Zurich, under the General Account No.
469857 totaled $3,597,544.00
I. XANDY-WINTROP: CHARIS-SCOLARI-
VALAMO-SPINUS-AVERTINA
FOUNDATION ACCOUNTS
31. This is the most intricate and complicated account group. As the Flow
Chart hereof shows, two (2) groups under the foundation organized by
Marcos dummies/nominees for FMs benefit, eventually joined together
and became one (1) account group under the AVERTINA FOUNDATION
for the benefit of both FM and Imelda. This is the biggest group from
where the $50-M investment fund of the Marcoses was drawn when they
bought the Central Banks dollar-denominated treasury notes with high-
yielding interests.
32. On March 20, 1968, after his second year in the presidency, Marcos
opened bank accounts with SKA using an alias or pseudonym WILLIAM
SAUNDERS, apparently to hide his true identity. The next day, March 21,
1968, his First Lady, Mrs. Imelda Marcos also opened her own bank
accounts with the same bank using an American-sounding alias, JANE
RYAN. Found among the voluminous documents in Malacaang shortly
after they fled to Hawaii in haste that fateful night of February 25, 1986,
were accomplished forms for Declaration/Specimen Signatures submitted
by the Marcos couple. Under the caption signature(s) Ferdinand and
Imelda signed their real names as well as their respective aliases
underneath.These accounts were actively operated and maintained by the
Marcoses for about two (2) years until their closure sometime in February,
1970 and the balances transferred to XANDY FOUNDATION.
33. The XANDY FOUNDATION was established on March 3, 1970 in
Vaduz. C.W. Fessler, C. Souviron and E. Scheller were named as members
of the Board of Trustees.
34. FM and Imelda issued the written mandate to establish the foundation
to Markus Geel of SKA on March 3, 1970. In the handwritten Regulations
signed by the Marcos couple as well as in the type-written Regulations
signed by Markus Geel both dated February 13, 1970, the Marcos spouses
were named the first beneficiaries, the surviving spouse as the second
beneficiary and the Marcos children Imee, Ferdinand, Jr. (Bongbong) and
Irene as equal third beneficiaries.
35. The XANDY FOUNDATION was renamed WINTROP
FOUNDATION on August 29, 1978. The Board of Trustees remained the
same at the outset. However, on March 27, 1980, Souviron was replaced
by Dr. Peter Ritter. On March 10. 1981, Ferdinand and Imelda Marcos
issued a written order to the Board of Wintrop to liquidate the foundation
and transfer all its assets to Bank Hofmann in Zurich in favor of FIDES
TRUST COMPANY. Later, WINTROP FOUNDATION was dissolved.
36. The AVERTINA FOUNDATION was established on May 13, 1981 in
Vaduz with Atty. Ivo Beck and Limag Management, a wholly-owned
subsidiary of FIDES TRUST CO., as members of the Board of
Trustees. Two (2) account categories, namely: CAR and NES, were
opened on September 10, 1981. The beneficial owner of AVERTINA was
not made known to the bank since the FIDES TRUST CO. acted as
fiduciary. However, the securities listed in the safe deposit register of
WINTROP FOUNDATION Category R as of December 31, 1980 were the
same as those listed in the register of AVERTINA FOUNDATION
Category CAR as of December 31, 1981. Likewise, the securities listed in
the safe deposit register of WINTROP FOUNDATION Category S as of
December 31, 1980 were the same as those listed in the register of
Avertina Category NES as of December 31, 1981.Under the
circumstances, it is certain that the beneficial successor of WINTROP
FOUNDATION is AVERTINA FOUNDATION. The balance of Category
CAR as of December 31, 1989 amounted to US$231,366,894.00 while that
of Category NES as of 12-31-83 was US$8,647,190.00. Latest documents
received from Swiss authorities included a declaration signed by IVO
Beck stating that the beneficial owners of AVERTINA FOUNDATION are
FM and Imelda. Another document signed by G. Raber of SKA indicates
that Avertina Foundation is owned by the Marcos Families.
37. The other groups of foundations that eventually joined AVERTINA
were also established by FM through his dummies, which started with the
CHARIS FOUNDATION.
38. The CHARIS FOUNDATION was established in VADUZ on
December 27, 1971. Walter Fessler and Ernst Scheller
of SKA and Dr. Peter Ritter were named as directors. Dr. Theo Bertheau,
SKA legal counsel, acted as founding director in behalf of FM by virtue of
the mandate and agreement dated November 12, 1971. FM himself was
named the first beneficiary and Xandy Foundation as second beneficiary in
accordance with the handwritten instructions of FM on November 12,
1971 and the Regulations. FM gave a power of attorney to Roberto S.
Benedicto on February 15, 1972 to act in his behalf with regard to Charis
Foundation.
39. On December 13, 1974, Charis Foundation was renamed Scolari
Foundation but the directors remained the same. On March 11, 1981 FM
ordered in writing that the Valamo Foundation be liquidated and all its
assets be transferred to Bank Hofmann, AG in favor of Fides Trust
Company under the account Reference OMAL. The Board of Directors
decided on the immediate dissolution of Valamo Foundation on June 25,
1981.
40 The SPINUS FOUNDATION was established on May 13, 1981 in
Vaduz with Atty. Ivo Beck and Limag Management, a wholly-owned
subsidiary of Fides Trust Co., as members of the Foundations Board of
Directors. The account was officially opened with SKA on September 10,
1981. The beneficial owner of the foundation was not made known to the
bank since Fides Trust Co. acted as fiduciary. However, the list of
securities in the safe deposit register of Valamo Foundation as of
December 31, 1980 are practically the same with those listed in the safe
deposit register of Spinus Foundation as of December 31, 1981. Under the
circumstances, it is certain that the Spinus Foundation is the beneficial
successor of the Valamo Foundation.
41. On September 6, 1982, there was a written instruction from Spinus
Foundation to SKA to close its Swiss Franc account and transfer the
balance to Avertina Foundation. In July/August, 1982, several transfers
from the foundations German marks and US dollar accounts were made to
Avertina Category CAR totaling DM 29.5-M and $58-M,
respectively. Moreover, a comparison of the list of securities of the Spinus
Foundation as of February 3, 1982 with the safe deposit slips of the
Avertina Foundation Category CAR as of August 19, 1982 shows that all
the securities of Spinus were transferred to Avertina.
J. TRINIDAD-RAYBY-PALMY
FOUNDATION ACCOUNTS
42. The Trinidad Foundation was organized on August 26, 1970 in Vaduz
with C.W. Fessler and E. Scheller of SKA and Dr. Otto Tondury as the
foundations directors. Imelda issued a written mandate to establish the
foundation to Markus Geel on August 26, 1970. The regulations as well as
the agreement, both dated August 28, 1970 were likewise signed by
Imelda. Imelda was named the first beneficiary and her children Imelda
(Imee), Ferdinand, Jr. (Bongbong) and, Irene were named as equal second
beneficiaries.
43. Rayby Foundation was established on June 22, 1973 in Vaduz with
Fessler, Scheller and Ritter as members of the board of directors. Imelda
issued a written mandate to Dr. Theo Bertheau to establish the foundation
with a note that the foundations capitalization as well as the cost of
establishing it be debited against the account of Trinidad
Foundation. Imelda was named the first and only beneficiary of Rayby
foundation. According to written information from SKA dated November
28, 1988, Imelda apparently had the intention in 1973 to transfer part of
the assets of Trinidad Foundation to another foundation, thus the
establishment of Rayby Foundation. However, transfer of assets never
took place. On March 10, 1981, Imelda issued a written order to transfer
all the assets of Rayby Foundation to Trinidad Foundation and to
subsequently liquidate Rayby. On the same date, she issued a written order
to the board of Trinidad to dissolve the foundation and transfer all its
assets to Bank Hofmann in favor of Fides Trust Co. Under the account
Reference Dido, Rayby was dissolved on April 6, 1981 and Trinidad was
liquidated on August 3, 1981.
44. The PALMY FOUNDATION was established on May 13, 1981 in
Vaduz with Dr. Ivo Beck and Limag Management, a wholly-owned
subsidiary of Fides Trust Co, as members of the Foundations Board of
Directors. The account was officially opened with the SKA on September
10, 1981. The beneficial owner was not made known to the bank since
Fides Trust Co. acted as fiduciary. However, when one compares the
listing of securities in the safe deposit register of Trinidad Foundation as of
December 31,1980 with that of the Palmy Foundation as of December 31,
1980, one can clearly see that practically the same securities were listed.
Under the circumstances, it is certain that the Palmy Foundation is the
beneficial successor of the Trinidad Foundation.
45. As of December 31, 1989, the ending balance of the bank accounts of
Palmy Foundation under General Account No. 391528 is $17,214,432.00.
46. Latest documents received from Swiss Authorities included a
declaration signed by Dr. Ivo Beck stating that the beneficial owner of
Palmy Foundation is Imelda. Another document signed by Raber shows
that the said Palmy Foundation is owned by Marcos Familie.
K. ROSALYS-AGUAMINA
FOUNDATION ACCOUNTS
47. Rosalys Foundation was established in 1971 with FM as the
beneficiary. Its Articles of Incorporation was executed on September 24,
1971 and its By-Laws on October 3, 1971. This foundation maintained
several accounts with Swiss Bank Corporation (SBC) under the general
account 51960 where most of the bribe monies from Japanese suppliers
were hidden.
48. On December 19, 1985, Rosalys Foundation was liquidated and all its
assets were transferred to Aguamina Corporations (Panama) Account No.
53300 with SBC. The ownership by Aguamina Corporation of Account
No. 53300 is evidenced by an opening account documents from the bank.
J. Christinaz and R.L. Rossier, First Vice-President and Senior Vice
President, respectively, of SBC, Geneva issued a declaration dated
September 3, 1991 stating that the by-laws dated October 3, 1971
governing Rosalys Foundation was the same by-law applied to Aguamina
Corporation Account No. 53300. They further confirmed that no change of
beneficial owner was involved while transferring the assets of Rosalys to
Aguamina. Hence, FM remains the beneficiary of Aguamina Corporation
Account No. 53300.
As of August 30, 1991, the ending balance of Account No. 53300
amounted to $80,566,483.00.
L. MALER FOUNDATION ACCOUNTS
49. Maler was first created as an establishment. A statement of its rules and
regulations was found among Malacaang documents. It stated, among
others, that 50% of the Companys assets will be for sole and full right
disposal of FM and Imelda during their lifetime, which the remaining 50%
will be divided in equal parts among their children. Another Malacaang
document dated October 19,1968 and signed by Ferdinand and Imelda
pertains to the appointment of Dr. Andre Barbey and Jean Louis Sunier as
attorneys of the company and as administrator and manager of all assets
held by the company. The Marcos couple, also mentioned in the said
document that they bought the Maler Establishment from SBC, Geneva.
On the same date, FM and Imelda issued a letter addressed to Maler
Establishment, stating that all instructions to be transmitted with regard to
Maler will be signed with the word JOHN LEWIS. This word will have
the same value as the couples own personal signature. The letter was
signed by FM and Imelda in their signatures and as John Lewis.
50. Maler Establishment opened and maintained bank accounts with SBC,
Geneva. The opening bank documents were signed by Dr. Barbey and Mr.
Sunnier as authorized signatories.
51. On November 17, 1981, it became necessary to transform Maler
Establishment into a foundation. Likewise, the attorneys were changed to
Michael Amaudruz, et. al. However, administration of the assets was left
to SBC. The articles of incorporation of Maler Foundation registered on
November 17, 1981 appear to be the same articles applied to Maler
Establishment. On February 28, 1984, Maler Foundation cancelled the
power of attorney for the management of its assets in favor of SBC and
transferred such power to Sustrust Investment Co., S.A.
52. As of June 6, 1991, the ending balance of Maler Foundations Account
Nos. 254,508 BT and 98,929 NY amount SF 9,083,567 and SG
16,195,258, respectively, for a total of SF 25,278,825.00. GM only until
December 31, 1980. This account was opened by Maler when it was still
an establishment which was subsequently transformed into a foundation.
53. All the five (5) group accounts in the over-all flow chart have a total
balance of about Three Hundred Fifty Six Million Dollars
($356,000,000.00) as shown by Annex R-5 hereto attached as integral part
hereof.
 x x x x x x.[27]
Respondents Imelda R. Marcos, Maria Imelda M. Manotoc, Irene M.
Araneta and Ferdinand Marcos, Jr., in their answer, stated the following:
xxx xxx xxx
4. Respondents ADMIT paragraphs 3 and 4 of the Petition.
5. Respondents specifically deny paragraph 5 of the Petition in so far as it
states that summons and other court processes may be served on
Respondent Imelda R. Marcos at the stated address the truth of the matter
being that Respondent Imelda R. Marcos may be served with summons
and other processes at No. 10-B Bel Air Condominium 5022 P. Burgos
Street, Makati, Metro Manila, and ADMIT the rest.
xxx xxx xxx
10. Respondents ADMIT paragraph 11 of the Petition.
11. Respondents specifically DENY paragraph 12 of the Petition for lack
of knowledge sufficient to form a belief as to the truth of the allegation
since Respondents were not privy to the transactions and that they cannot
remember exactly the truth as to the matters alleged.
12. Respondents specifically DENY paragraph 13 of the Petition for lack
of knowledge or information sufficient to form a belief as to the truth of
the allegation since Respondents cannot remember with exactitude the
contents of the alleged ITRs and Balance Sheet.
13. Respondents specifically DENY paragraph 14 of the Petition for lack
of knowledge or information sufficient to form a belief as to the truth of
the allegation since Respondents cannot remember with exactitude the
contents of the alleged ITRs.
14. Respondents specifically DENY paragraph 15 of the Petition for lack
of knowledge or information sufficient to form a belief as to the truth of
the allegation since Respondents cannot remember with exactitude the
contents of the alleged ITRs.
15. Respondents specifically DENY paragraph 16 of the Petition for lack
of knowledge or information sufficient to form a belief as to the truth of
the allegation since Respondents cannot remember with exactitude the
contents of the alleged ITRs.
16. Respondents specifically DENY paragraph 17 of the Petition insofar as
it attributes willful duplicity on the part of the late President Marcos, for
being false, the same being pure conclusions based on pure assumption
and not allegations of fact; and specifically DENY the rest for lack of
knowledge or information sufficient to form a belief as to the truth of the
allegation since Respondents cannot remember with exactitude the
contents of the alleged ITRs or the attachments thereto.
17. Respondents specifically DENY paragraph 18 of the Petition for lack
of knowledge or information sufficient to form a belief as to the truth of
the allegation since Respondents cannot remember with exactitude the
contents of the alleged ITRs.
18. Respondents specifically DENY paragraph 19 of the Petition for lack
of knowledge or information sufficient to form a belief as to the truth of
the allegation since Respondents cannot remember with exactitude the
contents of the alleged ITRs and that they are not privy to the activities of
the BIR.
19. Respondents specifically DENY paragraph 20 of the Petition for lack
of knowledge or information sufficient to form a belief as to the truth of
the allegation since Respondents cannot remember with exactitude the
contents of the alleged ITRs.
20. Respondents specifically DENY paragraph 21 of the Petition for lack
of knowledge or information sufficient to form a belief as to the truth of
the allegation since Respondents cannot remember with exactitude the
contents of the alleged ITRs.
21. Respondents specifically DENY paragraph 22 of the Petition for lack
of knowledge or information sufficient to form a belief as to the truth of
the allegation since Respondents cannot remember with exactitude the
contents of the alleged ITRs.
22. Respondents specifically DENY paragraph 23 insofar as it alleges that
Respondents clandestinely stashed the countrys wealth in Switzerland and
hid the same under layers and layers of foundation and corporate entities
for being false, the truth being that Respondents aforesaid properties were
lawfully acquired.
23. Respondents specifically DENY paragraphs 24, 25, 26, 27, 28, 29 and
30 of the Petition for lack of knowledge or information sufficient to form a
belief as to the truth of the allegation since Respondents were not privy to
the transactions regarding the alleged Azio-Verso-Vibur Foundation
accounts, except that as to Respondent Imelda R. Marcos she specifically
remembers that the funds involved were lawfully acquired.
24. Respondents specifically DENY paragraphs 31, 32, 33, 34, 35, 36,37,
38, 39, 40, and 41 of the Petition for lack of knowledge or information
sufficient to form a belief as to the truth of the allegations since
Respondents are not privy to the transactions and as to such transaction
they were privy to they cannot remember with exactitude the same having
occurred a long time ago, except that as to Respondent Imelda R. Marcos
she specifically remembers that the funds involved were lawfully acquired.
25. Respondents specifically DENY paragraphs 42, 43, 44, 45, and 46, of
the Petition for lack of knowledge or information sufficient to form a
belief as to the truth of the allegations since Respondents were not privy to
the transactions and as to such transaction they were privy to they cannot
remember with exactitude the same having occurred a long time ago,
except that as to Respondent Imelda R. Marcos she specifically remembers
that the funds involved were lawfully acquired.
26. Respondents specifically DENY paragraphs 49, 50, 51 and 52, of the
Petition for lack of knowledge or information sufficient to form a belief as
to the truth of the allegations since Respondents were not privy to the
transactions and as to such transaction they were privy to they cannot
remember with exactitude the same having occurred a long time ago,
except that as to Respondent Imelda R. Marcos she specifically remembers
that the funds involved were lawfully acquired.
Upon careful perusal of the foregoing, the Court finds that respondent
Mrs. Marcos and the Marcos children indubitably failed to tender genuine
issues in their answer to the petition for forfeiture. A genuine issue is an
issue of fact which calls for the presentation of evidence as distinguished
from an issue which is fictitious and contrived, set up in bad faith or
patently lacking in substance so as not to constitute a genuine issue for
trial. Respondents defenses of lack of knowledge for lack of privity or
(inability to) recall because it happened a long time ago or, on the part of
Mrs. Marcos, that the funds were lawfully acquired are fully insufficient to
tender genuine issues. Respondent Marcoses defenses were a sham and
evidently calibrated to compound and confuse the issues.
The following pleadings filed by respondent Marcoses are replete
with indications of a spurious defense:
(a) Respondents' Answer dated October 18, 1993;
(b) Pre-trial Brief dated October 4, 1999 of Mrs. Marcos,
Supplemental Pre-trial Brief dated October 19, 1999 of
Ferdinand, Jr. and Mrs. Imee Marcos-Manotoc adopting
the pre-trial brief of Mrs. Marcos, and Manifestation dated
October 19, 1999 of Irene Marcos-Araneta adopting the
pre-trial briefs of her co- respondents;
 (c) Opposition to Motion for Summary Judgment dated March
21, 2000, filed by Mrs. Marcos which the other
respondents (Marcos children) adopted;
(d) Demurrer to Evidence dated May 2, 2000 filed by Mrs.
Marcos and adopted by the Marcos children;
(e) Motion for Reconsideration dated September 26, 2000 filed
by Mrs. Marcos; Motion for Reconsideration dated
October 5, 2000 jointly filed by Mrs. Manotoc and
Ferdinand, Jr., and Supplemental Motion for
Reconsideration dated October 9, 2000 likewise jointly
filed by Mrs. Manotoc and Ferdinand, Jr.;
(f) Memorandum dated December 12, 2000 of Mrs. Marcos and
Memorandum dated December 17, 2000 of the Marcos
children;
(g) Manifestation dated May 26, 1998; and
(h) General/Supplemental Agreement dated December 23, 1993.
An examination of the foregoing pleadings is in order.
Respondents Answer dated October 18, 1993.
In their answer, respondents failed to specifically deny each and every
allegation contained in the petition for forfeiture in the manner required by
the rules. All they gave were stock answers like they have no sufficient
knowledge or they could not recall because it happened a long time ago,
and, as to Mrs. Marcos, the funds were lawfully acquired, without stating
the basis of such assertions.
Section 10, Rule 8 of the 1997 Rules of Civil Procedure, provides:
A defendant must specify each material allegation of fact the truth of
which he does not admit and, whenever practicable, shall set forth the
substance of the matters upon which he relies to support his denial. Where
a defendant desires to deny only a part of an averment, he shall specify so
much of it as is true and material and shall deny the remainder. Where a
defendant is without knowledge or information sufficient to form a belief
as to the truth of a material averment made in the complaint, he shall so
state, and this shall have the effect of a denial. [28]
The purpose of requiring respondents to make a specific denial is to
make them disclose facts which will disprove the allegations of petitioner
at the trial, together with the matters they rely upon in support of such
denial. Our jurisdiction adheres to this rule to avoid and prevent
unnecessary expenses and waste of time by compelling both parties to lay
their cards on the table, thus reducing the controversy to its true terms. As
explained in Alonso vs. Villamor,[29]
A litigation is not a game of technicalities in which one, more deeply
schooled and skilled in the subtle art of movement and position, entraps
and destroys the other. It is rather a contest in which each contending party
fully and fairly lays before the court the facts in issue and then, brushing
aside as wholly trivial and indecisive all imperfections of form and
technicalities of procedure, asks that justice be done upon the merits.
Lawsuits, unlike duels, are not to be won by a rapiers thrust.
On the part of Mrs. Marcos, she claimed that the funds were lawfully
acquired. However, she failed to particularly state the ultimate facts
surrounding the lawful manner or mode of acquisition of the subject funds.
Simply put, she merely stated in her answer with the other respondents that
the funds were lawfully acquired without detailing how exactly these
funds were supposedly acquired legally by them. Even in this case before
us, her assertion that the funds were lawfully acquired remains bare and
unaccompanied by any factual support which can prove, by the
presentation of evidence at a hearing, that indeed the funds were acquired
legitimately by the Marcos family.
 Respondents denials in their answer at the Sandiganbayan were based
on their alleged lack of knowledge or information sufficient to form a
belief as to the truth of the allegations of the petition.
It is true that one of the modes of specific denial under the rules is a
denial through a statement that the defendant is without knowledge or
information sufficient to form a belief as to the truth of the material
averment in the complaint. The question, however, is whether the kind of
denial in respondents answer qualifies as the specific denial called for by
the rules. We do not think so. In Morales vs. Court of Appeals,[30] this
Court ruled that if an allegation directly and specifically charges a party
with having done, performed or committed a particular act which the latter
did not in fact do, perform or commit, a categorical and express denial
must be made.
Here, despite the serious and specific allegations against them, the
Marcoses responded by simply saying that they had no knowledge or
information sufficient to form a belief as to the truth of such
allegations. Such a general, self-serving claim of ignorance of the facts
alleged in the petition for forfeiture was insufficient to raise an issue.
Respondent Marcoses should have positively stated how it was that they
were supposedly ignorant of the facts alleged.[31]
To elucidate, the allegation of petitioner Republic in paragraph 23 of
the petition for forfeiture stated:
23. The following presentation very clearly and overwhelmingly show in
detail how both respondents clandestinely stashed away the countrys
wealth to Switzerland and hid the same under layers upon layers of
foundations and other corporate entities to prevent its detection. Through
their dummies/nominees, fronts or agents who formed those foundations
or corporate entities, they opened and maintained numerous bank
accounts. But due to the difficulty if not the impossibility of detecting and
documenting all those secret accounts as well as the enormity of the
deposits therein hidden, the following presentation is confined to five
identified accounts groups, with balances amounting to about $356-M with
a reservation for the filing of a supplemental or separate forfeiture
complaint should the need arise.[32]
Respondents lame denial of the aforesaid allegation was:
22. Respondents specifically DENY paragraph 23 insofar as it alleges that
Respondents clandestinely stashed the countrys wealth in Switzerland and
hid the same under layers and layers of foundations and corporate entities
for being false, the truth being that Respondents aforesaid properties were
lawfully acquired.[33]
Evidently, this particular denial had the earmark of what is called in
the law on pleadings as a negative pregnant, that is, a denial pregnant with
the admission of the substantial facts in the pleading responded to which
are not squarely denied. It was in effect an admission of the averments it
was directed at.[34] Stated otherwise, a negative pregnant is a form of
negative expression which carries with it an affirmation or at least an
implication of some kind favorable to the adverse party. It is a denial
pregnant with an admission of the substantial facts alleged in the pleading.
Where a fact is alleged with qualifying or modifying language and the
words of the allegation as so qualified or modified are literally denied, has
been held that the qualifying circumstances alone are denied while the fact
itself is admitted.[35]
In the instant case, the material allegations in paragraph 23 of the said
petition were not specifically denied by respondents in paragraph 22 of
their answer. The denial contained in paragraph 22 of the answer was
focused on the averment in paragraph 23 of the petition for forfeiture that
Respondents clandestinely stashed the countrys wealth in Switzerland and
hid the same under layers and layers of foundations and corporate entities.
Paragraph 22 of the respondents answer was thus a denial pregnant with
admissions of the following substantial facts:
(1) the Swiss bank deposits existed and
 (2) that the estimated sum thereof was US$356 million as of
December, 1990.
Therefore, the allegations in the petition for forfeiture on the
existence of the Swiss bank deposits in the sum of about US$356 million,
not having been specifically denied by respondents in their answer, were
deemed admitted by them pursuant to Section 11, Rule 8 of the 1997
Revised Rules on Civil Procedure:
Material averment in the complaint, xxx shall be deemed admitted when
not specifically denied. xxx.[36]
By the same token, the following unsupported denials of respondents
in their answer were pregnant with admissions of the substantial facts
alleged in the Republics petition for forfeiture:
23. Respondents specifically DENY paragraphs 24, 25, 26, 27, 28, 29 and
30 of the Petition for lack of knowledge or information sufficient to form a
belief as to the truth of the allegation since respondents were not privy to
the transactions regarding the alleged Azio-Verso-Vibur Foundation
accounts, except that, as to respondent Imelda R. Marcos, she specifically
remembers that the funds involved were lawfully acquired.
24. Respondents specifically DENY paragraphs 31, 32, 33, 34, 35, 36, 37,
38, 39, 40, 41 of the Petition for lack of knowledge or information
sufficient to form a belief as to the truth of the allegations since
respondents were not privy to the transactions and as to such transactions
they were privy to, they cannot remember with exactitude the same having
occurred a long time ago, except as to respondent Imelda R. Marcos, she
specifically remembers that the funds involved were lawfully acquired.
25. Respondents specifically DENY paragraphs 42, 43, 45, and 46 of the
petition for lack of knowledge or information sufficient to from a belief as
to the truth of the allegations since respondents were not privy to the
transactions and as to such transaction they were privy to, they cannot
remember with exactitude, the same having occurred a long time ago,
except that as to respondent Imelda R. Marcos, she specifically remembers
that the funds involved were lawfully acquired.
26. Respondents specifically DENY paragraphs 49, 50, 51 and 52 of the
petition for lack of knowledge and information sufficient to form a belief
as to the truth of the allegations since respondents were not privy to the
transactions and as to such transaction they were privy to they cannot
remember with exactitude the same having occurred a long time ago,
except that as to respondent Imelda R. Marcos, she specifically remembers
that the funds involved were lawfully acquired.
The matters referred to in paragraphs 23 to 26 of the respondents
answer pertained to the creation of five groups of accounts as well as their
respective ending balances and attached documents alleged in paragraphs
24 to 52 of the Republics petition for forfeiture. Respondent Imelda R.
Marcos never specifically denied the existence of the Swiss funds. Her
claim that the funds involved were lawfully acquired was an
acknowledgment on her part of the existence of said deposits. This only
reinforced her earlier admission of the allegation in paragraph 23 of the
petition for forfeiture regarding the existence of the US$356 million Swiss
bank deposits.
The allegations in paragraphs 47[37] and 48[38] of the petition for
forfeiture referring to the creation and amount of the deposits of the
Rosalys-Aguamina Foundation as well as the averment in paragraph 52-
a[39] of the said petition with respect to the sum of the Swiss bank deposits
estimated to be US$356 million were again not specifically denied by
respondents in their answer. The respondents did not at all respond to the
issues raised in these paragraphs and the existence, nature and amount of
the Swiss funds were therefore deemed admitted by them. As held
in Galofa vs. Nee Bon Sing,[40] if a defendants denial is a negative
pregnant, it is equivalent to an admission.
Moreover, respondents denial of the allegations in the petition for
forfeiture for lack of knowledge or information sufficient to form a belief
as to the truth of the allegations since respondents were not privy to the
transactions was just a pretense. Mrs. Marcos privity to the transactions
was in fact evident from her signatures on some of the vital
documents[41] attached to the petition for forfeiture which Mrs. Marcos
failed to specifically deny as required by the rules. [42]
It is worthy to note that the pertinent documents attached to the
petition for forfeiture were even signed personally by respondent Mrs.
Marcos and her late husband, Ferdinand E. Marcos, indicating that said
documents were within their knowledge. As correctly pointed out by
Sandiganbayan Justice Francisco Villaruz, Jr. in his dissenting opinion:
The pattern of: 1) creating foundations, 2) use of pseudonyms and
dummies, 3) approving regulations of the Foundations for the distribution
of capital and income of the Foundations to the First and Second
beneficiary (who are no other than FM and his family), 4) opening of bank
accounts for the Foundations, 5) changing the names of the Foundations,
6) transferring funds and assets of the Foundations to other Foundations or
Fides Trust, 7) liquidation of the Foundations as substantiated by the
Annexes U to U-168, Petition [for forfeiture] strongly indicate that FM
and/or Imelda were the real owners of the assets deposited in the Swiss
banks, using the Foundations as dummies.[43]
How could respondents therefore claim lack of sufficient knowledge
or information regarding the existence of the Swiss bank deposits and the
creation of five groups of accounts when Mrs. Marcos and her late
husband personally masterminded and participated in the formation and
control of said foundations? This is a fact respondent Marcoses were never
able to explain.
Not only that. Respondents' answer also technically admitted the
genuineness and due execution of the Income Tax Returns (ITRs) and the
balance sheets of the late Ferdinand E. Marcos and Imelda R. Marcos
attached to the petition for forfeiture, as well as the veracity of the contents
thereof.
The answer again premised its denials of said ITRs and balance
sheets on the ground of lack of knowledge or information sufficient to
form a belief as to the truth of the contents thereof. Petitioner correctly
points out that respondents' denial was not really grounded on lack of
knowledge or information sufficient to form a belief but was based on lack
of recollection. By reviewing their own records, respondent Marcoses
could have easily determined the genuineness and due execution of the
ITRs and the balance sheets. They also had the means and opportunity of
verifying the same from the records of the BIR and the Office of the
President. They did not.
When matters regarding which respondents claim to have no
knowledge or information sufficient to form a belief are plainly and
necessarily within their knowledge, their alleged ignorance or lack of
information will not be considered a specific denial. [44] An unexplained
denial of information within the control of the pleader, or is readily
accessible to him, is evasive and is insufficient to constitute an effective
denial.[45]
The form of denial adopted by respondents must be availed of with
sincerity and in good faith, and certainly not for the purpose of confusing
the adverse party as to what allegations of the petition are really being
challenged; nor should it be made for the purpose of delay.[46] In the
instant case, the Marcoses did not only present unsubstantiated assertions
but in truth attempted to mislead and deceive this Court by presenting an
obviously contrived defense.
Simply put, a profession of ignorance about a fact which is patently
and necessarily within the pleaders knowledge or means of knowing is as
ineffective as no denial at all.[47] Respondents ineffective denial thus failed
to properly tender an issue and the averments contained in the petition for
forfeiture were deemed judicially admitted by them.
As held in J.P. Juan & Sons, Inc. vs. Lianga Industries, Inc.:
Its specific denial of the material allegation of the petition without setting
forth the substance of the matters relied upon to support its general denial,
when such matters were plainly within its knowledge and it could not
logically pretend ignorance as to the same, therefore, failed to properly
tender on issue.[48]
Thus, the general denial of the Marcos children of the allegations in
the petition for forfeiture for lack of knowledge or information sufficient
to form a belief as to the truth of the allegations since they were not privy
to the transactions cannot rightfully be accepted as a defense because they
are the legal heirs and successors-in-interest of Ferdinand E. Marcos and
are therefore bound by the acts of their father vis-a-vis the Swiss funds.
PRE-TRIAL BRIEF DATED OCTOBER 18, 1993
The pre-trial brief of Mrs. Marcos was adopted by the three Marcos
children. In said brief, Mrs. Marcos stressed that the funds involved were
lawfully acquired. But, as in their answer, they failed to state and
substantiate how these funds were acquired lawfully. They failed to
present and attach even
a single document that would show and prove the truth of their allegations.
Section 6, Rule 18 of the 1997 Rules of Civil Procedure provides:
The parties shall file with the court and serve on the adverse party, x x x
their respective pre-trial briefs which shall contain, among others:
xxx
(d) the documents or exhibits to be presented, stating the purpose thereof;
xxx
(f) the number and names of the witnesses, and the substance of their
respective testimonies.[49]
It is unquestionably within the courts power to require the parties to
submit their pre-trial briefs and to state the number of witnesses intended
to be called to the stand, and a brief summary of the evidence each of them
is expected to give as well as to disclose the number of documents to be
submitted with a description of the nature of each. The tenor and character
of the testimony of the witnesses and of the documents to be deduced at
the trial thus made known, in addition to the particular issues of fact and
law, it becomes apparent if genuine issues are being put forward
necessitating the holding of a trial. Likewise, the parties are obliged not
only to make a formal identification and specification of the issues and
their proofs, and to put these matters in writing and submit them to the
court within the specified period for the prompt disposition of the action.
[50]
The pre-trial brief of Mrs. Marcos, as subsequently adopted by
respondent Marcos children, merely stated:
xxx
WITNESSES
4.1 Respondent Imelda will present herself as a witness and reserves the
right to present additional witnesses as may be necessary in the course of
the trial.
xxx
DOCUMENTARY EVIDENCE
5.1 Respondent Imelda reserves the right to present and introduce in
evidence documents as may be necessary in the course of the trial.
Mrs. Marcos did not enumerate and describe the documents
constituting her evidence. Neither the names of witnesses nor the nature of
their testimony was stated. What alone appeared certain was the testimony
of Mrs. Marcos only who in fact had previously claimed ignorance and
lack of knowledge. And even then, the substance of her testimony, as
required by the rules, was not made known either. Such cunning tactics of
respondents are totally unacceptable to this Court. We hold that, since no
genuine issue was raised, the case became ripe for summary judgment.
OPPOSITION TO MOTION FOR SUMMARY
JUDGMENT
DATED MARCH 21, 2000
The opposition filed by Mrs. Marcos to the motion for summary
judgment dated March 21, 2000 of petitioner Republic was merely adopted
by the Marcos children as their own opposition to the said motion.
However, it was again not accompanied by affidavits, depositions or
admissions as required by Section 3, Rule 35 of the 1997 Rules on Civil
Procedure:
x x x The adverse party may serve opposing affidavits, depositions, or
admissions at least three (3) days before hearing. After hearing, the
judgment sought shall be rendered forthwith if the pleadings, supporting
affidavits, depositions, and admissions on file, show that, except as to the
amount of damages, there is no genuine issue as to any material fact and
that the moving party is entitled to a judgment as a matter of law.[51]
The absence of opposing affidavits, depositions and admissions to
contradict the sworn declarations in the Republics motion only
demonstrated that the averments of such opposition were not genuine and
therefore unworthy of belief.
Demurrer to Evidence dated May 2, 2000;[52]
Motions for Reconsideration;[53] and Memoranda
of Mrs. Marcos and the Marcos children[54]
All these pleadings again contained no allegations of facts showing
their lawful acquisition of the funds. Once more, respondents merely made
general denials without alleging facts which would have been admissible
in evidence at the hearing, thereby failing to raise genuine issues of fact.
Mrs. Marcos insists in her memorandum dated October 21, 2002 that,
during the pre-trial, her counsel stated that his client was just a beneficiary
of the funds, contrary to petitioner Republics allegation that Mrs. Marcos
disclaimed ownership of or interest in the funds.
This is yet another indication that respondents presented a fictitious
defense because, during the pre-trial, Mrs. Marcos and the Marcos
children denied ownership of or interest in the Swiss funds:
PJ Garchitorena:
Make of record that as far as Imelda Marcos is concerned through the
statement of Atty. Armando M. Marcelo that the US$360 million more or
less subject matter of the instant lawsuit as allegedly obtained from the
various Swiss Foundations do not belong to the estate of Marcos or to
Imelda Marcos herself. Thats your statement of facts?
Atty. MARCELO:
Yes, Your Honor.
PJ Garchitorena:
Thats it. Okay. Counsel for Manotoc and Manotoc, Jr. What is your point
here? Does the estate of Marcos own anything of the $360 million subject
of this case.
Atty. TECSON:
We joined the Manifestation of Counsel.
PJ Garchitorena:
You do not own anything?
Atty. TECSON:
Yes, Your Honor.
PJ Garchitorena:
Counsel for Irene Araneta?
Atty. SISON:
I join the position taken by my other compaeros here, Your Honor.
xxx
Atty. SISON:
Irene Araneta as heir do (sic) not own any of the amount, Your Honor.[55]
We are convinced that the strategy of respondent Marcoses was to
confuse petitioner Republic as to what facts they would prove or what
issues they intended to pose for the court's resolution. There is no doubt in
our mind that they were leading petitioner Republic, and now this Court,
to perplexity, if not trying to drag this forfeiture case to eternity.
Manifestation dated May 26, 1998 filed by MRS.
Marcos; General/Supplemental Compromise
Agreement dated December 28, 1993
These pleadings of respondent Marcoses presented nothing but
feigned defenses. In their earlier pleadings, respondents alleged either that
they had no knowledge of the existence of the Swiss deposits or that they
could no longer remember anything as it happened a long time ago. As to
Mrs. Marcos, she remembered that it was lawfully acquired.
In her Manifestation dated May 26, 1998, Mrs. Marcos stated that:
COMES NOW undersigned counsel for respondent Imelda R. Marcos, and
before this Honorable Court, most respectfully manifests:
That respondent Imelda R, Marcos owns 90% of the subject matter of the
above-entitled case, being the sole beneficiary of the dollar deposits in the
name of the various foundations alleged in the case;
That in fact only 10% of the subject matter in the above-entitled case
belongs to the estate of the late President Ferdinand E. Marcos.
In the Compromise/Supplemental Agreements, respondent Marcoses
sought to implement the agreed distribution of the Marcos
assets, including the Swiss deposits. This was, to us, an unequivocal
admission of ownership by the Marcoses of the said deposits.
But, as already pointed out, during the pre-trial conference,
respondent Marcoses denied knowledge as well as ownership of the Swiss
funds.
Anyway we look at it, respondent Marcoses have put forth no real
defense. The facts pleaded by respondents, while ostensibly raising
important questions or issues of fact, in reality comprised mere verbiage
that was evidently wanting in substance and constituted no genuine issues
for trial.
We therefore rule that, under the circumstances, summary judgment is
proper.
In fact, it is the law itself which determines when summary judgment
is called for. Under the rules, summary judgment is appropriate when there
are no genuine issues of fact requiring the presentation of evidence in a
full-blown trial. Even if on their face the pleadings appear to raise issue, if
the affidavits, depositions and admissions show that such issues are not
genuine, then summary judgment as prescribed by the rules must ensue as
a matter of law.[56]
 In sum, mere denials, if unaccompanied by any fact which will be
admissible in evidence at a hearing, are not sufficient to raise genuine
issues of fact and will not defeat a motion for summary judgment. [57] A
summary judgment is one granted upon motion of a party for an
expeditious settlement of the case, it appearing from the pleadings,
depositions, admissions and affidavits that there are no important
questions or issues of fact posed and, therefore, the movant is entitled to a
judgment as a matter of law. A motion for summary judgment is premised
on the assumption that the issues presented need not be tried either
because these are patently devoid of substance or that there is no genuine
issue as to any pertinent fact. It is a method sanctioned by the Rules of
Court for the prompt disposition of a civil action where there exists no
serious controversy.[58] Summary judgment is a procedural device for the
prompt disposition of actions in which the pleadings raise only a legal
issue, not a genuine issue as to any material fact. The theory of summary
judgment is that, although an answer may on its face appear to tender
issues requiring trial, if it is established by affidavits, depositions or
admissions that those issues are not genuine but fictitious, the Court is
justified in dispensing with the trial and rendering summary judgment for
petitioner.[59]
In the various annexes to the petition for forfeiture, petitioner
Republic attached sworn statements of witnesses who had personal
knowledge of the Marcoses' participation in the illegal acquisition of funds
deposited in the Swiss accounts under the names of five groups or
foundations. These sworn statements substantiated the ill-gotten nature of
the Swiss bank deposits. In their answer and other subsequent pleadings,
however, the Marcoses merely made general denials of the allegations
against them without stating facts admissible in evidence at the hearing,
thereby failing to raise any genuine issues of fact.
Under these circumstances, a trial would have served no purpose at
all and would have been totally unnecessary, thus justifying a summary
judgment on the petition for forfeiture. There were no opposing affidavits
to contradict the sworn declarations of the witnesses of petitioner
Republic, leading to the inescapable conclusion that the matters raised in
the Marcoses answer were false.
Time and again, this Court has encountered cases like this which are
either only half-heartedly defended or, if the semblance of a defense is
interposed at all, it is only to delay disposition and gain time. It is certainly
not in the interest of justice to allow respondent Marcoses to avail of the
appellate remedies accorded by the Rules of Court to litigants in good
faith, to the prejudice of the Republic and ultimately of the Filipino
people. From the beginning, a candid demonstration of respondents good
faith should have been made to the court below. Without the deceptive
reasoning and argumentation, this protracted litigation could have ended a
long time ago.
Since 1991, when the petition for forfeiture was first filed, up to the
present, all respondents have offered are foxy responses like lack of
sufficient knowledge or lack of privity or they cannot recall because it
happened a long time ago or, as to Mrs. Marcos, the funds were lawfully
acquired. But, whenever it suits them, they also claim ownership of 90%
of the funds and allege that only 10% belongs to the Marcos estate. It has
been an incredible charade from beginning to end.
In the hope of convincing this Court to rule otherwise, respondents
Maria Imelda Marcos-Manotoc and Ferdinand R. Marcos Jr. contend that
"by its positive acts and express admissions prior to filing the motion for
summary judgment on March 10, 2000, petitioner Republic had bound
itself to go to trial on the basis of existing issues. Thus, it had legally
waived whatever right it had to move for summary judgment." [60]
We do not think so. The alleged positive acts and express admissions
of the petitioner did not preclude it from filing a motion for summary
judgment.
Rule 35 of the 1997 Rules of Civil Procedure provides:
Rule 35
 Summary Judgment
Section 1. Summary judgment for claimant. - A party seeking to recover
upon a claim, counterclaim, or cross-claim or to obtain a declaratory relief
may, at any time after the pleading in answer thereto has been served,
move with supporting affidavits, depositions or admissions for a summary
judgment in his favor upon all or any part thereof.
Section 2. Summary judgment for defending party. - A party against whom
a claim, counterclaim, or cross-claim is asserted or a declaratory relief is
sought may, at any time, move with supporting affidavits, depositions or
admissions for a summary judgment in his favor as to all or any part
thereof. (Emphasis ours)[61]
Under the rule, the plaintiff can move for summary judgment at any
time after the pleading in answer thereto (i.e., in answer to the claim,
counterclaim or cross-claim) has been served." No fixed reglementary
period is provided by the Rules. How else does one construe the phrase
"any time after the answer has been served?
This issue is actually one of first impression. No local jurisprudence
or authoritative work has touched upon this matter. This being so, an
examination of foreign laws and jurisprudence, particularly those of the
United States where many of our laws and rules were copied, is in order.
Rule 56 of the Federal Rules of Civil Procedure provides that a party
seeking to recover upon a claim, counterclaim or cross-claim may move
for summary judgment at any time after the expiration of 20 days from the
commencement of the action or after service of a motion for summary
judgment by the adverse party, and that a party against whom a claim,
counterclaim or cross-claim is asserted may move for summary judgment
at any time.
However, some rules, particularly Rule 113 of the Rules of Civil
Practice of New York, specifically provide that a motion for summary
judgment may not be made until issues have been joined, that is, only after
an answer has been served. [62] Under said rule, after issues have been
joined, the motion for summary judgment may be made at any stage of the
litigation.[63] No fixed prescriptive period is provided.
Like Rule 113 of the Rules of Civil Practice of New York, our rules
also provide that a motion for summary judgment may not be made until
issues have been joined, meaning, the plaintiff has to wait for the answer
before he can move for summary judgment.[64] And like the New York
rules, ours do not provide for a fixed reglementary period within which to
move for summary judgment.
This being so, the New York Supreme Court's interpretation of Rule
113 of the Rules of Civil Practice can be applied by analogy to the
interpretation of Section 1, Rule 35, of our 1997 Rules of Civil Procedure.
Under the New York rule, after the issues have been joined, the
motion for summary judgment may be made at any stage of the litigation.
And what exactly does the phrase "at any stage of the litigation" mean?
In Ecker vs. Muzysh,[65] the New York Supreme Court ruled:
"PER CURIAM.
Plaintiff introduced her evidence and the defendants rested on the case
made by the plaintiff. The case was submitted. Owing to the serious illness
of the trial justice, a decision was not rendered within sixty days after the
final adjournment of the term at which the case was tried. With the
approval of the trial justice, the plaintiff moved for a new trial under
Section 442 of the Civil Practice Act. The plaintiff also moved for
summary judgment under Rule 113 of the Rules of Civil Practice. The
motion was opposed mainly on the ground that, by proceeding to trial,
the plaintiff had waived her right to summary judgment and that the
answer and the opposing affidavits raised triable issues. The amount due
and unpaid under the contract is not in dispute. The Special Term granted
both motions and the defendants have appealed.
The Special Term properly held that the answer and the opposing
affidavits raised no triable issue. Rule 113 of the Rules of Civil Practice
and the Civil Practice Act prescribe no limitation as to the time when a
motion for summary judgment must be made. The object of Rule 113 is
to empower the court to summarily determine whether or not a bona fide
issue exists between the parties, and there is no limitation on the power
of the court to make such a determination at any stage of the litigation."
(emphasis ours)
On the basis of the aforequoted disquisition, "any stage of the litigation"
means that "even if the plaintiff has proceeded to trial, this does not
preclude him from thereafter moving for summary judgment." [66]
In the case at bar, petitioner moved for summary judgment after pre-
trial and before its scheduled date for presentation of evidence.
Respondent Marcoses argue that, by agreeing to proceed to trial during the
pre-trial conference, petitioner "waived" its right to summary judgment.
This argument must fail in the light of the New York Supreme Court
ruling which we apply by analogy to this case. In Ecker,[67] the defendant
opposed the motion for summary judgment on a ground similar to that
raised by the Marcoses, that is, "that plaintiff had waived her right to
summary judgment" by her act of proceeding to trial. If, as correctly ruled
by the New York court, plaintiff was allowed to move for summary
judgment even aftertrial and submission of the case for resolution, more so
should we permit it in the present case where petitioner moved for
summary judgment before trial.
Therefore, the phrase "anytime after the pleading in answer thereto
has been served" in Section 1, Rule 35 of our Rules of Civil Procedure
means "at any stage of the litigation." Whenever it becomes evident at any
stage of the litigation that no triable issue exists, or that the defenses raised
by the defendant(s) are sham or frivolous, plaintiff may move for summary
judgment. A contrary interpretation would go against the very objective of
the Rule on Summary Judgment which is to "weed out sham claims or
defenses thereby avoiding the expense and loss of time involved in a
trial."[68]
In cases with political undertones like the one at bar, adverse parties
will often do almost anything to delay the proceedings in the hope that a
future administration sympathetic to them might be able to influence the
outcome of the case in their favor. This is rank injustice we cannot tolerate.
The law looks with disfavor on long, protracted and expensive
litigation and encourages the speedy and prompt disposition of cases. That
is why the law and the rules provide for a number of devices to ensure the
speedy disposition of cases. Summary judgment is one of them.
Faithful therefore to the spirit of the law on summary judgment which
seeks to avoid unnecessary expense and loss of time in a trial, we hereby
rule that petitioner Republic could validly move for summary judgment
any time after the respondents answer was filed or, for that matter, at any
subsequent stage of the litigation. The fact that petitioner agreed to
proceed to trial did not in any way prevent it from moving for summary
judgment, as indeed no genuine issue of fact was ever validly raised by
respondent Marcoses.
This interpretation conforms with the guiding principle enshrined in
Section 6, Rule 1 of the 1997 Rules of Civil Procedure that the "[r]ules
should be liberally construed in order to promote their objective of
securing a just, speedy and inexpensive disposition of every action and
proceeding."[69]
Respondents further allege that the motion for summary judgment
was based on respondents' answer and other documents that had long been
in the records of the case. Thus, by the time the motion was filed on March
10, 2000, estoppel by laches had already set in against petitioner.
We disagree. Estoppel by laches is the failure or neglect for an
unreasonable or unexplained length of time to do that which, by exercising
due diligence, could or should have been done earlier, warranting a
presumption that the person has abandoned his right or declined to assert
it.[70] In effect, therefore, the principle of laches is one of estoppel because
"it prevents people who have slept on their rights from prejudicing the
rights of third parties who have placed reliance on the inaction of the
original parties and their successors-in-interest". [71]
A careful examination of the records, however, reveals that petitioner
was in fact never remiss in pursuing its case against respondent Marcoses
through every remedy available to it, including the motion for summary
judgment.
Petitioner Republic initially filed its motion for summary judgment
on October 18, 1996. The motion was denied because of the pending
compromise agreement between the Marcoses and petitioner. But during
the pre-trial conference, the Marcoses denied ownership of the Swiss
funds, prompting petitioner to file another motion for summary judgment
now under consideration by this Court. It was the subsequent events that
transpired after the answer was filed, therefore, which prevented petitioner
from filing the questioned motion. It was definitely not because of neglect
or inaction that petitioner filed the (second) motion for summary judgment
years after respondents' answer to the petition for forfeiture.
In invoking the doctrine of estoppel by laches, respondents must
show not only unjustified inaction but also that some unfair injury to them
might result unless the action is barred. [72]
This, respondents failed to bear out. In fact, during the pre-trial
conference, the Marcoses disclaimed ownership of the Swiss deposits. Not
being the owners, as they claimed, respondents did not have any vested
right or interest which could be adversely affected by petitioner's alleged
inaction.
But even assuming for the sake of argument that laches had already
set in, the doctrine of estoppel or laches does not apply when the
government sues as a sovereign or asserts governmental rights. [73] Nor can
estoppel validate an act that contravenes law or public policy.[74]
As a final point, it must be emphasized that laches is not a mere
question of time but is principally a question of the inequity or unfairness
of permitting a right or claim to be enforced or asserted. [75] Equity
demands that petitioner Republic should not be barred from pursuing the
people's case against the Marcoses.
(2) The Propriety of Forfeiture
The matter of summary judgment having been thus settled, the issue
of whether or not petitioner Republic was able to prove its case for
forfeiture in accordance with the requisites of Sections 2 and 3 of RA 1379
now takes center stage.
The law raises the prima facie presumption that a property is
unlawfully acquired, hence subject to forfeiture, if its amount or value is
manifestly disproportionate to the official salary and other lawful income
of the public officer who owns it. Hence, Sections 2 and 6 of RA
1379[76] provide:
xxxxxx
Section 2. Filing of petition. Whenever any public officer or employee has
acquired during his incumbency an amount or property which is
manifestly out of proportion to his salary as such public officer or
employee and to his other lawful income and the income from legitimately
acquired property, said property shall be presumed prima facie to have
been unlawfully acquired.
xxxxxx
Sec. 6. Judgment If the respondent is unable to show to the satisfaction of
the court that he has lawfully acquired the property in question, then the
court shall declare such property in question, forfeited in favor of the
State, and by virtue of such judgment the property aforesaid shall become
the property of the State. Provided, That no judgment shall be rendered
within six months before any general election or within three months
before any special election. The Court may, in addition, refer this case to
the corresponding Executive Department for administrative or criminal
action, or both.
 From the above-quoted provisions of the law, the following facts
must be established in order that forfeiture or seizure of the Swiss deposits
may be effected:
(1) ownership by the public officer of money or
property acquired during his incumbency, whether it be in
his name or otherwise, and
(2) the extent to which the amount of that money or property
exceeds, i. e., is grossly disproportionate to, the legitimate
income of the public officer.
That spouses Ferdinand and Imelda Marcos were public officials
during the time material to the instant case was never in dispute. Paragraph
4 of respondent Marcoses' answer categorically admitted the allegations in
paragraph 4 of the petition for forfeiture as to the personal circumstances
of Ferdinand E. Marcos as a public official who served without
interruption as Congressman, Senator, Senate President and President of
the Republic of the Philippines from December 1, 1965 to February 25,
1986.[77] Likewise, respondents admitted in their answer the contents of
paragraph 5 of the petition as to the personal circumstances of Imelda R.
Marcos who once served as a member of the Interim Batasang
Pambansa from 1978 to 1984 and as Metro Manila Governor,
concurrently Minister of Human Settlements, from June 1976 to February
1986.[78]
Respondent Mrs. Marcos also admitted in paragraph 10 of her answer
the allegations of paragraph 11 of the petition for forfeiture which referred
to the accumulated salaries of respondents Ferdinand E. Marcos and
Imelda R. Marcos.[79] The combined accumulated salaries of the Marcos
couple were reflected in the Certification dated May 27, 1986 issued by
then Minister of Budget and Management Alberto Romulo. [80] The
Certification showed that, from 1966 to 1985, Ferdinand E. Marcos and
Imelda R. Marcos had accumulated salaries in the amount of P1,570,000
and P718,750, respectively, or a total of P2,288,750:
Ferdinand E. Marcos, as President
1966-1976 at P60,000/year P660,000
1977-1984 at P100,000/year 800,000
1985 at P110,000/year 110,000
P1,570,00
Imelda R. Marcos, as Minister
June 1976-1985 at P75,000/year P718,000
In addition to their accumulated salaries from 1966 to 1985 are the
Marcos couples combined salaries from January to February 1986 in the
amount of P30,833.33. Hence, their total accumulated salaries amounted
to P2,319,583.33. Converted to U.S. dollars on the basis of the
corresponding peso-dollar exchange rates prevailing during the applicable
period when said salaries were received, the total amount had an
equivalent value of $304,372.43.
The dollar equivalent was arrived at by using the official annual rates
of exchange of the Philippine peso and the US dollar from 1965 to 1985 as
well as the official monthly rates of exchange in January and February
1986 issued by the Center for Statistical Information of the Bangko
Sentral ng Pilipinas.
Prescinding from the aforesaid admissions, Section 4, Rule 129 of the
Rules of Court provides that:
Section 4. Judicial admissions An admission, verbal or written, made by a
party in the course of the proceedings in the same case does not require
proof. The admission may be contradicted only by showing that it was
made through palpable mistake or that no such admission was made. [81]
 It is settled that judicial admissions may be made: (a) in the pleadings
filed by the parties; (b) in the course of the trial either by verbal or written
manifestations or stipulations; or (c) in other stages of judicial
proceedings, as in the pre-trial of the case. [82] Thus, facts pleaded in the
petition and answer, as in the case at bar, are deemed admissions of
petitioner and respondents, respectively, who are not permitted to
contradict them or subsequently take a position contrary to or inconsistent
with such admissions.[83]
The sum of $304,372.43 should be held as the only known lawful
income of respondents since they did not file any Statement of Assets and
Liabilities (SAL), as required by law, from which their net worth could be
determined. Besides, under the 1935 Constitution, Ferdinand E. Marcos as
President could not receive any other emolument from the Government or
any of its subdivisions and instrumentalities. [84] Likewise, under the 1973
Constitution, Ferdinand E. Marcos as President could not receive during
his tenure any other emolument from the Government or any other source.
[85]
In fact, his management of businesses, like the administration of
foundations to accumulate funds, was expressly prohibited under the 1973
Constitution:
Article VII, Sec. 4(2) The President and the Vice-President shall not,
during their tenure, hold any other office except when otherwise provided
in this Constitution, nor may they practice any profession, participate
directly or indirectly in the management of any business, or be financially
interested directly or indirectly in any contract with, or in any franchise or
special privilege granted by the Government or any other subdivision,
agency, or instrumentality thereof, including any government owned or
controlled corporation.
Article VII, Sec. 11 No Member of the National Assembly shall appear as
counsel before any court inferior to a court with appellate jurisdiction, x x
x. Neither shall he, directly or indirectly, be interested financially in any
contract with, or in any franchise or special privilege granted by the
Government, or any subdivision, agency, or instrumentality thereof
including any government owned or controlled corporation during his term
of office. He shall not intervene in any matter before any office of the
government for his pecuniary benefit.
Article IX, Sec. 7 The Prime Minister and Members of the Cabinet shall be
subject to the provision of Section 11, Article VIII hereof and may not
appear as counsel before any court or administrative body, or manage any
business, or practice any profession, and shall also be subject to such other
disqualification as may be provided by law.
Their only known lawful income of $304,372.43 can therefore legally
and fairly serve as basis for determining the existence of a prima facie case
of forfeiture of the Swiss funds.
Respondents argue that petitioner was not able to establish a prima
facie case for the forfeiture of the Swiss funds since it failed to prove the
essential elements under Section 3, paragraphs (c), (d) and (e) of RA
1379.As the Act is a penal statute, its provisions are mandatory and should
thus be construed strictly against the petitioner and liberally in favor of
respondent Marcoses.
We hold that it was not for petitioner to establish the Marcoses other
lawful income or income from legitimately acquired property for the
presumption to apply because, as between petitioner and respondents, the
latter were in a better position to know if there were such other sources of
lawful income. And if indeed there was such other lawful income,
respondents should have specifically stated the same in their
answer. Insofar as petitioner Republic was concerned, it was enough to
specify the known lawful income of respondents.
Section 9 of the PCGG Rules and Regulations provides that, in
determining prima facie evidence of ill-gotten wealth, the value of the
accumulated assets, properties and other material possessions of those
covered by Executive Order Nos. 1 and 2
must be out of proportion to the known lawful income of such persons. The
respondent Marcos couple did not file any Statement of Assets and
Liabilities (SAL) from which their net worth could be determined. Their
failure to file their SAL was in itself a violation of law and to allow them
to successfully assail the Republic for not presenting their SAL would
reward them for their violation of the law.
Further, contrary to the claim of respondents, the admissions made by
them in their various pleadings and documents were valid. It is of record
that respondents judicially admitted that the money deposited with the
Swiss banks belonged to them.
We agree with petitioner that respondent Marcoses made judicial
admissions of their ownership of the subject Swiss bank deposits in their
answer, the General/Supplemental Agreements, Mrs. Marcos'
Manifestation and Constancia dated May 5, 1999, and the Undertaking
dated February 10, 1999. We take note of the fact that the Associate
Justices of the Sandiganbayan were unanimous in holding that respondents
had made judicial admissions of their ownership of the Swiss funds.
In their answer, aside from admitting the existence of the subject
funds, respondents likewise admitted ownership thereof. Paragraph 22 of
respondents' answer stated:
22. Respondents specifically DENY PARAGRAPH 23 insofar as it alleges
that respondents clandestinely stashed the country's wealth in Switzerland
and hid the same under layers and layers of foundations and corporate
entities for being false, the truth being that respondents' aforesaid
properties were lawfully acquired. (emphasis supplied)
By qualifying their acquisition of the Swiss bank deposits as lawful,
respondents unwittingly admitted their ownership thereof.
Respondent Mrs. Marcos also admitted ownership of the Swiss bank
deposits by failing to deny under oath the genuineness and due execution
of certain actionable documents bearing her signature attached to the
petition. As discussed earlier, Section 11, Rule 8 [86] of the 1997 Rules of
Civil Procedure provides that material averments in the complaint shall be
deemed admitted when not specifically denied.
The General[87] and Supplemental[88] Agreements executed by
petitioner and respondents on December 28, 1993 further bolstered the
claim of petitioner Republic that its case for forfeiture was proven in
accordance with the requisites of Sections 2 and 3 of RA 1379. The
whereas clause in the General Agreement declared that:
WHEREAS, the FIRST PARTY has obtained a judgment from the Swiss
Federal Tribunal on December 21, 1990, that the $356 million belongs in
principle to the Republic of the Philippines provided certain
conditionalities are met, but even after 7 years, the FIRST PARTY has not
been able to procure a final judgment of conviction against the PRIVATE
PARTY.
While the Supplemental Agreement warranted, inter alia, that:
In consideration of the foregoing, the parties hereby agree that the
PRIVATE PARTY shall be entitled to the equivalent of 25% of the amount
that may be eventually withdrawn from said $356 million Swiss deposits.
The stipulations set forth in the General and Supplemental
Agreements undeniably indicated the manifest intent of respondents to
enter into a compromise with petitioner. Corollarily, respondents
willingness to agree to an amicable settlement with the Republic only
affirmed their ownership of the Swiss deposits for the simple reason that
no person would acquiesce to any concession over such huge dollar
deposits if he did not in fact own them.
Respondents make much capital of the pronouncement by this Court
that the General and Supplemental Agreements were null and void.
[89]
They insist that nothing in those agreements could thus be admitted in
evidence against them because they stood on the same ground as an
accepted offer which, under Section 27, Rule 130 [90] of the 1997 Rules of
Civil Procedure, provides that in civil cases, an offer of compromise is not
an admission of any liability and is not admissible in evidence against the
offeror.
 We find no merit in this contention. The declaration of nullity of said
agreements was premised on the following constitutional and statutory
infirmities: (1) the grant of criminal immunity to the Marcos heirs was
against the law; (2) the PCGGs commitment to exempt from all forms of
taxes the properties to be retained by the Marcos heirs was against the
Constitution; and (3) the governments undertaking to cause the dismissal
of all cases filed against the Marcoses pending before the Sandiganbayan
and other courts encroached on the powers of the judiciary. The reasons
relied upon by the Court never in the least bit even touched on the veracity
and truthfulness of respondents admission with respect to their ownership
of the Swiss funds. Besides, having made certain admissions in those
agreements, respondents cannot now deny that they voluntarily admitted
owning the subject Swiss funds, notwithstanding the fact that the
agreements themselves were later declared null and void.
The following observation of Sandiganbayan Justice Catalino
Castaeda, Jr. in the decision dated September 19, 2000 could not have been
better said:
x x x The declaration of nullity of the two agreements rendered the same
without legal effects but it did not detract from the admissions of the
respondents contained therein. Otherwise stated, the admissions made in
said agreements, as quoted above, remain binding on the respondents. [91]
A written statement is nonetheless competent as an admission even if
it is contained in a document which is not itself effective for the purpose
for which it is made, either by reason of illegality, or incompetency of a
party thereto, or by reason of not being signed, executed or
delivered. Accordingly, contracts have been held as competent evidence of
admissions, although they may be unenforceable.[92]
The testimony of respondent Ferdinand Marcos, Jr. during the hearing
on the motion for the approval of the Compromise Agreement on April 29,
1998 also lent credence to the allegations of petitioner Republic that
respondents admitted ownership of the Swiss bank accounts. We quote the
salient portions of Ferdinand Jr.s formal declarations in open court:
ATTY. FERNANDO:
Mr. Marcos, did you ever have any meetings with
PCGG Chairman Magtanggol C. Gunigundo?
F. MARCOS, JR.:
Yes. I have had very many meetings in fact with Chairman.
ATTY. FERNANDO:
Would you recall when the first meeting occurred?
PJ GARCHITORENA:
In connection with what?
ATTY. FERNANDO:
In connection with the ongoing talks to compromise
the various cases initiated by PCGG against your family?
F. MARCOS, JR.:
The nature of our meetings was solely concerned
with negotiations towards achieving some kind of
agreement between the Philippine government and the
Marcos family. The discussions that led up to the
compromise agreement were initiated by our then counsel
Atty. Simeon Mesina x x x.[93]
xxx xxx xxx
ATTY. FERNANDO:
What was your reaction when Atty. Mesina informed you of
this possibility?
F. MARCOS, JR.:
My reaction to all of these approaches is that I am
always open, we are always open, we are very much always
 in search of resolution to the problem of the family and any
approach that has been made us, we have entertained.And
so my reaction was the same as what I have always why
not? Maybe this is the one that will finally put an end to this
problem.[94]
xxx xxx xxx
ATTY. FERNANDO:
Basically, what were the true amounts of the assets in
the bank?
PJ GARCHITORENA:
So, we are talking about liquid assets here? Just
Cash?
F. MARCOS, JR.:
Well, basically, any assets. Anything that was under
the Marcos name in any of the banks in Switzerland which
may necessarily be not cash.[95]
xxx xxx xxx
PJ GARCHITORENA:
x x x What did you do in other words, after being
apprised of this contract in connection herewith?
F. MARCOS, JR.:
I assumed that we are beginning to implement the
agreement because this was forwarded through the
Philippine government lawyers through our lawyers and
then, subsequently, to me. I was a little surprised because
we hadnt really discussed the details of the transfer of the
funds, what the bank accounts, what the mechanism would
be. But nevertheless, I was happy to see that as far as the
PCGG is concerned, that the agreement was perfected and
that we were beginning to implement it and that was a
source of satisfaction to me because I thought that finally it
will be the end.[96]
Ferdinand Jr.'s pronouncements, taken in context and in their entirety,
were a confirmation of respondents recognition of their ownership of the
Swiss bank deposits. Admissions of a party in his
testimony are receivableagainst him. If a party, as a witness, deliberately
concedes a fact, such concession has the force of a judicial admission.
[97]
It is apparent from Ferdinand Jr.s testimony that the Marcos family
agreed to negotiate with the Philippine government in the hope of finally
putting an end to the problems besetting the Marcos family regarding the
Swiss accounts. This was doubtlessly an acknowledgment of ownership on
their part. The rule is that the testimony on the witness stand partakes of
the nature of a formal judicial admission when a party testifies clearly and
unequivocally to a fact which is peculiarly within his own knowledge. [98]
In her Manifestation[99] dated May 26, 1998, respondent Imelda
Marcos furthermore revealed the following:
That respondent Imelda R. Marcos owns 90% of the subject matter of the
above-entitled case, being the sole beneficiary of the dollar deposits in the
name of the various foundations alleged in the case;
That in fact only 10% of the subject matter in the above-entitled case
belongs to the estate of the late President Ferdinand E. Marcos;
xxx xxx xxx
Respondents ownership of the Swiss bank accounts as borne out by
Mrs. Marcos' manifestation is as bright as sunlight. And her claim that she
is merely a beneficiary of the Swiss deposits is belied by her own
signatures on the appended copies of the documents substantiating her
ownership of the funds in the name of the foundations. As already
mentioned, she failed to specifically deny under oath the authenticity of
such documents, especially those involving William Saunders and Jane
Ryan which actually referred to Ferdinand Marcos and Imelda Marcos,
respectively. That failure of Imelda Marcos to specifically deny the
existence, much less the genuineness and due execution, of the instruments
bearing her signature, was tantamount to a judicial admission of the
genuineness and due execution of said instruments, in accordance with
Section 8, Rule 8[100]of the 1997 Rules of Civil Procedure.
Likewise, in her Constancia[101] dated May 6, 1999, Imelda Marcos
prayed for the approval of the Compromise Agreement and the subsequent
release and transfer of the $150 million to the rightful owner. She further
made the following manifestations:
xxx xxx xxx
2. The Republics cause of action over the full amount is its forfeiture in
favor of the government if found to be ill-gotten. On the other hand, the
Marcoses defend that it is a legitimate asset. Therefore, both parties
have an inchoate right of ownership over the account. If it turns out that
the account is of lawful origin, the Republic may yield to the
Marcoses. Conversely, the Marcoses must yield to the Republic.
(underscoring supplied)
xxx xxx xxx
3. Consistent with the foregoing, and the Marcoses having committed
themselves to helping the less fortunate, in the interest of peace,
reconciliation and unity, defendant MADAM IMELDA ROMUALDEZ
MARCOS, in firm abidance thereby, hereby affirms her agreement with
the Republic for the release and transfer of the US Dollar 150 million for
proper disposition, without prejudice to the final outcome of the litigation
respecting the ownership of the remainder.
Again, the above statements were indicative of Imeldas admission of
the Marcoses ownership of the Swiss deposits as in fact the Marcoses
defend that it (Swiss deposits) is a legitimate (Marcos) asset.
On the other hand, respondents Maria Imelda Marcos-Manotoc,
Ferdinand Marcos, Jr. and Maria Irene Marcos-Araneta filed a
motion[102] on May 4, 1998 asking the Sandiganbayan to place
the res (Swiss deposits) in custodia legis:
7. Indeed, the prevailing situation is fraught with danger! Unless the
aforesaid Swiss deposits are placed in custodia legis or within the Courts
protective mantle, its dissipation or misappropriation by the petitioner
looms as a distinct possibility.
Such display of deep, personal interest can only come from someone
who believes that he has a marked and intimate right over the considerable
dollar deposits. Truly, by filing said motion, the Marcos children revealed
their ownership of the said deposits.
Lastly, the Undertaking[103] entered into by the PCGG, the PNB and
the Marcos foundations on February 10, 1999, confirmed the Marcoses
ownership of the Swiss bank deposits. The subject Undertaking brought to
light their readiness to pay the human rights victims out of the funds held
in escrow in the PNB. It stated:
WHEREAS, the Republic of the Philippines sympathizes with the plight of
the human rights victims-plaintiffs in the aforementioned litigation
through the Second Party, desires to assist in the satisfaction of the
judgment awards of said human rights victims-plaintiffs, by releasing,
assigning and or waiving US$150 million of the funds held in escrow
under the Escrow Agreements dated August 14, 1995, although the
Republic is not obligated to do so under final judgments of the Swiss
courts dated December 10 and 19, 1997, and January 8, 1998;
WHEREAS, the Third Party is likewise willing to release, assign and/or
waive all its rights and interests over said US$150 million to the
aforementioned human rights victims-plaintiffs.
All told, the foregoing disquisition negates the claim of respondents
that petitioner failed to prove that they acquired or own the Swiss funds
and that it was only by arbitrarily isolating and taking certain statements
made by private respondents out of context that petitioner was able to treat
these as judicial admissions. The Court is fully aware of the relevance,
materiality and implications of every pleading and document submitted in
this case. This Court carefully scrutinized the proofs presented by the
parties. We analyzed, assessed and weighed them to ascertain if each piece
of evidence rightfully qualified as an admission. Owing to the far-reaching
historical and political implications of this case, we considered and
examined, individually and totally, the evidence of the parties, even if it
might have bordered on factual adjudication which, by authority of the
rules and jurisprudence, is not usually done by this Court. There is no
doubt in our mind that respondent Marcoses admitted ownership of the
Swiss bank deposits.
We have always adhered to the familiar doctrine that an admission
made in the pleadings cannot be controverted by the party making such
admission and becomes conclusive on him, and that all proofs submitted
by him contrary thereto or inconsistent therewith should be ignored,
whether an objection is interposed by the adverse party or not. [104] This
doctrine is embodied in Section 4, Rule 129 of the Rules of Court:
SEC. 4. Judicial admissions. An admission, verbal or written, made by a
party in the course of the proceedings in the same case, does not require
proof. The admission may be contradicted only by showing that it was
made through palpable mistake or that no such admission was made. [105]
In the absence of a compelling reason to the contrary, respondents
judicial admission of ownership of the Swiss deposits is definitely binding
on them.
The individual and separate admissions of each respondent bind all of
them pursuant to Sections 29 and 31, Rule 130 of the Rules of Court:
SEC. 29. Admission by co-partner or agent. The act or declaration of a
partner or agent of the party within the scope of his authority and during
the existence of the partnership or agency, may be given in evidence
against such party after the partnership or agency is shown by evidence
other than such act or declaration. The same rule applies to the act or
declaration of a joint owner, joint debtor, or other person jointly interested
with the party.[106]
SEC. 31. Admission by privies. Where one derives title to property from
another, the act, declaration, or omission of the latter, while holding the
title, in relation to the property, is evidence against the former.[107]
The declarations of a person are admissible against a party whenever
a privity of estate exists between the declarant and the party, the term
privity of estate generally denoting a succession in rights.
[108]
Consequently, an admission of one in privity with a party to the record
is competent.[109] Without doubt, privity exists among the respondents in
this case. And where several co-parties to the record are jointly interested
in the subject matter of the controversy, the admission of one is competent
against all.[110]
Respondents insist that the Sandiganbayan is correct in ruling that
petitioner Republic has failed to establish a prima facie case for the
forfeiture of the Swiss deposits.
We disagree. The sudden turn-around of the Sandiganbayan was
really strange, to say the least, as its findings and conclusions were not
borne out by the voluminous records of this case.
Section 2 of RA 1379 explicitly states that whenever any public
officer or employee has acquired during his incumbency an amount of
property which is manifestly out of proportion to his salary as such public
officer or employee and to his other lawful income and the income from
legitimately acquired property, said property shall be presumed prima
facie to have been unlawfully acquired. x x x
The elements which must concur for this prima facie presumption to
apply are:
(1) the offender is a public officer or employee;
(2) he must have acquired a considerable amount of money or
property during his incumbency; and
(3) said amount is manifestly out of proportion to his salary as such
public officer or employee and to his other lawful income
and the income from legitimately acquired property.
It is undisputed that spouses Ferdinand and Imelda Marcos were
former public officers. Hence, the first element is clearly extant.
The second element deals with the amount of money or property
acquired by the public officer during his incumbency. The Marcos couple
indubitably acquired and owned properties during their term of office. In
fact, the five groups of Swiss accounts were admittedly owned by
them. There is proof of the existence and ownership of these assets and
properties and it suffices to comply with the second element.
The third requirement is met if it can be shown that such assets,
money or property is manifestly out of proportion to the public officers
salary and his other lawful income. It is the proof of this third element that
is crucial in determining whether a prima facie presumption has been
established in this case.
Petitioner Republic presented not only a schedule indicating the
lawful income of the Marcos spouses during their incumbency but also
evidence that they had huge deposits beyond such lawful income in Swiss
banks under the names of five different foundations. We believe petitioner
was able to establish the prima facie presumption that the assets and
properties acquired by the Marcoses were manifestly and
patently disproportionate to their aggregate salaries as public
officials. Otherwise stated, petitioner presented enough evidence to
convince us that the Marcoses had dollar deposits amounting to US $356
million representing the balance of the Swiss accounts of the five
foundations, an amount way, way beyond their aggregate legitimate
income of only US$304,372.43 during their incumbency as government
officials.
Considering, therefore, that the total amount of the Swiss deposits
was considerably out of proportion to the known lawful income of the
Marcoses, the presumption that said dollar deposits were unlawfully
acquired was duly established. It was sufficient for the petition for
forfeiture to state the approximate amount of money and property acquired
by the respondents, and their total government salaries. Section 9 of the
PCGG Rules and Regulations states:
Prima Facie Evidence. Any accumulation of assets, properties, and other
material possessions of those persons covered by Executive Orders No. 1
and No. 2, whose value is out of proportion to their known lawful income
is prima facie deemed ill-gotten wealth.
Indeed, the burden of proof was on the respondents to dispute this
presumption and show by clear and convincing evidence that the Swiss
deposits were lawfully acquired and that they had other legitimate sources
of income. A presumption is prima facie proof of the fact presumed and,
unless the fact thus prima facie established by legal presumption is
disproved, it must stand as proved.[111]
Respondent Mrs. Marcos argues that the foreign foundations should
have been impleaded as they were indispensable parties without whom no
complete determination of the issues could be made. She asserts that the
failure of petitioner Republic to implead the foundations rendered the
judgment void as the joinder of indispensable parties was a sine qua
non exercise of judicial power. Furthermore, the non-inclusion of the
foreign foundations violated the conditions prescribed by the Swiss
government regarding the deposit of the funds in escrow, deprived them of
their day in court and denied them their rights under the Swiss constitution
and international law.[112]
 The Court finds that petitioner Republic did not err in not impleading
the foreign foundations. Section 7, Rule 3 of the 1997 Rules of Civil
Procedure,[113] taken from Rule 19b of the American Federal Rules of Civil
Procedure, provides for the compulsory joinder of indispensable parties.
Generally, an indispensable party must be impleaded for the complete
determination of the suit. However, failure to join an indispensable party
does not divest the court of jurisdiction since the rule regarding
indispensable parties is founded on equitable considerations and is not
jurisdictional. Thus, the court is not divested of its power to render a
decision even in the absence of indispensable parties, though such
judgment is not binding on the non-joined party.[114]
An indispensable party[115] has been defined as one:
[who] must have a direct interest in the litigation; and if this interest is
such that it cannot be separated from that of the parties to the suit, if the
court cannot render justice between the parties in his absence, if the decree
will have an injurious effect upon his interest, or if the final determination
of the controversy in his absence will be inconsistent with equity and good
conscience.
There are two essential tests of an indispensable party: (1) can relief
be afforded the plaintiff without the presence of the other party? and (2)
can the case be decided on its merits without prejudicing the rights of the
other party?[116] There is, however, no fixed formula for determining who is
an indispensable party; this can only be determined in the context and by
the facts of the particular suit or litigation.
In the present case, there was an admission by respondent Imelda
Marcos in her May 26, 1998 Manifestation before the Sandiganbayan that
she was the sole beneficiary of 90% of the subject matter in controversy
with the remaining 10% belonging to the estate of Ferdinand Marcos.
[117]
Viewed against this admission, the foreign foundations
were not indispensable parties. Their non-participation in the proceedings
did not prevent the court from deciding the case on its merits and
according full relief to petitioner Republic. The judgment ordering the
return of the $356 million was neither inimical to the foundations interests
nor inconsistent with equity and good conscience. The admission of
respondent Imelda Marcos only confirmed what was already generally
known: that the foundations were established precisely to hide the money
stolen by the Marcos spouses from petitioner Republic. It negated
whatever illusion there was, if any, that the foreign foundations owned
even a nominal part of the assets in question.
The rulings of the Swiss court that the foundations, as formal owners,
must be given an opportunity to participate in the proceedings hinged on
the assumption that they owned a nominal share of the assets.[118] But this
was already refuted by no less than Mrs. Marcos herself. Thus, she cannot
now argue that the ruling of the Sandiganbayan violated the conditions set
by the Swiss court. The directive given by the Swiss court for the
foundations to participate in the proceedings was for the purpose of
protecting whatever nominal interest they might have had in the assets as
formal owners. But inasmuch as their ownership was subsequently
repudiated by Imelda Marcos, they could no longer be considered as
indispensable parties and their participation in the proceedings became
unnecessary.
In Republic vs. Sandiganbayan,[119] this Court ruled that impleading
the firms which are the res of the action was unnecessary:
And as to corporations organized with ill-gotten wealth, but are not
themselves guilty of misappropriation, fraud or other illicit conduct in
other words, the companies themselves are not the object or thing involved
in the action, the res thereof there is no need to implead them either.
Indeed, their impleading is not proper on the strength alone of their having
been formed with ill-gotten funds, absent any other particular wrongdoing
on their part
Such showing of having been formed with, or having received ill-gotten
funds, however strong or convincing, does not, without more, warrant
identifying the corporations in question with the person who formed or
made use of them to give the color or appearance of lawful, innocent
acquisition to illegally amassed wealth at the least, not so as place on the
Government the onus of impleading the former with the latter in actions to
recover such wealth. Distinguished in terms of juridical personality and
legal culpability from their erring members or stockholders, said
corporations are not themselves guilty of the sins of the latter, of the
embezzlement, asportation, etc., that gave rise to the Governments cause
of action for recovery; their creation or organization was merely the result
of their members (or stockholders) manipulations and maneuvers to
conceal the illegal origins of the assets or monies invested therein. In this
light, they are simply the res in the actions for the recovery of illegally
acquired wealth, and there is, in principle, no cause of action against them
and no ground to implead them as defendants in said actions.
Just like the corporations in the aforementioned case, the foreign
foundations here were set up to conceal the illegally acquired funds of the
Marcos spouses. Thus, they were simply the res in the action for recovery
of ill-gotten wealth and did not have to be impleaded for lack of cause of
action or ground to implead them.
Assuming arguendo, however, that the foundations were
indispensable parties, the failure of petitioner to implead them was a
curable error, as held in the previously cited case of Republic vs.
Sandiganbayan:[120]
Even in those cases where it might reasonably be argued that the failure of
the Government to implead the sequestered corporations as defendants is
indeed a procedural abberation, as where said firms were allegedly used,
and actively cooperated with the defendants, as instruments or conduits for
conversion of public funds and property or illicit or fraudulent obtention of
favored government contracts, etc., slight reflection would nevertheless
lead to the conclusion that the defect is not fatal, but one correctible under
applicable adjective rules e.g., Section 10, Rule 5 of the Rules of Court
[specifying the remedy of amendment during trial to authorize or to
conform to the evidence]; Section 1, Rule 20 [governing amendments
before trial], in relation to the rule respecting omission of so-called
necessary or indispensable parties, set out in Section 11, Rule 3 of the
Rules of Court. It is relevant in this context to advert to the old familiar
doctrines that the omission to implead such parties is a mere technical
defect which can be cured at any stage of the proceedings even after
judgment; and that, particularly in the case of indispensable parties, since
their presence and participation is essential to the very life of the action,
for without them no judgment may be rendered, amendments of the
complaint in order to implead them should be freely allowed, even on
appeal, in fact even after rendition of judgment by this Court, where it
appears that the complaint otherwise indicates their identity and character
as such indispensable parties.[121]
Although there are decided cases wherein the non-joinder of
indispensable parties in fact led to the dismissal of the suit or the
annulment of judgment, such cases do not jibe with the matter at hand. The
better view is that non-joinder is not a ground to dismiss the suit or annul
the judgment. The rule on joinder of indispensable parties is founded on
equity. And the spirit of the law is reflected in Section 11, Rule 3 [122] of the
1997 Rules of Civil Procedure. It prohibits the dismissal of a suit on the
ground of non-joinder or misjoinder of parties and allows the amendment
of the complaint at any stage of the proceedings, through motion or on
order of the court on its own initiative.[123]
Likewise, jurisprudence on the Federal Rules of Procedure, from
which our Section 7, Rule 3[124] on indispensable parties was copied,
allows the joinder of indispensable parties even after judgment has been
entered if such is needed to afford the moving party full relief. [125] Mere
delay in filing the joinder motion does not necessarily result in the waiver
of the right as long as the delay is excusable. [126] Thus, respondent Mrs.
Marcos cannot correctly argue that the judgment rendered by the
Sandiganbayan was void due to the non-joinder of the foreign
foundations. The court had jurisdiction to render judgment which, even in
the absence of indispensable parties, was binding on all the parties before
it though not on the absent party.[127] If she really felt that she could not be
granted full relief due to the absence of the foreign foundations, she
should have moved for their inclusion, which was allowable at any stage
of the proceedings. She never did. Instead she assailed the judgment
rendered.
In the face of undeniable circumstances and the avalanche of
documentary evidence against them, respondent Marcoses failed to justify
the lawful nature of their acquisition of the said assets. Hence, the Swiss
deposits should be considered ill-gotten wealth and forfeited in favor of
the State in accordance with Section 6 of RA 1379:
SEC. 6. Judgment. If the respondent is unable to show to the satisfaction
of the court that he has lawfully acquired the property in question, then the
court shall declare such property forfeited in favor of the State, and by
virtue of such judgment the property aforesaid shall become property of
the State x x x.
The release of the Swiss funds held in escrow in the PNB is
dependent solely on the decision of this jurisdiction that said funds belong
to the petitioner Republic. What is important is our own assessment of the
sufficiency of the evidence to rule in favor of either petitioner Republic or
respondent Marcoses. In this instance, despite the absence of the
authenticated translations of the Swiss decisions, the evidence on hand tilts
convincingly in favor of petitioner Republic.
WHEREFORE, the petition is hereby GRANTED. The assailed
Resolution of the Sandiganbayan dated January 31, 2002 is SET ASIDE.
The Swiss deposits which were transferred to and are now deposited in
escrow at the Philippine National Bank in the estimated aggregate amount
of US$658,175,373.60 as of January 31, 2002, plus interest, are hereby
forfeited in favor of petitioner Republic of the Philippines.

SO ORDERED.
THE FAILURE TO PRESENT AUTHENTICATED
TRANSLATIONS OF THE SWISS DECISIONS

Finally, petitioner Republic contends that the Honorable

Sandiganbayan Presiding Justice Francis Garchitorena committed grave
abuse of discretion in reversing himself on the ground that the original
copies of the authenticated Swiss decisions and their authenticated
translations were not submitted to the court a quo. Earlier PJ Garchitorena
had quoted extensively from the unofficial translation of one of these
Swiss decisions in his ponencia dated July 29, 1999 when he denied the
motion to release US$150 Million to the human rights victims.
While we are in reality perplexed by such an incomprehensible
change of heart, there might nevertheless not be any real need to belabor
the issue. The presentation of the authenticated translations of the original
copies of the Swiss decision was not de rigueur for the public respondent
to make findings of fact and reach its conclusions. In short, the
Sandiganbayans decision was not dependent on the determination of the
Swiss courts. For that matter, neither is this Courts.
 THIRD DIVISION

CANELAND SUGAR G.R. No. 142896

CORPORATION,

Petitioner, Present:

YNARES-SANTIAGO, J.,

- versus - Chairperson,

AUSTRIA-MARTINEZ,

CHICO-NAZARIO,

HON. REYNALDO M. ALON, NACHURA, and

LAND BANK OF THE REYES, JJ.

PHILIPPINES, and

ERIC B. DE VERA, Promulgated:

Republic of the Philippines
Respondents. September 12, 2007
Supreme Court
x----------------------------------------------x
Manila
 DECISION
AUSTRIA-MARTINEZ, J.:
On July 15, 1999, Caneland Sugar Corporation (petitioner) filed with the
Regional Trial Court (RTC) of Silay City, Branch 40, a complaint for
damages, injunction, and nullity of mortgage against the Land Bank of the
Philippines (respondent) and Sheriff Eric B. de Vera, docketed as Civil
Case No. 2067-40, praying for the following reliefs: issuance of a
temporary restraining order enjoining respondent and the Sheriff from
proceeding with the auction sale of petitioners property; declaration of
nullity of any foreclosure sale to be held; declaration of nullity of the
mortgage constituted over petitioners property covered by TCT No. T-
11292 in favor of respondent; and award of damages.[1]
On July 21, 1999, the RTC issued an Order holding in abeyance the
auction sale set on July 23, 1999, as agreed upon by the parties.
[2]
Notwithstanding said directive, another foreclosure sale was scheduled
on October 15, 1999. Per RTC Order dated October 14, 1999, the October
15 scheduled sale was held in abeyance; but re-scheduled the sale
on November 15, 1999, for the following reasons:
However, P.D. 385 provides that it shall be mandatory for
government financial institution to foreclose collaterals
and/or securities for any loan, credit accommodations
and/or guarantees granted by them whenever the
arrearages on such account, including accrued interest and
other charges amount to at least 20% of the total
outstanding obligation as appearing in the books of the
financial institution. Moreover, no restraining order,
temporary or permanent injunction shall be issued by the
court against any government financial institution in any
action taken by such institution in compliance with the
mandatory foreclosure provided by said law. x x x The
defendant Land Bank of the Philippines and Eric B. De
Vera, Sheriff of this Court, are hereby authorized to
proceed with the extrajudicial foreclosure sale on
November 15, 1999.[3]
Petitioner filed a Motion for Reconsideration of the trial courts Order, but
this was denied per Order dated November 8, 1999.[4]
Petitioner then filed with the Court of Appeals (CA) a Petition
for Certiorari and Prohibition with Injunction, docketed as CA-G.R. SP
No. 56137. In a Decision[5] dated March 22, 2000, the CA, finding that the
RTC did not commit any grave abuse of discretion, denied due course and
dismissed the petition for lack of merit. [6] Petitioner sought reconsideration
of the Decision, which was eventually denied by the CA in a Resolution
dated April 17, 2000.[7]
Hence, the present Petition for Review on Certiorari under Rule 45 of the
Rules of Court.
Petitioner contends in the main that the RTCs act of authorizing the
foreclosure of its property amounts to a prejudgment of the case since it
amounts to a ruling that respondent has a valid mortgage in its
favor.Petitioner also argues, among others, that Presidential Decree (P.D.)
No. 385 is not applicable inasmuch as at the time of the lease to Sunnix,
Inc., the management and control of its operations has already been
virtually taken over by respondent.
On the other hand, respondent maintains that: P.D. No. 385 prohibits the
issuance of an injunctive order against government financial institutions;
the CA did not commit any grave abuse of discretion; the RTC Order
merely dealt with the propriety of the injunctive order and not the validity
of the mortgage; and the issue of the propriety of the injunctive order has
been rendered moot and academic by the foreclosure sale conducted and
the issuance of a certificate of sale by the sheriff. [8]
Based on the arguments of the parties, the principal issue is whether the
CA erred in finding that the RTC did not commit grave abuse of discretion
in not enjoining the extrajudicial foreclosure of the properties subject of
this case.
Without first resolving the foregoing issue, the Court finds that the petition
should be denied for the sole reason that the act sought to be enjoined by
petitioner is already fait accompli. In Transfield Philippines, Inc. v. Luzon
Hydro Corporation,[9] the Court held that
[I]njunction would not lie where the acts sought to be
enjoined have already become fait accompli or an
accomplished or consummated act. In Ticzon v. Video Post
Manila, Inc. this Court ruled that where the period within
which the former employees were prohibited from
engaging in or working for an enterprise that competed
with their former employer the very purpose of the
preliminary injunction has expired, any declaration
upholding the propriety of the writ would be entirely
useless as there would be no actual case or controversy
between the parties insofar as the preliminary injunction is
concerned.[10]
Records show that the foreclosure sale which petitioner sought to be
enjoined by the RTC has already been carried out by the Sheriff, and in
fact, a Certificate of Sale dated June 26, 2000 was issued to respondent.
[11]
There is, therefore, no more actual case or controversy between the
parties insofar as the RTCs refusal to enjoin the sale is concerned, and any
resolution by the Court of the impropriety or propriety of the RTCs refusal
to issue any restraining or injunctive relief against the foreclosure sale will
serve no purpose but merely lend further addle to Civil Case No. 2067-40
pending before the RTC.
Nevertheless, even if petitioners quest for the issuance of an injunctive
relief has been rendered moot and academic by the holding of the
foreclosure sale and issuance of Certificate of Sale, the Court finds it
necessary to resolve the merits of the principal issue raised for the
future guidance of both bench and bar. As the Court stated
in Acop v. Guingona, Jr.,[12] courts will decide a question otherwise moot
and academic if it is capable of repetition, yet evading review.
secured by the mortgage, the mortgaged property is
properly subject to a foreclosure sale. This is in consonance
with the doctrine that to authorize a temporary injunction,
the plaintiff must show, at least prima facie, a right to the
final relief.[15]

Petitioner does not dispute its loan obligation with respondent. Petitioners The foregoing conclusion finds greater force in light of the
bone of contention before the RTC is that the promissory notes are silent
provisions of P.D. No. 385,[16] Section 1 of which, provides
as to whether they were covered by the Mortgage Trust Indenture and
for a mandatory foreclosure, viz.:
Mortgage Participation on its property covered by TCT No. T-11292.[13] It
does not categorically deny that these promissory notes are covered by the
security documents. These vague assertions are, in fact,
negative pregnants, i.e., denials pregnant with the admission of the
Section 1. It shall be mandatory for government
substantial facts in the pleading responded to which are not squarely
financial institutions, after the lapse of sixty (60) days
denied. As defined in Republic of the Philippines v. Sandiganbayan,[14] a
from the issuance of this Decree, to foreclose the
negative pregnant is a form of negative expression which carries with it an
collaterals and/or securities for any loan, credit,
affirmation or at least an implication of some kind favorable to the adverse
accommodation, and/or guarantees granted by them
party. It is a denial pregnant with an admission of the substantial facts
whenever the arrearages on such account, including
alleged in the pleading. Where a fact is alleged with qualifying or
accrued interest and other charges, amount to at least
modifying language and the words of the allegation as so qualified or
twenty (20%) of the total outstanding obligations,
modified are literally denied, has been held that the qualifying
including interest and other charges, as appearing in the
circumstances alone are denied while the fact itself is admitted.
books of account and/or related records of the financial
institution concerned. This shall be without prejudice to
the exercise by the government financial institution of
such rights and/or remedies available to them under their
Petitioners allegations do not make out any justifiable basis
respective contracts with their debtors, including the right
for the granting of any injunctive relief. Even when the
to foreclose on loans, credits, accommodations, and or
mortgagors were disputing the amount being sought from
them, upon the non-payment of the loan, which was
 guarantees on which the arrearages are less than twenty
percent (20%).
while Section 2 prohibits the issuance of restraining orders or injunctions
against government financial institutions in any foreclosure action taken
by such institutions, to wit:
Section 2. No restraining order, temporary or
permanent injunction shall be issued by the court against
any government financial institution in any action taken
by such institution in compliance with the mandatory
foreclosure provided in Section 1 hereof whether such
restraining order, temporary or permanent injunction is
sought by the borrower(s) or any third party or parties,
except after due hearing in which it is established by the
borrower and admitted by the government financial
institution concerned that twenty percent (20%) of the
outstanding arrearages had been paid after the filing of
foreclosure proceedings.
Petitioner cannot find any solace in its contention that the case of Filipinas
Marble Corporation v. Intermediate Appellate Court [17] is applicable to the
present case. In Filipinas Marble, it was the DBP-imposed management of
FMC that brought the corporation to ruin, not to mention that there
were prima facie findings of mismanagement and misappropriation of the
loan proceeds by DBP and Bancom.Moreover, the liability of FMC for the
loan, which was the basis of the mortgage being foreclosed, was not yet
settled. These circumstances prompted the Court to grant an injunction
against the foreclosure sale. The Court ruled
x x x P.D. 385 was never meant to protect officials of
government lending institutions who take over the
management of a borrower corporation, lead that
corporation to bankruptcy through mismanagement or
misappropriation of its funds, and who, after ruining it,
use the mandatory provisions of the decree to avoid the
consequences of their misdeeds.
The designated officers of the government financing
institution cannot simply walk away and then state that
since the loans were obtained in the corporations name,
then P.D. 385 must be peremptorily applied and that there
is no way the borrower corporation can prevent the
automatic foreclosure of the mortgage on its properties
once the arrearages reach twenty percent (20%) of the
total obligation no matter who was responsible.[18]
In the case at bench, petitioner does not deny its liability. While petitioner
alleged that the management and control of its operations has already been
virtually taken over by respondent, thus, implying that it was respondent
that caused petitioner's present miserable financial state, this allegation is
obviously merely an attempt to place itself under the Filipinas
Marble situation in order to preempt the operation of P.D. No.
385. Petitioners claim is more appropriately threshed out and determined
after trial on the merits.
The Court likewise cannot sustain petitioner's argument that
the RTCs refusal to grant any injunctive relief amounts to a prejudgment
of the issues before it. The RTCs sole basis for allowing the foreclosure
sale to proceed is P.D. No. 385. It did not make any finding or disposition
on the issue of the validity of the mortgage.
WHEREFORE, the petition is DENIED.
settled that these injunctive reliefs are preservative
remedies for the protection of substantive rights and
interests. Injunction is not a cause of action in itself but
merely a provisional remedy, an adjunct to a main suit.
When the act sought to be enjoined ha[d]
become fait accompli, only the prayer for provisional
remedy should be denied. However, the trial court
should still proceed with the determination of the
principal action so that an adjudication of the rights of
the parties can be had.[20] (Emphasis supplied)

In any event, such issue of the validity of the mortgage, not to mention the
issue of the nullity of the foreclosure sale as well as petitioners prayer for Costs against petitioner.
damages, still has to be resolved in the trial court.

SO ORDERED.
[19]
As ruled in Philippine National Bank v. Court of Appeals, to
wit:

In the instant case, aside from the principal action for

damages, private respondent sought the issuance of a
temporary restraining order and writ of preliminary
injunction to enjoin the foreclosure sale in order to prevent
an alleged irreparable injury to private respondent. It is