LEPANTO CONSOLIDATED G.R. No.

163210
MINING COMPANY,
Petitioner, Present:

YNARES-SANTIAGO, J.,
- versus - Chairperson,
AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
NACHURA, and
MORENO DUMAPIS, REYES, JJ.
ELMO TUNDAGUI and
FRANCIS LIAGAO, Promulgated:
Respondents. August 13, 2008
x----------------------------------------------------------x

DECISION

AUSTRIA-MARTINEZ, J.:

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules
of Court assailing the November 7, 2003 Decision[1] and April 15, 2004 Resolution[2] of the
Court of Appeals (CA) in CA-G.R. SP No. 75860.

The antecedents of the case are as follows:

Lepanto Consolidated Mining Corporation (petitioner), a domestic juridical entity engaged

in mining, employed Moreno Dumapis and Elmo Tundagui as lead miners; and Francis
Liagao, as load, haul and dump (LHD) machine operator (respondents).[3] All three were
assigned at the 850 level, underground, Victoria Area in Lepanto, Mankayan,
Benguet. This is a known highgrade area where most of the ores mined are considered of
high grade content.[4]
In the afternoon of September 15, 2000, at 2:00 p.m., Dwayne Chambers (Chambers), one
of its foreign consultants who was then acting as Assistant Resident Manager of the Mine,
went underground at the 850 level to conduct a routinary inspection of the workers and the
working conditions therein. When he went to the various stopes of the said level, he was
surprised to see that nobody was there. However, when he went to the 8k stope, he noticed
a group of workers sitting, sorting, and washing ores believed to be highgrade. Realizing
that highgrading[5] was being committed, Chambers shouted. Upon hearing his angry
voice, the workers scampered in different directions of the stope.[6] Chambers then reported
the incident to the security investigation office.[7]

After investigating, Security Investigators Paul Pespes, Jr. and Felimon Ringor
(Security Investigators) executed a Joint Affidavit, which reads as follows:

xxxx

At about 3:40 PM of September 15, 2000, while we were at the Lepanto

Security Investigation office, we received a report that the LMD Asst. Resident
Manager, Mr. Dwayne Chambers saw and surprised several unidentified
miners at 8K Stope, 850 level committing Highgrading activities therein;

Consequently, all miners assigned to work therein including their supervisor

and SG Ceasarion Damoslog, an element of the Mine Security Patrol posted
therein as stationary guard were called to this office for interrogation regarding
this effect;

In the course of the investigation, we eventually learned that the highgrading

event really transpired somewhere at the roadway of 8K Stope, 850 level at
about 2:00 oclock PM of September 15, 2000. That the involved participants
were all miners assigned to work at 7K Stope, 8K Stope, 240 E, Cross Cut
South level drive, all located at 850 mine level. Likewise, the detailed
stationary guard assigned thereat and some mine supervisors were also directly
involved in this activity;

Security Guard Ceasarion Damoslog honestly confessed his direct

participation then claimed that he was allegedly convinced by Mr. Joel
Gumatin, one of the miners assigned at Panel No.1-est-North, 8K Stope, 850
level to cooperate with them to commit Highgrading. He revealed his
 companions to be all the miners assigned at 8K stope, namely, Joel
Gumatin, Brent Suyam, Maximo Madao, Elmo Tundaguiand Daniel Fegsar.
He also included those who were assigned to work at 240 E, XCS, namely:
Thomas Garcia (immediate supervisor), John Kitoyan, Moreno Dumapis, and
Marolito Cativo. He enumerated also messrs. Benedict Arocod, Samson
Damian, and Dionisio Bandoc, 7K Stope, 850 level assigned miners and
shiftboss, respectively;

Mr. Pablo Daguio, the shiftboss of 240 E, XCS, 850 level also positively
confirmed the Highgrading activity. He added that actually he came upon
the group and even dispersed them when he went therein prior to the arrival of
Mr. Chambers;

Furthermore, we also learned from the confession of Mr. Maximo

Madao that its was messrs. Joel Gumatin and Brent Suyam who took their
issued rock drilling machine then drilled holes and blasted the same at the 8K
Stope roadway with the assistance of Thomas Garcia, John Kitoyan, Benedict
Arocod, Samsom Damian, Daniel Fegsar and Francisco Liagao. That SG
Ceasarion Damoslog was present on the area standing and watching the group
during the incident;

That we are executing this joint affidavit to establish the foregoing facts and to
support any complaint that may be filed against respondents;

IN WITNESS WHEREOF, we have hereunto set our hands and affix our
signature this 28th day of September 2000, at Lepanto, Mankayan, Benguet.[8]
(Emphasis supplied)

On October 24, 2000, petitioner issued a resolution finding respondents and their co-
accused guilty of the offense of highgrading and dismissing them from their
employment.[9]

On November 14, 2000, respondents together with the nine other miners, filed a Complaint
for illegal dismissal with the Labor Arbiter (LA), docketed as NLRC Case No. 11-0607-00
against petitioner.[10] On August 21, 2001, the LA dismissed the complaint for lack of
merit.
On September 22, 2001, the miners appealed the decision of the LA to the National Labor
Relations Commission (NLRC). On August 30, 2002, the NLRC rendered a Decision,
declaring the dismissal of herein respondents as illegal, but affirming the dismissal of the
nine other complainant miners. The dispositive portion of the NLRC Decision insofar as
respondents are concerned, reads:

WHEREFORE, premises considered, the DECISION dated August 21,

2001 is hereby MODIFIED declaring the dismissal of complainants [herein
respondents] Moreno Dumapis, Elmo Tundagui and Francis Liagao illegal and
ordering respondent to pay them backwages in the total amount of four hundred
eighty thousand one hundred eighty two pesos and 63/100 (P480, 182.63) and
separation pay in the total amount of four hundred seventeen thousand two
hundred thirty pesos and 32/100 (P417,230.32) as computed in the body of the
decision.

xxxx
SO ORDERED.[11]

Petitioner filed a motion for reconsideration which was denied for lack of merit by the
NLRC in its Resolution dated on November 22, 2002.[12]

Petitioner then filed a petition for certiorari under Rule 65 of the Rules of Court
with the CA assailing the aforementioned decision and resolution of the NLRC. The CA
affirmed the decision of the NLRC[13] and denied petitioners Motion for Reconsideration.

Hence, herein petition on the following grounds:

THE HONORABLE COURT OF APPEALS COMMITTED GRAVE

AND REVERSIBLE ERROR IN AFFIRMING THE NATIONAL
LABOR RELATIONS COMMISSIONS DECISION DATED AUGUST
30, 2002 WHICH DECLARED AS ILLEGAL THE DISMISSAL FROM
SERVICE OF HEREIN RESPONDENTS.[14]

A. The Court of Appeals strict application of the hearsay rule under

Section 36, Rule 130 of the Rules of Court to the present case is uncalled
for.

B. In cases of dismissal for breach of trust and confidence, proof beyond

doubt is not required, it being sufficient that the employer has
 reasonable ground to believe that the employees are responsible for the
misconduct which renders them unworthy of the trust and confidence
demanded by their position.[15]

The petition is devoid of merit.

In finding the dismissal of respondents illegal, the CA upheld the NLRC in

considering the Joint Affidavit of the Security Investigators (Joint Affidavit) as hearsay and
therefore inadmissible, to wit:

We subscribed to the conclusion of the NLRC that the Joint Affidavit of

Security Investigators Paul D. Pespes, Jr. and Felimon Ringor is hearsay and
thus, inadmissible. Their narration of factual events was not based on their
personal knowledge but on disclosures made by Chambers and Daguio. Section
36, Rule 130 of the Rules of Court defined the nature of hearsay:

Witness can testify only to those facts which he knows of his personal
knowledge, that is, which are derived from his own perception, except as
otherwise provided in these rules.[16]

Arguing for the admissibility of the Joint Affidavit, petitioner cites Article 221 of
the Labor Code, as amended, which provides:

Article 221. Technical rules not binding and prior resort to amicable
settlement. In any proceeding before the Commission or any Labor
Arbiters, the rules of evidence prevailing in courts of law or equity shall not
be controlling and it is the spirit and intention of the Code that the Commission
and its members and the Labor Arbiters shall use every and all reasonable
means to ascertain the facts in each case speedily and objectively and without
regard to the technicalities of law or procedure, all in the interest of due
process. x x x (Emphasis supplied)

We agree with the petitioner.

Administrative bodies like the NLRC are not bound by the technical niceties of law
and procedure and the rules obtaining in courts of law. Indeed, the Revised Rules of Court
and prevailing jurisprudence may be given only stringent application, i.e., by analogy or in
a suppletory character and effect.[17]

In a number of cases,[18] this Court has construed Article 221 of the Labor Code as
permitting the NLRC or the LA to decide a case on the basis of position papers and other
documents submitted without necessarily resorting to technical rules of evidence as
observed in the regular courts of justice. Rules of evidence are not strictly observed in
proceedings before administrative bodies like the NLRC.[19]

In Bantolino v. Coca-Coca Bottlers Phils., Inc.[20] the Court ruled that although the
affiants had not been presented to affirm the contents of their affidavits and be cross-
examined, their affidavits may be given evidentiary value; the argument that such affidavits
were hearsay was not persuasive. Likewise, in Rase v. National Labor Relations
Commission,[21] this Court ruled that it was not necessary for the affiants to appear and
testify and be cross-examined by counsel for the adverse party. To require otherwise would
be to negate the rationale and purpose of the summary nature of the proceedings mandated
by the Rules and to make mandatory the application of the technical rules of evidence.

Thus, the CA and the NLRC erred in ruling that the Joint Affidavit is inadmissible
for being hearsay. The Joint Affidavit of the Security Investigators is admissible for what it
is, an investigation report.

However, the admissibility of evidence should not be confused with its probative
value. Admissibility refers to the question of whether certain pieces of evidence are to be
considered at all, while probative value refers to the question of whether the admitted
evidence proves an issue.[22] Thus, a particular item of evidence may be admissible, but its
evidentiary weight depends on judicial evaluation within the guidelines provided by the
rules of evidence.[23] The distinction is clearly laid out in Skippers United Pacific, Inc. v.
National Labor Relations Commission.[24] In finding that the Report of the Chief Engineer
did not constitute substantial evidence to warrant the dismissal of Rosaroso, this Court
ruled:
 According to petitioner, the foregoing Report established that respondent was
dismissed for just cause. The CA, the NLRC and the Labor Arbiter, however,
refused to give credence to the Report. They are one in ruling that the Report
cannot be given any probative value as it is uncorroborated by other
evidence and that it is merely hearsay, having come from a source, the
Chief Engineer, who did not have any personal knowledge of the events
reported therein.

xxxx

The CA upheld these findings, succinctly stating as follows:

Verily, the report of Chief Engineer Retardo is utterly bereft of probative value.
It is not verified by an oath and, therefore, lacks any guarantee of
trusthworthiness. It is furthermore, and this is crucial, not sourced from the
personal knowledge of Chief Engineer Retardo. It is rather based on the
perception of ATTENDING SUPT. ENGINEERS CONSTANTLY
OBSERVING ALL PERSONNELS ABILITY AND ATTITUDE WITH
REGARDS TO OUR TECHNICAL CAPABILITY AND BEHAVIOURS
WITH EMPHASY [sic] ON DISCIPLINE who NOTICED 3/E ROSAROSO
AS BEING SLACK AND NOT CARING OF HIS JOB AND DUTIES x x
x. Accordingly, the report is plain hearsay. It is not backed up by the
affidavit of any of the Supt. Engineers who purportedly had first-hand
knowledge of private respondents supposed lack of discipline,
irresponsibility and lack of diligence which caused him to lose his job. x x x

The Courts finds no reason to reverse the foregoing findings.[25] (Emphasis supplied)

While it is true that administrative or quasi-judicial bodies like the NLRC are not
bound by the technical rules of procedure in the adjudication of cases, this procedural rule
should not be construed as a license to disregard certain fundamental evidentiary rules. The
evidence presented must at least have a modicum of admissibility for it to have probative
value.[26] Not only must there be some evidence to support a finding or conclusion, but the
evidence must be substantial. Substantial evidence is more than a mere scintilla.[27] It means
such relevant evidence as a reasonable mind might accept as adequate to support a
conclusion.[28] Thus, even though technical rules of evidence are not strictly complied with
before the LA and the NLRC, their decision must be based on evidence that must, at the
very least, be substantial.[29]

Pursuant to the aforementioned doctrines, we now look into the probative weight of
the Joint Affidavit.

An examination of the Joint Affidavit reveals that the facts alleged therein by the
Security Investigators are not of their own personal knowledge. They simply referred to the
facts allegedly relayed to them by Chambers, Damoslog, Daguio, and Madao. Thus, there
is a need to individually scrutinize the statements and testimonies of the four sources of the
Joint Affidavit in order to determine the latters probative weight.

The Joint Affidavit states that, Mr. Dwayne Chambers saw and surprised
several unidentified miners x x x.[30] Chambers simply narrated to the Security
Investigators what he saw but did not indicate herein respondents.

Also stated in the Joint Affidavit is the alleged confession of Damoslog wherein he
named respondents Tundagui and Dumapis as his companions in the act of highgrading .[31]

Records show that Damoslog submitted two sworn statements. In his first
statement,[32] Damoslog claimed that he was unaware of the act of highrading, and denied
any involvement therein. However, in his second statement,[33] Damoslog claimed to have
personally witnessed the act of highgrading and named the miners involved to wit:

07. Ques - Could you narrate briefly how it transpired then?

Ans - On the first hour of this specific dated and shift at about 0800hrs,
while we were at the 8K stope, 850 level, Mr. Joel
Gumatin approached me that he could not procure some
needed amount of money and if possible we will commit
highgrading for that effect to settle his problem. That
because I pity him, I just answered that if they could
manage to do it then they could do it.
08. Ques - Who was the companion of Mr. Gumatin when he approached
you?
Ans - He was alone.

09. Ques - Did Gumatin specifically informed [sic] you his problem?
Ans - I did not asked him honestly but he only insisted that he needed an
amount of money badly as I earlier said.

10. Ques - So just after telling his purpose did he started [sic] the
highgrading activity?
Ans - No, the highgrading scheme started at past 1300 Hrs.

11. Ques - How did it started [sic]?

Ans - They started after they all finished their respective drilling
assignment. That while I was near the panel 2-West located
at the inner portion of 8K Stope, I observed the LHD unit
coming from the roadway near the 8K Eating station which
was previously parked thereat proceeded to the roadway of
panel 1-West then started cleaning and scraping said
roadway.That after cleaning he parked it at the inner
portion of the roadway. Then afterwhich one among the
miner who was not assigned therein and I failed to identify
his name shove two shovels on the roadway recently
cleaned by the LHD then handed it to us with another man
whom I dont know his name but could recognize and
identify him if I will meet him again then we washed the
same in the inner area of panel 2-West which is
adjacent. That after washing and sorting the same, we
placed it atop of an spread cartoon [sic] sheet. That while
we were busy washing and sorting, Mr. Gumatin also was
fixing and spreading the airhose for rockdrilling
machine. That few moments thereafter, I heard the running
engine of the drilling machine but I can not identify the
operator as my line of view was obstructed by the curbed
angle of the panel where we are washing the ores. That
afterwhich I heard somebody that they are now going to
blast the drilled holes but we remained in our place
continuing washing the stones. That after the blast Mr.
Garcia and one other companion whom I failed to identify
due to foggy condition caused by the explosive blasting
then handed us the additional newly unearth ores for
 washing. That while were still busy washing, Gumatin
approached us then told us that he will collect what was
already washed and sorted and start to process the
same. That Gumatin took the items then started to pound
the ores atop of an LHD unit parked near the entrance of
panel 2-East which was not used during the shift. That after
that, I stood up then subsequently proceeded to panel 2-
West then observed messrs. Maximo Madao, Benedict
Arocod, Brent Suyam, Daniel Fegsar, Thomas Garcia,
Mariolito Cativo, John Kitoyna and Samson
Damian who acted as the look out at the junction of 240 E,
XCS and 8K Stope. The enumerated miners except Damian
were in squatting position in scattered adjacent places busy
sorting ores. Moments later Shift boss Dionisio
Bandoc arrived then went to the place of Gumatin then told
us that he will get a portion of the already proceeded ores
for the operator to handcarry so that he will not need to
come to 8K Stope, 850 level then after taking some of the
loot he proceeded out simultaneously uttering that he will
check the look out at the outer area of the mainline posted
away from the 7K Stope.[34] (Emphasis supplied)

Evidently, Damoslog does not name respondents Dumapis and Tundagui as among
the miners involved in the act of highgrading; neither does he mention respondent Liagao.

The Joint Affidavit also states that Daguio positively confirmed the act of
highgrading. However, in his sworn statement,[35] Daguio claims that he did not recognize
nor did he identify any of the miners, to wit:

11. Ques - In your own honest observation, what could be the estimate [sic]
number of this group of miners doing highgrading activities?
Ans - I dont know but obviously they were several as manifested by their
number of cap lamplights. I also speculated that some of them
were hidden at the curved inner access of the roadway enroute to
the inner area.

12. Ques - Did you recognize nor [sic] identify any of them?
Ans - Honestly, no.[36] (Emphasis supplied)
 Lastly, the Joint Affidavit also points to the confession of Madao wherein he
particularly named respondent Liagao as one of the miners involved in the act of
highgrading.

Madao submitted two sworn statements. In his first sworn statement[37] dated
September 16, 2000, Madao claimed his innocence. He did not incriminate any of the
respondents. However, in his second sworn statement[38] dated September 20, 2000, Madao
claimed to have knowledge of the act of highgrading and specifically named respondent
Liagao as one of the miners involved, to wit:

09. Ques - Do I understand that Mr. Suyam has companions and had drilled first
the flooring of that roadway before blasting it?
Ans - Yes, that is true I saw Suyam and Gumatin transferred [sic] their assigned
drilling machine at the said roadway and drilled the area with the
company of Garcia, Kitoyan, Arocod, Damian, Fegsar
and Liagao.[39] (Emphasis supplied)

Nonetheless, the second sworn statement of Madao is not sufficient to find Liagao
guilty of highgrading. In a Joint Affidavit[40] which he executed with respondent Tundagui,
Madao made the following declarations:

When I, MAXIMO MADAO reported for work on September 16, 2000,

I am being required to appear at the security investigation office. After quitting
time I went to the security office and was surprised to learn that my name is
among those listed persons who were seen by Mr. Chambers committing acts of
highgrading on September 15, 2000. However, when I quit work on September
20, 2000 I was again called through telephone to appear at the security office.
Investigator Felimon Ringor told me that I will give another statement and
convinced to tell me all the names of the persons assigned thereat with the
promise that I will report for work. With my limited education having not
finished grade 1, I was made to give my statement on questions and answers
which are self-incriminating and knowingly mentioned names of persons
who are innocent. Worst, when I got my copy and the contents were fully
explained to me by our legal counsel I was surprised that it was duly notarized
when in fact and in truth after I gave my statement I did not appear before Atty.
Nina Fe Lazaga-Raffols for swearing. With this circumstances, I hereby
RETRACT my statement dated September 20, 2000 for being self
 incriminatory unassisted by my counselor union representative and hereby
ADAPTS [sic] and RETAINS my sworn statement dated September 16,
2000.[41] (Emphasis supplied)
In labor cases, in which technical rules of procedure are not to be strictly applied if
the result would be detrimental to the workingman, an affidavit of desistance gains added
importance in the absence of any evidence on record explicitly showing that the dismissed
employee committed the act which caused the dismissal.[42] Accordingly, the Court cannot
turn a blind eye and disregard Madaos recantation, as it serves to cast doubt as to the guilt
of respondent Liagao.

Based on the foregoing, the Court is convinced that the Joint Affidavit, being
sourced from Chambers, Damoslog, Daguio and Madao, has no probative value to support
evidence to warrant the dismissal of the respondents. Chambers and Daguio did not
identify the miners involved in the act of highgrading. In addition, Damoslogs first and
second sworn statements did not implicate respondents, and Madao recanted his statement
implicating respondent Liagao. As earlier discussed, the sworn statements and joint
affidavits of the sources do not corroborate but actually cast doubt as to the veracity of the
statements in the Joint Affidavit.

The second ground is not plausible.

While the Court agrees that the job of the respondents, as miners, although generally
described as menial, is nevertheless of such nature as to require a substantial amount of
trust and confidence on the part of petitioner,[43] the rule that proof beyond reasonable doubt
is not required to terminate an employee on the charge of loss of confidence, and that it is
sufficient that there be some basis for such loss of confidence, is not absolute.[44]

The right of an employer to dismiss an employee on the ground that it has lost its
trust and confidence in him must not be exercised arbitrarily and without just cause.[45] In
order that loss of trust and confidence may be considered as a valid ground for an
employees dismissal, it must be substantial and not arbitrary, and must be founded on
clearly established facts sufficient to warrant the employees separation from work.[46]
 In the present case, the Court reiterates that the evidence is not substantial to hold
respondents guilty of highgrading so as to warrant the dismissal of respondents.
Moreover, it is a well-settled doctrine that if doubts exist between the evidence
presented by the employer and the employee, the scales of justice must be tilted in favor of
the latter. It is a time-honored rule that in controversies between a laborer and his master,
doubts reasonably arising from the evidence, or in the interpretation of agreements and
writing, should be resolved in the formers favor. The policy is to extend the doctrine to a
greater number of employees who can avail themselves of the benefits under the law,
which is in consonance with the avowed policy of the State to give maximum aid and
protection to labor.[47]

Lastly, respondents prayer in their Comment[48] and Memorandum,[49] that the CA Decision
be modified by ordering their reinstatement to their former positions without loss of
seniority rights and with payment of full backwages from their alleged dismissal up to date
of reinstatement, deserves scant consideration. Respondents are estopped from claiming
their right to reinstatement.Records show that respondents along with their co-accused,
filed an appeal with the CA docketed as CA-G.R. SP No. 75457 questioning the decision
of the NLRC. The said appeal was denied by the CA. The case was then elevated to this
Court through a petition for review, entitled Thomas Garcia v. Court of Appeals, docketed
as G.R. No. 162554. However, the same was denied with finality for having been filed out
of time.[50] In effect, it serves to estop the respondents from praying for their reinstatement
in the present case. Under the doctrine of conclusiveness of judgment, which is also known
as reclusion of issues or collateral estoppel, issues actually and directly resolved in a former
suit cannot again be raised in any future case between the same parties involving a different
cause of action.[51] Applied to the present case, the former suit refers to CA-G.R. SP No.
75457 wherein the CA ordered separation pay instead of reinstatement and G.R. No.
162554 wherein this Court denied the petition for review filed by respondents together
with other dismissed workers. The future case is the present case in which the petitioner is
Lepanto Consolidated Mining Company assailing the validity of the CA Decision
declaring the dismissal of respondents to be illegal. Reinstatement was not an issue raised
by herein petitioner. Respondents cannot now be allowed to raise the same in the petition
filed by petitioner, for that would circumvent the finality of judgment as to separation pay
insofar as respondents are concerned.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals

dated November 7, 2003 and its Resolution dated April 15, 2004 in CA-G.R. SP No.
75860 are AFFIRMED.

[G.R. Nos. 135695-96. October 12, 2000]

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. TOMAS

TUNDAG, accused-appellant.

DECISION
QUISUMBING, J.:

For automatic review is the judgment of the Regional Trial Court of

Mandaue City, Branch 28, in Criminal Cases Nos.DU-6186 and DU-6203,
finding appellant Tomas Tundag guilty of two counts of incestuous rape and
sentencing him to death twice.
On November 18, 1997, private complainant Mary Ann Tundag filed with
the Mandaue City Prosecutors Office two separate complaints for incestuous
rape. The first complaint, docketed as Criminal Case No. DU-6186, alleged:

That on or about the 5th day of September, 1997, in the City of Mandaue, Philippines,
and within the jurisdiction of this Honorable Court, the above-named accused, being
the father of complainant MARY ANN TUNDAG, who is a 13-year-old girl, with
deliberate intent, did then and there wilfully, unlawfully and feloniously have sexual
intercourse with the said offended party against the latters will.

CONTRARY TO LAW.[1]

The other, docketed as Criminal Case No. DU-6203, averred:

That on or about the 7th day of November, 1997, in the City of Mandaue, Philippines,
and within the jurisdiction of this Honorable Court, the above-named accused, being
the father of complainant MARY ANN TUNDAG, who is a 13-year-old girl, with
deliberate intent, did then and there wilfully, unlawfully and feloniously have sexual
intercourse with the said offended party against the latters will.

CONTRARY TO LAW.[2]

Upon arraignment appellant, assisted by counsel de parte, pleaded Not

Guilty to the charges.
The two cases were consolidated and a joint trial ensued.
Appellants defense was bare denial. He claimed that private complainant
had fabricated the rape charges against him since he and his daughter, had a
quarrel when he accordingly reprimanded her for going out whenever he was
not at home.[3]
Appellant did not present any witness to reinforce his testimony.
On August 31, 1998, the trial court rendered its decision, thus:

WHEREFORE, foregoing premises considered, Joint Judgment is hereby rendered, to

wit:

I. In Criminal Case No. DU-6186 -

a) Finding the herein accused TOMAS TUNDAG guilty beyond reasonable doubt for
the crime of rape, said accused is hereby sentenced to the penalty of death;

b) To indemnify the offended party Mary Ann Tundag the following amounts:

(1) P50,000.00 by reason of the commission of the offense of rape upon her; and

(2) Another P50,000.00 as moral and exemplary damages under Article 2219 in
relation to Articles 2217 and 2230 of the New Civil Code for the pain and moral
shock suffered by her and for the commission of the crime of rape with one qualifying
aggravating circumstance; and

c) To pay the costs.

II. In Criminal Case No. DU-6203 -

a) Finding the herein accused TOMAS TUNDAG guilty beyond reasonable doubt for
the crime of rape, said accused is hereby sentenced to the penalty of death;

b) To indemnify the offended party Mary Ann Tundag the following amounts:

(1) P50,000.00 by reason of the commission of the offense of rape upon her; and

(2) Another P50,000.00 as moral and exemplary damages under Article 2219 in
relation to Articles 2217 and 2230 of the New Civil Code for the pain and moral
shock suffered by her and for the commission of the crime of rape with one qualifying
aggravating circumstance; and

(3) To pay the costs.

SO ORDERED.[4]

In its judgment, the court below gave credence to complainants version of

what accused did to her.

The evidence for the prosecution as adduced during the trial on the merits clearly
shows that private complainant Mary Ann Tundag is a 13 year old girl who does not
know how to read and write and has an IQ of 76% which is a very low general mental
ability and was living with her father, the herein accused, at Galaxy Compound,
Mandaue City.

xxx

That on September 5, 1997 at about 10:00 oclock in the evening, she was in the house
together with her father. But before she went to sleep, her father was already lying
down on the mat while herself (sic) just lied down at his head side which was not
necessarily beside him. However, when she was already sleeping, she noticed that her
father who was already undressed was beside her and was embracing her.Then, he
undressed her which she resisted but her father used a knife and told her that he would
kill her if she shouts and after that, he inserted his penis into her vagina and told her
not to shout or tell anyone.In effect, his penis penetrated her genital, which made her
vagina bleed and was very painful.

That when the penis of her father was already inserted in her vagina, her father was all
the time asking by saying (sic) : Does it feel good? And at the same time, he was
laughing and further, told her that a woman who does not marry can never enter
heaven and he got angry with her when she contradicted his statement.
That while the penis of her father was inside her vagina and (he) was humping over
her, she felt intense pain that she cried and told him to pull it out but did not accede
and in fact, said: Why will I pull it out when it feels so good(?)

That after removing his penis from her vagina and after telling her that she could not
go to heaven if she did not get married, her father just stayed there and continued
smoking while she cried.

That in the evening of November 7, 1997, she was at home washing the dishes while
her father was just smoking and squatting. That after she finished washing the dishes,
she lied (sic) down to sleep when her father embraced her and since she does not like
what he did to her, she placed a stool between them but he just brushed it aside and
laid down with her and was able to take her womanhood again by using a very sharp
knife which he was holding and was pointing it at the right side of her neck which
made her afraid.

That in the early morning of the following day, she left her fathers place and went to
her neighbor by the name of Bebie Cabahug and told her what had happened to her,
who, in turn, advised her to report the matter to the police, which she did and
accompanied by the policemen, she went to the Southern Islands Hospital where she
was examined and after her medical examination, she was brought back by the police
and was investigated by them.[5]

Appellants claim that the complainants charges were manufactured did not
impress the trial court, which found him twice guilty of rape. Now before us,
appellant assails his double conviction, simply contending that:[6]

THE TRIAL COURT HAS COMMITTED AN ERROR IN NOT ABSOLVING THE

ACCUSED-APPELLANT OF THE CRIMES CHARGED IN THE
INFORMATIONS DESPITE THE PRESENCE OF REASONABLE DOUBT TO
EXCULPATE HIM OF THE SAME.

Appellant flatly denies that the incidents complained of ever took place. He
contends that on September 5, 1997, he was working as a watch repairman
near Gals Bakery in Mandaue City Market and went home tired and sleepy at
around 11:00 oclock that evening. On November 7, 1997, he claims he was at
work. In his brief, he argues that it was impossible for him to have raped his
daughter because when the incidents allegedly transpired, he went to work
and naturally, being exhausted and tired, it is impossible for him to do such
wrongdoings.[7]
 The Office of the Solicitor General disagrees with appellant and urges the
Court to affirm the trial courts decision, with the recommendation that the
award of damages and indemnity ex delicto be modified to conform to
prevailing jurisprudence.
Considering the gravity of the offense charged as a heinous crime and the
irreversibility of the penalty of death imposed in each of these cases before
us, the Court leaves no stone unturned in its review of the records, including
the evidence presented by both the prosecution and the defense. Conviction
must rest on nothing less than a moral certainty of guilt.[8] But here we find no
room to disturb the trial courts judgment concerning appellants guilt, because
his defense is utterly untenable.
Appellants defense of alibi and denial is negative and self-serving. It
hardly counts as a worthy and weighty ground for exculpation in a trial
involving his freedom and his life. Against the testimony of private complainant
who testified on affirmative matters,[9] such defense is not only trite but
pathetic. Denial is an inherently weak defense, which becomes even weaker
in the face of the positive identification by the victim of the appellant as the
violator of her honor.[10] Indeed, we find that private complainant was
unequivocal in charging appellant with ravishing her. The victims account of
the rapes complained of was straightforward, detailed, and consistent.[11] Her
testimony never wavered even after it had been explained to her that her
father could be meted out the death penalty if found guilty by the court.[12]
In a prosecution for rape, the complainants credibility is the single most
important issue.[13] The determination of the credibility of witnesses is primarily
the function of the trial court. The rationale for this is that the trial court has the
advantage of having observed at first hand the demeanor of the witnesses on
the stand and, therefore, is in a better position to form an accurate impression
and conclusion.[14] Absent any showing that certain facts of value have clearly
been overlooked, which if considered could affect the result of the case, or
that the trial courts finding are clearly arbitrary, the conclusions reached by the
court of origin must be respected and the judgment rendered affirmed.[15]
Moreover, we note here that private complainants testimony is
corroborated by medical findings that lacerations were present in her
hymen. The examination conducted by Dr. Bessie Acebes upon the private
complainant yielded the following results:

Genitalia: grossly female

Pubic Hairs: scanty

Labia Majora: coaptated

Labia Minora: do

Fourchette: U-shaped

Vestibule: pinkish

Hymen: + old healed laceration at 3 and 9 oclock position(s).

Orifice: admits 2 fingers with ease

Vagina:

Walls: pinkish

Ruganities: prominent

Uterus: small

Cervix: closed

Discharges: Mucoid, minimal

Smears:

Conclusions: sperm identification (-)

Gram staining of vaginal disc.[16]

Dr. Acebes testified that her findings of healed hymenal lacerations in the
complainants private parts meant a history of sexual congress on her
part.[17] According to her, the lacerations may have been caused by the entry of
an erect male organ into complainants genitals. The examining physician
likewise pointed out that previous coitus may be inferred from complainants U-
shaped fourchette since the fourchette of a female who has not yet
experienced sexual intercourse is V-shaped.[18] While Dr. Acebes conceded
under cross-examination, that the existence of the datum U-shape(d)
fourchette does not conclusively and absolutely mean that there was sexual
intercourse or contact because it can be caused by masturbation of fingers or
other things,[19] nonetheless, the presence of the hymenal lacerations tends to
support private complainants claim that she was raped by appellant.
 Appellant next contends that his daughter pressed the rape charges
against him because she had quarreled with him after he had castigated her
for misbehavior. He stresses that the prosecution did not rebut his testimony
regarding his quarrel or misunderstanding with private complainant. He urges
us to consider the charges filed against him as the result of his frequent
castigation of her delinquent behavior.[20]
Such allegation of a family feud, however, does not explain the charges
away. Filing a case for incestuous rape is of such a nature that a daughters
accusation must be taken seriously.It goes against human experience that a
girl would fabricate a story which would drag herself as well as her family to a
lifetime of dishonor, unless that is the truth, for it is her natural instinct to
protect her honor.[21] More so, where her charges could mean the death of her
own father, as in this case.
Appellant likewise points out that it was very unlikely for him to have
committed the crimes imputed to him considering that he and his wife had ten
children to attend to and care for.This argument, however, is impertinent and
immaterial. Appellant was estranged from his wife, and private complainant
was the only child who lived with him.[22] As pointed out by the Solicitor
General, appellant was thus free to do as he wished to satisfy his bestial lust
on his daughter.[23]
Nor does appellants assertion that private complainant has some
psychological problems and a low IQ of 76 in any way favor his
defense. These matters did not affect the credibility of her testimony that
appellant raped her twice. We note that the victim understood the
consequences of prosecuting the rape charges against her own father, as
shown by the following testimony of the victim on cross-examination:
Q : Were you informed that if, and when your father will be found guilty, your father will be
sentenced to death?
A : Yes.
Q : Until now you wanted that your father will be sentenced by death?
A (Witness nodding.)

xxx
Q : I will inform you, Miss Witness, that you have filed two cases against your father and in
case your father would be found guilty, two death sentences will be imposed against
him?
A: Yes.
Q: With that information, do you still want this case would proceed?
A: I want this to proceed.[24]
 Indeed, appellant is guilty. But is the penalty of death imposed on him
correct?
Section 335 of the Revised Penal Code, as amended by Section 11 of
R.A. No. 7659,[25] penalizes rape of a minor daughter by her father as qualified
rape[26] and a heinous crime. In proving such felony, the prosecution must
allege and prove the elements of rape: (1) sexual congress; (2) with woman;
(3) by force or without her consent[27] and in order to warrant the imposition of
capital punishment, the additional elements that: (4) the victim is under 18
years of age at the time of the rape and (5) the offender is a parent of the
victim.[28]
In this case, it was sufficiently alleged and proven that the offender was
the victims father.[29] But the victims age was not properly and sufficiently
proved beyond reasonable doubt. She testified that she was thirteen years old
at the time of the rapes. However, she admitted that she did not know exactly
when she was born because her mother did not tell her. She further said that
her birth certificate was likewise with her mother. In her own words, the victim
testified - [30]
COURT TO WITNESS
Q: When were you born?
A: I do not know.
Q: You do not know your birthday?
A: My mama did not tell me exactly when I asked her.
COURT: Proceed.
FISCAL PEREZ: For our failure to secure the Birth Certificate Your Honor, may we just
request for judicial notice that the victim here is below 18 years old.
ATTY. SURALTA: Admitted.

Judicial notice is the cognizance of certain facts which judges may

properly take and act on without proof because they already know
them.[31] Under the Rules of Court, judicial notice may either be mandatory or
discretionary. Section 1 of Rule 129 of the Rules of Court provides when court
shall take mandatory judicial notice of facts -

SECTION 1. Judicial notice, when mandatory. - A court shall take judicial notice
without the introduction of evidence, of the existence and territorial extent of states,
their political history, forms of government and symbols of nationality, the law of
nations, the admiralty and maritime courts of the world and their seals, the political
constitution and history of the Philippines, the official acts of the legislative, executive
and judicial departments of the Philippines, the laws of nature, the measure of time,
and the geographical divisions.

Section 2 of Rule 129 enumerates the instances when courts may take
discretionary judicial notice of facts -

SEC. 2. Judicial notice, when discretionary. - A court may take judicial notice of
matters which are of public knowledge, or are capable of unquestionable
demonstration or ought to be known to judges because of their judicial functions.

Thus, it can be considered of public knowledge and judicially noticed that

the scene of the rape is not always nor necessarily isolated or secluded for
lust is no respecter of time or place. The offense of rape can and has been
committed in places where people congregate, e.g. inside a house where
there are occupants, a five (5) meter room with five (5) people inside, or even
in the same room which the victim is sharing with the accuseds sister.[32]
The Court has likewise taken judicial notice of the Filipinas inbred modesty
and shyness and her antipathy in publicly airing acts which blemish her honor
and virtue.[33]
On the other hand, matters which are capable of unquestionable
demonstration pertain to fields of professional and scientific knowledge. For
example, in People v. Alicante,[34] the trial court took judicial notice of the
clinical records of the attending physicians concerning the birth of twin baby
boys as premature since one of the alleged rapes had occurred 6 to 7 months
earlier.
As to matters which ought to be known to judges because of their judicial
functions, an example would be facts which are ascertainable from the record
of court proceedings, e.g. as to when court notices were received by a party.
With respect to other matters not falling within the mandatory or
discretionary judicial notice, the court can take judicial notice of a fact
pursuant to the procedure in Section 3 of Rule 129 of the Rules of Court which
requires that -

SEC. 3. Judicial notice, when hearing necessary. - During the trial, the court, on its
own initiative, or on request of a party, may announce its intention to take judicial
notice of any matter and allow the parties to be heard thereon.

After the trial, and before judgment or on appeal, the proper court, on its own
initiative or on request of a party, may take judicial notice of any matter and allow the
parties to be heard thereon if such matter is decisive of a material issue in the case.
 In this case, judicial notice of the age of the victim is improper, despite the
defense counsels admission, thereof acceding to the prosecutions motion. As
required by Section 3 of Rule 129, as to any other matters such as age, a
hearing is required before courts can take judicial notice of such
fact. Generally, the age of the victim may be proven by the birth or baptismal
certificate of the victim, or in the absence thereof, upon showing that said
documents were lost or destroyed, by other documentary or oral evidence
sufficient for the purpose.
Thus, in People v. Rebancos, 172 SCRA 426 (1989), the victim was below
12 and we found that the rape committed was statutory rape. The mother
testified that her daughter was born on October 26, 1974, and so was only 9
years old at the time of the rape on February 12, 1984. Although no birth
certificate was presented because the victims birth had allegedly not been
registered, her baptismal certificate was duly presented. Hence, we ruled that
the mothers testimony coupled with the presentation of the baptismal
certificate was sufficient to establish that the victim was below 12 at the time
of the rape.
However, in People v. Vargas, 257 SCRA 603 (1996), we ruled that
appellant can only be convicted of simple rape, and not statutory rape,
because of failure of the prosecution to prove the minority of the victim, who
was allegedly 10 years old at the time of the rape. The prosecution failed to
present either the birth or baptismal certificate of the victim. Also there was no
showing that the said documents were lost or destroyed to justify their non-
presentation. We held that testimony of the victim and her aunt were hearsay,
and that it was not correct for the trial court to judge the age of the victim by
her appearance.
In several recent cases, we have emphasized the need for independent
proof of the age of the victim, aside from testimonial evidence from the victim
or her relatives. In People v. Javier,[35] we stressed that the prosecution must
present independent proof of the age of the victim, even though it is not
contested by the defense. The minority of the victim must be proved with
equal certainty and clearness as the crime itself. In People v. Cula,[36] we
reiterated that it is the burden of the prosecution to prove with certainty the
fact that the victim was below 18 when the rape was committed in order to
justify the imposition of the death penalty. Since the record of the case was
bereft of any independent evidence thereon, such as the victims duly certified
Certificate of Live Birth, accurately showing private complainants age,
appellant could not be convicted of rape in its qualified form. In People v.
Veloso,[37] the victim was alleged to have been only 9 years of age at the time
of the rape. It held that the trial court was correct when it ruled that the
prosecution failed to prove the victims age other than through the testimony of
her father and herself.
Considering the statutory requirement in Section 335 of the Revised Penal
Code as amended by R.A. No. 7659 and R.A. No. 8353, we reiterate here
what the Court has held in Javier without any dissent, that the failure to
sufficiently establish victims age by independent proof is a bar to conviction
for rape in its qualified form. For, in the words of Melo, J., independent proof
of the actual age of a rape victim becomes vital and essential so as to remove
an iota of doubt that the case falls under the qualifying circumstances for the
imposition of the death penalty set by the law.
In this case, the first rape was committed on September 5, 1997 and is
therefore governed by the death penalty law, R.A. 7659. The penalty for the
crime of simple rape or rape in its unqualified form under Art. 335 of the
Revised Penal Code, as amended by Sec. 11 of R.A. 7659, is reclusion
perpetua. The second rape was committed on November 7, 1997, after the
effectivity of R.A. 8353, also known as the Anti-Rape Law of 1997, which took
effect on October 22, 1997. The penalty for rape in its unqualified form
remains the same.
As to civil indemnity, the trial court correctly awarded P50,000.00 for each
count of rape as civil indemnity. However, the award of another P50,000.00 as
moral and exemplary damages under Article 2219 in relation to Articles 2217
and 2230 of the Civil Code for each count is imprecise. In rape cases, the
prevailing jurisprudence permits the award of moral damages without need for
pleading or proof as to the basis thereof.[38] Thus, pursuant to current
jurisprudence, we award the amount of P50,000.00 as moral damages for
each count of rape.
The award of exemplary damages separately is also in order, but on a
different basis and for a different amount. Appellant being the father of the
victim, a fact duly proved during trial, we find that the alternative circumstance
of relationship should be appreciated here as an aggravating
circumstance. Under Article 2230 of the New Civil Code, exemplary damages
may be imposed when the crime was committed with one or more aggravating
circumstances. Hence, we find an award of exemplary damages in the
amount of P25,000.00 proper. Note that generally, in rape cases imposing the
death penalty, the rule is that relationship is no longer appreciated as a
generic aggravating circumstance in view of the amendments introduced by
R.A. Nos. 7659 and 8353. The father-daughter relationship has been treated
by Congress in the nature of a special circumstance which makes the
imposition of the death penalty mandatory.[39] However, in this case, the
special qualifying circumstance of relationship was proved but not the minority
of the victim, taking the case out of the ambit of mandatory death
sentence. Hence, relationship can be appreciated as a generic aggravating
circumstance in this instance so that exemplary damages are called for. In
rapes committed by fathers on their own daughters, exemplary damages may
be imposed to deter other fathers with perverse tendency or aberrant sexual
behavior from sexually abusing their own daughters.[40]
WHEREFORE, the judgment of the Regional Trial Court of Mandaue City,
Branch 28, in Criminal Case Nos. DU-6186 and DU-6203, is hereby
MODIFIED as follows: appellant Tomas Tundag is found guilty of two (2)
counts of simple rape; and for each count, sentenced to reclusion
perpetua and ordered to pay the victim the amount of P50,000.00 as
indemnity, P50,000.00 as moral damages, and P25,000.00 as exemplary
damages.
No pronouncement as to costs.
SO ORDERED.

[G.R. No. 138471. October 10, 2002]

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. MANUEL PRUNA

y RAMIREZ or ERMAN PRUNA y RAMIREZ, accused-appellant.

DECISION
DAVIDE, JR., C.J.:

A rosebud that had been snuffed out of its fragrance long before it could
even blossom into a flower. Such is the case of Lizette Arabelle Gonzales
(hereafter LIZETTE), who had been defiled at a very tender age. She was at
the time voiding her body waste at their neighbors backyard, but that did not
deter herein appellant from imposing his lechery on her. Indeed, lust is no
respecter of time and place. [1]

On 27 January 1995, an information for rape was filed against accused-

[2]

appellant Manuel Pruna y Ramirez or Erman Pruna y Ramirez (hereafter

PRUNA), the accusatory portion of which reads:

That on or about January 3, 1995 at Sitio Tabing-ilog, Brgy. Panilao, Pilar, Bataan,
Philippines, and within the jurisdiction of this Honorable Court, the said accused thru
force and intimidation, did then and there willfully, unlawfully and feloniously lie and
succeed to have sexual intercourse with the offended party, Lizette Arabelle Gonzales,
a 3-year-old minor girl, against the will and consent of the latter, to her damage and
prejudice.

Upon motion of PRUNAs counsel, the Public Attorneys Office (PAO), the
Information was amended changing the name of the accused from Manuel
Pruna y Ramirez to Erman Pruna y Ramirez, which was the name reflected in
his birth certificate. However, when he testified in court, he stated that his
[3]

name was Manuel Pruna; and in the minutes of the court proceedings, he
signed the name Manuel Pruna.
On 27 November 1995, upon the Motion to Put the Accused Under
Psychiatric or Mental Examination filed by PRUNAs counsel on the ground
[4]

that he could not secure from PRUNA a coherent answer to even simple
questions, the trial court ordered that the accused be brought to the National
Mental Hospital in Mandaluyong City for psychiatric or mental
examination. Accordingly, the trial was suspended, and PRUNA was sent to
[5]

the National Center for Mental Health (NCMH), Mandaluyong City.

On 28 June 1996, the trial court received a telegram from the NCMH
[6]

stating that PRUNA was in fair condition. The NCMH later submitted to the
trial court a report on the psychiatric evaluation of PRUNA with a
[7]

recommendation to put him back to jail for the resumption of court

proceedings. The report also stated that PRUNA narrated that while he and
his friends were under the bridge sniffing rugby and drinking alcohol, they saw
a 3-year-old girl defecating in the river bank; that they called her; and, upon
the order of his friends he placed her on his lap and attempted to caress her
sensitive parts. Said report was not, however, offered in evidence by the
prosecution or the defense.
The prosecution presented five witnesses, whose testimonies can be
summed up as follows:

Jacqueline Gonzales, the mother of LIZETTE, testified that on 3 January 1995, at 9:30
a.m., she was fetching water from the artesian well located ten meters away from her
house, while LIZETTE was defecating at the back of the house of their neighbor
Gloria Tolentino. Jacqueline then carried her pail of water and went back to her
house. Since LIZETTE was not home yet, Jacqueline headed toward the place where
the former was moving her bowel. She looked for LIZETTE but did not find her. It
was when Jacqueline was already returning to her house that she saw LIZETTE from
behind -- red-faced, crying, and appeared to be very frightened. When asked where
she came from, LIZETTE answered that she was brought by a certain Boy to the
grassy area at the back of Glorias house where she was sexually molested
(or kinantot in the Tagalog dialect). LIZETTE then pulled her mother and led her to
the house of PRUNA, which was about eight meters away from their house. PRUNA,
the only one known in their community as Boy, was not there. Jacqueline forthwith
requested her mother-in-law to report the matter to the police, while Jacqueline and
LIZETTE went to the Bataan Provincial Hospital. [8]

Jacqueline further declared that at the time of the alleged rape, LIZETTE
was 3 years old, but at the time Jacqueline testified on 17 October 1995,
LIZETTE was 4 years old. LIZETTEs last birthday was on 19 April 1995. [9]

LIZETTE testified that she knew PRUNA whom he called Boy. She
pointed to him inside the courtroom. According to her, PRUNA laid her down
in a grassy area and inserted his penis into her vagina. When the presiding
judge asked her whether she knew that it is a sin to tell a lie, she answered in
the affirmative. [10]

Dr. Emelita Quiroz, an obstetrician and gynecologist at the Bataan

Provincial Hospital, testified that on 3 January 1995, she conducted a
complete physical examination on LIZETTE and took wet smear specimen
from her vaginal wall through scraping. The specimen was sent to the
laboratory for analysis by a medical technologist. Further, she requested a
urinalysis for LIZETTE. The Medico-Legal Report prepared by Dr. Quiroz
[11] [12]

reveals the following findings:

Essentially normal PE-Findings

Infantile areola & nipples

Flat breasts (-) hematoma

(-) pubic hair

Labia minora and majora well coaptated

Hymenal ring intact (+) hyperemia (-) laceration

(Vaginal Opening)

LABORATORY RESULT:

WET SMEAR: KOH - Negative for T-Vaginalis

NSS- Negative for fungi

SPERM ANALYSIS -POSITIVE for sperm cells

Gram staining-few, epithelial cells seen, no other microorganism

URINALYSIS: RBC-3-7-/hpf epithelial cells few.

WBC-0-2

Although not stated in the Medico-Legal Report of Dr. Quiroz, the

urinalysis report includes a positive finding for sperm cells. Dr. Quiroz
[13]

explained that the presence of sperm cells in the vaginal canal signified that
sexual intercourse and ejaculation had occurred on the person of the
patient. There was no laceration; but there was hyperemia, which means
reddening of the tissue around the vaginal opening. Among the causes of
hyperemia is the insertion of a hard object like penis and finger. [14]

Teresita Magtagnob, the medical technologist who conducted the

laboratory examinations and prepared the corresponding reports, testified [15]

that sperm cells were found in the wet smear specimen and urine taken from
LIZETTE. [16]

SPO2 Romeo D. Bunsoy, a member of the Philippine National Police

assigned at the Pilar Municipal Station, testified that on 3 January 1995 the
parent of the minor rape victim filed a complaint against PRUNA. He referred
the matter to the desk officer to have it blottered. Upon his advise, the minor
was brought to the hospital for examination. When they returned from the
hospital, he took their statements. Later, he conducted an ocular inspection
and investigation at the alleged place of the incident and caused the place to
be photographed, which showed that the grasses were flattened. He inquired
from the people in the neighborhood, and one of them answered that he saw
the minor being brought by PRUNA to the place where the minor was
found. When PRUNA was brought to their station by four barangay tanods of
Panilao, Pilar, Bataan, SPO2 Bunsoy tried to converse with him, but the
former did not give any reply. [17]

On the part of the defense, Carlito Bondoc and PRUNA took the witness
stand.
Carlito testified that on 3 January 1995, he fetched water at the public
artesian well together with Jacqueline. After having drawn water from the well,
Jacqueline called her daughter, who was then defecating on the road near the
river; and they both went home. After a while, the parents of LIZETTE shouted
that their daughter was raped, and then they proceeded to the house of
PRUNA and accused him of having raped the child. Carlito asserted that
PRUNA could not have raped LIZETTE because he (PRUNA) was in his
house from the time that LIZETTE was moving her bowel up to the time that
her mother went to the house of PRUNA. Carlito knew that PRUNA was at
home because the former was also in the latters house to have coffee. Carlito
and the Sulit family thereafter brought PRUNA to the barangay hall. Since the
barangay captain was not around, they brought PRUNA to the municipal
building to prove that he was innocent.[18]

PRUNA denied having raped LIZETTE. He claimed that in the morning of

3 January 1995, he was in his house preparing coffee for Carlito. After Carlito
left, several men arrived and boxed him for reasons not known to him. Carlito
and the latters friend then brought him to the barangay hall. There, LIZETTEs
father boxed him. He was thereafter brought to the Pilar Municipal Jail. There,
the mother of the child threw at him the lid cover of a kettle. He was also
asked by the police to take off his clothes and lie flat; then he was
mauled. Thereafter, he was told to put his feet between the grills, and he was
made to masturbate. Worse, his testes were burned with cigarette butts.
Every night, he was asked to kneel on a chair and was hit with a 2x 2 piece of
wood. [19]

After trial, PRUNA was convicted by the trial court of the crime of rape in
its qualified form and sentenced to suffer the supreme penalty of death and to
indemnify the victim in the sum of P50,000, plus costs. Hence, this automatic
[20]

review.
In his Appellants Brief, PRUNA attributed to the trial court the following
[21]

errors:
I

IN RELYING ON THE TESTIMONY OF JACQUELINE S. GONZALES, THE

MOTHER OF THE CHILD, THAT THE LATTER WAS THREE (3) YEARS OLD
WHEN THE ALLEGED RAPE OCCURRED WHEN THE BEST EVIDENCE
THEREFOR IS THE BIRTH CERTIFICATE OF THE CHILD.

II

IN RELYING ON THE HEARSAY TESTIMONY OF JACQUELINE S.

GONZALES AS TO THE ALLEGED RAPE OF HER CHILD.

III
IN ADMITTING AND RELYING ON THE TESTIMONY OF COMPLAINANT[ ] CHILD WHO
WAS ONLY THREE (3) YEARS OLD WHEN THE ALLEGED RAPE OCCURRED EVEN AS
SHE WAS ONLY FIVE (5) YEARS OLD WHEN SHE TESTIFIED.
IV

IN CONVICTING THE ACCUSED ON DUBIOUS EVIDENCE.

The Office of the Solicitor General (hereafter OSG) seeks the affirmation
of the trial courts decision with the modification that an additional award of
P50,000 as moral damages be granted in favor of the offended party.
As culled from the arguments of the parties, the issues to be resolved in
this case are as follows:
(1) Whether LIZETTE was a competent and credible witness considering that she was
allegedly only 3 years old when the alleged rape occurred and 5 years old when she
testified;
(2) Whether Jacquelines testimony as to the declarations of LIZETTE is hearsay;
(3) Whether the failure of the prosecution to present Gloria Tolentino as a witness is
fatal;
(4) Whether appellants guilt has been proved beyond reasonable doubt;
(5) Whether the qualifying circumstance of minority has been duly proved as to justify
the imposition of the death penalty.

We shall resolve these issues in seriatim.

I. LIZETTEs Competency and Credibility as a Witness

Appellant disputes the competency of LIZETTE to testify by reason of her

tender age. When LIZETTE was called to testify, his counsel interposed a
vigorous objection to the admission of her testimony because of her tender
age. The trial court noted the objection and allowed her to testify; thus:
DIRECT EXAMINATION BY
PROS. LUMABAS:
Do you know Manuel Pruna?
A Yes, sir.
Q How do you call Manuel Pruna?
A Boy, sir.
Q Where is he?
 A There, sir. (Witness pointing to a person wearing blue T-shirt, who when asked, gave
his name as Manuel Pruna)
PROS. LUMABAS:
What did Manuel Pruna or Boy do to you?
A Inihiga niya ako and inserted his penis to my vagina, sir.
Q And in what place did he do this to you?
A In the grassy area, sir.
Q After he inserted his penis to your vagina, what happened next?
ATTY. BALUYOT:
The witness for quite sometime could not answer the question.
PROS. LUMABAS:
I think that will be all for the witness.[22]

After which, the defense counsel manifested that he would not cross-
examine her and that he intended to file a motion for her disqualification as a
witness. The court then proceeded to ask her a few questions, thus:
[23]

COURT :
Do you know what will happen to a child if she is not telling the truth?
A Sa lupa.
Q Do you know that it is a sin to tell a lie?
A Yes, sir.
Q The witness is excused considering the manifestation of Atty. Baluyot that he will be
filing a written motion for the striking out of the testimony of the witness
considering her tender age.[24]

No such motion is extant on the records. At the next hearing, the defense
counsel cross-examined LIZETTE, as follows:
ATTY. BALUYOT:
On January 3, 1995, in the morning where were you?
A I was in the grassy area, sir.
Q In that grassy area there were other children with you playing?
A None, sir.
Q You were then removing[sic] your bowel, is it not?
A Yes, sir.
Q Then while removing your bowel you saw your mother pass[ ] by, is it not?
A Yes, sir.
 Q She was then carrying a pail to fetch some water, is it not?
A Yes, sir.
Q The water from where she will fetch is [sic] a few meter[s] away from you, is it not?
A Near, sir.
ATTY. BALUYOT:
Considering that the grassy place where you were then discharging your bowel is
beside a street?
A Yes, sir.
Q And you saw your mother bringing a pail of water towards your house after her
pumping from the well, is it not?
A Yes, sir.
Q When she passed by she likewise saw you, is it not?
A Yes, sir.
Q Then how far were you from your house when you were discharging your bowel?
Please demonstrate the distance?
A Up to that door, sir.
Q From that position you were at the grass you could see your house, is it not?
A Yes, sir.
Q Could you tell the Honorable Court how long did it take you to discharge your bowel?
A For a short period of time, sir.
(Sandali lang po.)[25]

As a general rule, when a witness takes the witness stand, the law, on
ground of public policy, presumes that he is competent. The court cannot
reject the witness in the absence of proof of his incompetency. The burden is,
therefore, upon the party objecting to the competency of a witness to establish
the ground of incompetency. [26]

Section 21 of Rule 130 of the Rules on Evidence enumerates the persons

who are disqualified to be witnesses. Among those disqualified are [c]hildren
whose mental maturity is such as to render them incapable of perceiving the
facts respecting which they are examined and relating them truthfully.
No precise minimum age can be fixed at which children shall be excluded
from testifying. The intelligence, not the age, of a young child is the test of the
competency as a witness. It is settled that a child, regardless of age, can be
[27]

a competent witness if he can perceive and, in perceiving, can make known

his perception to others and that he is capable of relating truthfully the facts
for which he is examined. [28]
 In determining the competency of a child witness, the court must consider
his capacity (a) at the time the fact to be testified to occurred such that he
could receive correct impressions thereof; (b) to comprehend the obligation of
an oath; and (c) to relate those facts truly to the court at the time he is offered
as a witness. The examination should show that the child has some
[29]

understanding of the punishment which may result from false swearing. The
requisite appreciation of consequences is disclosed where the child states
that he knows that it is wrong to tell a lie, and that he would be punished if he
does so, or that he uses language which is equivalent to saying that he would
be sent to hell for false swearing. A child can be disqualified only if it can be
[30]

shown that his mental maturity renders him incapable of perceiving facts
respecting which he is being examined and of relating them truthfully. [31]

The question of competency of a child-witness rests primarily in the sound

discretion of the trial court. This is so because the trial judge sees the
proposed witness and observes his manner of testifying, his apparent
possession or lack of intelligence, as well as his understanding of the
obligation of an oath. Since many of the witness manners cannot be
[32]

photographed into the record, the finding of the trial judge will not be disturbed
or reversed unless from what is preserved it is clear that such finding was
erroneous. [33]

In this case, appellant questions the competency of LIZETTE as a witness

solely on the ground of her age. He failed to discharge the burden of showing
her mental immaturity. From the above-quoted testimony, it can be gleaned
that LIZETTE had the capacity of observation, recollection, and
communication and that she could discern the consequence of telling a
[34]

lie.We, therefore, sustain the trial court in admitting her testimony and
according it great weight.
We are not persuaded by appellants assertion that LIZETTE should not be
allowed to testify two years after the alleged rape when the interplay of frail
memory combines with the imagination of earlier years. It must be noted that it
is a most natural reaction for victims of criminal violence to have a lasting
impression of the manner in which the crime was committed and the identity
of the person responsible therefor. [35]

In a string of cases, we have said that the testimony of a rape victim who
is of young or tender age is credible and deserves full credit, especially
[36]

where no motive is attributed to the victim that would make her testify falsely
against the accused. Indeed, a girl of such age as LIZETTE would not
[37]

concoct a story of defloration; allow the examination of her private parts; and
undergo the expense, trouble, inconvenience, and the trauma of a public trial
unless she was in fact raped. [38]

II. The Alleged Hearsay Testimony of Jacqueline Gonzales

Contrary to appellants contention, Jacquelines testimony that LIZETTE

told her that appellant laid her in the grassy area and inserted his penis into
her vagina is not covered by the hearsay evidence rule, which finds
application when the declarant does not testify. This rule, as enunciated under
Section 36, Rule 130 of the Rules on Evidence, provides that a witness can
testify only to those facts which he knows of his personal knowledge except
as otherwise provided in the Rules of Court.
The term hearsay as used in the law on evidence, signifies evidence
which is not founded upon the personal knowledge of the witness from whom
it is elicited and which consequently does not depend wholly for its credibility
and weight upon the confidence which the court may have in him; its value, if
any, is measured by the credit to be given to some third person not sworn as
a witness to that fact, and consequently not subject to cross-examination. If[39]

one therefore testifies to facts which he learned from a third person not sworn
as a witness to those facts, his testimony is inadmissible as hearsay
evidence. [40]

The reason for the exclusion of hearsay evidence is that the party against
whom the hearsay testimony is presented is deprived of the right or
opportunity to cross-examine the person to whom the statements are
attributed. Moreover, the court is without opportunity to test the credibility of
[41]

hearsay statements by observing the demeanor of the person who made

them.[42]

In the instant case, the declarant (LIZETTE) herself was sworn as a

witness to the fact testified to by Jacqueline. The appellant even cross-
examined her (LIZETTE). Moreover, the trial court had the opportunity to
observe her manner of testifying. Hence, Jacquelines testimony on the
incident related to her by her daughter cannot be disregarded as hearsay
evidence.
Even assuming that the aforementioned testimony of Jacqueline is
hearsay, its non-admission would not save the day for the appellant. Such
testimony is not indispensable, as it merely serves to corroborate LIZETTEs
testimony that PRUNA laid her down in the grass and inserted his private
organ into hers. As discussed earlier, LIZETTEs testimony, which was found
to be credible by the trial court, is sufficient basis for conviction.
At any rate, Jacquelines testimony is proof of the victims conduct
immediately after the rape. It shows that LIZETTE immediately revealed to her
mother the rape incident and the identity of her defiler. As will be discussed
later, such conduct is one of the earmarks of the truth of the charge of rape.

III Non-Presentation of Gloria Tolentino as a Witness

Appellant harps on the prosecutions failure to put on the witness stand

Gloria Tolentino, who was listed as a witness and executed an affidavit on 4
January 1995 that she saw the appellant carrying and bringing LIZETTE to a
grassy area at the back of her house.
It is undisputed that at the time the case was called for trial, Gloria had
already moved out of her residence in Panilao, Pilar, Bataan, and could not be
found anymore. In any event, as opined by the OSG, her intended testimony
could be dispensed with, as it would only be corroborative of LIZETTEs
testimony that Pruna brought her to a grassy area.

IV. Sufficiency of the Prosecutions Evidence Against Appellant

When LIZETTE was put in the witness stand, she unhesitatingly identified
PRUNA, their neighbor, as the one who defiled her. A rape victim can easily
identify her assailant especially if he is known to her because during the rape,
she is physically close to her assailant that enables her to have a good look at
the latters physical features.
[43]

LIZETTE testified that on 3 January 1995 PRUNA, whom she called Boy,
laid her in a grassy area and inserted his penis into her genitalia. When a girl
or a woman says that she has been raped she says in effect all that is
necessary to show that rape was truly committed. She is not expected to
[44]

remember all the ugly details of the outrage committed against her. And [45]

when her testimony passes the test of credibility, the accused can be
convicted on the basis thereof, for in most cases it is the only evidence that
can be offered to establish his guilt.
[46]

Likewise, LIZETTEs mother testified that right after the incident LIZETTE
disclosed what happened to her and readily identified PRUNA as the culprit.
She even led her mother to the house of PRUNA. Thereafter, the two went
[47]
to the police authorities to report the incident, and then to the hospital for
LIZETTEs medical examination.
By and large, the medical evidence lends credence to LIZETTEs
testimony that PRUNA inserted his penis into her vagina. The Medico-Legal
Report shows that there was hyperemia or reddening of the vaginal opening
of LIZETTE. As opined by Dr. Quiroz, who was presented as an
expert witness, hyperemia can be caused by the insertion of a hard object
like penis and finger. The presence of sperm cells in the vaginal canal and
[48]

urine of LIZETTE is also a mute testimony of the sexual contact that further
strengthens LIZETTEs claim of rape.
This Court is not oblivious of the finding that no laceration was found in
LIZETTEs organ despite the fact that she was examined immediately after
she was raped. We have already ruled, however, that the absence of fresh
lacerations does not preclude the finding of rape, especially when the victim
[49]

is of tender age. Well- settled is the rule that rape is consummated by the
[50]

slightest penile penetration of the labia or pudendum of the female. The [51]

presence of hyperemia in LIZETTEs vaginal opening and the existence of

sperm cells in her vaginal canal and urine are clear indications that PRUNAs
organ indeed touched the labia or pudendum of LIZETTE.
In a nutshell, the following overwhelmingly establish the truth of the charge
of rape: (a) the spontaneity of the identification by LIZETTE of PRUNA as the
rapist; (b) her immediate revelation to her mother of the dastard act committed
against her; (c) her act of leading her mother to appellants house right after
the incident; (d) the prompt filing of the complaint before the authorities; (e)
LIZETTEs submission to medical examination; (f) the hyperemia in her private
part; and (g) the presence of sperm cells in her vaginal canal and urine.
The trial court correctly disregarded the defense of alibi raised by the
accused. We have consistently held that for alibi to prosper, it must be proved
that during the commission of the crime, the accused was in another place
and that it was physically impossible for him to be at the crime scene. Just like
denial, alibi is an inherently weak defense; and unless supported by clear and
convincing evidence, the same cannot prevail over the positive declaration of
the victim. We have also held that when alibi is established only by the
[52]

accused, his relatives, or close friends, the same should be treated with
strictest scrutiny.
[53]

Carlito, who was admittedly a close friend of appellants parents,

corroborated PRUNAs testimony that he (PRUNA) was in his house during
the time that LIZETTE was raped. It is, however, an established fact that the
place where the rape occurred was just a few meters away from the house of
PRUNA. Thus, there was no physical impossibility for PRUNA to be in the
grassy area to consummate the crime of rape.
The defense, through Carlito, attempted to impute motive to Jacqueline in
filing against PRUNA the charge of rape. According to him, LIZETTEs
grandparents, the Sulits, wanted to buy the place of the PRUNA family, but
the latter refused. Aside from the fact that such testimony was not
[54]

corroborated, said motive, if at all, is too flimsy to be even considered. No

mother in her right mind would use her offspring as an engine of malice. She
would not subject her child to the humiliation, disgrace, and even the stigma
attendant to a prosecution for rape unless she is motivated by the desire
to bring to justice the person responsible for her childs defilement. [55]

V. Sufficiency of Evidence of LIZETTEs Minority and Propriety of the

Imposition of the Death Penalty

The commission of the crime of rape by PRUNA having been duly

established by the prosecution, we now come to the question of the penalty to
be meted upon him.
Article 335, seventh paragraph, no. 4, of the Revised Penal Code, as
amended by Republic Act No. 7659, provides that the death penalty shall be
imposed if the crime of rape is committed against a child below seven (7)
years old. We have held that in such a case the minority of the victim must be
proved with equal certainty and clearness as the crime itself. The failure to
sufficiently establish the victims age is fatal and consequently bars conviction
for rape in its qualified form.
[56]

A persons age is best proved by the birth certificate. But is the

presentation of the victims birth certificate a sine qua non requirement to
prove her age for the appreciation of minority either as an element of the
crime or as a qualifying circumstance? Recent jurisprudence has conflicting
pronouncements.
In the following cases, no birth certificate was presented and this Court
ruled that the age of the victim was not duly proved by the prosecution:

1. In People v. Vargas, the testimonies of the victim and her aunt that the former was
[57]

10 years old at the time of the rape were not considered proof of her age for being
hearsay. This Court also observed that the victim could easily be mistaken for a child
below 12 years of age, and hence it was not correct to judge the victims age by her
appearance. We held: The difference of two or three years in age may not always be
readily apparent by mere physical manifestations or appearance.

2. In People v. Javier, the victim was alleged to be 16 years old, and the accused did
[58]

not contest her age. Ratiocinating that in this age of modernism, there is hardly any
difference between a 16-year-old girl and an 18-year-old one insofar as physical
features and attributes are concerned, this Court held that an independent proof of the
actual age of a rape victim is vital and essential so as to remove an iota of doubt that
the victim is indeed under 18 years of age as to fall under the qualifying
circumstances enumerated in R.A. No. 7659.

3. In People v. Brigildo, aside from the failure of the prosecution to present the
[59]

offended partys birth certificate or other equally acceptable official document

concerning her age, the testimonies on record were not clear as to her exact age. The
victim declared that she was 11 years old when she testified in court a year after the
incident, while her mother claimed that she was around 15 years old at the time of the
commission of the crime. The informations even alleged a different age. Hence, this
Court refused to appreciate the qualifying circumstance of minority because of the
uncertainty regarding her age.

4. In People v. Tipay, the offended party was alleged in the information to be under
[60]

16 years of age. No independent evidence was presented to prove it. This Court
recognized that the minority of a victim who may be below the age of 10 is quite
manifest and may be taken judicial notice of by the court. But when the victim is
between the crucial years of 15 and 17 where minority may seem to be dubitable due
to one's physical appearance, the prosecution should prove the fact of minority with
certainty. The lack of objection on the part of the accused concerning the victims age
does not excuse the prosecution from discharging its burden.

5. In People v. Cula, the victim was alleged in the complaint to be 16 years old when
[61]

the rape was committed, but no evidence at all was presented to prove her age. We
held that the failure of the accused to deny such allegation cannot make up for the
failure of the prosecution to prove with certainty the victims minority. Because of the
lacuna in the prosecutions evidence, coupled with the trial courts failure to make a
categorical finding of minority of the victim, we declined to consider the qualifying
circumstance of minority.

6. In People v. Veloso, the victim was alleged to be 9 years of age when she was
[62]

raped. Citing People v. Vargas, this Court refused to consider the testimonies of the
[63]

victim and her father as sufficient proof of her age.

7. In People v. Pecayo, the victim simply stated during the beginning of her direct
[64]

examination that she was 14 years old and that she was born on 13 January 1983. We
held that the victims casual testimony as to her age is not enough, and that the lack of
denial on the part of the accused does not excuse the prosecution from proving her age
through competent evidence such as a duly certified certificate of live birth, baptismal
certificate, or some other authentic document showing her age.

8. In People v. Tundag, the victim testified that she was 13 years of age when she
[65]

was raped, but she did not know exactly when she was born. Unable to secure a copy
of her birth certificate, the prosecution moved that judicial notice be taken of the fact
that she was below 18 years old at the time of the rape. Despite the admission by the
defense of such fact, this Court held that the age of the victim is not a matter of
judicial notice, whether mandatory or discretionary. Under Section 3, Rule 129 of the
Rules on Evidence, a hearing is required before such fact can be taken judicial notice
of by courts.

9. In People v. Geraban, the victims testimony was categorical in declaring that she
[66]

was 15, but her mothers testimony regarding her age was not clear. We thus declared
that the prosecution failed to discharge the burden of proving minority.

10. In People v. Liban and People v. Llandelar, the only evidence adduced to
[67] [68]

prove the minority of the victims was the victims bare testimony that they were 10
and 16 years old, respectively. This Court held that while the declaration of a victim
as to her age, being an exception to the hearsay proscription, would be admissible
under the rule on pedigree, the question on the relative weight that may be accorded to
it is another matter. The prosecution should present the victims birth certificate or, in
lieu thereof, any other documentary evidence, like a baptismal certificate, school
records, and documents of similar nature, or credible testimonial evidence that can
help establish the age of the victim. Neither the obvious minority of the victim nor the
absence any contrary assertion from the defense can exonerate the prosecution from
its burden. Judicial notice of the issue of age without the requisite hearing under
Section 3 of Rule 129 of the Rules on Evidence would not be sufficient compliance
with the law.

11. In People v. Alvarado, the victim testified that she was 14 years old at the time
[69]

of the rape, and this was confirmed by the accused, who was victims father. The
victims mother, however, testified as to her date of birth which showed that she was
13 years of age at the time of the commission of the crime. For this doubt as to the
victims age, the accused was held guilty of simple rape only and meted the penalty of
reclusion perpetua, and not death penalty.
 On the other hand, in the following cases, we ruled that the age of the
rape victim was sufficiently established despite the failure of the prosecution
to present the birth certificate of the offended party to prove her age:

1. In People v. Rafales, the testimony of the victim and her mother that the former
[70]

was only 10 years old when she was raped, which was not denied by the accused, was
deemed sufficient to prove her age for the purpose of determining whether the
accused could be held guilty of statutory rape, which is carnal knowledge of a woman
below 12 years of age.

2. In People v. De la Cruz, the testimony of the mother alone that her two daughters
[71]

were both 14 years old at the time of the rape incidents was deemed sufficient because
there was no reason to doubt the testimony of the mother, who had personal
knowledge of the ages of her children. Moreover, said testimony was never
challenged by the accused and stood unrebutted by any other evidence.

3. In People v. Bali-balita, the victims testimony as to her age, which was

[72]

corroborated by her half-sister, was deemed sufficient. We noted that the victim
testified in court four months after the rape, and hence it was not difficult for the trial
court to take judicial notice that she was under 18 years of age.

4. In People v. Velasco, the minority of the victim was deemed established by (a) the
[73]

complainant herself, who was held to be competent to testify on her age, as it

constituted family tradition; (b) the open admission of the accused that the victim was
a 12-year-old minor; and (c) the categorical finding of the trial court that she was a
minor of a little over twelve years.

5. In People v. Remudo, the trial court appreciated the qualifying circumstance of

[74]

minority on the strength of (a) the offended partys testimony as to the date of her
birth, which showed that she was 13 years old at the time of the rape, and (b) the
admission of said date of birth by the accused who was the victims brother.

6. In People v. LLanita the only evidence presented by the prosecution to establish

[75]

that the victim was below 7 years old at the time of the alleged rape was the victims
own testimony. Although hearsay because she could not have personal knowledge of
the date of her birth but could only acquire knowledge thereof from her parents or
relatives, said testimony was held admissible for being an assertion of family tradition
regarding pedigree. Her testimony and the accuseds admission that she was 5 years
old during the commission of the crime were held sufficient to establish her age.
7. In People v. Agustin, the victims testimony that she was 14 years old at the time of
[76]

the rape incidents, coupled with the express admission of her age by the accused who
was her father, sufficiently proved her minority.

8. In People v. Esuela, the testimony of the victims mother that the victim was 13
[77]

years of age at the time of the rape was held sufficient to establish minority for the
reason that as a mother she was in the best position to know when she delivered her
child. Also considered were the victims own testimony regarding her age, as well as
the observation of the trial court that she could not have been more than 18 years old
when she testified.

In order to remove any confusion that may be engendered by the

foregoing cases, we hereby set the following guidelines in appreciating age,
either as an element of the crime or as a qualifying circumstance.
1. The best evidence to prove the age of the offended party is an original
or certified true copy of the certificate of live birth of such party.
2. In the absence of a certificate of live birth, similar authentic
documents such as baptismal certificate and school records which show the
date of birth of the victim would suffice to prove age.
3. If the certificate of live birth or authentic document is shown to have
been lost or destroyed or otherwise unavailable, the testimony, if clear and
credible, of the victims mother or a member of the family either by affinity or
consanguinity who is qualified to testify on matters respecting pedigree such
as the exact age or date of birth of the offended party pursuant to Section 40,
Rule 130 of the Rules on Evidence shall be sufficient under the following
circumstances:

a. If the victim is alleged to be below 3 years of age and what is sought to be proved is
that she is less than 7 years old;

b. If the victim is alleged to be below 7 years of age and what is sought to be proved is
that she is less than 12 years old;

c. If the victim is alleged to be below 12 years of age and what is sought to be proved
is that she is less than 18 years old.

4. In the absence of a certificate of live birth, authentic document, or the

testimony of the victims mother or relatives concerning the victims age, the
complainants testimony will suffice provided that it is expressly and clearly
admitted by the accused. [78]
 5. It is the prosecution that has the burden of proving the age of the
offended party. The failure of the accused to object to the testimonial evidence
regarding age shall not be taken against him.
The trial court should always make a categorical finding as to the age of
the victim.
In the present case, no birth certificate or any similar authentic document,
such as a baptismal certificate of LIZETTE, was presented to prove her
age. In imposing the death penalty, the trial court ratiocinated in this wise:

In the instant case, the victim, Lizette Arabelle Gonzales, was a 3-year-old minor girl
as alleged in the information and the defense did not contest her age and as a matter of
fact was questioning her qualification to testify because of her tender age when she
testified two (2) years later in Court. The victims Medico-Legal Certificate date[d]
January 3, 1995 established the fact that at the time of the commission of the rape on
January 3, 1995, the child was only 3 years old. [79]

It thus appears that the trial courts finding that LIZETTE was 3 years old
when she was raped was based on the Medico-Legal Report prepared by Dr.
Quiroz, as well as on the fact that the defense did not contest her age and
even questioned her qualification to testify because of her tender age.
However, the Medico-Legal Report relied upon by the trial court does not
in any way prove the age of LIZETTE, for there is nothing therein which even
mentions her age. Only testimonial evidence was presented to establish
LIZETTEs age. Her mother, Jacqueline, testified on 17 October 1995 as
follows:
Q. Now, on January 3, 1995 at about 9:30 in the morning, do you still recall where you
were?
A. Yes, sir.
Q. Where were you at that particular date and time?
A. I was fetching water from an artesian well beside the house of my neighbor, sir.
Q. Where was this daughter of yours then when you were fetching water?
A. My daughter was discharging her bowel who was then at the back of the house of
our neighbor, sir.
How old is your daughter Lizette Arabelle Gonzales?
A. Three years old, sir.
Q. At the time that she was discharging her bowel, how old [was] she?
A. Three years old, sir. She is four years old now.
 Q. When was her last birthday?
A. April 19, 1995, sir.[80]

Likewise, LIZETTE testified on 20 November 1996, or almost two years

after the incident, that she was 5 years old. However, when the defense
[81]

counsel asked her how old she was on 3 January 1995, or at the time of the
rape, she replied that she was 5 years old. Upon further question as to the
date she was born, she could not answer. [82]

For PRUNA to be convicted of rape in its qualified form and meted the
supreme penalty of death, it must be established with certainty that LIZETTE
was below 7 years old at the time of the commission of the crime. It must be
stressed that the severity of the death penalty, especially its irreversible and
final nature once carried out, makes the decision-making process in capital
offenses aptly subject to the most exacting rules of procedure and evidence. [83]

In view of the uncertainty of LIZETTEs exact age, corroborative evidence

such as her birth certificate, baptismal certificate or any other authentic
document should be introduced in evidence in order that the qualifying
[84]

circumstance of below seven (7) years old is appreciated against the

appellant. The lack of objection on the part of the defense as to her age did
not excuse the prosecution from discharging its burden. That the defense
invoked LIZETTEs tender age for purposes of questioning her competency to
testify is not necessarily an admission that she was below 7 years of age
when PRUNA raped her on 3 January 1995. Such being the case, PRUNA
cannot be convicted of qualified rape, and hence the death penalty cannot be
imposed on him.
However, conformably with no. 3(b) of the foregoing guidelines, the
testimony of LIZETTEs mother that she was 3 years old at the time of the
commission of the crime is sufficient for purposes of holding PRUNA liable for
statutory rape, or rape of a girl below 12 years of age. Under the second
paragraph of Article 335, as amended by R.A. No. 7659, in relation to no. 3 of
the first paragraph thereof, having carnal knowledge of a woman under 12
years of age is punishable by reclusion perpetua. Thus, the penalty to be
imposed on PRUNA should be reclusion perpetua, and not death penalty.
As regards the civil liability of PRUNA, the indemnity in the amount of
P50,000 awarded by the trial court is not sufficient. In accordance with
recent jurisprudence, LIZETTE should also be awarded moral damages in the
amount of P50,000 without need of pleading or proof because the mental,
physical and psychological trauma suffered by her is too obvious. [85]
 WHEREFORE, the decision of the Regional Trial Court, Branch 1,
Balanga, Bataan, in Criminal Case No. 6044 is hereby AFFIRMED with the
modification that accused Manuel Pruna y Ramirez or Erman Pruna y
Ramirez is held guilty beyond reasonable doubt of statutory rape, and not
qualified rape, and is sentenced to suffer reclusion perpetua and to pay the
victim Lizette Arabelle Gonzales the sum of P50,000 as moral damages in
addition to the indemnity of P50,000.
Costs de oficio.
SO ORDERED.

[G.R. No. 132081. November 26, 2002]

JOEL M. SANVICENTE, petitioner, vs. PEOPLE OF THE

PHILIPPINES, respondent.

DECISION
YNARES-SANTIAGO, J.:

Petitioner was charged with homicide for the killing of one Dennis Wong y
Chua. On June 11, 1995, at around 5:30 p.m., petitioner fatally shot the victim
outside the Far East Bank along Katipunan Avenue, Loyola Heights, Quezon
City after the latter allegedly attempted to rob him of a large amount of cash
which he had just withdrawn from the automatic teller machine. [1]

Responding policemen found the lifeless body of the victim at the parking
space in front of the Far East Bank and Trust Company Branch along
Katipunan Road, Loyola Heights, Quezon City. Recovered at the scene were
five empty caliber .45 shells, two live caliber .45 bullets and an ATM card in
the name of Violeta Sanvicente. [2]

On June 13, 1995, police authorities located petitioners car in Barrio

Malapit, San Isidro, Nueva Ecija and took custody thereof.
Petitioners counsel, Atty. Leonardo A. Valmonte, turned over to Police
Station 9 petitioners .45 caliber Mark IV pistol bearing Serial No. 5504095. He
also wrote a letter addressed to P/Major Antonio Diaz, Station Commander of
PNP Station 9, CPDC, Anonas Road, Quezon City which reads as follows:
This is in connection with the alleged death of one Dennis Wong that occurred in
Katipunan Ave., Q.C., in the afternoon of June 11, 1995.

According to my client, Joel Sanvicente, on said date, place and hour above he just
withdrew from the Far East Bank and Trust Co., Katipunan branch a large amount of
cash. On his way out of the bank, said victim immediately attacked him to grab the
money he has just withdrew (sic). My said client pulled out his gun (duly licensed
with Permit to Carry) and fired a warning shot upwards. Still the deceased continued
his attack and grabbed his gun. After a brief struggle, my client was forced to shoot
the deceased in the defense of his person and money. My client will submit a formal
statement during the proper preliminary investigation, if needed.

On June 13, 1995, my clients car (Mercedes Benz with plate no. TFU 736) was taken
by your operatives led by Capt. Alejandro Casanova and [is] now in your custody.

In view of the untoward incident, my client suffered serious anxiety and depression
and was advised to undergo medical treatment and confinement at the Delos Santos
Hospital in Rodriguez Ave., Q. C. My client would have no objection if you assigned
police escort/guard under your supervision pending his confinement.

For all intense (sic) & purposes, this letter shall serve as a voluntary surrender,
without admission of guilt on the part of my client. [3]

At his arraignment, petitioner pleaded not guilty. [4]

During the trial, the prosecution presented Ballistics Report No. B-046-95,
stating that slugs recovered from the crime scene, on the one hand, and
cartridge cases fired from petitioners caliber .45 Mark IV pistol, on the other
hand, were fired from the same firearm. The Medico-Legal Officer who
[5]

conducted the autopsy on the deceased failed to appear at the trial. In order
to dispense with her testimony, petitioner admitted the due execution and
genuineness of the medico-legal report. After trial, the prosecution filed its
Formal Offer of Exhibits, which included the above-quoted letter of petitioners
[6]

counsel to P/Maj. Antonio Diaz, marked as Exhibit LL. The trial court admitted
all the prosecutions exhibits in its Order dated August 27, 1996. [7]

Meanwhile, petitioner begged leave to file a demurrer to evidence, which

was granted by the trial court. Hence, on August 29, 1996, petitioner filed a
[8]

Motion To Dismiss (On Demurrer to Evidence), based on the following

[9]

grounds: (1) the lack of positive identification of the accused is a fatal

omission warranting dismissal; (2) prosecutions evidence are totally
hearsay/incompetent, hence, inadmissible and the guilt of the accused was
not proven by positive evidence beyond reasonable doubt.
 On October 7, 1996, the trial court issued an Order dismissing the case
together with the civil aspect thereof for insufficiency of evidence. [10]

The prosecution filed a motion for reconsideration, which was denied on

[11]

the ground, among others, that with the dismissal of the case double jeopardy
had set in. [12]

The prosecution filed a petition for certiorari with the Court of Appeals,
docketed as CA-G.R. SP No. 43697. In a Decision dated July 25, 1997, the [13]

appellate court nullified the October 7, 1996 Order of the trial court. Petitioners
motion for reconsideration was likewise denied in a Resolution dated
[14]

January 2, 1998. [15]

Hence, the instant petition.

In reversing the trial courts Order dismissing the criminal case against
petitioner, the Court of Appeals found that the trial court committed grave
abuse of discretion in preventing the prosecution from establishing the due
execution and authenticity of Exhibit LL which, it claimed, positively identified
petitioner as the perpetrator of the crime charged. [16]

Under Rule 119, Section 23 of the Revised Rules of Criminal Procedure,

as amended, the trial court may dismiss the action on the ground of
insufficiency of evidence upon a demurrer to evidence filed by the accused
with or without leave of court. In resolving accuseds demurrer to evidence, the
court is merely required to ascertain whether there is competent or sufficient
evidence to sustain the indictment or support a verdict of guilt. [17]

The grant or denial of a demurrer to evidence is left to the sound discretion

of the trial court and its ruling on the matter shall not be disturbed in the
absence of a grave abuse of discretion. Significantly, once the court grants
[18]

the demurrer, such order amounts to an acquittal and any further prosecution
of the accused would violate the constitutional proscription on double
jeopardy. This constitutes an exception to the rule that the dismissal of a
[19]

criminal case made with the express consent of the accused or upon his own
motion bars a plea of double jeopardy. The finality-of-acquittal rule was
[20]

stressed thus in People v. Velasco: [21]

The fundamental philosophy highlighting the finality of an acquittal by the trial court
cuts deep into the humanity of the laws and in jealous watchfulness over the rights of
the citizens, when brought in unequal contest with the State
xxx. Thus Green expressed the concern that (t)he underlying idea, one that is deeply
[22]

ingrained in at least the Anglo-American system of jurisprudence, is that the State

with all its resources and power should not be allowed to make repeated attempts to
convict an individual for an alleged offense thereby subjecting him to embarrassment,
expense and ordeal and compelling him to live in a continuing state of anxiety and
insecurity, as well as enhancing the possibility that even though innocent, he may be
found guilty. [23]

It is axiomatic that on the basis of humanity, fairness and justice, an acquitted

defendant is entitled to the right of repose as a direct consequence of the finality of his
acquittal. The philosophy underlying this rule establishing the absolute nature of
acquittals is part of the paramount importance criminal justice system attaches to the
protection of the innocent against wrongful conviction. The interest in the finality-
[24]

of-acquittal rule, confined exclusively to verdicts of not guilty, is easy to understand:

it is a need for repose, a desire to know the exact extent of ones liability. With this
[25]

right of repose, the criminal justice system has built in a protection to insure that the
innocent, even those whose innocence rests upon a jurys leniency, will not be found
guilty in a subsequent proceeding. [26]

Given the far-reaching scope of an accuseds right against double

jeopardy, even an appeal based on an alleged misappreciation of evidence
will not lie. The only instance when double jeopardy will not attach is when
[27]

the trial court acted with grave abuse of discretion amounting to lack or
excess of jurisdiction, such as where the prosecution was denied the
opportunity to present its case, or where the trial was a sham. However,
[28] [29]

while certiorari may be availed of to correct an erroneous acquittal, the

petitioner in such an extraordinary proceeding must clearly demonstrate that
the trial court blatantly abused its authority to a point so grave as to deprive it
of its very power to dispense justice. [30]

In the instant case, petitioner filed a demurrer to evidence after the

prosecution adduced its evidence and rested its case. The trial court
subsequently dismissed the case after finding that the evidence presented by
the prosecution was insufficient to support the charge against petitioner. The
prosecution, which relied primarily on Exhibit LL as the basis for the
indictment against petitioner, however, contested the dismissal of the case
allegedly because the trial court prevented it from further identifying the
genuineness and due execution of said document in the manner that it
wanted. [31]

The crux of the problem lies in the confusion between the due
execution of a piece of documentary evidence vis--vis the truth of
its contents. Likewise at the core of the dilemma is the fundamental
distinction between an admission and a confession. The prosecution
maintains that the letter, Exhibit LL, constituted a confession and argues thus:
What better evidence is there to positively identify the perpetrator of the crime
than the confession of the petitioner himself, freely and voluntarily given,
assisted by counsel? According to the prosecution, this extrajudicial
[32]

confession constitutes the strongest evidence of guilt. [33]

An admission is defined under Rule 130, Section 26 of the Rules of Court

as the act, declaration or omission of a party as to a relevant fact. A
confession, on the other hand, under Rule 130, Section 33 is the declaration
of an accused acknowledging his guilt of the offense charged or any offense
necessarily included therein.
More particularly, a confession is a declaration made at any time by a
person, voluntarily and without compulsion or inducement stating
or acknowledging that he had committed or participated in the commission of
a crime. The term admission, on the other hand, is usually applied in criminal
cases to statements of fact by the accused which do not directly involve an
acknowledgment of the guilt of the accused or of criminal intent to commit the
offense with which he is charged. [34]

In short, in a confession, an accused acknowledges his guilt; while there is

no such acknowledgment of guilt in an admission. Only recently in People v.
[35]

Licayan, the Court distinguished confession and admission in this wise:

[36]

A confession is an acknowledgment in express terms, by a party in a criminal

case, of his guilt of the crime charged, while an admission is a statement by the
accused, direct or implied, of facts pertinent to the issue, and tending, in connection
with proof of other facts, to prove his guilt. In other words, an admission
is something less than a confession, and is but an acknowledgment of some fact or
circumstance which in itself is insufficient to authorize a conviction, and which tends
only to establish the ultimate fact of guilt. (Emphasis ours) [37]

There is no question that the letter dated June 14, 1995 is an

admission, not a confession, because of the unmistakable qualification in its
last paragraph that

For all intense (sic) & purposes, this letter shall serve as a voluntary
surrender, without admission of guilt on the part of my client. . . (Emphasis and italics
supplied).

With the foregoing distinctions in mind, the trial court correctly rejected the
prosecutions motion to have Exhibit LL further identified in the manner that it
wanted, i.e., through the proposed testimony of petitioners counsel, Atty.
[38]

Valmonte, who incidentally refused to testify. Aside from covering a subject

which squarely falls within the scope of privileged communication, it would,
more importantly, be tantamount to converting the admission into a
confession.
It can not be denied that the contents of Exhibit LL, particularly with regard
to the details of the shooting communicated by petitioner to Atty. Valmonte, is
privileged because it is connected with the business for which petitioner
retained the services of the latter. More specifically, said communication was
[39]

relayed by petitioner to Atty. Valmonte in order to seek his professional advice

or assistance in relation to the subject matter of the employment, or to explain
something in connection with it, so as to enable him to better advice his client
or manage the litigation. [40]

Pertinent to this is Section 24 (b) of Rule 130 of the Rules of Court, to wit:

SEC. 24. Disqualification by reason of privileged communication. The following

persons cannot testify as to matters learned in confidence in the following cases:

xxxxxxxxx

(b) An attorney cannot, without the consent of his client, be examined as to any
communication made by the client to him, or his advice given thereon in the course
of, or with a view to, professional employment nor can an attorneys secretary,
stenographer, or clerk be examined, without the consent of the client and his
employer, concerning any fact the knowledge of which has been acquired in such
capacity; x x x.

It is worthy to note that the prosecution did not summon petitioner himself
to testify although he too was a signatory of Exhibit LL. Apparently, it was
aware that petitioner could well invoke his right against self-incrimination and
refuse to answer its questions. The prosecution then attempted to draw out
what it could not constitutionally extract from his lawyer. Yet, and as stated
previously, said Exhibit LL had earlier been admitted in evidence by the trial
court in its Order dated August 27, 1996. What was objectionable was the
prosecutions sole reliance on the document without proof of other facts to
establish its case against petitioner because of its mistaken assumption that
the same was a confession.
Significantly, the prosecution was neither barred nor prevented by the trial
court from establishing the genuineness and due execution of the document
through other means. Rule 132, Section 20of the Rules of Court provides the
following means of authenticating the document:
SEC. 20. Proof of private document. Before any private document offered as authentic
is received in evidence, its due execution and authenticity must be proved either:

(a) By anyone who saw the document executed or written; or

(b) By evidence of the genuineness of the signature or handwriting of the maker.

Any other private document need only be identified as that which it is claimed to be.

Thus, the due execution of a document can be proved through the

testimony of: (1) the person/s who executed it; (2) the person before whom its
execution was acknowledged; or (3) any person who was present and saw it
executed and delivered or who, after its execution and delivery, saw it and
recognized the signatures therein or by a person to whom the parties to the
instrument previously confirmed the execution thereof. [41]

Thus, respondent could have called to the witness stand P/Maj. Antonio
Diaz, the addressee of Exhibit LL, to identify the said document since it was
supposedly delivered to him personally. Samples of the signatures appearing
on the document which can be readily obtained or witnesses who are familiar
with them could have also been presented. The prosecution did not. Neither
did it subpoena P/Senior Inspector Alejandro M. Casanova, who prepared the
detailed Police Report of the incident used as the basis of the inquest
proceedings, nor were any eyewitnesses presented, notwithstanding that
there appeared to be at least two eyewitnesses to the incident.
It must be borne in mind that in a criminal trial, it is the prosecution that
determines the charges to be filed and how the legal and factual elements in
the case shall be utilized as components of the information. Stated [42]

differently, the determination of what evidence to adduce to bolster a

successful prosecution of a criminal offense is the exclusive domain of
prosecutorial discretion. Indeed, courts generally can not interfere with the
prosecutors discretion as to control over criminal prosecutions. However, it is
[43]

the court which ultimately determines whether such evidence is sufficient to

sustain an indictment, thus, the care with which the prosecution must build up
its case against the accused can not be gainsaid because, as has been stated
time and again, in any criminal prosecution, the State must rely on the
strength of its own evidence and not on the weakness of the evidence of the
defense. [44]

Viewed vis-a-vis the foregoing lapses detailed above, the prosecutions

insistence to have Exhibit LL admitted in the manner it wanted shows only too
clearly a subtle but shrewd scheme to cover up for the foregoing procedural
missteps and to cut evidentiary corners to build its case at the expense of the
defense. This cannot be countenanced. An accused should not be prejudiced
for the failure of the prosecution to discharge its burden of overcoming the
constitutional presumption of innocence and to establish the guilt of the
accused beyond reasonable doubt. Indeed, if the prosecution fails to
[45]

discharge the burden, then it is not only the accuseds right to be freed, it is
even more the courts constitutional duty to acquit him. [46]

If at all, the foregoing acts of the prosecution underscores just how

careless and haphazard it had been in building up a case against the
petitioner. For such, it has nothing but itself to blame if the trial court in
assaying the proof it adduced found the same wanting. It will neither be
allowed to sweep its procedural miscues under the rug, so to speak, on the
pretext that it was denied due process when the trial court supposedly
prevented it from presenting Exhibit LL. To be more precise, the trial court
had admitted Exhibit LL in evidence but rejected the further admission of the
document in the manner that it wanted. Verily, the prosecution can not have
its cake and eat it too.
Moreover, we agree with the trial court that the letter marked as Exhibit LL
is hearsay inasmuch as its probative force depends in whole or in part on the
competency and credibility of some person other than the witness by whom it
is sought to produce it. The term as used in the law of evidence signifies all
[47]

evidence which is not founded upon the personal knowledge of the witness
from whom it is elicited, and which consequently does not depend wholly for
its credibility and weight upon the confidence which the court may have in
him. Its value, if any, is measured by the credit to be given to some third
persons not sworn as witnesses to that fact and consequently not subject to
cross-examination. In short, it is the evidence not of what the
[48]

witness knows himself but of what he has heard from others. Thus, in one
[49]

case we stated that [w]hen evidence is based on what was

supposedly told the witness, the same is without any evidentiary weight being
patently hearsay. In the case at bar, it is noteworthy that the statements in
[50]

the letter were made by petitioners counsel, who even began his narration of
the events with the phrase: According to my client.[51]

In holding that petitioner was identified as the person who committed the
offense, the appellate court relied on the following circumstances: (1) he
admitted responsibility therefor through Exhibit LL, which was signed by him
and his counsel; (2) he surrendered even before the issuance of the warrant
of arrest; (3) his gun was also surrendered to the police authorities by his
counsel; (4) empty shells recovered at the scene of the crime matched his
gun; and (5) the letter-referral of P/Senior Inspector Alejandro Casanova to
Quezon City Prosecutor indicated that petitioner was under the custody of the
policeman on detail supposedly to guard him at the hospital. [52]

With regard to the first circumstance, suffice it to state that, as has

lengthily been discussed earlier, Exhibit LL is merely an admission and not a
confession. In fact, petitioner specifically denied criminal intent therein. By and
of itself it is insufficient to support a conviction unless it is considered in
connection with other proof to establish the ultimate fact of guilt.
The second and third incidents actually support petitioners innocence
because were he indeed guilty of the felony, he would not likely have
surrendered even before the warrant was issued for his arrest. Courts go by
the biblical truism that the the wicked flee when no man pursueth but the
righteous are as bold as a lion.[53]

The fourth event merely proves the fact that the empty shells recovered
from the crime scene were fired from the surrendered gun. It, however, does
not answer the penultimate question of who actually pulled the trigger of the
firearm.
Lastly, the appellate courts reading of the letter-referral, mentioning that
[54]

petitioner had been placed under the custody of a policeman, was

inaccurate. As explained by Atty. Valmonte in Exhibit LL, the policeman was
actually requested for petitioners personal safety owing to the untoward
incident which caused petitioner serious anxiety and depression, and for
which he had to undergo treatment and confinement. [55]

All told, we find no grave abuse on the part of the trial court in dismissing
the charges against petitioner.
WHEREFORE, in view of all the foregoing, the petition is GRANTED. The
decision of the Court of Appeals dated July 25, 1997 and the Resolution dated
January 2, 1998 in CA-G.R. SP No. 43697 are REVERSED and SET ASIDE.
SO ORDERED.

A.M. No. RTJ-92-876 September 19, 1994

STATE PROSECUTORS, complainants,

vs.
JUDGE MANUEL T. MURO, Regional Trial Court, Branch 54, Manila, respondent.

PER CURIAM:
In assaying the requisite norms for qualifications and eminence of a magistrate, legal
authorities place a premium on how he has complied with his continuing duty to know
the law. A quality thus considered essential to the judicial character is that of "a man of
learning who spends tirelessly the weary hours after midnight acquainting himself with
the great body of traditions and the learning of the law; is profoundly learned in all the
learning of the law; and knows how to use that learning." 1

Obviously, it is the primary duty of a judge, which he owes to the public and to the legal
profession, to know the very law he is supposed to apply to a given controversy. He is
called upon to exhibit more than just a cursory acquaintance with the statutes and
procedural rules. Party litigants will have great faith in the administration of justice if
judges cannot justly be accused of apparent deficiency in their grasp of the legal
principles. For, service in the judiciary means a continuous study and research on the
law from beginning to end. 2

In a letter-complaint 3 dated August 19, 1992, respondent Judge Manuel T. Muro of the
Regional Trial Court (RTC) of Manila, Branch 54, was charged by State Prosecutors
Nilo C. Mariano, George C. Dee and Paterno V. Tac-an with ignorance of the law, grave
misconduct and violations of Rules 2.01, 3.01 and 3.02 of the Code of Judicial Conduct,
committed as follows:

1. That on August 13, 1992, respondent judge issued an Order dismissing

eleven (11) cases (docketed as Crim. Cases Nos. 92-101959 to 92-
101969, inclusive) filed by the undersigned complainant prosecutors
(members of the DOJ Panel of Prosecutors) against the accused Mrs.
Imelda Romualdez Marcos, for Violation of Central Bank Foreign
Exchange Restrictions, as consolidated in CB Circular No. 960, in relation
to the penal provisions of Sec. 34 of R.A. 265, as amended, . . .;

2. That respondent Judge issued his Order solely on the basis of

newspaper reports (August 11, 1992 issues of the Philippine Daily Inquirer
and the Daily Globe) concerning the announcement on August 10, 1992
by the President of the Philippines of the lifting by the government of all
foreign exchange restrictions and the arrival at such decision by the
Monetary Board as per statement of Central Bank Governor Jose Cuisia;

3. That claiming that the reported announcement of the Executive

Department on the lifting of foreign exchange restrictions by two
newspapers which are reputable and of national circulation had the effect
of repealing Central Bank Circular No. 960, as allegedly supported by
Supreme Court decisions . . ., the Court contended that it was deprived of
jurisdiction, and, therefore, motu, prop(r)io had to dismiss all the eleven
cases aforementioned "for not to do so opens this Court to charges of
trying cases over which it has no more jurisdiction;"
4. That in dismissing aforecited cases on August 13, 1992 on the basis of
a Central Bank Circular or Monetary Board Resolution which as of date
hereof, has not even been officially issued, and basing his Order/decision
on a mere newspaper account of the advance announcement made by the
President of the said fact of lifting or liberalizing foreign exchange controls,
respondent judge acted prematurely and in indecent haste, as he had no
way of determining the full intent of the new CB Circular or Monetary
Board resolution, and whether the same provided for exception, as in the
case of persons who had pending criminal cases before the courts for
violations of Central Bank Circulars and/or regulations previously issued
on the matter;

5. That respondent Judge's arrogant and cavalier posture in taking judicial

notice purportedly as a matter of public knowledge a mere newspaper
account that the President had announced the lifting of foreign exchange
restrictions as basis for his assailed order of dismissal is highly irregular,
erroneous and misplaced. For the respondent judge to take judicial notice
thereof even before it is officially released by the Central Bank and its full
text published as required by law to be effective shows his precipitate
action in utter disregard of the fundamental precept of due process which
the People is also entitled to and exposes his gross ignorance of the law,
thereby tarnishing public confidence in the integrity of the judiciary. How
can the Honorable Judge take judicial notice of something which has not
yet come into force and the contents, shape and tenor of which have not
yet been published and ascertained to be the basis of judicial action? The
Honorable Judge had miserably failed to "endeavor diligently to ascertain
the facts" in the case at bar contrary to Rule 3.02 of the Code of Judicial
Conduct constituting Grave Misconduct;

6. That respondent Judge did not even ha(ve) the prudence of requiring
first the comment of the prosecution on the effect of aforesaid Central
Bank Circular/Monetary Board resolution on the pending cases before
dismissing the same, thereby denying the Government of its right to due
process;

7. That the lightning speed with which respondent Judge acted to dismiss
the cases may be gleaned from the fact that such precipitate action was
undertaken despite already scheduled continuation of trial dates set in the
order of the court (the prosecution having started presenting its evidence .
. .) dated August 11, 1992 to wit: August 31, September 3, 10, 21, & 23
and October 1, 1992, all at 9:30 o'clock in the morning, in brazen
disregard of all notions of fair play, thereby depriving the Government of
its right to be heard, and clearly exposing his bias and partiality; and
 8. That, in fact, the motive of respondent Judge in dismissing the case
without even waiting for a motion to quash filed by the counsel for accused
has even placed his dismissal Order suspect.

Pursuant to a resolution of this Court dated September 8, 1992, respondent judge filed
his comment, 4 contending, inter alia, that there was no need to await publication of the
Central Bank (CB) circular repealing the existing law on foreign exchange controls for
the simple reason that the public announcement made by the President in several
newspapers of general circulation lifting foreign exchange controls was total, absolute,
without qualification, and was immediately effective; that having acted only on the basis
of such announcement, he cannot be blamed for relying on the erroneous statement of
the President that the new foreign exchange rules rendered moot and academic the
cases filed against Mrs. Marcos, and which was corrected only on August 17, 1992 but
published in the newspapers on August 18, 1992, and only after respondent judge had
issued his order of dismissal dated August 13, 1992; that the President was ill-advised
by his advisers and, instead of rescuing the Chief Executive from embarrassment by
assuming responsibility for errors in the latter's announcement, they chose to toss the
blame for the consequence of their failures to respondent judge who merely acted on
the basis of the announcements of the President which had become of public
knowledge; that the "saving clause" under CB Circular No. 1353 specifically refers only
to pending actions or investigations involving violations of CB Circular No. 1318,
whereas the eleven cases dismissed involved charges for violations of CB Circular No.
960, hence the accused cannot be tried and convicted under a law different from that
under which she was charged; that assuming that respondent judge erred in issuing the
order of dismissal, the proper remedy should have been an appeal therefrom but
definitely not an administrative complaint for his dismissal; that a mistake committed by
a judge should not necessarily be imputed as ignorance of the law; and that a "court can
reverse or modify a doctrine but it does not show ignorance of the justices or judges
whose decisions were reversed or modified" because "even doctrines initiated by the
Supreme Court are later reversed, so how much more for the lower courts?"

He further argued that no hearing was necessary since the prosecution had nothing to
explain because, as he theorized, "What explanation could have been given? That the
President was talking 'through his hat' (to use a colloquialism) and should not be
believed? That I should wait for the publication (as now alleged by complainants), of a
still then non-existent CB circular? . . . As it turned out, CB Circular No. 3153 (sic) does
not affect my dismissal order because the said circular's so-called saving clause does
not refer to CB Circular 960 under which the charges in the dismissed cases were
based;" that it was discretionary on him to take judicial notice of the facts which are of
public knowledge, pursuant to Section 2 of Rule 129; that the contention of
complainants that he acted prematurely and in indecent haste for basing his order of
dismissal on a mere newspaper account is contrary to the wordings of the newspaper
report wherein the President announced the lifting of controls as an accomplished fact,
not as an intention to be effected in the future, because of the use of the present perfect
tense or past tense "has lifted," not that he "intends to lift," foreign exchange controls.
Finally, respondent judge asseverates that complainants who are officers of the
Department of Justice, violated Section 6, Rule 140 of the Rules of Court which
provides that "proceedings against judges of first instance shall be private and
confidential" when they caused to be published in the newspapers the filing of the
present administrative case against him; and he emphasizes the fact that he had to
immediately resolve a simple and pure legal matter in consonance with the admonition
of the Supreme Court for speedy disposition of cases.

In their reply 5 and supplemental reply, 6 complainants aver that although the saving
clause under Section 16 of CB Circular No. 1353 made specific reference to CB Circular
No. 1318, it will be noted that Section 111 of Circular No. 1318, which contains a saving
clause substantially similar to that of the new circular, in turn refers to and includes
Circular No. 960. Hence, whether under Circular No. 1318 or Circular No. 1353,
pending cases involving violations of Circular No. 960 are excepted from the coverage
thereof. Further, it is alleged that the precipitate dismissal of the eleven cases, without
according the prosecution the opportunity to file a motion to quash or a comment, or
even to show cause why the cases against accused Imelda R. Marcos should not be
dismissed, is clearly reflective of respondent's partiality and bad faith. In effect,
respondent judge acted as if he were the advocate of the accused.

On December 9, 1993, this Court issued a resolution referring the complaint to the
Office of the Court Administrator for evaluation, report and recommendation, pursuant to
Section 7, Rule 140 of the Rules of Court, as revised, there being no factual issues
involved. The corresponding report and recommendation, 7 dated February 14, 1994,
was submitted by Deputy Court Administrator Juanito A. Bernad, with the approval of
Court Administrator Ernani Cruz-Paño.

The questioned order 8 of respondent judge reads as follows:

These eleven (11) cases are for Violation of Central Bank Foreign
Exchange Restrictions as consolidated in CB Circular No. 960 in relation
to the penal provision of Sec. 34 of R.A. 265, as amended.

The accused Mrs. Imelda R. Marcos pleaded not guilty to all these cases;
apparently the other accused in some of these cases, Roberto S.
Benedicto, was not arrested and therefore the Court did not acquire
jurisdiction over his person; trial was commenced as against Mrs. Marcos.

His Excellency, the President of the Philippines, announced on August 10,

1992 that the government has lifted all foreign exchange restrictions and it
is also reported that Central Bank Governor Jose Cuisia said that the
Monetary Board arrived at such decision (issue of the Philippine Daily
Inquirer, August 11, 1992 and issue of the Daily Globe of the same date).
The Court has to give full confidence and credit to the reported
announcement of the Executive Department, specially from the highest
official of that department; the Courts are charged with judicial notice of
 matters which are of public knowledge, without introduction of proof, the
announcement published in at least the two newspapers cited above
which are reputable and of national circulation.

Per several cases decided by the Supreme Court (People vs. Alcaras, 56
Phil. 520, People vs. Francisco, 56 Phil. 572, People vs. Pastor, 77 Phil.
1000, People vs. Crisanto Tamayo, 61 Phil. 225), among others, it was
held that the repeal of a penal law without re-enactment extinguishes the
right to prosecute or punish the offense committed under the old law and if
the law repealing the prior penal law fails to penalize the acts which
constituted the offense defined and penalized in the repealed law, the
repealed law carries with it the deprivation of the courts of jurisdiction to
try, convict and sentence persons charged with violations of the old law
prior to its repeal. Under the aforecited decisions this doctrine applies to
special laws and not only to the crimes punishable in the Revised Penal
Code, such as the Import Control Law. The Central Bank Circular No. 960
under which the accused Mrs. Marcos is charged is considered as a penal
law because violation thereof is penalized with specific reference to the
provision of Section 34 of Republic Act 265, which penalizes violations of
Central Bank Circular No. 960, produces the effect cited in the Supreme
Court decisions and since according to the decisions that repeal deprives
the Court of jurisdiction, this Court motu proprio dismisses all the eleven
(11) cases as a forestated in the caption, for not to do so opens this Court
to charges of trying cases over which it has no more jurisdiction.

This order was subsequently assailed in a petition for certiorari filed with the Court of
Appeals, entitled "People of the Philippines vs. Hon. Manuel T. Muro, Judge, RTC of
Manila, Br. 54 and Imelda R. Marcos," docketed as CA-G.R. SP No. 29349. When
required to file her comment, private respondent Marcos failed to file any. Likewise,
after the appellate court gave due course to the petition, private respondent was
ordered, but again failed despite notice, to file an answer to the petition and to show
cause why no writ of preliminary injunction should issue. Eventually, on April 29, 1993,
the Court of Appeals rendered a decision 9 setting aside the order of August 13, 1992,
and reinstating Criminal Cases Nos. 92-101959 to 92-101969.

In finding that respondent judge acted in excess of jurisdiction and with grave abuse of
discretion in issuing the order of dismissal, the appellate court held that:

The order was issued motu proprio, i.e., without any motion to dismiss
filed by counsel for the accused, without giving an opportunity for the
prosecution to be heard, and solely on the basis of newspaper reports
announcing that the President has lifted all foreign exchange restrictions.

The newspaper report is not the publication required by law in order that
the enactment can become effective and binding. Laws take effect after
fifteen days following the completion of their publication in the Official
 Gazette or in a newspaper of general circulation unless it is otherwise
provided (Section 1, Executive Order No. 200). The full text of CB Circular
1353, series of 1992, entitled "Further Liberalizing Foreign Exchange
Regulation" was published in the August 27, 1992 issue of the Manila
Chronicle, the Philippine Star and the Manila Bulletin. Per certification of
the CB Corporate Affairs Office, CB Circular No. 1353 took effect on
September 2 . . . .

Considering that respondent judge admittedly had not seen the official text
of CB Circular No. 1353, he was in no position to rule judiciously on
whether CB Circular No. 960, under which the accused Mrs. Marcos is
charged, was already repealed by CB Circular No. 1353. . . .

xxx xxx xxx

A cursory reading of the . . . provision would have readily shown that the
repeal of the regulations on non-trade foreign exchange transactions is not
absolute, as there is a provision that with respect to violations of former
regulations that are the subject of pending actions or investigations, they
shall be governed by the regulations existing at the time the cause of
action (arose). Thus his conclusion that he has lost jurisdiction over the
criminal cases is precipitate and hasty. Had he awaited the filing of a
motion to dismiss by the accused, and given opportunity for the
prosecution to comment/oppose the same, his resolution would have been
the result of deliberation, not speculation.

I. The doctrine of judicial notice rests on the wisdom and discretion of the courts. The
power to take judicial notice is to be exercised by courts with caution; care must be
taken that the requisite notoriety exists; and every reasonable doubt on the subject
should be promptly resolved in the negative. 10

Generally speaking, matters of judicial notice have three material requisites: (1) the
matter must be one of common and general knowledge; (2) it must be well and
authoritatively settled and not doubtful or uncertain; and (3) it must be known to be
within the limits of the jurisdiction of the court. 11 The provincial guide in determining
what facts may be assumed to be judicially known is that of notoriety. 12 Hence, it can be
said that judicial notice is limited to facts evidenced by public records and facts of
general notoriety. 13

To say that a court will take judicial notice of a fact is merely another way of saying that
the usual form of evidence will be dispensed with if knowledge of the fact can be
otherwise acquired. 14 This is because the court assumes that the matter is so notorious
that it will not be disputed. 15 But judicial notice is not judicial knowledge. The mere
personal knowledge of the judge is not the judicial knowledge of the court, and he is not
authorized to make his individual knowledge of a fact, not generally or professionally
known, the basis of his action. Judicial cognizance is taken only of those matters which
are "commonly" known. 16

Things of "common knowledge," of which courts take judicial notice, may be matters
coming to the knowledge of men generally in the course of the ordinary experiences of
life, or they may be matters which are generally accepted by mankind as true and are
capable of ready and unquestioned demonstration. 17 Thus, facts which are universally
known, and which may be found in encyclopedias, dictionaries or other publications, are
judicially noticed, provided they are of such universal notoriety and so generally
understood that they may be regarded as forming part of the common knowledge of
every person. 18

Respondent judge, in the guise of exercising discretion and on the basis of a mere
newspaper account which is sometimes even referred to as hearsay evidence twice
removed, took judicial notice of the supposed lifting of foreign exchange controls, a
matter which was not and cannot be considered of common knowledge or of general
notoriety. Worse, he took cognizance of an administrative regulation which was not yet
in force when the order of dismissal was issued. Jurisprudence dictates that judicial
notice cannot be taken of a statute before it becomes effective. 19 The reason is simple.
A law which is not yet in force and hence, still inexistent, cannot be of common
knowledge capable of ready and unquestionable demonstration, which is one of the
requirements before a court can take judicial notice of a fact.

Evidently, it was impossible for respondent judge, and it was definitely not proper for
him, to have taken cognizance of CB Circular No. 1353, when the same was not yet in
force at the time the improvident order of dismissal was issued.

II. Central Bank Circular No. 1353, which took effect on September 1, 1992, further
liberalized the foreign exchange regulations on receipts and disbursements of residents
arising from non-trade and trade transactions. Section 16 thereof provides for a saving
clause, thus:

Sec. 16. Final Provisions of CB Circular No. 1318. - All the provisions in
Chapter X of CB Circular No. 1318 insofar as they are not inconsistent
with, or contrary to the provisions of this Circular, shall remain in full force
and effect: Provided, however, that any regulation on non-trade foreign
exchange transactions which has been repealed, amended or modified by
this Circular, violations of which are the subject of pending actions or
investigations, shall not be considered repealed insofar as such pending
actions or investigations are concerned, it being understood that as to
such pending actions or investigations, the regulations existing at the time
the cause of action accrued shall govern.

Respondent judge contends that the saving clause refers only to the provisions of
Circular No. 1318, whereas the eleven criminal cases he dismissed involve a violation
of CB Circular No. 960. Hence, he insists, Circular No. 960 is deemed repealed by the
new circular and since the former is not covered by the saving clause in the latter, there
is no more basis for the charges involved in the criminal cases which therefore warrant
a dismissal of the same. The contention is patently unmeritorious.

Firstly, the second part of the saving clause in Circular No. 1353 explicitly provides that
"any regulation on non-trade foreign transactions which has been repealed, amended or
modified by this Circular, violations of which are the subject of pending actions or
investigations, shall not be considered repealed insofar as such pending actions or
investigations are concerned, it being understood that as to such pending actions or
investigations, the regulations existing at the time the cause of action accrued shall
govern." The terms of the circular are clear and unambiguous and leave no room for
interpretation. In the case at bar, the accused in the eleven cases had already been
arraigned, had pleaded not guilty to the charges of violations of Circular No. 960, and
said cases had already been set for trial when Circular No. 1353 took effect.
Consequently, the trial court was and is supposed to proceed with the hearing of the
cases in spite of the existence of Circular No. 1353.

Secondly, had respondent judge only bothered to read a little more carefully the texts of
the circulars involved, he would have readily perceived and known that Circular No.
1318 also contains a substantially similar saving clause as that found in Circular No.
1353, since Section 111 of the former provides:

Sec. 111. Repealing clause. - All existing provisions of Circulars 365, 960
and 1028, including amendments thereto, with the exception of the second
paragraph of Section 68 of Circular 1028, as well as all other existing
Central Bank rules and regulations or parts thereof, which are inconsistent
with or contrary to the provisions of this Circular, are hereby repealed or
modified accordingly: Provided, however, that regulations, violations of
which are the subject of pending actions or investigations, shall be
considered repealed insofar as such pending actions or investigations are
concerned, it being understood that as to such pending actions or
investigations, the regulations existing at the time the cause of action
accrued shall govern.

It unequivocally appears from the section above quoted that although Circular No. 1318
repealed Circular No. 960, the former specifically excepted from its purview all cases
covered by the old regulations which were then pending at the time of the passage of
the new regulations. Thus, any reference made to Circular No. 1318 necessarily
involves and affects Circular No. 960.

III. It has been said that next in importance to the duty of rendering a righteous
judgment is that of doing it in such a manner as will beget no suspicion of the fairness
and integrity of the judge. 20 This means that a judge should not only render a just,
correct and impartial decision but should do so in such a manner as to be free from any
suspicion as to its fairness and impartiality and as to his integrity. While a judge should
possess proficiency in law in order that he can competently construe and enforce the
law, it is more important that he should act and behave in such a manner that the
parties before him should have confidence in his impartiality. Thus, it is not enough that
he decides cases without bias and favoritism. Nor is it sufficient that he in fact rids
himself of prepossessions. His actuations should moreover inspire that belief. Like
Caesar's wife, a judge must not only be pure but beyond suspicion. 21

Moreover, it has always heretofore been the rule that in disposing of controverted
cases, judges should show their full understanding of the case, avoid the suspicion of
arbitrary conclusion, promote confidence in their intellectual integrity and contribute
useful precedents to the growth of the law. 22 A judge should be mindful that his duty is
the application of general law to particular instances, that ours is a government of laws
and not of men, and that he violates his duty as a minister of justice under such a
system if he seeks to do what he may personally consider substantial justice in a
particular case and disregards the general law as he knows it to be binding on him.
Such action may have detrimental consequences beyond the immediate controversy.
He should administer his office with due regard to the integrity of the system of the law
itself, remembering that he is not a depository of arbitrary power, but a judge under the
sanction of the law. 23 These are immutable principles that go into the very essence of
the task of dispensing justice and we see no reason why they should not be duly
considered in the present case.

The assertion of respondent judge that there was no need to await publication of
Circular No. 1353 for the reason that the public announcement made by the President in
several newspapers of general circulation lifting foreign exchange controls is total,
absolute, without qualification, and immediately effective, is beyond comprehension. As
a judge of the Regional Trial Court of Manila, respondent is supposed to be well-versed
in the elementary legal mandates on the publication of laws before they take effect. It is
inconceivable that respondent should insist on an altogether different and illogical
interpretation of an established and well-entrenched rule if only to suit his own personal
opinion and, as it were, to defend his indefensible action. It was not for him to indulge or
even to give the appearance of catering to the at-times human failing of yielding to first
impressions. 24 He having done so, in the face of the foregoing premises, this Court is
hard put to believe that he indeed acted in good faith.

IV. This is not a simple case of a misapplication or erroneous interpretation of the law.
The very act of respondent judge in altogether dismissing sua sponte the eleven
criminal cases without even a motion to quash having been filed by the accused, and
without at least giving the prosecution the basic opportunity to be heard on the matter
by way of a written comment or on oral argument, is not only a blatant denial of
elementary due process to the Government but is palpably indicative of bad faith and
partiality.

The avowed desire of respondent judge to speedily dispose of the cases as early as
possible is no license for abuse of judicial power and discretion, 25 nor does such
professed objective, even if true, justify a deprivation of the prosecution's right to be
heard and a violation of its right to due process of
law. 26

The lightning speed, to borrow the words of complainants, with which respondent judge
resolved to dismiss the cases without the benefit of a hearing and without reasonable
notice to the prosecution inevitably opened him to suspicion of having acted out of
partiality for the accused. Regardless of how carefully he may have evaluated changes
in the factual situation and legal standing of the cases, as a result of the newspaper
report, the fact remains that he gave the prosecution no chance whatsoever to show or
prove that it had strong evidence of the guilt of the accused. To repeat, he thereby
effectively deprived the prosecution of its right to due process. 27 More importantly,
notwithstanding the fact that respondent was not sure of the effects and implications of
the President's announcement, as by his own admission he was in doubt whether or not
he should dismiss the cases, 28 he nonetheless deliberately refrained from requiring the
prosecution to comment thereon. In a puerile defense of his action, respondent judge
can but rhetorically ask: "What explanation could have been given? That the President
was talking 'through his hat' and should not be believed? That I should wait for the
publication of a still then non- existent CB Circular?" The pretended cogency of this
ratiocination cannot stand even the minutest legal scrutiny.

In order that bias may not be imputed to a judge, he should have the patience and
circumspection to give the opposing party a chance to present his evidence even if he
thinks that the oppositor's proofs might not be adequate to overthrow the case for the
other party. A display of petulance and impatience in the conduct of the trial is a norm of
conduct which is inconsistent with the "cold neutrality of an impartial judge." 29 At the
very least, respondent judge acted injudiciously and with unjustified haste in the outright
dismissal of the eleven cases, and thereby rendered his actuation highly dubious.

V. It bears stressing that the questioned order of respondent judge could have seriously
and substantially affected the rights of the prosecution had the accused invoked the
defense of double jeopardy, considering that the dismissal was ordered after
arraignment and without the consent of said accused. This could have spawned legal
complications and inevitable delay in the criminal proceedings, were it not for the
holding of the Court of Appeals that respondent judge acted with grave abuse of
discretion amounting to lack of jurisdiction. This saved the day for the People since in
the absence of jurisdiction, double jeopardy will not set in. To stress this point, and as
a caveat to trial courts against falling into the same judicial error, we reiterate what we
have heretofore declared:

It is settled doctrine that double jeopardy cannot be invoked against this

Court's setting aside of the trial court's judgment of dismissal or acquittal
where the prosecution which represents the sovereign people in criminal
cases is denied due process. . . . .

Where the prosecution is deprived of a fair opportunity to prosecute and

prove its case, its right to due process is thereby violated.
 The cardinal precept is that where there is a violation of basic
constitutional rights, courts are ousted of their jurisdiction. Thus, the
violation of the State's right to due process raises a serious jurisdictional
issue . . . which cannot be glossed over or disregarded at will. Where the
denial of the fundamental right of due process is apparent, a decision
rendered in disregard of that right is void for lack of jurisdiction . . . . 30

It is also significant that accused Marcos, despite due notice, never submitted either her
comment on or an answer to the petition for certiorari as required by the Court of
Appeals, nor was double jeopardy invoked in her defense. This serves to further
underscore the fact that the order of dismissal was clearly unjustified and erroneous.
Furthermore, considering that the accused is a prominent public figure with a record of
influence and power, it is not easy to allay public skepticism and suspicions on how said
dismissal order came to be, to the consequent although undeserved discredit of the
entire judiciary.

VI. To hold a judge liable for rendering a manifestly unjust order through inexcusable
negligence or ignorance, it must be clearly shown that although he has acted without
malice, he failed to observe in the performance of his duty that diligence, prudence and
care which the law is entitled to exact in the rendering of any public service. Negligence
and ignorance are inexcusable if they imply a manifest injustice which cannot be
explained by a reasonable interpretation, and even though there is a misunderstanding
or error of the law applied, it nevertheless results logically and reasonably, and in a very
clear and indisputable manner, in the notorious violation of the legal precept. 31

In the present case, a cursory perusal of the comment filed by respondent judge reveals
that no substantial argument has been advanced in plausible justification of his act. He
utterly failed to show any legal, factual, or even equitable justification for the dismissal of
the eleven criminal cases. The explanation given is no explanation at all. The strained
and fallacious submissions therein do not speak well of respondent and cannot but
further depreciate his probity as a judge. On this point, it is best that pertinent unedited
excerpts from his comment 32 be quoted by way of graphic illustration and emphasis:

On the alleged ignorance of the law imputed to me, it is said that I issued
the Order dismissing the eleven (11) cases against Mrs. Imelda R. Marcos
on the basis of newspaper reports referred to in paragraph 2 of the letter
complaint without awaiting the official publication of the Central Bank
Circular. Ordinarily a Central Bank Circular/Resolution must be published
in the Official Gazette or in a newspaper of general circulation, but the
lifting of "all foreign exchange controls" was announced by the President
of the Philippines WITHOUT QUALIFICATIONS; as published in the Daily
Globe, August 11, 1992" the government has lifted ALL foreign exchange
controls," and in the words of the Philippine Daily Inquirer report of the
same date "The government yesterday LIFTED the LAST remaining
restrictions on foreign exchange transactions, . . ." (emphasis in both
quotations supplied) not only the President made the announcement but
also the Central Bank Governor Jose Cuisia joined in the announcement
by saying that "the Monetary Board arrived at the decision after noting
how the "partial liberalization" initiated early this year worked."

Therefore, because of the ABSOLUTE lifting of ALL restrictions on foreign

exchange transactions, there was no need to await the publication of the
repealing circular of the Central Bank. The purpose of requiring publication
of laws and administrative rules affecting the public is to inform the latter
as to how they will conduct their affairs and how they will conform to the
laws or the rules. In this particular case, with the total lifting of the controls,
there is no need to await publication. It would have been different if the
circular that in effect repealed Central Bank Circular No. 960, under which
the accused was charged in the cases dismissed by me, had provided for
penalties and/or modified the provisions of said Circular No. 960.

The Complainants state that the lifting of controls was not yet in force
when I dismissed the cases but it should be noted that in the report of the
two (2) newspapers aforequoted, the President's announcement of the
lifting of controls was stated in the present perfect tense (Globe) or past
tense (Inquirer). In other words, it has already been lifted; the
announcement did not say that the government INTENDS to lift all foreign
exchange restrictions but instead says that the government "has LIFTED
all foreign exchange controls," and in the other newspaper cited above,
that "The government yesterday lifted the last remaining restrictions on
foreign exchange transactions". The lifting of the last remaining exchange
regulations effectively cancelled or repealed Circular No. 960.

The President, who is the Chief Executive, publicly announced the lifting
of all foreign exchange regulations. The President has within his control
directly or indirectly the Central Bank of the Philippines, the Secretary of
Finance being the Chairman of the Monetary Board which decides the
policies of the Central Bank.

No official bothered to correct or qualify the President's announcement of

August 10, published the following day, nor made an announcement that
the lifting of the controls do not apply to cases already pending, not until
August 17 (the fourth day after my Order, and the third day after report of
said order was published) and after the President said on August 17,
reported in the INQUIRER's issue of August 18, 1992, that the "new
foreign exchange rules have nullified government cases against Imelda R.
Marcos, telling reporters that the charges against the widow of former
President Marcos "have become moot and academic" because of new
ruling(s) which allow free flow of currency in and out of the country" (Note,
parenthetically, the reference to "new rules" not to "rules still to be
drafted"). The INQUIRER report continues: "A few hours later, presidential
spokeswoman Annabelle Abaya said, RAMOS (sic) had "corrected
 himself'." "He had been belatedly advised by the Central Bank Governor
Jose Cuisia and Justice Secretary Franklin Drilon that the Monetary Board
Regulation excluded from its coverage all criminal cases pending in court
and such a position shall stand legal scrutiny', Mrs. Abaya, said."

I will elaborate on two points:

1. If the President was wrong in making the August 10 announcement

(published in August 11, 1992, newspapers) and in the August 17
announcement, SUPRA, and thus I should have relied on the Presidential
announcements, and there is basis to conclude that the President was at
the very least ILL-SERVED by his financial and legal advisers, because no
one bothered to advise the President to correct his announcements, not
until August 17, 1992, a few hours after the President had made another
announcement as to the charges against Imelda Marcos having been
rendered moot and academic. The President has a lot of work to do, and
is not, to my knowledge, a financier, economist, banker or lawyer. It
therefore behooved his subalterns to give him timely (not "belated")
advice, and brief him on matters of immediate and far-reaching concerns
(such as the lifting of foreign exchange controls, designed, among others
to encourage the entry of foreign investments). Instead of rescuing the
Chief Executive from embarrassment by assuming responsibility for errors
in the latter's announcement, these advisers have chosen to toss the
blame for the consequence of their failing to me, who only acted on the
basis of announcements of their Chief, which had become of public
knowledge.

xxx xxx xxx

The Court strongly feels that it has every right to assume and expect that respondent
judge is possessed with more than ordinary credentials and qualifications to merit his
appointment as a presiding judge in the Regional Trial Court of the National Capital
Judicial Region, stationed in the City of Manila itself. It is, accordingly, disheartening
and regrettable to note the nature of the arguments and the kind of logic that
respondent judge would want to impose on this Court notwithstanding the manifest lack
of cogency thereof. This calls to mind similar scenarios and how this Court reacted
thereto.

In one case, an RTC Judge was administratively charged for acquitting the accused of a
violation of CB Circular No. 960 despite the fact that the accused was apprehended with
US$355,349.00 while boarding a plane for Hongkong, erroneously ruling that the State
must first prove criminal intent to violate the law and benefit from the illegal act, and
further ordering the return of US$3,000.00 out of the total amount seized, on the
mistaken interpretation that the CB circular exempts such amount from seizure.
Respondent judge therein was ordered dismissed from the government service for
gross incompetence and ignorance of the law. 33
Subsequently, the Court dismissed another RTC judge, with forfeiture of retirement
benefits, for gross ignorance of the law and for knowingly rendering an unjust order or
judgment when he granted bail to an accused charged with raping an 11-year old girl,
despite the contrary recommendation of the investigating judge, and thereafter granted
the motion to dismiss the case allegedly executed by the complainant. 34

Similarly, an RTC judge who was described by this Court as one "who is ignorant of
fairly elementary and quite familiar legal principles and administrative regulations, has a
marked penchant for applying unorthodox, even strange theories and concepts in the
adjudication of controversies, exhibits indifference to and even disdain for due process
and the rule of law, applies the law whimsically, capriciously and oppressively, and
displays bias and impartiality," was dismissed from the service with forfeiture of all
retirement benefits and with prejudice to reinstatement in any branch of the government
or any of its agencies or instrumentalities. 35

Still in another administrative case, an RTJ judge was also dismissed by this Court for
gross ignorance of the law after she ordered, in a probate proceeding, the cancellation
of the certificates of title issued in the name of the complainant, without affording due
process to the latter and other interested parties. 36

Only recently, an RTC judge who had been reinstated in the service was dismissed
after he acquitted all the accused in four criminal cases for illegal possession of
firearms, on the ground that there was no proof of malice or deliberate intent on the part
of the accused to violate the law. The Court found him guilty of gross ignorance of the
law, his error of judgment being almost deliberate and tantamount to knowingly
rendering an incorrect and unjust judgment. 37

ACCORDINGLY, on the foregoing premises and considerations, the Court finds

respondent Judge Manuel T. Muro guilty of gross ignorance of the law. He is hereby
DISMISSED from the service, such dismissal to carry with it cancellation of eligibility,
forfeiture of leave credits and retirement benefits, and disqualification from
reemployment in the government service. 38

Respondent is hereby ordered to CEASE and DESIST immediately from rendering any
judgment or order, or continuing any judicial action or proceeding whatsoever, effective
upon receipt of this decision.

SO ORDERED.
 SECOND DIVISION

LBC EXPRESS, INC. and, G.R. No. 161760

LBC INTERNATIONAL, INC.,
Petitioners,
Present:
PUNO, J., Chairman,
- versus - AUSTRIA-MARTINEZ,
CALLEJO, SR.,
TINGA, and
SPOUSES EUBERTO and CHICO-NAZARIO, JJ.
SISINIA ADO,
Respondents.
Promulgated:

August 25, 2005

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

DECISION

CALLEJO, SR., J.:

Before us is a petition for review on certiorari of the Decision[1] of the Court of

Appeals (CA) in CA-G.R. CV No. 73732 affirming that of the Regional Trial
Court (RTC) of Naval, Biliran, Branch 16, holding LBC International, Inc.
and LBC Express, Inc. solidarily liable for damages.

The factual backdrop of the case, as found by the CA, is as follows:

Euberto Ado was an overseas contract worker, employed as a mechanic in
the Marine Workshop of Al Meroouge Group in Bahrain.[2] He was the holder of
Passport No. L067892.
 Al-Mulla Cargo & Packing (AMCP) of Manama, Bahrain was an agent of
LBC International, Inc. and LBC Express, Inc. (hereinafter collectively referred to
as LBC).[3]

When his two-year contract of employment expired, Euberto, together with

his wife Sisinia, decided to take a three-month vacation to the Philippines. They
secured a re-entry visa to Bahrain.

Before flying to the Philippines, on August 8, 1995, Euberto transported five

(5) boxes, each weighing 168 kilograms, through AMCP,[4] with himself as the
consignee of the packages. AMCP issued House Air Waybill (HAWB) No. 004467
covering Eubertos packages. Under the waybill, Zachary Furagganan, the LBCs
import manager and the representative of AMCP in the Philippines with office
at LBC International, Inc., LBC Aviation Center, Domestic Road, Pasay
City,[5] was the party to notify upon Eubertos arrival in Manila.[6]

Upon their arrival in the Philippines, the spouses Ado proceeded to LBCs
Customer Service Department located at the LBC Aviation Center, Domestic
Road, Pasay City, to take delivery of the boxes from Furagganan. Myrna Mendoza,
an employee of LBC, suggested that Euberto avail of the custom duty exemptions
for his packages, and entrust his passport to her for submission to the Customs
Office. Euberto hesitated because it contained his re-entry visa to Bahrain, which
he needed to get another two-year contract with Al Meroouge. He was concerned
that his passport might get lost. However, after being assured that his passport,
together with his boxes, would be forwarded to him, he acquiesced. He turned over
his passport to LBC, for which he was issued a receipt.[7]

Eubertos boxes were delivered to him via the LBC-Ormoc City Branch on
different dates: three boxes on September 7, 1995;[8] one box on September 14,
1995[9] and one box on September 16, 1995.[10] He inquired about his passport, but
the Ormoc City LBC Manager told him that his passport was not in their office. He
advised Euberto to wait for a few days, as it might arrive on a later date. Euberto
made several follow-ups, to no avail.[11] Furagganan sent letter-inquiries to the
managers of the LBC-Cebu Branch and LBC-Catbalogan Branch,[12] informing
them that Eubertos passport was attached to HAWB No. 004467, together with the
waybills and bill of lading of shipments. However, the passport of Euberto could
not be located.
Euberto then engaged the services of counsel who, on January 8, 1996, sent
a demand letter[13] to LBC. Still, LBC did not act on the demand and failed to
return his passport. Euberto was not able to return to Bahrain and report back for
work.

On September 22, 1997, Euberto filed a Complaint[14] for damages

against LBC Express, Inc. and LBC International, Inc. with the RTC of Naval,
Biliran. The case was docketed as Civil Case No. B-1024 and raffled to Branch 16,
and was later amended[15] to implead Eubertos wife Sisinia. The complaint alleged
that because of the loss of Eubertos passport through the gross negligence of the
defendants, he failed to report back for work in Bahrain. The spouses Ado prayed
that damages for Eubertos unearned income be awarded to them and that after due
proceedings, the court render judgment in their favor, as follows:

1. Condemning and ordering the defendants, jointly and severally, to pay

the plaintiff the following sums:

a. P300,000.00 as moral damages;

b. P200,000.00 as exemplary damages;
c. Actual and compensatory damages of P20,000.00 a month from
October 10, 1995 with interest at the legal rate of 12% per annum until
fully paid;
d. P30,000.00 as attorneys fees;
e. P20,000.00 as litigation expenses;
f. To pay the costs of the suit.

2. Plaintiffs further pray for such other reliefs and remedies as [the]
Honorable Court may deem just and equitable in the premises.[16]

In their answer with counterclaim,[17] LBC alleged that their delivery van
carrying Eubertos packages was forcibly opened and pilfered by

unidentified person/s at its Pasay City office, and surmised that the said passport
was probably one of the items stolen. The spouses Ado had only themselves to
blame for the damages they sustained, as Euberto failed to secure a replacement
passport from the Department of Foreign Affairs, and a visa from the Embassy of
Bahrain.

To prove their claim for actual damages, spouses Ado offered in evidence a
certification from Eubertos employer, which reads:
TO WHOM IT MAY CONCERN:

This is to certify that Mr. Euberto Ado holder of Passport Number L

067892 was working as a Mechanic at our Marine Workshop. He left Bahrain on
 08.08.1995 to Manila on holiday for the period of three months. He was getting
the basic salary of BD 280.000 (Two hundred & Eighty) only monthly.

He was holding the return visa for coming back to after having his leave.
Mr. Euberto Ado could not return back to Bahrain [as] his passport was
misplace[d] in Manila.

Yours (sic) Sincerely,

Praful V. Birje (Manager)[18]

On August 14, 2001, the spouses Ado filed their formal offer of documentary
evidence.[19] The defendants were given ten (10) days from August 30, 2001 within
which to file their comments thereon. Meanwhile, trial was set at 8:30 a.m. of
October 10, 2001 and on November 8 and 9, 2001 for the defendants to adduce
their evidence.[20] However, the defendants failed to file their respective comments
and on October 4, 2001, the court issued an Order[21] admitting all the documentary
evidence of the plaintiffs. On October 10, 2001, the case was called for hearing.
There was no appearance for the defendants, and the court issued an order
declaring that the defendants were deemed to have waived their right to adduce
their evidence, and that the case was considered submitted for decision.[22]

On October 22, 2001, the trial court rendered judgment[23] in favor of the
spouses Ado. The fallo of the decision reads:

WHEREFORE, premises considered, this Court finds in favor of the

plaintiffs and renders judgment against the defendants making them liable
solidarily to pay the plaintiffs:

(a) P480,000.00 in compensatory damages plus legal interest from the

filing of this complaint until fully paid;

(b) P300,000.00 in moral damages;

 (c) P30,000.00 in attorneys fees; and

(d) to pay the costs.

SO ORDERED.[24]

The trial court declared that Eubertos passport was lost because of the
defendants gross negligence.

On November 5, 2001, LBC filed a Motion dated October 31, 2001, for the
reconsideration of the trial courts Order dated October 10, 2001, praying that trial
proceed as scheduled on November 8, 2001. The defendants also filed their
comments on the plaintiffs formal offer of evidence. Before the trial court could
resolve the motion, the defendants received a copy of the decision on November 9,
2001.

On November 14, 2001, LBC appealed the decision to the CA. In their
Brief, LBC, as appellants, alleged that:

1. The lower court erred in declaring that plaintiff-appellee Euberto Ado

lost a renewed contract at a basic salary of 280 Bahrain Dinar that entitles the
plaintiffs-appellees for the award of actual and moral damages as well as
attorneys fees.

2. The lower court erred in declaring that the defendants-appellants

waived its (sic) right to present the necessary evidence.[25]
 LBC questioned the trial courts ruling that due to the loss of his passport,
Euberto lost the opportunity for the renewal of his two-year contract, at the basic
salary of about P20,000.00 a month in Bahrain, or for the total peso equivalent
of P480,000.00 for two years. They argued that such ruling of the court was based
on mere speculations. Moreover, the certification issued by Eubertos employer
does not indicate that he had an existing contract, or that he would be given
another two-year contract. LBC argued that Euberto failed to lessen the damages
he suffered by filing an application for the issuance of another passport and or
application for a two-year contract before the Bahrain Embassy in the Philippines;
hence, the spouses Ado were not entitled to any damages, much less moral
damages as they failed to adduce evidence that LBC acted in bad faith in failing to
return Eubertos passport.

On the second assignment of error, LBC averred that the trial court erred in
declaring the case submitted for decision for their failure to appear for the trial on
October 10, 2001. If they had been allowed to adduce their evidence, they would
have presented Jimwell Morales, who would testify that the shipments and
Eubertos passport were properly handled. When the shipments and cargoes were
brought to the LBC Express, Inc., Head Office at Pasay City for sorting and
forwarding to their final destination, the delivery van carrying various shipments,
including those of the spouses Ado and the passport attached to the shipments air
waybill, was forcibly opened by robbers along 14th Street, Port Area, South
Harbor, Manila.[26]
 On July 10, 2003, the CA rendered judgment affirming the assailed decision.

LBC, now the petitioners, filed their petition for review

on certiorari claiming that the CA erred
A. IN FINDING THAT RESPONDENT EUBERTO ADO HAD A TWO-
YEAR CONTRACT WITH HIS FORMER EMPLOYER ABROAD THAT
ALLEGEDLY JUSTIFIES THE AWARD TO HIM OF EXORBITAN (SIC)
ACTUAL OR COMPENSATORY DAMAGES OF FOUR HUNDRED EIGHTY
THOUSAND PESOS (P480,000.00);

B. IN AFFIRMING THE AWARD OF ACTUAL OR

COMPENSATORY DAMAGES BASED ON SPECULATION/OR
GUESSWORK, IN VIOLATION OF THE BEST EVIDENCE OBTAINABLE
RULE;

C. IN AFFIRMING THE AWARD OF THREE HUNDRED

THOUSAND PESOS (P300,000.00) MORAL DAMAGES, FOR PETITIONER
COMMITTED NO BAD FAITH AND THERE IS NO SUFFICIENT PROOF
ON RESPONDENTS ALLEGED MORAL SUFFERING;

D. IN AFFIRMING THE AWARD OF SUCH MORAL DAMAGES,

BECAUSE THE SAME HAS BECOME PUNITIVE FOR PETITIONER OR
HAS BECOME A MEASURE FOR RESPONDENTS ENRICHMENT AT
PETITIONERS EXPENSE;

E. IN AFFIRMING [THE] AWARD OF ATTORNEYS FEES,

PETITIONER NOT BEING IN BAD FAITH, AND TO PUT A PREMIUM TO
LITIGATE NOT BEING A SOUND PUBLIC POLICY.[27]

The petitioners reiterate their submissions in the appellate court in support of

their petition.

The petition is partially granted.

One is entitled to actual or compensatory damages in the form of an

adequate compensation for such pecuniary losses suffered as has been duly proved.
In contracts, the damages for which the obligor who acted in good faith shall be
those that are the natural and probable consequences of the breach of the
obligation, and which the parties have foreseen or could have reasonably foreseen
at the time the obligation was constituted. In the case where the obligor acted in
bad faith, the obligor shall be responsible for all the damages which may be
reasonably attributed to the non-performance of the obligation.[28]

The Court agrees with the petitioners contention that the respondents failed
to adduce preponderant evidence to prove that upon his return to Bahrain, he
would be automatically employed by his former employer for a period of two years
and that he will be given the same job with the same compensation as provided for
in his expired employment contract.

It is well-settled in our jurisdiction that actual or compensatory damages is

not presumed, but must be duly proved with reasonable degree of certainty. A
court cannot rely on speculation, conjecture or guesswork as to the fact and amount
of damages, but must depend upon competent proof that they have suffered and on
evidence of the actual amount thereof.[29] Indeed, the party alleging a fact has the
burden of proving it and a mere allegation is not evidence.[30]

In this case, the only evidence adduced by the respondents to prove that
Euberto had been granted a two-year re-entry visa and that upon his return to
Bahrain he would be automatically given a two-year employment contract is
Eubertos own testimony and his employers certification. The CA found the same to
be sufficient, and affirmed the award for actual/compensatory damages, thus:
 We do not agree. It is worthy to note that appellants reproduction of
appellee Eubertos testimony is, to say the least, incomplete. A more judicious
scrutiny of the records, however, reveal that while the two-year contract has not
actually been executed between appellee Euberto and his employer, his
employment is assured by the fact that he was issued a re-entry visa by the
embassy. The portion of the cross-examination left out by the appellant reads:

Q-Is a re-entry visa an assurance of contract (sic)?

A-Yes, automatically.

Q-On what basis?

A-If I could go back to place (sic) of work before the expiration of
my re-entry visa, automatically, another contract will be issued.

Q-Is that so?

A-Yes, Sir.

Contrary, therefore, to appellants assertion, the re-entry visa may be

considered as sufficient proof of the continuation of his contract with Al
Meroouge for a period of another two years, since he will not be issued the same
by Bahrains embassy, absent any showing that he has a valid reason to return to
the same country.

Moreover, the Certification (Exhibit A, Records, p. 193) issued by

appellee Eubertos employer, Al Meroouge, explicitly stated that, when said
appellee left Bahrain on August 1995, he was merely on holiday, or simply on
leave, for a period of three months, indicating that he was in fact expected to
return to work after the said period. The last portion of said Certification even
recognized the reason for his failure to return after his leave, stating thus:
He was holding the return visa for coming back to (sic) after
having his leave. Mr. Euberto Ado could not return to Bahrain has (sic)
his passport was misplace (sic) in Manila. (Emphasis and underscoring
[sic] supplied)[31]

The appellate courts conclusion based on respondent Eubertos testimony and

the certification of his former employer is a non sequitur. The entirety of the
relevant portions of respondent Eubertos testimony on cross-examination reads:

ATTY. MAYOL:
Q For the period of two (2) years for how long have you been working?
A Two (2) years finished contract.
Q And another contract should be made whenever you return?
A Yes, Sir.

Q In 1995, you were in Al Meroouge, you were able to perform your job on the
period of your contract. Supposedly, you go back to Bahrain you will be
under the same company?
A Yes, Sir.

Q But you have no contract yet?

A I have re-entry visa. Whenever I will assume work in Bahrain automatically
another contract will be issued.

Q At that time, there was no contract yet?

A Not yet.

Q Is a re-entry visa an assurance of contract?

A Yes, automatically.

Q On what basis?
A If I could go back to place of work before the expiration of my re-entry visa,
automatically, another contract will be issued.

Q Is that so?
A Yes, Sir.

Q In support of your testimony, you presented a certification from your alleged

employer?
A Yes, Sir.

Q Who secured that certification?

A I requested one of my compadre because he was there.

Q You were not the one who secured that certification?

A Yes, of course, because I am here and I could not go back because my passport
was lost.

Q How close are you with your manager?

A Very close because I was even entrusted to maintain the yatch owned by the
manager.

Q The fact that you were not in Bahrain, you have no personal knowledge about
the issuance of certification?
A Yes, I have no personal knowledge.
 COURT: What is that certification?

ATTY. SABITSANA:
Certification of employment and salary.

COURT: The past employment?

ATTY. SABITSANA:
Yes, Your Honor.[32]

Thus, Eubertos two-year contract of employment had already expired before

leaving Bahrain for his three-month vacation in the Philippines. Whether or not
respondent Eubertos employer would automatically employ him upon his return to
Bahrain after his sojourn in the Philippines would depend entirely upon his
employer. The respondents failed to adduce any evidence that Eubertos employer
would give him his former position under the same terms and conditions stipulated
in his previous employment contract. Euberto even failed to prove, by
preponderant evidence, other than his self-serving testimony, that the re-entry visa
issued to him was at his employers behest, with an assurance that upon his return
to Bahrain, he would automatically be re-employed. The respondents could very
well have secured an undertaking or an authenticated certification from Eubertos
employer that upon his return to Bahrain, he would be automatically employed for
a period of two years under the same terms and conditions of the first contract.
While they adduced in evidence a certification from Eubertos employer that he had
been issued a re-entry visa, there was no undertaking to automatically re-employ
respondent Euberto for another two years upon his return to Bahrain for a monthly
salary of 280 Bahrain Dinars. The CA, thus, erred in affirming the award of actual
or compensatory damages of P480,000.00 to the respondent spouses.
 There is preponderant evidence that the respondents indeed suffered some
pecuniary loss due to the loss of Eubertos passport. However, the respondents
failed to adduce preponderant evidence of the passports value. Nevertheless, they
are entitled to temperate damages of P10,000.00 under Article 2224 of the New
Civil Code which provides: [t]emperate or moderate damages, which are more
than nominal but less than compensatory damages, may be recovered when the
court finds that some pecuniary loss has been suffered but its amount cannot, from
the nature of the case, be proved with certainty.[33]

The CA affirmed the award of moral damages in favor of the respondents as

follows:
Considering the foregoing and the fact that appellants had in fact been
negligent in handling appellee Eubertos passport, the trial court could not be said
to have erred in awarding both actual and moral damages to the appellees, the
latter being justified further by the fact that the appellees entire family suffered,
having lost much-needed source of their income, which also resulted in their
failure to complete the construction of the house they were building.[34]

Case law has it that moral damages may be awarded for breach of contract
where the breach thereof by the obligor is wanton, reckless, malicious or in bad
faith, oppressive or abusive,[35] or where the obligor is guilty of gross negligence
amounting to bad faith.[36] In the case of Philippine Telegraph & Telephone
Corporation v. Court of Appeals,[37] the Court had laid the requisites for awarding
moral damages, thus: first, evidence of besmirched reputation or physical, mental
or psychological suffering sustained by the claimant; second, a culpable act or
omission factually established; third, proof that the wrongful act or omission of the
defendant is the proximate cause of the damages sustained by the claimant; and
fourth, that the case is predicated on any of the instances expressed or envisioned
by Article 2219 and Article 2220 of the Civil Code.

Article 2220 of the Civil Code states that breach of contract may be a legal
ground for awarding moral damages if the defendant acted fraudulently or in bad
faith.

The rulings of the trial and appellate courts that the respondent spouses are
entitled to moral damages are correct. While the failure to deliver Eubertos
passport does not per se amount to willful misconduct[38] or bad faith, the evidence
on record shows that the petitioners indeed acted in bad faith and in wanton
disregard of their contractual obligation to the respondents.

The respondents made numerous inquiries from the petitioners on the

whereabouts of Eubertos passport, and repeatedly made requests for its return; the
petitioners dilly-dallied and gave various excuses. The petitioners told the
respondents that the passport may have been inadvertently transported to their
other branches. Exasperated, the respondents had to secure the services of counsel.
Their demands for the production of the passport (made through counsel) were
ignored by the petitioners. Worse still, the petitioners alleged in their answer to the
complaint that the van carrying Eubertos passport, while parked somewhere along
14th Street, Port Area, South Harbor, Manila, was forcibly opened by unidentified
person/s who pilfered its contents, probably including the said passport. [39] The trial
court found the allegation of pilferage to be baseless and declared as follows:

The defendants LBC failed to notify Euberto Ado at the earliest possible
time that his passport was lost. It was only in the second week of October 1996
that he was informed through the letters of Atty. Florencio C. Lameyra, dated
October 9, 1996, to the Chief, Legal and Enforcement Division of the Civil
Aeronautics Board, and the letter of Atty. Generoso Santos that his passport was
lost and not stolen by thieves as asserted in their answer.[40]

Thus, with the attendant circumstances, there is ample basis for an award of
moral damages to the respondents. There is, to be sure, no hard and fast rule for
determining what would be a fair amount of moral damages.

Each case has to be resolved based on the attendant particulars. The Court finds
that an award of P50,000.00 as moral damages in favor of the respondents is
commensurate in this case.

Considering that the petitioners were guilty of bad faith and the private
respondents were compelled to litigate,[41] the latter are entitled to the amount
of P15,000.00 as attorneys fees.

IN LIGHT OF ALL THE FOREGOING, the Court of Appeals Decision

in CA-G.R. CV No. 73732 is AFFIRMED WITH MODIFICATION. The award
for actual/compensatory damages is deleted. In lieu thereof, the respondents,
spouses Euberto and Sisinia Ado, are awarded temperate damages in the amount
of P10,000.00. The awards for moral damages and attorneys fees are reduced
to P50,000.00 and P15,000.00, respectively. No costs.

SO ORDERED.
ROMEO J. CALLEJO, SR.
Associate Justice

WE CONCUR:

REYNATO S. PUNO
Associate Justice
Chairman

MA. ALICIA AUSTRIA-MARTINEZ DANTE O. TINGA

Associate Justice Associate Justice

MINITA V. CHICO-NAZARIO
Associate Justice

ATTESTATION
 I attest that the conclusions in the above decision were reached in
consultation before the case was assigned to the writer of the opinion of the Courts
Division.

REYNATO S. PUNO
Associate Justice
Chairman, Second Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division
Chairmans Attestation, it is hereby certified that the conclusions in the above
decision were reached in consultation before the case was assigned to the writer of
the opinion of the Courts Division.

HILARIO G. DAVIDE, JR.

Chief Justice

[1]
Penned by Associate Justice Mercedes Gozo-Dadole, with Associate Justices Conrado M. Vasquez, Jr. and
Rosmari D. Carandang, concurring; Rollo, pp. 32-47.
[2]
Exhibit A.
[3]
See Exhibit B.
[4]
Ibid.
[5]
Exhibit B-2.
[6]
TSN, 14 March 2001, p. 8.
[7]
Exhibit C.
[8]
Exhibit D-1.
[9]
Exhibit E.
[10]
Exhibit F.
[11]
TSN, 14 March 2001, p. 15.
[12]
Exhibits H and I.
[13]
Exhibit K.
[14]
Records, p. 1.
[15]
Id. at 40, 84.
[16]
Id. at 88-89.
[17]
Id. at 101.
[18]
Rollo, p. 193; Exhibit A.
[19]
Id. at 189-192.
[20]
Id. at 203.
[21]
Id. at 206-208.
[22]
Records, p. 210.
[23]
Id. at 211-219; Penned by Judge Enrique O. Asis.
[24]
Id. at 219.
[25]
CA Rollo, p. 33.
[26]
CA Rollo, pp. 50-51.
[27]
Rollo, pp. 5-6.
[28]
Article 2201, New Civil Code.
[29]
Bayer Phils., Inc. v. Court of Appeals, 394 Phil. 777 (2000).
[30]
Saguid v. Court of Appeals, G.R. No. 150611, 10 June 2003, 403 SCRA 678.
[31]
Rollo, pp. 43-44.
[32]
TSN, 1 August 2001, pp. 3-4.
[33]
Emphasis supplied.
[34]
Rollo, p. 44.
[35]
Herbosa v. Court of Appeals, 425 Phil. 431 (2002).
[36]
Sarmiento v. Spouses Sun-Cabrido, 449 Phil. 108 (2003).
[37]
437 Phil. 76 (2002).
[38]
See Luna v. Court of Appeals, G.R. Nos. 100374-75, 27 November 1992, 216 SCRA 107, where the Court did
not subscribe to the therein petitioners argument that the private respondents failure to deliver their luggage at the
designated time and place amounted ipso facto to willful misconduct. The Court went on to state that for willful
misconduct to exist, there must be a showing that the acts complained of were impelled by an intention to violate the
law, or were in persistent disregard of ones rights; it must be evidenced by a flagrantly or shamefully wrong or
improper conduct.
[39]
Records, p. 103.
[40]
Rollo, p. 56.
[41]
See Rollo, p. 53.

SECOND DIVISION
THE CONSOLIDATED BANK G.R. No. 143338
AND TRUST CORPORATION
(SOLIDBANK),
P e t i t i o n e r, Present:

PUNO,
Chairman,
- versus AUSTRIA-MARTINEZ,
CALLEJO, SR.,
TINGA, and
 CHICO-NAZARIO, JJ.
DEL MONTE MOTOR WORKS,
INC., NARCISO G. Promulgated:
[1]
MORALES, AND SPOUSE,
R e s p o n d e n t s. July 29, 2005
x--------------------------------------------------x

DECISION

CHICO-NAZARIO, J.:

This is a petition for review on certiorari of the Decision[2] of the Court of Appeals
in CA-G.R. CV No. 16886 entitled, The Consolidated Bank & Trust Corporation
(SOLIDBANK) v. Del Monte Motor Works, Inc., Narciso O. Morales and Spouse
promulgated on 25 November 1999 and of the Resolution of the appellate court
dated 11 May 2000 denying petitioners motion for reconsideration. Said decision
and resolution affirmed the order dated 28 December 1987 of the Regional Trial
Court (RTC), Branch 27, Manila.

The facts of the case are as follows:

On 13 June 1984, petitioner filed before the RTC of Manila a complaint [3] for
recovery of sum of money against respondents, impleading the spouse of
respondent Narciso O. Morales (respondent Morales) in order to bind their
conjugal partnership of gains. Petitioner, a domestic banking and trust corporation,
alleges therein that on 23 April 1982, it extended in favor of respondents a loan in
the amount of One Million Pesos (P1,000,000.00) as evidenced by a promissory
note executed by respondents on the same date. Under the promissory note,
respondents Del Monte Motor Works, Inc. (respondent corporation) and Morales
bound themselves jointly and severally to pay petitioner the full amount of the loan
through twenty-five monthly installments of P40,000.00 a month with interest
pegged at 23% per annum. The note was to be paid in full by 23 May 1984. As
respondents defaulted on their monthly installments, the full amount of the loan
became due and demandable pursuant to the terms of the promissory note.
Petitioner likewise alleges that it made oral and written demands upon respondents
to settle their obligation but notwithstanding these demands, respondents still failed
to pay their indebtedness which, as of 09 March 1984, stood at P1,332,474.55.
Petitioner attached to its complaint as Annexes A, B, and C, respectively, a
photocopy of the promissory note supposedly executed by respondents, a copy of
the demand letter it sent respondents dated 20 January 1983, and statement of
account pertaining to respondents loan.

On 31 October 1984, petitioner filed an Ex-Parte Motion to Declare the Defendants

in Default which was opposed by the defendants upon the ground that they were
never served with copies of the summons and of petitioners complaint.

On 23 November 1984, respondent corporation filed before the trial court a

manifestation attaching thereto its answer to petitioners complaint which states the
following:
2- That it denies generally and specifically the allegations contained in
paragraphs 3, 4, 5, 6, 7 and 8 thereof for lack of knowledge and information
sufficient to form a belief as to the truth of the matters therein alleged, the
truth being those alleged in the Special and Affirmative Defenses
hereinbelow contained;

3- ANSWERING FURTHER, and by way of a first special and affirmative

defense, defendant herein states that the promissory note in question is void
for want of valid consideration and/or there was no valuable consideration
involved as defendant herein did not receive any consideration at all;

4- ANSWERING FURTHER, and by way of a second special affirmative

defense, defendant herein alleges that no demand has ever been sent to nor
received by herein defendant and if ever demands were made, denies any
liability as averred therein.

5- ANSWERING FURTHER, and by way of a third special and affirmative

defense, defendant herein avers that the complaint states no cause of action
and has no basis either in fact or in law;

VERIFICATION
I, JEANETTE D. TOLENTINO, of legal age, after having been duly sworn
to in accordance with law, depose and state:

That I am the Controller of Del Monte Motor Works, Inc., one of the
defendants in this case.

That for and in behalf of the defendant corporation, I caused the preparation
of the above-narrated answer.

That I have read the contents thereof and they are true of my own
knowledge.

(SGD) JEANNETTE D. TOLENTINO[4]

On 06 December 1984, respondent Morales filed his manifestation together with
his answer wherein he likewise renounced any liability on the promissory note,
thus:

1. He ADMIT[S] paragraphs 1, 2, and 3 of the complaint with a

qualification in paragraph 3 thereof that he has long been separated from
his wife and the system governing their property relations is that of
complete separation of property and not that of conjugal partnership of
gain[s];

2. He [DENIES], generally and specifically, the allegations contained in

paragraphs 4, 5, 6, 7, and 8 thereof, for lack of knowledge and information
sufficient to form a belief and as to the truth of the matter therein averred,
the truth being those alleged in the Special And Affirmative Defenses
hereinbelow pleaded;

SPECIAL AND AFFIRMATIVE DEFENSES

4. He has never signed the promissory note attached to the complaint in his
personal and/or individual capacity as such;

5. That the said promissory note is ineffective, unenforceable and void for
lack of valid consideration;

6. That even admitting, argumenti gratia, the validity and execution of the
questioned promissory note, still, defendant herein cannot be bound
personally and individually to the said obligations as banking procedures
requires, it being a standard operating procedure of all known banking
institution, that to hold a borrower jointly and severally liable in his official
as well as personal capacity, the borrower must sign a Suretyship
Agreement or at least, a continuing guarranty with that of the corporation
he represent(s) but which in this case is wanting;

7. That transaction/obligation in question did not, in any way,

redound/inure to the benefit of the conjugal partnership of gain, as there is
no conjugal partnership of gain to speak with, defendant having long been
separated from his wife and their property relation is governed by the
system of complete separation of property, and more importantly, he has
 never signed the said promissory note in his personal and individual
capacity as such;

VERIFICATION

That I, NARCISO MORALES, after having been duly sworn to in

accordance with law, hereby depose and declare that:

I am one of the named defendant[s] in the above-entitled case;

I have cause[d] the preparation of the foregoing Answer upon facts and
figures supplied by me to my retained counsel; have read each and every
allegations contained therein and hereby certify that the same are true and
correct of my own knowledge and information.

(SGD) NARCISO MORALES

Affiant[5]

On 26 December 1984, the trial court denied petitioners motion to declare

respondents in default and admitted their respective answers.[6]

During the trial on the merits of this case, petitioner presented as its sole witness,

Liberato A. Lavarino (Lavarino), then the manager of its Collection Department.

Substantially, Lavarino stated that respondents obtained the loan, subject of this

case, from petitioner and due to respondents failure to pay a single monthly

installment on this loan, petitioner was constrained to send a demand letter to

respondents; that as a result of this demand letter, Jeannette Tolentino (Tolentino),

respondent corporations controller, wrote a letter to petitioner requesting for some

consideration because of the unfavorable business atmosphere then buffeting their

business operation; that Tolentino enclosed to said letter a check with a face value

of P220,020.00 to be discounted by petitioner with the proceeds being applied as

partial payment to their companys obligation to petitioner; that after receipt of this

partial payment, respondents obligation again became stagnant prompting

petitioner to serve respondents with another demand letter which, unfortunately,

was unheeded by respondents. Lavarino also identified the following exhibits for

petitioner: photocopy of the duplicate original of the promissory note attached to

the complaint as Exhibit A;[7]petitioners 20 January 1983 demand letter marked as

Exhibit B;[8] Tolentinos letter to petitioner dated 10 February 1983 and marked as

Exhibit C;[9] and the 09 March 1984 statement of account sent to respondents

marked as Exhibit D.[10]

On 26 September 1985, petitioner made its formal offer of evidence.

However, as the original copy of Exhibit A could no longer be found, petitioner

instead sought the admission of the duplicate original of the promissory note which

was identified and marked as Exhibit E.

The trial court initially admitted into evidence Exhibit E and granted respondents
motion that they be allowed to amend their respective answers to conform with this
new evidence.[11]

On 30 September 1985, respondent corporation filed a manifestation and motion

for reconsideration[12] of the trial courts order admitting into evidence petitioners
Exhibit E. Respondent corporation claims that Exhibit E should not have been
admitted as it was immaterial, irrelevant, was not properly identified and hearsay
evidence. Respondent corporation insists that Exhibit E was not properly identified
by Lavarino who testified that he had nothing to do in the preparation and
execution of petitioners exhibits, one of which was Exhibit E. Further, as there
were markings in Exhibit A which were not contained in Exhibit E, the latter could
not possibly be considered an original copy of Exhibit A. Lastly, respondent
corporation claims that the exhibit in question had no bearing on the complaint as
Lavarino admitted that Exhibit E was not the original of Exhibit A which was the
foundation of the complaint and upon which respondent corporation based its own
answer.

Respondent Morales similarly filed a manifestation with motion to reconsider

order admitting as evidence Exhibit E[13] which, other than insisting that the due
execution and genuineness of the promissory note were not established as far as he
was concerned, essentially raised the same arguments contained in respondent
corporations manifestation with motion for reconsideration referred to above.
On 06 December 1985, the trial court granted respondents motions for
reconsideration.[14] Petitioner moved for the reconsideration of this order which
was denied by the court a quo on 20 December 1985.[15]

On 26 December 1985, respondents separately filed their motions to dismiss on the

similar ground that with the exclusion of Exhibits A and E, petitioner no longer
possessed any proof of respondents alleged indebtedness.[16]

On 08 April 1986, petitioner filed a motion[17] praying that the presiding judge,
Judge Ricardo D. Diaz, of the court a quo inhibit himself from this case
maintaining that the latter rushed into resolving its motion for reconsideration of
the trial courts order of 06 December 1985 thereby depriving it the opportunity of
presenting proof that the original of Exhibit A was delivered to respondents as
early as 02 April 1983. Such haste on the part of the presiding judge, according to
petitioner, cast doubt on his objectivity and fairness. This motion to inhibit was
denied by the trial court on 06 August 1987.[18]

In an order dated 28 December 1987,[19] the case before the trial court was
dismissed, the dispositive portion of which reads:

WHEREFORE, the instant case against defendants Del Monte Motor

Works, Inc. and Narciso O. Morales and spouse, is hereby DISMISSED,
with costs against the plaintiff.
The trial courts finding was affirmed by the Court of Appeals in the assailed
decision now before us. The dispositive portion of the appellate courts decision
reads:

WHEREFORE, PREMISES CONSIDERED, the decision of the Regional

Trial Court, Manila, Branch 27, dated December 28, 1987 dismissing
plaintiff-appellant['s] complaint is hereby AFFIRMED. Cost against the
plaintiff-appellant.[20]

Petitioner thereafter filed a motion for reconsideration dated 14 December 1999

which was denied for lack of merit in a resolution of the Court of Appeals

promulgated on 11 May 2000.[21]

Aggrieved by the appellate courts ruling, petitioner now seeks redress from this

Court imputing the following errors on the Court of Appeals:

THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN

IT FOUND THAT PRIVATE RESPONDENTS DENIED THE
MATERIAL ALLEGATIONS OF PETITIONER SOLIDBANKS
COMPLAINT, DESPITE THE PRESENCE OF INDUBITABLE FACTS
CLEARLY POINTING TO THE FACT THAT SAID PRIVATE
RESPONDENTS ADMITTED THE GENUINENESS AND DUE
EXECUTION OF THE SUBJECT PROMISSORY NOTE.

II
 THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN
IT UPHELD THE EXCLUSION OF EXHIBIT E, THE SECOND
ORIGINAL OF THE PROMISSORY NOTE, DESPITE THE FACT
THAT THE ORIGINAL OF EXHIBIT A (XEROX COPY OF THE
DUPLICATE ORIGINAL OF THE PROMISSORY NOTE) WAS
ACTUALLY IN THE POSSESSION OF PRIVATE RESPONDENTS,
THUS WARRANTING THE ADMISSION OF SECONDARY
EVIDENCE.

III

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT

HOLDING THAT THE TRIAL JUDGE SHOULD HAVE INHIBITED
HIMSELF FROM TAKING COGNIZANCE OF AND FROM TRYING
AND DECIDING THE INSTANT CASE CONSIDERING HIS
PERCEIVED AND MANIFEST BIAS AND PARTIALITY IN FAVOR
OF THE PRIVATE RESPONDENTS TO THE GRAVE PREJUDICE OF
PETITIONER SOLIDBANK.[22]

The petition is meritorious.

In resolving the case against petitioner, the appellate court held that contrary to

petitioners stance, respondents were able to generally and specifically deny under

oath the genuineness and due execution of the promissory note, thus:

There can be no dispute to the fact that the allegations in the answer
(Record, p. 20, 26-27), of both defendants, they denied generally and
specifically under oath the genuineness and due execution of the
promissory note and by way of special and affirmative defenses herein
states that he (MORALES) never signed the promissory note attached to
the complaint (Exh. A) in his personal and/or individual capacity.
Moreover, what appears in the record (Record, p. 20) was an admission of
paragraphs 1 & 2 but they deny generally and specifically the rest of the
allegations. It would be considered that there is a sufficient compliance of
the requirement of the law for specific denial.[23]
We hold otherwise.

The pertinent portion of the Rules of Court on the matter provides:

SEC. 8. How to contest such documents. When an action or defense is

founded upon a written instrument, copied in or attached to the
corresponding pleading as provided in the preceding section, the
genuineness and due execution of the instrument shall be deemed admitted
unless the adverse party, under oath, specifically denies them and sets forth
what he claims to be the facts; but the requirement of an oath does not
apply when the adverse party does not appear to be a party to the
instrument or when compliance with an order for an inspection of the
original instrument is refused.[24]

In the case of Permanent Savings and Loan Bank v. Mariano Velarde,[25] this Court
held that

. . . Respondent also denied any liability on the promissory note as he

allegedly did not receive the amount stated therein, and the loan documents
do not express the true intention of the parties. Respondent reiterated these
allegations in his denial under oath, stating that the promissory note sued
upon, assuming that it exists and bears the genuine signature of herein
defendant, the same does not bind him and that it did not truly express the
real intention of the parties as stated in the defenses

Respondents denials do not constitute an effective specific denial as

contemplated by law. In the early case of Songco vs. Sellner,[26] the Court
expounded on how to deny the genuineness and due execution of an
actionable document, viz.:

. . . This means that the defendant must declare under oath

that he did not sign the document or that it is otherwise false
or fabricated. Neither does the statement of the answer to the
effect that the instrument was procured by fraudulent
 representation raise any issue as to its genuineness or due
execution. On the contrary such a plea is an admission both of
the genuineness and due execution thereof, since it seeks to
avoid the instrument upon a ground not affecting either.[27]

In this case, both the court a quo and the Court of Appeals erred in ruling that
respondents were able to specifically deny the allegations in petitioners complaint
in the manner specifically required by the rules. In effect, respondents had, to all
intents and purposes, admitted the genuineness and due execution of the subject
promissory note and recognized their obligation to petitioner.

The appellate court likewise sustained the ruling of the trial court that the best
evidence rule or primary evidence must be applied as the purpose of the proof is to
establish the terms of the writing meaning the alleged promissory note as it is the
basis of the recovery of the money allegedly loaned to the defendants (respondents
herein).[28]

The best evidence rule is encapsulated in Rule 130, Section 3, of the Revised Rules
of Civil Procedure which provides:

Sec. 3. Original document must be produced; exceptions. When the subject

of inquiry is the contents of a document, no evidence shall be admissible
other than the original document itself, except in the following cases:

(a) When the original has been lost or destroyed, or cannot be produced in
court, without bad faith on the part of the offeror;
 (b) When the original is in the custody or under the control of the party
against whom the evidence is offered, and the latter fails to produce it after
reasonable notice;

(c) When the original consists of numerous accounts or other documents

which cannot be examined in court without great loss of time and the fact
sought to be established from them is only the general result of the whole;
and

(d) When the original is a public record in the custody of a public officer or
is recorded in a public office.

The best evidence rule, according to Professor Thayer, first appeared in the
year 1699-1700 when in one case involving a goldsmith, Holt, C. J., was quoted as
stating that they should take into consideration the usages of trade and that the best
proof that the nature of the thing will afford is only required.[29] Over the years, the
phrase was used to describe rules which were already existing such as the rule that
the terms of a document must be proved by the production of the document itself,
in preference to evidence about the document; it was also utilized to designate the
hearsay rule or the rule excluding assertions made out of court and not subject to
the rigors of cross-examination; and the phrase was likewise used to designate the
group of rules by which testimony of particular classes of witnesses was preferred
to that of others.[30]

According to McCormick, an authority on the rules of evidence, the only

actual rule that the best evidence phrase denotes today is the rule requiring the

production of the original writing[31] the rationale being:

 (1) that precision in presenting to the court the exact words of the writing is
of more than average importance, particularly as respects operative or
dispositive instruments, such as deeds, wills and contracts, since a slight
variation in words may mean a great difference in rights, (2) that there is a
substantial hazard of inaccuracy in the human process of making a copy by
handwriting or typewriting, and (3) as respects oral testimony purporting to
give from memory the terms of a writing, there is a special risk of error,
greater than in the case of attempts at describing other situations generally.
In the light of these dangers of mistransmission, accompanying the use of
written copies or of recollection, largely avoided through proving the terms
by presenting the writing itself, the preference for the original writing is
justified.[32]

Bearing in mind that the risk of mistransmission of the contents of a writing is the
justification for the best evidence rule, we declare that this rule finds no application
to this case. It should be noted that respondents never disputed the terms and
conditions of the promissory note thus leaving us to conclude that as far as the
parties herein are concerned, the wording or content of said note is clear enough
and leaves no room for disagreement. In their responsive pleadings, respondents
principal defense rests on the alleged lack of consideration of the promissory note.
In addition, respondent Morales also claims that he did not sign the note in his
personal capacity. These contentions clearly do not question the precise
wording[33] of the promissory note which should have paved the way for the
application of the best evidence rule. It was, therefore, an error for the Court of
Appeals to sustain the decision of the trial court on this point.
Besides, the best evidence rule as stated in our Revised Rules of Civil Procedure is
not absolute. As quoted earlier, the rule accepts of exceptions one of which is when
the original of the subject document is in the possession of the adverse party. As
pointed out by petitioner in its motion to inhibit, had it been given the opportunity
by the court a quo, it would have sufficiently established that the original of
Exhibit A was in the possession of respondents which would have called into
application one of the exceptions to the best evidence rule.

Significantly, and as discussed earlier, respondents failed to deny specifically the

execution of the promissory note. This being the case, there was no need for
petitioner to present the original of the promissory note in question. Their judicial
admission with respect to the genuineness and execution of the promissory note
sufficiently established their liability to petitioner regardless of the fact that
petitioner failed to present the original of said note.[34]

Indeed, when the defendant fails to deny specifically and under oath the due
execution and genuineness of a document copied in a complaint, the plaintiff need
not prove that fact as it is considered admitted by the defendant.[35] In the case
of Asia Banking Corporation v. Walter E. Olsen & Co.,[36] this Court held that

Another error assigned by the appellant is the fact that the lower court took
into consideration the documents attached to the complaint as a part
thereof, without having been expressly introduced in evidence. This was no
error. In the answer of the defendants there was no denial under oath of the
authenticity of these documents. Under Section 103 of the Code of Civil
Procedure, the authenticity and due execution of these documents must, in
 that case, be deemed admitted. The effect of this is to relieve the plaintiff
from the duty of expressly presenting such documents as evidence. The
court, for the proper decision of the case, may and should consider, without
the introduction of evidence, the facts admitted by the parties.[37]

Anent petitioners allegation that the presiding judge of the court a quo should have
inhibited himself from this case, we resolve this issue against petitioner.

In order for this Court to sustain a charge of partiality and prejudice brought
against a judge, there must be convincing proof to show that he or she is, indeed,
biased and partial. Bare allegations are not enough. Bias and prejudice are serious
charges which cannot be presumed particularly if weighed against a judges sacred
obligation under his oath of office to administer justice without respect to person
and do equal right to the poor and the rich.[38] There must be a showing of bias and
prejudice stemming from an extrajudicial source resulting in an opinion in the
merits on some basis other than what the judge learned from his participation in the
case.[39]
In this case, as petitioner failed to proffer any evidence indicating that Judge Diaz
was guilty of bias and prejudice, we affirm the Court of Appeals holding that there
was no cogent reason for him to disqualify himself from this case.
Finally, Rule 33, Section 1, of the Revised Rules of Civil Procedure states the rule
on the effect of judgment on demurrer to evidence. It reads:

SECTION 1. Demurrer to evidence.- After the plaintiff has completed the

presentation of his evidence, the defendant may move for dismissal on the
ground that upon the facts and the law the plaintiff has shown no right to
relief. If his motion is denied, he shall have the right to present evidence. If
 the motion is granted but on appeal the order of dismissal is reversed he
shall be deemed to have waived the right to present evidence.

A demurrer to evidence abbreviates judicial proceedings, it being an instrument for

the expeditious termination of an action. Caution, however, must be exercised by
the party seeking the dismissal of a case upon this ground as under the rules, if the
movants plea for the dismissal on demurrer to evidence is granted and the order of
dismissal is reversed on appeal, he loses his right to adduce evidence. If the
defendants motion for judgment on demurrer to evidence is granted and the order
is subsequently reversed on appeal, judgment is rendered in favor of the adverse
party because the movant loses his right to present evidence. [40] The reviewing
court cannot remand the case for further proceedings; rather, it should render
judgment on the basis of the evidence presented by the plaintiff.[41]

Under the promissory note executed by respondents in this case, they are obligated
to petitioner in the amount of One Million Pesos, this being the amount of loan
they obtained on 23 April 1982. In addition, they also bound themselves to pay the
23% interest per annum on the loan; and a penalty charge of 3% per annum on the
amount due until fully paid. Respondents likewise agreed to pay attorneys fees
equivalent to 10% of the total amount due, but in no case less than P200.00, plus
costs of suit with both these amounts bearing a 1% interest per month until paid.
Costs against respondents.
WHEREFORE, premises considered, the Court of Appeals decision dated 25
November 1999 as well as its Resolution of 11 May 2000, affirming the order of
the Regional Trial Court, Manila, Branch 27, dated 28 December 1987, are
hereby REVERSED and SET ASIDE. Respondents are ordered to pay One
Million Pesos (P1,000,000.00) plus 23% interest per annum, penalty charge of 3%
interest per annum, and 10% of the amount due as attorneys fees together with a
1% interest per month until fully paid. The sum of P220,020.00 which was the
value of the postdated check given

by respondents to petitioner as partial payment should be deducted from the

amount due from respondents.

SO ORDERED.

MINITA V. CHICO-NAZARIO
Associate Justice

WE CONCUR:

REYNATO S. PUNO
Associate Justice
Chairman

MA. ALICIA AUSTRIA-MARTINEZ ROMEO J. CALLEJO, SR.

 Associate Justice Associate Justice

DANTE O. TINGA
Associate Justice

ATTESTATION
I attest that the conclusions in the above Decision were reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.

REYNATO S. PUNO
Associate Justice
Chairman, Second Division

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, and the Division

Chairmans Attestation, it is hereby certified that the conclusions in the above
Decision were reached in consultation before the case was assigned to the writer of
the opinion of the Courts Division.
 HILARIO G. DAVIDE, JR.
Chief Justice

[1]
Narciso O. Morales in the Decision of the Court of Appeals.
[2]
Penned by Associate Justice Mercedes Gozo-Dadole with Associate Justices Ramon A. Barcelona and Demetrio
G. Demetria concurring; Rollo, pp. 9-26.
[3]
Records, pp. 1-6.
[4]
Records, pp. 20-21.
[5]
Records, pp. 26-27.
[6]
Records, p. 34.
[7]
Records, p. 72.
[8]
Records, p. 73.
[9]
Records, p. 75.
[10]
Records, p. 76.
[11]
Records, p. 79.
[12]
Records, pp. 80-83.
[13]
Records, pp. 84-90.
[14]
Records, p. 118.
[15]
Records, p. 148.
[16]
Records, pp. 150-165.
[17]
Records, pp. 195-200.
[18]
Records, pp. 233-238.
[19]
Records, pp. 244-252.
[20]
Rollo, p. 25.
[21]
Rollo, p. 28.
[22]
Rollo, p. 42.
[23]
Rollo, p. 18.
[24]
Rule 8, Section 8, Revised Rules of Civil Procedure.
[25]
G.R. No. 140608, 23 September 2004, 439 SCRA 1.
[26]
G.R. No. 11513, 04 December 1917, 37 Phil. 254.
[27]
Supra, note 25, pp. 8-9.
[28]
Records, p. 250.
[29]
IV Evidence in Trials at Common Law, John Henry Wigmore, p. 399 (1972 Ed.).
[30]
Id. at 400.
[31]
Handbook of the Law of Evidence, Charles T. McCormick, p. 409 (1954 Ed.).
[32]
Id. at 410.
[33]
Evidence, Edward W. Cleary, p. 416 (4th Ed.).
[34] Supra, note 25 at 10; Hornales v. The National Labor Relations Commission, et al., G.R. No. 118943, 10

September 2001, 364 SCRA 778; SCC Chemicals Corporation v. The Honorable Court of Appeals, et al.,
G.R. No. 128538, 28 February 2001, 353 SCRA 70.
[35]
VII The Revised Rules of Court in the Philippines (Evidence), Vicente J. Francisco, p. 9 (1997 Ed.)
[36]
G.R. No. 24488, 28 December 1925, 48 Phil. 529.
[37]
Id. at 532.
[38]
People of the Philippines v. Court of Appeals, et al., G.R. No. 129120, 02 July 1999, 309 SCRA 705.
[39]
Soriano v. Angeles, G.R. No. 109920, 31 August 2000, 339 SCRA 366.
[40]
Quebral v. Court of Appeals, G.R. No. 101941, 25 January 1996, 252 SCRA 353.
[41]
Radiowealth Finance Company v. Del Rosario, G.R. No. 138739, 06 July 2000, 335 SCRA 288.

Republic of the Philippines

Supreme Court
Manila

FIRST DIVISION

SALUN-AT MARQUEZ and G.R. No. 168387

NESTOR DELA CRUZ,
Petitioners,
Present:
- versus -
CORONA, C. J., Chairperson,
ELOISA ESPEJO, ELENITA VELASCO, JR.,
ESPEJO, EMERITA ESPEJO, LEONARDO-DE CASTRO,
OPHIRRO ESPEJO, OTHNIEL DEL CASTILLO, and
ESPEJO, ORLANDO ESPEJO, PEREZ, J.
OSMUNDO ESPEJO, ODELEJO
ESPEJO and NEMI FERNANDEZ, Promulgated:
Respondents. August 25, 2010
x--------------------------------------------------------x

DECISION

DEL CASTILLO, J.

When the parties admit the contents of written documents but put in issue whether these
documents adequately and correctly express the true intention of the parties, the deciding
body is authorized to look beyond these instruments and into the contemporaneous and
subsequent actions of the parties in order to determine such intent.

Well-settled is the rule that in case of doubt, it is the intention of the contracting parties
that prevails, for the intention is the soul of a contract, not its wording which is prone to
mistakes, inadequacies, or ambiguities. To hold otherwise would give life, validity, and
precedence to mere typographical errors and defeat the very purpose of agreements.
This Petition for Review on Certiorari[1] assails the October 7, 2003 Decision,[2] as well
as the May 11, 2005 Resolution[3] of the Court of Appeals (CA) in CA G.R. SP No.
69981. The dispositive portion of the appellate courts Decision reads:

WHEREFORE, finding reversible error committed by the Department of Agrarian

Reform Adjudication Board, the instant petition for review is GRANTED. The assailed
Decision, dated 17 January 2001, rendered by the Department of Agrarian Reform
Adjudication Board is hereby ANNULLED and SET ASIDE. The Decision of the
Department of Agrarian Reform Adjudication Board of Bayombong[,] Nueva Vizcaya,
dated 17 March 1998, is REINSTATED. Costs against respondents.

SO ORDERED.[4]

The reinstated Decision of the Department of Agrarian Reform Adjudication Board

(DARAB) of Bayombong, Nueva Vizcaya, in turn, contained the following dispositive
portion:

Accordingly, judgment is rendered:

1. Finding [respondents] to be the owner by re-purchase from RBBI [of] the Murong
property covered by TCT No. [T-]62096 (formerly TCT No. 43258);

2. Ordering the cancellation of TCT with CLOA Nos. 395 and 396 in the name[s] of
Salun-at Marquez and Nestor de la Cruz respectively, as they are disqualified to
become tenants of the Lantap property;

3. Directing RBBI to sell through VOS the Lantap property to its rightful
beneficiary, herein tenant-farmer Nemi Fernandez under reasonable terms and
conditions;

4. Ordering RBBI to return the amount paid to it by Nestor and Salun-at; and
ordering the latter to pay 20 cavans of palay per hectare at 46 kilos per cavan unto
 [respondents] plus such accrued and unpaid rentals for the past years as may be duly
accounted for with the assistance of the Municipal Agrarian Reform Officer of
Bagabag, Nueva Vizcaya who is also hereby instructed to assist the parties execute
their leasehold contracts and;

5. The order to supervise harvest dated March 11, 1998 shall be observed until
otherwise modified or dissolved by the appellate body.

SO ORDERED.[5]

Factual Antecedents

Respondents Espejos were the original registered owners of two parcels of agricultural
land, with an area of two hectares each. One is located at Barangay Lantap, Bagabag,
Nueva Vizcaya (the Lantap property) while the other is located in Barangay Murong,
Bagabag, Nueva Vizcaya (the Murong property). There is no dispute among the parties
that the Lantap property is tenanted by respondent Nemi Fernandez (Nemi)[6] (who is the
husband[7] of respondent Elenita Espejo (Elenita), while the Murong property is tenanted
by petitioners Salun-at Marquez (Marquez) and Nestor Dela Cruz (Dela Cruz).[8]

The respondents mortgaged both parcels of land to Rural Bank of Bayombong, Inc.
(RBBI) to secure certain loans. Upon their failure to pay the loans, the mortgaged
properties were foreclosed and sold to RBBI. RBBI eventually consolidated title to the
properties and transfer certificates of title (TCTs) were issued in the name of RBBI. TCT
No. T-62096 dated January 14, 1985 was issued for the Murong property. It contained
the following description:

Beginning at a point marked I on plan H-176292, S. 44034 W. 1656.31 m. more or less

from B.L.L.M. No 1, Bagabag Townsite, K-27,
thence N. 28 deg. 20 E., 200.00 m. to point 2;
thence S. 61 deg. 40 E., 100.00 m. to point 3;
thence S. 28 deg. 20 W., 200.00 m. to point 4;
thence N. 61 deg. 40 W., 100.00 m. to point 1; point of beginning;
Containing an area of 2.000 hectares. Bounded on the northeast, by Road; on the
southeast, and southwest by public land; and on the northwest by Public Land, properties
 claimed by Hilario Gaudia and Santos Navarrete. Bearings true. Declination 0131
E. Points referred to are marked on plan H-176292. Surveyed under authority of sections
12-22 Act No. 2874 and in accordance with existing regulations of the Bureau of Lands
by H.O. Bauman Public Land Surveyor, [in] December 1912-March 1913. Note: All
corners are Conc. Mons. 15x15x60 cm. This is Lot No. 79-A=Lot No. 159 of Bagabag
Townsite, K-27.[9]

Subsequently, TCT No. T-62836 dated June 4, 1985 was issued for the Lantap property
and contained the following description:

Beginning at a point marked 1 on plan H-105520, N. 80 deg. 32 W., 1150.21 m. from

BLLM No. 122, Irrigation project,
thence N. 61 deg. 40E., 200.00 m. to point 2;
thence N. 28 deg. 20E, 100.00 m. to point 3;
thence S. 61 deg. 40E, 200.00 m. to point 4;
thence S. 28 deg. 20W, 100.00 m. to point 1; point of beginning; containing an area of
2.0000 hectares. Bounded on the northeast, southeast, and southwest by Public land; and
on the northwest by Road and public land. Bearings true. Declination 0 deg. 31E., points
referred to are marked on plan H-105520. Surveyed under authority of Section 12-22,
Act No. 2874 and in accordance with existing regulations of the Bureau of Lands, by
H.O. Bauman Public Land Surveyor, [in] Dec. 1912-Mar. 1913 and approved on January
6, 1932. Note: This is Lot No. 119-A Lot No. 225 of Bagabag Townsite K-27. All
corners are B.I. Conc. Mons. 15x60 cm.[10]

Both TCTs describe their respective subjects as located in Bagabag Townsite, K-27,
without any reference to either Barangay Lantap or Barangay Murong.

On February 26, 1985, respondents Espejos bought back one of their lots from
RBBI. The Deed of Sale[11] described the property sold as follows:

x x x do hereby SELL, TRANSFER, and CONVEY, absolutely and unconditionally x x

x that certain parcel of land, situated in the Municipality of Bagabag, Province of Nueva
Vizcaya, and more particularly bounded and described as follows, to wit:

Beginning at a point marked 1 on plan x x x x Containing an area of 2.000

hectares. Bounded on the NE., by Road; on the SE., and SW by Public
Land; and on the NW., by Public Land, properties claimed by Hilario
Gaudia and Santos Navarrete. Bearing true. Declination 013 B. Points
referred to are marked on plan H-176292.
 of which the Rural Bank of Bayombong (NV) Inc., is the registered owner in fee simple
in accordance with the Land Registration Act, its title thereto being evidenced by
Transfer Certificate of Title No. T-62096issued by the Registry of Deeds of Nueva
Vizcaya.

As may be seen from the foregoing, the Deed of Sale did not mention
the barangay where the property was located but mentioned the title of the property
(TCT No. T-62096), which title corresponds to the Murong property. There is no
evidence, however, that respondents took possession of the Murong property, or
demanded lease rentals from the petitioners (who continued to be the tenants of the
Murong property), or otherwise exercised acts of ownership over the Murong
property. On the other hand, respondent Nemi (husband of respondent Elenita and
brother-in-law of the other respondents), continued working on the other property -- the
Lantap property -- without any evidence that he ever paid rentals to RBBI or to any
landowner. The Deed of Sale was annotated on TCT No. T-62096 almost a decade later,
on July 1, 1994.[12]

Meanwhile, on June 20, 1990, RBBI, pursuant to Sections 20[13] and 21[14] of Republic
Act (RA) No. 6657,[15] executed separate Deeds of Voluntary Land Transfer (VLTs) in
favor of petitioners Marquez and Dela Cruz, the tenants of the Murong property. Both
VLTs described the subject thereof as an agricultural land located
in Barangay Murong and covered by TCT No. T-62836 (which, however, is the title
corresponding to the Lantap property).[16]

After the petitioners completed the payment of the purchase price of P90,000.00 to
RBBI, the DAR issued the corresponding Certificates of Land Ownership Award
(CLOAs) to petitioners Marquez[17] and Dela Cruz[18] on September 5, 1991. Both
CLOAs stated that their subjects were parcels of agricultural land situated
in Barangay Murong.[19] The CLOAs were registered in the Registry of Deeds of Nueva
Vizcaya on September 5, 1991.
On February 10, 1997 (more than 10 years after the Deed of Sale in favor of the
respondents and almost seven years after the execution of VLTs in favor of the
petitioners), respondents filed a Complaint[20] before the Regional Agrarian Reform
Adjudicator (RARAD) of Bayombong, Nueva Vizcaya for the cancellation of petitioners
CLOAs, the deposit of leasehold rentals by petitioners in favor of respondents, and the
execution of a deed of voluntary land transfer by RBBI in favor of respondent Nemi. The
complaint was based on respondents theory that the Murong property, occupied by the
petitioners, was owned by the respondents by virtue of the 1985 buy-back, as
documented in the Deed of Sale. They based their claim on the fact that their Deed of
Sale refers to TCT No. 62096, which pertains to the Murong property.

Petitioners filed their Answer[21] and insisted that they bought the Murong property as
farmer-beneficiaries thereof. They maintained that they have always displayed good
faith, paid lease rentals to RBBI when it became the owner of the Murong property,
bought the same from RBBI upon the honest belief that they were buying the Murong
property, and occupied and exercised acts of ownership over the Murong
property. Petitioners also argued that what respondents Espejos repurchased from RBBI
in 1985 was actually the Lantap property, as evidenced by their continued occupation and
possession of the Lantap property through respondent Nemi.

RBBI answered[22] that it was the Lantap property which was the subject of the buy-back
transaction with respondents Espejos. It denied committing a grave mistake in the
transaction and maintained its good faith in the disposition of its acquired assets in
conformity with the rural banking rules and regulations.

OIC-RARAD Decision[23]

The OIC-RARAD gave precedence to the TCT numbers appearing on the Deed of Sale
and the VLTs. Since TCT No. T-62096 appeared on respondents Deed of Sale and the
said title refers to the Murong property, the OIC-RARAD concluded that the subject of
sale was indeed the Murong property. On the other hand, since the petitioners VLTs
referred to TCT No. T-62836, which corresponds to the Lantap property, the OIC-
RARAD ruled that petitioners CLOAs necessarily refer to the Lantap property. As for the
particular description contained in the VLTs that the subject thereof is the Murong
property, the OIC-RARAD ruled that it was a mere typographical error.
Further, since the VLTs covered the Lantap property and petitioners are not the actual
tillers thereof, the OIC-RARAD declared that they were disqualified to become tenants
of the Lantap property and ordered the cancellation of their CLOAs. It then ordered
RBBI to execute a leasehold contract with the real tenant of the Lantap property, Nemi.

The OIC-RARAD recognized that petitioners only right as the actual tillers of the
Murong property is to remain as the tenants thereof after the execution of leasehold
contracts with and payment of rentals in arrears to respondents.

DARAB Decision[24]

Upon appeal filed by petitioners, the DARAB reversed the OIC-RARAD Decision. It
ruled that in assailing the validity of the CLOAs issued to petitioners as bona fide tenant-
farmers, the burden of proof rests on the respondents. There being no evidence that the
DAR field personnel were remiss in the performance of their official duties when they
issued the corresponding CLOAs in favor of petitioners, the presumption of regular
performance of duty prevails. This conclusion is made more imperative by the
respondents admission that petitioners are the actual tillers of the Murong property, hence
qualified beneficiaries thereof.

As for respondents allegation that they bought back the Murong property from RBBI, the
DARAB ruled that they failed to support their allegation with substantial evidence. It
gave more credence to RBBIs claim that respondents repurchased the Lantap property,
not the Murong property. Respondents, as owners of the Lantap property, were ordered
to enter into an agricultural leasehold contract with their brother-in-law Nemi, who is the
actual tenant of the Lantap property.
The DARAB ended its January 17, 2001 Decision in this wise:

We find no basis or justification to question the authenticity and validity of the CLOAs
issued to appellants as they are by operation of law qualified beneficiaries over the
landholdings; there is nothing to quiet as these titles were awarded in conformity with the
CARP program implementation; and finally, the Board declares that all controverted
claims to or against the subject landholding must be completely and finally laid to rest.

WHEREFORE, premises considered and finding reversible errors[,] the assailed decision
is ANNULLED and a new judgment is hereby rendered, declaring:

1. Appellants Salun-at Marquez and Nestor Dela Cruz as the bona fide
tenant-tillers over the Murong property and therefore they are the qualified beneficiaries
thereof;

2. Declaring Transfer Certificate of Title (TCT) Nos. 395 and 396 issued in
the name of [farmer-beneficiaries] Salun-at Marquez and Nestor Dela Cruz respectively,
covered formerly by TCT No. 62096 (TCT No. 43258) of the Murong property as valid
and legal;

3. Ordering the co-[respondents] to firm-up an agricultural leasehold contract

with bona fide tenant-tiller Nemi Fernandez over the Lantap property, [the latter] being
the subject matter of the buy back arrangement entered into between [respondents] and
Rural Bank of Bayombong, Incorporated, and other incidental matters are deemed
resolved.

SO ORDERED.[25]

Ruling of the Court of Appeals

In appealing to the CA, the respondents insisted that the DARAB erred in ruling that they
repurchased the Lantap property, while the petitioners were awarded the Murong
property. They were adamant that the title numbers indicated in their respective deeds of
conveyance should control in determining the subjects thereof. Since respondents Deed
of Sale expressed that its subject is the property with TCT No. T-62096, then what was
sold to them was the Murong property. On the other hand, petitioners VLTs and CLOAs
say that they cover the property with TCT No. T-62836; thus it should be understood that
they were awarded the Lantap property. Respondents added that since petitioners are not
the actual tillers of the Lantap property, their CLOAs should be cancelled due to their
lack of qualification.

The CA agreed with the respondents. Using the Best Evidence Rule embodied in Rule
130, Section 3, the CA held that the Deed of Sale is the best evidence as to its contents,
particularly the description of the land which was the object of the sale. Since the Deed of
Sale expressed that its subject is the land covered by TCT No. T-62096 the Murong
property then that is the property that the respondents repurchased.
The CA further ruled that as for petitioners VLTs, the same refer to the property with
TCT No. T-62836; thus, the subject of their CLOAs is the Lantap property. The
additional description in the VLTs that the subject thereof is located in Barangay Murong
was considered to be a mere typographical error. The CA ruled that the technical
description contained in the TCT is more accurate in identifying the subject property
since the same particularly describes the properties metes and bounds.

Both the RBBI[26] and petitioners[27] filed their respective motions for reconsideration,
which were separately denied.[28]

On June 22, 2004, RBBI filed a separate Petition for Review on Certiorari, docketed as
G.R. No. 163320, with this Court.[29] RBBI raised the issue that the CA failed to
appreciate that respondents did not come to court with clean hands because they misled
RBBI to believe at the time of the sale that the two lots were not tenanted. RBBI also
asked that they be declared free from any liability to the parties as it did not enrich itself
at anyones expense. RBBIs petition was dismissed on July 26, 2004 for lack of
merit. The said Resolution reads:

Considering the allegations, issues[,] and arguments adduced in the petition for review on
certiorari, the Court Resolves to DENY the petition for lack of sufficient showing that the
Court of Appeals had committed any reversible error in the questioned judgment to
warrant the exercise by this Court of its discretionary appellate jurisdiction in this case.[30]
Their Motion for Reconsideration was likewise denied with finality.[31] Entry of judgment
was made in that case on December 15, 2004.[32]

On July 27, 2005,[33] petitioners filed the instant petition.

Issues

Rephrased and consolidated, the parties present the following issues for the Courts
determination:

I
What is the effect of the final judgment dismissing RBBIs Petition for Review
on Certiorari, which assailed the same CA Decision

II
Whether the CA erred in utilizing the Best Evidence Rule to determine the subject of the
contracts

III
What are the subject properties of the parties respective contracts with RBBI

Our Ruling

Propriety of the Petition

Respondents maintain that the instant petition for review raises factual issues which are
beyond the province of Rule 45.[34]

The issues involved herein are not entirely factual. Petitioners assail the appellate courts
rejection of their evidence (as to the contractual intent) as inadmissible under the Best
Evidence Rule. The question involving the admissibility of evidence is a legal question
that is within the Courts authority to review.[35]
Besides, even if it were a factual question, the Court is not precluded to review the
same. The rule that a petition for review should raise only questions of law admits of
exceptions, among which are (1) when the findings are grounded entirely on
speculations, surmises, or conjectures; (2) when the inference made is manifestly
mistaken, absurd or impossible; (3) when there is grave abuse of discretion; (4) when the
judgment is based on a misappreciation of facts; (5) when the findings of fact
are conflicting; (6) when, in making its findings, the same are contrary to the admissions
of both appellant and appellee; (7) when the findings are contrary to those of the trial
court; (8) when the findings are conclusions without citation of specific evidence on
which they are based; (9) when the facts set forth in the petition as well as in the
petitioner's main and reply briefs are not disputed by the respondent; and (10) when the
findings of fact are premised on the supposed absence of evidence and contradicted by
the evidence on record.[36]

In the instant case, we find sufficient basis to apply the exceptions to the general rule
because the appellate court misappreciated the facts of the case through its erroneous
application of the Best Evidence Rule, as will be discussed below. Moreover, the
disparate rulings of the three reviewing bodies below are sufficient for the Court to
exercise its jurisdiction under Rule 45.

First Issue
Dismissal of RBBIs appeal

Respondents maintain that the Courts earlier dismissal of RBBIs petition

for review of the same CA Decision is eloquent proof that there is no reversible error in
the appellate courts decision in favor of the respondents.[37]

We are not persuaded. This Court dismissed RBBIs earlier petition in G.R. No. 163320
because it failed to convincingly demonstrate the alleged errors in the CA Decision. The
bank did not point out the inadequacies and errors in the appellate courts decision but
simply placed the responsibility for the confusion on the respondents for allegedly
misleading the bank as to the identity of the properties and for misrepresenting that the
two lots were not tenanted. Thus, RBBI argued that respondents did not come to court
with clean hands.

These arguments were ineffectual in convincing the Court to review the appellate courts
Decision. It is the appellants responsibility to point out the perceived errors in the
appealed decision.When a party merely raises equitable considerations such as the clean
hands doctrine without a clear-cut legal basis and cogent arguments to support his claim,
there should be no surprise if the Court is not swayed to exercise its appellate jurisdiction
and the appeal is dismissed outright. The dismissal of an appeal does not always and
necessarily mean that the appealed decision is correct, for it could simply be the result of
the appellants inadequate discussion, ineffectual arguments, or even procedural lapses.

RBBIs failure to convince the Court of the merits of its appeal should not prejudice
petitioners who were not parties to RBBIs appeal, especially because petitioners duly
filed a separate appeal and were able to articulately and effectively present their
arguments. A party cannot be deprived of his right to appeal an adverse decision just
because another party had already appealed ahead of him,[38] or just because the other
partys separate appeal had already been dismissed.[39]

There is another reason not to bind the petitioners to the final judgment against
RBBI. RBBI executed the transfer (VLTs) in favor of petitioners prior to the
commencement of the action.Thus, when the action for cancellation of CLOA was filed,
RBBI had already divested itself of its title to the two properties involved. Under the rule
on res judicata, a judgment (in personam) is conclusive only between the parties and
their successors-in-interest by title subsequent to the commencement of the
action.[40] Thus, when the vendor (in this case RBBI) has already transferred his title to
third persons (petitioners), the said transferees are not bound by any judgment which may
be rendered against the vendor.[41]

Second Issue
 Is it correct to apply the Best Evidence Rule?

Citing the Best Evidence Rule in Rule 130, Section 3, the CA held that the Deed of Sale
between respondents and RBBI is the best evidence as to the property that was sold by
RBBI to the respondents. Since the Deed of Sale stated that its subject is the land covered
by TCT No. T-62096 the title for the Murong property then the property repurchased by
the respondents was the Murong property. Likewise, the CA held that since the VLTs
between petitioners and RBBI refer to TCT No. T-62836 the title for the Lantap property
then the property transferred to petitioners was the Lantap property.

Petitioners argue that the appellate court erred in using the best evidence rule to
determine the subject of the Deed of Sale and the Deeds of Voluntary Land
Transfer. They maintain that the issue in the case is not the contents of the contracts but
the intention of the parties that was not adequately expressed in their contracts. Petitioners
then argue that it is the Parol Evidence Rule that should be applied in order to adequately
resolve the dispute.

Indeed, the appellate court erred in its application of the Best Evidence Rule. The Best
Evidence Rule states that when the subject of inquiry is the contents of a document, the
best evidence is the original document itself and no other evidence (such as a
reproduction, photocopy or oral evidence) is admissible as a general rule. The original is
preferred because it reduces the chance of undetected tampering with the document.[42]

In the instant case, there is no room for the application of the Best Evidence Rule because
there is no dispute regarding the contents of the documents. It is admitted by the parties
that the respondents Deed of Sale referred to TCT No. T-62096 as its subject; while the
petitioners Deeds of Voluntary Land Transfer referred to TCT No. T-62836 as its subject,
which is further described as located in Barangay Murong.

The real issue is whether the admitted contents of these documents adequately and
correctly express the true intention of the parties. As to the Deed of Sale, petitioners (and
RBBI) maintain that while it refers to TCT No. T-62096, the parties actually intended the
sale of the Lantap property (covered by TCT No. T-62836).

As to the VLTs, respondents contend that the reference to TCT No. T-62836
(corresponding to the Lantap property) reflects the true intention of RBBI and the
petitioners, and the reference to Barangay Murong was a typographical error. On the
other hand, petitioners claim that the reference to Barangay Murong reflects their true
intention, while the reference to TCT No. T-62836 was a mere error. This dispute reflects
an intrinsic ambiguity in the contracts, arising from an apparent failure of the instruments
to adequately express the true intention of the parties. To resolve the ambiguity, resort
must be had to evidence outside of the instruments.

The CA, however, refused to look beyond the literal wording of the documents and
rejected any other evidence that could shed light on the actual intention of the contracting
parties. Though the CA cited the Best Evidence Rule, it appears that what it actually
applied was the Parol Evidence Rule instead, which provides:

When the terms of an agreement have been reduced to writing, it is considered as

containing all the terms agreed upon and there can be, between the parties and their
successors in interest, no evidence of such terms other than the contents of the written
agreement.[43]

The Parol Evidence Rule excludes parol or extrinsic evidence by which a party seeks to
contradict, vary, add to or subtract from the terms of a valid agreement or
instrument. Thus, it appears that what the CA actually applied in its assailed Decision
when it refused to look beyond the words of the contracts was the Parol Evidence Rule,
not the Best Evidence Rule. The appellate court gave primacy to the literal terms of the
two contracts and refused to admit any other evidence that would contradict such terms.

However, even the application of the Parol Evidence Rule is improper in the case at
bar. In the first place, respondents are not parties to the VLTs executed between RBBI
and petitioners; they are strangers to the written contracts. Rule 130, Section 9
specifically provides that parol evidence rule is exclusive only as between the parties and
their successors-in-interest. The parol evidence rule may not be invoked where at least
one of the parties to the suit is not a party or a privy of a party to the written document in
question, and does not base his claim on the instrument or assert a right originating in the
instrument.[44]

Moreover, the instant case falls under the exceptions to the Parol Evidence Rule, as
provided in the second paragraph of Rule 130, Section 9:

However, a party may present evidence to modify, explain or add to the terms of the
written agreement if he puts in issue in his pleading:

(1) An intrinsic ambiguity, mistake or imperfection in the written

agreement;

(2) The failure of the written agreement to express the true intent and
agreement of the parties thereto;

x x x x (Emphasis supplied)

Here, the petitioners VLTs suffer from intrinsic ambiguity. The VLTs described the
subject property as covered by TCT No. T-62836 (Lantap property), but they also
describe the subject property as being located in Barangay Murong. Even the
respondents Deed of Sale falls under the exception to the Parol Evidence Rule. It refers to
TCT No. T-62096 (Murong property), but RBBI contended that the true intent was to sell
the Lantap property. In short, it was squarely put in issue that the written agreement failed
to express the true intent of the parties.

Based on the foregoing, the resolution of the instant case necessitates an examination of
the parties respective parol evidence, in order to determine the true intent of the
parties. Well-settled is the rule that in case of doubt, it is the intention of the contracting
parties that prevails, for the intention is the soul of a contract,[45] not its wording which is
prone to mistakes, inadequacies, or ambiguities. To hold otherwise would give life,
validity, and precedence to mere typographical errors and defeat the very purpose of
agreements.
In this regard, guidance is provided by the following articles of the Civil Code involving
the interpretation of contracts:

Article 1370. If the terms of a contract are clear and leave no doubt upon the intention of
the contracting parties, the literal meaning of its stipulations shall control.

If the words appear to be contrary to the evident intention of the parties, the latter shall
prevail over the former.

Article 1371. In order to judge the intention of the contracting parties, their
contemporaneous and subsequent acts shall be principally considered.

Rule 130, Section 13 which provides for the rules on the interpretation of documents is
likewise enlightening:

Section 13. Interpretation according to circumstances. For the proper construction of an

instrument, the circumstances under which it was made, including the situation of the
subject thereof and of the parties to it, may be shown, so that the judge may be placed in
the position of those whose language he is to interpret.

Applying the foregoing guiding rules, it is clear that the Deed of Sale was intended to
transfer the Lantap property to the respondents, while the VLTs were intended to convey
the Murong property to the petitioners. This may be seen from the contemporaneous and
subsequent acts of the parties.

Third issue
Determining the intention of the parties
regarding the subjects of their contracts

We are convinced that the subject of the Deed of Sale between RBBI and the respondents
was the Lantap property, and not the Murong property. After the execution in 1985 of the
Deed of Sale, the respondents did not exercise acts of ownership that could show that
they indeed knew and believed that they repurchased the Murong property. They did not
take possession of the Murong property. As admitted by the parties, the Murong property
was in the possession of the petitioners, who occupied and tilled the same without any
objection from the respondents.Moreover, petitioners paid leasehold rentals for using the
Murong property to RBBI, not to the respondents.

Aside from respondents neglect of their alleged ownership rights over the Murong
property, there is one other circumstance that convinces us that what respondents really
repurchased was the Lantap property. Respondent Nemi (husband of respondent Elenita)
is the farmer actually tilling the Lantap property, without turning over the supposed
landowners share to RBBI. This strongly indicates that the respondents considered
themselves (and not RBBI) as the owners of the Lantap property. For if respondents
(particularly spouses Elenita and Nemi) truly believed that RBBI retained ownership of
the Lantap property, how come they never complied with their obligations as supposed
tenants of RBBIs land? The factual circumstances of the case simply do not support the
theory propounded by the respondents.
We are likewise convinced that the subject of the Deeds of Voluntary Land Transfer
(VLTs) in favor of petitioners was the Murong property, and not the Lantap
property. When the VLTs were executed in 1990, petitioners were already the tenant-
farmers of the Murong property, and had been paying rentals to RBBI accordingly. It is
therefore natural that the Murong property and no other was the one that they had
intended to acquire from RBBI with the execution of the VLTs. Moreover, after the
execution of the VLTs, petitioners remained in possession of the Murong property,
enjoying and tilling it without any opposition from anybody. Subsequently, after the
petitioners completed their payment of the total purchase price of P90,000.00 to RBBI,
the Department of Agrarian Reform (DAR) officials conducted their investigation of the
Murong property which, with the presumption of regularity in the performance of official
duty, did not reveal any anomaly. Petitioners were found to be in actual possession of the
Murong property and were the qualified beneficiaries thereof. Thus, the DAR officials
issued CLOAs in petitioners favor; and these CLOAs explicitly refer to the land
in Barangay Murong. All this time, petitioners were in possession of the Murong
property, undisturbed by anyone for several long years, until respondents started the
controversy in 1997.

All of these contemporaneous and subsequent actions of RBBI and petitioners support
their position that the subject of their contract (VLTs) is the Murong property, not the
Lantap property.Conversely, there has been no contrary evidence of the parties actuations
to indicate that they intended the sale of the Lantap property. Thus, it appears that the
reference in their VLT to TCT No. T-62836 (Lantap property) was due to their honest
but mistaken belief that the said title covers the Murong property. Such a mistake is not
farfetched considering that TCT No. T-62836 only refers to the Municipality of
Bayombong, Nueva Vizcaya, and does not indicate the particular barangay where the
property is located. Moreover, both properties are bounded by a road and public
land. Hence, were it not for the detailed technical description, the titles for the two
properties are very similar.
The respondents attempt to discredit petitioners argument that their VLTs were
intrinsically ambiguous and failed to express their true intention by asking why
petitioners never filed an action for the reformation of their contract.[46] A cause of action
for the reformation of a contract only arises when one of the contracting parties manifests
an intention, by overt acts, not to abide by the true agreement of the parties.[47] It seems
fairly obvious that petitioners had no cause to reform their VLTs because the parties
thereto (RBBI and petitioners) never had any dispute as to the interpretation and
application thereof. They both understood the VLTs to cover the Murong property (and
not the Lantap property). It was only much later, when strangers to the contracts argued
for a different interpretation, that the issue became relevant for the first time.

All told, we rule that the Deed of Sale dated February 26, 1985 between respondents and
RBBI covers the Lantap property under TCT No. T-62836, while the Deeds of
Voluntary Land Transfer and TCT Nos. CLOA-395 and CLOA-396 of the petitioners
cover the Murong property under TCT No. T-62096. In consequence, the CAs ruling
against RBBI should not be executed as such execution would be inconsistent with our
ruling herein. Although the CAs decision had already become final and executory as
against RBBI with the dismissal of RBBIs petition in G.R. No. 163320, our ruling herein
in favor of petitioners is a supervening cause which renders the execution of the
CA decision against RBBI unjust and inequitable.

WHEREFORE, the Petition for Review on Certiorari is GRANTED. The assailed

October 7, 2003 Decision, as well as the May 11, 2005 Resolution of the Court of
Appeals in CA-G.R. SP No. 69981 are REVERSED and SET ASIDE. The January 17,
2001 Decision of the DARAB Central Office is REINSTATED. The Deed of Sale dated
February 26, 1985 between respondents and Rural Bank of Bayombong, Inc. covers the
Lantap property under TCT No. T-62836, while the Deeds of Voluntary Land Transfer
and TCT Nos. CLOA-395 and CLOA-396 of the petitioners cover the Murong property
under TCT No. T-62096. The Register of Deeds of Nueva Vizcaya is directed to make
the necessary corrections to the titles of the said properties in accordance with this
Decision. Costs against respondents.
SO ORDERED.

MARIANO C. DEL CASTILLO

Associate Justice

WE CONCUR:

RENATO C. CORONA
Chief Justice
Chairperson

PRESBITERO J. VELASCO, JR. TERESITA J. LEONARDO-DE CASTRO

Associate Justice Associate Justice
 JOSE PORTUGAL PEREZ
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the
conclusions in the above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Courts Division.

RENATO C. CORONA
Chief Justice

[1]
Rollo of G.R. No. 168387, pp. 10-26.
[2]
Id. at 27-35; penned by Associate Justice Perlita J. Tria Tirona and concurred in by Associate Justices Portia
Alino-Hormachuelos and Rosalinda Asuncion-Vicente.
[3]
Id. at 36-37.
[4]
Id. at 34.
[5]
Regional Agrarian Reform Adjudicators (RARADs) Decision dated March 17, 1998, pp. 4-5; DARAB records,
pp. 101-102.
[6]
CA Decision, pp. 5-6; rollo of G.R. No. 168387, pp. 32-33. Respondents Memorandum, p. 7; id. at 125.
[7]
DARAB records, p. 57.
[8]
CA Decision, pp. 5-6; rollo of G.R. No. 168387, pp. 32-33. Respondents Memorandum, p. 7; id. at 125.
[9]
DARAB records, p. 74.
[10]
Id. at 69.
[11]
Id. at 71-72.
[12]
Entry No. 229242 - DEED OF ABSOLUTE SALE executed by the Rural Bank of Bayombong, NV, Inc.,
represented by Manager, Romeo F. Ramos, Jr., in favor of ELOISA ESPEJO, ELENITA ESPEJO, EMERITA
ESPEJO, OPHIRO ESPEJO, OTHANIEL ESPEJO, ODELEJO ESPEJO, ORLANDO ESPEJO, OSMONDO
ESPEJO, for the sum of P9,562 notarized by Miguel M. Guevara, Notary Public; under Doc. No. 51; Page No.
11; Book XIV; Series of 1985 dated February 26, 1985 and inscribed July 1, 1994 at 10:45 A.M. (Id. at 74).
[13]
Section 20. Voluntary Land Transfer. Landowners of agricultural lands subject to acquisition under this Act
may enter into a voluntary arrangement for direct transfer of their lands to qualified beneficiaries x x x:
[14]
Section 21. Payment of Compensation by Beneficiaries under Voluntary Land Transfer. Direct payment in
cash or in kind may be made by the farmer-beneficiary to the landowner under terms to be mutually agreed
upon by both parties, which shall be binding upon them, upon registration with and approval by the DAR. Said
approval shall be considered given, unless notice of disapproval is received by the farmer-beneficiary within 30
days from the date of registration. x x x
[15]
COMPREHENSIVE AGRARIAN REFORM LAW OF 1988.
[16]
That the LANDOWNER voluntarily transfer his ownership over a parcel of agricultural land and covered by R.A. 6657 and
opted to be paid directly by the FARMER-BENEFICIARY. The said agricultural land is situated at Murong, Reservation
Bagabag, Nueva Vizcaya and particularly described as follows:
OCT/TCT No. T-62836
x x x x (CA rollo, pp. 93 and 96)
[17]
TCT No. CLOA - 395 (DARAB records, p. 84). Registered with the Land Registration Authority on September
5, 1991.
[18]
TCT No. CLOA - 396 (Id. at 85). Registered with the Land Registration Authority on September 5, 1991.
[19]
TO ALL WHOM THESE PRESENTS SHALL COME, GREETINGS:
WHEREAS, pursuant to the provisions of Republic Act No. 6657, dated June 10, 1988, INSTITUTING A
COMPREHENSIVE AGRARIAN REFORM PROGRAM TO PROMOTE SOCIAL JUSTICE AND
INDUSTRIALIZATION AND PROVIDING THE MECHANISM FOR ITS IMPLEMENTATION, there is hereby
awarded unto SALUN-AT MARQUEZ [and NESTOR DELA CRUZ], a parcel of agricultural land situated in
Barangay Murong, Municipality of Bagabag, Province of Nueva Vizcaya, Island of Luzon, Philippines, containing an
area of TEN THOUSAND (10,000 sq. m.) square meters, more or less, which is now more particularly bounded and
described at the back hereof.
xxxx
Reference: This certificate is a transfer from Transfer Certificate of Title No. T-62836.
(Id. at 84-85).
[20]
Id. at 1-8. Docketed as DARAB Case No. II-162-NV-97.
[21]
Id. at 21-25.
[22]
Id. at 11-13.
[23]
Id. at 79-83.
[24]
Id. at 145-132. Docketed as DARAB Case No. 7554.
[25]
DARAB Decision, pp. 13-14; id. at 133-132.
[26]
CA rollo, pp. 142-147.
[27]
Id. at 247-254.
[28]
Resolution dated March 19, 2004 (Id. at 153) denying RBBIs Motion for Reconsideration; Resolution dated May
11, 2005 (Id. at 257-258) denying herein petitioners Motion for Reconsideration.
[29]
Id. at 178-190. Entitled Rural Bank of Bayombong, Inc. represented by its President/General Manager Romeo F.
Ramos, Jr., vs. Eloisa Espejo, et al.
[30]
Rollo of G.R. No. 163320, p. 91.
[31]
Id. at 107.
[32]
Id. at 108.
[33]
Upon petitioners motion, the Court issued a Resolution on July 20, 2005 granting petitioners a thirty- (30) day
extension to file the Petition for Review on Certiorari. (Rollo of G.R. No. 168387, p. 8)
[34]
Respondents Memorandum, p. 9; id. at 127.
[35]
See People v. Exala, G.R. No. 76005, April 23, 1993, 221 SCRA 494, 499; People v. Judge Seeris, 187 Phil.
558, 560 (1980); People v. Alarcon, 78 Phil. 732, 737 (1947).
[36]
Reyes v. Montemayor, G.R. No. 166516, September 3, 2009, 598 SCRA 61, 74. Emphasis supplied.
[37]
Respondents Memorandum, p. 10; rollo of G.R. No. 168387, p. 128.
[38]
See Borromeo v. Court of Appeals, 162 Phil. 430, 438 (1976).
[39]
See Citibank, N.A. (Formerly First National City Bank) v. Sabeniano, G.R. No. 156132, October 16, 2006, 504
SCRA 378, 403-405.
[40]
RULES OF COURT, Rule 39, Section 47 (b).
[41]
See De Leon v. De Leon, 98 Phil. 589, 591-592 (1956).
[42]
The Best Evidence Rule comes into play when a reproduction of the original or oral evidence is offered to prove
the contents of a document. The purpose of the rule requiring the production of the best evidence is the
 prevention of fraud, because if a party is in possession of [the best] evidence and withholds it, and seeks to
substitute inferior evidence in its place, the presumption naturally arises that the better evidence is withheld for
fraudulent purposes which its production would expose and defeat. Asuncion v. National Labor Relations
Commission, 414 Phil. 329, 339 (2001).
[43]
RULES OF COURT, RULE 130, Section 9, first paragraph.
[44]
Lechugas v. Court of Appeals, 227 Phil. 310, 319 (1986).
[45]
Kilosbayan, Inc. v. Guingona, Jr., G.R. No. 113375, May 5, 1994, 232 SCRA 110, 143.
[46]
Respondents Memorandum, p. 16; rollo of G.R. No. 168387, p. 134.
[47]
Multi-Realty Development Corporation v. Makati Tuscany Condominium Corporation, G.R. No. 146726, June
16, 2006, 491 SCRA 9, 30-31, citing Tormon v. Cutanda, 119 Phil. 84, 87-88 (1963).

THIRD DIVISION

NATIONAL POWER G.R. No. 170491

CORPORATION,
Petitioner, Present:

YNARES-SANTIAGO, J.,
- versus - Chairperson,
AUSTRIA-MARTINEZ,
CALLEJO, SR.,
HON. RAMON G. CODILLA, JR., CHICO-NAZARIO, and
Presiding Judge, RTC NACHURA, JJ.
of Cebu, Br.19, BANGPAI
SHIPPING COMPANY, and Promulgated:
WALLEM SHIPPING,
INCORPORATED, April 4, 2007
Respondents.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

CHICO-NAZARIO, J.:

Before Us is a Petition for Review on Certiorari under Rule 45 of the Rules

of Civil Procedure, assailing the Decision[1] of the Court of Appeals in CA-G.R.
CEB-SP No. 00848, dated 9 November 2005, which dismissed the Petition
for Certiorari filed by the National Power Corporation seeking to set aside the
Order[2] issued by the Regional Trial Court (RTC) of Cebu, Branch 19 dated 16
November 2004, denying admission and excluding from the records plaintiffs
(herein petitioner) Exhibits A, C, D, E, H and its sub-markings, I, J, and its sub-
markings, K, L, M and its sub-markings, N and its sub-markings, O, P and its sub-
markings, Q and its sub-markings, R and S and its sub-markings.

On 20 April 1996, M/V Dibena Win, a vessel of foreign registry owned and
operated by private respondent Bangpai Shipping, Co., allegedly bumped and
damaged petitioners Power Barge 209 which was then moored at
the Cebu International Port. Thus, on 26 April 1996, petitioner filed before
the Cebu RTC a complaint for damages against private
respondent Bangpai Shipping Co., for the alleged damages caused on petitioners
power barges.

Thereafter, petitioner filed an Amended Complaint dated 8 July

1996 impleading herein private respondent Wallem Shipping, Inc., as additional
defendant, contending that the latter is a ship agent of Bangpai Shipping Co. On 18
September 1996, Wallem Shipping, Inc. filed a Motion to Dismiss which was
subsequently denied by public respondent Judge in an Order dated 20 October
1998. Bangpai Shipping Co. likewise filed a Motion to Dismiss which was also
denied by public respondent Judge in an Order issued on 24 January 2003.

Petitioner, after adducing evidence during the trial of the case, filed a formal
offer of evidence before the lower court on 2 February 2004 consisting of Exhibits
A to V together with the sub-marked portions thereof. Consequently, private
respondents Bangpai Shipping Co. and Wallem Shipping, Inc. filed their
respective objections to petitioners formal offer of evidence.

On 16 November 2004, public respondent judge issued the assailed order

denying the admission and excluding from the records petitioners Exhibits A, C,
D, E, H and its sub-markings, I, J and its sub-markings, K, L, M and its sub-
markings, N and its sub-markings, O, P and its sub-markings, Q and its sub-
markings, R and S and its sub-markings.According to the court a quo:

The Court finds merit in the objections raised and the motion to strike out
filed respectively by the defendants. The record shows that the plaintiff has been
given every opportunity to present the originals of the Xerox or photocopies of
the documents it offered. It never produced the originals. The plaintiff attempted
to justify the admission of the photocopies by contending that the photocopies
offered are equivalent to the original of the document on the basis of the
Electronic Evidence (Comment to Defendant Wallem Philippines Objections and
Motion to Strike).But as rightly pointed out in defendant Wallems Reply to the
Comment of Plaintiff, the Xerox copies do not constitute the electronic evidence
defined in Section 1 of Rule 2 of the Rules on Electronic Evidence as follows:

(h) Electronic document refers to information or the

representation of information, data, figures, symbols or other
models of written expression, described or however represented,
by which a right is established or an obligation extinguished, or by
which a fact may be proved and affirmed, which is received,
recorded, transmitted, stored, processed, retrieved or produced
electronically. It includes digitally signed documents and any
printout, readable by sight or other means which accurately reflects
the electronic data message or electronic document. For the
purpose of these Rules, the term electronic document may be used
interchangeably with electronic data message.

The information in those Xerox or photocopies was not received, recorded,

retrieved or produced electronically. Moreover, such electronic evidence must be
authenticated (Sections 1 and 2, Rule 5, Rules on Electronic Evidence), which the
plaintiff failed to do. Finally, the required Affidavit to prove the admissibility and
evidentiary weight of the alleged electronic evidence (Sec. 1, Rule 9, Ibid) was
not executed, much less presented in evidence.

The Xerox or photocopies offered should, therefore, be stricken off the

record. Aside from their being not properly identified by any competent witness,
the loss of the principals thereof was not established by any competent proof.

xxxx

WHEREFORE, plaintiffs Exhibits A, C, D, E, H and its sub-markings, I, J,

and its sub-markings, K, L, M and its sub-markings, N and its sub-markings, O, P
and its sub-markings, Q and its sub-markings, and R are hereby DENIED
admission and excluded from the records. However, these excluded evidence
should be attached to the records of this case to enable the appellate court to pass
upon them should an appeal be taken from the decision on the merits to be
rendered upon the termination of the trial of this case.

Exhibits S and its sub-markings are also DENIED admission for lack of
proper identification since the witness who brought these pictures expressly
admitted that he was not present when the photos were taken and had not
knowledge when the same where taken.[3]
 Upon denial of petitioners Motion for Reconsideration in an Order dated 20
April 2005, petitioner filed a Petition for Certiorari under Rule 65 of the Rules of
Civil Procedure before the Court of Appeals maintaining that public respondent
Judge acted with grave abuse of discretion amounting to lack or excess of
jurisdiction in denying the admission of its Exhibits A, C, D, E, H and its sub-
markings, I, J and its sub-markings, K, L, M and its sub-markings, N and its sub-
markings, O, P and its sub-markings, Q and its sub-markings, R, and S and its sub-
markings.

On 9 November 2005, the appellate court issued a Decision dismissing

petitioners petition for certiorari, the pertinent portions of which elucidate:

After a judicious scrutiny of the record of the case on hand, together with
the rules and jurisprudence which are applicable in the premises, we have come
up with a finding that the petition for certiorari filed in this case is not
meritorious.

It appears that there is no sufficient showing by the petitioner that the

respondent judge acted with grave abuse of discretion in issuing the assailed
orders in Civil Case No. CEB-18662.As what our jurisprudence tells us, grave
abuse of discretion is meant such capricious and whimsical exercise of judgment
as would be equivalent to lack of jurisdiction x x x.

In the case at bench, what has been shown to the contrary by the totality of
the record on hand is that the respondent judge acted correctly and within the pale
of his sound discretion in issuing the assailed order, dated November 16, 2004, in
Civil Case No. CEB-18662.

Indeed, it appears that the pieces of petitioners documentary evidence

which were denied admission by the respondent judge were not properly
identified by any competent witness. As pointed out by the
respondent Bangpai Shipping Company in its comment on the petition filed in this
case which reproduces some excerpts of the testimonies in the court a quo of
Atty. Marianito De Los Santos, Engr. Nestor Enriquez, Jr. and
Mr. Rodulfo I. Pagaling, the said witnesses did not have personal knowledge of
and participation in the preparation and making of the pieces of documentary
evidence denied admission by respondent judge x x x. In other words, there was
lack of proper identification of said pieces of documentary evidence. x x x.

Then another ground for denying admission of petitioners Exhibits A, C,

D, E, H, I, J, K, L, M, N, O, P, Q, R, and S by the respondent judge is that said
pieces of documentary evidence were merely photocopies of purported documents
or papers. There is no gainsaying the fact that the respondent judge acted within
the pale of his discretion when he denied admission of said documentary
evidence. Section 3 of Rule 130 of the Rules of Court of the Philippines is very
explicit in providing that, when the subject of inquiry are the contents of
documents, no evidence shall be admissible other than the original documents
themselves, except in certain cases specifically so enumerated therein, and the
petitioner has not shown that the non-presentation or non-production of its
original documentary pieces of evidence falls under such exceptions. As aptly
pointed out by the respondent judge in the order issued by him on November 16,
2004:

x x x The record shows that the plaintiff (petitioner herein)

has been given every opportunity to present the originals of the
Xerox or photocopies of the documents it offered. It never
produced said originals.

So, the petitioner has only itself to blame for the respondent judges denial
of admission of its aforementioned documentary evidence.

Of course, the petitioner tries to contend that the photocopies of

documents offered by it are equivalent to the original documents that it sought to
offer in evidence, based on the Rules on Electronic Evidence which were in force
and effect since August 1, 2001. However, such a contention is devoid of
merit. The pieces of documentary evidence offered by the petitioner in Civil Case
CEB-18662 which were denied admission by the respondent judge do not actually
constitute as electronic evidence as defined in the Rules on Electronic
Evidence. The informationstherein were not received, retrieved or produced
electronically. The petitioner has not adequately established that its documentary
evidence were electronic evidence. it has not properly authenticated such
evidence as electronic documents, assuming arguendo that they are. Lastly, the
petitioner has not properly established by affidavit pursuant to Rule 9 of the Rules
on Electronic Evidence the admissibility and evidentiary weight of said
documentary evidence.

Thus, by any legal yardstick, it is manifest that the respondent judge did
not commit grave abuse of discretion in denying admission of the aforementioned
documentary evidence of petitioner.

But even if it be granted just for the sake of argument that the respondent
judge committed an error in denying the aforementioned documentary evidence of
the petitioner, still the petition for certiorari filed in this case must fail. Such error
would at most be only an error of law and not an error of jurisdiction. In Lee vs.
People, 393 SCRA 397, the Supreme Court of the Philippines said that certiorari
will not lie in case of an error of law. x x x.

WHEREFORE, in view of the foregoing premises, judgment is hereby

rendered by us DISMISSING the petition filed in this case and AFFIRMING the
assailed orders issued by respondent judge in Civil Case No. CEB-18662.[4]
 Aggrieved by the aforequoted decision, petitioner filed the instant petition.

The focal point of this entire controversy is petitioners obstinate contention

that the photocopies it offered as formal evidence before the trial court are the
functional equivalent of their original based on its inimitable interpretation of the
Rules on Electronic Evidence.

Petitioner insists that, contrary to the rulings of both the trial court and the
appellate court, the photocopies it presented as documentary evidence actually
constitute electronic evidence based on its own premise that an electronic
document as defined under Section 1(h), Rule 2 of the Rules on Electronic
Evidence is not limited to information that is received, recorded, retrieved or
produced electronically. Rather, petitioner maintains that an electronic document
can also refer to other modes of written expression that is produced electronically,
such as photocopies, as included in the sections catch-all proviso: any print-out or
output, readable by sight or other means.

We do not agree.

In order to shed light to the issue of whether or not the photocopies are
indeed electronic documents as contemplated in Republic Act No. 8792 or the
Implementing Rules and Regulations of the Electronic Commerce Act, as well as
the Rules on Electronic Evidence, we shall enumerate the following documents
offered as evidence by the petitioner, to wit:

1. Exhibit A is a photocopy of a letter manually signed by a certain Jose C. Troyo, with

RECEIVED stamped thereon, together with a handwritten date;

2. Exhibit C is a photocopy of a list of estimated cost of damages of petitioners power

barges 207 and 209 prepared by Hopewell Mobile Power Systems Corporation and
manually signed by Messrs. Rex Malaluan and Virgilio Asprer;

3. Exhibit D is a photocopy of a letter manually signed by a certain Nestor G. Enriquez, Jr.,

with RECEIVED stamped thereon, together with a handwritten notation of the date it was
received;

4. Exhibit E is a photocopy of a Standard Marine Protest Form which was filled up and
accomplished by Rex Joel C. Malaluan in his own handwriting and signed by
him. Portions of the Jurat were handwritten, and manually signed by the Notary Public;
 5. Exhibit H is a photocopy of a letter manually signed by Mr. Nestor G. Enriquez, Jr. with
RECEIVED stamped thereon, together with a handwritten notation of the date it was
received;

6. Exhibit I is a photocopy of a computation of the estimated energy loss allegedly suffered

by petitioner which was manually signed by Mr. Nestor G. Enriquez, Jr.;

7. Exhibit J is a photocopy of a letter containing the breakdown of the cost estimate,

manually signed by Mr. Nestor G. Enriquez, Jr., with RECEIVED stamped thereon,
together with a handwritten notation of the date it was received, and other handwritten
notations;

8. Exhibit K is a photocopy of the Subpoena Duces Tecum Ad Testificandum written using

a manual typewriter, signed manually by Atty. Ofelia Polo-De Los Reyes, with a
handwritten notation when it was received by the party;

9. Exhibit L is a photocopy of a portion of the electricity supply and operation and

maintenance agreement between petitioner and Hopewell, containing handwritten
notations and every page containing three unidentified manually placed signatures;

10. Exhibit M is a photocopy of the Notice of Termination with attachments addressed to

Rex Joel C. Malaluan, manually signed by Jaime S. Patinio, with a handwritten notation
of the date it was received.The sub-markings also contain manual signatures and/or
handwritten notations;

11. Exhibit N is a photocopy of a letter of termination with attachments addressed

to VIrgilio Asprer and manually signed by Jaime S. Patino. The sub-markings contain
manual signatures and/or handwritten notations;

12. Exhibit O is the same photocopied document marked as Annex C;

13. Exhibit P is a photocopy of an incident report manually signed by Messrs. Malaluan and
Bautista and by the Notary Public, with other handwritten notations;

14. Exhibit Q is a photocopy of a letter manually signed by Virgilio Asprer and by a Notary
Public, together with other handwritten notations.

On the other hand, an electronic document refers to information or the

representation of information, data, figures, symbols or other models of
written expression, described or however represented, by which a right is
established or an obligation extinguished, or by which a fact may be proved and
affirmed, which is received, recorded, transmitted, stored, processed, retrieved
or produced electronically.[5] It includes digitally signed documents and any
printout, readable by sight or other means which accurately reflects the electronic
data message or electronic document.[6]

The rules use the word information to define an electronic

document received, recorded, transmitted, stored, processed, retrieved or produced
electronically. This would suggest that an electronic document is relevant only in
terms of the information contained therein, similar to any other document which is
presented in evidence as proof of its contents.[7] However, what differentiates an
electronic document from a paper-based document is the manner by which the
information is processed; clearly, the information contained in an electronic
document is received, recorded, transmitted, stored, processed, retrieved or
produced electronically.

A perusal of the information contained in the photocopies submitted by

petitioner will reveal that not all of the contents therein, such as the signatures of
the persons who purportedly signed the documents, may be recorded or produced
electronically. By no stretch of the imagination can a persons signature affixed
manually be considered as information electronically received, recorded,
transmitted, stored, processed, retrieved or produced. Hence, the argument of
petitioner that since these paper printouts were produced through an electronic
process, then these photocopies are electronic documents as defined in the Rules
on Electronic Evidence is obviously an erroneous, if not preposterous,
interpretation of the law. Having thus declared that the offered photocopies are not
tantamount to electronic documents, it is consequential that the same may not be
considered as the functional equivalent of their original as decreed in the law.

Furthermore, no error can be ascribed to the court a quo in denying

admission and excluding from the records petitioners Exhibits A, C, D, E, H and
its sub-markings, I, J and its sub-markings, K, L, M and its sub-markings, N and
its sub-markings, O, P and its sub-markings, Q and its sub-markings, and R. The
trial court was correct in rejecting these photocopies as they violate the best
evidence rule and are therefore of no probative value being incompetent pieces of
evidence. Before the onset of liberal rules of discovery, and modern technique of
electronic copying, the best evidence rule was designed to guard against
incomplete or fraudulent proof and the introduction of altered copies and the
withholding of the originals.[8] But the modern justification for the rule has
expanded from the prevention of fraud to a recognition that writings occupy a
central position in the law.[9] The importance of the precise terms of writings in the
world of legal relations, the fallibility of the human memory as reliable evidence of
the terms, and the hazards of inaccurate or incomplete duplicate are the concerns
addressed by the best evidence rule.[10]

Moreover, as mandated under Section 2, Rule 130 of the Rules of Court:

"SECTION 2. Original writing must be produced; exceptions. There can be no

evidence of a writing the contents of which is the subject of inquiry, other than the
original writing itself, except in the following cases:
(a) When the original has been lost, destroyed, or cannot be produced in court;
(b) When the original is in the possession of the party against whom the evidence
is offered, and the latter fails to produce it after reasonable notice;
(c) When the original is a record or other document in the custody of a public
officer;
(d) When the original has been recorded in an existing record a certified copy of
which is made evidence by law;
(e) When the original consists of numerous accounts or other documents which
cannot be examined in court without great loss of time and the fact sought to be
established from them is only the general result of the whole."

When the original document has been lost or destroyed, or cannot be

produced in court, the offeror, upon proof of its execution or existence and the
cause of its unavailability without bad faith on his part, may prove its contents by a
copy, or by a recital of its contents in some authentic document, or by the
testimony of witnesses in the order stated.[11] The offeror of secondary evidence is
burdened to prove the predicates thereof: (a) the loss or destruction of the original
without bad faith on the part of the proponent/offeror which can be shown by
circumstantial evidence of routine practices of destruction of documents; [12] (b) the
proponent must prove by a fair preponderance of evidence as to raise a reasonable
inference of the loss or destruction of the original copy; and (c) it must be shown
that a diligent and bona fide but unsuccessful search has been made for the
document in the proper place or places.[13] However, in the case at bar, though
petitioner insisted in offering the photocopies as documentary evidence, it failed to
establish that such offer was made in accordance with the exceptions as
enumerated under the abovequoted rule. Accordingly, we find no error in the
Order of the court a quodenying admissibility of the photocopies offered by
petitioner as documentary evidence.
 Finally, it perplexes this Court why petitioner continued to obdurately
disregard the opportunities given by the trial court for it to present the originals of
the photocopies it presented yet comes before us now praying that it be allowed to
present the originals of the exhibits that were denied admission or in case the same
are lost, to lay the predicate for the admission of secondary evidence. Had
petitioner presented the originals of the documents to the court instead of the
photocopies it obstinately offered as evidence, or at the very least laid the predicate
for the admission of said photocopies, this controversy would not have
unnecessarily been brought before the appellate court and finally to this Court for
adjudication. Had it not been for petitioners intransigence, the merits of petitioners
complaint for damages would have been decided upon by the trial court long
ago. As aptly articulated by the Court of Appeals, petitioner has only itself to
blame for the respondent judges denial of admission of its aforementioned
documentary evidence and consequently, the denial of its prayer to be given
another opportunity to present the originals of the documents that were denied
admission nor to lay the predicate for the admission of secondary evidence in case
the same has been lost.

WHEREFORE, premises considered, the instant petition is

hereby DENIED. The Decision of the Court of Appeals in CA-G.R. CEB-SP No.
00848, dated 9 November 2005 is hereby AFFIRMED. Costs against petitioner.

SO ORDERED.

MINITA V. CHICO-NAZARIO
Associate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson
MA. ALICIA AUSTRIA-MARTINEZ ROMEO J. CALLEJO, SR.
Associate Justice Associate Justice

ANTONIO EDUARDO B. NACHURA

Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision were reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division
Chairpersons Attestation, it is hereby certified that the conclusions in the above
Decision were reached in consultation before the case was assigned to the writer of
the opinion of the Courts Division.

REYNATO S. PUNO
Chief Justice
[1]
Penned by Associate Justice Isaias P. Dicdican with Associate Justices Ramon M. Bato, Jr.
and Apolinario D. Bruselas, Jr., concurring; rollo, pp. 40-49.
[2]
Civil Case No. CEB-18662, penned by Judge Ramon. G. Codilla, Jr.; id. at 153-160.
[3]
RTC Order, pp. 5-6; id. at 54-55.
[4]
CA Decision, pp. 6-9; id. at 45-48.
[5]
RULES ON ELECTRONIC EVIDENCE, Rule 2, Sec. 1, par. (h).
[6]
Id.
[7]
REVISED RULES ON EVIDENCE, Rule 130, Sec. 2.
[8]
Lee v. People of the Philippines, G.R. No. 159288, 19 October 2004, 440 SCRA 662, 683.
[9]
Id.
[10]
Id. citing Seller v. Lucas Films Ltd., 808 F. 2d 1316 (1989).
[11]
Id. citing RULES OF COURT, Rule 130, Sec. 5.
[12]
Id. citing United States v. Balzano, 687 Fed. 6; Wright v. Farmers Co-op, 681 F. 2d. 549.
[13]
Id. citing 32 Corpus Juris Secundum, id. at 773.

FIRST DIVISION

[G.R. No. 123906. March 27, 1998]

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. ROWENA

HERMOSO BENEDICTUS, accused-appellant.

DECISION
DAVIDE, JR., J.:

In an information[1]

1 filed on 20 October 1993 before the Regional Trial Court of Malolos, Bulacan, and
assigned to Branch 76 thereof, the accused-appellant was charged with the crime of
illegal recruitment under Article 38 in relation to Articles 34 and 39 of the Labor Code of
the Philippines, as amended, allegedly committed as follows:
That in or about the month of December, 1992, in the municipality of
Malolos, province of Bulacan, Philippines, and within the jurisdiction of
this Honorable Court, the above-named accused, a non-licensee or
non-holder of authority from the Department of Labor and Employment
to recruit and/or place workers under local or overseas employment,
did then and there wilfully, unlawfully and feloniously, with false
pretenses, undertake illegal recruitment activities, placement or
deployment for a fee of Napoleon dela Cruz, Ernesto Vasquez,
Evangeline Magpayo, Crisanta Vasquez, Evelyn de Dios and Mercy
Magpayo for overseas employment.
 Contrary to law.
Upon arraignment, the appellant entered a plea of not guilty.
At the trial on the merits, the prosecution presented as witnesses the complaining
victims Napoleon de la Cruz, Crisanta Vasquez, Evelyn de Dios, Mercy Magpayo, and
Evangeline Magpayo, as well as Barangay Captain Emerlito Calara. The defense had
only the appellant as its witness.
The Office of the Solicitor General summarized in the Appellees Brief [2] the evidence
for the prosecution as follows:
On December 15, 1992, complainants Napoleon de la Cruz, Crisanta
Vasquez, Evelyn de Dios, Mercy [Magpayo] and Evangeline Magpayo
met appellant in the house of Crisanta Vasquez located at Bambang,
Bulacan. There, appellant told them that she was recruiting workers for
deployment in Taiwan. She promised them that they would be sent to
Taiwan on January 15, 1993. Napoleon dela Cruz gave the amount of
P2,700.00 as placement fees. He also submitted the requirements like
marriage contract, employment certificate and six (6) copies of 2x2 ID
pictures (TSN, August 4, 1994, pp. 2-11). Crisanta Vasquez gave the
amount of P1,500.00 as processing fee since she already had a
passport (TSN, November 29, 1994, p. 6). Evelyn de Dios gave the
total amount of P4,400.00 representing P3,000.00 as her and her
husbands placement fees and P1,400.00 for their passports (TSN,
November 29, 1994, pp. 20-21). Mercy [Magpayo] gave P2,600.00
representing placement fee, passport and others (TSN, November 29,
1994, pp. 29-30). Evangeline Magpayo gave P2,350 (Ibid. p.
37). When appellant failed to send complainants to Taiwan on the
promised date, January 15, 1993, complainants, together with
appellant, went to the Barangay Hall and in front of the Barangay
Captain, appellant signed a document (Exhs. C and 1) and promised to
return the money to them.
Complainants, on March 29, 1993, signed a Magkakasamang Salaysay (Exhs.
B to B-2) and filed a complaint before the Fiscals office (TSN, August 11, 1994,
p. 3). In support of their complaint, they submitted a certification from the POEA
dated July 21, 1994 (Exh. A) to the effect that appellant, in her personal
capacity, was neither licensed nor authorized to recruit workers for overseas
employment (TSN, August 4, 1997, pp. 11-12).[3]
We adopt this summary as our own, as it is fully supported by the transcripts of the
stenographic notes of the testimonies of the witnesses for the prosecution.
Upon the other hand, the appellant denied having recruited the complainants. She
claimed that she had only borrowed money from them. In support of her claim, she
presented the Affidavit of Desistance[4] executed by the complainants when she and her
sister had paid them her debt.
The trial court gave full credit to the version of the prosecution and found
unmeritorious appellants defense. It noted that in appellants statement before Barangay
Captain Emerlito Calara,[5] she had promised to return to the complainants the money
she had taken from them. There was nothing in said statement that showed that such
money was a debt. As to the Affidavit of Desistance, the trial court rejected the same,
for it was signed by the complainants after all of them testified in court and were paid by
the appellant.
The trial court likewise observed that the appellant had failed to refute the statement
in the certification issued by the POEA that she was not licensed to recruit workers for
overseas employment, and that she had even admitted in open court that she was not
licensed to do so.
Accordingly, in its decision of 7 February 1996,[6] the trial court convicted the
appellant of the crime of illegal recruitment in large scale and sentenced her to suffer life
imprisonment and to pay a fine of P100,000.
The appellant seasonably filed her notice of appeal. In her Appellants Brief,[7] she
imputes upon the trial court the commission of this single error, to wit:
THE TRIAL COURT GRAVELY ERRED IN FINDING [HER] GUILTY
OF THE CRIME OF ILLEGAL RECRUITMENT IN A LARGE SCALE
DESPITE THE FAILURE OF THE PROSECUTION TO PROVE HER
GUILT BEYOND REASONABLE DOUBT.
She anchors her appeal chiefly on the Affidavit of Desistance executed by the
complainants. She claims that it creates serious doubts as to her liability and proves
that she was not engaged in recruitment activities. Finally, she alleges that the POEA
certification is a mere fabrication and should not have been given any probative value;
and, in any event, the prosecution failed to prove that she had no license or authority to
recruit workers.
The Office of the Solicitor General supports the trial courts decision and prays that
the assailed decision be affirmed in toto.
The appeal is without merit.
The Affidavit of Desistance deserves scant consideration. In the first place, it was
executed after the complainants testified under oath and in open court that they were
offered job placements abroad and were made to pay placement or processing fees. In
the second place, the affidavit did not expressly repudiate their testimony in court on the
recruitment activities of the appellant. In fact, the appellant admitted that the
complaining witnesses executed it after she had paid them back the amounts they had
given her.[8] The affidavit was more of an afterthought arising from personal
consideration of pity.
We have said before that courts should not attach persuasive value to affidavits of
desistance, especially when executed as an afterthought. [9] Moreover, it would be a
dangerous rule for courts to reject testimonies solemnly taken before the courts of
justice simply because the witnesses who had given them later on changed their mind
for one reason or another, for such rule would make solemn trial a mockery and place
the investigation of truth at the mercy of unscrupulous witnesses. [10] It must always be
remembered that a criminal offense is an outrage to the sovereign State. To the State
belongs the power to prosecute and punish crimes. While there may be a compromise
upon the civil liability arising from an offense, such compromise shall not extinguish the
public action for the imposition of the legal penalty.[11]
Finally, the appellant failed to refute the testimony of Barangay Captain Calara that
the complainants filed the case against her because she recruited them and later
reneged on her assurances.
The challenge against the POEA certification (Exh. A) that the appellant was neither
licensed nor authorized to recruit workers for overseas employment must likewise
fail. The trial court correctly ruled that the said certification is a public document issued
by a public officer in the performance of an official duty; hence, it is a prima
facie evidence of the facts therein stated pursuant to Section 23 of Rule 132 of the
Rules of Court. In any event, as said court noted, the appellant admitted in open court
that she was not licensed or authorized to recruit workers.[12]
Recruitment is defined in Article 13(b) of the Labor Code as follows:
Recruitment and placement refers to any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring or procuring workers, and
includes referrals, contract services, promising or advertising for
employment, locally or abroad, whether for profit or not: Provided, that
any person or entity which, in any manner, offers or promises for a fee
employment to two or more persons shall be deemed engaged in
recruitment and placement.
Illegal recruitment is defined in Article 38 of the Labor Code as follows:
ART. 38. Illegal Recruitment. -- (a) Any recruitment activities including
the prohibited practices enumerated under Article 34 of this Code, to
be undertaken by non-licensees or non-holders of authority shall be
deemed illegal and punishable under Article 39 of this Code. The
Ministry of Labor and Employment or any law enforcement officers may
initiate complaints under this Article.
(b) Illegal recruitment when committed by a syndicate or in large scale
shall be considered an offense involving economic sabotage and shall
be penalized in accordance with Article 39 hereof.
Illegal recruitment is deemed committed by a syndicate if carried out by
a group of three (3) or more persons conspiring and/or confederating
with one another in carrying out any unlawful or illegal transaction,
enterprise or scheme defined under the first paragraph hereof. Illegal
 recruitment is deemed committed in large scale if committed against
three (3) or more persons individually or as a group.
It can be gleaned from the foregoing that there is illegal recruitment in large scale
when a person (a) undertakes any recruitment activity defined under Article 13(b) or any
prohibited practice enumerated under Article 34 of the Labor Code; (b) does not have a
license or authority to lawfully engage in the recruitment and placement of workers; and
(c) commits the same against three or more persons, individually or as a
group.[13] Paragraph (b) of Article 38, explicitly provides that illegal recruitment when
committed by a syndicate or in large scale shall be considered an offense involving
economic sabotage. Under Article 39 of the Labor Code the penalty of life imprisonment
and a fine of P100,000 shall be imposed if illegal recruitment constitutes economic
sabotage.
The appellant promised the five complainants that there were jobs available for
them in Taiwan. She exacted money from them for alleged passports, as well as for
placement fees. There was a certification from the POEA that the appellant was not
licensed to recruit workers for overseas job placements, which she likewise admitted in
her testimony. All these point to the inescapable conclusion that she was engaged in
illegal recruitment in large scale. Thus, the trial court correctly found the appellant guilty
beyond reasonable doubt of the crime of illegal recruitment in large scale. The penalty
imposed upon her is in accordance with Article 39 of the Labor Code.
WHEREFORE, the instant appeal is DISMISSED and the decision of the Regional
Trial Court of Malolos, Bulacan, Branch 76, in Criminal Case No. 3363-M-93 is hereby
AFFIRMED in toto.
SO ORDERED.
Bellosillo, Vitug, Panganiban and Quisumbing, JJ., concur.

[1] Original Record (OR)

[2] Rollo, 92-103.
[3] Id., 95-97.
[4] Exh. D, also Exh. 2; OR, 96.
[5] Exh. C, also Exh. 1; OR, 61.
[6] Per Judge Roland B. Jurado. OR, 105-111; Rollo, 33-39.
[7] Rollo, 48-55.
[8] TSN, 25 October 1995, 9.
[9] Castillo v. Calanog, 199 SCRA 75, 81 [1991]; People v. Ballabare, 264 SCRA 350, 363 [1996].
[10] People v. Mangulabnan, 200 SCRA 611, 623 [1991]; People v. Romero, 224 SCRA 749, 757 [1993];

People v. Agbayani, G.R. No. 122770, 16 January 1998.

[11] People v. Romero, supra note 10 at 757-758 citing Article 2034 of the Civil Code.
[12] TSN, 25 October 1995, 10.
[13] People v. Comia, 236 SCRA 185, 193 [1994]; People v. Benemerito, 264 SCRA 677, 691-692 [1996];

People v. Buemio, 265 SCRA 582, 597 [1996].

THIRD DIVISION
 [G.R. No. 107372. January 23, 1997]

RAFAEL S. ORTAEZ, petitioner, vs. THE COURT OF APPEALS,

OSCAR INOCENTES, AND ASUNCION LLANES
INOCENTES, respondents.

RESOLUTION
FRANCISCO, J.:

On September 30, 1982, private respondents sold to petitioner two (2) parcels of
registered land in Quezon City for a consideration of P35,000.00 and P20,000.00,
respectively. The first deed of absolute sale covering Transfer Certificate of Title (TCT)
No. 258628 provides in part:

"That for and in consideration of the sum of THIRTY FIVE THOUSAND

(P35,000.00) PESOS, receipt of which in full is hereby acknowledged, we have sold,
transferred and conveyed, as we hereby sell, transfer and convey, that subdivided
portion of the property covered by TCT No. 258628 known as Lot No. 684-G-1-B-2
in favor of RAFAEL S. ORTANEZ, of legal age, Filipino. whose marriage is under a
regime of complete separation of property, and a resident of 942 Aurora Blvd.,
Quezon City, his heirs or assigns." [1]

while the second deed of absolute sale covering TCT No. 243273 provides:

"That for and in consideration of the sum of TWENTY THOUSAND (P20,000.00)

PESOS receipt of which in full is hereby acknowledged, we have sold, transferred
and conveyed, as we hereby sell, transfer and convey, that consolidated-subdivided
portion of the property covered by TCT No. 243273 known as Lot No. 5 in favor of
RAFAEL S. ORTANEZ, of legal age, Filipino, whose marriage is under a regime of
complete separation of property, and a resident of 942 Aurora Blvd., Cubao, Quezon
City his heirs or assigns. [2]

Private respondents received the payments for the above-mentioned lots, but failed
to deliver the titles to petitioner. On April 9, 1990 the latter demanded from the former
the delivery of said titles.[3] Private respondents, however, refused on the ground that the
title of the first lot is in the possession of another person, [4] and petitioner's acquisition of
the title of the other lot is subject to certain conditions.
Offshoot, petitioner sued private respondents for specific performance before the
RTC. In their answer with counterclaim private respondents merely alleged the
existence of the following oral conditions[5] which were never reflected in the deeds of
sale:[6]
"3.3.2 Title to the other property (TCT No. 243273) remains with the defendants
(private respondents) until plaintiff (petitioner) shows proof that all the following
requirements have been met:

(i) Plaintiff will cause the segregation of his right of way amounting to 398 sq. m.;

(ii) Plaintiff will submit to the defendants the approved plan for the segregation;

(iii) Plaintiff will put up a strong wall between his property and that of defendants' lot
to segregate his right of way;

(iv) Plaintiff will pay the capital gains tax and all other expenses that may be incurred
by reason of sale. x x x."

During trial, private respondent Oscar Inocentes, a former judge, orally testified that
the sale was subject to the above conditions,[7] although such conditions were not
incorporated in the deeds of sale. Despite petitioner's timely objections on the ground
that the introduction of said oral conditions was barred by the parol evidence rule, the
lower court nonetheless, admitted them and eventually dismissed the complaint as well
as the counterclaim. On appeal, the Court of Appeals (CA) affirmed the court a quo.
Hence, this petition.
We are tasked to resolve the issue on the admissibility of parol evidence to
establish the alleged oral conditions-precedent to a contract of sale, when the deeds of
sale are silent on such conditions.
The parol evidence herein introduced is inadmissible. First, private respondents'
oral testimony on the alleged conditions, coming from a party who has an interest in the
outcome of the case, depending exclusively on human memory, is not as reliable as
written or documentary evidence.[8] Spoken words could be notoriously unreliable unlike
a written contract which speaks of a uniform language. [9] Thus, under the general rule in
Section 9 of Rule 130[10] of the Rules of Court, when the terms of an agreement were
reduced to writing, as in this case, it is deemed to contain all the terms agreed upon and
no evidence of such terms can be admitted other than the contents
thereof.[11] Considering that the written deeds of sale were the only repository of the truth,
whatever is not found in said instruments must have been waived and abandoned by
the parties.[12] Examining the deeds of sale, we cannot even make an inference that the
sale was subject to any condition. As a contract, it is the law between the parties. [13]
Secondly, to buttress their argument, private respondents rely on the case of Land
Settlement Development, Co. vs. Garcia Plantation[14] where the Court ruled that a
condition precedent to a contract may be established by parol evidence. However, the
material facts of that case are different from this case. In the former, the contract sought
to be enforced[15]expressly stated that it is subject to an agreement containing the
conditions-precedent which were proven through parol evidence. Whereas, the deeds of
sale in this case, made no reference to any pre- conditions or other agreement. In fact,
the sale is denominated as absolute in its own terms.
 Third, the parol evidence herein sought to be introduced would vary, contradict or
defeat the operation of a valid instrument,[16] hence, contrary to the rule that:

The parol evidence rule forbids any addition to x x x the terms of a written instrument
by testimony purporting to show that, at or before the signing of the document, other
or different terms were orally agreed upon by the parties. [17]

Although parol evidence is admissible to explain the meaning of a contract, "it cannot
serve the purpose of incorporating into the contract additional contemporaneous
conditions which are not mentioned at all in the writing unless there has been fraud or
mistake." [18] No such fraud or mistake exists in this case.
Fourth, we disagree with private respondents' argument that their parol evidence is
admissible under the exceptions provided by the Rules, specifically, the alleged failure
of the agreement to express the true intent of the parties. Such exception obtains only in
the following instance:

"[W]here the written contract is so ambiguous or obscure in terms that the contractual
intention of the parties cannot be understood from a mere reading of the instrument. In
such a case, extrinsic evidence of the subject matter of the contract, of the relations of
the parties to each other, and of the facts and circumstances surrounding them when
they entered into the contract may be received to enable the court to make a proper
interpretation of the instrument." [19]

In this case, the deeds of sale are clear, without any ambiguity, mistake or imperfection,
much less obscurity or doubt in the terms thereof.
Fifth, we are not persuaded by private respondents contention that they "put in
issue by the pleadings" the failure of the written agreement to express the true intent of
the parties. Record shows[20] that private respondents did not expressly plead that the
deeds of sale were incomplete or that it did not reflect the intention [21] of the buyer
(petitioner) and the seller (private respondents). Such issue must be "squarely
presented."[22] Private respondents merely alleged that the sale was subject to four (4)
conditions which they tried to prove during trial by parol evidence. [23] Obviously, this
cannot be done, because they did not plead any of the exceptions mentioned in the
parol evidence rule.[24] Their case is covered by the general rule that the contents of the
writing are the only repository of the terms of the agreement. Considering that private
respondent Oscar Inocentes is a lawyer (and former judge) he was "supposed to be
steeped in legal knowledge and practices" and was "expected to know the
consequences"[25] of his signing a deed of absolute sale. Had he given an iota's attention
to scrutinize the deeds, he would have incorporated important stipulations that the
transfer of title to said lots were conditional.[26]
One last thing, assuming arguendo that the parol evidence is admissible, it should
nonetheless be disbelieved as no other evidence appears from the record to sustain the
existence of the alleged conditions. Not even the other seller, Asuncion Inocentes, was
presented to testify on such conditions.
 ACCORDINGLY, the appealed decision is REVERSED and the records of this case
REMANDED to the trial court for proper disposition in accordance with this ruling.
SO ORDERED.
Narvasa, C.J., (Chairman), Davide, Jr., Melo, and Panganiban, JJ., concur.

[1]
Annex "B", Records, p. 79; Rollo, pp. 27-28.
[2]
Annex "A", p. 77; Rollo, p. 28.
[3]
Rollo, p. 24; Records, p. 7.
[4]
The title is with a certain Atty. Joson for the purpose of subdividing the said lot, which fact is allegedly
known to petitioner.
[5]
Records, p. 21.
[6]
Rollo, p. 26.
[7]
TSN, Oscar Inocentes, February 27, 1991, pp. 4, 5.
[8]
Abella vs. CA, G.R. No. 107606, June 20, 1996.
[9]
De Leon vs. CA, 204 SCRA 612.
[10]
Formerly Sec. 7 of Rule 130.
[11]
Siasat v. IAC, 139 SCRA 238; Enriquez vs. Ramos, 116 Phil. 525.
[12]
Cu vs. CA, 195 SCRA 647, citing Moran, Comments on the Rules of Court, Vol. V, 1980 ed., p. 101.
[13]
Manila Bay Club Corp. vs. CA, 245 SCRA 715; Gaw vs. IAC, 220 SCRA 405.
[14]
117 Phil. 761 (1963).
[15]
Exhibit "L".
[16]
Tupue vs. Urgel, 161 SCRA 417; Continental Airlines vs. Santiago, 172 SCRA 490; Gerales vs. CA,
218 SCRA 640.
[17]
Heirs of del Rosario vs. Santos, 194 Phil. 671; 108 SCRA 43.
[18]
Pioneer Savings and Loan Bank vs. CA, 226 SCRA 740, 744 (1993) citing dela Rama vs. Ledesma,
143 SCRA 1 and Yu Tek vs. Gonzales, 29 Phil. 384.
[19]
Heirs of del Rosario vs. Santos, supra., (Phil.) at 687 citing Francisco, Vicente J.; The Revised Rules of
Court in the Philippines, vol. VII, pp. 161-162 (1973) .
[20]
Private respondents' answer with counterclaim filed before the lower court does not mention nor refer
to the parol evidence rule and the exceptions therein. All that they pleaded were the alleged
conditions for which petitioner must first comply.
[21]
Phil. National Railways vs. CIR of Albay, Br. 1, 83 SCRA 569.
[22]
Tolentino vs. Gonzales, 50 Phil. 558, 567 (1927).
[23]
Phil. National Railways vs. CIR of Albay, Br. 1, supra.
[24]
Ibid.
[25]
See Pioneer Savings and Loan Bank vs. CA, supra. at 744.
[26]
Ibid., see also dela Rama and Gaw cases, supra.

THIRD DIVISION

MAXIMO ALVAREZ, G.R. No. 143439

Petitioner,

Present:

PANGANIBAN, J., Chairman,

SANDOVAL-GUTIERREZ,

CORONA,
- versus -
CARPIO MORALES, and

GARCIA, JJ.

Promulgated:
SUSAN RAMIREZ,
Respondent.

October 14, 2005

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

DECISION

SANDOVAL-GUTIERREZ, J.:

Before us is a petition for review on certiorari[1] assailing the Decision[2] of the

Court of Appeals dated May 31, 2000 in CA-G.R. SP No. 56154,
entitled SUSAN RAMIREZ, petitioner, versus, HON. BENJAMIN M.
AQUINO, JR., as JUDGE RTC, MALABON, MM, BR. 72, and MAXIMO
ALVAREZ, respondents.

Susan Ramirez, herein respondent, is the complaining witness in Criminal

Case No. 19933-MN for arson[3] pending before the Regional Trial Court,
Branch 72, Malabon City. The accused is Maximo Alvarez, herein petitioner.
He is the husband of Esperanza G. Alvarez, sister of respondent.

On June 21, 1999, the private prosecutor called Esperanza Alvarez to the
witness stand as the first witness against petitioner, her husband. Petitioner and
his counsel raised no objection.
Esperanza testified as follows:
ATTY. ALCANTARA:

We are calling Mrs. Esperanza Alvarez, the wife of the accused, Your
Honor.

COURT:

Swear in the witness.

xxx

ATTY. MESIAH: (sic)

Your Honor, we are offering the testimony of this witness for the purpose
of proving that the accused Maximo Alvarez committed all the elements of the
crime being charged particularly that accused Maximo Alvarez pour on May 29,
1998 gasoline in the house located at Blk. 5, Lot 9, Phase 1-C, Dagat-dagatan,
Navotas, Metro Manila, the house owned by his sister-in-law Susan Ramirez;
that accused Maximo Alvarez after pouring the gasoline on the door of the house
of Susan Ramirez ignited and set it on fire; that the accused at the time he
successfully set the house on fire (sic) of Susan Ramirez knew that it was
occupied by Susan Ramirez, the members of the family as well as Esperanza
Alvarez, the estranged wife of the accused; that as a consequence of the
accused in successfully setting the fire to the house of Susan Ramirez, the door
of said house was burned and together with several articles of the house,
including shoes, chairs and others.

COURT:

You may proceed.

xxx

DIRECT EXAMINATION

ATTY. ALCANTARA:

xxx

Q: When you were able to find the source, incidentally what was the source of
that scent?

A: When I stand by the window, sir, I saw a man pouring the gasoline in the
house of my sister (and witness pointing to the person of the accused
inside the court room).

Q: For the record, Mrs. Witness, can you state the name of that person, if you
know?

A: He is my husband, sir, Maximo Alvarez.

Q: If that Maximo Alvarez you were able to see, can you identify him?

A: Yes, sir.

Q: If you can see him inside the Court room, can you please point him?

A: Witness pointing to a person and when asked to stand and asked his name,
he gave his name as Maximo Alvarez.[4]
 In the course of Esperanzas direct testimony against petitioner, the latter
showed uncontrolled emotions, prompting the trial judge to suspend the
proceedings.

On June 30, 1999, petitioner, through counsel, filed a motion[5] to disqualify

Esperanza from testifying against him pursuant to Rule 130 of the Revised
Rules of Court on marital disqualification.

Respondent filed an opposition[6] to the motion. Pending resolution of the

motion, the trial court directed the prosecution to proceed with the
presentation of the other witnesses.

On September 2, 1999, the trial court issued the questioned Order disqualifying
Esperanza Alvarez from further testifying and deleting her testimony from the
records.[7]The prosecution filed a motion for reconsideration but was denied in
the other assailed Order dated October 19, 1999.[8]

This prompted respondent Susan Ramirez, the complaining witness in

Criminal Case No. 19933-MN, to file with the Court of Appeals a petition
for certiorari[9]with application for preliminary injunction and temporary
restraining order.[10]

On May 31, 2000, the Appellate Court rendered a Decision nullifying and
setting aside the assailed Orders issued by the trial court.
 Hence, this petition for review on certiorari.

The issue for our resolution is whether Esperanza Alvarez can testify

against her husband in Criminal Case No. 19933-MN.

Section 22, Rule 130 of the Revised Rules of Court provides:

Sec. 22. Disqualification by reason of marriage. During their

marriage, neither the husband nor the wife may testify for or against the
other without the consent of the affected spouse, except in a civil case by
one against the other, or in a criminal case for a crime committed by one
against the other or the latters direct descendants or ascendants.

The reasons given for the rule are:

1. There is identity of interests between husband and wife;

2. If one were to testify for or against the other, there is consequent

danger of perjury;

3. The policy of the law is to guard the security and confidences of

private life, even at the risk of an occasional failure of justice, and to
prevent domestic disunion and unhappiness; and

4. Where there is want of domestic tranquility there is danger of

punishing one spouse through the hostile testimony of the other.[11]
 But like all other general rules, the marital disqualification rule has its
own exceptions, both in civil actions between the spouses and in criminal cases
for offenses committed by one against the other. Like the rule itself, the
exceptions are backed by sound reasons which, in the excepted cases, outweigh
those in support of the general rule. For instance, where the marital and
domestic relations are so strained that there is no more harmony to be
preserved nor peace and tranquility which may be disturbed, the reason based
upon such harmony and tranquility fails. In such a case, identity of interests
disappears and the consequent danger of perjury based on that identity is non-
existent. Likewise, in such a situation, the security and confidences of private
life, which the law aims at protecting, will be nothing but ideals, which
through their absence, merely leave a void in the unhappy home.[12]

In Ordoo vs. Daquigan,[13] this Court held:

We think that the correct rule, which may be adopted in this jurisdiction, is
that laid down in Cargil vs. State, 35 ALR 133, 220 Pac. 64, 25 Okl. 314, wherein
the court said:

The rule that the injury must amount to a physical wrong

upon the person is too narrow; and the rule that any offense
remotely or indirectly affecting domestic harmony comes within
the exception is too broad. The better rule is that, when an offense
directly attacks, or directly and vitally impairs, the conjugal
relation, it comes within the exception to the statute that one shall
not be a witness against the other except in a criminal prosecution
for a crime committee (by) one against the other.
 Obviously, the offense of arson attributed to petitioner, directly impairs
the conjugal relation between him and his wife Esperanza. His act, as
embodied in the Information for arson filed against him, eradicates all the
major aspects of marital life such as trust, confidence, respect and love by
which virtues the conjugal relationship survives and flourishes.

As correctly observed by the Court of Appeals:

The act of private respondent in setting fire to the house of his sister-in-
law Susan Ramirez, knowing fully well that his wife was there, and in fact with the
alleged intent of injuring the latter, is an act totally alien to the harmony and
confidences of marital relation which the disqualification primarily seeks to
protect. The criminal act complained of had the effect of directly and vitally
impairing the conjugal relation. It underscored the fact that the marital and
domestic relations between her and the accused-husband have become so
strained that there is no more harmony, peace or tranquility to be preserved. The
Supreme Court has held that in such a case, identity is non-existent. In such a
situation, the security and confidences of private life which the law aims to
protect are nothing but ideals which through their absence, merely leave a void in
the unhappy home. (People v. Castaeda, 271 SCRA 504). Thus, there is no
longer any reason to apply the Marital Disqualification Rule.

It should be stressed that as shown by the records, prior to the

commission of the offense, the relationship between petitioner and his wife
was already strained. In fact, they were separated de facto almost six months
before the incident. Indeed, the evidence and facts presented reveal that the
preservation of the marriage between petitioner and Esperanza is no longer an
interest the State aims to protect.
 At this point, it bears emphasis that the State, being interested in laying
the truth before the courts so that the guilty may be punished and the innocent
exonerated, must have the right to offer the direct testimony of Esperanza,
even against the objection of the accused, because (as stated by this Court
in Francisco[14]), it was the latter himself who gave rise to its necessity.

WHEREFORE, the Decision of the Court of Appeals is AFFIRMED. The

trial court, RTC, Branch 72, Malabon City, is ordered to allow Esperanza
Alvarez to testify against petitioner, her husband, in Criminal Case No. 19933-
MN. Costs against petitioner.

SO ORDERED.

ANGELINA SANDOVAL-GUTIERREZ

Associate Justice

WE CONCUR:

ARTEMIO V. PANGANIBAN
Associate Justice
Chairman
 RENATO C. CORONA CONCHITA CARPIO MORALES

Associate Justice Associate Justice

CANCIO C. GARCIA

Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision were reached in consultation
before the case was assigned to the writer of the opinion of the Court's Division.

ARTEMIO V. PANGANIBAN

Associate Justice

Chairman, Third Division

CERTIFICATION
 Pursuant to Article VIII, Section 13 of the Constitution, and the Division
Chairman's Attestation, it is hereby certified that the conclusions in the above
Decision were reached in consultation before the case was assigned to the writer of
the opinion of the Court.

HILARIO G. DAVIDE, JR.

Chief Justice

[1]
Under Rule 45, Section 1 of the 1997 Revised Rules of Civil Procedure, as amended.
[2]
Penned by Justice Portia Alio-Hormachuelos and concurred in by Justice Ma. Alicia Austria-Martinez (now a
member of this Court) and Justice Elvi John S. Asuncion.
[3]
Docketed as Criminal Case No. 19933-MN and captioned People of the Philippines vs. Maximo Alvarez.
[4]
Transcript of Stenographic Notes (TSN), June 21, 1999 at 3-7.
[5]
Rollo at 44-47.
[6]
Id. at 48-58.
[7]
Id. at 85-87.
[8]
Id. at 88.
[9]
Under Rule 65, Section 1 of the 1997 Revised Rules on Civil Procedure, as amended.
[10]
Rollo at 101-134.
[11]
People of the Philippines vs. Francisco, No. L-568, July 16, 1947, 78 Phil. 694, and Cargill vs. State, 220, Pac.,
64, 65; 25 Okl. Cr., 314; 35 A.L.R., 133.
[12]
People of the Philippines vs. Francisco, id.
[13]
No. L-39012, January 31, 1975, 62 SCRA 270.
[14]
Supra.

THIRD DIVISION

[G.R. No. 111244. December 15, 1997]

ARTURO ALANO, petitioner, vs. THE HONORABLE COURT OF
APPEALS, HON. ENRICO A. LANZANAS, Presiding Judge,
Regional Trial Court, National Capital Judicial Region, Manila,
Branch 37, and ROBERTO CARLOS, respondents.

DECISION
ROMERO, J.:

Petitioner Arturo Alano has filed this petition for review of the decision [1] of the Court
of Appeals in CA-G.R. SP No. 28150 which affirmed in toto the order of the Regional
Trial Court of Manila, Branch 37[2] denying petitioners motion for the suspension of
proceeding of Criminal Case No. 90-84933, entitled People of the Philippines vs. Arturo
Alano as well as his motion for reconsideration.
Criminal Case No. 90-84933 is a prosecution for the crime of estafa. The
information[3] alleges:

That on or about June 10, 1986, in the City of Manila, Philippines, the said accused
did then and there wilfully, unlawfully and feloniously defraud Roberto S. Carlos in
the following manner, to wit: the said accused, pretending to be still the owner of a
parcel of land with an area of 1,172 square meters, more or less, located at Bicutan,
Taguig, Metro Manila, covered by Tax Declaration No. 120-004-00398, well knowing
that he had previously sold the same to the said Roberto S. Carlos for P30,000.00,
sold the aforesaid property for the second time to one Erlinda B. Dandoy
for P87,900.00, thereby depriving the said Roberto S. Carlos of his rightful
ownership/possession of the said parcel of land, to the damage and prejudice of the
said Roberto S. Carlos in the aforesaid amount of P30,000.00, Philippine currency.

Contrary to law.

Petitioner moved for the suspension of the criminal case on the ground that there
was a prejudicial question pending resolution in another case being tried in the Regional
Trial Court, National Capital Region, Pasig, Branch 68. The case, docketed as Civil
Case No. 55103 and entitled Roberto Carlos and Trinidad M. Carlos v. Arturo Alano, et
al., concerns the nullity of the sale and recovery of possession and damages. In the
aforementioned Civil Case, private respondent filed a complaint against the petitioner
seeking the annulment of the second sale of said parcel of land made by the petitioner
to a certain Erlinda Dandoy on the premise that the said land was previously sold to
them. In his answer, petitioner contends that he never sold the property to the private
respondents and that his signature appearing in the deed of absolute sale in favor of the
latter was a forgery, hence, the alleged sale was fictitious and inexistent. At this
juncture, it is worth mentioning that the civil case was filed on March 1, 1985, five years
before June 19, 1990 when the criminal case for estafa was instituted.
 On October 3, 1991, the trial court denied the petitioners motion as well as a
subsequent motion for reconsideration.
Aggrieved, petitioner filed a petition for certiorari and prohibition before the Court of
Appeals seeking the nullification of the assailed order.
On July 26, 1993,[4] the Court of Appeals dismissed the petition for lack of merit, the
decretal portion of which reads:

WHEREFORE, finding no merit to the petition, the same is hereby DISMISSED, with
cost against petitioner.

Hence, this petition.

The only issue in this petition is whether the pendency of Civil Case No. 55103, is a
prejudicial question justifying the suspension of the proceedings in Criminal Case No.
90-84933 filed against the petitioner.
Petitioner alleges that his signature appearing in the first deed of absolute sale in
favor of private respondent was a forgery, such that there was no second sale covering
the said parcel of land. Otherwise stated, if the Court in the said Civil Case rules that the
first sale to herein private respondent was null and void, due to the forgery of petitioners
signature in the first deed of sale, it follows that the criminal case for estafa would not
prosper.
While at first blush there seems to be merit in petitioners claim, we are compelled to
affirm the Court of Appeals findings.
The doctrine of prejudicial question comes into play in a situation where a civil
action and a criminal action are both pending and there exists in the former an issue
which must be preemptively resolved before the criminal action may proceed, because
howsoever the issue raised in the civil action is resolved such resolution would be
determinative of the guilt or innocence of the accused in the criminal action. [5] In other
words, if both civil and criminal cases have similar issues or the issue in one is
intimately related to the issues raised in the other, then a prejudicial question would
likely exist, provided the other element or characteristic is satisfied.[6]
On the basis of the foregoing and a perusal of the facts obtaining in the case at bar,
the disposition of the issue raised need not unduly detain us. We have already ruled
that a criminal action for estafa (for alleged double sale of property) is a prejudicial
question to a civil action for nullity of the alleged deed of sale and the defense of the
alleged vendor is the forgery of his signature in the deed.[7]
Notwithstanding the apparent prejudicial question involved, the Court of Appeals still
affirmed the Order of the trial court denying petitioners motion for the suspension of the
proceeding on the ground that petitioner, in the stipulation of facts, had already admitted
during the pre-trial order dated October 5, 1990 of the criminal case the validity of his
signature in the first deed of sale between him and the private respondent, as well as
his subsequent acknowledgment of his signature in twenty-three (23) cash vouchers
evidencing the payments made by theprivate respondent. [8] Moreover, it was also noted
by the Court of Appeals that petitioner even wrote to the private respondent offering to
refund whatever sum the latter had paid.[9]
In this regard, the pre-trial provision on criminal procedure found in Rule 118 of the
Rules of Court provides:

Sec. 2. Pre-trial conference; subjects. x x x. The pre-trial conference shall consider the
following:

(a) Plea bargaining

(b)Stipulation of facts

From the foregoing, there is no question that a stipulation of facts by the parties in a
criminal case is recognized as declarations constituting judicial admissions, hence,
binding upon the parties[10] and by virtue of which the prosecution dispensed with the
introduction of additional evidence and the defense waived the right to contest or
dispute the veracity of the statement contained in the exhibit. [11]
Accordingly, the stipulation of facts stated in the pre-trial order amounts to an
admission by the petitioner resulting in the waiver of his right to present evidence on his
behalf. While it is true that the right to present evidence is guaranteed under the
Constitution,[12] this right may be waived expressly or impliedly.[13]
Since the suspension of the criminal case due to a prejudicial question is only a
procedural matter, the same is subject to a waiver by virtue of the prior acts of the
accused. After all, the doctrine of waiver is made solely for the benefit and protection of
the individual in his private capacity, if it can be dispensed with and relinquished without
infringing on any public right and without detriment to the community at large. [14]
Accordingly, petitioners admission in the stipulation of facts during the pre-trial of
the criminal amounts to a waiver of his defense of forgery in the civil case. Hence, we
have no reason to nullify such waiver, it being not contrary to law, public order, public
policy, morals or good customs, or prejudicial to a third person with a right recognized
by law.[15] Furthermore, it must be emphasized that the pre-trial order was signed by the
petitioner himself. As such, the rule that no proof need be offered as to any facts
admitted at a pre-trial hearing applies.[16]
WHEREFORE, in view of the foregoing, the appealed decision of the Court of
Appeals dated July 26, 1993 is AFFIRMED. Costs against petitioner.
SO ORDERED.
Narvasa, C.J., (Chairman), Melo, Francisco, and Panganiban, JJ., concur.

[1]
Penned by Justice Regina G. Ordoez-Benitez and concurred in by Justice Manuel C. Herrera and
Bernardo P. Pardo.
[2]
Per Judge Angelina Gutierrez.
[3]
Rollo, p. 30.
[4]
Id., pp. 96-101.
[5]
Flordelis v. Castillo, 58 SCRA 301 (1974); Donato v. Luna, 160 SCRA 441 (1988).
[6]
Benitez v. Concepcion, Jr., 2 SCRA 178 (1961).
[7]
Ras v. Rasul, 100 SCRA 125 (1980).
[8]
Pre-trial Order, Rollo, pp. 134-140.
[9]
Decision, Rollo, p. 101.
[10]
People v. Hernandez, 260 SCRA 25 (1996).
[11]
People v. Bocar, 27 SCRA 512 (1969).
[12]
Sec. 14, Art. 3, 1987 Constitution.
[13]
People v. Dichose, 96 SCRA 957 (1980).
[14]
People v. Donato, 198 SCRA 130 (1991).
[15]
Article 6, Civil Code.
[16]
Afable, et al. v. Ruiz, et al., 56 O.G. 3767; Permanent Concrete Products, Inc. v. Teodoro, 26 SCRA
339 (1969); Munasque v. Court of Appeals, 139 SCRA 533 (1985).

FIRST DIVISION

BOSTON BANK OF THE G. R. No. 158149

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

PERLA P. MANALO and CARLOS

MANALO, JR.,
Promulgated:

Respondents. February 9, 2006

x--------------------------------------------------x
DECISION

CALLEJO, SR., J.:

Before us is a Petition for Review on Certiorari of the Decision[1] of the Court of

Appeals (CA) in CA-G.R. CV No. 47458 affirming, on appeal, the Decision[2] of
the Regional Trial Court (RTC) of Quezon City, Branch 98, in Civil Case No. Q-
89-3905.

The Antecedents

The Xavierville Estate, Inc. (XEI) was the owner of parcels of land in Quezon
City, known as the Xavierville Estate Subdivision, with an area of 42 hectares. XEI
caused the subdivision of the property into residential lots, which was then offered
for sale to individual lot buyers.[3]

On September 8, 1967, XEI, through its General Manager, Antonio Ramos,

as vendor, and The Overseas Bank of Manila (OBM), as vendee, executed a Deed
of Sale of Real Estate over some residential lots in the subdivision, including Lot
1, Block 2, with an area of 907.5 square meters, and Lot 2, Block 2, with an area of
832.80 square meters. The transaction was subject to the approval of the Board of
Directors of OBM, and was covered by real estate mortgages in favor of the
Philippine National Bank as security for its account amounting to P5,187,000.00,
and the Central Bank of the Philippines as security for advances amounting
to P22,185,193.74.[4] Nevertheless, XEI continued selling the residential lots in the
subdivision as agent of OBM.[5]

Sometime in 1972, then XEI president Emerito Ramos, Jr. contracted the
services of Engr. Carlos Manalo, Jr. who was in business of drilling deep water
wells and installing pumps under the business name Hurricane Commercial, Inc.
For P34,887.66, Manalo, Jr. installed a water pump at Ramos residence at the
corner of Aurora Boulevardand Katipunan Avenue, Quezon City. Manalo, Jr. then
proposed to XEI, through Ramos, to purchase a lot in the Xavierville subdivision,
and offered as part of the downpayment the P34,887.66 Ramos owed him. XEI,
through Ramos, agreed. In a letter dated February 8, 1972, Ramos requested
Manalo, Jr. to choose which lots he wanted to buy so that the price of the lots and
the terms of payment could be fixed and incorporated in the conditional
sale.[6] Manalo, Jr. met with Ramos and informed him that he and his wife Perla
had chosen Lots 1 and 2 of Block 2 with a total area of 1,740.3 square meters.

In a letter dated August 22, 1972 to Perla Manalo, Ramos confirmed the
reservation of the lots. He also pegged the price of the lots at P200.00 per square
meter, or a total of P348,060.00, with a 20% down payment of the purchase price
amounting to P69,612.00 less the P34,887.66 owing from Ramos, payable on or
before December 31, 1972; the corresponding Contract of Conditional Sale would
then be signed on or before the same date, but if the selling operations of XEI
resumed after December 31, 1972, the balance of the downpayment would fall due
then, and the spouses would sign the aforesaid contract within five (5) days from
receipt of the notice of resumption of such selling operations. It was also stated in
the letter that, in the meantime, the spouses may introduce improvements thereon
subject to the rules and regulations imposed by XEI in the subdivision. Perla
Manalo conformed to the letter agreement.[7]

The spouses Manalo took possession of the property on September 2, 1972,

constructed a house thereon, and installed a fence around the perimeter of the lots.

In the meantime, many of the lot buyers refused to pay their monthly
installments until they were assured that they would be issued Torrens titles over
the lots they had purchased.[8] The spouses Manalo were notified of the resumption
of the selling operations of XEI.[9] However, they did not pay the balance of the
downpayment on the lots because Ramos failed to prepare a contract of conditional
sale and transmit the same to Manalo for their signature. On August 14, 1973,
Perla Manalo went to the XEI office and requested that the payment of the amount
representing the balance of the downpayment be deferred, which, however, XEI
rejected. On August 10,
1973, XEI furnished her with a statement of their account as of July 31, 1973,
showing that they had a balance of P34,724.34 on the downpayment of the two lots
after deducting the account of Ramos, plus P3,819.68[10] interest thereon from
September 1, 1972 to July 31, 1973, and that the interests on the unpaid balance of
the purchase price of P278,448.00 from September 1, 1972 to July 31, 1973
amounted to P30,629.28.[11] The spouses were informed that they were being billed
for said unpaid interests.[12]

On January 25, 1974, the spouses Manalo received another statement of

account from XEI, inclusive of interests on the purchase price of the lots. [13] In a
letter dated April 6, 1974 to XEI, Manalo, Jr. stated they had not yet received the
notice of resumption of Leis selling operations, and that there had been no
arrangement on the payment of interests; hence, they should not be charged with
interest on the balance of the downpayment on the property.[14] Further, they
demanded that a deed of conditional sale over the two lots be transmitted to them
for their signatures. However, XEI ignored the demands. Consequently, the
spouses refused to pay the balance of the downpayment of the purchase price.[15]

Sometime in June 1976, Manalo, Jr. constructed a business sign in the

sidewalk near his house. In a letter dated June 17, 1976, XEI informed Manalo, Jr.
that business signs were not allowed along the sidewalk. It demanded that he
remove the same, on the ground, among others, that the sidewalk was not part of
the land which he had purchased on installment basis from XEI. [16] Manalo, Jr. did
not respond. XEI reiterated its demand on September 15, 1977.[17]

Subsequently, XEI turned over its selling operations to OBM, including the
receivables for lots already contracted and those yet to be sold.[18] On December 8,
1977, OBM warned Manalo, Jr., that putting up of a business sign is specifically
prohibited by their contract of conditional sale and that his failure to comply with
its demand would impel it to avail of the remedies as provided in their contract of
conditional sale.[19]

Meanwhile, on December 5, 1979, the Register of Deeds issued Transfer

Certificate of Title (TCT) No. T-265822 over Lot 1, Block 2, and TCT No. T-
265823 over Lot 2, Block 2, in favor of the OBM.[20] The lien in favor of the
Central Bank of the Philippines was annotated at the dorsal portion of said title,
which was later cancelled on August 4, 1980.[21]

Subsequently, the Commercial Bank of Manila (CBM) acquired the

Xavierville Estate from OBM. CBM wrote Edilberto Ng, the president of
Xavierville Homeowners Association that, as of January 31, 1983, Manalo, Jr. was
one of the lot buyers in the subdivision.[22] CBM reiterated in its letter to Ng that,
as of January 24, 1984, Manalo was a homeowner in the subdivision.[23]

In a letter dated August 5, 1986, the CBM requested Perla Manalo to stop
any on-going construction on the property since it (CBM) was the owner of the lot
and she had no permission for such construction.[24] She agreed to have a
conference meeting with CBM officers where she informed them that her husband
had a contract with OBM, through XEI, to purchase the property. When asked to
prove her claim, she promised to send the documents to CBM. However, she failed
to do so.[25] On September 5, 1986, CBM reiterated its demand that it be furnished
with the documents promised,[26] but Perla Manalo did not respond.

On July 27, 1987, CBM filed a complaint[27] for unlawful detainer against
the spouses with the Metropolitan Trial Court of Quezon City. The case was
docketed as Civil Case No. 51618. CBM claimed that the spouses had been
unlawfully occupying the property without its consent and that despite its
demands, they refused to vacate the property.The latter alleged that they, as
vendors, and XEI, as vendee, had a contract of sale over the lots which had not yet
been rescinded.[28]
 While the case was pending, the spouses Manalo wrote CBM to offer an
amicable settlement, promising to abide by the purchase price of the property
(P313,172.34), per agreement with XEI, through Ramos. However, on July 28,
1988, CBM wrote the spouses, through counsel, proposing that the price
of P1,500.00 per square meter of the property was a reasonable starting point for
negotiation of the settlement.[29] The spouses rejected the counter
proposal,[30] emphasizing that they would abide by their original agreement with
XEI. CBM moved to withdraw its complaint[31] because of the issues raised.[32]

In the meantime, the CBM was renamed the Boston Bank of

the Philippines. After CBM filed its complaint against the spouses Manalo, the
latter filed a complaint for specific performance and damages against the bank
before the Regional Trial Court (RTC) of Quezon City on October 31, 1989.

The plaintiffs alleged therein that they had always been ready, able and
willing to pay the installments on the lots sold to them by the defendants remote
predecessor-in-interest, as might be or stipulated in the contract of sale, but no
contract was forthcoming; they constructed their house worth P2,000,000.00 on the
property in good faith; Manalo, Jr., informed the defendant, through its counsel, on
October 15, 1988 that he would abide by the terms and conditions of his original
agreement with the defendants predecessor-in-interest; during the hearing of the
ejectment case on October 16, 1988, they offered to pay P313,172.34 representing
the balance on the purchase price of said lots; such tender of payment was rejected,
so that the subject lots could be sold at considerably higher prices to third parties.

Plaintiffs further alleged that upon payment of the P313,172.34, they were
entitled to the execution and delivery of a Deed of Absolute Sale covering the
subject lots, sufficient in form and substance to transfer title thereto free and clear
of any and all liens and encumbrances of whatever kind and nature.[33] The
plaintiffs prayed that, after due hearing, judgment be rendered in their favor, to wit:

WHEREFORE, it is respectfully prayed that after due hearing:

 (a) The defendant should be ordered to execute and deliver a Deed of
Absolute Sale over subject lots in favor of the plaintiffs after payment of the sum
of P313,172.34, sufficient in form and substance to transfer to them titles thereto
free and clear of any and all liens and encumbrances of whatever kind or nature;

(b) The defendant should be held liable for moral and exemplary damages
in the amounts of P300,000.00 and P30,000.00, respectively, for not promptly
executing and delivering to plaintiff the necessary Contract of Sale,
notwithstanding repeated demands therefor and for having been constrained to
engage the services of undersigned counsel for which they agreed to pay attorneys
fees in the sum of P50,000.00 to enforce their rights in the premises and
appearance fee of P500.00;

(c) And for such other and further relief as may be just and equitable in the
premises.[34]

In its Answer to the complaint, the defendant interposed the following

affirmative defenses: (a) plaintiffs had no cause of action against it because the
August 22, 1972 letter agreement between XEI and the plaintiffs was not binding
on it; and (b) it had no record of any contract to sell executed by it or its
predecessor, or of any statement of accounts from its predecessors, or records of
payments of the plaintiffs or of any documents which entitled them to the
possession of the lots.[35] The defendant, likewise, interposed counterclaims for
damages and attorneys fees and prayed for the eviction of the plaintiffs from the
property.[36]

Meanwhile, in a letter dated January 25, 1993, plaintiffs, through counsel,

proposed an amicable settlement of the case by paying P942,648.70, representing
the balance of the purchase price of the two lots based on the current market
value.[37] However, the defendant rejected the same and insisted that for the smaller
lot, they pay P4,500,000.00, the current market value of the property.[38] The
defendant insisted that it owned the property since there was no contract or
agreement between it and the plaintiffs relative thereto.

During the trial, the plaintiffs adduced in evidence the separate Contracts of
Conditional Sale executed between XEI and Alberto Soller;[39] Alfredo
Aguila,[40] and Dra. Elena Santos-Roque[41] to prove that XEI continued selling
residential lots in the subdivision as agent of OBM after the latter had acquired the
said lots.

For its part, defendant presented in evidence the letter dated August 22,
1972, where XEI proposed to sell the two lots subject to two suspensive
conditions: the payment of the balance of the downpayment of the property, and
the execution of the corresponding contract of conditional sale. Since plaintiffs
failed to pay, OBM consequently refused to execute the corresponding contract of
conditional sale and forfeited the P34,877.66 downpayment for the two lots, but
did not notify them of said forfeiture.[42] It alleged that OBM considered the lots
unsold because the titles thereto bore no annotation that they had been sold under a
contract of conditional sale, and the plaintiffs were not notified of XEIs resumption
of its selling operations.

On May 2, 1994, the RTC rendered judgment in favor of the plaintiffs and
against the defendant. The fallo of the decision reads:
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and
against the defendant

(a) Ordering the latter to execute and deliver a Deed of Absolute Sale over
Lot 1 and 2, Block 2 of the Xavierville Estate Subdivision after payment of the
sum of P942,978.70 sufficient in form and substance to transfer to them titles
thereto free from any and all liens and encumbrances of whatever kind and nature.

(b) Ordering the defendant to pay moral and exemplary damages in the
amount of P150,000.00; and

(c) To pay attorneys fees in the sum of P50,000.00 and to pay the costs.

SO ORDERED.[43]

The trial court ruled that under the August 22, 1972 letter agreement of XEI and
the plaintiffs, the parties had a complete contract to sell over the lots, and that they
had already partially consummated the same. It declared that the failure of the
defendant to notify the plaintiffs of the resumption of its selling operations and to
execute a deed of conditional sale did not prevent the defendants obligation to
convey titles to the lots from acquiring binding effect. Consequently, the plaintiffs
had a cause of action to compel the defendant to execute a deed of sale over the
lots in their favor.

Boston Bank appealed the decision to the CA, alleging that the lower court
erred in (a) not concluding that the letter of XEI to the spouses Manalo, was at
most a mere contract to sell subject to suspensive conditions, i.e., the payment of
the balance of the downpayment on the property and the execution of a deed of
conditional sale (which were not complied with); and (b) in awarding moral and
exemplary damages to the spouses Manalo despite the absence of testimony
providing facts to justify such awards.[44]

On September 30, 2002, the CA rendered a decision affirming that of the

RTC with modification. The fallo reads:

WHEREFORE, the appealed decision is AFFIRMED with

MODIFICATIONS that (a) the figure P942,978.70 appearing [in] par. (a) of the
dispositive portion thereof is changed to P313,172.34 plus interest thereon at the
rate of 12% per annum from September 1, 1972 until fully paid and (b) the award
of moral and exemplary damages and attorneys fees in favor of plaintiffs-
appellees is DELETED.

SO ORDERED.[45]

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

Boston Bank filed a motion for the reconsideration of the decision alleging
that there was no perfected contract to sell the two lots, as there was no agreement
between XEI and the respondents on the manner of payment as well as the other
terms and conditions of the sale. It further averred that its claim for recovery of
possession of the aforesaid lots in its Memorandum dated February 28, 1994 filed
before the trial court constituted a judicial demand for rescission that satisfied the
requirements of the New Civil Code.However, the appellate court denied the
motion.

Boston Bank, now petitioner, filed the instant petition for review
on certiorari assailing the CA rulings. It maintains that, as held by the CA, the
records do not reflect any schedule of payment of the 80% balance of the purchase
price, or P278,448.00. Petitioner insists that unless the parties had agreed on the
manner of payment of the principal amount, including the other terms and
conditions of the contract, there would be no existing contract of sale or contract to
sell.[47] Petitioner avers that the letter agreement to respondent spouses dated
August 22, 1972 merely confirmed their reservation for the purchase of Lot Nos. 1
and 2, consisting of 1,740.3 square meters, more or less, at the price of P200.00 per
square meter (or P348,060.00), the amount of the downpayment thereon and the
application of the P34,887.00 due from Ramos as part of such downpayment.

Petitioner asserts that there is no factual basis for the CA ruling that the
terms and conditions relating to the payment of the balance of the purchase price of
the property (as agreed upon by XEI and other lot buyers in the same subdivision)
were also applicable to the contract entered into between the petitioner and the
respondents. It insists that such a ruling is contrary to law, as it is tantamount to
compelling the parties to agree to something that was not even discussed, thus,
violating their freedom to contract. Besides, the situation of the respondents cannot
be equated with those of the other lot buyers, as, for one thing, the respondents
made a partial payment on the downpayment for the two lots even before the
execution of any contract of conditional sale.

Petitioner posits that, even on the assumption that there was a perfected
contract to sell between the parties, nevertheless, it cannot be compelled to convey
the property to the respondents because the latter failed to pay the balance of the
downpayment of the property, as well as the balance of 80% of the purchase price,
thus resulting in the extinction of its obligation to convey title to the lots to the
respondents.

Another egregious error of the CA, petitioner avers, is the application of

Republic Act No. 6552. It insists that such law applies only to a perfected
agreement or perfected contract to sell, not in this case where the downpayment on
the purchase price of the property was not completely paid, and no installment
payments were made by the buyers.

Petitioner also faults the CA for declaring that petitioner failed to serve a
notice on the respondents of cancellation or rescission of the contract to sell, or
notarial demand therefor. Petitioner insists that its August 5, 1986 letter requiring
respondents to vacate the property and its complaint for ejectment in Civil Case
No. 51618 filed in the Metropolitan Trial Court amounted to the requisite demand
for a rescission of the contract to sell. Moreover, the action of the respondents
below was barred by laches because despite demands, they failed to pay the
balance of the purchase price of the lots (let alone the downpayment) for a
considerable number of years.

For their part, respondents assert that as long as there is a meeting of the
minds of the parties to a contract of sale as to the price, the contract is valid despite
the parties failure to agree on the manner of payment. In such a situation, the
balance of the purchase price would be payable on demand, conformably to Article
1169 of the New Civil Code. They insist that the law does not require a party to
agree on the manner of payment of the purchase price as a prerequisite to a valid
contract to sell. The respondents cite the ruling of this Court in Buenaventura v.
Court of Appeals[48] to support their submission.

They argue that even if the manner and timeline for the payment of the
balance of the purchase price of the property is an essential requisite of a contract
to sell, nevertheless, as shown by their letter agreement of August 22, 1972 with
the OBM, through XEI and the other letters to them, an agreement was reached as
to the manner of payment of the balance of the purchase price. They point out that
such letters referred to the terms of the
terms of the deeds of conditional sale executed by XEI in favor of the other lot
buyers in the subdivision, which contained uniform terms of 120 equal monthly
installments (excluding the downpayment, but inclusive of pre-computed
interests). The respondents assert that XEI was a real estate broker and knew that
the contracts involving residential lots in the subdivision contained uniform terms
as to the manner and timeline of the payment of the purchase price of said lots.

Respondents further posit that the terms and conditions to be incorporated in

the corresponding contract of conditional sale to be executed by the parties would
be the same as those contained in the contracts of conditional sale executed by lot
buyers in the subdivision. After all, they maintain, the contents of the
corresponding contract of conditional sale referred to in the August 22, 1972 letter
agreement envisaged those contained in the contracts of conditional sale that XEI
and other lot buyers executed. Respondents cite the ruling of this Court in Mitsui
Bussan Kaisha v. Manila E.R.R. & L. Co.[49]

The respondents aver that the issues raised by the petitioner are factual,
inappropriate in a petition for review on certiorari under Rule 45 of the Rules of
Court. They assert that petitioner adopted a theory in litigating the case in the trial
court, but changed the same on appeal before the CA, and again in this Court. They
argue that the petitioner is estopped from adopting a new theory contrary to those it
had adopted in the trial and appellate courts. Moreover, the existence of a contract
of conditional sale was admitted in the letters of XEI and OBM. They aver that
they became owners of the lots upon delivery to them by XEI.

The issues for resolution are the following: (1) whether the factual issues
raised by the petitioner are proper; (2) whether petitioner or its predecessors-in-
interest, the XEI or the OBM, as seller, and the respondents, as buyers, forged a
perfect contract to sell over the property; (3) whether
petitioner is estopped from contending that no such contract was forged by the
parties; and (4) whether respondents has a cause of action against the petitioner for
specific performance.

The rule is that before this Court, only legal issues may be raised in a
petition for review on certiorari. The reason is that this Court is not a trier of facts,
and is not to review and calibrate the evidence on record. Moreover, the findings of
facts of the trial court, as affirmed on appeal by the Court of Appeals, are
conclusive on this Court unless the case falls under any of the following
exceptions:

(1) when the conclusion is a finding grounded entirely on speculations,

surmises and conjectures; (2) when the inference made is manifestly mistaken,
absurd or impossible; (3) where there is a grave abuse of discretion; (4) when the
judgment is based on a misapprehension of facts; (5) when the findings of fact are
conflicting; (6) when the Court of Appeals, in making its findings went beyond
the issues of the case and the same is contrary to the admissions of both appellant
and appellee; (7) when the findings are contrary to those of the trial court; (8)
when the findings of fact are conclusions without citation of specific evidence on
which they are based; (9) when the facts set forth in the petition as well as in the
petitioners main and reply briefs are not disputed by the respondents; and (10)
when the findings of fact of the Court of Appeals are premised on the supposed
absence of evidence and contradicted by the evidence on record.[50]

We have reviewed the records and we find that, indeed, the ruling of the
appellate court dismissing petitioners appeal is contrary to law and is not supported
by evidence. A careful examination of the factual backdrop of the case, as well as
the antecedental proceedings constrains us to hold that petitioner is not barred from
asserting that XEI or OBM, on one hand, and the respondents, on the other, failed
to forge a perfected contract to sell the subject lots.

It must be stressed that the Court may consider an issue not raised during the
trial when there is plain error.[51] Although a factual issue was not raised in the trial
court, such issue may still be considered and resolved by the Court in the interest
of substantial justice, if it finds that to do so is necessary to arrive at a just
decision,[52] or when an issue is closely related to an issue raised in the trial court
and the Court of Appeals and is necessary for a just and complete resolution of the
case.[53] When the trial court decides a case in favor of a party on certain grounds,
the Court may base its decision upon some other points, which the trial court or
appellate court ignored or erroneously decided in favor of a party.[54]

In this case, the issue of whether XEI had agreed to allow the respondents to
pay the purchase price of the property was raised by the parties. The trial court
ruled that the parties had perfected a contract to sell, as against petitioners claim
that no such contract existed. However, in resolving the issue of whether the
petitioner was obliged to sell the property to the respondents, while the CA
declared that XEI or OBM and the respondents failed to agree on the schedule of
payment of the balance of the purchase price of the property, it ruled that XEI and
the respondents had forged a contract to sell; hence, petitioner is entitled to
ventilate the issue before this Court.

We agree with petitioners contention that, for a perfected contract of sale or

contract to sell to exist in law, there must be an agreement of the parties, not only
on the price of the property sold, but also on the manner the price is to be paid by
the vendee.

Under Article 1458 of the New Civil Code, in a contract of sale, whether
absolute or conditional, one of the contracting parties obliges himself to transfer
the ownership of and deliver a determinate thing, and the other to pay therefor a
price certain in money or its equivalent. A contract of sale is perfected at the
moment there is a meeting of the minds upon the thing which is the object of the
contract and the price. From the averment of perfection, the parties are bound, not
only to the fulfillment of what has been
expressly stipulated, but also to all the consequences which, according to their
nature, may be in keeping with good faith, usage and law.[55] On the other hand,
when the contract of sale or to sell is not perfected, it cannot, as an independent
source of obligation, serve as a binding juridical relation between the parties.[56]

A definite agreement as to the price is an essential element of a binding

agreement to sell personal or real property because it seriously affects the rights
and obligations of the parties. Price is an essential element in the formation of a
binding and enforceable contract of sale. The fixing of the price can never be left
to the decision of one of the contracting parties. But a price fixed by one of the
contracting parties, if accepted by the other, gives rise to a perfected sale.[57]

It is not enough for the parties to agree on the price of the property. The
parties must also agree on the manner of payment of the price of the property to
give rise to a binding and enforceable contract of sale or contract to sell. This is so
because the agreement as to the manner of payment goes into the price, such that a
disagreement on the manner of payment is tantamount to a failure to agree on the
price.[58]
In a contract to sell property by installments, it is not enough that the parties agree
on the price as well as the amount of downpayment. The parties must, likewise,
agree on the manner of payment of the balance of the purchase price and on the
other terms and conditions relative to the sale. Even if the buyer makes a
downpayment or portion thereof, such payment cannot be considered as sufficient
proof of the perfection of any purchase and sale between the parties. Indeed, this
Court ruled in Velasco v. Court of Appeals[59]that:
It is not difficult to glean from the aforequoted averments that the
petitioners themselves admit that they and the respondent still had to meet and
agree on how and when the down-payment and the installment payments were to
be paid. Such being the situation, it cannot, therefore, be said that a definite and
firm sales agreement between the parties had been perfected over the lot in
 question. Indeed, this Court has already ruled before that a definite agreement on
the manner of payment of the purchase price is an essential element in the
formation of a binding and enforceable contract of sale. The fact, therefore, that
the petitioners delivered to the respondent the sum of P10,000.00 as part of the
downpayment that they had to pay cannot be considered as sufficient proof of the
perfection of any purchase and sale agreement between the parties herein under
article 1482 of the New Civil Code, as the petitioners themselves admit that some
essential matter the terms of payment still had to be mutually covenanted.[60]

We agree with the contention of the petitioner that, as held by the CA, there
is no showing, in the records, of the schedule of payment of the balance of the
purchase price on the property amounting to P278,448.00. We have meticulously
reviewed the records, including Ramos February 8, 1972 and August 22, 1972
letters to respondents,[61] and find that said parties confined themselves to agreeing
on the price of the property (P348,060.00), the 20% downpayment of the purchase
price (P69,612.00), and credited respondents for the P34,887.00 owing from
Ramos as part of the 20% downpayment. The timeline for the payment of the
balance of the downpayment (P34,724.34) was also agreed upon, that is, on or
before XEI resumed its selling operations, on or before December 31, 1972, or
within five (5) days from written notice of such resumption of selling operations.
The parties had also agreed to incorporate all the terms and conditions relating to
the sale, inclusive of the terms of payment of the balance of the purchase price and
the other substantial terms and conditions in the corresponding contract of
conditional sale, to be later signed by the parties, simultaneously with respondents
settlement of the balance of the downpayment.

The February 8, 1972 letter of XEI reads:

Mr. Carlos T. Manalo, Jr.
Hurricane Rotary Well Drilling
Rizal Avenue Ext.,Caloocan City

Dear Mr. Manalo:

We agree with your verbal offer to exchange the proceeds of your contract
with us to form as a down payment for a lot in our Xavierville Estate Subdivision.
 Please let us know your choice lot so that we can fix the price and terms of
payment in our conditional sale.
Sincerely yours,

XAVIERVILLE ESTATE, INC.

(Signed)
EMERITO B. RAMOS, JR.
President

CONFORME:

(Signed)
CARLOS T. MANALO, JR.
Hurricane Rotary Well Drilling[62]

The August 22, 1972 letter agreement of XEI and the respondents reads:
Mrs. Perla P. Manalo
1548 Rizal Avenue Extension
Caloocan City

Dear Mrs. Manalo:

This is to confirm your reservation of Lot Nos. 1 and 2; Block 2 of our

consolidation-subdivision plan as amended, consisting of 1,740.3 square meters
more or less, at the price of P200.00 per square meter or a total price
of P348,060.00.

It is agreed that as soon as we resume selling operations, you must pay a down
payment of 20% of the purchase price of the said lots and sign the corresponding
Contract of Conditional Sale, on or before December 31, 1972, provided,
however, that if we resume selling after December 31, 1972, then you must pay
the aforementioned down payment and sign the aforesaid contractwithin five (5)
days from your receipt of our notice of resumption of selling operations.

In the meanwhile, you may introduce such improvements on the said lots as you
may desire, subject to the rules and regulations of the subdivision.

If the above terms and conditions are acceptable to you, please signify your
conformity by signing on the space herein below provided.

Thank you.
 Very truly yours,

XAVIERVILLE ESTATE, INC. CONFORME:

By:

(Signed) (Signed)
EMERITO B. RAMOS, JR. PERLA P. MANALO
President Buyer[63]
Based on these two letters, the determination of the terms of payment of
the P278,448.00 had yet to be agreed upon on or before December 31, 1972, or
even afterwards, when the parties sign the corresponding contract of conditional
sale.

Jurisprudence is that if a material element of a contemplated contract is left

for future negotiations, the same is too indefinite to be enforceable.[64] And when
an essential element of a contract is reserved for future agreement of the parties, no
legal obligation arises until such future agreement is concluded.[65]

So long as an essential element entering into the proposed obligation of

either of the parties remains to be determined by an agreement which they are to
make, the contract is incomplete and unenforceable.[66] The reason is that such a
contract is lacking in the necessary qualities of definiteness, certainty and
mutuality.[67]

There is no evidence on record to prove that XEI or OBM and the

respondents had agreed, after December 31, 1972, on the terms of payment of the
balance of the purchase price of the property and the other substantial terms and
conditions relative to the sale. Indeed, the parties are in agreement that there had
been no contract of conditional sale ever executed by XEI, OBM or petitioner, as
vendor, and the respondents, as vendees.[68]
 The ruling of this Court in Buenaventura v. Court of Appeals has no bearing
in this case because the issue of the manner of payment of the purchase price of the
property was not raised therein.

We reject the submission of respondents that they and Ramos had intended
to incorporate the terms of payment contained in the three contracts of conditional
sale executed by XEI and other lot buyers in the corresponding contract of
conditional sale, which would later be signed by them.[69] We have meticulously
reviewed the respondents complaint and find no such allegation therein.[70] Indeed,
respondents merely alleged in their complaint that they were bound to pay the
balance of the purchase price of the property in installments. When respondent
Manalo, Jr. testified, he was never asked, on direct examination or even on cross-
examination, whether the terms of payment of the balance of the purchase price of
the lots under the contracts of conditional sale executed by XEI and other lot
buyers would form part of the corresponding contract of conditional sale to be
signed by them simultaneously with the payment of the balance of the
downpayment on the purchase price.

We note that, in its letter to the respondents dated June 17, 1976, or almost
three years from the execution by the parties of their August 22, 1972 letter
agreement, XEI stated, in part, that respondents had purchased the property on
installment basis.[71] However, in the said letter, XEI failed to state a specific
amount for each installment, and whether such payments were to be made
monthly, semi-annually, or annually. Also, respondents, as plaintiffs below, failed
to adduce a shred of evidence to prove that they were obliged to pay
the P278,448.00 monthly, semi-annually or annually. The allegation that the
payment of the P278,448.00 was to be paid in installments is, thus, vague and
indefinite. Case law is that, for a contract to be enforceable, its terms must be
certain and explicit, not vague or indefinite.[72]

There is no factual and legal basis for the CA ruling that, based on the terms
of payment of the balance of the purchase price of the lots under the contracts of
conditional sale executed by XEI and the other lot buyers, respondents were
obliged to pay the P278,448.00 with pre-computed interest of 12% per annum in
120-month installments. As gleaned from the ruling of the appellate court, it failed
to justify its use of the terms of payment under the three contracts of conditional
sale as basis for such ruling, to wit:
On the other hand, the records do not disclose the schedule of payment of
the purchase price, net of the downpayment. Considering, however, the Contracts
of Conditional Sale (Exhs. N, O and P) entered into by XEI with other lot buyers,
it would appear that the subdivision lots sold by XEI, under contracts to sell, were
payable in 120 equal monthly installments (exclusive of the downpayment but
including pre-computed interests) commencing on delivery of the lot to the
buyer.[73]

By its ruling, the CA unilaterally supplied an essential element to the letter

agreement of XEI and the respondents. Courts should not undertake to make a
contract for the parties, nor can it enforce one, the terms of which are in
doubt.[74] Indeed, the Court emphasized in Chua v. Court of Appeals[75] that it is not
the province of a court to alter a contract by construction or to make a new contract
for the parties; its duty is confined to the interpretation of the one which they have
made for themselves, without regard to its wisdom or folly, as the court cannot
supply material stipulations or read into contract words which it does not contain.

Respondents, as plaintiffs below, failed to allege in their complaint that the

terms of payment of the P278,448.00 to be incorporated in the corresponding
contract of conditional sale were those contained in the contracts of conditional
sale executed by XEI and Soller, Aguila and Roque.[76] They likewise failed to
prove such allegation in this Court.

The bare fact that other lot buyers were allowed to pay the balance of the
purchase price of lots purchased by them in 120 or 180 monthly installments does
not constitute evidence that XEI also agreed to give the respondents the same mode
and timeline of payment of the P278,448.00.
 Under Section 34, Rule 130 of the Revised Rules of Court, evidence that one
did a certain thing at one time is not admissible to prove that he did the same or
similar thing at another time, although such evidence may be received to prove
habit, usage, pattern of conduct or the intent of the parties.

Similar acts as evidence. Evidence that one did or did not do a certain
thing at one time is not admissible to prove that he did or did not do the same or a
similar thing at another time; but it may be received to prove a specific intent or
knowledge, identity, plan, system, scheme, habit, custom or usage, and the like.

However, respondents failed to allege and prove, in the trial court, that, as a
matter of business usage, habit or pattern of conduct, XEI granted all lot buyers the
right to pay the balance of the purchase price in installments of 120 months of
fixed amounts with pre-computed interests, and that XEI and the respondents had
intended to adopt such terms of payment relative to the sale of the two lots in
question. Indeed, respondents adduced in evidence the three contracts of
conditional sale executed by XEI and other lot buyers merely to prove that XEI
continued to sell lots in the subdivision as sales agent of OBM after it acquired said
lots, not to prove usage, habit or pattern of conduct on the part of XEI to
require all lot buyers in the subdivision to pay the balance of the purchase price of
said lots in 120 months. It further failed to prive that the trial court admitted the
said deeds[77] as part of the testimony of respondent Manalo, Jr.[78]
Habit, custom, usage or pattern of conduct must be proved like any other
facts. Courts must contend with the caveat that, before they admit evidence of
usage, of habit or pattern of conduct, the offering party must establish the degree of
specificity and frequency of uniform response that ensures more than a mere
tendency to act in a given manner but rather, conduct that is semi-automatic in
nature. The offering party must allege and prove specific, repetitive conduct that
might constitute evidence of habit. The examples offered in evidence to prove
habit, or pattern of evidence must be numerous enough to base on inference of
systematic conduct. Mere similarity of contracts does not present the kind of
sufficiently similar circumstances to outweigh the danger of prejudice and
confusion.
 In determining whether the examples are numerous enough, and sufficiently
regular, the key criteria are adequacy of sampling and uniformity of response.
After all, habit means a course of behavior of a person regularly represented in like
circumstances.[79] It is only when examples offered to establish pattern of conduct
or habit are numerous enough to lose an inference of systematic conduct that
examples are admissible. The key criteria are adequacy of sampling and uniformity
of response or ratio of reaction to situations.[80]

There are cases where the course of dealings to be followed is defined by the
usage of a particular trade or market or profession. As expostulated by Justice
Benjamin Cardozo of the United States Supreme Court: Life casts the moulds of
conduct, which will someday become fixed as law. Law preserves the moulds
which have taken form and shape from life.[81] Usage furnishes a standard for the
measurement of many of the rights and acts of men.[82] It is also well-settled that
parties who contract on a subject matter concerning which known usage prevail,
incorporate such usage by implication into their agreement, if nothing is said to be
contrary.[83]

However, the respondents inexplicably failed to adduce sufficient competent

evidence to prove usage, habit or pattern of conduct of XEI to justify the use of the
terms of payment in the contracts of the other lot buyers, and thus grant
respondents the right to pay the P278,448.00 in 120 months, presumably because
of respondents belief that the manner of payment of the said amount is not an
essential element of a contract to sell. There is no evidence that XEI or OBM and
all the lot buyers in the subdivision, including lot buyers who pay part of the
downpayment of the property purchased by them in the form of service, had
executed contracts of conditional sale containing uniform terms and conditions.
Moreover, under the terms of the contracts of conditional sale executed by XEI and
three lot buyers in the subdivision, XEI agreed to grant 120 months within which
to pay the balance of the purchase price to two of them, but granted one 180
months to do so.[84] There is no evidence on record that XEI granted the same right
to buyers of two or more lots.

Irrefragably, under Article 1469 of the New Civil Code, the price of the
property sold may be considered certain if it be so with reference to another thing
certain. It is sufficient if it can be determined by the stipulations of the contract
made by the parties thereto[85] or by reference to an agreement incorporated in the
contract of sale or contract to sell or if it is capable of being ascertained with
certainty in said contract;[86] or if the contract contains express or implied
provisions by which it may be rendered certain;[87]or if it provides some method or
criterion by which it can be definitely ascertained.[88] As this Court held
in Villaraza v. Court of Appeals,[89] the price is considered certain if, by its terms,
the contract furnishes a basis or measure for ascertaining the amount agreed upon.

We have carefully reviewed the August 22, 1972 letter agreement of the
parties and find no direct or implied reference to the manner and schedule of
payment of the balance of the purchase price of the lots covered by the deeds of
conditional sale executed by XEI and that of the other lot buyers[90] as basis for or
mode of determination of the schedule of the payment by the respondents of
the P278,448.00.

The ruling of this Court in Mitsui Bussan Kaisha v. Manila Electric

Railroad and Light Company[91] is not applicable in this case because the basic
price fixed in the contract was P9.45 per long ton, but it was stipulated that the
price was subject to modification in proportion to variations in calories and ash
content, and not otherwise. In this case, the parties did not fix in their letters-
agreement, any method or mode of determining the terms of payment of the
balance of the purchase price of the property amounting to P278,448.00.

It bears stressing that the respondents failed and refused to pay the balance
of the downpayment and of the purchase price of the property amounting
to P278,448.00 despite notice to them of the resumption by XEI of its selling
operations. The respondents enjoyed possession of the property without paying a
centavo. On the other hand, XEI and OBM failed and refused to transmit a contract
of conditional sale to the respondents. The respondents could have at least
consigned the balance of the downpayment after notice of the resumption of the
selling operations of XEI and filed an action to compel XEI or OBM to transmit to
them the said contract; however, they failed to do so.

As a consequence, respondents and XEI (or OBM for that matter) failed to
forge a perfected contract to sell the two lots; hence, respondents have no cause of
action for specific performance against petitioner. Republic Act No. 6552 applies
only to a perfected contract to sell and not to a contract with no binding and
enforceable effect.

IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The

Decision of the Court of Appeals in CA-G.R. CV No. 47458
is REVERSED and SET ASIDE. The Regional Trial Court of Quezon City,
Branch 98 is ordered to dismiss the complaint. Costs against the respondents.

SO ORDERED.

ROMEO J. CALLEJO, SR.

Associate Justice

WE CONCUR:

ARTEMIO V. PANGANIBAN
Chief Justice
Chairperson

CONSUELO YNARES-SANTIAGO MA. ALICIA AUSTRIA-

MARTINEZ Associate Justice Associate Justice
 MINITA V. CHICO-NAZARIO
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified

that the conclusions in the above decision were reached in consultation before the
case was assigned to the writer of the opinion of the Courts Division.

ARTEMIO V. PANGANIBAN
Chief Justice

[1]
Penned by Associate Justice Edgardo P. Cruz, with Associate Justices Oswaldo D. Agcaoili (retired) and Amelita
G. Tolentino, concurring; rollo, pp. 9-19.
[2]
Penned by Judge Justo M. Sultan; records, pp. 295-304.
[3]
Exhibits N, O and P, folder of exhibits, pp. 37-57.
[4]
Exhibit L, id. at 19.
[5]
Exhibits N, O and P, id. at 37-57.
[6]
Exhibit A, id. at 1.
[7]
Exhibit B, id. at 2.
[8]
Exhibit Q-1, id. at 60.
[9]
TSN, May 21, 1990, p. 11.
[10]
Exhibit E-1, id. at 6.
[11]
Id.
[12]
Exhibit E, id. at 5.
[13]
Exhibit F, id. at 7.
[14]
Id.
[15]
TSN, 20 January 1992, p. 5.
[16]
Exhibit G, folder of exhibits, p. 8.
[17]
Exhibit H, id. at 9.
[18]
TSN, July 17, 1992, pp. 14-18.
[19]
Exhibit H, folder of exhibits, p. 9.
[20]
Exhibits 1 and 2, id. at 79-84.
[21]
Id.
[22]
Exhibit I-1, id. at 11.
[23]
Exhibit J-1, id. at 13.
[24]
Exhibit 6, id. at 91.
[25]
Exhibit 7, id. at 92.
[26]
Id.
[27]
Exhibit S, id. at 68.
[28]
Exhibit T, id. at 71.
[29]
Exhibit R, id. at 65.
[30]
Exhibit R-1, id. at 67.
[31]
Exhibit U, id. at 74.
[32]
Id.
[33]
Records, pp. 3-6.
[34]
Id. at 6-7.
[35]
Id. at 35-36.
[36]
Id. at 36-38.
[37]
Exhibit V, folder of exhibits, p. 77.
[38]
TSN, December 17, 1993, pp. 1-5.
[39]
Exhibit N, folder of exhibits, p. 17.
[40]
Exhibit O, id. at 44.
[41]
Exhibit P, id. at 51.
[42]
TSN, 17 July 1992, pp. 7-25.
[43]
Records, p. 304.
[44]
CA rollo, p. 32.
[45]
Rollo, p. 85.
[46]
Exhibits N, O and P, folder of exhibits, p. 82.
[47]
Rollo, pp. 46-47.
[48]
G.R. No. 126376, November 20, 2003, 416 SCRA 263 (2003).
[49]
39 Phil. 624 (1919).
[50]
Siasat v. Court of Appeals, 425 Phil. 139,145 (2002)
[51]
Del Rosario v. Bonga, G.R. No. 136308, January 23, 2001, 350 SCRA 101, 110.
[52]
Abra Valley College, Inc. v. Aquino, G.R. No. L-39086, June 15, 1988, 162 SCRA 106, 116, citing Perez v.
Court of Appeals, 127 SCRA 645 (1984).
[53]
F.F. Maacop Construction Co., Inc. v. Court of Appeals, 334 Phil. 208, 212 (1997), citing Garrido v. CA, 236
SCRA 450 (1994).
[54]
See Relativo v. Castro, 76 Phil. 563 (1946).
[55]
GSIS v. Province of Tarlac, G.R. No. 157860, December 1, 2003, 417 SCRA 60.
[56]
Jovan Land, Inc. v. Court of Appeals, 335 Phil. 626, 629 (1997).
[57]
Article 1473, New Civil Code.
[58]
Montecillo v. Reynes, 434 Phil. 456 (2002); San Miguel Proprietor Philippines, Inc. v. Huang, 391 Phil. 636
(2000); Co v. Court of Appeals, 349 Phil. 749 (1998); Uraca v. Court of Appeals,344 Phil. 253 (1997); Toyota Car,
Inc. v. Court of Appeals,314 Phil. 201 (1995.
[59]
151-A Phil. 868 (1973).
[60]
Id. at 887.
[61]
Infra.
[62]
Exhibit A, folder of exhibits, p. 1 (Underscoring supplied)
[63]
Exhibit B, id. at 2.
[64]
Ansorge v. Kane, 155 N.E. 683 (1927); A.M. Webb & Co. v. Robert P. Miller Co., 157 F.2d 865 (1946).
[65]
Boatright v. Steinite Radio Corporation, 46 F. 2d 385 (1931).
[66]
WILLISTON ON CONTRACTS, VOLUME I, SECTION 45, 149 (3rd ed. 1957).
[67]
Weigham v. Kilifer, 215 F. 168.
[68]
TSN, May 21, 1990, pp. 17-18; TSN, July 17, 1992, p. 25.
[69]
Exhibits N, O & P, folder of exhibits, pp. 37-57.
[70]
Supra, at note 22.
[71]
Exhibit G, folder of exhibits, p. 8
[72]
Potter v. Leitenberger Mach. Co., 166 Pa. Super 31, 70 A. 2d 390 (1950).
[73]
Rollo, p. 82.
[74]
Id.
[75]
361 Phil. 308, 317 (1999), citing Bacolod Murcia Milling Co., Inc., v. Bana Nacional Filipino, 74 Phil. 675, 680
(1944).
[76]
Supra, at note 66.
[77]
EXHIBIT N Conditional Contract of Sale executed by Xavierville Estate, Inc. in favor of Alberto Soller dated
December 8, 1969, to prove that after Xavierville Estate sold its lots, it continued to execute sales contracts over
same in its name; EXHIBIT O Xerox copy of Deed of Absolute Sale executed by Xavierville Estate, Inc. in favor of
Alfredo Aguila dated May 20, 1970, to prove that although the lots in said subdivision were already sold by virtue of
EXHIBIT L, Commercial Bank of Manila (COMBANK) the VENDEE still allowed Xavierville Estate to sign
contracts in its name; EXHIBIT P Xerox copy of Deed of Absolute Sale executed by Xavierville Estate, Inc. in favor
of Elena Roque Santos dated June 29, 1970, to prove that although lots in Xavierville Estate were already sold to
Combank, the latter still allowed Xavierville Estate to sign contracts in its name;
[78]
Records, p. 128.
[79]
Wilson v. Volkswagen of America, Inc., 561 F.2d 494 (1977).
[80]
Loughan v. Firestone Tire & Rubber Co., 749 F.2d. 1519 (1985).
[81]
THE NATURE OF THE JUDICIAL PROCESS (THE STORRS LECTURES DELIVERED
AT YALE UNIVERSITY), 64 (1963).
[82]
Tong v. Borstad, 231 N.W. 2d. 795 (1975).
[83]
Robinson v. United States, 82 U.S. 363; 20 L.ed 653 (1871).
[84]
Name of the purchasers
[85]
Majarabas v. Leonardo, 11 Phil. 272 (1908).
[86]
Kelley v. Creston Buick Sales Co., 34 N.W. 2d. 598 (1948).
[87]
Hoskins v. Mclaughlin, 161 S.W.2d 395 (1942).
[88]
Packard Fort Work, Inc. v. Van Zandt, 224 S.W.2d 896 (1949).
[89]
334 Phil. 750,760 (1997), citing Mararabas v. Leonardo, supra.
[90]
See note 66.
[91]
39 Phil. 624 (1919).

THIRD DIVISION

LEA MER INDUSTRIES, INC., G.R. No. 161745

Petitioner,
Present
Panganiban, J.,
Chairman,
- versus - Sandoval-Gutierrez,
Corona,
Carpio Morales, and
 Garcia, JJ
Promulgated:
MALAYAN INSURANCE CO., INC.,*
Respondent. September 30, 2005
x -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- x

DECISION

PANGANIBAN, J.:

C ommon carriers are bound to observe extraordinary diligence in

their vigilance over the goods entrusted to them, as required by

the nature of their business and for reasons of public policy.

Consequently, the law presumes that common carriers are at fault or

negligent for any loss or damage to the goods that they transport. In the

present case, the evidence submitted by petitioner to overcome this

presumption was sorely insufficient.

 The Case

Before us is a Petition for Review[1] under Rule 45 of the Rules of

Court, assailing the October 9, 2002 Decision[2] and the December 29, 2003
Resolution[3] of the Court of Appeals (CA) in CA-GR CV No. 66028. The
challenged Decision disposed as follows:

WHEREFORE, the appeal is GRANTED. The December 7,

1999 decision of the Regional Trial Court of Manila, Branch 42 in
Civil Case No. 92-63159 is hereby REVERSED and SET ASIDE.
[Petitioner] is ordered to pay the [herein respondent] the value of the
lost cargo in the amount of P565,000.00. Costs against the [herein
petitioner].[4]

The assailed Resolution denied reconsideration.

The Facts
 Ilian Silica Mining entered into a contract of carriage with Lea Mer
Industries, Inc., for the shipment of 900 metric tons of silica sand valued
at P565,000.[5]Consigned to Vulcan Industrial and Mining Corporation, the
cargo was to be transported from Palawan to Manila. On October 25,
1991, the silica sand was placed on board Judy VII, a barge leased by Lea
Mer.[6] During the voyage, the vessel sank, resulting in the loss of the
cargo.[7]

Malayan Insurance Co., Inc., as insurer, paid Vulcan the value of the
lost cargo.[8] To recover the amount paid and in the exercise of its right of
subrogation, Malayan demanded reimbursement from Lea Mer, which
refused to comply. Consequently, Malayan instituted a Complaint with the
Regional Trial Court (RTC) of Manila on September 4, 1992, for the
collection of P565,000 representing the amount that respondent had paid
Vulcan.[9]

On October 7, 1999, the trial court dismissed the Complaint, upon

finding that the cause of the loss was a fortuitous event. [10] The RTC noted
that the vessel had sunk because of the bad weather condition brought
about by Typhoon Trining. The court ruled that petitioner had no advance
knowledge of the incoming typhoon, and that the vessel had been cleared
by the Philippine Coast Guard to travel from Palawan to Manila.[11]

Ruling of the Court of Appeals

Reversing the trial court, the CA held that the vessel was not seaworthy
when it sailed for Manila. Thus, the loss of the cargo was occasioned by
petitioners fault, not by a fortuitous event.[12]

Hence, this recourse.[13]

The Issues

Petitioner states the issues in this wise:

A. Whether or not the survey report of the cargo surveyor, Jesus

Cortez, who had not been presented as a witness of the said report
during the trial of this case before the lower court can be admitted in
evidence to prove the alleged facts cited in the said report.
 B. Whether or not the respondent, Court of Appeals, had validly or
legally reversed the finding of fact of the Regional Trial Court which
clearly and unequivocally held that the loss of the cargo subject of
this case was caused by fortuitous event for which herein petitioner
could not be held liable.

C. Whether or not the respondent, Court of Appeals, had committed

serious error and grave abuse of discretion in disregarding the
testimony of the witness from the MARINA, Engr. Jacinto Lazo y
Villegal, to the effect that the vessel Judy VII was seaworthy at the
time of incident and further in disregarding the testimony of the PAG-
ASA weather specialist, Ms. Rosa Barba y Saliente, to the effect that
typhoon Trining did not hit Metro Manila or Palawan.[14]

In the main, the issues are as follows: (1) whether petitioner is liable for the

loss of the cargo, and (2) whether the survey report of Jesus Cortez is

admissible in evidence.

The Courts Ruling

The Petition has no merit.

First Issue:
 Liability for Loss of Cargo

Question of Fact

The resolution of the present case hinges on whether the loss of the cargo

was due to a fortuitous event. This issue involves primarily a question of

fact, notwithstanding petitioners claim that it pertains only to a question of

law. As a general rule, questions of fact may not be raised in a petition for

review.[15] The present case serves as an exception to this rule, because the

factual findings of the appellate and the trial courts vary. [16] This Court

meticulously reviewed the records, but found no reason to reverse the CA.

Rule on Common Carriers

Common carriers are persons, corporations, firms or associations engaged

in the business of carrying or transporting passengers or goods, or both --

by land, water, or air -- when this service is offered to the public for

compensation.[17] Petitioner is clearly a common carrier, because it offers to

the public its business of transporting goods through its vessels.[18]

Thus, the Court corrects the trial courts finding that petitioner became a

private carrier when Vulcan chartered it.[19] Charter parties are classified as

contracts of demise (or bareboat) and affreightment, which are

distinguished as follows:
Under the demise or bareboat charter of the vessel, the
charterer will generally be considered as owner for the voyage or
service stipulated. The charterer mans the vessel with his own
people and becomes, in effect, the owner pro hac vice, subject to
liability to others for damages caused by negligence. To create a
demise, the owner of a vessel must completely and exclusively
relinquish possession, command and navigation thereof to the
charterer; anything short of such a complete transfer is a contract of
affreightment (time or voyage charter party) or not a charter party at
all.[20]

The distinction is significant, because a demise or bareboat charter

indicates a business undertaking that is private in character. [21] Consequently,

the rights and obligations of the parties to a contract of private carriage are

governed principally by their stipulations, not by the law on common

carriers.[22]
 The Contract in the present case was one of affreightment, as shown

by the fact that it was petitioners crew that manned the tugboat M/V

Ayalit and controlled the barge Judy VII.[23] Necessarily, petitioner was a

common carrier, and the pertinent law governs the present factual

circumstances.

Extraordinary Diligence Required

Common carriers are bound to observe extraordinary diligence in their

vigilance over the goods and the safety of the passengers they transport, as

required by the nature of their business and for reasons of public

policy.[24] Extraordinary diligence requires rendering service with the

greatest skill and foresight to avoid damage and destruction to the goods

entrusted for carriage and delivery.[25]

Common carriers are presumed to have been at fault or to have acted

negligently for loss or damage to the goods that they have

transported.[26] This presumption can be rebutted only by proof that they

observed extraordinary diligence, or that the loss or damage was

occasioned by any of the following causes:[27]

(1) Flood, storm, earthquake, lightning, or other natural disaster or
calamity;
(2) Act of the public enemy in war, whether international or civil;
(3) Act or omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in the
containers;
(5) Order or act of competent public authority.[28]

Rule on Fortuitous Events

Article 1174 of the Civil Code provides that no person shall be responsible

for a fortuitous event which could not be foreseen, or which, though

foreseen, was inevitable. Thus, if the loss or damage was due to such an

event, a common carrier is exempted from liability.

Jurisprudence defines the elements of a fortuitous event as follows:

(a) the cause of the unforeseen and unexpected occurrence, or the failure

of the debtors to comply with their obligations, must have been

independent of human will; (b) the event that constituted the caso

fortuito must have been impossible to foreseeor, if foreseeable, impossible

to avoid; (c) the occurrence must have been such as to render it impossible

for the debtors to fulfill their obligation in a normal manner; and (d) the

obligor must have been free from any participation in the aggravation of

the resulting injury to the creditor.[29]

To excuse the common carrier fully of any liability, the fortuitous

event must have been the proximate and only cause of the

loss.[30] Moreover, it should have exercised due diligence to prevent or

minimize the loss before, during and after the occurrence of the fortuitous

event.[31]

Loss in the Instant Case

There is no controversy regarding the loss of the cargo in the present case.

As the common carrier, petitioner bore the burden of proving that it had

exercised extraordinary diligence to avoid the loss, or that the loss had been

occasioned by a fortuitous event -- an exempting circumstance.

 It was precisely this circumstance that petitioner cited to escape

liability. Lea Mer claimed that the loss of the cargo was due to the bad

weather condition brought about by Typhoon Trining.[32] Evidence was

presented to show that petitioner had not been informed of the incoming

typhoon, and that the Philippine Coast Guard had given it clearance to

begin the voyage.[33] On October 25, 1991, the date on which the voyage

commenced and the barge sank, Typhoon Trining was allegedly far from

Palawan, where the storm warning was only Signal No. 1.[34]

The evidence presented by petitioner in support of its defense of

fortuitous event was sorely insufficient. As required by the pertinent law, it

was not enough for the common carrier to show that there was an

unforeseen or unexpected occurrence. It had to show that it was free from

any fault -- a fact it miserably failed to prove.

First, petitioner presented no evidence that it had attempted to

minimize or prevent the loss before, during or after the alleged fortuitous

event.[35] Its witness, Joey A. Draper, testified that he could no longer

remember whether anything had been done to minimize loss when water

started entering the barge.[36]This fact was confirmed during his cross-

examination, as shown by the following brief exchange:

Atty. Baldovino, Jr.:

Other than be[a]ching the barge Judy VII, were there other precautionary
measure[s] exercised by you and the crew of Judy VII so as to
prevent the los[s] or sinking of barge Judy VII?

xxxxxxxxx

Atty. Baldovino, Jr.:

Your Honor, what I am asking [relates to the] action taken by the
officers and crew of tugboat Ayalit and barge Judy VII x x x to
prevent the sinking of barge Judy VII?

xxxxxxxxx

Court:
Mr. witness, did the captain of that tugboat give any instruction on
how to save the barge Judy VII?

Joey Draper:
I can no longer remember sir, because that happened [a] long time ago. [37]

Second, the alleged fortuitous event was not the sole and proximate

cause of the loss. There is a preponderance of evidence that the barge was

not seaworthy when it sailed for Manila.[38] Respondent was able to prove

that, in the hull of the barge, there were holes that might have caused or

aggravated the sinking.[39]Because the presumption of negligence or fault

applied to petitioner, it was incumbent upon it to show that there were no

holes; or, if there were, that they did not aggravate the sinking.

Petitioner offered no evidence to rebut the existence of the holes. Its

witness, Domingo A. Luna, testified that the barge was in tip-top or

excellent condition,[40] but that he had not personally inspected it when it

left Palawan.[41]

The submission of the Philippine Coast Guards Certificate of

Inspection of Judy VII, dated July 31, 1991, did not conclusively prove that

the barge was seaworthy.[42] The regularity of the issuance of the Certificate

is disputably presumed.[43] It could be contradicted by competent evidence,

which respondent offered. Moreover, this evidence did not necessarily take

into account the actual condition of

the vessel at the time of the commencement of the voyage.[44]

Second Issue:
Admissibility of the Survey Report
Petitioner claims that the Survey Report[45] prepared by Jesus Cortez, the

cargo surveyor, should not have been admitted in evidence. The Court

partly agrees. Because he did not testify during the trial,[46] then the Report

that he had prepared was hearsay and therefore inadmissible for the

purpose of proving the truth of its contents.

The Survey Report Not the Sole Evidence

The facts reveal that Cortezs Survey Report was used in the testimonies of

respondents witnesses -- Charlie M. Soriano; and Federico S. Manlapig, a

cargo marine surveyor and the vice-president of Toplis and Harding

Company.[47] Soriano testified that the Survey Report had been used in

preparing the final Adjustment Report conducted by their company. [48] The

final Report showed that the barge was not seaworthy because of the

existence of the holes. Manlapig testified that he had prepared that Report

after taking into account the findings of the surveyor, as well as the pictures

and the sketches of the place where the sinking occurred.[49] Evidently, the
existence of the holes was proved by the testimonies of the witnesses, not

merely by Cortez Survey Report.

Rule on Independently
Relevant Statement

That witnesses must be examined and presented during the trial,[50] and that

their testimonies must be confined to personal knowledge is required by

the rules on evidence, from which we quote:

Section 36. Testimony generally confined to personal
knowledge; hearsay excluded. A witness can testify only to those
facts which he knows of his personal knowledge; that is, which are
derived from his own perception, except as otherwise provided in
these rules.[51]

On this basis, the trial court correctly refused to admit Jesus Cortezs

Affidavit, which respondent had offered as evidence.[52] Well-settled is the

rule that, unless the affiant is presented as a witness, an affidavit is

considered hearsay.[53]
 An exception to the foregoing rule is that on independently relevant

statements. A report made by a person is admissible if it is intended to

prove the tenor, not the truth, of the statements.[54] Independent of the

truth or the falsity of the statement given in the report, the fact that it has

been made is relevant. Here, the hearsay rule does not apply.[55]

In the instant case, the challenged Survey Report prepared by Cortez was

admitted only as part of the testimonies of respondents witnesses. The

referral to Cortezs Report was in relation to Manlapigs final Adjustment

Report. Evidently, it was the existence of the Survey Report that was

testified to. The admissibility of that Report as part of the testimonies of

the witnesses was correctly ruled upon by the trial court.

At any rate, even without the Survey Report, petitioner has already failed to

overcome the presumption of fault that applies to common carriers.

WHEREFORE, the Petition is DENIED and the assailed Decision

and Resolution are AFFIRMED. Costs against petitioner.
 SO ORDERED.

ARTEMIO V. PANGANIBAN
Associate Justice
Chairman, Third Division

WECONCUR:

ANGELINA SANDOVAL-GUTIERREZ RENATO C. CORONA

Associate Justice Associate Justice

CONCHITA CARPIO MORALES CANCIO C. GARCIA

Associate Justice Associate Justice

ATTESTATION
I attest that the conclusions in the above Decision had been reached in

consultation before the case was assigned to the writer of the opinion of

the Courts Division.

ARTEMIO V. PANGANIBAN
Associate Justice
Chairman, Third Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division
Chairmans Attestation, it is hereby certified that the conclusions in the
above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Courts Division.

HILARIO G. DAVIDE, JR.

Chief Justice

* The Petition included the Court of Appeals as a respondent. However, the CA was omitted
by the Court from the title of the case because, under Section 4 of Rule 45 of the
Rules of Court, the appellate court need not be impleaded in petitions for review.
[1] Rollo, pp. 12-27.
[2] Id., pp. 36-41. Tenth Division. Penned by Justice Elvi John S. Asuncion, with the

concurrence of Justices Portia Alio-Hormachuelos (Division chairperson) and Juan

Q. Enriquez Jr. (member).
[3] Id., p. 48.
[4] Assailed Decision, pp. 5-6; rollo, pp. 40-41.
[5] Id., pp. 1 & 36.
[6] The barge was allegedly owned by J. T. Lighterage Services. (TSN dated September 27,

1995, p. 3) It was non-propelled therefore, it could only operate through its towing by
petitioners tugboat M/T Ayalit. (TSN dated April 26, 1995, p. 12; TSN dated April
25, 1996, p. 19)
[7] Assailed Decision, p. 1; rollo, p. 36.
[8] Id., pp. 2 & 37.
[9] Ibid. The case was docketed as Civil Case No. 92-63159 and raffled to Branch 42.
[10] Ibid.
[11] RTC Decision dated December 7, 1999, p. 9; rollo, p. 58.
[12] Assailed Decision, p. 4; rollo, p. 39.
[13] The case was deemed submitted for decision on October 25, 2004, upon this Courts

receipt of petitioners sparse, 6-page (with only two pages of argument)

Memorandum, signed by Atty. Romualdo M. Jubay. Respondents Memorandum,
signed by Atty. Frederick C. Angel, was received by this Court on October 7, 2004.
[14] Petition, p. 8; rollo, p. 19. Original in uppercase.
[15] 1 of Rule 45 of the Rules of Court.
[16] Menchavez v. Teves Jr., 449 SCRA 380, 395, January 26, 2005; Philippine American General

Insurance Company v. PKS Shipping Company, 401 SCRA 222, 230, April 9,
2003; Commissioner of Internal Revenue v. Embroidery and Garments Industries (Phil.), Inc., 364
Phil. 541, 546, March 22, 1999.
[17] Art. 1732 of the Civil Code.
[18] Petition, pp. 4-5; rollo, pp. 14-15.
[19] RTC Decision dated December 7, 1999, p. 7; rollo, p. 56.
[20] Puromines, Inc. v. Court of Appeals, 220 SCRA 281, 288, per Nocon J. See also National Food
Authority v. Court of Appeals, 370 Phil. 735, 743, August 4, 1999.
[21] Philippine American General Insurance Company v. PKS Shipping Company, supra, p.

228; Coastwise Lighterage Corporation v. Court of Appeals, 316 Phil. 13, 19, July 12, 1995.
[22] National Steel Corporation v. Court of Appeals, 347 Phil. 345, 362, December 12,

1997; Valenzuela Hardwood and Industrial Supply, Inc. v. Court of Appeals, 274 SCRA 642,
654, June 30, 1997.
[23] RTC Decision dated December 7, 1999, pp. 4-6; rollo, pp. 53-55.
[24] Art. 1733 of the Civil Code.
[25] Calvo v. UCPB General Insurance Co., Inc., 429 Phil. 244, 252, March 19, 2002; Compania

Maritima v. Court of Appeals, 164 SCRA 685, 692, August 29, 1988.
[26] Art. 1735 of the Civil Code.
[27] Ibid. See also National Trucking and Forwarding Corp. v. Lorenzo Shipping Corporation, GR No.

153563, February 7, 2005; Asia Lighterage and Shipping, Inc. v. Court of Appeals, 409
SCRA 340, 346, August 19, 2003; Philippine American General Insurance Company v. PKS
Shipping Company, supra, p. 229; Coastwise Lighterage Corporation v. Court of Appeals, supra,
p. 20; Basco v. Court of Appeals, 221 SCRA 318, 323, April 7, 1993.
[28] Art. 1734 of the Civil Code.
[29] Mindex Resources Development v. Morillo, 428 Phil. 934, 944, March 12, 2002; Philippine

American General Insurance Co. Inc. v. MGG Marine Services, Inc., 428 Phil. 705,
714, March 8, 2002; Metal Forming Corp. v. Office of the President, 317 Phil. 853, 859,
August 28, 1995; Vasquez v. Court of Appeals, 138 SCRA 553, 557, September 13,
1985; Republic v. Luzon Stevedoring Corp., 128 Phil. 313, 318, September 29, 1967.
[30] Art. 1739 of the Civil Code.
[31] Ibid.
[32] RTC Decision dated December 7, 1999, p. 9; rollo p. 58 (citing the testimony of Rosa S.

Barba). See also Petitioners Memorandum, p. 2; rollo, p. 157.

[33] Ibid. (citing the testimony of Domingo A. Luna).
[34] The testimony of Rosa S. Barba, weather specialist of Philippine Atmosphere (PAGASA),

was summarized by the RTC as follows:

In May 1993, upon the request of [petitioners] counsel, she issued a weather bureau
report or certification, an official record of Pagasa, which weather report is based
on their weather station at Puerto Princesa, Palawan. x x x The report on the
weather condition on October 21, 1991 at around 11:00 am to 2:00 pm was
weathercast sky. The bad weather condition on October 25, 26, and 27, 1991
was caused by typhoon Trining but said typhoon then was far from Palawan,
which was only signal No. 1. Tropical storm Trining entered the Philippine area of
responsibility on October 24. Pagasa did issue a warning that said storm was
approaching the Philippines. Storm Trining was classified, as super typhoon with
a maximum of 185 kilometer[s] per hour and the coverage was big. On October
24, 1991, typhoon Trining hit Batangas, the Ilocos Provinces, Isabela, but not
Metro Manila or Palawan. Maybe Palawan was affected but if ever it was affected
it was only minimal. RTC Decision dated December 7, 1999, p. 6; rollo, p.
55.
[35] See Art. 1739 of the Civil Code.
[36] The testimony of Joey A. Draper, the quarter master in charge of steering the tugboat,
was summarized by the RTC as follows:
On October 25, 1991, he was assigned in the tugboat M/T Ayalit. x x x [The tugboat] was
towing the barge Judy VII which was carrying silica sand. x x x He was an
ordinary seaman in 1991 and it was his first year as a seaman, although he
made several trips to Palawan and Manila. x x x He does not know the
qualification[s] of a seaman but he was then a second year high school [student]
and though he did not take any examination, he knew about navigation. When
the incident happened in 1991[,] he had no seaman book as it was not yet strict
at the time and the seaman book can be dispensed with. He was only 18 years
and has an actual training of the work when he boarded the tugboat. Even if he
has no formal schooling, the master allowed him to handle the wheel of the
tugboat. When they left San Vicente, Palawan for Manila on said date at around
4:00 pm, the weather was fair. When they passed by Linapakan Island, the
waves were quite big and the wind was a little bit strong. At that point in time, the
barge patrol of Judy VII wave[d] his hand [at] them. Their captain decided to
approach the barge. They noticed that [there was] water already inside the
barge. About two (2) days later, their captain decided to beach the barge. The
said barge then sank and only the barges house at the back portion of the barge
(the puppa) was above water. He could only remember that they save[d] the
bargemen and proceeded to El Nido, Palawan where they secured themselves to
save the tugboat. But he could no longer remember how long a time they stayed
thereat nor if they went back to the barge Judy VII. RTC Decision, p. 6; rollo,
p. 55.
[37] TSN dated November 22, 1995, pp. 27-29.
[38] In civil cases, parties who carry the burden of proof must establish their case by a

preponderance of evidence. 1 of Rule 133 of the Rules of Court.

[39] Respondent proved this allegation through the testimony of its witnesses and submission

of documentary evidence. Unseaworthiness was also the finding of the appellate

court. Assailed Decision, p. 4; rollo, p. 39.
[40] TSN dated April 26, 1995, p. 44.
[41] TSN dated September 27, 1995, pp. 17-21.
[42] Petitioners Exhibit 4.
[43] 3(m) of Rule 131 of the Rules of Court.
[44] Delsan Transport Lines, Inc. v. Court of Appeals, 420 Phil. 824, 834, November 15, 2001.
[45] Exhibit H. See Respondents Offer of Evidence, p. 2; records, p. 159.
[46] Petitioners Memorandum, p. 3; rollo, p. 160.

Respondents witness, Federico S. Manlapig, testified that Jesus Cortez -- who had already
migrated to Australia -- could no longer testify. TSN dated December 15, 1994, p. 9.
[47] RTC Decision dated December 7, 1999, p. 4; rollo, p. 53.
[48] Ibid.
[49] TSN dated December 15, 1994, pp. 9-13.
[50] 1 of Rule 132 of the Rules of Court.
[51] Rule 130 of the Rules of Court.
[52] RTC Order dated March 17, 1995; records, p. 165.
[53] Melchor v. Gironella, GR No. 151138, February 16, 2005; People v. Crispin, 383 Phil. 919,

931, March 2, 2000; People v. Villeza, 127 SCRA 349, 359, January 31, 1984; Paa v.
Chan, 128 Phil. 815, 821, October 31, 1967.
[54] Country Bankers Insurance v. Lianga Bay and Community Multi-purpose Cooperative, 425 Phil. 511,
521, January 25, 2002. See also Presidential Commission on Good Government v.
Desierto, 445 Phil. 154, 191, February 10, 2003; People v. Mallari, 369 Phil. 872, 884, July
20, 1999; People v. Cloud, 333 Phil. 306, 322, December 10, 1996.
[55] People v. Velasquez, 352 SCRA 455, 476, February 21, 2001; Gotesco Investment Corporation v.

Chatto, 210 SCRA 18, 32, June 16, 1992.

SECOND DIVISION

[G.R. No. 118707. February 2, 1998]

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. FERNANDO

VIOVICENTE y GONDESA, accused-appellant.

DECISION
MENDOZA, J.:

In an information dated August 8, 1991 accused-appellant Fernando Viovicente y

Gondesa, together with John Doe, Peter Doe, and Mike Doe, was charged with murder,
as follows:[1]

That on or about the 21st day of July, 1991, in Quezon City, Philippines, and
within the jurisdiction of this Honorable Court, the above-named accused,
armed with a bolo and an icepick, conspiring together, confederating with and
mutually helping one another, did, then and there, wilfully, unlawfully and
feloniously with intent to kill, with treachery and evident premeditation and by
taking advantage of superior strength, attack, assault and employ personal
violence upon the person of FERNANDO HOYOHOY Y VENTURA, by then
and there, stabbing him on the chest with the use of said bolo and icepick,
thereby inflicting upon him serious and mortal wounds which were the direct
and immediate cause of his untimely death, to the damage and prejudice of
the heirs of said Fernando Hoyohoy y Ventura, in such amount as may be
awarded under the provisions of the Civil Code.

CONTRARY TO LAW.

Fernando Flores testified that while he was on his way to work at 6 a.m. on
July 21, 1991, he saw his co-worker Fernando Hoyohoy attacked by four
men. Hoyohoy was buying cigarettes at a store located in an alley of Tatalon
Street, Quezon City when, according to Flores, two persons emerged from
behind the store. Flores identified the two as accused-appellant Fernando
Viovicente, alias Macoy, and one Balweg. The two approached the victim and
seized him by the shoulders (accused-appellant held the victims right
shoulder, while Balweg held him by the left). Then, Flores said, two other
persons, whom he identified as Maning and Duras, came up to the victim and
stabbed him in the left side of the chest. The victim was struck first by Maning
with a bolo, followed by Duras who stabbed Hoyohoy with an icepick. The [2]

four then fled from the scene.

During the whole incident, Fernando Flores was ten steps away from the
victim.[3] Flores testified that he knew accused-appellant because both of them had
worked in a department store in Sta. Mesa.[4] He said that two weeks after the incident,
his sister saw accused-appellant in their neighborhood and told him. The two of them
then informed the victims brother who then tried to apprehend accused-appellant.
Accused-appellant resisted and drew his knife, but neighbors joined in subduing
him. Later, they turned him over to the barangay captain.[5] On August 6, 1991, Flores
gave a statement regarding the incident to the police.[6]
Tomas Hoyohoy, the victims brother, testified[7] that after Fernando had been
stabbed he ran to their house and identified Maning Viovicente, Duras Viovicente,
accused-appellant Fernando Macoy Viovicente, and Romero Balweg Obando as his
assailants. The four were neighbors of theirs in Tatalon.
Fernando Hoyohoy was taken to the National Orthopedic Hospital where he died at
11 a.m. of the same day (July 21, 1991). A death certificate [8] and certificate of
postmortem examination[9] were later issued. For the victims funeral, the family incurred
P9,000.00 in expenses.[10]
Cpl. Iluminado Combalicer of the Galas Police Sub-Station 4 testified[11] that, upon
receipt of the report of the incident, he went to the National Orthopedic Hospital where
he was able to talk to the victim. This was at 8 a.m. of July 21, 1991. Hoyohoy told him
that he had been stabbed by Maning. Cpl. Combalicer took down the victims statement
and made him sign it.[12] The pertinent portion of the statement reads:
Tanong: Anong pangalan mo?
Sagot: Fernando Hoyohoy y Ventura, 25 taong gulang, binata, empleyado, tubo sa Manila,
nakatira sa No. 11, Bicol Brigade, Tatalon, Q.C.
02 T: Bakit ka narito sa hospital?
S: Sinaksak po ako ni Maning at Duras roon ring nakatira sa may likod ng bahay
namin.
03 T: Anong dahilan at ikaw ay sinaksak?
S: Hindi ko po alam.
Accused-appellants defense was alibi.[13] He claimed that on July 21, 1991, the day
of the incident, he was in Bataan. According to him, two weeks later he returned to
Manila because he did not like his job in Bataan. He went to his mothers house and,
after eating, went to the house of his cousins, Maning and Duras. It was there where he
was arrested. Accused-appellants mother, Filomena Canlas, corroborated his alibi.[14]
The Regional Trial Court of Quezon City (Branch 92)[15] convicted accused-appellant
of murder and sentenced him to 17 years, 4 months, and 1 day of reclusion temporal,
as minimum, to 20 years of reclusion temporal, as maximum, and ordered him to pay
the heirs P9,000.00 as burial expenses, P50,000.00 moral damages, and the costs. On
appeal, the Court of Appeals[16] thought the penalty should be increased to reclusion
perpetua because of the absence of mitigating and aggravating circumstances and, in
accordance with Rule 124, 13, certified the case to this Court for final review. The Court
gave accused-appellant the opportunity of filing an additional appellants brief but he
found it unnecessary to do so. The case was therefore submitted for resolution on the
basis of the briefs of the parties in the Court of Appeals and the record of the trial court.
Accused-appellants brief contains the following assignment of errors:
I

THE COURT A QUO ERRED IN GIVING WEIGHT AND CREDENCE TO

THE TESTIMONIES OF THE PROSECUTION WITNESSES AND IN
DISREGARDING THE THEORY OF THE DEFENSE.
II

THE COURT A QUO ERRED IN FINDING ACCUSED-APPELLANT

FERNANDO VIOVICENTE GUILTY BEYOND REASONABLE DOUBT OF
THE OFFENSE CHARGED DESPITE OF THE FAILURE OF THE VICTIM
FERNANDO HOYOHOY TO IDENTIFY ACCUSED-APPELLANT AS ONE OF
THE ASSAILANTS IN HIS ANTE-MORTEM STATEMENT HE HAD GIVEN
TO THE POLICE INVESTIGATOR AT THE HOSPITAL.

First. Accused-appellant contends that it was error for the trial court to rely on
the ante mortem statement of the deceased which he gave to his brother Tomas, in
which the deceased pointed to accused-appellant and Balweg as his assailants. He
argues that the alleged declaration cannot be considered a dying declaration under
Rule 130, 37 of the Rules on Evidence because it was not in writing and it was not
immediately reported by Tomas Hoyohoy to the authorities. Instead, according to
accused-appellant, the trial court should have considered the statement (Exh. F) given
by the victim to Cpl. Combalicer also on the day of the incident, July 21, 1991. In that
statement, the victim pointed to the brothers Maning Viovicente and Duras Viovicente
as his assailants. This contention is without merit. The Revised Rules on Evidence do
not require that a dying declaration must be made in writing to be admissible. Indeed, to
impose such a requirement would be to exclude many a statement from a
victim in extremis for want of paper and pen at the critical moment. Instead Rule 130,
37[17] simply requires for admissibility of an ante mortem statement that (a) it must
concern the crime and the surrounding circumstances of the declarants death; (b) at the
time it was made, the declarant was under a consciousness of impending death; (c) the
declarant was competent as a witness; and (d) the declaration was offered in a criminal
case for homicide, murder, or parricide in which the decedent was the victim. [18] These
requisites have been met in this case. First, Fernando Hoyohoys statement to his
brother Tomas concerns his death as the same refers to the identity of his
assailants. Second, he made the declaration under consciousness of an impending
death considering the gravity of his wounds which in fact caused his death several
hours later. Third, Fernando Hoyohoy was competent to testify in court. And fourth, his
dying declaration was offered in a criminal prosecution for murder where he himself was
the victim.
Nor is there merit in the contention that because Tomas Hoyohoy, to whom the
alleged ante mortem statement was given, reported it to the police on August 5, 1991,
after accused-appellant had been arrested, it should be treated as suspect. Delay in
making a criminal accusation however does not necessarily impair a witness credibility if
such delay is satisfactorily explained.[19] Tomas testified that he knew Cpl. Combalicer
had talked to his brother Fernando at the hospital[20] implying that he did not then make a
statement because the matter was under investigation.
Second. Actually, the trial courts decision is anchored mainly on the testimony of
Fernando Flores. Flores was an eyewitness to the killing of Fernando Hoyohoy. This
witness pointed to accused-appellant and to three others (Balweg, Maning Viovicente,
and Duras Viovicente) as the assailants, describing the part each played in the slaying
of Fernando Hoyohoy. Flores testified:
FISCAL REYES:
Q While you were along that Alley at Tatalon, Quezon City, what happened if any, Mr.
Witness?
A I saw Fernando Hoyohoy buying cigarette.
Q What happened while he was buying cigarette?
A Four (4) persons went near him while he was buying cigarette and two (2) held him by the
hand.
Q Mr. witness you said that Fernando Hoyohoy at the time was buying cigarette where was
he facing at the time?
A He was facing the store.
Q How far were you from Fernando Hoyohoy?
A Ten (10) steps away.
Q You said that four (4) persons appeared and two (2) held Fernando Hoyohoy by the
shoulder, from where did these two (2) come from?
A The two (2) persons came behind the store.
Q Who held Hoyohoy by the right shoulder if you know, Mr. witness?
A Fernando Viovicente and Alias Balweg.
Q Only the right shoulder?
A Yes, Maam.
Q I am asking you the right shoulder?
A Fernando Viovicente.
Q And who held Hoyohoys left shoulder?
A Alias Balweg.
Q Do you know the complete name of Alias Balweg?
A No, Maam, I do not know.
Q How about the other two (2) what did these two (2) persons do to Fernando Hoyohoy at
the time?
A They were the ones who stabbed Fernando Hoyohoy.
Q What were the names of the two (2) persons who stabbed Fernando Hoyohoy?
A Maning and Duras.
Q Do you know the full name of these two (2) persons?
A No, Maam.
Q What was Maning holding at the time?
A A bolo, Maam.
Q What was Duras holding?
A Icepick.
Q Where did Maning stab the victim Fernando Hoyohoy?
A At the left chest.
Q Who stabbed first, Mr. witness?
A Maning.
Q And what did Duras do?
A He helped stabbed Fernando Hoyohoy.
Q With what weapon?
A Icepick.
Q You said that Fernando Viovicente was the one who held Fernando Hoyohoy by the right
shoulder is that correct?
A Yes, Maam.
Q Is that Viovicente the same Viovicente who is now the accused in this Court?
A Yes, Maam.
Q Will you please look around and if he is around please point at him, Mr. witness?
A Witness pointing to a person who identified himself as Fernando Viovicente.
 Q Mr. witness you mentioned that these Duras and Maning were brothers, is it not?
A Yes, Maam.
Q Do you know at least their family name?
A Viovicente.
Q Where are they residing if you know, Mr. witness?
A They are living with their sisters.
Q Is Fernando Viovicente the one whom you pointed in this courtroom a brother of Maning
and Duras?
A No Maam.
Q How many stabs did Fernando Hoyohoy receive from these two persons?
A Two (2) stab wounds.
Q How many from Maning?
A One (1) stab.
Q How about from Duras?
A One, Maam.
Q What happened after these two (2) persons Maning and Duras stabbed Fernando
Hoyohoy?
A They ran away.20
Accused-appellant claims that Flores was biased, being a neighbor of the
deceased. But so were the Viovicentes and Romero Obando his neighbors. No ill
motive on his part that would impel Flores to testify falsely against accused-appellant
has been shown. Consequently, the trial courts finding as to his testimony is entitled to
great respect. Indeed unless the trial judge plainly overlooked certain facts of substance
and value which, if considered, might affect the result of the case, his assessment of the
credibility of witnesses must be respected.[21]Flores positive identification of accused-
appellant should be given greater credence than the latters bare and self-serving
denials.[22]
Third. The foregoing evidence unequivocally showing accused-appellant as among
those who conspired to kill Fernando Hoyohoy is dispositive of his defense that he was
in Bataan on the day of the crime. It is settled that alibi cannot prevail against positive
identification of the accused. In addition, accused-appellants defense is weakened by
the inconsistencies between his testimony and his mothers. Accused-appellant testified
that he departed for Bataan on a Sunday (July 21, 1991) at past 8:00 in the morning
with his cousin Lucring, taking a ride in the car of his employer.[23] But his mother testified
that accused-appellant and Lucring left for Bataan at noontime on July 18, 1991 and
they left by bus.[24]
The Court of Appeals correctly held accused-appellant guilty of murder and since
there was neither mitigating nor aggravating circumstance, the penalty should
be reclusion perpetua.No reason was really given by the trial court for meting out on
accused-appellant the penalty of 17 years, 4 months, and 1 day of reclusion temporal,
as minimum, to 20 years of reclusion temporal, as maximum. However, the award of the
damages made by the trial court, as affirmed by the Court of Appeals, must be
revised. In addition to the amount of P9,000.00 for burial expenses, which should be
treated as actual damages, and the amount of P50,000.00 as moral damages, accused-
appellant must be made to pay indemnity in the amount of P50,000.00.[25]
WHEREFORE, the decision appealed from is AFFIRMED with the modification that
accused-appellant is sentenced to suffer the penalty of reclusion perpetua and ordered
to pay to the heirs of Fernando Hoyohoy the sum of P9,000.00, as actual
damages, P50,000.00, as moral damages, and P50,000.00, as civil indemnity for the
death of Fernando Hoyohoy.
SO ORDERED.
Regalado (Chairman), Melo, Puno and Martinez, JJ., concur.

[1]
Records, p. 1.
[2]
TSN, pp. 3-6, 11-14, Nov. 5, 1991.
[3]
Id., p. 3.
[4]
Id., p. 8.
[5]
Ibid.
Exh. A, Folder of Exhibits, pp. 1-2. A detail of the incident contained therein which was not brought out
[6]

during the testimony of Fernando Flores was that the four assailants of Fernando Hoyohoy were drunk
when they ganged up on him.
[7]
TSN, pp. 3-5, Nov. 12, 1991.
[8]
Exh. D, Folder of Exhibits, p. 5.
[9]
Exh. E, id., p. 6.
[10]
Per receipt dated July 27, 1991 issued by Funeraria Real. Exh. C, id., p. 4.
[11]
TSN, pp. 10-11, Nov. 21, 1991.
[12]
Exh. F, Folder of Exhibits, p. 7.
[13]
TSN, pp. 5-9, Dec. 3, 1991.
[14]
TSN, p. 3, Dec. 5, 1991.
[15]
Per Judge Pacita Caizares-Nye.
Per Justice Ricardo J. Francisco and concurred in by Justices Ramon A. Barcelona, and Godardo A.
[16]

Jacinto.
This provision reads: Dying declaration. - The declaration of a dying person, made under the
[17]

consciousness of an impending death, may be received in any case wherein his death is the subject of
inquiry, as evidence of the cause and surrounding circumstances of such death.
[18]
People v. Garma, G.R. No. 110872, April 18, 1997.
[19]
People v. Apongan, G.R. No. 112369, April 4, 1997; People v. Padao, 267 SCRA 64 (1997).
TSN, p. 5, Nov. 12, 1991. Tomas testified though that he was outside the room when Cpl. Combalicer
[20]

conducted the investigation.

20
TSN, pp. 3-6, Nov. 5, 1991.
[21]
E.g., People v. Apongan, G.R. No. 112369, April 4, 1997.
[22]
People v. Obzunar, 265 SCRA 547 (1996).
[23]
TSN, pp. 7-8, Dec. 3, 1991.
[24]
TSN, p. 5, Dec. 5, 1991.
[25]
People v. Mendoza, G.R. No. 115809, Jan. 23, 1998.