THIRD DIVISION

[G.R. No. 78777. September 2, 1992.]

MERLIN P. CAIÑA, Petitioner, v. PEOPLE OF THE PHILIPPINES and

MUNICIPAL TRIAL COURT IN CITIES, BRANCH IV, CAGAYAN DE ORO
CITY, Respondent.

Jatico & Arnado Law Office for Petitioner.

Jaime Y. Sindiong for Respondents.

SYLLABUS

1. REMEDIAL LAW; APPEAL; GUIDELINES FOR APPEALS IN CIVIL AND

CRIMINAL CASES EXCEPT WHERE THE PENALTY OF DEATH, RECLUSION
PERPETUA OR LIFE IMPRISONMENT IS IMPOSED. — The procedure adopted by
the petitioner in this case is improper. This is evident from the fact that the petitioner
filed a notice of appeal with the Regional Trial Court to the Supreme Court claiming
that the issue raised is a pure question of law. The proper procedure that should have
been followed was to file a petition for review on certiorari under Rule 45 of the Rules
of Court. This Court en banc, through a resolution entitled Murillo v. Consul, UDK-
9748, March 1, 1990 laid down the following guidelines for appeals in civil cases and
criminal cases except where the penalty of death, reclusion perpetua or life
imprisonment is imposed: (1) If an appeal is attempted from a judgment of a Regional
Trial Court by notice of appeal, that appeal can and should never go to this Court,
regardless of any statement in the notice that the court of choice is the Supreme Court;
(2) If an appeal by notice of appeal is taken from the Regional Trial Court to the Court
of Appeals and in the latter Court, the appellant raises naught but issues of law the
appeal should be dismissed for lack of jurisdiction; (3) If an appeal is essayed from the
judgment rendered by a Regional Trial Court in the exercise of its appellate jurisdiction
by notice of appeal, instead of by petition for review, the appeal is inefficacious and
should be dismissed; and (4) it is only through petitions for review on certiorari that
the appellate jurisdiction of this Court may properly be invoked.

2. ID.; ID.; QUESTION OF LAW AND QUESTION OF FACT; DISTINGUISHED.

— The case of Cheesman v. Intermediate Appellate Court, 193 SCRA 93, 100-101
[1991], distinguishes between questions of fact and questions of law. We quote: ". . . a
question of law — which exists ‘when the doubt or difference arises as to what the law
is on a certain state of facts’ — ‘there is a question of fact when the doubt or difference
arises as to the truth or the falsehood of alleged facts,’ (Ramos, Et. Al. v. Pepsi-Cola
Bottling Co. of the P.I., Et Al., 19 SCRA 289, 292, citing II Bouvier’s Law Dictionary,
2784, and II Martin, Rules of Court, 255; SEE also, Francisco, The Rules of Court,
Annotated and Commented, 1968, ed., Vol. III, pp. 485-488) or when the ‘query
necessarily invites calibration of the whole evidence considering mainly the credibility
of witnesses, existence and relevancy of specific surrounding circumstances, their
relation to each other and to the whole and the probabilities of the situation.’ (See Lim
v. Calaguas, 83 Phil. 796, 799, and Mackay Radio & Tel. Co. v. Rich, 28 SCRA 699,
705, cited in Moran, Comments on the Rules, 1979 ed., p. 474) . . .

3. ID.; ID.; ID.; ID.; APPLICATION IN CASE AT BAR. — Questions on whether or

not there was a preponderance of evidence to justify the award of damages or whether
or not there was a causal connection between the given set of facts and the damage
suffered by the private complainant or whether or not the act from which civil liability
might arise exists are questions of fact. In this regard, the petitioner’s case should not
have been elevated to this Court since a petition for review on certiorari under Rule 45
allows only questions of law to be raised (Section 2, Rule 45, Rules of Court). The
proper procedure that he should have adopted was to file a petition for review with the
Court of Appeals within 15 days from notice of judgment pointing out errors of fact or
law that will warrant a reversal or modification of the decision or judgment sought to
be reviewed (See Resolution of Court of Appeals dated August 12, 1971, par. 22 [b] of
Interim Rules of Court and Sec. 22, BP 129).

4. CRIMINAL LAW; DAMAGE TO PROPERTY THRU RECKLESS

IMPRUDENCE; CIVIL LIABILITY THEREOF; EXTINGUISHED BY THE
ABSENCE OF ACT THAT MIGHT GIVE RISE THERETO. — It is clear from the
decision of the Municipal Trial Court that there was no finding of recklessness,
negligence and imprudence on the part of the accused. We quote: "With respect to the
evidence presented by the prosecution, it is the thinking of the court that the most
important or paramount factor in cases of this nature, is to evidently prove the
recklessness, negligence and imprudence of the accused. The prosecution failed to
show a clear and convincing evidence of such recklessness, negligence and
imprudence. Prosecution witness Rene Abas stated that the speed of the jeep of the
accused was on a regular speed or not so fast or just the very speed the jeep can run. It
can be gleaned therefore from the decision that the act from which civil liability might
arise does not exist. It is noted by the Court that in the dispositive portion of the
decision of the Municipal Trial Court, the accused’ (petitioner in this case) acquittal
was based on the ground that his guilt was not proved beyond reasonable doubt making
it possible for Dolores Perez to prove and recover damages. (See Article 29, Civil
Code) However, from a reading of the decision of the Municipal Trial Court, there is a
clear showing that the act from which civil liability might arise does not exist. Civil
liability is then extinguished. (See Padilla v. Court of Appeals, 129 SCRA 558, 570
[1984])
 DECISION

GUTIERREZ, JR., J.:

Merlin P. Caiña, whom we denominate petitioner, questions the award of damages

made by the Municipal Trial Court while acquitting him of the charge of reckless
imprudence resulting in serious physical injuries. The award of damages was initially
deleted on appeal but was later on reinstated by the Regional Trial Court upon a motion
for reconsideration.

The records of this case were sent to the Court of Appeals inspite of the appellant’s
error in filing a notice of appeal to the Supreme Court on a pure question of law. The
appellate court forwarded the case to us. Instead of rejecting the case at that time, this
Court considered the issue sufficiently important to warrant this review. The completed
records were re-assigned to the undersigned ponente for study and report preparatory to
full court deliberations only on August 5, 1992. cralawnad

The facts of the case are as follows: chanrob1es virtual 1aw library

The petitioner, Merlin P. Caiña, Accused of reckless imprudence resulting in serious

physical injuries, was acquitted of the criminal charge against him in a decision
rendered by the Municipal Trial Court of Cagayan de Oro City, Branch 4. However, the
petitioner was ordered to pay the private complainant, Dolores Perez, the sum of
P2,893.40 representing actual damages. The dispositive portion of said decision
reads:jgc:chanrobles.com.ph

"IN VIEW OF THE FOREGOING, and for failure of the prosecution to establish the
guilt of the accused beyond reasonable doubt, the accused is hereby acquitted.

"However, the accused is ordered to pay the private complainant the amount of
P2,893.40 representing the actual damages incurred by the private complainant in
connection with this case" (Records, pp. 479-480).

The petitioner, questioning the award of damages, appealed to the Regional Trial Court.
The Regional Trial Court of Misamis Oriental, Branch 24 rendered its decision, the
dispositive portion of which reads as follows: jgc:chanrobles.com.ph

"WHEREFORE, in view of the foregoing observations, the decision pertaining to the

civil aspect only, appealed from, is hereby REVERSED and a new one entered,
absolving accused of civil liability. It is understood that this decision does not touch the
trial court’s decision on the acquittal of the accused." (Rollo, p. 33)

The private complainant subsequently filed a Motion for Reconsideration upon which
the Regional Trial Court reversed its former decision, to wit: chanrobles virtual lawlibrary
"WHEREFORE, in view of the foregoing observations, this court hereby RESOLVES
to reconsider its decision dated February 17, 1986 and consequently to AFFIRM as it
hereby affirms in toto the decision appealed from as far as the civil aspect of the same
is concerned." (Rollo, p. 43)

As a result of such reversal, the petitioner filed this appeal raising one legal issue to be
resolved:jgc:chanrobles.com.ph

"THAT THE TRIAL COURT AND THE RESPONDENT REGIONAL TRIAL

COURT ERRED IN AWARDING CIVIL LIABILITY AGAINST THE HEREIN
PETITIONER AND THE SAID AWARD IS VOID AND ILLEGAL." (Rollo, p. 26)

The petitioner alleges that the award for damages is void and illegal as there was no
finding of any preponderance of evidence as to the causal connection between the given
set of facts and the damage suffered by the private complainant. In fact, there is a clear
showing from the face of the decision of the trial court that the fact from which the civil
liability might arise does not exist.

Before discussing the merits of this case, we first discuss the procedural aspect.

The procedure adopted by the petitioner in this case is improper. This is evident from
the fact that the petitioner filed a notice of appeal with the Regional Trial Court to the
Supreme Court claiming that the issue raised is a pure question of law (Records, p.
805). The proper procedure that should have been followed was to file a petition for
review or certiorari under Rule 45 of the Rules of Court. chanrobles law library : red

The Regional Trial Court in its order issued March 31, 1987 (Records, p. 807) correctly
reminded the petitioner that the appeal to the Supreme Court shall be through a petition
for certiorari governed by Rule 45 of the Rules of Court. However, the Regional Trial
Court forwarded the records of the case to the Court of Appeals. The Court of Appeals,
in turn, noting in the Notice of Appeal that only questions of law were involved,
thereupon transmitted the records of said case to this Court (Rollo, p. 1).

This Court en banc, through a resolution entitled Murillo v. Consul, UDK-9748, March
1, 1990 laid down the following guidelines for appeals in civil cases and criminal cases
except where the penalty of death, reclusion perpetua or life imprisonment is imposed:
(1) If an appeal is attempted from a judgment of a Regional Trial Court by notice of
appeal, that appeal can and should never go to this Court, regardless of any statement in
the notice that the court of choice is the Supreme Court; (2) If an appeal by notice of
appeal is taken from the Regional Trial Court to the Court of Appeals and in the latter
Court, the appellant raises naught but issues of law the appeal should be dismissed for
lack of jurisdiction; (3) If an appeal is essayed from, the judgment rendered by a
Regional Trial Court in the exercise of its appellate jurisdiction by notice of appeal,
instead of by petition for review, the appeal is inefficacious and should be dismissed;
and (4) it is only through petitions for review on certiorari that the appellate
jurisdiction of this Court may properly be invoked.
Applying the rules abovementioned, the Court of Appeals should not have transmitted
the records to this Court.

But even assuming arguendo that a petition for review on certiorari under Rule 45 was
correctly filed, from a reading of the petitioner’s brief, it can be seen that what
petitioner is raising is a question of fact.

The case of Cheesman v. Intermediate Appellate Court, 193 SCRA 93, 100-101 [1991],
distinguishes between question of fact and questions of law. We quote: chanrobles virtual lawlibrary

x x x

". . . a question of law — which exists ‘when the doubt or difference arises as to what
the law is on a certain state of facts’ — ‘there is a question of fact when the doubt or
difference arises as to the truth or the falsehood of alleged facts,’ (Ramos, Et. Al. v.
Pepsi-Cola Bottling Co. of the P.I., Et Al., 19 SCRA 289, 292, citing II Bouvier’s Law
Dictionary, 2784, and II Martin, Rules of Court, 255; SEE also, Francisco, The Rules of
Court, Annotated and Commented, 1968, ed., Vol. III, pp 485-488) or when the ‘query
necessarily invites calibration of the whole evidence considering mainly the credibility
of witnesses, existence and relevancy of specific surrounding circumstances, their
relation to each other and to the whole and the probabilities of the situation.’ (See Lim
v. Calaguas, 83 Phil. 796, 799, and Mackay Radio Tel. Co. v. Rich, 28 SCRA 699, 705,
cited in Moran, Comments on the Rules, 1979 ed., p. 474).

x x x

Questions on whether or not there was a preponderance of evidence to justify the award
of damages or whether or not there was a causal connection between the given set of
facts and the damage suffered by the private complainant or whether or not the act from
which civil liability might arise exists are questions of fact.

In this regard, the petitioner’s case should not have been elevated to this Court since a
petition for review on certiorari under Rule 45 allows only questions of law to be
raised (Section 2, Rule 45, Rules of Court).

The proper procedure that he should have adopted was to file a petition for review with
the Court of Appeals within 15 days from notice of judgment pointing out errors of fact
or law that will warrant a reversal or modification of the decision or judgment sought to
be reviewed (See Resolution of Court of Appeals dated August 12, 1971, par. 22 [b] of
Interim Rules of Court and Sec. 22, BP 129). chanrobles v irtual lawlibrary

However, this Court noting that this case was last acted upon by the Regional Trial
Court six (6) years ago and the records of the case have already been brought to this
Court, has decided to delve on the merits of the case.
The petitioner’s contention is meritorious. We grant the petition.

It is clear from the decision of the Municipal Trial Court that there was no finding of
recklessness, negligence and imprudence on the part of the accused. We quote: jgc:chanrobles.com.ph

"With respect to the evidence presented by the prosecution, it, is the thinking of the
court that the most important or paramount factor in cases of this nature, is to evidently
prove the recklessness, negligence and imprudence of the accused. The prosecution
failed to show a clear and convincing evidence of such recklessness, negligence and
imprudence. Prosecution witness Rene Abas stated that the speed of the jeep of the
accused was on a regular speed or not so fast or just the very speed the jeep can run.
(Decision, p. 5, Records, p. 477, Emphasis Supplied)

It can be gleaned therefore from the decision that the act from which civil liability
might arise does not exist.

It is noted by the Court that in the dispositive portion of the decision of the Municipal
Trial Court, the accused’ (petitioner in this case) acquittal was based on the ground that
his guilt was not proved beyond reasonable doubt making it possible for Dolores Perez
to prove and recover damages. (See Article 29, Civil Code) However, from a reading of
the decision of the Municipal Trial Court, there is a clear showing that the act from
which civil liability might arise does not exist. Civil liability is then extinguished. (See
Padilla v. Court of Appeals, 129 SCRA 558, 570 [1984]) chanroblesvirtualawlibrary

WHEREFORE, the petition is GRANTED. The questioned order of the Regional Trial
Court issued on July 14, 1986 is SET ASIDE while the Regional Trial Court’s decision
issued on February 17, 1986 reversing the decision of the Municipal Trial Court
pertaining to the civil aspect, absolving accused of civil liability, is hereby
REINSTATED.

Bidin, Davide, Jr. and Romero, JJ., concur.

Feliciano, J., is on leave.

FIRST DIVISION

[G.R. No. 122166. March 11, 1998]

CRESENTE Y. LLORENTE, JR., petitioner, vs. SANDIGANBAYAN and LETICIA G.
FUERTES, respondents.

DECISION

PANGANIBAN, J.:

In a prosecution for violation of Section 3[e] of the Anti-Graft Law, that is, causing undue
injury to any party, the government prosecutors must prove actual injury to the offended
party; speculative or incidental injury is not sufficient.
The Case

Before us is a petition for review of the Decision promulgated on June 23, 1995 and the
Resolution promulgated on October 12, 1995 of the Sandiganbayan in Criminal Case
No. 18343, finding Cresente Y. Llorente, Jr. guilty as charged.

Llorente, then municipal mayor of Sindangan, Zamboanga del Norte, was charged with
violation of Sec. 3[e] of Republic Act No. 3019, otherwise known as the Anti-Graft and
Corrupt Practices Act, under an Information dated October 22, 1992, textually
reproduced as follows:i[1]

That in or about and during the period of July, 1990 to October, 1991, or for
sometime subsequent thereto, in the Municipality of Sindangan, Province of
Zamboanga del Norte, Philippines, and within the jurisdiction of this Honorable
Court, the above-named accused Cresente Y. Llorente, Jr., a public officer,
being then the Mayor of Sindangan, Zamboanga del Norte, in the exercise of his
official and administrative functions, did then and there, wilfully, unlawfully and
criminally with evident bad faith refuse to sign and approve the payrolls and
vouchers representing the payments of the salaries and other emoluments of
Leticia G. Fuertes, without just valid cause and without due process of law,
thereby causing undue injury to the said Leticia G. Fuertes.

CONTRARY TO LAW.

Duly arraigned on March 29, 1993, petitioner, with the assistance of counsel, entered a
plea of NOT GUILTY.ii[2] After trial in due course, the Sandiganbayaniii[3] rendered
the assailed Decision, disposing as follows:iv[4]

WHEREFORE, judgment is hereby rendered finding accused Mayor Cresente Y.

Llorente, Jr. GUILTY beyond reasonable doubt as principal of the crime of
Violation of Section 3(e) of Republic Act 3019, as amended, and he is hereby
 sentenced to suffer imprisonment of SIX (6) YEARS and ONE (1) MONTH, as
minimum to SEVEN (7) YEARS, as maximum; to further suffer perpetual
disqualification from public office; and to pay the costs.

Respondent Court denied the subsequent motion for reconsideration in the assailed
Resolution, thus:v[5]

WHEREFORE, accuseds Motion for Reconsideration and/or New Trial is hereby

DENIED for lack of merit. His Motion for Marking of Additional Exhibits Cum
Offer of Documentary Exhibits in Support of Motion for Reconsideration and/or
New Trial is now rendered moot and academic.

Hence, this petition.vi[6]

The Facts
Version of the Prosecution

As found by Respondent Court, the prosecutions version of the facts of this case is as
follows:vii[7]

After appreciating all the evidence on both sides, the following uncontroverted
facts may be gleaned:

1. Accused Mayor Cresente Y. Llorente, Jr., at the time the alleged act was
committed, was the Municipal Mayor of Sindangan, Zamboanga del Norte.

2. Private [C]omplainant, Leticia C. Fuertes, is the duly appointed Assistant

Municipal Treasurer in the same municipality since October 18, 1985.

3. Starting 1986, private complainant was detailed to different offices, as follows:

(a) Municipality of Katipunan, Zamboanga del Norte from April, 1986 to August, 1987
as OIC Municipal Treasurer.

(b) Municipality of Roxas, Zamboanga del Norte from September, 1987 to March,
1988 as OIC Municipal Treasurer.

(c) Office of the Provincial Treasurer of Zamboanga del Norte from April, 1988 to
May, 1988.

(d) Municipality of Pian, Zamboanga del Norte from June, 1988 to June, 1990 as
OIC Municipal Treasurer.

4. In July, 1990, she was returned to her post as Assistant Municipal Treasurer in
the town of Sindangan.
She was not provided with office table and chair nor given any assignment;
neither her daily time record and application for leave acted upon by the
municipal treasurer per instruction of accused Mayor (Exh. G-2; G-3).
5. On July 23, 1990, the Sangguniang Bayan of Sindangan, Zamboanga del
Norte, presided by accused Mayor, passed Resolution No. SB 214 (Exh. 3),
vehemently objecting to the assignment of complainant as Assistant Municipal
Treasurer of Sindangan.
6. On March 12, 1991, accused Municipal Mayor received a letter (SB
Resolution No. 36) from the Sangguniang Bayan of the Municipality of Pian,
demanding from the private complainant return of the amount overpaid to her as
salaries (par. 9, p. 2 of Exh. 4 counter-affidavit of accused Mayor).
7. On May 22, 1991, private complainant filed a Petition for Mandamus with
Damages (Exh. E) against the accused Mayor and the Municipality of Sindangan
before Branch II, Regional Trial Court of Sindangan, Zamboanga del Norte
docketed as Special Proceedings No. 45, for the alleged unjustified refusal of
Mayor Llorente to sign and/or approve her payrolls and/or vouchers representing
her salaries and other emoluments as follows: (a) salary for the month of June,
1990 in the amount of P5,452.00 under disbursement voucher dated September
5, 1990 (Exh. H). Although complainant rendered services at the municipality of
Pian during this period, she could not collect her salary there considering that as
of that month, Pian had already appointed an Assistant Municipal Treasurer.
When she referred the matter to the Provincial Auditor, she was advised to claim
her salary for that month with her mother agency, the Municipality of Sindangan,
[(]p. 12, TSN of August 9, 1994; 10th paragraph of complainants Supplemental
Affidavit marked Exh. G); (b) salary differential for the period from July 1, 1989 to
April 30, 1990 in the total amount of P19,480.00 under disbursement voucher
dated August, 1990 (Exh. I); (c) 13th month pay, cash gift and clothing
allowance under Supplemental Budget No. 5, CY 1990 in the total amount of
P7,275 per disbursement voucher dated December 4, 1990 (Exh. J); (d)
vacation leave commutation for the period from October to December 31, 1990
in the total amount of P16,356.00 per disbursement voucher dated December 3,
1990 (Exh. K); (e) RATA for the months of July, August and September, 1990,
January and February, 1991 in the total amount of P5,900.00 (par. 12 & 16 of
Exh. E); and (f) salaries for January and February, 1991 in the total amount of
P10,904.00 (par. 17 of Exh. E).
8. Accused Mayor did not file an answer; instead, he negotiated for an amicable
settlement of the case (p. 24, TSN of August 10, 1994). Indeed, a Compromise
Agreement (Exh. A) dated August 27, 1991, between the accused and private
complainant was submitted to and approved by the court, hereto quoted as
follows:

COMPROMISE AGREEMENT
That the parties have agreed, as they hereby agree, to settle this case amicably on the
basis of the following terms and conditions, to wit:

(a) That the respondent Mayor Cresente Y. Llorente, Jr. binds himself to sign and/or
approve all vouchers and/or payrolls for unpaid salaries, RATA, Cash-gifts, 13th month
pay, clothing allowance, salary differentials and other emoluments which the petitioner
is entitled is Assistant Municipal Treasurer of Sindangan, Zamboanga del Norte;

(b) That the parties herein hereby waive, renounce and relinquish their other claims
and counter-claims against each other;

(c) That the respondent Mayor Cresente Y. Llorente Jr. binds himself to sign and/or
approve all subsequent vouchers and payrolls of the herein petitioner.

9. On August 27, 1991, a Decision (Exh. B) was rendered by Judge Wilfredo

Ochotorena on the basis of the aforesaid compromise agreement.
10. For his failure to comply with the terms of the compromise agreement,
private complainant, thru counsel, filed a Motion for Execution on September 12,
1991. A Writ of Execution (Exh. C) was issued by the Court on September 17,
1991, and served [on] the accused on September 23, 1991.
11. As shown in the Sheriffs Return dated November 19, 1991 (Exh. D),
private complainant was paid her salaries for the period from January, 1991 to
August, 1991, while the rest of her salaries including the RATA and other
emoluments were not paid considering the alleged need of a supplemental
budget to be enacted by the Sangguniang Bayan of Sindangan per verbal
allegation of the municipal treasurer.
12. Complainant was not also paid her salaries from July to December
1990; September and October, 1991; RATA for the period from July 1990 to
June 1994 (admission of accused, pp. 8-9, TSN of June 27, 1994, a.m.; Exh. E;
p. 17, TSN of June 27, 1994).
13. Sometime in 1993, accused municipal mayor received from the
Municipality of Pian, Bill No. 93-08 (Exh. 1), demanding from the Municipality of
Sindangan settlement of overpayment to complainant Fuertes in the amount of
P50,643.93 per SB Resolution No. 6 sent on July 23, 1990. The bill was settled
by the Municipality of Sindangan in December, 1993 per Disbursement Voucher
No. 101-9312487 dated December 2, 1993 (Exh. 2).
14. Private complainant was able to receive complete payment of her
claims only on January 4, 1993 in the form of checks all dated December 29,
1992 (as appearing on Exhs. H, I, J, K of the prosecution, Exhs. 6, 7, 8, of the
defense) except her RATA which was given to her only on July 25, 1994,
covering the period from July 1990 to December, 1993 amounting to
P55,104.00, as evidenced by Disbursement Voucher dated July 25, 1994 (Exh.
5).
Version of the Defense

While admitting some delays in the payment of the complainants claims, petitioner
sought to prove the defense of good faith -- that the withholding of payment was due to
her failure to submit the required money and property clearance, and to the
Sangguniang Bayans delayed enactment of a supplemental budget to cover the claims.
He adds that such delays did not result in undue injury to complainant. In his
memorandum, petitioner restates the facts as follows:viii[8]

1. Complainant xxx was appointed assistant municipal treasurer of Sindangan,

Zamboanga del Norte on October 18, 1985. However, starting 1986 until July
1990, or for a period of about four (4) and one half (1/2) years, she was detailed
in other municipalities and in the Office of the Provincial Treasurer of
Zamboanga del Norte. She returned as assistant treasurer of Sindangan in July
1990. (Decision, pp. 5-6).
2. As complainant had been working in municipallities and offices other than in
Sindangan for more than four (4) years, her name was removed from the regular
payroll of Sindangan, and payment of past salaries and other emoluments had
to be done by vouchers. When complainant xxx presented her vouchers to
petitioner, the latter required her to submit clearances from the different offices
to which she was detailed, as well as a certificate of last payment as required by
COA regulations (Tsn, p. 11, Aug. 10, 1994). Instead of submitting the required
documents, Mrs. Fuertes said that what I did, I endorsed my voucher to the
mayor through the municipal treasurer (Tsn, p. 13, June 27, 1994). The
municipal treasurer could not, however, process the vouchers and certify as to
the availability of funds until after the Sangguniang Bayan had passed a
supplemental budget for the purpose (Exhs. D and 6-c Motion), which came only
in December 1992.
3. Petitioner, in the meanwhile, received on March 12, 1991 SB Resolution No.
36 from the Municipality of Pinan, demanding from Mrs. xxx Fuertes the
reimbursement of P105,915.00, and because of this demand, he needed time to
verify the matter before acting on Mrs. Fuertes claims (Exh. 4). Mrs. Fuertes
admitted that she had at the time problems of accountability with the Municipality
of Pinan. She testified:

Q. Counsel now is asking you, when you went back to Sindangan there was [sic]
still problems of the claims either against you or against the Municipality of Sindangan
by the municipalities had, [sic] in their minds, overpaid you?

A. Yes, your Honor, that was evidence[d] by the bill of the Municipality of Pinan to
the Municipality of Sindangan. (Tsn, p. 18, Aug. 3, 194).

4. Petitioner also stated that he could not act on complainants claims because
she had not submitted the required money and property accountability clearance
from Pinan (Tsn, 11, Aug. 10, 1994) and that at the time the Sangguniang Bayan
 had not appropriated funds for the purpose. (Tsn, pp. 18, 30, 42-43, Aug. 10,
1994). Nonetheless, petitioner included Mrs. Fuertes name in the regular annual
budget beginning 1991 (Exhs. 4-b, 4-d, 4-f), as a result of which she had been
since then receiving her regular monthly salary.
5. On May 21, 1991, Mrs. Fuertes filed a complaint xxx. Petitioner filed his
answer to the complaint, alleging as a defense, that plaintiff did not exhaust
administrative remedies. (Annex B, p. 3, Petition; Exh. 1-Motion). On August 27,
1991, the parties entered into a compromise agreement, which the trial court
approved (Exh. B). x x x.
6. Upon motion of counsel for Mrs. Fuertes, the trial court issued a writ of
execution of the compromise judgment. However, the writ of execution was
addressed only to petitioner; it was not served on the municipal Sangguniang
Bayan. x x x.
Thus, Mrs. Fuertes had been receiving her regular salary from January, 1991
because petitioner had included her name in the regular budget beginning 1991,
which fact complainant did not dispute. With respect to her other claims for past
services in other offices, Municipal Treasurer, Mrs. Narcisa Caber, informed that
a supplemental budget for such purpose to be passed by the Sangguniang
Bayan was necessary before she could be paid thereof. Being the municipal
treasurer, Mrs. Caber knew that without such supplemental budget, payment of
Mrs. Fuertes other claims could not be made because the law requires that
disbursements shall be made in accordance with the ordinance authorizing the
annual or supplemental appropriations (Sec. 346, RA 7160) and that no money
shall be disbursed unless xxx the local treasurer certifies to the availability of
funds for the purpose. (Sec. 344, RA 7160).
7. Petitioner had instructed the municipal budget officer to prepare the
supplemental budget for payment of complainants unpaid claims for submission
to the Sangguniang [Bayan] for enactment. (Tsn, pp. 32-33, Aug. 10, 1994). The
budget officer, Mr. Narciso Siasico stated as follows:
1. I am the budget officer for the Municipality of Sindangan,
Zamboanga del Norte, a position I have held since 1981.

xxx xxx xxx

3. Immediately after said mandamus case was settled through a

compromise agreement, Mayor Llorente instructed me to prepare the
necessary budget proposals for the deliberation and approval of the
Sangguniang Bayan;

xxx xxx xxx.

8. Instead of waiting for the Sangguniang Bayan to enact the budget or of

securing an alias writ of execution to compel the Sangguniang Bayan to pass
the same, Mrs. Fuertes filed a criminal complaint with the Office of the
 Ombudsman under date of October 28, 1991, admitting receipt of her salaries
from January 1991 and saying she had not been paid her other claims in
violation of the compromise judgment. (Exh. F). She had thus made the Office of
the Ombudsman a collecting agency to compel payment of the judgment
obligation.
9. While the budget proposal had been prepared and submitted to the
Sangguniang Bayan for action, it took time for the Sangguniang Bayan to pass
the supplemental budget and for the Provincial Board to approve the same. It
was only on December 27, 1992 that the municipal treasurer and the municipal
accountant issued a certification of availability of funds for the purpose.
Petitioner approved the vouchers immediately, and in a period of one week, Mrs.
Fuertes was paid all claims, as evidenced by the prosecutions Exhs. H, I, J and
K, which were the four vouchers of Mrs. Fuertes, xxxx.

xxx xxx xxx

11. Petitioner testified that he could not immediately sign or approve the
vouchers of Mrs. Fuertes for the following reasons:
a) The Sangguniang Bayan had not appropriated the amounts to pay
Mrs. Fuertes. (Tsn, pp. 18, 30, 42-43, Aug. 10, 1994).
b) Municipal Treasurer Caber, to whom Mrs. Fuertes endorsed her
vouchers for processing, and the Municipal Accountant issued the
certificate of availability of funds only on December 27, 1992 (Tsn, p. 42,
Aug. 10, 1994; Exhs. H, I, J and K); and the delay in the issuance of the
certificate of availability of funds was due to the delay by the Provincial
Board to approve the supplemental budget. (Tsn, p. 43, Aug. 10, 1994).
[c]) He received on March 12, 1991 a demand from the Municipality of
Pinan, Zamboanga del Norte, where Mrs. Fuertes last worked, for the
reimbursement of P105,915.00, and the matter had to be clarified first.
(Exh. 4). Mrs. Fuertes admitted that she had some problem of
accountability with the Municipality of Pinan. (Tsn, p. 18, 1994). It took
time before this matter could be clarified by the Municipality of Pinan
reducing its claim to P50,647.093 and the Municipality of Sindangan
paying said claim. (Exh. 2; Decision, p. 9).
[d]) Mrs. Fuertes had not submitted the required clearance from the
Municipality of Pinan. (Tsn, p. 11, Aug. 10, 1994). He did not insist on
this requirement after the trial court issued the writ of execution to
implement the compromise judgment. (Tsn, p. 23, Aug. 10, 1994).
Nonetheless, in the post audit of Mrs. Fuertes accountability, the
Commission on Audit issued a notice of suspension of the amount of
P5,452.00 from Mrs. Fuertes for her failure to submit: 1. Clearance for
money & property accountability from former office. 2. Certification as
[sic] last day of service in former office. 3. Certification of last salary
 received & issued by the disbursing officer in former office, certified by
chief accountant and verified by resident auditor. (Exh. 2-Motion).
12. The Information dated October 12, 1992 filed against petitioner alleged
that petitioner as mayor did not sign and approve the vouchers of Mrs. Fuertes
for payment of her salaries and other emoluments from July 1, 1990 to October
1991, which caused her undue injury. However, the prosecutions Exh. D, the
sheriffs return dated November 19, 1991, stated that Mrs. Fuertes had received
her salary from January 1, 1991 up to the present, which meant that even before
the information was filed, she had been paid her regular salaries from January 1,
1991 to October 1991. The supplemental budget to cover payment of her other
claims for past services was passed only in December 1992 and the municipal
treasurer and accountant issued the certificate of availability of funds only on
December 27, 1992, and Mrs. Fuertes got paid of [sic] all her other claims,
including those not claimed in the Information, within one week therefrom. (Exhs.
H, I, J, and K).

xxx xxx xxx.

Ruling of the Sandiganbayan

Respondent Court held that the delay or withholding of complainants salaries and
emoluments was unreasonable and caused complainant undue injury. Being then the
sole breadwinner in their family, the withholding of her salaries caused her difficulties in
meeting her familys financial obligations like paying for the tuition fees of her four
children. Petitioners defense that complainant failed to attach the required money and
property clearance to her vouchers was held to be an afterthought that was brought
about, in the first place, by his own failure to issue any memorandum requiring its
submission. That the voucher form listed the clearance as one of the requirements for
its approval had neither been brought to complainants attention, nor raised by petitioner
as defense in his answer. In any event, the payment of complainants salary from
January to November 1991, confirmed by the sheriffs return, showed that the clearance
was not an indispensable requirement, because petitioner could have acted upon or
approved the disbursement even without it. The alleged lack of a supplemental budget
was also rejected, because it was petitioners duty as municipal mayor to prepare and
submit the executive and supplemental budgets under Sections 318, 320, and 444
(3)(ii) of the Local Government Code,ix[9] and the complainants claims as assistant
municipal treasurer, a permanent position included in the plantilla for calendar year
1990 and 1991, were classified as current operating expenditures for the same calendar
years, which were chargeable against the general funds of the town of Sindangan.
Except for the representation and transportation allowance, Fuertes claims for thirteenth
month pay, cash gift and clothing allowance were already covered by Supplemental
Budget No. 5 for calendar year 1990. Petitioners contention that funds covering
complainants claims were made available only in December 1992 was unbelievable,
considering that an ordinance enacting a supplemental budget takes effect upon its
approval or on the date fixed therein under Sec. 320 of the Local Government Code.
The Sandiganbayan also ruled that the petitioners evident bad faith was the direct and
proximate cause of Fuertes undue injury. Complainants salaries and allowances were
withheld for no valid or justifiable reasons. Such delay was intended to harass
complainant, because petitioner wanted to replace her with his political protege whom
he eventually designated as municipal treasurer, bypassing Fuertes who was next in
seniority. Bad faith was further evidenced by petitioners instructions to the outgoing
municipal treasurer not to give the complaining witness any work assignment, not to
provide her with office table and chair, not to act on her daily time record and application
for leave of absence, instructions which were confirmed in the municipal treasurers
certification. (Exh. G-2).
The Issues

In his memorandum, petitioner submits the following issues:x[10]

1. Could accused be held liable under Sec. 3(e) of R.A. 3019 in the discharge of
his official administrative duties, a positive act, when what was imputed to him
was failing and refusing to sign and/or approve the vouchers of Mr[s]. Fuertes on
time or by inaction on his obligation under the compromise agreement (ibid., p.
19), a passive act? Did not the act come under Sec. 3(f) of R.A. 3019, of [sic]
which accused was not charged with?
2. Assuming, arguendo, that his failure and refusal to immediately sign and
approve the vouchers of Mrs. Fuertes comes [sic] under Sec. 3(e), the questions
are:

(a) Did not the duty to sign and approve the same arise only after the Sangguniang
Bayan had passed an appropriations ordinance, and not before? In other words, was
the non-passage of the appropriation ordinance a justifiable reason for not signing the
vouchers?

(b) Did Mrs. Fuertes suffer undue injury, as the term is understood in Sec. 3(e), she
having been paid all her claims?

(c) Did petitioner not act in good faith in refusing to immediately sign the vouchers
and implement the compromise agreement until the Sangguniang Bayan had enacted
the appropriation ordinance and until Mrs. Fuertes submitted the clearance from the
Municipality of Pinan, Zamboanga del Norte?

Restated, petitioner claims that the prosecution failed to establish the elements of
undue injury and bad faith. Additionally, petitioner submits that a violation of Section 3[e]
of RA 3019 cannot be committed through nonfeasance.
The Courts Ruling

The petition is meritorious. After careful review of the evidence on record and thorough
deliberation on the applicable provision of the Anti-Graft Law, the Court agrees with the
solicitor generals assessment that the prosecution failed to establish the elements of the
crime charged.
First Issue: Undue Injury

Petitioner was charged with violation of Section 3[e] of R.A. 3019, which states:

SEC. 3. Corrupt practices of public officers.In addition to acts or omissions of

public officers already penalized by existing law, the following shall constitute
corrupt practices of any public officer and are hereby declared to be unlawful:

xxx xxx xxx

(e) Causing any undue injury to any party, including the Government, or
giving any private party any unwarranted benefits, advantage or preference in
the discharge of his official, administrative or judicial functions through manifest
partiality, evident bad faith or gross inexcusable negligence. This provision shall
apply to officers and employees of offices or government corporations charged
with the grant of licenses or permits or other concessions.

To hold a person liable under this section, the concurrence of the following elements
must be established beyond reasonable doubt by the prosecution:

(1) that the accused is a public officer or a private person charged in conspiracy
with the former;
(2) that said public officer commits the prohibited acts during the performance of
his or her official duties or in relation to his or her public positions;
(3) that he or she causes undue injury to any party, whether the government or a
private party; and
(4) that the public officer has acted with manifest partiality, evident bad
faith or gross inexcusable negligence.xi[11]

The solicitor general, in his manifestation,xii[12] points out that undue injury requires
proof of actual injury or damage, citing our ruling in Alejandro vs. Peoplexiii[13] and
Jacinto vs. Sandiganbayan.xiv[14] Inasmuch as complainant was actually paid all her
claims, there was thus no undue injury established.

This point is well-taken. Unlike in actions for torts, undue injury in Sec. 3[e] cannot be
presumed even after a wrong or a violation of a right has been established. Its existence
must be proven as one of the elements of the crime. In fact, the causing of undue injury,
or the giving of any unwarranted benefits, advantage or preference through manifest
partiality, evident bad faith or gross inexcusable negligence constitutes the very act
punished under this section. Thus, it is required that the undue injury be specified,
quantified and proven to the point of moral certainty.
In jurisprudence, undue injury is consistently interpreted as actual damage. Undue has
been defined as more than necessary, not proper, [or] illegal; and injury as any wrong or
damage done to another, either in his person, rights, reputation or property[;] [that is,
the] invasion of any legally protected interest of another. Actual damage, in the context
of these definitions, is akin to that in civil law.xv[15]

In turn, actual or compensatory damages is defined by Article 2199 of the Civil Code as
follows:

Art. 2199. Except as provided by law or by stipulation, one is entitled to an

adequate compensation only for such pecuniary loss suffered by him as he has
duly proved. Such compensation is referred to as actual or compensatory
damages.

Fundamental in the law on damages is that one injured by a breach of a contract, or by

a wrongful or negligent act or omission shall have a fair and just compensation
commensurate to the loss sustained as a consequence of the defendants act. Actual
pecuniary compensation is awarded as a general rule, except where the circumstances
warrant the allowance of other kinds of damages.xvi[16] Actual damages are primarily
intended to simply make good or replace the loss caused by the wrong.xvii[17]

Furthermore, damages must not only be capable of proof, but must be actually proven
with a reasonable degree of certainty. They cannot be based on flimsy and non-
substantial evidence or upon speculation, conjecture or guesswork.xviii[18] They
cannot include speculative damages which are too remote to be included in an accurate
estimate of the loss or injury.

In this case, the complainant testified that her salary and allowance for the period
beginning July 1990 were withheld, and that her family underwent financial difficulty
which resulted from the delay in the satisfaction of her claims.xix[19] As regards her
money claim, payment of her salaries from January 1991 until November 19, 1991 was
evidenced by the Sheriffs Return dated November 19, 1991 (Exh. D). She also admitted
having been issued a check on January 4, 1994 to cover her salary from June 1 to June
30, 1990; her salary differential from July 1, 1989 to April 30, 1990; her thirteenth-month
pay; her cash gift; and her clothing allowances. Respondent Court found that all her
monetary claims were satisfied. After she fully received her monetary claims, there is no
longer any basis for compensatory damages or undue injury, there being nothing more
to compensate.

Complainants testimony regarding her familys financial stress was inadequate and
largely speculative. Without giving specific details, she made only vague references to
the fact that her four children were all going to school and that she was the breadwinner
in the family. She, however, did not say that she was unable to pay their tuition fees and
the specific damage brought by such nonpayment. The fact that the injury to her family
was unspecified or unquantified does not satisfy the element of undue injury, as akin to
actual damages. As in civil cases, actual damages, if not supported by evidence on
record, cannot be considered.xx[20]

Other than the amount of the withheld salaries and allowances which were eventually
received, the prosecution failed to specify and to prove any other loss or damage
sustained by the complainant. Respondent Court insists that complainant suffered by
reason of the long period of time that her emoluments were withheld.

This inconvenience, however, is not constitutive of undue injury. In Jacinto, this Court
held that the injury suffered by the complaining witness, whose salary was eventually
released and whose position was restored in the plantilla, was negligible; undue injury
entails damages that are more than necessary or are excessive, improper or
illegal.xxi[21] In Alejandro, the Court held that the hospital employees were not caused
undue injury, as they were in fact paid their salaries.xxii[22]
Second Issue: No Evident Bad Faith

In the challenged Decision, Respondent Court found evident bad faith on the part of the
petitioner, holding that, without any valid or justifiable reason, accused withheld the
payment of complainants salaries and other benefits for almost two (2) years,
demonstrating a clear manifestation of bad faith.xxiii[23] It then brushed aside the
petitioners defenses that complainant failed to submit money and property clearances
for her vouchers, and that an appropriation by the Sangguniang Bayan was required
before complainants vouchers could be approved. It said:xxiv[24]

Secondly, his reliance on the failure of complainant to submit the clearances

which were allegedly necessary for the approval of vouchers is futile in the light
of the foregoing circumstances:

xxx xxx xxx

b. The evidence on record shows that complainants salaries for the period from
January to November 1991 (included as subject matter in the mandamus case) were
duly paid, as confirmed in the Sheriffs Return dated November 19, 1991 (Exh. D). This
means that accused, even without the necessary clearance, could have acted upon or
approved complainants disbursement vouchers if he wanted to.

c. It may be true that a clearance is an indispensable requirement before

complainant will be paid of her claims, but accused could not just hide behind the cloak
of the clearance requirement in order to exculpate himself from liability. As the
approving officer, it was his duty to direct complainant to submit the same. Moreover,
accused could not just set aside the obligation he voluntarily imposed upon himself
when he entered into a compromise agreement binding himself to sign complainants
vouchers without any qualification as to the clearance requirement. Perforce, he could
have seen to it that complainant secured the same in order that he could comply with
the said obligation.
xxx xxx xxx

Fourthly, accuseds contention that the delay in the release of complainants claim could
not be attributed to him because the vouchers were only submitted to him for his
signature on December 24-27, 1992; that the approval of the budget
appropriations/resolutions depends on the Sangguniang Bayan, Budget Officer and the
Sangguniang Panlalawigan, is unavailing.

As revealed in the alleged newly discovered evidence themselves, particularly x x x SB

Res. No. 202 and Appropriation Ordinance No. 035, both dated May 21, 1990 (Exh. 5-a-
Motion), the Sangguniang Bayan appropriated a budget of P5M in the General Fund for
calendar year 1991 [the Budget Officer does not approve the budget but assists the
Municipal Mayor and the Sangguniang Bayan in the preparation of the budget (Sec.
475, Local Government Code of 1991)]. Complainants claims consisted of her salaries
and other benefits for 1990 and 1991 which were classified as Current Operating
Expenditures chargeable against the General Fund. It is undisputed that she was
holding her position as Assistant Municipal Treasurer in a permanent capacity (her
position was also designated Assistant Department Head), which was included in the
plantilla for calender years 1990 and 1991 (Exhs. 4-a & '4-b', Motion). In Program
Appropriation and Obligation by Object (Exhs. 4-c & 4-c, Motion), appropriations were
made for current operating expenditures to which complainants claims properly
appertained. xxx. Verily, complainants claims were covered by appropriations duly
approved by the officials concerned, signifying that adequate funds were available for
the purpose. In fact, even complainants claims for her 13th month pay, cash gift and
clothing allowance, subject matter of Disbursement Voucher marked Exhibit J which
would need a supplemental budget was covered by Supplemental Budget No. 5 for CY
1990 duly approved by the authorities concerned as shown in the voucher itself. This
means that the said claim was already obligated (funds were already reserved for it) as
of calendar year 1990. xxxx. It is clear, then, that as regards availability of funds, there
was no obstacle for the release of all the complainants claims.

The Court disagrees. Respondent Court cannot shift the blame on the petitioner, when it
was the complainant who failed to submit the required clearance. This requirement,
which the complainant disregarded, was even printed at the back of the very vouchers
sought to be approved. As assistant municipal treasurer, she ought to know that this is a
condition for the payment of her claims. This clearance is required by Article 443 of the
Implementing Rules and Regulations of the Local Government Code of 1991:

Art. 443. Property Clearances When an employee transfers to another

government office, retires, resigns, is dismissed, or is separated from the
service, he shall be required to secure supplies or property clearance from the
supply officer concerned, the provincial or city general services officer
concerned, the municipal mayor and the municipal treasurer, or the punong
barangay and the barangay treasurer, as the case may be. The local chief
executive shall prescribe the property clearance form for this purpose.
For her own failure to submit the required clearance, complainant is not entirely
blameless for the delay in the approval of her claims.

Also, given the lack of corresponding appropriation ordinance and certification of

availability of funds for such purpose, petitioner had the duty not to sign the vouchers.
As chief executive of the municipality Llorente could not have approved the voucher for
the payment of complainants salaries under Sec. 344, Local Government Code of
1991.xxv[25] Also, Appropriation Ordinance No. 020xxvi[26] adding a supplemental
budget for calendar year 1990 was approved on April 10, 1989, or almost a year before
complainant was transferred back to Sindangan. Hence, she could not have been
included therein. SB Resolution No. 202 and Appropriation Ordinance No. 035,xxvii[27]
which fixed the municipal budget for calendar year 1991, was passed only on May 21,
1990, or almost another year after the transfer took effect. The petitioners failure to
approve the complainants vouchers was therefore due to some legal
obstacles,xxviii[28] and not entirely without reason. Thus, evident bad faith cannot be
completely imputed to him.

Bad faith does not simply connote bad judgment or negligence; it imputes a dishonest
purpose or some moral obliquity and conscious doing of a wrong; a breach of sworn
duty through some motive or intent or ill will; it partakes of the nature of fraud. (Spiegel
v. Beacon Participations, 8 NE 2nd Series, 895, 1007). It contemplates a state of mind
affirmatively operating with furtive design or some motive of self interest or ill will for
ulterior purposes (Air France v. Carrascoso, 18 SCRA 155, 166-167). Evident bad faith
connotes a manifest deliberate intent on the part of the accused to do wrong or cause
damage. xxix[29]

In Jacinto, evident bad faith was not appreciated because the actions taken by the
accused were not entirely without rhyme or reason; he refused to release the
complainants salary because the latter failed to submit her daily time record; he refused
to approve her sick-leave application because he found out that she did not suffer any
illness; and he removed her name from the plantilla because she was moonlighting
during office hours. Such actions were measures taken by a superior against an erring
employee who studiously ignored, if not defied, his authority.xxx[30]

In Alejandro, evident bad faith was ruled out, because the accused gave his approval to
the questioned disbursement after relying on the certification of the bookkeeper on the
availability of funds for such disbursement.xxxi[31]
Third Issue: Interpretation of Causing

The Court does not completely agree with petitioners assertion that the imputed act
does not fall under Sec. 3[e] which, according to him, requires a positive act -- a
malfeasance or misfeasance. Causing means to be the cause or occasion of, to effect
as an agent, to bring into existence, to make or to induce, to compel.xxxii[32] Causing
is, therefore, not limited to positive acts only. Even passive acts or inaction may cause
undue injury. What is essential is that undue injury, which is quantifiable and
demonstrable, results from the questioned official act or inaction.

In this case, the prosecution accused petitioner of failing or refusing to pay

complainants salaries on time, while Respondent Court convicted him of unduly
delaying the payment of complainants claims. As already explained, both acts did not,
however, legally result in undue injury or in giving any unwarranted benefits, advantage
or preference in the discharge of his official, [or] administrative x x x functions. Thus,
these acts are not punishable under Sec. 3[e].

It would appear that petitioners failure or refusal to act on the complainants vouchers, or
the delay in his acting on them more properly falls under Sec. 3[f]:

(f) Neglecting or refusing, after due demand or request, without sufficient

justification, to act within a reasonable time on any matter pending before him for
the purpose of obtaining, directly or indirectly, from any person interested in the
matter some pecuniary or material benefit or advantage, or for purpose of
favoring his own interest or giving undue advantage in favor of or discriminating
against any other interested party.

Here, the neglect or refusal to act within a reasonable time is the criminal act, not the
causing of undue injury. Thus, its elements are:

1) The offender is a public officer;

2) Said officer has neglected or has refused to act without sufficient justification
after due demand or request has been made on him;
3) Reasonable time has elapsed from such demand or request without the public
officer having acted on the matter pending before him; and
4) Such failure to so act is for the purpose of obtaining, directly or indirectly, from
any person interested in the matter some pecuniary or material benefit or
advantage in favor of an interested party, or discriminating against
another.xxxiii[33]

However, petitioner is not charged with a violation of Sec. 3[f]. Hence, further
disquisition is not proper. Neither may this Court convict petitioner under Sec. 3[f]
without violating his constitutional right to due process.

WHEREFORE, the petition is hereby GRANTED. Petitioner is ACQUITTED of violating

Section 3[e] of R.A. 3019, as amended. No costs.

SO ORDERED.

Davide, Jr. (Chairman), Bellosillo, Vitug and Quisumbing, JJ., concur.

i[1] Records, p. 1; the information was signed by Special Prosecution Officer II Luz L.
Quiones-Marcos of the Office of the Special Prosecutor.

ii[2] Records, p. 60.

iii[3] First Division is composed of J. Minita Chico-Nazario, ponente; PJ. Francis E.

Garchitorena and J. Jose S. Balajadia, concurring.

iv[4] Rollo, pp. 56-57.

v[5] Rollo, p. 72.

vi[6] The case was deemed submitted for resolution upon filing of the memorandum for
Respondent Court on December 11, 1997 by the Office of the Ombudsman.

vii[7] Rollo, pp. 39-44.

viii[8] Rollo, pp. 259-266; the memorandum for the petitioner was signed by Atty.
Ruben E. Agpalo.

ix[9] SEC. 318. Preparation of the Budget by the Local Chief Executive. Upon receipt of
the statements of income and expenditures from the treasurer, the budget proposals of
the heads of departments and offices, and estimates of income and budgetary ceilings
from the local finance committee, the local chief executive shall prepare the executive
budget for the ensuing fiscal year in accordance with the provisions of this Title.

The local chief executive shall submit the said executive budget to the
sanggunian concerned not later than the sixteenth (16th) of October of the current fiscal
year. Failure to submit such budget on the date prescribed herein shall subject the local
chief executive to such criminal and administrative penalties as provided for under this
Code and other applicable laws.
SEC. 320. Effectivity of Budgets. The ordinance enacting the annual budget shall
take effect at the beginning of the ensuing calendar year. An ordinance enacting a
supplemental budget, however, shall take effect upon its approval or on the date fixed
therein.
The responsibility for the execution of the annual and supplemental budgets and
the accountability therefor shall be vested primarily in the local chief executive
concerned.
SEC. 444. The Chief Executive: Powers, Duties, Functions and Compensation
xxxx The municipal mayor shall:
(3) xxx xxx xxx
(ii) Prepare and submit to the sanggunian for approval the executive and
supplemental budgets of the municipality for the [ensuing] calendar years in the manner
provided for under Title Five, Book II of this Code.

x[10] Rollo, p. 266.

xi[11] Ponce de Leon vs. Sandiganbayan, 186 SCRA 745, 754, June 25, 1990; Pecho
vs. Sandiganbayan, 238 SCRA 116, 128, November 14, 1994; Jacinto vs.
Sandiganbayan, 178 SCRA 254, 259, October 2, 1989; and Medija, Jr. vs.
Sandiganbayan, 218 SCRA 219, 223, January 29, 1993.

xii[12] Rollo, p. 140; the 30-page Manifestation in Lieu of Comment of the OSG, dated
March 6, 1996, was signed by then Solicitor General Raul I. Goco, Asst. Solicitor
General Romeo C. dela Cruz and Solicitor Karl B. Miranda.

xiii[13] 170 SCRA 400, 405, February 20, 1989.

xiv[14] Supra.

xv[15] Pecho vs. Sandiganbayan, supra at p. 133.

xvi[16] Art. 2199, Civil Code; Nolledo, Civil Code of the Philippines, 10th ed., Vol. V, p.
927; and Gonzales-Decano, Notes on Torts and Damages, 1992 ed., pp. 141 & 144.

xvii[17] Tolentino, The Civil Code, Vol. V, 1992 ed., pp. 633-634.

xviii[18] Ibid.

xix[19] TSN, August 9, 1994, p. 3.

xx[20] Fuentes, Jr. vs. Court of Appeals, 253 SCRA 430, 438, February 9, 1996;
People vs. Fabrigas, 261 SCRA 436, 448, September 5, 1996.

xxi[21] Jacinto vs. Sandiganbayan, supra at p. 259.

xxii[22] Alejandro vs. People, supra at p. 405.

xxiii[23] Rollo, p. 56.

xxiv[24] Ibid., pp. 65-68.

xxv[25] SEC. 344. Certification on, and Approval of, Vouchers.No money shall be
disbursed unless the local budget officer certifies to the existence of appropriation that
has been legally made for the purpose, the local accountant has obligated said
appropriation, and the local treasurer certifies to the availability of funds for the purpose.
Vouchers and payrolls shall be certified to and approved by the head of the department
or office who has administrative control of the fund concerned, as to validity, propriety,
and legality of the claim involved. Except in cases of disbursements involving regularly
recurring administrative expenses such as payrolls for regular or permanent employees,
xxx, approval of the disbursement voucher by the local chief executive himself shall be
required whenever local funds are disbursed.

xxx xxx xxx.

xxvi[26] Records, p. 219.

xxvii[27] Records, pp. 322-323.

xxviii[28] Baldivia vs. Lota, 107 Phil 1099, 1103 [1960]; and Discanso vs. Gatmaytan,
109 Phil 816, 920-921 [1960].

xxix[29] Marcelo vs. Sandiganbayan, 185 SCRA 346, 349, May 14, 1990.

xxx[30] Jacinto vs. Sandiganbayan, supra at p. 260.

xxxi[31] Alejandro vs. Sandiganbayan, supra at p. 405.

xxxii[32] Pecho vs. Sandiganbayan, supra, p. 135.

xxxiii[33] Coronado vs. Sandiganbayan, 225 SCRA 406, 409-410, August 18, 1993;
and Nessia vs. Fermin, 220 SCRA 615, 621-622, March 30, 1993.
 Republic of the Philippines
SUPREME COURT
Baguio

FIRST DIVISION

G.R. No. 75120 April 28, 1994

POLICARPIO CAYABYAB, petitioner,

vs.
THE HONORABLE INTERMEDIATE, APPELLATE COURT, FAUSTINO, GABRIEL,
SOLEDAD & FRANCISCA, and all surnamed LANDINGIN and AMPARO
FRANCISCO, respondents.

Villamor A. Tolete for petitioner.

Juan O. Reyes, Manuel, Jr., Nepuscua & Pimentel, Jr. Law Offices for private
respondents.

QUIASON, J.:

This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court to
reverse and set aside (1) the decision of the Court of Appeals in AC-G.R. CV No.
03883, reversing the decision of the Regional Trial Court of Pangasinan, Branch XLII,
Dagupan City, in Civil Case No. D- 5101; and (2) its resolution denying the motion for
reconsideration of the decision.

We deny the petition and affirm the decision and resolution of the Court of Appeals.

Respondents Gabriel, Soledad and Francisca, all surnamed Landingin, are children of
respondent Faustino Landingin and the late Agapita Ferrer. Petitioner is the son of
Agapita Ferrer by her first husband, Ludovico Cayabyab, while respondent Amparo
Francisco is petitioner's niece, being the daughter of his sister, Nieves Cayabyab.

In their second amended complaint filed against petitioner before Branch VII of the
Court of First Instance of Pangasinan docketed as Civil Case No. D-5101, private
respondents asked for the annulment of the deeds of sale and the recovery of
possession of four parcels of land with damages. Two of the parcels of land (Lots [a]
and [d]) are situated in Dagupan City while the other two (Lots [b] and [c]) are situated in
Barrio Botao, Sta. Barbara, Pangasinan.

Private respondents alleged that petitioner was able to obtain the signatures of Agapita
Ferrer and respondent Faustino Landingin in the deeds of sale through fraud, undue
influence and abuse of confidence. It was only in 1980, or three years thereafter, that
they learned of said sales after respondent Gabriel Landingin received from petitioner a
demand to vacate Lot (d) on which petitioner and private respondents all reside.
According to private respondents, these lots form part of their inheritance as the
compulsory heirs of Agapita Ferrer, to the exclusion of petitioner, who already received
his share during Ferrer's lifetime.

In his answer, petitioner did not claim Lot (a) but alleged that he acquired by purchase
one-third portion of Lots (b) and (c) by virtue of a Deed of Absolute Sale executed by
respondent Faustino Landingin and Agapita Ferrer on March 21, 1973 and notarized
before Notary Public Eduardo B. Siapno (Exh. "O"; Exh. "10"); the remaining two-thirds
portion of Lots (b) and (c) by virtue of a Deed of Absolute Sale executed by respondent
Faustino Landingin and Agapita Ferrer before Notary Public Juan S. Caguioa on April
21, 1977 (Exh. "P"; Exh. "9"); and Lot (d) by virtue of a Deed of Absolute Sale executed
by Agapita Ferrer with the marital consent of respondent Faustino Landingin on April 21,
1977 (Exh. "N"; Exh. "2").

On May 9, 1984, the trial court rendered judgment dismissing the complaint without
pronouncement as to damages and costs.

Both parties appealed to the Intermediate Appellate Court, with private respondents
questioning the merits of the decision and petitioner questioning the omission of an
award for damages.

On October 7, 1985, the Intermediate Appellate Court rendered judgment reversing the
questioned decision. It ordered the annulment of the deeds of sale over the subject lots
and declared the heirs of Agapita Ferrer and respondent Faustino Landingin the owners
and rightful possessors of the parcels of land in question. The dispositive portion of the
decision reads as follows:

WHEREFORE, in view of the improper appreciation of the facts by the Court a quo,
which likewise misapplied the law involved therein, We hereby reverse and set aside
the appealed decision and render another one annulling the deeds of sale executed on
March 21, 1973 (Exh. 0 or 10) and on April 21, 1977 (Exh. P or 9 and Exh. N or 2),
covering Parcels (b), (c) and (d) of the complaint, cancelling Transfer Certificate of Title
No. 37058 (Exh. 4) and reinstating Transfer Certificate of Title No. 10018 (Exh. H),
declaring the four (4) lands described in the complaint as owned by the heirs of
Faustino Landingin and Agapita Ferrer. We hereby order the defendant to immediately
surrender possession thereof to the plaintiffs. No damages and costs (Rollo, p. 71).

Hence, this recourse.

II

It is an established principle that the factual findings of the Court of Appeals are final
and conclusive on this Court. However, where the findings of the Court of Appeals and
the trial court are contrary to each other, we deem it necessary to review the records
and the evidence of the instant case (Gaw v. Intermediate Appellate Court, 220 SCRA
405 [1993]; Lauron v. Court of Appeals, 184 SCRA 215 [1990]; Valenzuela v. Court of
Appeals, 191 SCRA 1 [1990]). There is no dispute that the lands subject of this case,
namely, Lots (a), (b), (c) and (d) formerly belonged to the conjugal partnership of
respondent Faustino Landingin and Agapita Ferrer. The ownership over Lot (a) is,
however, not being contested by petitioner and therefore respondents' claim that it is
conjugal stands uncontradicted.

Petitioner's evidence show that: the one-third portion comprising 1,806 square meters
each of Lots (b) and (c) were sold on March 21, 1973 by the spouses to petitioner for a
consideration of P1,000.00 (Exh. "O"; Exh. "10"); the remaining two-thirds portion of the
same lots comprising 3,612 square meters each were sold to petitioner on April 21,
1977 for a total consideration of P3,612.00 (Exh. "P"; Exh. "9"); and, on the same date,
the spouses also sold Lot (d) to petitioner for a consideration of P5,000.00 (Exh. "N";
Exh. 2). All these transactions were evidenced by deeds of sale signed by respondent
Faustino Landingin and thumbmarked by Agapita Ferrer, which were witnessed by two
persons and acknowledged by the vendors before a notary public. The sale of Lot (d)
was recorded on April 28, 1977 with the Register of Deeds, who cancelled TCT No.
10018 in the spouses' name and accordingly issued TCT No. 37058 in petitioner's
name.

Petitioner claims that the sale of the subject lots to him is valid and binding as clearly
evidenced by the deeds of sale which are public documents. According to him, private
respondents' allegation of fraud, deceit and undue influence have not been established
sufficiently and competently to rebut the presumption of regularity and due execution of
the deeds of sale.

Indeed, the general rule is that whosoever alleges fraud or mistake in any transaction
must substantiate his allegation, since it is presumed that a person takes ordinary care
for his concerns and that private transactions have been fair and regular. This rule is
especially applied when fraud or mistake is alleged to annul notarial documents which
are clothed with the prima facie presumption of regularity and due execution (Revised
Rules on Evidence, Rule 132 [B], Sec. 30).

Nevertheless, the general rule admits of exceptions, one of which is Article 1332 of the
Civil Code which provides:

When one of the parties is unable to read, or if the contract is in a language not
understood by him, and mistake or fraud is alleged, the person enforcing the contract
must show that the terms thereof have been fully explained to the former.
Under the foregoing provision, where a party to a contract is illiterate, or can not read
nor understand the language in which the contract is written, the burden is on the party
interested in enforcing the contract to prove that the terms thereof are fully explained to
the former in a language understood by him (Sales v. Court of Appeals, 211 SCRA 858
[1992]; Heirs of Enrique Zambales v. Court of Appeals, 120 SCRA 897 [1983]; Bunyi v.
Reyes, 39 SCRA 504 [1971]). In all contractual, property or other relations, where one
of the parties is at a disadvantage on account of his physical, mental or other handicap,
the courts must be careful and vigilant for his protection (Civil Code of the Philippines,
Art. 24; Rural Bank of Caloocan, Inc. v. Court of Appeals, 104 SCRA 151 [1981]; Tang
v. Court of Appeals, 90 SCRA 236 [1979]).

In the case at bench, both respondent Faustino Landingin and Agapita Ferrer were
illiterate. The latter, in fact, could only thumbmark her signature on all the deeds of sale
(Exhs. "2-B"; "9-D"; "10-C"); and although respondent Faustino Landingin may have
affixed his signature to the deeds of sale, he could neither read nor write and actually
lost the use of his right arm to paralysis in 1971 (TSN, September 10, 1981, pp. 4-5). To
make matters worse, all the deeds were written in English while the spouses could
speak and understand only the Pangasinense and Ilocano dialects (TSN, June 30,
1981, pp. 14-15; Id., Sept. 10, 1981, pp. 4-6; Id., Aug. 21, 1982, pp. 21-22).

Since fraud and undue influence in the execution of the subject deeds are alleged by
respondents, the burden, under the circumstances, shifted to petitioner to prove that the
contents thereof had been adequately explained to the vendors and that the latter fully
understood the same (Heirs of Enrique Zambales v. Court of Appeals, supra., at 904).

As very well found by the Court of Appeals, petitioner failed to discharge this burden.

The testimonies of Bartolome Ceralde and Dr. Alfredo Cerezo are not sufficient and
credible enough to tip the scale in favor of petitioner.

First, Ceralde is a "compadre" of petitioner. The fact that the respondent Faustino
Landingin and Agapita Ferrer sold a parcel of land to him in 1973, does not necessarily
make the sale of the lots to petitioner valid and binding. Dr. Cerezo, on the other hand,
has been the spouses' physician since 1955 and his testimony that he never knew of
Agapita Ferrer's eye operation and hospital confinement in Manila (TSN, August 27,
1982, p. 25) raises serious doubts about his credibility.

Second, when the two contracts were executed and witnessed by Dr. Cerezo in 1977,
Agapita Ferrer and respondent Faustino Landingin were 81 years old. In fact, barely six
months later, Agapita actually died of senility, as stated in her death certificate (Exh.
"A").

Third, both Dr. Cerezo and Ceralde testified that Atty. Tandoc, the lawyer who allegedly
drew up the deeds of sale in 1977, read and explained in Pangasinense the contents of
said deeds to the spouses. Ceralde, however, was not present when Atty. Tandoc
allegedly performed the said act. Surprisingly too, Atty. Tandoc allegedly performed the
said a witness. Even Attys. Caguioa and Siapno, who notarized respectively the same
deeds of sale, as well as the 1973 contract, were never called to testify. No explanation
whatsoever was given as to the failure of petitioners to present these two notaries public
who notarized the deeds of sale in question.

The weight of the testimony of Dr. Cerezo is therefore undermined by this lapse on the
part of petitioner. Only the two notaries public could be examined and cross-examined
on the accuracy of their translation of the contents of the documents written in English
into the dialect known to and understood by the vendors.

Fourth, the couple was not assisted by any of their children in the execution of the
subject contracts. This circumstance is strange and highly suspicious. Magdalena,
respondent Faustino Landingin's daughter by his first marriage, and Soledad Landingin
were then living with their parents. Like Amparo Francisco, their step-niece, they
actually assisted the couple in their correspondences and transactions (TSN, June 22,
1981, pp. 4, 15; Id., June 30, 1981, p. 17; Id., Sept. 10, 1981, pp. 3, 14; Id., October 21,
1982, pp. 3-4). However, neither of the sisters nor Amparo was invited to act as an
instrumental witness, much less informed of the execution of the contracts at petitioner's
house which is merely one meter away from their house (TSN, Aug. 27, 1982, p. 18).

Fifth, there is no satisfactory showing that the consideration for the sale of the lots was
ever paid to Agapita Ferrer and respondent Faustino Landingin. Where it is claimed that
the signature and thumbmark of the vendors were procured by the vendees through
fraud, undue influence and abuse of confidence, a showing that valuable consideration
passed hands and that the vendors benefitted therefrom, may help erase any thought
that such sinister designs attended the transaction.

Indeed, all these facts and circumstances lend credence to the claim that the sale of the
subject lots and the execution of the deeds of sale were done surreptitiously and in
fraud of the couple and their heirs (Aguinaldo v. Esteban, 135 SCRA 645 [1985]).

WHEREFORE, the decision of the Court of Appeals is AFFIRMED and the petition is
DENIED.

SO ORDERED.

Cruz, Davide, Jr., Quiason and Kapunan, JJ., concur.

Bellosillo, J., took no part.

 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-46061 November 14, 1984

ST. LOUIS REALTY CORPORATION, petitioner,

vs.
COURT OF APPEALS and CONRADO J. ARAMIL, respondents.

Romeo Z. Comia for petitioner.

Roman R. Bersamin for private respondent.

AQUINO, J.:

This case is about the recovery of damages for a wrongful advertisement in the Sunday
Times where Saint Louis Realty Corporation misrepresented that the house of Doctor
Conrado J. Aramil belonged to Arcadio S. Arcadio.

St. Louis Realty caused to be published with the permission of Arcadio S. Arcadio (but
without permission of Doctor Aramil) in the issue of the Sunday Times of December 15,
1968 an advertisement with the heading "WHERE THE HEART IS". Below that heading
was the photograph of the residence of Doctor Aramil and the Arcadio family and then
below the photograph was the following write-up:

Home is where the heart is. And the hearts of MR. AND MRS. ARCADIO S. ARCADIO
and their family have been captured by BROOKSIDE HILLS. They used to rent a small
2-bedroom house in a cramped neighborhood, sadly inadequate and unwholesome for
the needs of a large family. They dream(ed) of a more pleasant place free from the din
and dust of city life yet near all facilities. Plans took shape when they heard of
BROOKSIDE HILLS. With thrift and determination, they bought a lot and built their
dream house ... for P31,000. The Arcadios are now part of the friendly, thriving
community of BROOKSIDE HILLS... a beautiful first-class subdivision planned for
wholesome family living.

The same advertisement appeared in the Sunday Times dated January 5, 1969. Doctor
Aramil a neuropsychiatrist and a member of the faculty of the U. E. Ramon Magsaysay
Memorial Hospital, noticed the mistake. On that same date, he wrote St. Louis Realty
the following letter of protest:

Dear Sirs:
This is anent to your advertisements appearing in the December 15, 1968 and January
5, 1969 issues of the Sunday Times which boldly depicted my house at the above-
mentioned address and implying that it belonged to another person. I am not aware of
any permission or authority on my part for the use of my house for such publicity.

This unauthorized use of my house for your promotional gain and much more the
apparent distortions therein are I believe not only transgression to my private property
but also damaging to my prestige in the medical profession I have had invited in several
occasions numerous medical colleagues, medical students and friends to my house and
after reading your December 15 advertisement some of them have uttered some
remarks purporting doubts as to my professional and personal integrity. Such sly
remarks although in light vein as "it looks like your house," "how much are you renting
from the Arcadios?", " like your wife portrayed in the papers as belonging to another
husband," etc., have resulted in no little mental anguish on my part.

I have referred this matter to the Legal Panel of the Philippine Medical Association and
their final advice is pending upon my submission of supporting ownership papers.

I will therefore be constrained to pursue court action against your corporation unless
you could satisfactorily explain this matter within a week upon receipt of this letter.

The letter was received by Ernesto Magtoto, an officer of St. Louis Realty in charge of
advertising. He stopped publication of the advertisement. He contacted Doctor Aramil
and offered his apologies. However, no rectification or apology was published.

On February 20, 1969, Aramil's counsel demanded from St. Louis Realty actual, moral
and exemplary damages of P110,000 (Exh. D). In its answer dated March 10, St. Louis
Realty claimed that there was an honest mistake and that if Aramil so desired,
rectification would be published in the Manila Times (Exh. 3).

It published in the issue of the Manila Times of March 18, 1969 a new advertisement
with the Arcadio family and their real house. But it did not publish any apology to Doctor
Aramil and an explanation of the error.

On March 29, Aramil filed his complaint for damages. St. Louis Realty published in the
issue of the Manila Times of April 15, 1969 the following "NOTICE OF
RECTIFICATION" in a space 4 by 3 inches:

This will serve as a notice that our print ad 'Where the Heart is' which appeared in the
Manila Times issue of March 18, 1969 is a rectification of the same ad that appeared in
the Manila Times issues rectification of the same ad that appeal of December 15, 1968
and January 5, 1969 wherein a photo of the house of another Brookside Homeowner
(Dr. Aramil-private respondent) was mistakenly used as a background for the featured
homeowner's the Arcadio family.
The ad of March 18, 1969 shows the Arcadio family with their real house in the
background, as was intended all along.

Judge Jose M. Leuterio observed that St. Louis Realty should have immediately
published a rectification and apology. He found that as a result of St. Louis Realty's
mistake, magnified by its utter lack of sincerity, Doctor Aramil suffered mental anguish
and his income was reduced by about P1,000 to P1,500 a month. Moreover, there was
violation of Aramil's right to privacy (Art. 26, Civil Code).

The trial court awarded Aramil P8,000 as actual damages, P20,000 as moral damages
and P2,000 as attorney's fees. St. Louis Realty appealed to the Court of Appeals.

The Appellate Court affirmed that judgment, with Acting Presiding Justice Magno S.
Gatmaitan as ponente, and Justices Sixto A. Domondon and Samuel F. Reyes
concurring.

The Appellate Court reasoned out that St. Louis Realty committed an actionable quasi-
delict under articles 21 and 26 of the Civil Code because the questioned advertisements
pictured a beautiful house which did not belong to Arcadio but to Doctor Aramil who,
naturally, was annoyed by that contretemps.

In this appeal, St. Louis Realty contends that the Appellate Court ignored certain facts
and resorted to surmises and conjectures. This contention is unwarranted. The
Appellate Court adopted the facts found by the trial court. Those factual findings are
binding on this Court.

St. Louis Realty also contends that the decision is contrary to law and that the case was
decided in a way not in conformity with the rulings of this Court. It argues that the case
is not covered by article 26 which provides that "every person shall respect the dignity,
personality, privacy and peace of mind of his neighbors and other persons". "Prying into
the privacy of another's residence" and "meddling with or disturbing the private life or
family relations of another" and "similar acts", "though they may not constitute a criminal
offense, shall produce a cause of action for damages, prevention and other relief".

The damages fixed by Judge Leuterio are sanctioned by Articles 2200, 2208 and 2219
of the Civil Code. Article 2219 allows moral damages for acts and actions mentioned in
Article 26. As lengthily explained by Justice Gatmaitan, the acts and omissions of the
firm fan under Article 26.

St. Louis Realty's employee was grossly negligent in mixing up the Aramil and Arcadio
residences in a widely circulated publication like the Sunday Times. To suit its purpose,
it never made any written apology and explanation of the mix-up. It just contented itself
with a cavalier "rectification ".

Persons, who know the residence of Doctor Aramil, were confused by the distorted,
lingering impression that he was renting his residence from Arcadio or that Arcadio had
leased it from him. Either way, his private life was mistakenly and unnecessarily
exposed. He suffered diminution of income and mental anguish.

WHEREFORE, the judgment of the Appellate Court is affirmed. Costs against the
petitioner.

SO ORDERED.

Makasiar, Concepcion, Jr., Abad Santos, Escolin and Cuevas, JJ., concur.
FIRST DIVISION

[G.R. No. 83974. August 17, 1998]

SPOUSES NARCISO RONGAVILLA and DOLORES RONGAVILLA, petitioners, vs.

COURT OF APPEALS AND MERCEDES DELA CRUZ AND FLORENCIA DELA CRUZ,
respondents.

DECISION

QUISUMBING, J.:

For review on appeal by certiorari are the Decisionxxxiii[1] of the Court of Appeals in
CA-G.R. CV No. 06543, promulgated on March 11, 1988, and the Resolutionxxxiii[2]
dated June 28, 1988, denying petitioner's motion for reconsideration.

The appealed decision affirmed in toto the judgment of the Regional Trial Court of
Pasay City in Civil Case No. LP-8790-P, which disposed of the controversy as follows:

"WHEREFORE, judgment is hereby rendered declaring void and inexistent the Deed of
Absolute Sale (Exh. "I") dated June 3, 1976 allegedly executed by plaintiffs in favor of
defendant spouses, which document is now particulary identified as Doc, No. 164; Page
no. 34; Book No. I; Series of 1976 in the Notarial Register of Arcadio Espiritu, a Notary
Public for and in Province of Cavite. Further, defendant spouses are hereby ordered -

a. To reconvey to the plaintiffs, free from all liens and encumbrances, the property
covered by Transfer Certificate of Title No. S-28903 of the Registry of Deeds for the
Province of Rizal;

b. . To pay to plaintiffs the sum of P5,000.00 as attorney's fees; and

c. To pay the cost of the suit."xxxiii[3]

As gleaned from the record, the private parties are closely related. Plaintiffs below, now
the private respondents, are the aunts of herein petitioner Dolores Rongavilla. Both
spinsters, they earn their livelihood as embroiderers ("magbuburda") and dressmakers;
although unschooled in English, they are however able to read and write in Tagalog.
Since they are of advanced age (Mercedes de la Cruz, 60 and Florencia de la Cruz,
71), their day to day activities were confined mostly close to home.

The property subject of this controversy between kith and kin is a parcel of land, located
in Manuyo, Las Pias, Rizal (now Metro Manila) owned by private respondents, in the
proportion of one-half (1/2) pro-indiviso, with another niece named Juanita Jimenez as
co-owner of the other one-half. The whole parcel consisted of 131 square meters and
was covered by Original Certificate of Title (OCT) No. 5415 of the Register of Deeds of
the Province of Rizal. This OCT, as well as the Transfer Certificate of Title (TCT) No. S-
28903 after the parcel was subdivided, was kept in the possession of Juanita Jimenez,
who is the elder sister of Dolores Rongavilla.

Although the basic fact situation here might appear all too familiar, the legal controversy
itself is notable for having passed through the entire channel of the justice
system.xxxiii[4] The present petition before us was given due course per
Resolutionxxxiii[5] dated June 26, 1989; but it was denied on September 20, 1989, for
non-compliance with certain requirements;xxxiii[6] although, upon motion for
reconsideration by the petitioners showing compliance, it was reinstatedxxxiii[7] on
September 2, 1991.

Considering the circumstances in this case, including the relationship of the parties, it
behooves this Court now to examine closely and carefully the questioned judgment and
the record below. For the Court could not but be mindful of the codal admonition that:

"In all contractual, property or other relations, when one of the parties is at a
disadvantage on account of his moral dependence, ignorance, indigence, mental
weakness, tender age, or other handicap, the courts must vigilant for his protection."
(Art. 24, Civil Code)

From the facts found below, it appears that in the month of May, 1976, the private
respondents borrowed the amount of two thousand (P2,000) from the petitioners for the
purpose of having their (respondents') dilapidated rooftop repaired.

A month later, petitioner Dolores Rongavilla and her sister Juanita Jimenez visited their
aunt's home, bringing with them a document for the signature of their aunts. The
document is admittedly typewritten in English. When asked in Tagalog by one of the
aunts, respondent Mercedes de la Cruz, what the paper was all about, Dolores
Rongavilla answered also in Tagalog, that it was just a document to show that the
private respondents had a debt amounting to P2,000. On account of that representation,
private respondent signed the document.

In September 1980, or after a lapse of over four years, petitioner Dolores Rongavilla
went to private respondents' place and asked them to vacate the parcel in question,
claiming that she and her husband were already the new owners of the land.

Surprised by petitioners' moves, private respondents with the help of friends went to the
Office of the Register of Deeds of the Province of Rizal to verify the matter. They
discovered that their Certificate of Title had been cancelled and a new one, Transfer
Certificate of Title No. S-28903, had been issued in favor of petitioners. They further
discovered that said parcel of land had been mortgaged with the Cavite Development
Bank by the petitioners. It was only then that the private respondents realized that the
document they had previously been asked by their nieces to sign was a deed of sale.

On February 3, 1981, private respondents filed with the Court of First Instance, now
Regional Trial Court, of Pasay City the sworn complaintxxxiii[8] to have the purported
deed of sale declared void and inexistent, for being fictitious and simulated, and
secured by means of fraud and misrepresentation. They alleged that they did not sell
their property in question to the defendants; that they did not receive any consideration
on the supposed sale; that their Original Certificate of Title was cancelled and TCT No.
S-28903 was issued in favor of defendants (herein petitioners), who thereafter
mortgaged said title for a total of P40,000.00 to the damage and prejudice of the
plaintiffs. They also claimed moral and exemplary damages, as the court might
determine.

Petitioners duly filed their answerxxxiii[9] after the denial of their motion to dismiss,
alleging that plaintiffs (now the private respondents) sold their parcel of land voluntarily,
that there was consent to the deed of sale, that there was sufficient consideration
therefor and that the document on the sale was complete in itself and in due form,
enabling the Register of deeds to cancel their old TCT and issue a new one. Petitioners
further stated that private respondent were fully appraised by the Notary Public, Atty.
Arcadio G. Espiritu, on what the document was all about, and having understood the
explanation made by said Notary Public, they voluntarily affixed their signatures on said
document. Petitioners also asserted as affirmative and/or special defenses that
prescription had set in and that private respondents no longer had a cause of action,
and that the deed of sale contained all the pre-requisites of a contract, namely consent
of the parties, consideration or a price certain, and determinate thing or object; and
could no longer be annulled. They also claimed moral and exemplary damages.

The trial court's judgment, quoted at the outset, being adverse to the petitioners, they
seasonably appealed. And after their rebuff at the appellate level, they come now to this
Court on certiorari under Rule 45 of the Rules of Court, citing the following grounds for
their petition:

"(1) It is clear and patent error of the Court of Appeals to declare as 'void and inexistent
the Deed of Absolute Sale (Exhibit 1) dated June 3, 1976.

(2) The Court of Appeals committed grave error of law in holding that the action to
declare nullity of the Deed of Absolute Sale (Exhibit 1) does not prescribe.

(3) The Court of Appeals committed grave abuse of discretion in relying on a purported
Certificate of Bureau of Internal Revenue which was not offered in evidence.

(4) The Court of Appeals committed grave error of law and abuse of discretion and
grave abuse of discretion amounting to lack or excess of jurisdiction in ordering the
petitioners to reconvey the subject parcel of land to the private respondents."xxxiii[10]

With a slight variation but consistent with the grounds they have relied on petitioners
raise in their Memorandumxxxiii[11] the following:

"ISSUES
1. Did the Court of Appeals commit a clear and patent error in declaring as 'void
and inexistent' the Deed of Absolute Sale (Exhibit 1) dated June 3, 1976?

2. Did the Court of Appeals commit grave error in holding that the action to annul
the Deed of Sale (Exhibit 1) does not prescribe?

3. Did the Court of Appeals commit grave abuse of discretion in relying on a

purported Certificate of the Bureau of Internal Revenue which was not offered in
evidence?

4. Did the Court of Appeals commit grave error of law and grave abuse of discretion
amounting to lack of jurisdiction or in excess of jurisdiction in ordering petitioners to
reconvey the subject parcel of land to the private respondents?"

These issues may be synthesized into one: Did the respondent Court of Appeals
commit reversible error when it upheld the trial court's judgment that the disputed Deed
of Sale (Exhibit "1") is void and inexistent?

To resolve this pivotal issue, it must be noted that private respondents, as plaintiffs
below, based their complaint to declare the disputed deed void and inexistent on two
fundamental grounds: (1) lack of consent and (2) want of consideration. Under oath,
they strongly denied selling or even just agreeing to sell, their parcel of land to their
niece and nephew-in-law. During the hearing, they also denied going to and appearing
before the Notary Public who prepared the deed of sale. They also vehemently denied
receiving any consideration for the alleged sale. They added that their signatures on the
purported deed of sale were obtained by fraud and misrepresentation as petitioners had
misled them to believe the document was just a paper to evidence a debt of P2,000
they obtained to buy G.I sheets for the repair of their leaking roof.xxxiii[12] Private
respondents were shocked and got sick when they were told by petitioners that they
(respondents) were no longer the owners of the land.xxxiii[13]

On these two points of consent and consideration, the trial court found that:

"x x x. A careful analysis and meticulous evaluation of the evidence on record has
convinced the Court that the sale of their property to the defendants was farthest from
the plaintiffs' minds. The Court believes that when plaintiffs voluntarily signed the
document which turned out to be a deed of sale, they were misled by defendant Dolores
Rongavilla and her sister Juanita Jimenez into believing that what they signed was a
document acknowledging the loan of P2,000.00 extended them by said defendant.

"The Deed of Absolute Sale (Exh. "l") mentions a consideration of P2,000.00. Three
years after the alleged sale, the same property was mortgaged by defendant spouses
with the Cavite Development Bank for P40,000.00. Clearly enough, the gross
inadequacy and unconsciounableness [sic] of the consideration deters the Court from
subscribing to defendants' theory that plaintiffs sold the property to them. It is more
reasonable to assume that the amount of P2,000.00 mentioned in the deed refers to the
loan defendants extended to plaintiffs for the same amount.

"Plaintiffs are now of advanced age. Their only property is the lot in question and the
house erected thereon. x x x.

"As there is no indication that plaintiffs were in dire need of money, except for few [sic]
amount, except for few [sic] amount necessary for the repair of the roof of their house
for which they obtained a loan of P2,000.00 from defendants, there was no reason for
plaintiffs to dispose of their property. To do so would be inconsistent with the regular
norm of human conduct and the natural course of events. It is not in accord with the
natural promptings and instincts of human nature."xxxiii[14]

To these findings by thetrial court, the Court of Appelas in its own decision asserted. In
addition, it laid stress on the point of lack of consideration by quoting agreeably the trial
judge's holding thereon:

"By more than mere preponderance of evidence of evidence plaintiffs [herein private
respondents] have established the merit of their cause of action. The Court is of the
opinion and so holds that there was fraud exercised by defendant Dolores Rongavilla
and her sister Juanita Jimenez in securing the signature of the Deed of Absolute Sale
(Exh. 'l') and there was no consideration whatsoever dor the alleged sale. Undoubtedly,
the said deed of sale is simulated, fictitious and void."xxxiii[15]

And before concluding, the appellate court reiterated the proper characterization of the
deed of sale in question, not as an annullable contract, but as a void and inexistent
contract as found by the trial court:

"x x x. In the case at bar, however, We are dealing not merely with a voidable contract
which is tainted with fraud, mistake, undue influence, violence or intimidation which may
justify the annulment of a contract, but with a contract that is null and void ab initio.

"In the present case, plaintiffs-appellees declared under oath in their complaint that they
signed the alleged document without knowing that said document was a deed of
absolute sale. This means that plaintiffs-appelles consent was not only vitiated, but that
plaintiffs-appealles have not give their consent at all. And since there was no consent,
the deed of absolute sale is, therefore, null and void ab initio. xxx'"xxxiii[16]

Dissatisfied, petitioners now seek from this Court the reversal of the judgment below.
They insist in their petition before us that the deed is valid; and that because of the
statute of limitations, after the lapse of four years from its execution and registration, it
could no longer be annulled.

They assert that "the presumption that contracts are presumed to be valid and to be
supported by lawful and good consideration of one dollar is just as effectual and
valuable as a larger sum stipulated or paid''.xxxiii[17]
They further assert that since private respondents signed the Deed of Sale, as a public
instrument, the truth of the recitals therein embodied could only be impugned and
disproved, not by mere preponderance of evidence, but by evidence of the "the clearest
and most satisfactory character, convincing and overwhelming.'"xxxiii[18] Petitioners
further state that since they have been the ones paying real estate taxes on the
property, rather than their aunts, the latter by their acts had confirmed the deed
executed by them.xxxiii[19]

Despite the petitioners' insistence that the deed of sale is presumed valid and, being
registered, could not be disturbed anymore, we however find their arguments and
ratiocination less than persuasive. While petitioners would not want the deed of sale to
be impugned, they themselves contradict the recitals therein. On the vital point of
consideration, they and their witnesses, namely Juanita Jimenez and Atty. Arcadio
Espiritu repeatedly declared that the true consideration paid for the sale of the land was
not P2,000 as stated in their own Exhibit "l", the Deed of Sale, but in fact
P7,800.00.xxxiii[20]

Petitioner Dolores Rongavilla herself on cross-examination testified as follows:

"Atty. Rodriguez:

Q. You stated that you were present when this was explained by the notary public,
how did the notary public explain this deed of sale in English or Tagalog?

A. It was explained by the notary public that the property is being sold by them to us
and that the consideration was only P2,000.00 as appearing in the document in order
that we may be able to save for the payment of taxes and documentary stamps.

Q. Did the plaintiffs not say anything when the notary public according to you
explained that instead of P7,800.00, P2,000.00 will be stated in the document?

A. They did not say anything because we gave to them the amount of the
consideration agreed between us the sum of P7,800.00. (t.s.n., Sept. 2, 1982, pp. 9-
10)"xxxiii[21]

By their own testimony, the petitioners are pictured as not exactly averse to bending the
truth, particularly the purported consideration. Sadly, the irony of it is that while they
claimed they were regulary paying taxes on the land in question they had no second
thoughts stating at the trial and later on appeal that they had resorted to doctoring the
price stated in the disputed Deed of Sale, allegedly "to save on taxes". That admission
surely opens the door to questions on the integrity, genuineness and veracity of said
public instrument.

Thus, the trial court could not be said to err in asserting that "while it is true that public
documents are presumed genuine and regular under the provisions of the Rules of
Court, this presumption is a rebuttable presumption which may be overcome by clear,
strong and convincing evidence."xxxiii[22]

Moreover, Exhibit "l", the deed itself, shows that contrary to the testimony of the notary
public, who appeared as a witness for petitioners, what was originally typed therein was
the amount of "Three Thousand Pesos (P3,000)", which later on was substituted by the
handwritten amount now of Two Thousand Pesos (P2,000)."xxxiii[23] There is no need
to speculate on the motivation for this alteration. The notary public might have just
wanted to further save on taxes, rather than short-change the coffers of the
government. But, again, the whole fabric of petitioners' claim to the sanctity of the deed
as public instrument had thereby been shredded.

If as petitioners claimed on trial, the price paid was P7,800 while their deed showed only
P2,000, after the amount of P3,000 in the deed was altered, one may well inquire: which
figure could this Court believe? Could one say that the trial and the appellate courts
both erred in holding that no consideration passed from the buyer to the seller?

But petitioners herein would further take to task the appellate court for grave abuse of
discretion, as well as for a reversible error, in having relied on the "purported
Certification of the Bureau of Internal Revenue which was not offered in evidence".
Since this is a petition under Rule 45, however, we will not dwell on the alleged grave
abuse of discretion but limit our observation to the alleged error of law. The BIR
certificate was the subject of the testimony of witnesses at the hearing where both
parties took full advantage of the opportunity for direct and cross-examination as well as
rebuttal and sur-rebuttal.xxxiii[24] On the witness stand, private respondents as plaintiffs
below denied that they had any tax account number nor even residence certificates.
They were supported by their witnesses, testifying also under oath. They contradicted
the claim of the petitioners' lawyer-notary public, that the disputed deed of sale was
complete and in due form and was signed in his presence by the private respondents.
They further denied even having gone to the office of the lawyer-notary public in
Bacoor, Cavite, on June 3, 1976, the date of execution shown in the deed, or on any
other date. While indeed the BIR certificate was not formally offered in evidence, hence
no longer available on review, the record would show that said BIR certificate was
presented during the testimony on rebuttal of respondent Mercedes de la Cruz:xxxiii[25]

"ATTY. RODRIGUEZ:

According to the defendants, there was the alleged deed of sale executed by you and
your sister in favor of the defendants before Notary Public Arcadio G. Espiritu. It
appears you have presented Tax Account No. (TAN) 2345-463-6 and your sister
Florencia de la Cruz also presented Tax Account No. (TAN) 2345-468-4. Now, do you
have any tax account number?

WITNESS:

None, sir.xxxiii[26]
xxx

ATTY. RODRIGUEZ:

I am showing to you this certification from the "Kawanihan ng Rentas, Quezon City ,
dated June 16, 1982, addressed to Miss Florencia de la Cruz and Miss Mercedes de la
Cruz, Las Pias, Metro-Manila, issued by the accounting chief, stating that in reply to
you[r] request dated June 14, 1982, requesting certification of your TAN, the records of
their office do not show that you were issued any tax account number, what relation has
this document which for purposes of identification, we respectfully request that the same
be marked Exhibit "C" to the certification issued by the BIR?

WITNESS:

"Yes, this is the one."xxxiii[27]

Now even if the matter of the official certification by the BIR is set aside, the whole
question of the TAN being fake or belonging to somebody else, would boil down to one
of credibility between the two camps. Unfortunately for the petitioners herein, the trial
court found them and their witnesses far from credible. As remarked by the trial Judge,
"the declarations of defendants [herein petitioners] do not inspire rational
belief."xxxiii[28] It would thus appear that the trial court and the appellate court
committed no grave error of law, that would impel us on this point to override their
judgment.

Neither can we give assent to the assertion of petitioners that the appealed Court of
Appeals (CA) decision here as well as the judgment below is "contrary to settled
jurisprudence". This Court in Rivero v. Court of Appeals, 80 SCRA 411 (1977) had
occasion already to affirm a trial court's judgment declaring null and void the questioned
deed of sale where it found:

"The undisputed facts of record support the finding of the trial court that the consent of
Ana Concepcion to the deed of sale was obtained through fraudulent misrepresentation
of [her nephew] Jaime Rivero that the contract she was signing was one of mortgage."

"The land in question is located in the municipality of Polo, Bulacan, very near Manila. It
has an area of 2 hectares, 32 ares and 45 centares. The consideration for the sale of
said land is only P5,000.00 which is not only grossly inadequate but shocking to the
conscience x x x"xxxiii[29]

In Ocejo, Perez & Co. vs. Flores, 40 Phil. 921 (1920), regarding the sale of land in
Tayabas, Quezon, the Court confronted a similar question:

"The first question presented is whether the contract of sale executed by Isabel Flores
in favor of Joaquin Bas is valid or not.
"By relying upon the documents executed in his favor by Isabel Flores evidencing the
contract of sale, Joaquin Bas insists that there has been a perfect and valid contract of
sale of real estate between them and that he paid to her the consideration of P20,000
mentioned in said documents. x x x.

"Isabel Flores, on the other hand, maintained that there was neither a real sale nor did
she receive a centavo from the defendant, as the price of said sale, x x x."xxxiii[30]

Concluded the Court, after reviewing the series of transactions on record:

"It is then evident that the contract of sale mentioned in the notarial document of May 7,
1915, lacks cause or consideration and is therefore null and void and without any effect
whatsoever according to Article 1275 of the Civil Code, for it has been satisfactorily and
conclusively proven that the purchaser Joaquin Bas has not paid Isabel Flores for the
price of the lands that the latter has sold to him, and after being contented with having
for a long time given several promises showing that he had no intention to comply with
his contract, he concluded by executing four promissory notes payable to the vendor,
which recite the aforementioned purchase price and which were not also paid, there
appearing in the record facts from which it can be inferred that fraud has been
committed."xxxiii[31]

This Court in Mapalo v. Mapalo, 17 SCRA 114 (1966) stated:

"The rule under the Civil Code, again be it the old or the new, is that contracts without a
cause or consideration produce no effect whatsoever."xxxiii[32]

The "problem" before the Court "is whether a deed which states a consideration that in
fact did not exist, is a contract, without consideration, and therefore void ab initio, or a
contract with a false consideration, and therefore, at least under the Old Civil Code,
voidable." This problem arose, as observed by the Court, because the questioned "deed
of sale" between the brothers Magpalo, in 1936, stated that it had for its consideration
Five Hundred (P500.00) Pesos. In fact, however, said "consideration was totally
absent."xxxiii[33]

Thus, the Court concluded:

"In our view, therefore, the ruling of this Court in Ocejo, Perez & Co. vs. Flores, 40 Phil.
921 is squarely applicable herein. In that case we ruled that a contract of purchase and
sale is null and null and void and produces no effect whatsoever where the same is
without cause or consideration in that the purchase price which appears thereon as paid
has in fact never been paid by the puchaser to vendor."xxxiii[34]

Turning now to the issue of prescription, it follows that once the disputed deed is found
to be inexistent and void, the statute of limitations cannot apply. As the courts below
ruled, the cause of action for its declaration as such is imprescriptible.xxxiii[35]
Petitioners-spouses contend, however, that this is contrary to settled jurisprudence
because the applicable precedent should be Pangadil v. CFI of Cotabato, 116 SCRA
347 (1982). But the fact situation of that case differs radically from the present
controversy. There the Court upheld the dismissal of the action to declare a document
known as "Ratificacion de Una Venta" as inexistent and void after finding that it was "not
a contract wherein the parties do not intend to be bound at all;" that no circumstance
was alleged to sustain the contention "that the execution of the aforesaid document is
contrary to public policy;"xxxiii[36] and that for 27 years the petitioners did not even care
to verify the status of the land in question. "Their inaction for such a considerable period
of time reflects on the credibility of their pretense that they merely intended to confirm
an oral mortgage, instead of sale of the land in question."xxxiii[37]

Here in the present case, there is no doubt about the credibility of plaintiffs below
(herein private respondents) in pursuing their cause promptly and forcefully. They never
intended to sell, nor acceded to be bound by the sale of their land. Public policy is also
well served in defending the rights of the aged to legal protection, including their right to
property that is their home, as against fraud, misrepresentation, chicanery and abuse of
trust and confidence by those who owed them candor and respect.

More to the point, in our view, is Baranda v. Baranda, 150 SCRA 59 (1987), where this
Court found that:

"This Civil Code provides in Article 1391 that an action to annul a contract on the ground
of vitiated consent must be filed within four years from the discovery of the vice of
consent. In the instant case, however, we are dealing not with a voidable contract
tainted with fraud, mistake, undue influence, violence or intimidation that can justify its
nullification, but with a contract that is null and void ab initio

"Paulina Baranda declared under oath in her complaint that she signed the deeds of
sale without knowing what they were, which means that her consent was not merely
marred by the above-stated vices, so as to make the contracts voidable, but that she
had not given her consent at all. We are also satisfied that there was no valid
consideration either for the alleged transfers, for reasons already discussed. Lack of
consent and consideration made the deeds of sale void altogetherxxxiii[38]and rendered
them subject to attack at any time, conformably to the rule in Article 1410 that an action
to declare the inexistence of void contracts 'does not prescribe'."xxxiii[39]

And if the passage of time could not cure the fatal flaw in the inexistent and void
contract, neither could an alleged ratification or confirmation thereof. Further, as in the
case before us, reconveyance is proper. "The defect of inexistence of a contract is
permanent and incurable, hence it cannot be cured either by ratification or by
prescription. x x x There is no need of an action to set aside a void or inexistent
contract; in fact such action cannot logically exist. However, an action to declare the
non-existence of the contract can be maintained; and in the same action, the plaintiff
may recover what he has given by virtue of the contract."xxxiii[40]
Given the circumstances of the case and there being no reversible error in the
challenged decision, we are in accord with the judgment below and find the petitioners'
appeal without merit. For as well said in the Court of Appeals' Decision and Resolution
under review, "We cannot contemplate of the rather absurd situation, which defendants-
appellants would ineluctably lead [u]s to, where plaintiffs-appellees would sell their only
house, in which they have lived for so many years, in order to secure the measly sum of
P2,000.00 to repair the roof of their only house, which would all be lost to them anyway
upon the consummation of the sale. They would then become homeless, and the
repaired roof would be of no use to them."xxxiii[41] Experience which is the life of the
law -- as well as logic and common sense -- militates against the petitioners' cause.

WHEREFORE, the instant petition is hereby DENIED. The Decision and the Resolution
of the Court of Appeals in CA-G.R. CV No. 06543 are hereby AFFIRMED.

Cost against petitioners.

SO ORDERED.

Davide , Jr. (Chairman), Bellosillo, Vitug and Panganiban, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-55201 February 3, 1994

MARIANO T. LIM, JAIME T. LIM, JOSE T. LIM, JOVITA T. LIM, ANACORITA T. LIM,
ANTONIETTA T. LIM, RUBEN T. LIM, BENJAMIN T. LIM, ET AL., petitioners,
vs.
COURT OF APPEALS, LORENZO O. TAN and HERMOGENES O. TAN, respondents.

Eulogio E. Gatdula for petitioners.

Miles L. Ludovice for private respondents.

PUNO, J.:

This is a petition for review of the Decision of the Court of Appeals in CA-G.R. No.
51340-R entitled "Mariano T. Lim, et al., vs. Lorenzo O. Tan, et al., dated July 28,
1908.1

The case involves the partition of the properties of the deceased spouse Tan Quico and
Josefa Oraa. The former died on May 11, 1932 and the latter on August 6, 1932. Both
died intestate. They left some ninety six (96) hectares of land located in the municipality
of Guinobatan and Camalig Albay.2

The late spouses were survived by four (4) children: Cresencia, Lorenzo, Hermogenes
and Elias. Elias died on May 2, 1935 without issue. Cresencia died on December 20,
1967. 3 She was survived by her husband, Lim Chay Sing,4 and children, Mariano,
Jaime, Jose Jovita, Anacoreta, Antonietta, Ruben, Benjamin and Rogelio. They are the
petitioners in the case at bench.

The sad spectacle of the heirs squalling over the properties of their deceased parents
was again replayed in the case at bench. The protagonists were the widower and
children of Cresencia on one side, and Lorenzo and Hermogenes on the other side.

The late Cresencia and Lorenzo had contrasting educational background. Cresencia
only reached the second grade of elementary school. She could not read or write in
English. On the other hand, Lorenzo is a lawyer and a CPA.
Petitioners, heirs of Cresencia, alleged that since the demise of the spouses Tan Quico
and Josefa Oraa, the subject properties had been administered by respondent Lorenzo.
They claimed that before her death, Cresencia had demanded their partition from
Lorenzo.5 After Cresencia's death, they likewise clamored for their partition.6 Their
efforts proved fruitless. They failed Civil Case No. 3676.

Respondent Lorenzo and Hermogenes adamant stance against partition is based on

various contentions. Principally, they urge: (1) that the properties had already been
partitioned, albeit, orally; and (2) during her lifetime, the late Cresencia had sold and
conveyed all her interests in said properties to respondent Lorenzo. They cited as
evidence the "Deed of Confirmation of Extra Judicial Settlement of the Estate of Tan
Quico and Josefa Oraa"7 and a receipt of payment.8

The trial court decided in favor of the petitioners. It rejected the alleged oral petition in
light of the contrary testimony of respondent Hermogenes. It voided the "Deed of
Confirmation of Extra Judicial Settlement of the Estate of Tan Quico and Josefa Oraa
and Sale"9 on the ground that it was not understood by the late Cresencia when she
signed it.

On appeal, the respondent Court of Appeals, voting 4-1, reversed. It held there was
evidence to establish that the subject properties had been previously partitioned. It ruled
that respondent Lorenzo was not shown to have exercised any undue influence over the
late Crescencia when she signed the said Deed of Confirmation, etc.

Dissatisfied, petitioners filed this petition for review by certiorari. They submit:

I. THE FINDING OR CONCLUSION DRAWN BY THE HONORABLE COURT OF

APPEALS THAT —

THE EVIDENCE ON RECORD ALSO SHOWS THAT THE TERMS OF EXH. "E" (ALSO
EXH. "1" IN ENGLISH) WERE READ TO CRESENCIANA O. TAN IN THE BICOL
DIALECT, EXPLAINED TO AND UNDERSTOOD BY HER, BEFORE SHE SIGNED
THE SAME.

BASED ON THE FACTS STATED IN THE JUDGMENT QUOTING "THE PERTINENT

TESTIMONIES ON THIS POINT" OR BOTH DEFENDANTS IS MANIFESTLY
INCORRECT, AS THE SAME FALL FAR SHORT OF THE MANDATORY
REQUIREMENT OF ART. 1332, CIVIL CODE, THAT THE TERMS THEREOF
SHOULD BE FULLY EXPLAINED TO THE ILLITERATE CRESENCIA O. TAN WHO
DID NOT KNOW HOW TO READ AND WRITE IN ENGLISH.

II. THE CONCLUSION DRAWN BY THE HONORABLE COURT OF APPEALS THAT

THERE WAS NO UNDUE INFLUENCE EXERTED ON CRESENCIA O. TAN BY HER
(LAWYER-CPA) BROTHER LORENZO O. TAN BASED ON FACTS STATED IN THE
QUESTIONED JUDGMENT IS CLEARLY INCORRECT, AS IT IS CONTRARY TO THE
PROVISION OF ART. 1337, CIVIL CODE.
III. THE FINDING AND DECLARATION OF THE HONORABLE COURT OF APPEALS
THAT LORENZO O. TAN IS THE LAWFUL OWNER OF THE PROPERTIES
PERTAINING TO THE SHARE OF SAID ILLITERATE OR PARTY AT A
DISADVANTAGE, CRESENCIA O. TAN BY VIRTUE OF SAID DOCUMENT (EXH. "E";
ALSO EXH. "1") IS CONTRARY TO LAW, AS THE LATTER'S CONSENT WAS GIVEN
BY MISTAKE, UNDUE INFLUENCE AND/OR FRAUD.

IV. THE FINDING OF THE HONORABLE COURT OF APPEALS THAT THERE WAS
AN ORAL PARTITION BY AND AMONG CRESENCIA O. TAN AND HER TWO
BROTHERS LORENZO O. TAN AND HERMOGENES O. TAN IS CONTRARY TO THE
ORAL ADMISSION OF HERMOGENES O. TAN HIMSELF WHO TESTIFIED THAT —

WE DID NOT HAVE EXACTLY A PARTITION IN 1930.

AS WELL AS SERIOUSLY CONTRADICTED BY CLEAR, COMPETENT AND

CREDIBLE DOCUMENTARY EVIDENCE AND THEREFORE SHOULD BE
DISREGARDED.

We grant the petition.

The general rule is that factual findings of lower courts are accorded great respect by
this court on review of their decisions. In the petition at bench, we are constrained to re-
examine these findings considering the contrarieties in the findings made by the
appellate court and the trial court. Indeed, even the Decision of the appellate court is not
a unanimous but a mere majority decision.

The first issue is whether or not the subject properties had already been partitioned
among the heirs of tan Quico and Josefa Oraa. The private respondents alleged that the
properties had been orally partitioned in 1930. 10 Their evidence on this score,
however, leaves much to be desired. It is only respondent Lorenzo who stubbornly
insisted that the said properties had already been divided. However, brother
Hermogenes, the other respondent, gave a different testimony. We quote his testimony:

xxx xxx xxx

Court:

Q Never mind your sister, we are talking about your parents. During their lifetime in
1930 you said that the properties would be divided, so, in 1930, there was no actual
division because it would only be divided?

A We did not have exactly a partition in 1930.

Q You did not have a partition in 1930?

A No, your Honor. 11

The documentary evidence likewise support the conclusion that there was no such
partition. Exhibit "2", the receipt dated April 20, 1966 thumbmarked by the late
Crescencia and presented by the petitioners themselves reads:

RECEIPT FOR P8,970.00

Received from LORENZO O. TAN, on various dates, the total sum of EIGHT
THOUSAND NINE HUNDRED SEVENTY (P8,970.00) PESOS as partial payment for
the sale of my pro-indiviso share on the properties inherited by me from my deceased
parents.

As guarantee for the payment, I put up as security my pro-indiviso one-third share on

the properties inherited by me from my deceased parents.

Signed this 20th day of April, 1966 at Quezon City, Philippines.

(SGD.) CRESENCIA O. TAN

Witness: (SGD.) ANTONIETTA T. LIM

Note: Amount of P8,970 includes P6,700 paid to acquire Lot No. 202-54-41-T from
Pedro L. Morada who transferred his right to Jovita Lim.

The receipt speaks of the late Cresencia's pro-indiviso share of the subject properties or
her share before division. We also note that the subject lots are still covered by tax
declarations 12 in the name of their parents. If these lots had already been partitioned to
the different heirs and then occupied by them, it appears strange that their tax
declarations have not been adjusted to reflect their ownership considering the long time
that has elapsed since 1930. Respondent Lorenzo testified that he took possession of
the lot supposed to belong to the late Crescencia in 1966, 13 yet, he himself did not
cause any change in its tax declaration. Similarly corrosive of the claim of private
respondents is their own Exhibit "E" or "1", entitled "Deed of Confirmation of Extra
Judicial Settlement of the Estate of Tan Quico and Josefa Oraa." Nowhere in the text of
this document prepared by no less than respondent Lorenzo, is there any intimation that
the subject why Exhibit was entitled Deed of Confirmation, respondent Lorenzo
explained; ". . . . we want to put it in black and white, the separation of the properties
which was in existence since 1930 to 1932. . ." (TSN, March 2, 1970, p. 40). To say the
least, the omission buttresses the conclusion that the properties have not been
partitioned.

We now determine the next crucial issue of fact, i. e., whether or not the above
mentioned Deed of Confirmation of Extra Judicial Settlement of the estate of Tan Quico
and Josefa Oraa (Exhibit "E" or "1") is valid. The respondent court, reversing the trial
court, held that the evidence failed to establish that it was signed by the late Crescencia
as a result of fraud, mistake or undue influence. We hold this ruling erroneous. In
calibrating the credibility of the witnesses on this issue, we take our mandate from
Article 1332 of the Civil Code which provides: "When one of the parties is unable to
read, or if the contract is in language not understood by him, and mistake or fraud is
alleged, the person enforcing the contract must show that the terms thereof have been
fully explained to the former." this substantive law came into being due to the finding of
the Code Commission that there is still a fairly large number of illiterates in this country,
and documents are usually drawn up in English or Spanish. 14 It is also in accord with
our state policy of promoting social
justice. 15 It also supplements Article 24 of the Civil Code which calls on court to be
vigilant in the protection of the rights of those who are disadvantaged in life. in the
petition at bench, the questioned Deed is written in English, a language not understood
by the late Crescencia, an illiterate. It was prepared by the respondent Lorenzo, a
lawyer and CPA. For reasons difficult to divine, respondent Lorenzo did not cause the
notarization of the deed. Petitioners alleged that the Deed was signed by the late
Crescencia due to mistake, fraud or undue influence. They postulated that respondent
Lorenzo took advantage of the late Crescencia's trust and confidence. Testifying on the
trust of the late Crescencia on respondent Lorenzo, petitioner Jose Lim declared: 16

xxx xxx xxx

Q Now, will you tell the Court how the relation between your mother and your uncle
Lorenzo Tan before September 1967?

A My mother was so close to his brother, Lorenzo Tan. My mother always asked him
advice because he is considered by my mother as God to her. . . .

Considering these circumstances, the burden was on private respondents to prove that
the content of the Deed was explained to the illiterate Crescencia before she signed it.
17 In this regard, the evidence adduced by the respondents failed to discharge their
burden. On one hand, respondent Lorenzo testified that he and his brother, respondent
Hermogenes, explained in Bicolano, the meaning of the deed to the late Crescencia,
viz: 18

ATTY. LUDOVICE:

Q Who read the document to her?

A I and my brother.

Q Who is that brother?

A Hermogenes Tan.

COURT:

Q Who read that document?

A I prepared it.

Q You prepared it yourself?

A Yes, sir.

Q Why do you have to prepare the document?

A Because I have all the details.

COURT:

All right.

ATTY. LUDOVICE:

Q In what language did you read this document to Crescencia O. Tan?

A First it was in English then it was in Bicol so as to clarify things, they were my sister
and my brother and to other persons who is going to witness the document

Q Did your sister understand the Bicol dialect when the contents of this was read?

A Yes and before that, my sister knows everything what is going on.

ATTY. GATDULA:

I moved to strike out the last portion of the answer.

COURT:

Strike it out.

Respondent Hermogenes, however, gave a different testimony. He declared it was

respondent Lorenzo alone who read the text of the Deed in Bicolano to the late
Crescencia. We quote his testimony, viz: 19

Q You presented this document, EXHIBIT 1 for the defendants, to Crescencia Tan?

A It was presented by my brother Lorenzo Tan.

Q On what occasion was that on August 15, 1967 was this presented?

A August 16 coincide with the fiesta in our town, Guinobatan.

Q Was this read to your sister by your brother Lorenzo?

A Yes, sir, that was read.

Q In what language was it read to her?

A It was read in Bicol.

Q Did your sister understand the contents of the document?

A Yes, sir.

Q Who read the document to her?

A Lorenzo Tan read the document.

This variance in testimony on a material matter works against the credibility of private
respondents. Nor are we prepared to give full faith and credit to the testimony that
respondent Lorenzo alone explained the text of the deed to the late Crescencia.
Respondent Lorenzo has too much of a material stake on the dispute. His testimony on
the issue is, therefore, not free from bias and prejudice. Indeed, the preparation and
alleged signing of the said Deed leave a lot of questions unanswered. For one, the
Deed as important as it is, was not caused to be notarized by respondent Lorenzo. The
need for notarization could not have escaped respondent Lorenzo, a lawyer by
profession. Article 1358 of the Civil Code requires that the Deed should appear in a
public document. For another, respondent Lorenzo prepared the Deed in English
language when he knew all along that the late Cresencia would not be able to
comprehend its meaning. For still another, none of the alleged witnesses to the Deed
was presented to testify on whether it was signed by the late Crescencia voluntarily and
with clear comprehension of its content. Last but not the least, it is strange that the
Crescencia signed the said Deed with full freedom and complete understanding of its
legal significance.

Finally, we come to the issue of whether or not the late Crescencia sold her inheritance
share in favor of the respondent Lorenzo. In taking the stance that there was indeed a
sale, private respondents point to the receipt, Exh. "2" dated April 20, 1966 as evidence.
The significance of this receipt, Exh. "2" was well analyzed by the trial court and we
approve its ruling, viz:

Said defendant likewise presented in evidence a receipt (Exhibit 2) purports to show

that on April 20, 1966, Cresencia O. Tan had already received the aggregate amount of
P8,970.00 from defendant Lorenzo O. Tan as "partial payment for the sale of my
(Cresenciana O. Tan's) pro-indiviso share on the properties inherited by me from my
deceased parents.

It is contended, by these exhibits, that Cresenciana O. Tan wanted to buy Lot 202-5-41-
T at No. 53 Bignay, Project 2, Quezon City, with the proceeds of the sale to defendant
Lorenzo O. Tan of a portion of Lot 7671 located in Singtan, Guinobatan, Albay, which is
alleged to be the share of said Cresenciana O. Tan.

However, the same receipt Exhibit 2 recites at the bottom thereof that the amount of
P8,970.00 includes the amount of P6,700.00 paid to purchase the lot of certain Pedro L.
Morada who transferred his right to Jovita Lim. This statement in Exhibit 2 belies
defendant's contention that Cresenciana O. Tan is the buyer of the lot in Quezon City.

IN VIEW WHEREOF, the petition for review on certiorari is granted and the Decision of
the respondent appellate court in Ca-G.R. No. 51340-R dated July 28, 1980 is reversed
and set aside. In its lieu, the Decision of the then CFI of Albay, 10th Judicial District, Br.
II in Civil Case No. 3676 is reinstated. Costs against private respondents.

SO ORDERED.

Narvasa, C.J., Padilla and Regalado, JJ., concur.

Nocon, J., is on leave.

# Footnotes

1 The Decision was penned by Associates Justice Serafin Cuevas with the concurrence
of Associate Justices Crisolito Pascual, Hugo Gutierrez, Jr., and Jorge Coquia, but with
Associate Justice Carolina Aquino dissenting. It reversed the Decision of the then CFI of
Albay, 10th Judicial District, Br. II in Civil Case No. 3676 for Partition, Accounting with
Damages, the dispositive portion of which reads:

WHEREFORE, in view of all the foregoing, judgment is hereby rendered as follows:

(1) Ordering the partition of all the real properties listed and enumerated in the
INVENTORY, Annex "A" to the amended complaint on Exhibit "B", among the following
and in the following proportion, to wit:

(a) One-third (1/3) to be adjudicated and awarded to Hermogenes O. Tan; and

(b) One-third (1/3) to adjudicated and awarded to Hermogenes O. Tan; and

(c) One-third (1/3) to be adjudicated and awarded to the herein plaintiffs Mariano,
Jaime, Jovita, Jose, Anacorita, Antonietta, Ruben, Benjamin, and Rogelio, all surnamed
T. Lim and Lim Chay Sing, per stripes in representation of their deceased mother
CRESENCIANA C. TAN.

The partition herein adjudged may be effected either by common agreement of the
parties herein mentioned as entitled thereto, or through a project commissioner to be
suggested by said parties within a period of ten (10) days from receipt of a copy of this
judgment, subject to the conformity of the parties and the approval of the court;

(2) Defendant Lorenzo O. Tan is hereby ordered to render a full and complete
accounting of all the fruits and income derived from the properties subject of partition
from 1932 to the present;

(3) Defendants are hereby ordered to pay unto the plaintiffs damages by way of
attorney's fees in the sum of P3,000.00; and

(4) The "Deed of Confirmation" of Extra-Judicial partition and sale dated August 15,
1967 executed by Cresenciana O. Tan, as vendor, and Lorenzo O. Tan as vendee and
Hermogenes O. Tan, and acknowledged before Notary Public JOSE P. OIRA is hereby
declared null and void as having been procured with fraud and/or mistake.

Costs against the defendant.

2 Exhibit "B".

3 Exhibit "A".

4 Also known as Salvador Guariña.

5 TSN, August 14, 1969, pp. 6-8.

6 Ibid, pp. 9-12.

7 Exh. "E" or "1".

8 Exh. "2".

9 Exhibit "E" or "1".

10 TSN, March 2, 1970, pp. 40-42.

11 TSN, April 8, 1970, p. 29.

12 Exhibits "C", "C-1" to "C-21".

13 TSN, March 2, 1970, p. 23.

14 Code Commission Report, p. 136.

15 Article II, sec. 10 of the 1987 Constitution.

16 TSN, August 14, 1969, pp. 23-24.

17 Tolentino, Civil Code of the Philippines, Vol. IV 1991 ed., p. 486 citing Ayala vs.
Valderama, etc., 49 O.G. 980, March 1953. Arzadon vs. Banson, et al., (CA G.R. No.
2661-R, November 15, 1963.

18 TSN, March 2, 1970, pp. 31-32.

19 TSN, April 8, 1970, p. 7.