G.R. No. 198682 April 10, 2013
03-11-2005 directing all
FRANCISCO C. ADALIM, Petitioner,
vs.
ERNESTO TANINAS, JORGE ORITA, MA. IRMA DAIZ (deceased),
YOLANDO DEGUINION, GRACE LIM, EMMA T ANINAS, ISIDRO BUSA, MA.
NALYN DOTING CO, ESTER ULTRA, FRANCISCO ESPORAS, ENRICO
BEDIASAY, JESUS CHERREGUINE,* AIDA EVIDENTE, RODRIGO
TANIÑAS, VIRGILIO ADENIT, CLARITA DOCENA, ERENE DOCENA, GUIO
BALICHA, LUZ BACULA, PERFECTO MAGRO, ANACLETO EBIT,
DOLORES PENAFLOR, ERWENIA BALMES, CECILIO CEBUANO, MA.
ELENA ABENIS, DANILO ALEGRE, and THE COURT OF APPEALS (FIFTH
DIVISION), Respondents.
DECISION
CARPIO, J.:
The Case
1
This Petition for Review on Certiorari seeks to reverse the Court of Appeals'
2 3
Decision dated 28 January 2011 and its Resolution dated 6 September 2011 in
CA-G.R. SP No. 110703. The Court of Appeals (CA) affirmed Civil Service
4
Commission (CSC) Resolution No. 09-1197 dated 10 August 2009.
The Facts
During the 10 May 2004 elections, Diego Lim (Lim) was proclaimed Mayor of
Taft, Eastern Samar. Petitioner Francisco C. Adalim (Adalim), a candidate for
the same position, filed an election protest against Lim before the Regional Trial
Court of Borongan, Eastern Samar, Branch 1 (RTC). On 5 August 2005, the
RTC ruled in favor of Adalim and declared him as the winning candidate in the
elections. On 10 August 2005, Lim appealed the RTC decision with the
Commission on Elections (Comelec).
On 11 August 2005, the RTC granted Adalim’s motion for execution pending
appeal. Lim, however, continued to hold office in the municipal building. On 13
August 2005, Adalim issued a Memorandum directing all municipal employees
"to log-in and log-out at the Office of the Mayor, 4th Floor, Cyrus Hotel." On 15
August 2005, Adalim issued another Memorandum stating that the local
government unit of Taft, Eastern Samar was temporarily relocated at Cyrus
Hotel. On the same day, Lim filed a Petition for Certiorari with Temporary
Restraining Order or Status Quo Order before the Comelec against the motion
for execution. Thereafter, the Comelec issued a twenty-day Status Quo Order
5
effective 23 August to 12 September 2005. On 10 October 2005, the Comelec
denied Lim’s petition for certiorari. Lim filed a Motion for Reconsideration.
On 24 October 2005, Adalim issued Memorandum No.
municipal employees to submit their Daily Time Records (DTRs); otherwise,
they would not be paid their salaries. On 23 November 2005, the Office of the
Municipal Treasurer issued a Certification listing the employees, which included
respondent employees, with no DTRs for the months of August, September, and
October 2005, to wit:
1. Grace C. Lim – Mun. Budget Officer
2. Ma. Irma D. Daiz – MPDCO/ Local Civil Registrar
xxx
4. Erwenia Balmes – Social Welfare Officer III
5. Dolores Peñaflor – Administrative Asst. II
6. Aida Evidente – Budgeting Aide
7. Emma Taniñas – Revenue Collector Clerk
8. Rodrigo V. Taniñas – Revenue Collector Clerk
9. Nalyn V. Dotingco – Nurse II
10. Clarita C. Docena – Midwife II
xxx
12. Elena Abenis – Midwife II
13. Francisco Esporas – Security Guard II
14. Guio Balicha – Security Guard I
15. Ernesto Taniñas – Security Guard I
16. Enrico Bediasay – Security Guard I
17. Luz S. Bacula – Day Care Worker
18. Jorge Orita – Community Affairs Asst.
xxx
20. Jesus Aquiatan Cherreguine – Administrative Aide III
21. Perfecto Magro – Administrative Aide III
22. Yolando Deguinion – Administrative Aide III
23. Anacleto Ebit – Administrative Aide I
24. Erene V. Docena – Agricultural Technologist
25. Ester D. Ultra – Agricultural Technologist
26. Danilo Alegre – Agricultural Technologist
27. Isidro Busa – Administrative Aide I
28. Virgilio Adenit – Administrative Aide I
6
29. Cecilio Cebuano – Administrative Aide I
On the same day, Adalim issued memoranda dropping respondent employees
7
from the rolls due to absence without official leave (AWOL).
On 26 May 2006, respondent employees, except Isidro Busa and Ester Ultra,
filed an appeal with the Civil Service Commission Regional Office (CSCRO) No.
VIII. On 20 July 2006, Isidro Busa and Ester Ultra filed a similar appeal.
Respondent employees claimed that the memoranda dropping them from the
rolls were issued without due process and without authority. They argued that
the issue as to who won the mayoralty elections was not yet resolved at the time
they were dropped from the rolls. Moreover, respondent employees denied that
they were on AWOL. They alleged that they were regularly reporting for work in
the municipal building until Adalim occupied it on 7 March 2006 and prevented
them from entering.
In a Comment dated 9 July 2006, Adalim sought the dismissal of the appeal for
being filed out of time, for failure to pay the appeal fee, and for lack of merit.
Adalim alleged that he had the authority to issue the memoranda based on the
writ of execution pending appeal issued by the RTC. Adalim further claimed that
respondent employees were on AWOL because they failed to submit DTRs and
approved leave of absences.
Subsequently, CSCRO No. VIII directed respondent employees to attach the
proof of payment of their appeal fee, to which they complied. In an Order dated
27 October 2006, the CSCRO No. VIII granted respondent employees’ appeal
and ordered their reinstatement with payment of back salaries. The CSCRO No.
VIII ruled that Adalim had no authority to drop respondent employees from the
rolls since the issue on who won the mayoralty elections was not yet resolved
during the period that respondent employees were declared on AWOL. The
CSCRO No. VIII further found that respondent employees continued to report in
the municipal building as evidenced by the police blotter. Respondent
employees did not log in on the office logbook because they were denied access
to the office logbook.
Adalim filed a motion for reconsideration but the same was denied by CSCRO
No. VIII. On 17 January 2007, Adalim appealed to the CSC.
The Ruling of the Civil Service Commission
On the basis of Adalim’s appeal alone, the CSC issued Resolution No. 07-
8 Hence, this petition.
1845 dated 27 September 2007, reversing the decision of the CSCRO No. VIII.
The CSC found merit in Adalim’s arguments and held that respondent
employees indeed failed to report at the assigned temporary work station
causing them to be on AWOL. Hence, respondent employees filed their motion
for reconsideration.
9
In Resolution No. 09-0262 dated 24 February 2009, the CSC reversed
Resolution No. 07-1845 and directed Adalim to reinstate respondent employees
to their respective positions with payment of their salaries and benefits effective
August 2005 up to their actual reinstatement. Adalim moved for reconsideration,
10
which the CSC denied in its Resolution No. 09-1197 dated 10 August 2009.
The dispositive portion of the CSC Resolution reads:
WHEREFORE, the Motion for Reconsideration of Mayor Francisco Adalim is
DENIED. Accordingly, CSC Resolution No. 09-0262 dated February 24, 2009
which directed Mayor Adalim to reinstate Taniñas, et al. to their respective
positions and pay their salaries and benefits effective August 2005 up to their
actual reinstatement, STANDS with modification that the ruling on reinstatement
is not applicable to Ma. Irma D. Daiz who died on August 31, 2007 and Isidro
Busa who retired on September 14, 2008. They are, however, still entitled to the
salaries and benefits from August 2005 up to the termination of their relation
with the Municipal Government of Taft.
The Motion for Execution of Taniñas, et al. is GRANTED. Accordingly, Mayor
Francisco Adalim is directed to implement the said decision within five (5) days
from receipt hereof, otherwise, he may be cited for contempt and be held liable
11
for Conduct Prejudicial to the Best Interest of the Service or Neglect of Duty.
Accordingly, Adalim filed a petition for review with the CA.
The Ruling of the Court of Appeals
In its 28 January 2011 Decision, the CA dismissed Adalim’s petition for want of
merit and affirmed both Resolution Nos. 09-0262 and 09-1197 of the CSC. The
CA emphasized that:
x x x this case involves an administrative proceeding, hence, the technical rules
of procedure under the Rules of Court need not be strictly applied pursuant to
Section 3, Rule 1 of the Uniform Rules on Administrative Cases in the Civil
Service, which provides:
"Section 3. Technical Rules in Administrative Investigations. - Administrative
investigations shall be conducted without necessarily adhering strictly to the
12
technical rules of procedure and evidence applicable to judicial proceedings."
The Issues
Adalim seeks a reversal and assigns the following errors:
I. The honorable court of appeals erred and gravely abused its discretion
in giving due course to the appeal of respondent employees with the csc
despite the fact that it was filed out of time or after more than six (6)
months from their receipt of the dismissal order.
II. The honorable court of appeals erred and gravely abused its discretion
in giving due course to the appeal of respondent employees with the
respondent csc despite the fact that the appeal fee was not paid until
october 27, 2007 or eleven (11) months after their receipt of the
dismissal order. Worse, the appeal fee was paid on the very same day
when the csc regional office no. 8 promulgated its decision.
 III. The honorable court of appeals erred and gravely abused its discretion
in affirming the decision of the csc despite the fact that the latter
admitted issues not presented or alleged in the pleadings.
IV. The honorable court of appeals erred and gravely abused its discretion
in giving due course to the appeal of respondent employees with the csc
when it decreed: "however, the issue on who is the duly elected mayor
during the period when taniñas, et. Al. Were declared on absence
without official leave (awol) was still unresolved by the comelec",
thereby disregarding the writ of execution pending appeal issued on
13
august 11, 2005 by the regional trial court on the election protest case.
The Ruling of the Court
The petition has no merit.
At the outset, Adalim assails the CSC’s liberal application of its rules. In a
number of cases, we upheld the CSC’s decision relaxing its procedural rules to
14
render substantial justice. The Revised Rules on Administrative Cases in the
Civil Service themselves provide that administrative investigations shall be
conducted without strict recourse to the technical rules of procedure and
15
evidence applicable to judicial proceedings. The case before the CSC involves
16
the security of tenure of public employees protected by the Constitution. Public
interest requires a resolution of the merits of the appeal instead of dismissing
the same based on a rigid application of the CSC Rules of
17
Procedure. Accordingly, both the CSC and the CA properly allowed
respondent employees’ appeal despite procedural lapses to resolve the issue on
the merits.
Having settled the procedural issue, we resolve the main issue of whether
respondent employees were validly dropped from the rolls by Adalim due to
AWOL.
Basic is the rule that in petitions for review on certiorari under Rule 45 of the
Rules of Court, only questions of law may be raised by the parties and passed
upon by this Court. On the other hand, the issue of the AWOL of respondent
18
employees is a question of fact. Time and again, this Court held that factual
findings of quasi-judicial bodies like the CSC, when adopted and affirmed by the
CA and if supported by substantial evidence, are accorded respect and even
19
finality by this Court. While this Court has recognized several exceptions to this
rule, we do not find any of these exceptions in the present case.
Adalim dropped respondent employees from the rolls due to AWOL using CSC
20
Memorandum Circular No. 14 as basis. This means that the employees left or
abandoned their posts for a continuous period of thirty (30) calendar days or
21
more without any justifiable reason and notice to their superiors.
Both the CSC and the CA found that respondent employees did not commit
AWOL. Despite the unresolved mayoralty issue in Taft, Eastern Samar,
respondent employees were continuously performing their functions in the
municipal building during the period that they were declared on AWOL, or during
August, September and October 2005. The CA, adopting the findings of the
CSC, held:
x x x Contrary to petitioner Adalim’s allegations, in the midst of the political
turmoil, respondents were seen continuously performing their functions at the
municipal hall. This fact was confirmed by the municipal vice mayor, the
sangguniang bayan members, the barangay treasurers, and reported in the
police blotter of the Philippine National Police. The pieces of evidence submitted
by the respondents only during the motion for reconsideration stage should not
be taken against them. As they had explained, they were never given the
opportunity by the CSC to file an answer to the appeal filed by Adalim, and that
22
the motion for reconsideration was the first pleading that they had filed. x x x.
The records further reveal that respondent employees never intended to go on
leave or abandon their posts. The CSC held that:
After a thorough re-examination of the records, the Commission took note of the
peculiar circumstances of the instant case taking into consideration the
uncertain political landscape in the Municipal Government of Taft after the May
2004 national and local elections. For reporting to the wrong political camp, the
movants, obviously, have become victims and were caught in the cross-fire, so
to speak, between two political rivals x x x. The situation is further aggravated
when the authorities (Regional Trial Court, Department of the Interior and Local
Government and the Commission on Elections) who are supposed to settle the
controversy issue conflicting decisions. As such it is to be expected that the
employees did not know whom to follow between Lim and Adalim because of
23
the conflicting views. x x x (Emphasis supplied)
As pointed out by the CA, during the period that respondent employees were
declared on AWOL, the petition for certiorari against the writ of execution and
the appeal on the election protest were both pending before the Comelec. The
Comelec also issued a Status Quo order. Thus, the CA aptly found that
respondent employees "in this particular situation were just victims of the ill-
effects of the intense tug-of-war between Lim and Adalim for the mayoralty
24
position in Taft, Eastern Samar."
Thus, we find no reason to depart from the decision of the CA, which affirmed
that of the esc, ordering respondent employees' reinstatement with payment of
back salaries. WHEREFORE, we DENY the petition. We AFFIRM the Decision
dated 28 January 2011 and the Resolution dated 6 September 2011 in CA-G.R.
SP No. 110703. Costs against petitioner. SO ORDERED.
G.R. No. 177188 December 4, 2008
EL GRECO SHIP MANNING AND MANAGEMENT
CORPORATION, petitioner,
vs.
COMMISSIONER OF CUSTOMS, respondent.
DECISION
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review on Certiorari under Rule 45 of the
Revised Rules of Court, filed by petitioner El Greco Ship Manning and
Management Corporation (El Greco), seeking to reverse and set aside the
1
Decision of the Court of Tax Appeals (CTA) En Banc dated 14 March 2007 in
C.T.A. EB No. 162. In its assailed Decision, the CTA En Banc affirmed the
2
Decision dated 17 October 2005 of the CTA Second Division in CTA Case No.
6618, ordering the forfeiture of the vessel M/V Criston, also known as M/V
Neptune Breeze, for having been involved in the smuggling of 35,000 bags of
imported rice.
The factual and procedural antecedents of this case are as follows:
On 23 September 2001, the vessel M/V Criston docked at the Port of Tabaco,
Albay, carrying a shipment of 35,000 bags of imported rice, consigned to
Antonio Chua, Jr. (Chua) and Carlos Carillo (Carillo), payable upon its delivery
to Albay. Glucer Shipping Company, Inc. (Glucer Shipping) is the operator of
3
M/V Criston.
Upon the directive of then Commissioner Titus Villanueva of the Bureau of
Customs (BOC), a Warrant of Seizure and Detention, Seizure Identification
No. 06-2001, was issued by the Legaspi District Collector, on 23 September
2001 for the 35,000 bags of imported rice shipped by M/V Criston, on the ground
that it left the Port of Manila without the necessary clearance from the Philippine
Coast Guard. Since the earlier Warrant covered only the cargo, but not M/V
Criston which transported it, a subsequent Warrant of Seizure and Detention,
Seizure Identification No. 06-2001-A, was issued on 18 October 2001
particularly for the said vessel. The BOC District Collector of the Port of Legaspi
thereafter commenced proceedings for the forfeiture of M/V Criston and its
cargo under Seizure Identification No. 06-2001-A and Seizure Identification No.
4 06-2001-A ordering the forfeiture of the M/V Criston, also known as M/V
06-2001, respectively.
To protect their property rights over the cargo, consignees Chua and Carillo filed
before the Regional Trial Court (RTC) of Tabaco, Albay, a Petition for Prohibition
with Prayer for the Issuance of Preliminary Injunction and Temporary
Restraining Order (TRO) assailing the authority of the Legaspi District Collectors
to issue the Warrants of Seizure and Detention and praying for a permanent
injunction against the implementation of the said Warrants. Their Petition was
5
docketed as Civil Case No. T-2170.
After finding the Petition sufficient in form and substance and considering the
extreme urgency of the matter involved, the RTC issued a 72-hour TRO
conditioned upon the filing by Chua and Carillo of a bond in the amount
of P31,450,000.00, representing the value of the goods. After Chua and Carillo
6
posted the required bond, the 35,000 bags of rice were released to them.
The Legaspi District Collector held in abeyance the proceedings for the forfeiture
of M/V Criston and its cargo under Seizure Identification No. 06-2001 and
Seizure Identification No. 06-2001-A pending the resolution by the RTC of Civil
Case No. T-2170. When the RTC granted the Motion to Dismiss Civil Case No.
T-2170 filed by the BOC, the Legaspi District Collector set the hearing of
Seizure Identification No. 06-2001 and Seizure Identification No. 06-2001-A. A
notice of the scheduled hearing of the aforementioned seizure cases was sent to
Glucer Shipping but it failed to appear at the hearing so set. After a second
notice of hearing was ignored by Glucer Shipping, the prosecutor was allowed to
7
present his witnesses.
In the meantime, while M/V Criston was berthing at the Port of Tabaco under the
custody of the BOC, the Province of Albay was hit by typhoon "Manang." In
order to avert any damage which could be caused by the typhoon, the vessel
was allowed to proceed to another anchorage area to temporarily seek shelter.
After typhoon "Manang" had passed through Albay province, M/V Criston,
8
however, failed to return to the Port of Tabaco and was nowhere to be found.
Alarmed, the BOC and the Philippine Coast Guard coordinated with the
Philippine Air Force to find the missing vessel. On 8 November 2001, the BOC
received information that M/V Criston was found in the waters of Bataan sporting
9
the name of M/V Neptune Breeze.
Based on the above information and for failure of M/V Neptune Breeze to
present a clearance from its last port of call, a Warrant of Seizure and Detention
under Seizure Identification No. 2001-208 was issued against the vessel by
the BOC District Collector of the Port of Manila.
10
For the same reasons, the Legaspi District Collector rendered a Decision on 27
June 2002 in Seizure Identification No. 06-2001 and Seizure Identification No.
Neptune Breeze, and its cargo, for violating Section 2530 (a), (f) and (k) of the
11
Tariff and Customs Code.
In the meantime, El Greco, the duly authorized local agent of the registered
owner of M/V Neptune Breeze, Atlantic Pacific Corporation, Inc. (Atlantic
Pacific), filed with the Manila District Collector, in Seizure Identification No.
2001-208, a Motion for Intervention and Motion to Quash Warrant of Seizure
Detention with Urgent Prayer for the Immediate Release of M/V Neptune
Breeze. El Greco claimed that M/V Neptune Breeze was a foreign registered
vessel owned by Atlantic Pacific, and different from M/V Criston which had been
12
involved in smuggling activities in Legaspi, Albay.
Acting favorably on the motion of El Greco, the Manila District Collector issued
13
an Order dated 11 March 2002 quashing the Warrant of Seizure and Detention
it issued against M/V Neptune Breeze in Seizure Identification No. 2001-208 for
lack of probable cause that the said vessel was the same one known as M/V
Criston which fled from the jurisdiction of the BOC Legaspi District after being
seized and detained therein for allegedly engaging in smuggling activities.
According to the decretal part of the Manila District Collector’s Order:
WHEREFORE, pursuant to the authority vested in me by law, it is
hereby ordered and decreed that the Warrant of Seizure and Detention
issued thereof be Quashed for want of factual or legal basis, and that
the vessel "M/V Neptune Brreze" be released to [El Greco] after
clearance with the Commissioner of Customs, proper identification and
compliance with existing rules and regulations pertinent in the premises.
On automatic review by BOC Commissioner Antonio Bernardo, the Order dated
11 March 2002 of the District Collector of the Port of Manila was reversed after
finding that M/V Neptune Breeze and M/V Criston were one and the same and
that the Legaspi District Collector had already acquired prior jurisdiction over the
vessel. The Decision dated 15 January 2003 of the BOC Commissioner,
nd 14
contained in his 2 Indorsement to the Manila District Collector, decreed:
Respectfully returned to the District Collector, POM, the within case folders in
POM S. I. No. 2001-208, EL GRECO SHIP MANNING AND MANAGEMENT
CORPORATION, Claimant/Intervenor, with the information that the Decision of
that Port in the aforesaid case is hereby REVERSED in view of the following
reasons:
1. Subject vessel MV "NEPTUNE BREEZE" and MV "CRISTON" are
one and the same as shown by the vessels documents retrieved by
the elements of the Philippine Coast Guard from MV "CRISTON"
during the search conducted on board thereof when the same was
apprehended in Tabaco, Albay, indicating therein the name of the
vessel MV "NEPTUNE BREEZE," the name of the master of the
vessel a certain YUSHAWU AWUDU, etc. These facts were
corroborated by the footage of ABS-CBN taken on board the vessel
when the same was subjected to search.
2. Hence, prior jurisdiction over the said vessel was already acquired
by the Port of Legaspi when the said Port issued WSD S.I. No. 06-
2001-A and therefore, the Decision of the latter Port forfeiting the
subject vessel supercedes the Decision of that Port ordering its
release.
Seeking the reversal of the Decision dated 15 January 2003 of the BOC
Commissioner, El Greco filed a Petition for Review with the CTA which was
lodged before its Second Division as CTA Case No. 6618. El Greco averred that
the BOC Commissioner committed grave abuse of discretion in ordering the
forfeiture of the M/V Neptune Breeze in the absence of proof that M/V Neptune
15
Breeze and M/V Criston were one and the same vessel. According to El
Greco, it was highly improbable that M/V Criston was merely assuming the
identity of M/V Neptune Breeze in order to evade liability since these were
distinct and separate vessels as evidenced by their Certificates of Registry.
While M/V Neptune Breeze was registered in St. Vincent and the
16
Grenadines as shown in its Certificate of Registry No. 7298/N, M/V Criston
was registered in the Philippines. Additionally, El Greco argued that the Order
dated 11 March 2002 of the Manila District Collector already became final and
executory for failure of the BOC Commissioner to act thereon within a period of
30 days in accordance with Section 2313 of the Tariff and Customs Code.
17
On 17 October 2005, the CTA Second Division rendered a Decision in CTA
Case No. 6618 sustaining the 15 January 2003 Decision of the BOC
Commissioner ordering the forfeiture of M/V Neptune Breeze. Referring to the
crime laboratory report submitted by the Philippine National Police (PNP) stating
that the serial numbers of the engines and the generators of both M/V Criston
and M/V Neptune Breeze were identical, the CTA Second Division concluded
that both vessels were indeed one and the same vessel. The CTA Second
Division further ruled that nothing in the provisions of Section 2313 of the Tariff
and Customs Code could buttress El Greco’s contention that the Order dated 11
March 2002 of the Manila District Collector already became final and executory.
The dispositive portion of the Decision of the CTA Second Division reads:
WHEREFORE, premises considered, the present Petition for Review is
nd
hereby DISMISSED. The Decision in the 2 Indorsement dated January
18
15, 2003 of then Commissioner Bernardo is hereby AFFIRMED.
19
In a Resolution dated 7 February 2006, the CTA Second Division denied the
Motion for Reconsideration of El Greco for failure to present issues that had not
been previously threshed out in its earlier Decision.
Undaunted, El Greco elevated its case to the CTA En Banc through a Petition
for Review, docketed as C.T.A. EB No. 162, this time lamenting that it was being
deprived of its property without due process of law. El Greco asserted that the
CTA Second Division violated its constitutional right to due process when it
upheld the forfeiture of M/V Neptune Breeze on the basis of the evidence
presented before the Legaspi District Collector in Seizure Identification No. 06-
2001 and Seizure Identification No. 06-2001-A, of which El Greco was not
20
notified and in which it was not able to participate.
 21
In its Decision promulgated on 14 March 2007, the CTA En Banc declared that
the CTA Second Division did not commit any error in its disquisition, and
dismissed the Petition of El Greco in C.T.A. EB No. 162 for lack of merit.
According to the CTA En Banc, the appreciation and calibration of evidence on
appeal (from the ruling of the BOC) lies within the sound discretion of its
Division, and the latter’s findings and conclusions cannot be set aside unless it
has been sufficiently shown that they are not supported by evidence on record.
The CTA En Banc thus disposed:
WHEREFORE, the instant petition is hereby DISMISSED. Accordingly,
the assailed Decision promulgated on October 17, 2005 and Resolution
dated February 7, 2006 of the Second Division of this Court, are hereby
22
AFFIRMED.
Without filing a Motion for Reconsideration with the CTA, El Greco already
sought recourse before this Court via this Petition for Review on Certiorari,
raising the following issues:
I. WHETHER OR NOT EL GRECO WAS DENIED OF ITS RIGHT TO
DUE PROCESS.
II. WHETHER OR NOT M/V NEPTUNE BREEZE AND M/V CRISTON
ARE ONE AND THE SAME VESSEL.
III. WHETHER OR NOT M/V NEPTUNE BREEZE IS QUALIFIED TO
BE THE SUBJECT OF FORFEITURE UNDER SECTION 2531 OF THE
TARIFF AND CUSTOMS CODE.
The primordial issue to be determined by this Court is whether M/V Neptune
Breeze is one and the same as M/V Criston which had been detained at the Port
of Tabaco, Albay, for carrying smuggled imported rice and had fled the custody
of the customs authorities to evade its liabilities.
El Greco insists that M/V Neptune Breeze and M/V Criston are not the same
vessel. In support of its position, El Greco again presents the foreign registration
of its vessel as opposed to the local registration of M/V Criston.
The CTA En Banc, however, affirming the findings of the CTA Second Division,
as well as the Legaspi District Collector, concluded otherwise.
We sustain the determination of the CTA En Banc on this matter.
Well-entrenched is the rule that findings of facts of the CTA are binding on this
Court and can only be disturbed on appeal if not supported by substantial
23
evidence. Substantial evidence is that amount of relevant evidence which a
24
reasonable mind might accept as adequate to justify a conclusion.
A review of the records of the present case unveils the overwhelming and utterly
significant pieces of evidence that more than meets the quantum of evidence
necessary to establish that M/V Neptune Breeze is the very same vessel as M/V
Criston, which left the anchorage area at Legaspi, Albay, without the consent of
the customs authorities therein while under detention for smuggling 35,000 bags
of imported rice.
The crime laboratory report of the PNP shows that the serial numbers of the
engines and generators of the two vessels are identical. El Greco failed to rebut
this piece of evidence that decisively identified M/V Neptune Breeze as the
same as M/V Criston. We take judicial notice that along with gross tonnage, net
tonnage, length and breadth of the vessel, the serial numbers of its engine and
generator are the necessary information identifying a vessel. In much the same
way, the identity of a land motor vehicle is established by its unique motor and
chassis numbers. It is, thus, highly improbable that two totally different vessels
would have engines and generators bearing the very same serial numbers; and
the only logical conclusion is that they must be one and the same vessel.
Equally significant is the finding of the Legaspi District Collector that all the
documents submitted by M/V Criston were spurious, including its supposed
registration in the Philippines. In a letter dated 14 March 2002, Marina
Administrator Oscar M. Sevilla attested that M/V Criston was not registered with
the Marina.
Finally, Customs Guard Adolfo Capistrano testified that the features of M/V
Criston and M/V Neptune Breeze were similar; while Coast Guard Commander
Cirilo Ortiz narrated that he found documents inside M/V Criston bearing the
name M/V Neptune Breeze. These testimonies further fortified the conclusion
reached by the Legaspi District Collector that M/V Criston and M/V Neptune
Breeze were one and the same.
We also take note that the purported operator of M/V Criston, Glucer Shipping,
was a total no-show at the hearings held in Seizure Identification No. 06-2001
and Seizure Identification No. 06-2001-A before the Legaspi District Collector.
Despite being sent several notices of hearing to its supposed address, Glucer
Shipping still failed to appear in the said proceedings. It becomes highly
unfathomable for an owner to ignore proceedings for the seizure of its vessel,
risking the loss of a property of enormous value.
From the foregoing, we can only deduce that there is actually no Glucer
Shipping and no M/V Criston. M/V Criston appears to be a mere fictional identity
assumed by M/V Neptune Breeze so it may conduct its smuggling activities with
little risk of being identified and held liable therefor.
We cannot give much credence to the self-serving denial by El Greco that M/V
Neptune Breeze is not the same as M/V Criston in light of the substantial
evidence on record to the contrary. The foreign registration of M/V Neptune
Breeze proves only that it was registered in a foreign country; but it does not
render impossible the conclusions consistently reached by the Legaspi District
Collector, the CTA Second Division and the CTA en banc, and presently by this
Court, that M/V Neptune Breeze was the very same vessel used in the conduct
of smuggling activities in the name M/V Criston.
Neither can we permit El Greco to evade the forfeiture of its vessel, as a
consequence of its being used in smuggling activities, by decrying denial of due
process.
In administrative proceedings, such as those before the BOC, technical rules of
procedure and evidence are not strictly applied and administrative due process
25
cannot be fully equated with due process in its strict judicial sense. The
essence of due process is simply an opportunity to be heard or, as applied to
administrative proceedings, an opportunity to explain one's side or an
26
opportunity to seek reconsideration of the action or ruling complained of.
Although it was not able to participate in the proceedings in Seizure
Identification No. 06-2001 and Seizure Identification No. 06-2001-A before the
Legaspi District Collector, it had ample opportunity to present its side of the
controversy in Seizure Identification No. 2001-208 before the Manila District
Collector. To recall, full proceedings were held before the Manila District
Collector in Seizure Identification No. 2001-208. Even the evidence presented
by El Greco in the latter proceedings fails to persuade. The only vital evidence it
presented before the Manila District Collector in Seizure Identification No. 2001-
208 was the foreign registration of M/V Neptune Breeze. It was still the same
piece of evidence which El Greco submitted to this Court. Even when taken into
consideration and weighed against each other, the considerably sparse
evidence of El Greco in Seizure Identification No. 2001-208 could not
successfully refute the substantial evidence in Seizure Identification No. 06-2001
and Seizure Identification No. 06-2001-A that M/V Neptune Breeze is the same
as M/V Criston.
Moreover, the claim of El Greco that it was denied due process flounders in light
of its ample opportunity to rebut the findings of the Legaspi District Collector in
Seizure Identification No. 06-2001 and No. 06-2001-A before the CTA Second
Division in CTA Case No. 6618 and the CTA En Banc in C.T.A. EB No. 162, and
now before this Court in the Petition at bar. Unfortunately, El Greco was unable
to make full use to its advantage of these repeated opportunities by offering all
possible evidence in support of its case. For example, evidence that could
establish that M/V Neptune Breeze was somewhere else at the time when M/V
Criston was being held by customs authority at the Port of Legaspi, Albay, would
have been helpful to El Greco’s cause and very easy to secure, but is glaringly
absent herein.
After having established that M/V Neptune Breeze is one and the same as M/V
Criston, we come to another crucial issue in the case at bar, that is, whether the
order of forfeiture of the M/V Neptune Breeze is valid.
The pertinent provisions of the Tariff and Customs Code read:
SEC. 2530. Property Subject to Forfeiture Under Tariff and Customs Law. – Any
vehicle, vessel or aircraft, cargo, articles and other objects shall, under the
following conditions, be subject to forfeiture:
a. Any vehicle, vessel or aircraft, including cargo, which shall be used unlawfully
in the importation or exportation of articles or in conveying and/or transporting
contraband or smuggled articles in commercial quantities into or from any
Philippine port or place. The mere carrying or holding on board of contraband or
smuggled articles in commercial quantities shall subject such vessel, vehicle,
aircraft or any other craft to forfeiture; Provided, That the vessel, or aircraft or
any other craft is not used as duly authorized common carrier and as such a
carrier it is not chartered or leased;
xxxx
f. Any article, the importation or exportation of which is effected or attempted
contrary to law, or any article of prohibited importation or exportation, and all
other articles which, in the opinion of the Collector, have been used, are or were
intended to be used as instruments in the importation or exportation of the
former;
xxxx
k. Any conveyance actually being used for the transport of articles subject to
forfeiture under the tariff and customs laws, with its equipage or trappings, and
any vehicle similarly used, together with its equipage and appurtenances
including the beast, steam or other motive power drawing or propelling the
same. The mere conveyance of contraband or smuggled articles by such beast
or vehicle shall be sufficient cause for the outright seizure and confiscation of
such beast or vehicle, but the forfeiture shall not be effected if it is established
that the owner of the means of conveyance used as aforesaid, is engaged as
common carrier and not chartered or leased, or his agent in charge thereof at
the time has no knowledge of the unlawful act.
The penalty of forfeiture is imposed on any vessel engaged in smuggling,
provided that the following conditions are present:
(1) The vessel is "used unlawfully in the importation or exportation of
articles into or from" the Philippines;
 (2) The articles are imported to or exported from "any Philippine port or
place, except a port of entry"; or
(3) If the vessel has a capacity of less than 30 tons and is "used in the
importation of articles into any Philippine port or place other than a port
of the Sulu Sea, where importation in such vessel may be authorized by
27
the Commissioner, with the approval of the department head."
There is no question that M/V Neptune Breeze, then known as M/V Criston, was
carrying 35,000 bags of imported rice without the necessary papers showing
that they were entered lawfully through a Philippine port after the payment of
appropriate taxes and duties thereon. This gives rise to the presumption that
such importation was illegal. Consequently, the rice subject of the importation,
as well as the vessel M/V Neptune Breeze used in importation are subject to
forfeiture. The burden is on El Greco, as the owner of M/V Neptune Breeze, to
show that its conveyance of the rice was actually legal. Unfortunately, its claim
that the cargo was not of foreign origin but was merely loaded at North Harbor,
Manila, was belied by the following evidence - the Incoming Journal of the
Philippine Coast Guard, Certification issued by the Department of Transportation
and Communications (DOTC) Port State Control Center of Manila, and the letter
dated 4 October 2001 issued by the Sub-Port of North Harbor Collector Edward
de la Cuesta, confirming that there was no such loading of rice or calling of
vessel occurring at North Harbor, Manila. It is, therefore, uncontroverted that the
35,000 bags of imported rice were smuggled into the Philippines using M/V
Neptune Breeze.
We cannot give credence to the argument of El Greco that the Order dated 11
March 2002 of the Manila District Collector, finding no probable cause that M/V
Neptune Breeze is the same as M/V Criston, has already become final and
executory, thus, irreversible, pursuant to Section 2313 of the Tariff and Customs
Code. According to said provision:
SEC. 2313. Review of Commissioner. – The person aggrieved by the
decision or action of the Collector in any matter presented upon protest or
by his action in any case of seizure may, within fifteen (15) days after
notification in writing by the Collector of his action or decision, file a written
notice to the Collector with a copy furnished to the Commissioner of his
intention to appeal the action or decision of the Collector to the
Commissioner. Thereupon the Collector shall forthwith transmit all the
records of the proceedings to the Commissioner, who shall approve, modify
or reverse the action or decision of the Collector and take such steps and
make such orders as may be necessary to give effect to his decision:
Provided, That when an appeal is filed beyond the period herein prescribed,
the same shall be deemed dismissed.
If in any seizure proceedings, the Collector renders a decision adverse to
the Government, such decision shall be automatically reviewed by the
Commissioner and the records of the case elevated within five (5) days from
the promulgation of the decision of the Collector. The Commissioner shall
render a decision on the automatic appeal within thirty (30) days from
receipts of the records of the case. If the Collector’s decision is reversed by
the Commissioner, the decision of the Commissioner shall be final and
executory. However, if the Collector’s decision is affirmed, or if within thirty
(30) days from receipt of the record of the case by the Commissioner
no decision is rendered or the decision involves imported articles whose
published value is five million pesos (P5,000,000.00) or more, such
decision shall be deemed automatically appealed to the Secretary of
Finance and the records of the proceedings shall be elevated within five (5)
days from the promulgation of the decision of the Commissioner or of the
Collector under appeal, as the case may be: Provided, further, That if the
decision of the Commissioner or of the Collector under appeal as the case
may be, is affirmed by the Secretary of Finance or if within thirty (30) days
from receipt of the records of the proceedings by the Secretary of Finance,
no decision is rendered, the decision of the Secretary of Finance, or of the
Commissioner, or of the Collector under appeal, as the case may be, shall
become final and executory.
In any seizure proceeding, the release of imported articles shall not be
allowed unless and until a decision of the Collector has been confirmed in
writing by the Commissioner of Customs. (Emphasis ours.)
There is nothing in Section 2313 of the Tariff and Customs Code to support the
position of El Greco. As the CTA en banc explained, in case the BOC
Commissioner fails to decide on the automatic appeal of the Collector’s Decision
within 30 days from receipt of the records thereof, the case shall again be
deemed automatically appealed to the Secretary of Finance. Also working
against El Greco is the fact that jurisdiction over M/V Neptune Breeze, otherwise
known as M/V Criston, was first acquired by the Legaspi District Collector; thus,
the Manila District Collector cannot validly acquire jurisdiction over the same
vessel. Judgment rendered without jurisdiction is null and void, and void
28
judgment cannot be the source of any right whatsoever.
Finally, we strongly condemn the ploy used by M/V Neptune Breeze, assuming
a different identity to smuggle goods into the country in a brazen attempt to
defraud the government and the Filipino public and deprive them of much
needed monetary resources. We further laud the efforts of the Commissioner of
the Customs Bureau and the other executive officials in his department to curb
the proliferation of smuggling syndicates in the country which deserves no less
than our full support.
WHEREFORE, in view of the foregoing, the instant Petition is DENIED. The
Decision dated 17 October 2005 and Resolution dated 7 February 2006 of the
Court of Tax Appeals En Banc in CTA EB No. 172 are AFFIRMED. Costs
against the petitioner. SO ORDERED.
G.R. No. 125356 November 21, 2001
SUPREME TRANSLINER INC., FELIPE SIA and NOVENCIO
FLORES, petitioners,
vs.
HON. COURT OF APPEALS, GLORIA BRAZAL and minor LOTIS BRAZAL,
represented by her father, NOEL BRAZAL, respondents.
QUISUMBING, J.:
1
This petition seeks to annul the decision dated September 21, 1995, of the
2
Court of Appeals in CA G.R. No. 39784, and its resolution dated June 18, 1996
denying petitioners' motion for reconsideration.
Petitioners Supreme Transliner Inc. and Felipe Sia are the registered owners of
a bus driven by co-petitioner Novencio Flores. On September 24, 1990, the bus
collided with a passenger jeepney carrying private respondents Gloria and Lotis
Brazal. At the time of the incident, the jeepney was owned and registered in the
name of Marcelino Villones and driven by Reynaldo Decena.
As a result of the collision, private respondents suffered injuries. They instituted
Civil Case No. SP-3312 for damages against petitioners based on quasi-
delict and against Villones and Decena for breach of contract. Petitioners, in
turn, filed a third-party complaint against Country Bankers Insurance Company,
insurer of the Supreme Transliner bus.
During the trial, Gloria Brazal testified that on September 24, 1990, she and her
daughter Lotis were on board the passenger jeepney when the Supreme
Transliner bus hit it, causing them injuries that required medical treatment.
Decena and Villones testified on their own behalf and presented Luzviminda
Malabanan and Sgt. Nicolas M. Roxas as witnesses. Decena recounted that on
September 24, 1990, at about 2:00 P.M., he was driving a passenger jeepney
bound for Candelaria, Quezon. On board, the jeepney was about fifteen
passengers, including private respondents Gloria and Lotis Brazal. Upon
reaching Sampaloc, Sariaya, Quezon, a Supreme Transliner bus coming from
the opposite direction, suddenly appeared on a curved portion of the road and
overtook another jeepney, which it was then following. Thereafter, the bus
collided with Decena's jeepney.1âwphi1.nêt
Petitioners presented Novencio Flores and Moises Alvarez, the Manager of
Supreme Transliner. Both testified that the passenger jeepney was running very
fast when the accident occurred. On the third-party complaint, petitioners
showed that they already submitted the required documents for insurance claim
and that Country Bankers Insurance Company promised to settle the claim, but
did not.
On October 28, 1992, the trial court rendered its judgment, the dispositive
portion of which reads:
WHEREFORE, finding that the plaintiffs [have] established by
preponderance of evidence the allegations of the complaint, judgment is
hereby rendered:
ON THE COMPLAINT:
1. Ordering the defendants Felipe Sia, as registered owner of the
Supreme Bus, and Novencio Flores primarily liable for the damages of
the plaintiffs and directing them to jointly and severally pay plaintiffs the
following:
a. The amount of TWENTY FIVE THOUSAND PESOS (P25,000.00) by
way of actual damages;
b. The amount of P10,000.00 by way of moral damages;
c. The amount of P5,000.00 as attorney's fees.
On the third-party complaint, judgment is hereby rendered ordering the
third-party defendant to pay the third-party plaintiffs any and all amounts
that they have paid to the plaintiffs by reason of this decision provided it
does not exceed P50,000.00.
Third-party defendant is also ordered to pay the costs.
SO ORDERED.
3
The trial court declared that Flores was negligent in operating the bus, while Sia
failed to exercise the diligence of a good father of a family in the choice,
supervision and direction of his employees.
On the third-party complaint, the trial court found that Supreme Transliner had
insured the bus with Country Bankers, paid the premiums for the period covering
the accident, and made an insurance claim by notifying the insurer and
submitting the required documents. However, until the filing of the complaint,
Country Bankers had not acted upon Supreme Transliner's claim. The trial court
ordered Country Bankers to pay third-party plaintiffs an amount not exceeding
P50,000.
Petitioners appealed to the Court of Appeals where they maintained that the trial
court erred in: (a) pronouncing them liable to private respondents; (b) awarding
the amount of P25,000 as actual damages; and (c) finding Sia solidarily liable

with driver Flores. Country Bankers Insurance Company filed on July 5, 1994, a
manifestation and motion wherein it stated that it had already settled its
maximum liability under the policy, and therefore prayed for its exclusion from
the case.
On September 21, 1995, the Court of Appeals promulgated its decision,
decreeing as follows:
WHEREFORE, the appealed judgment is AFFIRMED subject to the
Manifestation and Motion filed by third-party defendant as discussed in
the text of herein decision.
Costs against defendant-third party appellant Felipe Sia and defendant-
appellant Novencio C. Flores.
4 petitioners?
SO ORDERED.
The Court of Appeals found that there was competent and preponderant
evidence which showed that driver Novencio Flores' negligence was the
proximate cause of the mishap and that Felipe Sia failed to perform the required
degree of care in the selection and supervision of the bus driver. It also found
that the actual damages representing the medical expenses incurred by private
respondents were properly supported by receipts.
Petitioners filed a motion for reconsideration but this was denied. Hence, this
petition, where petitioners raise the following issues:
I claim constitutes their cause of action against petitioners which said private
ARE EVIDENCES (SIC) IN THE RECORDS OF THE CASE BUT NOT
OFFERED BY A P ARTY LITIGANT BE CONSIDERED IN THE
LATTER'S FAVOR?
II
ARE EVIDENCES (SIC) ADDUCED BY A CO-DEFENDANT BE
CONSIDERED AS EVIDENCES (SIC) OF THE PLAINTIFF AS
5
AGAINST THE OTHER DEFENDANT?
Petitioners aver that the Court of Appeals erred in affirming the trial court's
decision which was mainly based on the evidence proffered by their co-
defendants Decena and Villones. Petitioners contend that this evidence, which
proved their liability for quasi-delict, could not be appreciated against them
because the same was not adopted, much less offered in evidence by private
respondents. Neither did Decena and Villones file a cross-claim against them.
6 7
Consequently, in accordance with Section 1, Rule 131 and Sections 34 and
8
35 , Rule 132 of the Rules of Court, said evidence was placed beyond the
court's consideration, hence they could not be held liable on the basis thereof.
Private respondents contend that Philippine courts are not only courts of law but
of equity and justice as well. The Court of Appeals, being a court of record, has
to appreciate all the facts and evidence before it in determining the parties'
rights and liabilities regardless of who among the litigants actually presented the
same. Further, they point out that the issue is being raised for the first time, thus
it is highly improper to nullify or reverse the Court of Appeals' decision based
solely on a completely new and foreign ground.
For our resolution are the following issues: (a) Who has the burden of proving
herein petitioners' liability? (b) May the evidence presented by Decena and
Villones be considered in determining preponderance of evidence against herein
Burden of proof is the duty of a party to present evidence to establish his claim
or defense by the amount of evidence required by law, which is preponderance
9
of evidence in civil cases. The party, whether plaintiff or defendant, who asserts
the affirmative of the issue has the burden of proof to obtain a favorable
judgment. For the defendant, an affirmative defense is one which is not a denial
of an essential ingredient in the plaintiffs cause of action, but one which, if
10
established, will be a good defense - i.e. an "avoidance" of the claim.
In this case, both private respondents as well as the jeepney driver Reynaldo
Decena and its owner Marcelino Villones claim that the bus driver, Novencio
Flores, was liable for negligently operating the bus. For private respondents, the
respondents must prove by preponderance of evidence. At the same time, the
same claim is a matter of affirmative defense on the part of Decena and Villones
who are impleaded as co-defendants of petitioners. Therefore, both private
respondents as well as the said co-defendants had the burden of proving
petitioners' negligence by the quantum of proof required to establish the latter's
liability, i.e. by preponderance of evidence.
On the second issue, we rule in the affirmative. The evidence presented by the
jeepney owner and its driver, Villones and Decena, forms part of the totality of
the evidence concerning the negligence committed by petitioners as defendants
in quasi-delict case. Preponderance of evidence is determined by considering all
the facts and circumstances of the case, culled from the evidence, regardless of
11
who actually presented it. Petitioners' liability were proved by the evidence
presented by Decena and Villones at the trial, taken together with the evidence
presented by the victims of the collision, namely herein private respondents
Gloria and Lotis Brazal.
We find petitioners' reliance on Sections 34 and 35 of Rule 132 of the Rules of
Court misplaced. Petitioners cited these rules to support their allegation that
evidence by Decena and Villones should not be considered in private
respondents' favor since the latter did not adopt much less offer them in
evidence. Nothing in Section 34 requires that the evidence be offered or
adopted by a specific party before it could be considered in his favor. It is
enough that the evidence is offered for the court's consideration. We find,
moreover, no pertinence in petitioners' invocation of Rule 35, on when to make
an offer, except to indicate to us petitioners' reliance on inapplicable
technicalities that betray the lack of merit of their petition.

WHEREFORE, the instant petition is DENIED. The decision and resolution

dated September 21, 1995 and June 18, 1996, respectively, of the Court of
Appeals are hereby AFFIRMED.

Costs against petitioners.1âwphi1.nêt

SO ORDERED.
G.R. No. L-45137 September 23, 1985
FE J. BAUTISTA and MILAGROS J. CORPUS, petitioners,
vs.
HON. MALCOLM G. SARMIENTO, District Judge, Court of First Instance of
Pampanga, Branch I and the PEOPLE OF THE PHILIPPINES, respondents.
CUEVAS, J.:
In this special civil action of certiorari and Prohibition with Preliminary Injunction,
petitioners assail respondent Judge Malcolm G. Sarmiento's denial of their
Motion to Dismiss filed in the nature of demurrer to evidence in Criminal Case
No. 808 for Estafa entitled "PEOPLE OF THE PHILIPPINES vs. FE BAUTISTA,
MILAGROS CORPUS and TERESITA VERGERE ", pending before the defunct
Court of First Instance of Pampanga Branch I.
An information charging Fe Bautista, Milagros Corpus and Teresita Vergere with
estafa was filed before the sala of Judge Malcolm G. Sarmiento. The third
accused, Teresita Vergere, was granted a separate trial. To prove its case, the
prosecution presented during the trial the private complainant, Dr. Leticia C.
Yap, as its only witness. Thereafter, petitioners, believing the prosecution failed
to prove their guilty beyond reasonable doubt, moved to dismissal the case by
way of demurrer to the evidence.
1 evidence presented so far on record.
In an Order dated June 3, 1976 respondent judge denied said motion. The
Order states:
Fe Bautista and Milagros Corpus, accused, through counsel,
filed a "Moton to Dismiss" (Demurrer to Evidence) to the
information charging the two accused for Estafa, The other third
accused Teresita Vergere, granted as separate trial.
The grounds alleged in the Motion to Dismiss are as follows: First, the
inf• rmation alleges that the two accused received jewelries from Dr. Leticia C.
Yap on April 19, 1975 on consignment. The defense' contention is that the
jewelries were received by the said accused by virtue of purchase and sale. The
defense overlooks the other allegation in the Information specifically alleging:—
That these pieces of jewelries should be sold by the accused on
commission basis and to pay or to deliver the proceeds thereof
to Dr. Leticia C. Yap if sold, and if not sold to return said
jewelries. ...
In spite of represented demands made on the said
accused, said accused failed and refused and still fails
and refuses to return the jewelries or deliver the
proceeds thereof to the damage and prejudice of said
Dr. Leticia C. Yap in the total amount of P77,300.00.
The meaning of consignment is not a sale.
It means that the goods sent by one person to another,
to be sold or disposed of by the latter for and on
account of the former. The transmission of the goods.
Agency is within the foregoing meaning by Bouvier's Law Dictionary
(Vol. 1, pp. 619-620)
The offended party testified that the accused acted as her agents for the
sale of the jewelries. Second ground, that the prosecution failed to
establish the prior demand to prove misappropriation on the part of the
accused. Exhibits B and B-1 are documentary evidence to establish
demand through Atty. Gorospe made by the offended party prior to the
filing of the case. This letter of demand was subsequently made after
several previous oral demands were made by the complainant on said
accused.
The Court believes that the prosecution established a prima facie case
of Estafa alleged in the Information against said accused on the
PREMISES CONSIDERED, the Court hereby denies the defense'
Motion to Dismiss and orders the trial of this case for the reception of
evidence of the accused on July 9, 1976 at 8:00 o'clock in the morning.
SO ORDERED.
2
Accordingly, a motion for reconsideration was duly filed but was likewise
3
denied "for lack of merit Hence, this petition.
Initially, it is necessary to point out that the remedy of certiorari is improper, The
respondent Judge's order denying the petitioners' motion to dismiss the
complaint by way of demurrer to the evidence is merely an interlocutory order, It
cannot, therefore, be the subject of a petition for certiorari. What should have
been done was to continue with the trial of the case and had the decision been
4
adverse, to raise the issue on appeal.
The rule that certiorari cannot be a substitute for appeal, however, admits an
exception. This is when the questioned order is an oppressive exercise of
 5
judicial authority. But, even granting petitioners the benefit of the exception,
still certiorari would not lie. For, as would be shortly explained, there was no
arbitrary exercise of judicial authority.
It is the contention of petitioners that respondent Judge lost jurisdiction to
proceed with the trial of the case and that he was in duty-bound to acquit them,
considering his findings in denying their motion to dismiss that "....the
prosecution established a prima facie case of Estafa alleged in the Information
against said accused on the evidence presented so far on record". Petitioners
further argue that in a criminal case, conviction can be had only upon proof
beyond reasonable doubt and not on a mere prima facie case.
Since the denial of the motion to dismiss was anchored on a finding of a prima
facie case, a clear understanding of the term and its implications is in order.
A prima facie case is that amount of evidence which would be
sufficient to counter-balance the general presumption of
innocence, and warrant a conviction, if not encountered and
controlled by evidence tending to contradict it, and render it
improbable, or to prove other facts inconsistent with it, and the
establishment of a prima facie case does not take away the
presumption of innocence which may in the opinion of the jury
be such as to rebut and control it. Ex parte Parr 288 P. 852,
855, 106 Cal.
6
App. 95.
There is no denying that in a criminal case, unless the guilt of the accused is
established by proof beyond reasonable doubt, he is entitled to an acquittal. But
when the trial court denies petitioners' motion to dismiss by way of demurrer to
evidence on the ground that the prosecution had established a prima facie case
against them, they assume a definite burden. It becomes incumbent upon
petitioners to adduce evidence to meet and nullify, if not overthrow, the prima
7
facie case against them. This is due to the shift in the burden of evidence, and
not of the burden of proof as petitioners would seem to believe.
When a prima facie case is established by the prosecution in a criminal case, as
in the case at bar, the burden of proof does not shift to the defense. It remains
throughout the trial with the party upon whom it is imposed—the prosecution. It
is the burden of evidence which shifts from party to party depending upon the
8
exigencies of the case in the course of the trial. This burden of going forward
with the evidence is met by evidence which balances that introduced by the
prosecution. Then the burden shifts back.
A prima facie case need not be countered by a preponderance of evidence nor
by evidence of greater weight. Defendant's evidence which equalizes the weight
of plaintiff's evidence or puts the case in equipoise is sufficient. As a result,
plaintiff will have to go forward with the proof. Should it happen that at the trial
the weight of evidence is equally balanced or at equilibrium and presumptions
9
operate against plaintiff who has the burden of proof, he cannot prevail.
In the case at bar, the order denying petitioners' motion to dismiss, required
them to present their evidence. They refused and/or failed to do so. This justified
an inference of their guilt. The inevitable result was that the burden of evidence
shifted on them to prove their innocence, or at least, raises a reasonable doubt
as to their guilt.
Petitioners, likewise, assign as error the order of respondent Judge directing
them to present their evidence after the denial of their motion to dismiss. By
doing so, they contend that respondent Judge would, in effect, be relying on the
possible weakness of the defense' evidence, rather than on the strength of the
prosecution's own evidence in resolving their guilt or innocence,
We find petitioners' aforesaid submission utterly devoid of merit. Such a
10
procedure finds support in the case of Arbriol vs. Homeres wherein we held
that—
Now that the Government cannot appeal in criminal cases if the
defendant would be placed thereby in double jeopardy (Sec. 2,
Rule 118), the dismissal of the case for insufficiency of the
evidence after the prosecution has rested terminates the case
then and there. But if the motion for dismissal is denied, the
court should proceed to hear the evidence for the defense
before entering judgment regardless of whether or not the
defense had reserved its Tight to present evidence in the event
its motion for dismissal be denied The reason is that it is the
constitutional right of the accused to be heard in his defense
before sentence is pronounced on him. Of course if the accused
has no evidence to present or expressly waives the right to
present it, the court has no alternative but to decide the case
upon the evidence presented by the prosecution alone.
(Emphasis supplied)
WHEREFORE, finding the order complained of to be well-taken and there being
no grave abuse of discretion that attended its issuance, the instant petition is
DISMISSED with costs against petitioners.
The Presiding Judge of the Regional Trial Court of Pampanga where this case is
now assigned, is hereby ordered to continue immediately with the trial of
Criminal Case No. 808 until its final disposition.
SO ORDERED.

G.R. No. 193089 July 9, 2012
ROSENA FONTELAR OGAWA, Petitioner,
vs.
ELIZABETH GACHE MENIGISHI, Respondent.
DECISION
PERLAS-BERNABE, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court
1 2
assailing the March 8, 2010 Decision and June 21, 2010 Resolution of the
Court of Appeals (CA) in CA-G.R. CV No. 86362 which affirmed with
3
modification the September 1, 2005 Decision of the Regional Trial Court (RTC)
of Sorsogon City, Branch 52, granting respondent’s counterclaim in the amount
of 1,000,000.00 Yen and deleting the award of damages as well as attorney’s
fees in favor of the petitioner.
The Facts
Petitioner Roseña Fontelar Ogawa and respondent Elizabeth Gache Menigishi
were childhood friends and former residents of Sorsogon City. Respondent
married a Japanese national, Tomohito Menigishi (Tomohito), and lived in
Japan. Sometime in June 1992, the Menigishis visited the Philippines and
introduced Yashoyuki Ogawa (Yashoyuki), Tomohito’s friend, to petitioner.
Yashoyuki and petitioner eventually got married in the Philippines and
thereafter, also lived in Japan.
4
On January 26, 2004, petitioner filed a complaint for sum of money, damages,
breach of good human relation and unjust enrichment before the RTC against
respondent, docketed as Civil Case No. 2004-7299, alleging that the latter
borrowed from her the amounts of P15,000.00, P100,000.00 and P8,000.00, in
September 2000, August 2001, and March 2003, respectively. Unable to pay,
respondent offered to sell her building and its improvements in Sorsogon City to
petitioner for a consideration of P1,500,000.00 with the agreement that her
outstanding loans with petitioner be deducted from the purchase price and the
balance payable in installments.
As partial payment for the properties, petitioner remitted the following amounts
to respondent: (a) P150,000.00 through the account of her friend Emma Fulleros
on October 23, 2003; and (b) P250,772.90 by way of bank remittance to
respondent's Equitable-PCI Bank Account on December 8, 2003. Having paid
huge amounts and in order to protect her proprietary rights, petitioner then
demanded for the execution of the corresponding deed of sale, but respondent
backed out from the deal and reneged on her obligations.
5
In her Answer with Counterclaim, respondent specifically denied her
indebtedness to petitioner and claimed that it was the latter who owed her
1,000,000.00 Yen, equivalent to about P500,000.00, as evidenced by a receipt.
In partial payment of her indebtedness, petitioner, thus, remitted the amounts of
P150,000.00 and P250,000.00 to respondent, leaving a balance of
P100,000.00. Respondent also sought reimbursement of the advances she
allegedly made for the wedding expenses of petitioner and Yashoyuki in the
amount of 4,000,000.00 Yen. While she admitted offering her property for sale to
petitioner, respondent explained that the sale did not materialize as petitioner
failed to produce the stipulated downpayment. By way of counterclaim,
respondent prayed for the award of 4,000,000.00 Yen, the balance of
petitioner's purported loan in the amount of P100,000.00; moral and exemplary
damages; and attorney’s fees.
The RTC Ruling
Finding that respondent was indeed indebted to petitioner in the amounts of
P150,000.00 and P250,772.90 or the total amount of P400,772.90, the RTC
6
rendered a Decision dated September 1, 2005, thus:
1. Ordering the defendant to pay the plaintiff the amount of P400,772.90
plus interest of 12% from the date of filing of this case until the same
shall have been paid in full.
2. Ordering the defendant to reimburse the plaintiff for the actual
expenses she incurred in filing the instant case, to wit:
a. P54,000.00 for her fare of plane tickets
b. P7,355.00 for docket fees
3. Ordering the defendant to pay the plaintiff the following amounts:
a. P25,000.00 – moral damages
b. P25,000.00 – exemplary damages
c. P50,000.00 – attorney’s fees
d. P1,000.00 – per appearance of her lawyer
SO ORDERED.
The RTC refused to give credence to respondent's testimony on her
counterclaims for being incredible, inconsistent, and contrary to human
experience. It likewise disregarded the receipt presented by respondent as proof
of petitioner's purported indebtedness of 1,000,000.00 Yen.
The CA Ruling
On appeal, the CA affirmed the RTC’s awards of the sums of P150,000.00 and
P250,772.90 in favor of petitioner and sustained the denial of respondent's
counterclaim of 4,000,000.00 Yen for lack of evidence. However, it gave
probative value to the receipt for 1,000,000.00 Yen and held it sufficient to
establish petitioner's indebtedness to respondent, considering the purported
admission of the former's counsel as well as petitioner's own failure to
specifically deny the same under oath as provided for under Section 8, Rule 8 of
the Rules of Court. Consequently, it granted respondent's counterclaim of
1,000,000.00 Yen. Finally, having found both parties at fault, the CA deleted the
awards of damages and attorney’s fees.
Issue Before The Court
In this petition, petitioner advances the question of whether the disputed receipt
sufficiently established respondent's counterclaim that petitioner owed her
1,000,000.00 Yen.
Petitioner’s Arguments
Petitioner argues that the receipt for 1,000,000 Yen is not a promissory note and
as such, its due execution and genuineness need not be denied under oath.
Moreover, she denied any admission of liability that can be deduced from her
counsel’s manifestation during the trial that "the one who usually prepares the
receipt is the obligor or the creditor."
Respondent’s Arguments
Respondent, in her Comment, prays for the dismissal of the petition insisting
that the CA did not err in sustaining the obligation of petitioner in her favor on
the basis of the disputed receipt which the latter never denied and her counsel
even admitted.
The Court’s Ruling
The Court finds merit in the petition.
At the outset, it should be emphasized that the factual findings of the trial court,
when adopted and confirmed by the CA, are binding and conclusive upon the
Court and may not be reviewed on appeal. However, when the RTC and the CA
differ in their findings of fact and conclusions, as in this case, it becomes
imperative to digress from this general rule and revisit the factual circumstances
7
surrounding the controversy.
In this case, the RTC and the CA gave different interpretations on the context of
the receipt (Exhibit 1) executed by the parties and arrived at incongruent
findings. On one hand, the RTC considered it as having failed to establish any
right on the part of respondent to collect from petitioner the purported
indebtedness of 1,000,000.00 Yen, while on the other, the CA found it sufficient
to confer liability.
A receipt is defined as a written and signed acknowledgment that money or
8
good was delivered or received. Exhibit 1, upon which respondent relies to
support her counterclaim, sufficiently satisfies this definition. It reads in full:
June 13, 2003
I receive the total amount of 1,000,000 Yen (x x x)
Signed
Elizabeth Menigishi Roseña Ogawa
However, while indubitably containing the signatures of both parties, a plain
reading of the contents of Exhibit 1 negates any inference as to the nature of the
transaction for which the 1,000,000 Yen was received and who between the
parties is the obligor and the obligee. What is apparent is a mere written and
signed acknowledgment that money was received. There are no terms and
conditions found therein from which a right or obligation may be established.
9
Hence, it cannot be considered an actionable document upon which an action
or defense may be founded.
Consequently, there was no need to deny its genuineness and due execution
under oath in accordance with Section 8, Rule 8 of the Rules of Civil Procedure
which provides:
Section 8. How to contest such documents. – When an action or defense is
founded upon a written instrument, copied in, or attached to the corresponding
pleading as provided in the preceding Section, the genuineness and due
execution of the instrument shall be deemed admitted unless the adverse party,
under oath, specifically denies them, and sets forth what he claims to be the
facts; but the requirement of an oath does not apply when the adverse party
does not appear to be party to the instrument or when compliance with an order
for an inspection of the original is refused.
Corollary thereto, the manifestation made in open court by Atty. Gerona,
petitioner's counsel, cannot be construed as an admission of her liability. The
pertinent testimony of respondent and the manifestation of Atty. Gerona on May
18, 2005 read:
Q: Ms. Witness, on the cross-examination, the counsel asked you how come
that the signature of Rosena which was marked as EXHIBIT "1-a" and your
signature marked as EXHIBIT "1-b" are parallel to each other?
A: Because it was Rosena who made this. I was just made to confirm that she
borrowed money from me.
"Preponderance of evidence" is the weight, credit, and value of the aggregate
evidence on either side and is usually considered to be synonymous with the
11
term "greater weight of evidence" or "greater weight of credible evidence."
From the evidence on record, it is clear that respondent failed to prove her
counterclaim by preponderance of evidence.1âwphi1
In view of the foregoing, the Court cannot sustain the findings of the CA that
12
both parties are at fault. Accordingly, the award of damages granted by the
RTC in favor of petitioner must be reinstated with the modification that the award
of actual damages in the amount of

13
Q: Whose handwriting are these, the wording I received One Million Yen… P400,772.00, in the nature of a loan or forbearance of money, shall earn 12%
(interrupted) interest per annum reckoned from the date of filing of the instant complaint until
the finality of this Decision. Thereafter, the judgment award inclusive of interest
14
ATTY. GERONA: (TO THE COURT) shall bear 12% annual interest until fully paid.

That is admitted, Your Honor, because the one who usually prepares the receipt
10
is the obligor or the creditor.
From the foregoing exchange, it cannot be clearly ascertained who between the
two signatories is the obligor and obligee. Atty. Gerona's statement that the one
who usually prepares the receipt is the obligor or the creditor did not
conclusively imply that petitioner owed respondent 1,000,000.00 Yen, or vice
versa. Hence, absent any other evidence to prove the transaction for which the
receipt was issued, the Court cannot consider Exhibit 1 as evidence of a
purported loan between petitioner and respondent which the former categorically
denied. It is settled that the burden of proof lies with the party who asserts
his/her right. In a counterclaim, the burden of proving the existence of the claim
lies with the defendant, by the quantum of evidence required by law, which in
this case is preponderance of evidence. On this score, Section 1, Rule 133 of
the Revised Rules on Evidence provides:
WHEREFORE, the instant petition is GRANTED. The March 8, 201 0 Decision
and June 21, 2010 Resolution of the Court of Appeals are REVERSED and SET
ASIDE and the September 1, 2005 Decision of the Regional Trial Court of
Sorsogon City, Branch 52 is REINSTATED with MODIFICATION ordering
respondent Elizabeth Gache Menigishi to pay
petitioner Rosefia Fontelar Ogawa the amount of P400,772.00 plus 12% interest
per annum reckoned from the date of filing of the instant complaint until the
finality of this Decision. Thereafter, the judgment award inclusive of interest shall
bear 12% annual interest until fully paid.
SO ORDERED.

Section 1. Preponderance of evidence, how determined. – In civil cases, the

party having the burden of proof must establish his case by a preponderance of
evidence. In determining where the preponderance of evidence or superior
weight of evidence on the issues involved lies, the court may consider all the
facts and circumstance of the case, the witness’ manner of testifying, their
intelligence, their means and opportunity of knowing the facts to which they are
testifying, the nature of the facts to which they testify, the probability of their
testimony, their interest or want of interest, and also their personal credibility so
far as the same may legitimately appear upon the trial. The court may also
consider the number of witnesses, though the preponderance is not necessarily
with the greater number.
G.R. No. 177809 October 16, 2009
SPOUSES OMAR and MOSHIERA LATIP, Petitioners,
vs.
ROSALIE PALAÑA CHUA, Respondent.
DECISION
NACHURA, J.:
Challenged in this petition for review on certiorari is the Court of Appeals (CA)
1 of said building with an area of 56 square meters under the following terms and
Decision in CA-G.R. SP No. 89300: (1) reversing the decision of the Regional
2
Trial Court (RTC), Branch 274, Parañaque City in Civil Case No. 04-0052; and
(2) reinstating and affirming in toto the decision of the Metropolitan Trial Court
(MeTC), Branch 78, of the same city in Civil Case No. 2001-315.
3 a. That the monthly rental of the two (2) cubicles in PESOS,
First, we sift through the varying facts found by the different lower courts.
The facts parleyed by the MeTC show that respondent Rosalie Chua (Rosalie) is
the owner of Roferxane Building, a commercial building, located at No. 158
Quirino Avenue corner Redemptorist Road, Barangay Baclaran, Parañaque
City.
On July 6, 2001, Rosalie filed a complaint for unlawful detainer plus damages
against petitioners, Spouses Omar and Moshiera Latip (Spouses Latip). Rosalie
attached to the complaint a contract of lease over two cubicles in Roferxane
Bldg., signed by Rosalie, as lessor, and by Spouses Latip, as lessees thereof.1
a vv p h ! 1
The contract of lease reads:
CONTRACT OF LEASE
KNOW ALL MEN BY THESE PRESENTS:
This Contract of Lease is entered into by and between:
ROSALIE PALAÑA CHUA, Filipino, of legal age, married with office at 2/F
JOFERXAN Building, F.B. Harrison St., Brgy. Baclaran, Parañaque City, and
hereinafter referred to as the LESSOR,
- and -
OMAR LATIEF marriage to MOSHIERA LATIEF, also both Filipino, of legal age
with address at 24 Anahan St. RGV Homes Parañaque City, and hereinafter
referred to as the LESSEES.
WITNESSETH
1. That the LESSOR is the owner of the commercial building erected at the lot of
the Toribio G. Reyes Realty, Inc. situated at 158 Quirino Ave. corner
Redemptorist Road, Barangay Baclaran in Parañaque Ctiy;
2. That LESSOR hereby leases two (2) cubicles located at the 1st & 2nd Floor,
conditions, to wit:
SIXTY THOUSAND (₱60,000.00), Philippine Currency.
However, due to unstable power of the peso LESSEES agrees
to a yearly increase of ten (10%) percent of the monthly rental;
b. That any rental in-arrears shall be paid before the expiration
of the contract to the LESSOR;
c. That LESSEES agree to pay their own water and electric
consumptions in the said premises;
d. That the LESSEES shall not sub-let or make any alteration in
the cubicles without a written permission from the LESSOR.
Provided, however, that at the termination of the Contract, the
lessee shall return the two cubicles in its original conditions at
their expenses;
e. That the LESSEES agree to keep the cubicles in a safe and
sanitary conditions, and shall not keep any kinds of flammable
or combustible materials.
f. That in case the LESSEES fail to pay the monthly rental every
time it falls due or violate any of the above conditions shall be
enough ground to terminate this Contract of Lease. Provided,
further, that, if the LESSEES pre-terminate this Contract they
shall pay the rentals for the unused month or period by way of
liquidated damages in favor of the LESSOR.
3. That this Contract of Lease is for six (6) yrs. only starting from December
_____, 1999 or up to December ______, 2005.
IN WITNESS WHEREOF, the parties have hereunto affixed their hands this A year after the commencement of the lease and with Spouses Latip already
___th day of December, 1999 at City of Manila, Philippines. occupying the leased cubicles, Rosalie, through counsel, sent the spouses a
letter demanding payment of back rentals and should they fail to do so, to
(sgd.) (sgd.) vacate the leased cubicles. When Spouses Latip did not heed Rosalie’s
ROSALIE PALAÑA-CHUA MOSHIERA LATIEF demand, she instituted the aforesaid complaint.
LESSOR LESSEE
In their Answer, Spouses Latip refuted Rosalie’s claims. They averred that the
lease of the two (2) cubicles had already been paid in full as evidenced by
(sgd.) receipts showing payment to Rosalie of the total amount of ₱2,570,000.00. The
OMAR LATIEF three (3) receipts, in Rosalie’s handwriting, read:
LESSEE
1. I received the amount of ₱2,000,000.00 (two million pesos)
SIGNED IN THE PRESENCE OF: from [O]mar Latip & Moshi[e]ra Latip for the payment of 2
cubicles located at 158 Quirino Ave. corner Redemptorist Rd.[,]
5
(sgd.) (sgd.) Baclaran P[arañ]aque City. ROFERLAND Bldg. with the terms
1. Daisy C. Ramos 2. Ferdinand C. Chua 6 yrs. Contract.

Republic of the Philippines) ₱2,000,000.00 (sgd.)

City of Manila)s.s. CHECK # 3767924 ____________________
FAR EAST BANK Rosalie Chua
ACKNOWLEDGMENT

(sgd.)
BEFORE ME, a Notary Public for and in the City of Manila personally appeared
____________________
the following persons:
Ferdinand Chua
Rosalie P. Chua with CTC No. 05769706 at Parañaque City on 2/1/99; Moshiera
Latief with CTC No. 12885654 at Parañaque City on 11/11/99; Omar Latief with 2. Received cash
CTC No. 12885653 Parañaque City on Nov. 11, 1999. ₱500,000.00
From Moshiera Latip
known to me and to me known to be the same persons who executed this
instrument consisting of two (2) pages duly signed by them and the two (2) (sgd.)
instrumental witnesses and acknowledged to me that the same is their free and Rosalie Chua
12/10/99
voluntarily acts and deeds. ____________________
Received by
IN FAITH AND TESTIMONY WHEREOF, I have hereunto affixed my hand and
Notarial Seal this ____th day of December, 1999 at the City of Manila, 3. Received cash
Philippines. ₱70,000.00 from
Moshiera Latip
Doc. No. _____ ATTY. CALIXTRO B. RAMOS
Page No. _____ NOTARY PUBLIC (sgd.)
Book No. LXV Until December 31, 2000 12-11-99 ____________________
6
Series of 1999 PTR # 374145-1/11/99/-Mla. Received by:
4
IBP # 00262-Life Member
Spouses Latip asseverated that sometime in October 1999, Rosalie offered for
sale lease rights over two (2) cubicles in Roferxane Bldg. Having in mind the
brisk sale of goods during the Christmas season, they readily accepted
Rosalie’s offer to purchase lease rights in Roferxane Bldg., which was still under
construction at the time. According to Spouses Latip, the immediate payment of
₱2,570,000.00 would be used to finish construction of the building giving them
first priority in the occupation of the finished cubicles.
Thereafter, in December 1999, as soon as two (2) cubicles were finished,
Spouses Latip occupied them without waiting for the completion of five (5) other
stalls. Spouses Latip averred that the contract of lease they signed had been
novated by their purchase of lease rights of the subject cubicles. Thus, they
were surprised to receive a demand letter from Rosalie’s counsel and the
subsequent filing of a complaint against them.
The MeTC ruled in favor of Rosalie, viz.:
WHEREFORE, premises considered, the [Spouses Latip] and all persons
claiming rights under them are hereby ordered to VACATE the property subject
of this case located at the 1st and 2nd floors of a Roferxane Building situated at
No. 158 Quirino Avenue corner Redemptorist Road, Barangay Baclaran,
Parañaque City. The [Spouses Latip] are also ordered to PAY [Rosalie] the
amount of SEVEN HUNDRED TWENTY THOUSAND PESOS (₱720,000.00) as
rent arrearages for the period of December 1999 to December 2000 and
thereafter to PAY [Rosalie] the amount of SEVENTY TWO THOUSAND PESOS
(₱72,000.00) per month from January 2001 to December 2002, plus ten percent
(10%) increase for each and every succeeding years thereafter as stipulated in
paragraph 2(a) of the Contract of Lease x x x, until the [Spouses Latip] have
completely vacated the leased premises subject of this lease. Finally[,] the
[Spouses Latip] are hereby ordered to PAY [Rosalie] the amount of TWENTY
THOUSAND PESOS (₱20,000.00) as attorney’s fees and TWO THOUSAND
PESOS (₱2,000.00) per [Rosalie’s] appearance in Court as appearance fee and
to PAY the cost of this suit.
[Spouses Latip’s] counterclaim is hereby DISMISSED for lack of merit.
7
SO ORDERED.
In stark contrast, the RTC reversed the MeTC and ruled in favor of Spouses
Latip. The RTC did not give credence to the contract of lease, ruling that it was
not notarized and, in all other substantial aspects, incomplete. Further on this
point, the RTC noted that the contract of lease lacked: (1) the signature of
Ferdinand Chua, Rosalie’s husband; (2) the signatures of Spouses Latip on the
first page thereof; (3) the specific dates for the term of the contract which only
stated that the lease is for "six (6) y[ea]rs only starting from December 1999 or
up to December 2005"; (4) the exact date of execution of the document, albeit
the month of December and year 1999 are indicated therein; and (5) the
provision for payment of deposit or advance rental which is supposedly
uncommon in big commercial lease contracts.
The RTC believed the claim of Spouses Latip that the contract of lease was
modified and supplemented; and the entire lease rentals for the two (2) cubicles
for six (6) years had already been paid by Spouses Latip in the amount of
₱2,570,000.00. As to Rosalie’s claim that her receipt of ₱2,570,000.00 was
simply goodwill payment by prospective lessees to their lessor, and not payment
for the purchase of lease rights, the RTC shot this down and pointed out that,
apart from her bare allegations, Rosalie did not adduce evidence to substantiate
this claim. On the whole, the RTC declared an existent lease between the
parties for a period of six (6) years, and already fully paid for by Spouses Latip.
Thus, Spouses Latip could not be ejected from the leased premises until
expiration of the lease period.
The RTC disposed of the appeal, viz.:
WHEREFORE, all the foregoing considered, the appealed decision of the
[MeTC] dated January 13, 2004 is reversed as judgment is hereby rendered for
the [Spouses Latip] and against [Rosalie], ordering the latter to pay the former –
(1) the sum of PhP1,000,000.00 as moral damages;
(2) the sum of PhP500,000.00 as exemplary damages;
(3) the sum of PhP250,000.00 plus PhP3,000.00 per court appearance
as and for attorney’s fees; and
(4) costs of suit.
8
SO ORDERED.
In yet another turn of events, the CA, as previously mentioned, reversed the
RTC and reinstated the decision of the MeTC. The CA ruled that the contract of
lease, albeit lacking the signature of Ferdinand and not notarized, remained a
complete and valid contract. As the MeTC had, the CA likewise found that the
alleged defects in the contract of lease did not render the contract ineffective.
On the issue of whether the amount of ₱2,570,000.00 merely constituted
payment of goodwill money, the CA took judicial notice of this common practice
in the area of Baclaran, especially around the Redemptorist Church. According
to the appellate court, this judicial notice was bolstered by the Joint Sworn
Declaration of the stallholders at Roferxane Bldg. that they all had paid goodwill
money to Rosalie prior to occupying the stalls thereat. Thus, ruling on Rosalie’s
appeal, the CA disposed of the case:
WHEREFORE, in view of the foregoing, the Petition for Review is hereby
GRANTED. The assailed decision of RTC Parañaque City Branch 274 dated
September 24, 2004 is hereby REVERSED and SET ASIDE, and the January
13, 2004 decision of the MeTC is REINSTATED and AFFIRMED en toto.
9
SO ORDERED.
Not surprisingly, Spouses Latip filed the present appeal.
The singular issue for our resolution is whether Spouses Latip should be ejected
from the leased cubicles.
As previously adverted to, the CA, in ruling for Rosalie and upholding the
ejectment of Spouses Latip, took judicial notice of the alleged practice of
prospective lessees in the Baclaran area to pay goodwill money to the lessor.
We disagree.
Sections 1 and 2 of Rule 129 of the Rules of Court declare when the taking of
judicial notice is mandatory or discretionary on the courts, thus:
SECTION 1. Judicial notice, when mandatory. – A court shall take judicial
notice, without the introduction of evidence, of the existence and territorial extent
of states, their political history, forms of government and symbols of nationality,
the law of nations, the admiralty and maritime courts of the world and their seals,
the political constitution and history of the Philippines, the official acts of the
legislative, executive and judicial departments of the Philippines, the laws of
nature, the measure of time, and the geographical divisions.
SEC. 2. Judicial notice, when discretionary. – A court may take judicial notice of
matters which are of public knowledge, or are capable of unquestionable
demonstration or ought to be known to judges because of their judicial functions.
10
On this point, State Prosecutors v. Muro is instructive:
I. The doctrine of judicial notice rests on the wisdom and discretion of the courts.
The power to take judicial notice is to be exercised by courts with caution; care
must be taken that the requisite notoriety exists; and every reasonable doubt on
the subject should be promptly resolved in the negative.
Generally speaking, matters of judicial notice have three material requisites: (1)
the matter must be one of common and general knowledge; (2) it must be well
and authoritatively settled and not doubtful or uncertain; and (3) it must be
known to be within the limits of the jurisdiction of the court. The principal guide in
determining what facts may be assumed to be judicially known is that of
notoriety. Hence, it can be said that judicial notice is limited to facts evidenced
by public records and facts of general notoriety.
To say that a court will take judicial notice of a fact is merely another way of
saying that the usual form of evidence will be dispensed with if knowledge of the
fact can be otherwise acquired. This is because the court assumes that the
matter is so notorious that it will not be disputed. But judicial notice is not judicial
knowledge. The mere personal knowledge of the judge is not the judicial
knowledge of the court, and he is not authorized to make his individual
knowledge of a fact, not generally or professionally known, the basis of his
action. Judicial cognizance is taken only of those matters which are "commonly"
known.
Things of "common knowledge," of which courts take judicial notice, may be
matters coming to the knowledge of men generally in the course of the ordinary
experiences of life, or they may be matters which are generally accepted by
mankind as true and are capable of ready and unquestioned demonstration.
Thus, facts which are universally known, and which may be found in
encyclopedias, dictionaries or other publications, are judicially noticed, provided
they are of such universal notoriety and so generally understood that they may
11
be regarded as forming part of the common knowledge of every person.
We reiterated the requisite of notoriety for the taking of judicial notice in the
12
recent case of Expertravel & Tours, Inc. v. Court of Appeals, which cited State
Prosecutors:
Generally speaking, matters of judicial notice have three material requisites: (1)
the matter must be one of common and general knowledge; (2) it must be well
and authoritatively settled and not doubtful or uncertain; and (3) it must be
known to be within the limits of the jurisdiction of the court. The principal guide in
determining what facts may be assumed to be judicially known is that of
notoriety. Hence, it can be said that judicial notice is limited to facts evidenced
by public records and facts of general notoriety. Moreover, a judicially noticed
fact must be one not subject to a reasonable dispute in that it is either: (1)
generally known within the territorial jurisdiction of the trial court; or (2) capable
of accurate and ready determination by resorting to sources whose accuracy
cannot reasonably be questionable.
Things of "common knowledge," of which courts take judicial notice, may be
matters coming to the knowledge of men generally in the course of the ordinary
experiences of life, or they may be matters which are generally accepted by
mankind as true and are capable of ready and unquestioned demonstration.
Thus, facts which are universally known, and which may be found in
encyclopedias, dictionaries or other publications, are judicially noticed, provided,
they are such of universal notoriety and so generally understood that they may
be regarded as forming part of the common knowledge of every person. As the
common knowledge of man ranges far and wide, a wide variety of particular
facts have been judicially noticed as being matters of common knowledge. But a
court cannot take judicial notice of any fact which, in part, is dependent on the
existence or non-existence of a fact of which the court has no constructive
knowledge.1avvphi1
From the foregoing provisions of law and our holdings thereon, it is apparent
that the matter which the appellate court took judicial notice of does not meet the
requisite of notoriety. To begin with, only the CA took judicial notice of this
supposed practice to pay goodwill money to the lessor in the Baclaran area.
Neither the MeTC nor the RTC, with the former even ruling in favor of Rosalie,
found that the practice was of "common knowledge" or notoriously known.
We note that the RTC specifically ruled that Rosalie, apart from her bare
allegation, adduced no evidence to prove her claim that the amount of
₱2,570,000.00 simply constituted the payment of goodwill money.
Subsequently, Rosalie attached an annex to her petition for review before the
CA, containing a joint declaration under oath by other stallholders in Roferxane
Bldg. that they had paid goodwill money to Rosalie as their lessor. On this score,
we emphasize that the reason why our rules on evidence provide for matters
that need not be proved under Rule 129, specifically on judicial notice, is to
dispense with the taking of the usual form of evidence on a certain matter so
notoriously known, it will not be disputed by the parties.
However, in this case, the requisite of notoriety is belied by the necessity of
attaching documentary evidence, i.e., the Joint Affidavit of the stallholders, to
Rosalie’s appeal before the CA. In short, the alleged practice still had to be
proven by Rosalie; contravening the title itself of Rule 129 of the Rules of Court
– What need not be proved.
Apparently, only that particular division of the CA had knowledge of the practice
to pay goodwill money in the Baclaran area. As was held in State Prosecutors,
justices and judges alike ought to be reminded that the power to take judicial
notice must be exercised with caution and every reasonable doubt on the
subject should be ample reason for the claim of judicial notice to be promptly
resolved in the negative.
Ultimately, on the issue of whether Spouses Latip ought to be ejected from the
leased cubicles, what remains in evidence is the documentary evidence signed
by both parties – the contract of lease and the receipts evidencing payment of
₱2,570,000.00.
We need not be unduly detained by the issue of which documents were
executed first or if there was a novation of the contract of lease. As had been
found by the RTC, the lease contract and the receipts for the amount of
₱2,570,000.00 can be reconciled or harmonized. The RTC declared:
Definitely, the parties entered into a lease agreement over two (2) cubicles of
the 1st and 2nd floors of Roferxane (Roferland) Building, a commercial building
located at 158 Quirino Avenue, corner Redemptorist Road, Baclaran,
Parañaque City and belonging to [Rosalie]. The lease agreement is for a term of
six (6) years commencing in December 1999 up to December 2005. This
agreement was embodied in a Contract of Lease x x x. The terms of this lease
contract, however, are modified or supplemented by another agreement
between the parties executed and or entered into in or about the time of
execution of the lease contract, which exact date of execution of the latter is
13
unclear.
We agree with the RTC’s holding only up to that point. There exists a lease
agreement between the parties as set forth in the contract of lease which is a
complete document. It need not be signed by Ferdinand Chua as he likewise did
not sign the other two receipts for ₱500,000.00 and ₱70,000.00, respectively,
which contained only the signature of Rosalie. Besides, it is undisputed that
Rosalie owns and leases the stalls in Roferxane Bldg.; thus, doing away with the
need for her husband’s consent. The findings of the three lower courts concur
on this fact.
The contract of lease has a period of six (6) years commencing in December
1999. This fact is again buttressed by Spouses Latip’s admission that they
occupied the property forthwith in December 1999, bearing in mind the brisk
sales during the holiday season.
On the conflicting interpretations by the lower courts of the receipts amounting to
₱2,570,000.00, we hold that the practice of payment of goodwill money in the
Baclaran area is an inadequate subject of judicial notice. Neither was Rosalie
able to provide sufficient evidence that, apart from the belatedly submitted Joint
Affidavit of the stallholders of Roferxane Bldg., the said amount was simply for
the payment of goodwill money, and not payment for advance rentals by
Spouses Latip.
In interpreting the evidence before us, we are guided by the Civil Code
provisions on interpretation of contracts, to wit:
Art. 1371. In order to judge the intention of the contracting parties, their
contemporaneous and subsequent acts shall be principally considered.
Art. 1372. However general the terms of a contract may be, they shall not be
understood to comprehend things that are distinct and cases that are different
from those which the parties intended to agree.
Art. 1373. If some stipulation of any contract should admit of several meanings,
it shall be understood as bearing that import which is most adequate to render it
effectual.
The RTC was already on the right track when it declared that the receipts for rentals. Thus, since the contract of lease remained operative, we find that
₱2,570,000.00 modified or supplemented the contract of lease. However, it Rosalie’s receipt of the monies should be considered as advanced rentals on
made a quantum leap when it ruled that the amount was payment for rentals of the leased cubicles. This conclusion is bolstered by the fact that Rosalie
the two (2) cubicles for the entire six-year period. We cannot subscribe to this demanded payment of the lease rentals only in 2000, a full year after the
finding. To obviate confusion and for clarity, the contents of the receipts, already commencement of the lease.
set forth above, are again reproduced:
Finally, we note that the lease ended in 2005. Consequently, Spouses Latip can
1. I received the amount of ₱2,000,000.00 (two million pesos) from be ejected from the leased premises. They are liable to Rosalie for unpaid
[O]mar Latip & Moshi[e]ra Latip for the payment of 2 cubicles located at rentals on the lease of the two (2) cubicles in accordance with the stipulations on
158 Quirino Ave. corner Redemptorist Rd.[,] Baclaran P[arañ]que City. rentals in the Contract of Lease. However, the amount of ₱2,570,000.00,
ROFERLAND Bldg. with the terms 6 yrs. Contract. covering advance rentals, must be deducted from this liability of Spouses Latip
to Rosalie.
₱2,000,000.00 (sgd.)
CHECK # 3767924 ____________________ WHEREFORE, premises considered, the petition is hereby GRANTED. The
FAR EAST BANK Rosalie Chua decision of the Court of Appeals in CA-G.R. SP No. 89300 is REVERSED. The
petitioners, spouses Omar and Moshiera Latip, are liable to respondent Rosalie
Chua for unpaid rentals minus the amount of ₱2,570,000.00 already received by
(sgd.) her as advance rentals. No costs.
____________________
Ferdinand Chua SO ORDERED.

2. Received cash
₱500,000.00
From Moshiera Latip

(sgd.)
Rosalie Chua
12/10/99
____________________
Received by

3. Received cash
₱70,000.00 from
Moshiera Latip

(sgd.)
12-11-99 ____________________
14
Received by:

There is nothing on the receipts and on record that the payment and receipt of
₱2,570,000.00 referred to full payment of rentals for the whole period of the
lease. All three receipts state Rosalie’s receipt of cash in varying amounts. The
first receipt for ₱2,000,000.00 did state payment for two (2) cubicles, but this
cannot mean full payment of rentals for the entire lease period when there are
no words to that effect. Further, two receipts were subsequently executed
pointing to the obvious fact that the ₱2,000,000.00 is not for full payment of
G.R. No. 171406 April 4, 2011
ASIAN TERMINALS, INC., Petitioner,
vs.
MALAYAN INSURANCE, CO., INC., Respondent.
DECISION
DEL CASTILLO, J.:
Once the insurer pays the insured, equity demands reimbursement as no one
should benefit at the expense of another.
1
This Petition for Review on Certiorari under Rule 45 of the Rules of Court
2 3
assails the July 14, 2005 Decision and the February 14, 2006 Resolution of the
Court of Appeals (CA) in CA G.R. CV No. 61798.
Factual Antecedents
On November 14, 1995, Shandong Weifang Soda Ash Plant shipped on board
the vessel MV "Jinlian I" 60,000 plastic bags of soda ash dense (each bag
4
weighing 50 kilograms) from China to Manila. The shipment, with an invoice
value of US$456,000.00, was insured with respondent Malayan Insurance
Company, Inc. under Marine Risk Note No. RN-0001-21430, and covered by a
Bill of Lading issued by Tianjin Navigation Company with Philippine Banking
Corporation as the consignee and Chemphil Albright and Wilson Corporation as
5
the notify party.
On November 21, 1995, upon arrival of the vessel at Pier 9, South Harbor,
6 22
Manila, the stevedores of petitioner Asian Terminals, Inc., a duly registered
domestic corporation engaged in providing arrastre and stevedoring
7
services, unloaded the 60,000 bags of soda ash dense from the vessel and
brought them to the open storage area of petitioner for temporary storage and
safekeeping, pending clearance from the Bureau of Customs and delivery to the
8
consignee. When the unloading of the bags was completed on November 28,
1995, 2,702 bags were found to be in bad order condition.
9 14, 2005 Decision, the CA agreed with the RTC that the damage/loss was
On November 29, 1995, the stevedores of petitioner began loading the bags in
the trucks of MEC Customs Brokerage for transport and delivery to the
10
consignee. On December 28, 1995, after all the bags were unloaded in the
warehouses of the consignee, a total of 2,881 bags were in bad order condition
11
due to spillage, caking, and hardening of the contents.
On April 19, 1996, respondent, as insurer, paid the value of the lost/ damaged
12
cargoes to the consignee in the amount of ₱643,600.25.
Ruling of the Regional Trial Court
On November 20, 1996, respondent, as subrogee of the consignee, filed before
13
the Regional Trial Court (RTC) of Manila, Branch 35, a Complaint for damages
against petitioner, the shipper Inchcape Shipping Services, and the cargo broker
14
MEC Customs Brokerage.
15
After the filing of the Answers, trial ensued.
16
On June 26, 1998, the RTC rendered a Decision finding petitioner liable for the
damage/loss sustained by the shipment but absolving the other defendants. The
RTC found that the proximate cause of the damage/loss was the negligence of
petitioner’s stevedores who handled the unloading of the cargoes from the
17
vessel. The RTC emphasized that despite the admonitions of Marine Cargo
Surveyors Edgar Liceralde and Redentor Antonio not to use steel hooks in
retrieving and picking-up the bags, petitioner’s stevedores continued to use such
18
tools, which pierced the bags and caused the spillage. The RTC, thus, ruled
that petitioner, as employer, is liable for the acts and omissions of its stevedores
19 20 21
under Articles 2176 and 2180 paragraph (4) of the Civil Code. Hence, the
dispositive portion of the Decision reads:
WHEREFORE, judgment is rendered ordering defendant Asian Terminal, Inc. to
pay plaintiff Malayan Insurance Company, Inc. the sum of ₱643,600.25 plus
interest thereon at legal rate computed from November 20, 1996, the date the
Complaint was filed, until the principal obligation is fully paid, and the costs.
The complaint of the plaintiff against defendants Inchcape Shipping Services
and MEC Customs Brokerage, and the counterclaims of said defendants against
the plaintiff are dismissed.
SO ORDERED.
Ruling of the Court of Appeals
23
Aggrieved, petitioner appealed to the CA but the appeal was denied. In its July
caused by the negligence of petitioner’s stevedores in handling and storing the
24
subject shipment. The CA likewise rejected petitioner’s assertion that it
received the subject shipment in bad order condition as this was belied by
Marine Cargo Surveyors Redentor Antonio and Edgar Liceralde, who both
testified that the actual counting of bad order bags was done only after all the
bags were unloaded from the vessel and that the Turn Over Survey of Bad
Order Cargoes (TOSBOC) upon which petitioner anchors its defense was
prepared only on November 28, 1995 or after the unloading of the bags was
25
completed. Thus, the CA disposed of the appeal as follows:
WHEREFORE, premises considered, the appeal is DENIED. The assailed
Decision dated June 26, 1998 of the Regional Trial Court of Manila, Branch 35,
in Civil Case No. 96-80945 is hereby AFFIRMED in all respects.
26
SO ORDERED.
27
Petitioner moved for reconsideration but the CA denied the same in a
28
Resolution dated February 14, 2006 for lack of merit.
Issues
Hence, the present recourse, petitioner contending that:
1. RESPONDENT-INSURER IS NOT ENTITLED TO THE RELIEF
GRANTED AS IT FAILED TO ESTABLISH ITS CAUSE OF ACTION
AGAINST HEREIN PETITIONER SINCE, AS THE ALLEGED
SUBROGEE, IT NEVER PRESENTED ANY VALID, EXISTING,
ENFORCEABLE INSURANCE POLICY OR ANY COPY THEREOF IN
COURT.
2. THE HONORABLE COURT OF APPEALS ERRED WHEN IT
OVERLOOKED THE FACT THAT THE TOSBOC & RESBOC WERE
ADOPTED AS COMMON EXHIBITS BY BOTH PETITIONER AND
RESPONDENT.
3. CONTRARY TO TESTIMONIAL EVIDENCE ON RECORD,
VARIOUS DOCUMENTATIONS WOULD POINT TO THE VESSEL’S
LIABILITY AS THERE IS, IN THIS INSTANT CASE, AN
OVERWHELMING DOCUMENTARY EVIDENCE TO PROVE THAT
THE DAMAGE IN QUESTION WERE SUSTAINED WHEN THE
SHIPMENT WAS IN THE CUSTODY OF THE VESSEL.
4. THE HONORABLE COURT OF APPEALS ERRED WHEN IT
ADJUDGED HEREIN DEFENDANT LIABLE DUE TO [THE] FACT
THAT THE TURN OVER SURVEY OF BAD ORDER CARGOES
(TOSBOC) WAS PREPARED ONLY AFTER THE COMPLETION OF
THE DISCHARGING OPERATIONS OR ON NOVEMBER 28, 1995.
THUS, CONCLUDING THAT DAMAGE TO THE CARGOES WAS DUE
TO THE IMPROPER HANDLING THEREOF BY ATI STEVEDORES.
5. THE HONORABLE COURT OF APPEALS ERRED IN NOT TAKING
JUDICIAL NOTICE OF THE CONTRACT FOR CARGO HANDLING
SERVICES BETWEEN PPA AND ATI AND APPLYING THE
PERTINENT PROVISIONS THEREOF AS REGARDS ATI’S
29
LIABILITY.
In sum, the issues are: (1) whether the non-presentation of the
insurance contract or policy is fatal to respondent’s cause of action; (2)
whether the proximate cause of the damage/loss to the shipment was
the negligence of petitioner’s stevedores; and (3) whether the court can
take judicial notice of the Management Contract between petitioner and
the Philippine Ports Authority (PPA) in determining petitioner’s liability.
Petitioner’s Arguments
Petitioner contends that respondent has no cause of action because it failed to
present the insurance contract or policy covering the subject
30
shipment. Petitioner argues that the Subrogation Receipt presented by
respondent is not sufficient to prove that the subject shipment was insured and
31
that respondent was validly subrogated to the rights of the consignee. Thus,
petitioner submits that without proof of a valid subrogation, respondent is not
entitled to any reimbursement.
32
Petitioner likewise puts in issue the finding of the RTC, which was affirmed by
the CA, that the proximate cause of the damage/loss to the shipment was the
33
negligence of petitioner’s stevedores. Petitioner avers that such finding is
contrary to the documentary evidence, i.e., the TOSBOC, the Request for Bad
34
Order Survey (RESBOC) and the Report of Survey. According to petitioner,
these documents prove that it received the subject shipment in bad order
condition and that no additional damage was sustained by the subject shipment
35
under its custody. Petitioner asserts that although the TOSBOC was prepared
only after all the bags were unloaded by petitioner’s stevedores, this does not
36
mean that the damage/loss was caused by its stevedores.
Petitioner also claims that the amount of damages should not be more than
₱5,000.00, pursuant to its Management Contract for cargo handling services
37
with the PPA. Petitioner contends that the CA should have taken judicial notice
of the said contract since it is an official act of an executive department subject
38
to judicial cognizance.
Respondent’s Arguments
Respondent, on the other hand, argues that the non-presentation of the
insurance contract or policy was not raised in the trial court. Thus, it cannot be
39
raised for the first time on appeal. Respondent likewise contends that under
prevailing jurisprudence, presentation of the insurance policy is not
40
indispensable. Moreover, with or without the insurance contract or policy,
respondent claims that it should be allowed to recover under Article 1236 of
41
42
the Civil Code. Respondent further avers that "the right of subrogation has its
roots in equity - it is designed to promote and to accomplish justice and is the
mode which equity adopts to compel the ultimate payment of a debt by one who
in justice, equity and good conscience ought to pay."
43
Respondent likewise maintains that the RTC and the CA correctly found that the
damage/loss sustained by the subject shipment was caused by the negligent
44
acts of petitioner’s stevedores. Such factual findings of the RTC, affirmed by
45
the CA, are conclusive and should no longer be disturbed. In fact, under
46
Section 1 of Rule 45 of the Rules of Court, only questions of law may be raised
47
in a petition for review on certiorari.
As to the Management Contract for cargo handling services, respondent
48
contends that this is outside the operation of judicial notice. And even if it is
not, petitioner’s liability cannot be limited by it since it is a contract of adhesion.
Our Ruling
The petition is bereft of merit.
Non-presentation of the insurance contract or policy is not fatal in the instant
case
Petitioner claims that respondent’s non-presentation of the insurance contract or
policy between the respondent and the consignee is fatal to its cause of action.
We do not agree.
First of all, this was never raised as an issue before the RTC. In fact, it is not
among the issues agreed upon by the parties to be resolved during the pre-
50
trial. As we have said, "the determination of issues during the pre-trial
conference bars the consideration of other questions, whether during trial or on
51
appeal." Thus, "[t]he parties must disclose during pre-trial all issues they intend
to raise during the trial, except those involving privileged or impeaching matters.
x x x The basis of the rule is simple. Petitioners are bound by the delimitation of
52
the issues during the pre-trial because they themselves agreed to the same."
53
Neither was this issue raised on appeal. Basic is the rule that "issues or
grounds not raised below cannot be resolved on review by the Supreme Court,
for to allow the parties to raise new issues is antithetical to the sporting idea of
54
fair play, justice and due process."
Besides, non-presentation of the insurance contract or policy is not
55 56
necessarily fatal. In Delsan Transport Lines, Inc. v. Court of Appeals,
ruled that:
Anent the second issue, it is our view and so hold that the presentation in
evidence of the marine insurance policy is not indispensable in this case before
the insurer may recover from the common carrier the insured value of the lost
cargo in the exercise of its subrogatory right. The subrogation receipt, by itself,
is sufficient to establish not only the relationship of herein private respondent as
insurer and Caltex, as the assured shipper of the lost cargo of industrial fuel oil,
but also the amount paid to settle the insurance claim. The right of subrogation
accrues simply upon payment by the insurance company of the insurance claim.
The presentation of the insurance policy was necessary in the case of Home
Insurance Corporation v. CA (a case cited by petitioner) because the shipment
therein (hydraulic engines) passed through several stages with different parties
49
involved in each stage. First, from the shipper to the port of departure; second,
from the port of departure to the M/S Oriental Statesman; third, from the M/S
Oriental Statesman to the M/S Pacific Conveyor; fourth, from the M/S Pacific
Conveyor to the port of arrival; fifth, from the port of arrival to the arrastre
operator; sixth, from the arrastre operator to the hauler, Mabuhay Brokerage
Co., Inc. (private respondent therein); and lastly, from the hauler to the
consignee. We emphasized in that case that in the absence of proof of
stipulations to the contrary, the hauler can be liable only for any damage that
occurred from the time it received the cargo until it finally delivered it to the
consignee. Ordinarily, it cannot be held responsible for the handling of the cargo
before it actually received it. The insurance contract, which was not presented in
evidence in that case would have indicated the scope of the insurer’s liability, if
any, since no evidence was adduced indicating at what stage in the handling
57
process the damage to the cargo was sustained. (Emphasis supplied.)
In International Container Terminal Services, Inc. v. FGU Insurance
58
Corporation, we used the same line of reasoning in upholding the Decision of
the CA finding the arrastre contractor liable for the lost shipment despite the
failure of the insurance company to offer in evidence the insurance contract or
policy. We explained:
Indeed, jurisprudence has it that the marine insurance policy needs to be
presented in evidence before the trial court or even belatedly before the
appellate court. In Malayan Insurance Co., Inc. v. Regis Brokerage Corp., the
Court stated that the presentation of the marine insurance policy was necessary,
as the issues raised therein arose from the very existence of an insurance
contract between Malayan Insurance and its consignee, ABB Koppel, even prior
to the loss of the shipment. In Wallem Philippines Shipping, Inc. v. Prudential
Guarantee and Assurance, Inc., the Court ruled that the insurance contract must
be presented in evidence in order to determine the extent of the coverage. This
was also the ruling of the Court in Home Insurance Corporation v. Court of
Appeals.
we
However, as in every general rule, there are admitted exceptions. In Delsan
Transport Lines, Inc. v. Court of Appeals, the Court stated that the presentation
of the insurance policy was not fatal because the loss of the cargo undoubtedly
occurred while on board the petitioner’s vessel, unlike in Home Insurance in
which the cargo passed through several stages with different parties and it could
not be determined when the damage to the cargo occurred, such that the insurer
should be liable for it.
As in Delsan, there is no doubt that the loss of the cargo in the present case
occurred while in petitioner’s custody. Moreover, there is no issue as regards the
provisions of Marine Open Policy No. MOP-12763, such that the presentation of
the contract itself is necessary for perusal, not to mention that its existence was
already admitted by petitioner in open court. And even though it was not offered
in evidence, it still can be considered by the court as long as they have been
properly identified by testimony duly recorded and they have themselves been
59
incorporated in the records of the case.
Similarly, in this case, the presentation of the insurance contract or policy was
not necessary. Although petitioner objected to the admission of the Subrogation
Receipt in its Comment to respondent’s formal offer of evidence on the ground
60
that respondent failed to present the insurance contract or policy, a perusal of
61 62
petitioner’s Answer and Pre-Trial Brief shows that petitioner never
questioned respondent’s right to subrogation, nor did it dispute the coverage of
the insurance contract or policy. Since there was no issue regarding the validity
of the insurance contract or policy, or any provision thereof, respondent had no
reason to present the insurance contract or policy as evidence during the trial.
Factual findings of the CA, affirming the RTC, are conclusive and binding
Petitioner’s attempt to absolve itself from liability must likewise fail.
Only questions of law are allowed in petitions for review on certiorari under Rule
45 of the Rules of Court. Thus, it is not our duty "to review, examine, and
evaluate or weigh all over again the probative value of the evidence
63
presented," especially where the findings of both the trial court and the
64
appellate court coincide on the matter. As we have often said, factual findings
of the CA affirming those of the RTC are conclusive and binding, except in the
following cases: "(1) when the inference made is manifestly mistaken, absurd or
impossible; (2) when there is grave abuse of discretion; (3) when the findings
are grounded entirely on speculations, surmises or conjectures; (4) when the
judgment of the [CA] is based on misapprehension of facts; (5) when the [CA], in
making its findings, went beyond the issues of the case and the same is contrary
to the admissions of both appellant and appellee; (6) when the findings of fact
are conclusions without citation of specific evidence on which they are based;
(7) when the [CA] manifestly overlooked certain relevant facts not disputed by
the parties and which, if properly considered, would justify a different conclusion;
and (8) when the findings of fact of the [CA] are premised on the absence of
65
evidence and are contradicted by the evidence on record." None of these are
availing in the present case.
Both the RTC and the CA found the negligence of petitioner’s stevedores to be
the proximate cause of the damage/loss to the shipment. In disregarding the
contention of petitioner that such finding is contrary to the documentary
evidence, the CA had this to say:
ATI, however, contends that the finding of the trial court was contrary to the
documentary evidence of record, particularly, the Turn Over Survey of Bad
Order Cargoes dated November 28, 1995, which was executed prior to the turn-
over of the cargo by the carrier to the arrastre operator ATI, and which showed
that the shipment already contained 2,702 damaged bags.
We are not persuaded.
Contrary to ATI’s assertion, witness Redentor Antonio, marine cargo surveyor
of Inchcape for the vessel Jinlian I which arrived on November 21, 1995 and up
to completion of discharging on November 28, 1995, testified that it was only
after all the bags were unloaded from the vessel that the actual counting of
bad order bags was made, thus:
xxxx
The above testimony of Redentor Antonio was corroborated by Edgar
Liceralde, marine cargo surveyor connected with SMS Average Surveyors and
Adjusters, Inc., the company requested by consignee Chemphil Albright and
Wilson Corporation to provide superintendence, report the condition and
determine the final outturn of quantity/weight of the subject shipment. x x x
xxxx
Defendant-appellant ATI, for its part, presented its claim officer as witness who
testified that a survey was conducted by the shipping company and ATI before
the shipment was turned over to the possession of ATI and that the Turn Over
Survey of Bad Order Cargoes was prepared by ATI’s Bad Order (BO) Inspector.
Considering that the shipment arrived on November 21, 1998 and the
unloading operation commenced on said date and was completed on
November 26, 1998, while the Turn Over Survey of Bad Order Cargoes,
reflecting a figure of 2,702 damaged bags, was prepared and signed on
November 28, 1998 by ATI’s BO Inspector and co-signed by a representative of
the shipping company, the trial court’s finding that the damage to the
cargoes was due to the improper handling thereof by ATI’s stevedores
cannot be said to be without substantial support from the records.
We thus see no cogent reason to depart from the ruling of the trial court that ATI
should be made liable for the 2,702 bags of damaged shipment. Needless to
state, it is hornbook doctrine that the assessment of witnesses and their

testimonies is a matter best undertaken by the trial court, which had the
opportunity to observe the demeanor, conduct or attitude of the witnesses. The
findings of the trial court on this point are accorded great respect and will not be
reversed on appeal, unless it overlooked substantial facts and circumstances
which, if considered, would materially affect the result of the case.
We also find ATI liable for the additional 179 damaged bags discovered upon
delivery of the shipment at the consignee’s warehouse in Pasig. The final Report
of Survey executed by SMS Average Surveyors & Adjusters, Inc., and
independent surveyor hired by the consignee, shows that the subject shipment
incurred a total of 2881 damaged bags.
The Report states that the withdrawal and delivery of the shipment took about
ninety-five (95) trips from November 29, 1995 to December 28, 1995 and it was
upon completion of the delivery to consignee’s warehouse where the final count
of 2881 damaged bags was made. The damage consisted of torn/bad order
condition of the bags due to spillages and caked/hardened portions.
We agree with the trial court that the damage to the shipment was caused by the
negligence of ATI’s stevedores and for which ATI is liable under Articles 2180
and 2176 of the Civil Code. The proximate cause of the damage (i.e., torn bags,
spillage of contents and caked/hardened portions of the contents) was the
improper handling of the cargoes by ATI’s stevedores, x x x
xxxx
ATI has not satisfactorily rebutted plaintiff-appellee’s evidence on the negligence
of ATI’s stevedores in the handling and safekeeping of the cargoes. x x x
xxxx
We find no reason to disagree with the trial court’s conclusion. Indeed, from the
nature of the [damage] caused to the shipment, i.e., torn bags, spillage of
contents and hardened or caked portions of the contents, it is not difficult to see
that the damage caused was due to the negligence of ATI’s stevedores who
used steel hooks to retrieve the bags from the higher portions of the piles
thereby piercing the bags and spilling their contents, and who piled the bags in
the open storage area of ATI with insufficient cover thereby exposing them to
66
the elements and [causing] the contents to cake or harden.
Clearly, the finding of negligence on the part of petitioner’s stevedores is
supported by both testimonial and documentary evidence. Hence, we see no
reason to disturb the same.
Judicial notice does not apply
67
Finally, petitioner implores us to take judicial notice of Section 7.01, Article VII
of the Management Contract for cargo handling services it entered with the PPA,
which limits petitioner’s liability to ₱5,000.00 per package.
Unfortunately for the petitioner, it cannot avail of judicial notice.
Sections 1 and 2 of Rule 129 of the Rules of Court provide that:
SECTION 1. Judicial notice, when mandatory. — A court shall take judicial
notice, without the introduction of evidence, of the existence and territorial extent
of states, their political history, forms of government and symbols of nationality,
the law of nations, the admiralty and maritime courts of the world and their seals,
the political constitution and history of the Philippines, the official acts of the
legislative, executive and judicial departments of the Philippines, the laws of
nature, the measure of time, and the geographical divisions.1avvphi1
SEC. 2. Judicial notice, when discretionary. — A court may take judicial notice of
matters which are of public knowledge, or are capable of unquestionable
demonstration or ought to be known to judges because of their judicial functions.
The Management Contract entered into by petitioner and the PPA is clearly not
among the matters which the courts can take judicial notice of. It cannot be
considered an official act of the executive department. The PPA, which was
68
created by virtue of Presidential Decree No. 857, as amended, is a
government-owned and controlled corporation in charge of administering the
69
ports in the country. Obviously, the PPA was only performing a proprietary
function when it entered into a Management Contract with petitioner. As such,
judicial notice cannot be applied.
WHEREFORE, the petition is hereby DENIED. The assailed July 14, 2005
Decision and the February 14, 2006 Resolution of the Court of Appeals in CA-
G.R. CV No. 61798 are hereby AFFIRMED.
SO ORDERED.
G.R. No. L-59713 March 15, 1982
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
ANTONIO ARIZALA Y FLORES @ TONY, accused appellant.
ABAD SANTOS, J.:
ANTONIO ARIZALA Y FLORES was convicted of rape by the Court of First
Instance of La Union and sentenced to suffer "an indeterminate penalty of SIX
(6) YEARS and ONE (1) DAY of prision mayor as minimum, to TWELVE (12)
YEARS and ONE (1) DAY of reclusion temporal as maximum; to pay the
complainant, Trinidad Baladad, the sum of P5,000.00 as moral damages; and to
pay the costs."
ARIZALA appealed his conviction to the Court of Appeals which found him guilty
of the crime charged in a comprehensive decision wherein the evidence was
analyzed and the law involved was discussed. The Court of Appeals made the
following conclusion: "There being one aggravating circumstance of dwelling
which is offset by the mitigating circumstance of voluntary surrender, We are of
the opinion that the penalty of reclusion perpetua should be, as it is hereby,
imposed upon the appellant." However, judgment was not entered and the case
with its entire record was elevated to us for review pursuant to Rule 124, Sec. 12
of the Rules of Court, and people vs. Daniel L-40330, November 20, 1978, 86
SCRA 511, 532, People vs. Ramos, L-49818, February 20, 1979, 88 SCRA 486.
A verified complaint for rape was filed by Trinidad Natividad Vda. de Baladad
with the Municipal Court of Bauang, La Union, on August 12, 1974. The
complaint reads:
The undersigned OFFENDED PARTS upon being duly sworn to in
accordance with law, hereby accuses ANTONIO ARIZALA Y FLORES
alias "TONY" of the crime of RAPE committed as follows to wit:
That on or about the 7th day of JUNE, 1974, in the barrio Quinavite
municipality of Bauang, province of La Union, Philippines, and within the
jurisdiction of this Honorable Court. The about named accused, with
lewed designs did then and there, wilfully, unlawfully, and feloniously by
means of violence and force, having hit and delivered a blow that
rendered the undersigned unconscious, succeeded in having sexual
intercourse with the undersigned while she was thus rendered in the
state of unconsciousness, without her consent to the damage and
prejudice of the undersigned.
That the felony was committed with the aggravating circumstance of
dwelling of the offended party.
CONTRARY TO ARTICLE 335 of the Revised Penal Code as amended.
On the same day, Municipal Judge Simeon V. Caces conducted a preliminary
investigation and finding probable cause he issued a warrant for the arrest of
Antonio Arizala which was served likewise on the same day. Contrary to the
decisions of both the trial court and the Court of Appeals, there is nothing in
the expediente nor in the testimony of the witnesses which indicates that Arizala
surrendered voluntarily.
Arizala waived the second stage of the preliminary investigation so the case was
elevated to the Court of First Instance for trial on the merits. The Assistant
Provincial Fiscal in charge of the case submitted a manifestation that he was
adopting the criminal complaint filed in the municipal court instead of filing an
information.
The People's version of the case is as follows:
The complainant in this case is Trinidad Baladad, who at the time of the
criminal incident, was 46 years old and a widow with ten (10) children
(p. 3, tsn., Sept. 17, 1974). On the other hand, the accused-appellant
Antonio Arizala was then 48 years old a tricycle driver and a neighbor of
the complainant in Barangay Quinavite, Bauang, La Union (p. 2, tsn.,
Dec. 4,1975).
At about 10:30 o'clock in the evening of June 17, 1974, the complainant
was arranging some clothes inside the room on the ground floor of her
house. At the time, her 8-year old daughter Edna who shared the
complainant's room, was already asleep. The bedroom was lit by a 40-
watt fluorescent lamp from the sala (a door curtain separated the room
from the sala The front door and windows were locked, but the kitchen
door was not because her son, Arthur, used this door when arriving late
at night from work (pp. 3-14, tsn., Sept. 17,1974).
Then complainant heard the sound of a door being opened. She was
not alarmed by this, thinking that it was her son, Arthur, who was
entering the house. The door curtain was pushed aside. When the
complainant turned to look, she saw, and recognized, the accused (pp.
15-16, tsn., Id).
Suddenly the accused punched complainant on the stomach. The latter
instantly lost consciousness, unable to shout to seek help. When she
regained consciousness, the accused was no longer there. She was
lying on her back on the cement floor with her "duster" (a loose kind of
 dress) raised to her waist, her legs apart, her panties removed and
placed near the wall Seminal fluid was oozing from her vagina. As the
mother of ten children, these circumstances made her realize that she
had been abused (pp. 16-21, 4 1, tsn., Id.)
Complainant did not undergo medical examination, fearful of the
reaction of her older children and of her brother on the knowledge of the
incident. The next day, however, complainant went to her neighbor, a
policeman named Milan Corpus. She narrated the incident and sought
his advice on what action to take without her relatives knowing about it.
She was advised to file a complaint. At first, she refused, not wanting
any of her relatives to know what had befallen her. Finally, on July 25,
1974 with anguish and mental torture bearing down on her, complainant
decided to tell all of it to her brother, Julio Natividad . (pp. 21, 42-47,
tsn., Id).
Accompanied by her brother Julio, complainant gave her sworn
statement at the office of the National Bureau of Investigation in San
Fernando, La Union. Subsequently she filed the complaint for rape
against the accused.
There were several instances when the Arizalas pleaded with the
complainant not to file any charges and/or sought forgiveness. About
one week after the incident, the Arizalas came to complainant's house in
the morning, requesting her not to file any case against the accused.
Again, in the early morning of July 25, 1974, they came again to plead
with her and that they should settle the case, saying that all of them
would only suffer embarrassment. Again, at 1:00 o'clock in the afternoon
of the same day, the Arizalas came and asked forgiveness from the
complainant for the incident of June 17, 1974 and for the latter not to file
charges. Complainant refused because she wanted justice. At 5:00
o'clock in the afternoon of the same date, when complainant's daughter
Crisanta arrived from her teaching job, the Arizalas returned, and
complainant told them she would await the decision of her brother, Julio,
and her son, Vivencio, who was still in Baguio at the time (pp. 55-68,
tsn., Id).
Then, again at the office of the National Bureau of Investigation in San
Fernando, La Union where complainant and Crisanta gave their
statements, the accused knelt before Vivencio pleading 'Forgive me
son, for what I have done to your mother The accused was the sponsor
at Vivencio's wedding (pp. 4-6, No. 5 file of tsn., Id.). (Brief, pp. 2-5.)
The appellant's version paints a totally different picture as follows:
The complainant Trinidad Baladad and the accused- appellant Antonio
Arizala are neighbors in the same barrio of Quinavite, Bauang, La Union
and their houses are only about 30 to 40 meters apart. They have
known each other since childhood TSN, 12/4/75, p. 3) and their
relationship as such became closer with the appellant acting as sponsor
during the wedding and confirmation of complainant's two sons, Dinong
and Vivencio, respectively (IBID, 5/11/76, p. 6). With this admittedly
close relationship existing even long before the date of the alleged
incident complained of, that is, on June 17, 1974, the complainant used
to fetch water from and bathe near the well belonging to and in the yard
of the appellant (IBID 10/l/75, p. 3), watch night TV programs in
appellant's house and join the latter and members of his family in having
some snacks therein (IBID 2/19/75, p. 8; Ibid, 10,11/75, p. 11). In short,
the complainant was always welcome in the appellant's house where
the former sometimes render unsolicited household chores (IBID,
10/1/75, p. 12).
But, sometime during the later part of January, or early February, 1974,
the relationship between complainant and the appellant came to a twist
when the former asked from the latter a loan of P5.00 and, a few days
thereafter, another loan of P10.00 (IBID 12/4/75, pp. 5-6; Ibid, 5/11/76,
pp. 3-4), without the first loan having as yet then settled. The appellant
was reluctant to give the second loan of P10.00 but for complainant's
remark: 'Anyway we are sweethearts' (IBID 12/4/75, p. 6). With the first
and second loans, totalling P15.00, still unsatisfied, the complainant
again pestered the appellant for a third loan of P10.00. The appellant
again obliged as he was emotionally moved by complainant's statement:
'Come on sweetheart give me (IBID p. 9). On this third loan, the
appellant handed a twenty-peso bill but the expectation for the return of
the ten peso change was in vain (IBID p. 10).
Because of the manifestly romantic gesture of complainant when she
asked for the third loan the appellant proposed to complainant, saying
'Sweet, let me come tonight then and to which the complainant readily
agreed, saying: 'That only for, in Pilipino, 'Iyan lang pala (IBID p. 10).
Hence, an understated was reached whereby the complainant should
wait in her house in the evening, between 10:00 p.m. and 12:00
midnight, and to unlock the door for appellant to enter unnoticed by
others (IBID pp. 11-12). That was in the evening of Feb. 14,1974, a
memorable date commemmorating the feast of St. Valentine and a day
primarily destined for people and their loved ones. On this unforgettable
day, the first sexual act between complainant and the appellant was
consummated, followed later by frequent sexual contacts (IBID 1/6/76,
pp. 11, 14; Ibid, 5/11/76, pp. 7, 12).
After the first intercourse, the relationship between complainant and the
appellant became the more intimate, with the former frequenting the
house of the latter on the pretext of watching therein the night TV
programs. Even complainant's youngest and 8-year old child, Edna,
shared the love and affection resulting from her mother's illicit
relationship with the appellant who used to give money to both mother
and child (IBID, 5/8/75, p. 13: Ibid, 1/21/76, p. 25), at the expense of
appellant's immediate members of his family (IBID 5/8/75, pp. 13-14).
In the evening of June 17, 1974, the date of the alleged incident
complained of, the complainant informed the appellant of the
interruption and/or delay in the former's menstrual flow and she advised
appellant to consult the authorities on family planning (IBID 1/6/76, p.
25; Ibid, 6/7/76, p. 3). So, on the following day, June 18, 1974, the
appellant saw and consulted Mrs. Leonora Manantan, the Registered
Midwife working at the Rural Health Unit in Bauang, La Union (IBID
6/19/75, p. 17). The records in the office of Mrs. Manantan (Exh. 3 &
Exh. 3-A) disclose and confirm the consultations made by the appellant
on June 18, 1974 when he was even handed a family planning
pamphlet (Exh. 4) on which appears the illustration of the rhythm
method of family planning as explained by Mrs. Manantan to the
appellant (Exh. 4-A; TSN, 6/19/75, p. 9; Ibid, 1/6/76, p. 12; Ibid, 6/7176,
p. 17) and during his ailment the complainant made almost daily visits
(IBID 1/6/76, p. 13), bringing with her some expensive cakes and
medicines for the appellant who was in bed alone in his room (IBID p.
16; Ibid, 2/19/75, p. 14). Even appellant's 20-year old daughter, Nee
(she was 21 years old when she testified on Feb. 19, 1975), saw
complainant going in and out of appellant's room (IBID 2/10/75, p. 13).
After recovering from his sickness the appellant and the complainant
resumed their sexual orgy under the same circumstances as was done
before.
Because of the actuations of both complainant and the appellant,
consisting in their intimate conversations, the unsolicited household
services rendered by complainant in appellant's house and the latter's
special treatment of complainant's daughter, Edna, not to mention the
reduction in appellant's earnings (IBID 10/l/75, pp. 11-12) brought about
by his giving money to and free tricycle rides to complainant and her
daughter, Edna (IBID 5/8/75, pp. 13-14) — all these taken together
generated suspicion on the part of appellant's wife, Cleofe Arizala, who
forced on the appellant, in the evening of July 2, 1974, a confrontation
about the suspicion she entertained that her husband had as his
paramour the complainant. It was in this confrontation that the appellant
admitted extra-legal adventures with complainant, but with the
admonition for appellant's wife and their daughter not to quarrel with the
complainant (IBID 5/8/75, p. 24; Ibid, 10/l/75, p. 7; Ibid, 1/6/76, p. 32).
Accordingly, an arrangement was made for appellant's wife to call for
the complainant the following morning for the three of them to settle
matters over (IBID, 5/8/75, p. 7; Ibid, 1/6/76, p. 32).
So, on July 3, 1974 the complainant, the appellant and his wife, Cleofe,
talked in appellant's house where both he and the complainant admitted
their illicit relationship, This, notwithstanding, the appellant's
understanding wife forgave and pardoned him and the complainant for
as long as such relationship ended right then and there (IBID 10/l/75, p.
9; Ibid, 1/6/76, pp. 35-36). The complainant even pleaded that her
relationship with the appellant be kept a secret in order not to reach the
knowledge of complainant's children, brothers and sisters (IBID 10/l/75,
pp. 9-10; Ibid, 1/6/76, pp. 36-37). Despite the pardon for their misdeeds,
however, the complainant and the appellant continued and resumed
their morally reprehensible amorous relations by indulging in the same
sexual orgy as often, if not oftener than before (IBID 1/21/76, pp. 6-7,
21).
In the morning of July 8, 1974, the appellant was caught writing a letter
(Exhs. 2 & 2-A) addressed to the complainant (IBID pp. 809, and an
unusual incident transpired when a scuffle ensued for the possession of
said letter among appellant, his wife and their daughter, Nelmie. In the
process, the appellant maltreated and laid hands on his wife (IBID pp.
10-11, 14-16: Ibid, 10/l/75, p. 14; Ibid, 5/8/75, pp. 29-30). Appellant's
sister, Nemesia Cacdac, who just arrived in appellant's house from the
Notre Dame Hospital in Baguio City where she underwent a surgical
operation (IBID 6/25/75, pp. 5-), was also present during the scuffle for
the letter (Exh. 2) and it was she who picked the same up and later
handed it to appellant's wife Ibid, pp. 6, 9-11).
After the incident involving the letter (Exh. 2) was over, Nemesia
Cacdac went to complainant's house to return the thermos bottle that
the former used while in the hospital (IBID p. 11). On this occasion, the
complainant inquired about the cause of the trouble between appellant
and his wife (IBID p. 12) but appellant's sister pretended not to know.
Thereafter, though, the complainant confided her illicit relationship with
the appellant (IBID p. 14) but the complainant disclosed her intention to
reverse the Situation by the filing of charges against the appellant if the
latter's wife did not stop quarreling with said appellant Ibid, p. 16).
The continuing, immoral and illegal affair between complainant and the
appellant had inflamed the ire of the latter's wife when, on July 25, 1974,
a heated confrontation that almost resulted in a tragic encounter erupted
between complainant and appellant's wife (IBID 5/8/75, pp. 33-34, 37-
38; Ibid, 11/11/75, p. 6: Ibid, 1/21/76, pp. 27-28, 30). After this incident,
the complainant left but was joined by the appellant to whom the former
revealed her intention of filing the corresponding charges against the
latter's wife as a result of said incident. Appellant's wife also followed
and caught up on the way (IBID 1/21/76, p. 33) and the three proceeded
to the public market where the appellant left the two woman behind
(IBID p. 34; Ibid, 11/11/75, p. 6). From the public market, the
 complainant and the appellant's wife went to the municipal building
(IBID 11/11/75, p. 7). Coming out from the municipal building the two
women again left together and, while outside, the complainant saw and
informed her brother, Julio Natividad, that the appellant was always in
her house every night and that he had taken her womanhood but said
Julio Natividad merely shrugged off the information by telling his sister,
the complainant, that he (Julio) would take care of the matter (IBID p. 9)
and the complainant and the appellant's wife left together for home.
In the afternoon of July 25, 1974, the appellant and his wife went to
complainant's house to ask forgiveness for what appellant's wife did
earlier in the day when she quarreled with the complainant Ibid,
11/11/75, p. 23; Ibid, 2/24/76, p. 8).
But, on July 27, 1974 the complainant's brother, Julio Natividad, went to
appellant's house and advised the latter not to leave since the quarrel
between his (appellant's) wife and The complainant two days before
would be settled Ibid, 11,11 75, pp. 12-13, Ibid, 1/21/76, pp. 40- 41).
And, after lunch of the same day, Julio Natividad returned to appellant's
house to fetch the latter. then they (Julio Natividad, the appellant and his
wife) were about to leave, three men arrived and introduced themselves
as members of the National Bureau of Investigation (NBI) [IBID 11 11/75
p. 14].
Thereafter, all of them left and they proceeded to the office of the NBI in
San Fernando, La Union (IBID p. 15) where both appellant and his wife
were made to sign an already prepared document in affidavit form (Exh.
C). The contents of said document were not made known to appellant
and his wife but they were made to understand by the NBI that the same
is the settlement of the quarrel that occurred on July 25, 1974 and
involving the complainant and the appellant's wife (IBID), pp. 16-17;
Ibid, 2/24/76, pp. 4-5). After the appellant and his wife had affixed their
signatures on said document (Exh. C) they were even obliged to
contribute one (1) case of beer to be brought to the house of Julio
Natividad in celebration of such settlement and the appellant complied
(IBID, 11/11/75, p. 24; Ibid, 2/24/76, pp. 12-13).
Utilizing the statements of complainant and her witnesses, reinforced by
the already accomplished affidavit (Exh. C) the contents of which the
appellant and his wife knew all the time to have embodied the
settlement of the quarrel between complainant and appellant's wife, the
prosecution hastily filed the charge of rape against the appellant. (Brief,
pp. 1-8.)
The appellant claims that the trial court committed the following errors:
I. THE LOWER COURT ERRED IN GIVING CREDENCE
TO THE VERSION OF THE PROSECUTION
(COMPLAINANT).
II. THE TRIAL COURT ERRED IN NOT CONSIDERING
THE FACTS AND CIRCUMSTANCES THAT NEGATE
THE EXISTENSE OF THE CRIME CHARGED (RAPE).
III. THE LOWER COURT ERRED IN NOT ABSOLVING
AND/OR ACQUITTING THE ACCUSSED-APPELLANT.
The third assignment of error is but a formal one, resulting from the first two
assignment of error which can be re-statedand capsulized as follows: which is
The more credible version, that of prosecution or that of the accused?
In resolving the question, We have to recall the cardinal rule that.
On matters of credibility, this Court has accorded the highest degree of
respect for the findings of the trial judge because he had the opportunity
to see, hear and observe the witnesses testify and to weigh their
testimonies. The trial judge's findings of fact shall not be disturbed
unless it appears from the record that facts or circumstances of weight
or influence were overlooked, their significance misinterpreted, or there
were inherent weaknesses in the supporting evidence. (People vs.
Bautista, L-31900, August 6, 1979, 92 SCRA 465; see also People vs.
Caramonte, L-31866, November 7, 1979, 94 SCRA 150; People vs.
Tigulo, L-34334, November 7, 1979, 94 SCRA 183, People vs. Ramos,
L-35063, December 27, 1979, 94 SCRA 842; People vs. Mercado, L-
39513, April 28, 1980, 97 SCRA 232.)
Evidently the trial court found the complaining witness to be more credible and in
line with the rule above stated We do not believe that the record of the case will
warrant a reversal of the decision.
Exhibit C which is an affidavit executed by the appellant on July 27, 1974, and
verified before NBI Agent Eladio C. Velasco is strong evidence against him. The
affidavit reads:
1. ANTONIO ARIZALA Y FLORES, of legal age, residing B. Quinavite,
Bauang, La Union and married to CLEOFE ESTEPA after having
been sworn in accordance to law, depose and say:
1. That I am the same Antonio Arizala y Flores, who is denounced for
a case of alleged rape committed on the person of one MRS.
TRINIDAD NATIVIDAD VDA. DE BALADAD of Bo. Quinavite,
Bauang, La Union;
2. That because of this denunciation and charge I and my wife went to
the house of said Mrs. Trinidad Natividad Vda. de Baladad in the
afternoon of Thursday July 25, 1974 asking for forgiveness and
 begging from said Mrs. Trinidad Natividad Vda. de Baladad to have
the case settled amicably and out of Court so that the authorities
concerned will not be informed anymore;
3. That a daughter of Mrs. Trinidad Natividad Vda. de Baladad named
Crisanta N. Baladad, a high school teacher was present at the time
that we talked of this forgiveness;
4. That no final action was arrived at because according to Mrs.
Trinidad Natividad Vda. de Baladad and her daughter Crisanta, the
matter must have to be consulted first with her eldest son named
VlVENCIO and some other close relatives;
5. That here and now in the presence of the eldest son Vivencio and
an uncle of Vivencio named Julio Natividad as well as in the
presence of Mrs. Trinidad Natividad Vda. de Baladad and her
daughter Crisanta, and in your presence as investigator of this case,
I again would like to ask for forgiveness and pray that this case will
not reach the Courts; and
6. Finally the forgiveness that I am begging is in connection with that
incident which happened in the house of Mrs. Trinidad Natividad
Vda. de Baladad on the night of June 17,1974.
7. Affiant further sayeth naught .
The appellant claims that he signed the affidavit without reading it, He insinuates
that he could not comprehend English. But the decision of the trial court
categorically states that, "The accused could read English, as was
demonstrated in Court when he read aloud the beginning of the statement in
question, 'I, Antonio Arizala, etc. . . .' and the name at the bottom over which he
affixed his signature, 'Antonio F. Arizala.' Hence, he knew that he was the main
executing party, and not his wife, who signed said document after him, her name
only appearing below her husband's signature." (p. 14, decision.) And the claim
of the appellant that Exhibit C was executed in order to settle a quarrel or spat
between his wife and the complainant must be rejected because the document
does not mention of any quarrel between the two. On the contrary it tells of the
incident on June 17, 1974, when the rape took place.
The appellant also claims that he could not possibly have gone to bed with the
complainant on June 17, 1974, because on that day she had her monthly period.
We take judicial notice of the fact that such a condition does not bar sexual
union. Intercourse may be messy but it is not impossible. And to bolster his
contention, the appellant claims that he even consulted Mrs. Leonora Manantan
the registered midwife at the Rural Health Unit in Bauang who gave him a
pamphlet of the rhythm method of family planning (Exh. 3-A). But there is no
showing that the complainant had asked the appellant to do what he did.
Accordingly, his act cannot bind her.
The appellant harps on Exhibit 2 (Expedients, p. 159) to show that he and the
complainant were having an affair. Exhibit 2 is a self-serving evidence for it is a
letter supposedly written by the appellant to the complainant which the latter
never received. The conclusion of the trial court in respect of Exhibit 2 is well-
founded. It says:
The story about the letter, Exh. 2, is obviously a concoction, which has
overshot the realm of credibility, to say the least. It is absurd that the
accused, who professed going almost nightly to rendezvous with the
complainant, except when the latter was tired or had her senses would
still have to send money to her by ordinary mail and follow-up by
another letter whether she had received the sum, when he could simply
give the cash to her, personally, before or after the supposedly frequent
love trysts. How can a communication by mail be resorted to in order to
keep their up to then undiscovered relationship secret A query sent by
mail would logically be answered by the same medium, which return
mail would actually invite an investigation by the cheated wife on what
woman (from the handwriting on the envelope) was writing to her
husband, and why
This constrains one to conclude that the only purpose of the elaborately
fabricated tale by the accused, his sister, wife and daughter, was a
desperate attempt to defend against the criminal charge at bar.
However, these defense witnesses forget to synchronize their
respective testimonies. Thus, the following inconsistencies in
contradictions:
1. On the place where the accused wrote the letter. Exh. 2. — Nelmie
Arizala — in his room (T.S.N., May 8, 1975); Nemesia Cacdac — in the
sala (TSN Sept. 2,1975; Cleofe Arizala — in his room (T.S.N., Oct 1,
1975).
2. On house the letter was passed around. — Nelmie — Auntie
Nemesia got it when my father threw it away. She kept it, then showed it
to us. She gave it to my mother who turned it over to me. (T.S.N., May
8,1975). Nemesia, on direct examination. — Tony (the accused)
dropped the letter, I picked it up and read it. Afterwards, I gave it
to Cleofe (T.S.N., June 25, 1975). However, on cross-examination, she
said that she gave the letter first to Nelmie, who gave it to Cleofe T. S.
N., Sept. 2, 1975). Cleofe — It was given to me, and I gave it to Nelmie
for safe keeping (T S. N., Oct. 1, 1975).
3. On the aftermath of the incident regarding the letter — Cleofe —
Nelmie told me she had grabbed the letter, but her father had got it
again. I went to his room and asked about it, why he would not show it.
We argued until we were outside the house, and he hit me repeatedly
kinabilnak (T.S.N., Oct. 1, 1975). Nemesia — when Nelmie grabbed the
letter, Tony (the accused was about to strike her, but Cleofe, herself
tried to grab the letter and failed. (T.S.N., June 25, 1975). Nelmie never
mentioned that her father ever tried to hit her, or that he repeatedly
 struck her mother, while the women were supposedly trying to get the
letter in question from the accused.

Rape is punished by reclusion perpetua which is an indivisible penalty. The

appellant is not entitled to any mitigating circumstance. Hence, whether or not
he voluntarily surrendered and whether or not his crime was aggravated by
dwelling is immaterial. The penalty will still be reclusion perpetua.

WHEREFORE, the judgment of the court a quo is affirmed with the sole
modification that the appellant shall undergo instead the penalty of reclusion
perpetua Costs de oficio.

SO ORDERED.
G.R. No. 128720 January 23, 2002
S/SGT. ELMER T. VERGARA, petitioner,
vs.
PEOPLE OF THE PHILIPPINES, respondent.
DECISION
QUISUMBING, J.:
Petitioner seeks the reversal of the Court of Appeals’ decision dated October 31,
1996, in CA-G.R. No. CR 18318, which affirmed the judgment of the Regional
Trial Court of Pasig City, Branch 167, in Criminal Case No. 86163, convicting
him of robbery, thus:
WHEREFORE, judgment is hereby rendered finding the accused S/Sgt. Elmer
Vergara GUILTY beyond peradventure of doubt of the crime of Robbery defined
and penalized under Art. 294, No. (5), in relation to Art. 295, of the Revised
Penal Code and is hereby sentenced to an indeterminate penalty of Four (4)
years of prision correcional, as minimum, to Eight (8) years and Twenty-One
(21) days of prision mayor, as maximum; to indemnify the offended party in the
sum of P106,000.00; to suffer all the accessory penalties appurtenant thereto;
and, to pay the Costs.
1
SO ORDERED.
The facts of the case are as follows:
On March 19, 1991, an information charging S/Sgt. Elmer Vergara, PC, C1C
Nicasio Custodio y Abrera, PC and Leonido Losanes y Vasquez of robbery in
band was filed by the Rizal Provincial Prosecutor’s Office with the RTC of Pasig,
Metro Manila. The information reads:
That on or about the 19th day of October, 1990, in the Municipality of
Mandaluyong, Metro Manila, Philippines, a place within the jurisdiction of this
Honorable Court, the above-named accused, conspiring and confederating
together with John Doe, whose true identity and present whereabout is still
unknown, and mutually helping and aiding one another, armed with high
powered handguns, with intent of gain, by means of violence and intimidation
employed upon the person of one Catherine F. Manalo, an employee of J & E
Manalo Construction Co., Inc., who was then aboard a private car, did then and
there wilfully, unlawfully and feloniously take, steal and divest from Catherine F.
Manalo the payroll money amounting to ₱89,000.00 belonging to J & E Manalo
Construction Company, Inc. and a gold necklace with two (2) pendants, 18K
valued at ₱17,000 belonging to Catherine F. Manalo, to the damage and
prejudice of J & E Manalo Construction Company, Inc. and Catherine F. Manalo
in the aforementioned amounts of ₱89,000.00 and ₱17, 000.00 respectively.
2
Contrary to law.
Although all the suspects were brought into police custody, petitioner’s co-
accused managed to extricate themselves from police control and remain at
large. Only petitioner was left to face the charges. On May 21, 1993, he was
arraigned. With the assistance of counsel de oficio, he pleaded "not guilty" to the
charges. Following the pre-trial conference on August 20, 1993, trial on the
merits ensued.
The prosecution relied on the positive identification made by private complainant
who testified in court. As found by the court a quo:
xxx
On October 27, 1990, during the police line-up at the San Juan Police
Station…she positively identified herein accused Elmer Vergara as the armed
man who pointed the gun at her after he approached the left side of the car and
wearing an army fatigue uniform with black hat and who got her car keys,
thereafter, she executed another statement implicating accused Elmer Vergara
as one of the four armed men who robbe[d] her.
On March 16, 1994, during the hearing of the case, she (Catherine F. Manalo)
again pointed to accused Elmer Vergara to be one of the robbery/hold-up gang
members (HULIDAP), who took the payroll money of the J & E Manalo
Construction Co., Inc., and her gold necklace, his participation being that of the
person who pointed the gun at her and got the keys to her car; she remembered
him to be about 5’6" to 5’7" in height, with dark features, chubby and heavily
3
built.
Petitioner claimed an alibi, while denying any participation in the offense. The
trial court summed up his defense as follows:
Accused Elmer Vergara lays a serious doubt on his identity as one of the
perpetrators of the robbery ‘hold-up’ in question…Claiming innocence, he
presented evidence showing that he was at some other place during the
occurrence of the robbery. His alleged presence at the Pacita Complex at San
Pedro, Laguna, being a member of the narcotic operatives engaged in a
surveillance of a suspected drug pusher, was corroborated by no less than the
team leader Captain, now Major Christopher Laxa. Major Christopher Laxa was
definite in declaring that S/Sgt. Elmer Vergara was physically present inside the
Pizza Hut restaurant at Pacita Complex, San Pedro Laguna, at about 3:00
o’clock in the afternoon of October 19, 1990 and, that he did not leave the area
from the time of their arrival at around 1:00 o’clock in the morning until 11:30
4
o’clock in the evening.…
The trial court chose to believe the prosecution and disregarded petitioner’s
alibi. On March 29, 1995, it convicted Vergara not of robbery in band as charged
in the information, however, but of robbery as defined and penalized under
Article 294 of the Revised Penal Code. As explained by the trial court:
Under Art. 295 of the Revised Penal Code a robbery shall be deemed to have
been committed by a band when more than three armed malefactors (underline
supplied) take part in its commission. The prosecution’s evidence demonstrates
that only three (3) in the group were armed, although there was another member
inside the car at the time of the commission. However, there is no indication that
the person inside the car was armed. Conceding in gratia argumenti, therefore,
that the group of the accused Elmer Vergara was composed of more than three
(3) malefactors, the evidence disclosed that only three (3) were armed, and
hence, the crime cannot be considered to have been committed by a band and
does not come within the purview of Article 296 of the Revised Penal Code,
which requires more than three (3) armed malefactors to constitute the crime of
5
robbery committed by a band.
In convicting petitioner for robbery, the trial court stated:
Both the defenses of negative identification and alibi are unavailing. Contrary to
these protestations, complainant Catherine Manalo had a vivid recollection of
the identity of S/Sgt. Elmer Vergara as the person who accosted her on the left
side of the car or at the driver’s seat and who poked a gun at her neck and was
also the one who took the key from the ignition. It was a clear day, 3:00 o’clock
in the afternoon, and the probability of a poor recollection is nil. Catherine
Manalo was able to see Sgt. Elmer Vergara while on board the Gallant (sic)
Sigma Car when it was trailing her car and also at the time it was passing her
car until her path was blocked and the three (3) armed malefactors
disembarked. She had sufficient time to recollect the faces of the persons who
approached the car and their respective positions. There is no reason to doubt
her unerring testimony that she was able to positively remember and then later
on identified the robbers. Between the positive declaration of Catherine Manalo
and the denial of accused Elmer Vergara, the former deserves more credence,
notwithstanding minor inaccuracies as to the height and weight and styling of the
hair of accused Elmer Vergara.
xxx
Conceding the fact that accused Elmer Vergara was in San Pedro, Laguna, it is
not physically impossible for him to have gone to Pasig, Metro Manila,
considering that he had an available means of transportation. The distance
between San Pedro, Laguna where the accused claimed he was at the time the
robbery took place, and Pasig, Metro Manila, where the crime was committed, is
less than an hour drive by car and can easily be reached by one who, like the
6
accused Elmer Vergara, had a car available to him.
Aggrieved by his conviction, Vergara elevated the case to the Court of Appeals,
docketed as CA-G.R. CR No. 18318, on the sole issue of whether or not
petitioner committed the crime charged against him. The appeal was anchored
on two grounds: (1) the alleged dubious identification of Vergara by the private
complainant, and (2) failure of the trial court to appreciate Vergara’s alibi that he
was on an intelligence mission in San Pedro, Laguna at the time the alleged
robbery, specially in view of the corroboration of his alibi by his commanding
officer.
Finding no reversible error in the findings and conclusions of the trial court, the
Court of Appeals affirmed Vergara’s conviction. The appellate court said:
In the case at bench (sic), the prosecution had proven the identity of accused-
appellant beyond reasonable doubt through the testimonies of prosecution
witnesses Villanueva and Manalo. Appellant failed to controvert the testimony of
prosecution witness Villanueva that accused-appellant was pointed to by
witness Manalo out of nine (9) persons. Thus, the trial court had no reason to
consider the identification made by witness Manalo in the police station as one
that stemmed from a suggestive identification procedure used by the police.
The trial court was correct in regarding the difference in height as a minor
matter. What is vital is that the witness recognized accused in the line-up and
reiterated her identification of accused-appellant in open court. In the absence of
ill-motive on her part to testify falsely against accused-appellant, the trial court is
7
correct in giving full faith and credence to the testimony of witness Manalo.
Petitioner timely filed a motion for reconsideration, but it was denied by the
appellate court in its resolution of March 26, 1997.
Insisting on his innocence, petitioner now submits to this Court the following sole
assignment of error:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN GIVING
MORE CREDENCE TO THE TESTIMONY OF COMPLAINANT CATHERINE
MANALO THAN THE TESTIMONIES OF THE ACCUSED AND HIS WITNESS
AND CONSEQUENTLY FURTHER ERRED IN FINDING THE ACCUSED
8
GUILTY OF THE CRIME BEYOND REASONABLE DOUBT.
The issue of whether or not the guilt of the accused had been proven beyond
reasonable doubt hinges, in our view, on the credibility of witnesses presented
by the prosecution and the defense. Crucial in this regard is the identification
made by the complaining witness, Catherine Manalo, of the petitioner, Sgt.
Elmer T. Vergara, as one of the malefactors.
Petitioner vehemently insists that the contradictions in Catherine Manalo’s
testimony are not mere minor inconsistencies. According to petitioner, while
private complainant below described him as around 5’6"-5’7" tall, weighing about
160-165 lbs., and sporting a military haircut; in truth, he is only 5’3-1/2" tall, tips
the scale at less than 150 lbs., and had long hair at the time of the incident.
Given these discrepancies, petitioner insists that private complainant below
must have been referring to another person and not to him.
Basically, petitioner’s contention raises questions of facts, which traditionally fall
within the province of the trial court and the Court of Appeals. After reviewing the
records of this case, we find no reason to disturb the assessment of the trial
court of all the pieces of evidence submitted before it, particularly as its findings
and conclusions had been affirmed by the appellate court.
In this case, petitioner has been convicted on the basis of the positive
identification made by private complainant below. As the Court of Appeals
stressed, petitioner was categorically identified by the private complainant not
just once, but twice, as one of the armed men who robbed her. The first time
was during the police line-up of nine (9) persons on October 27, 1990 and the
second time was during her testimony in open court. The records show that
private complainant had no motive to falsely testify against petitioner. We agree
with the lower courts that the discrepancies in the private complainant’s
description are not decisive. Her description was based on visual estimates,
which cannot be expected to be perfect. What is decisive is that petitioner was
positively and categorically identified as one of the robbers, not just once but
twice, by private complainant, Catherine Manalo. Her recollection of his
description might suffer from imperfection regarding his height, weight and
personal appearance. But we note less. Jurisprudence recognizes that victims of
crime have a penchant for seeing the faces and features of their attackers, and
9 (sic) October 19, 1990.
remembering them. That some variance as to petitioner’s height and weight
might exist in her recollection, in comparison to his statistical measurement does
not destroy her credibility. That the trial court found this variance inconsequential
does not render its findings on the credibility of witnesses erroneous. Such
findings are accorded great respect and will be sustained by the appellate courts
unless the trial court overlooked, misunderstood, or misapplied some facts or
circumstances of weight and substance which could alter the decision or affect
10
the result of the case. Here, the important thing is that complaining witness
Catherine Manalo identified the petitioner as one of the perpetrators of the
robbery twice, without any presumptions or suggestion from the police at the
line-up or the court at the trial.
Petitioner also argues that the prosecution failed to contradict his alibi. He
submits that the prosecution failed to prove that he had a car available to him, or
that he drove one from San Pedro, Laguna to Pasig, Metro Manila. Petitioner
further insists that the trial court’s finding that the place where the crime was
committed is less than an hour’s drive by car and can easily be reached by one
who, like petitioner, had a car available to him, is erroneous and unsupported by
the evidence on record.
Judicial notice could be taken of the travel time by car from San Pedro, Laguna
to Pasig City, Metro Manila, because it is capable of unquestionable
demonstration, and nowadays is already of public knowledge, especially to
11
commuters. We find no error in the trial court’s finding that it was not
impossible for petitioner to be at the scene of the crime, despite his alibi that he
was engaged in intelligence work in San Pablo Laguna that same afternoon of
October 19, 1990.
For alibi to prosper, it would not be enough for the accused to prove that he was
elsewhere when the crime was committed. He must further demonstrate that it
would have been physically impossible for him to have been at the scene of the
12
crime at the time of its commission. It is essential that credible and tangible
proof of physical impossibility for the accused to be at the scene of the crime be
13
presented to establish an acceptable alibi. Petitioner failed to meet this test.
While petitioner could have been working as intelligence agent in San Pedro,
Laguna from October 19 –21, 1990, contrary to his claim, it was not physically
impossible for him to have been in Pasig City, Metro Manila on the day of the
commission of the crime.
Petitioner’s insistence that he had no vehicle available to him is not supported
by the testimony of his own commanding officer who testified in petitioner’s
defense, to wit:
FISCAL: CROSS EXAMINATION:
Q: Mr. Witness, what mode of transportation did you take in going to Laguna in
A: We used cars.
Q: What vehicle?
A: Toyota Corona ’78 model and a Galant, old model.
Q: And in what particular vehicle did you yourself used?
A: Toyota Corona and another car as a back-up vehicle.
xxx
Q: Who arrived ahead, your car or the car of the accused?
A: We arrived together because we traveled not far with each other, we
maintained the distance of three to five meters, ma’m.
Q: How many were you?
A: Normally, up to nine members of the team, but in that operation I think, seven
or six members, ma’m.
xxx
Q: Who were the companions of Vergara where he was riding?
A: It was Sgt. San Jose who was driving the car, together with Sgt. Magno and
Sgt. Rubi.
Q: How about you, who were your companions?
A: I was with the other car, with a civilian driver, and I cannot recall anymore
14
whom I was with at the time.
Nor was his commanding officer’s corroborative testimony of much help in
sustaining petitioner’s alibi, as shown by the following:
FISCAL:
What is your basis that Vergara was with you at about 3:00 in the afternoon of
October 19, 1990?
A: What do you mean basis? His physical presence in the area is my basis,
ma’m, that he was there.
Q: Do you keep an attendance record or attendance book of the members of the
team?
A: We do not normally do it once we left for an operation, we believe it is not
necessary to account every minute every hour of the operation, so long as we
are in the area, target area and every body (sic) is posted on our designated
position, as soon as the signal is already given then that’s the time we will
respond or arrest the guy, but I can say that Sgt. Vergara never left the place
until the 21st of October, he was there in Pacita Complex, ma’m.
Q: In other cases where you conducted surveillance do you maintain a logbook?
A: The log book is filled up only, I mean we do the logging prior and after the
operation, that’s the time we placed the preparations or extent of our operation,
that’s the time we entered this in the log book and when we returned from the
operation, we also registered about the result of the operation.
xxx
Q: You do not likewise keep a call or make a roll call or keep attendance record?
A: It is automatic ma’m, everytime, during the operation we see to it that all the
persons were in the area at the time we registered ourselves in the logbook.
Q: In your team, who in particular is assigned to keep track of the attendance?
A: Being the team leader, I am the one in charge to keep the movements of
every members (sic) of the team, but when I left on 19th October proceeding to
Makati, I specifically gave instructions to maintain the operation and see to it that
they have new informations (sic) or new development of the case they have to
call me by radio so that I can come back in the area, that was the instruction to
the assistant team leader whenever I left the area.
Q: So I understand that you do not go with the members of the team during the
whole period or duration of the surveillance.
A: Sometimes, ma’m, there are instances. In that particular instance I left my
men at about 1130 in the evening of 19th October, I left my team and back again
in the early morning of 20 October.
15
There were far too many glaring lapses in the testimony of petitioner’s
corroborative witness for petitioner’s alibi to be given much weight, thus:
Q: And what was that particular mission in San Pedro, Laguna on October 19,
1990?
A: We were supposed to conduct a buy-bust operation with the aid of our
informant, an errand boy of the subject pusher.
Q: Do you know the name of that informant?
A: I cannot recall.
xxx
Q: And in what particular place in Laguna was this suppose(d) surveillance that
you will conduct?
A: I cannot recall the name of the street but I know the place, but the street identification of the petitioner by a credible witness who has no motive to testify
20
name and the exact number I cannot recall. falsely.

xxx WHEREFORE, the instant petition is hereby DENIED. The decision of the Court
of Appeals in CA-G.R. No. CR 18318 is hereby AFFIRMED. Costs against the
Q: What place? petitioner.

A: I cannot recall. SO ORDERED.

Q: What is the number?

A: I cannot recall.

Q: Who was the subject?

A: It was a certain alias German, ma’m.

xxx

COURT:

Is a certain Nicasio Custodio y Abrera a member of your team?

A: I think during that time.

xxx

COURT:

On October 19, 1990, will you recall if he was with you?

16
A: I cannot recall, your honor.

In the case of alibi, it is elementary that the requirements of time and place be
strictly complied with by the defense, meaning that the accused must not only
show that he was somewhere else but that it was also physically impossible for
him to have been at the scene of the crime at the time it was
17
committed. 1âwphi1

In the light of private complainant’s positive identification of petitioner as the

perpetrator of the crime, the latter’s defense of bare denial and alibi must
18
necessarily fail, as her positive testimony overrides his negative testimony. Alibi
is a weak defense that becomes even weaker in the face of positive
19
identification of the accused. Further, an alibi cannot prevail over the positive
 SECOND DIVISION
G.R. No. 200751, August 17, 2015
MONICO LIGTAS, Petitioner, v. PEOPLE OF THE PHILIPPINES, Respondent.
DECISION
LEONEN, J.:
"Bakit niya babawiin ang aking saka?" tanong ni Tata Selo. "Dinaya ko na ba
siya sa partihan? Tinuso ko na ba siya? Siya ang may-ari ng lupa at kasama
lang niya ako. Hindi ba't kaya maraming nagagalit sa akin ay dahil sa ayaw kong
magpamigay ng kahit isang pinangko kung anihan?"
Hindi pa rin umaalis sa harap ng istaked si Tata Selo. Nakahawak pa rin siya sa
rehas. Nakatingin siya sa labas ngunit wala siyang sino mang tinitingnan.
"Binabawi po niya ang aking saka," sumbong ni Tata Selo. "Saan papo ako
pupunta kung wala na akong saka?"
Habang nakakapit sa rehas at nakatingin sa labas, sinasabi niyang lahat ay
kinuha na sa kanila, lahat, ay! ang lahat ay kinuha na sa kanila.
- "TataSelo" (1963) by Rogelio R. Sikat
The uncontested declaration of the Department of Agrarian Reform Adjudication
Board that Monico Ligtas was a tenant negates a finding of theft beyond
reasonable doubt. Tenants having rights to the harvest cannot be deemed to
have taken their own produce.
1 criminal case.
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court,
2
assailing the Court of Appeals Decision dated March 16, 2010 and the
3 4
Resolution dated February 2, 2012. The Court of Appeals affirmed the
5 her share to the harvest. However, he could not remember the exact amount
Decision of the Regional Trial Court finding Monico Ligtas (Ligtas) guilty beyond
6 anymore. Previously, Ligtas and Pablo Palo were workers in another land,
reasonable doubt of theft.
Ligtas was charged with the crime of theft under Article 308 of the Revised
7
Penal Code. The Information provides:chanRoblesvirtualLawlibrary
th
That on or about the 29 day of June 2000 at Sitio Lamak, Barangay San Juan,
Municipality of Sogod, Province of Southern Leyte, Philippines and within the
jurisdiction of this Honorable Court, the above-named accused, with intent of
gain, entered into the abaca plantation belonging to one Anecita Pacate, and
once inside the plantation, did then and there willfully, unlawfully and feloniously
harvested 1,000 kilos of abaca fibers, valued at Php29,000.00 at Php29.00 per
kilo, without the consent of said owner, Anecita Pacate, to her damage and
prejudice in the aforestated amount of Twenty Nine Thousand Pesos
(Php29,000.00), Philippine currency.
8
CONTRARY TO LAW. ChanRoblesVirtualawlibrary
9
Ligtas pleaded not guilty.
The prosecution presented five (5) witnesses during trial: Efren Cabero
(Cabero), Modesto Cipres (Cipres), Anecita Pacate, SPO2 Enrique Villaruel, and
Ernesto Pacate.
10
According to the prosecution witnesses, Anecita Pacate was the owner of an
abaca plantation situated at Sitio Lamak, Barangay San Juan, Sogod, Southern
Leyte. On June 29, 2000, Cabero, the plantation's administrator, and several
men, including Cipres, went to the plantation to harvest abaca upon Anecita
Pacate's instructions. At about 10:00 a.m., Cabero and his men were surprised
to find Ligtas harvesting abaca at the plantation. Ligtas was accompanied by
three (3) unidentified men. Allegedly, Ligtas threatened that there would be loss
of life if they persisted in harvesting the abaca. Cabero reported the incident to
11
Anecita Pacate and the police.
On July 2, 2000, Cabero and Cipres went back to the plantation and conducted
a survey on the condition of the plantation. They found that 1,000 kilos of abaca,
12
valued at P28.00 per kilo, were harvested by Ligtas.
On July 3, 2000, Ligtas and Anecita Pacate confronted each other before the
13
Sogod Police Station. Ligtas admitted to harvesting the abaca but claimed that
14
he was the plantation owner.
The defense presented three (3) witnesses during trial: Ligtas; Pablo Palo, his
15
neighbor; and Delia Ligtas, his wife. According to Ligtas, he had been a tenant
16
of Anecita Pacate and her late husband, Andres Pacate since 1993. Andres
Pacate installed him as tenant of the 1.5 to two hectares of land involved in the
17
18
Ligtas allegedly "made his first harvest in 1997." He then gave Anecita Pacate
19
20
21
around 15 hectares, owned by Anecita Pacate and Andres Pacate.
Ligtas alleged that on June 28, 2000, Anecita Pacate sent workers to harvest
abaca from the land he cultivated. Ligtas prevented the men from harvesting the
22
abaca since he was the rightful tenant of the land.
Furthermore, Ligtas denied harvesting abaca at the plantation on June 29, 2000.
He claimed that he was with Cabero and Cipres attending a barangay fiesta at
Sitio Hubasan, San Juan, Sogod, Southern Leyte, when the alleged harvesting
23
happened.
Meanwhile, Ligtas filed a Complaint before the Department of Agrarian Reform
Adjudication Board (DARAB) of Sogod, Southern Leyte for Maintenance of
24
Peaceful Possession on November 21, 2000. On January 22, 2002, the
25
DARAB rendered the Decision ruling that Ligtas was a bona fide tenant of the
26
land.
While records are bereft as to when the DARAB Decision was formally offered
as evidence before the trial court, records are clear that the DARAB Decision
27 28
was considered by both the trial court and Court of Appeals and without any
29
objection on the part of the People of the Philippines.
In the Decision dated August 16, 2006, the Regional Trial Court held that "the
30
prosecution was able to prove the elements of theft[.]" Ligtas' "defense of
tenancy was not supported by concrete and substantial evidence nor was his
claim of harvest sharing between him and [Anecita Pacate] duly corroborated by
31
any witness." His "defense of alibi cannot prevail over the positive identification
32
... by prosecution witnesses."
The dispositive portion of the Decision reads:chanRoblesvirtualLawlibrary
WHEREFORE, finding the accused Monico Ligtas guilty beyond reasonable
doubt of the crime of Theft, this court hereby renders judgment, sentencing him:
1. To suffer the indeterminate penalty of four (4) years, nine (9) months
and ten (10) days as minimum to eight (8) years and eight (8) months as
maximum;cralawlawlibrary
2. To indemnify the offende[d] party:
a. The amount of P29,000.00 for the value of the abaca
stole[n];cralawlawlibrary
b. The amount of P5000.00 as moral damages;cralawlawlibrary
c. The amount of P10,000.00 as litigation expenses/attorney's
fees;cralawlawlibrary
The Court of Appeals declared that Ligtas' reliance on the DARAB Decision
"declaring him as a bonafide tenant of the . . . land is irrelevant in the case at
37
bar":
Jurisprudence is replete with cases declaring that "findings of or certifications
issued by the Secretary of Agrarian Reform, or his authorized representative, in
a given locality concerning the presence or absence of a tenancy relationship
between the contending parties, are merely preliminary or provisional and are
38
not binding upon the courts.["] ChanRoblesVirtualawlibrary
As to the ownership of the land, the Court of Appeals held that Ligtas had taken
conflicting positions. While he claimed to be a legitimate tenant, Ligtas also
assailed Anecita Pacate's title over the land. Under Rule 131, Section 2 of the
Rules of Court, a tenant cannot deny the title of his or her landlord at the time of
39
the commencement of the tenancy relation.
The Court of Appeals remained unconvinced as to Ligtas' allegations on
ownership. "He claims that the parcel of land owned by [Anecita Pacate] is
different from the subject abaca land. However, such assertion was based
merely on the testimony of the municipal assessor, not an expert competent to
40
identify parcels of land."
More importantly, the Court of Appeals ruled that Ligtas committed theft by
41
harvesting abaca from Anecita Pacate's plantation. Ligtas had constructive
42
possession of the subject of the theft without the owner's consent. "The subject
of the crime need not be carried away or actually taken out from the land in
43
order to consummate the crime of theft."
Furthermore, Ligtas' argument that the abaca did not constitute as personal
property under the meaning of Article 308 of the Revised Penal Code was
44
erroneous. Following the definition of personal property, the abaca hemp was
"capable of appropriation [and] [could] be sold and carried away from one place
45
to another." The Court of Appeals affirmed the trial court's finding that about
46
1,000 kilos of abaca were already harvested. Hence, all the elements of theft
under Article 308 of the Revised Penal Code were sufficiently established by the
prosecution.

The Court of Appeals ruled that Ligtas' defense of alibi could not excuse him
47
from criminal liability. His alibi was doubtfully established. "[W]here an
3. To pay the costs. accused's alibi is established only by himself, his relatives and friends, his denial
48
of culpability should be accorded the strictest scrutiny."
33
SO ORDERED. ChanRoblesVirtualawlibrary
49
ChanRoblesVirtualawlibrary Ligtas' attack on the credibility of the witnesses did not prosper. He failed to
I show that the case was initiated only through Anecita Pacate's quest for
50
revenge or to ensure that Ligtas would be evicted from the land.
34
The Court of Appeals affirmed the ruling of the trial court. According to it, "the
35
burden to prove the existence of the tenancy relationship" belonged to Ligtas. The Court of Appeals dismissed Ligtas' appeal and affirmed the trial court's
He was not able to establish all the essential elements of a tenancy Decision finding Ligtas guilty beyond reasonable doubt of theft under Article 308
36 51
agreement. of the Revised Penal Code. The dispositive portion of the Decision
reads:chanRoblesvirtualLawlibrary
WHEREFORE, the instant Appeal is DISMISSED. Accordingly, the assailed
Decision dated . . . August 16, 2006 of the Regional Trial Court of Sogod,
Southern Leyte, Branch 39, in Criminal Case No. R-225, finding accused-
appellant Monico Ligtas guilty beyond reasonable doubt of Theft under Article
308 of the Revised Penal Code, is hereby AFFIRMED in all respects.
52
SO ORDERED. ChanRoblesVirtualawlibrary
53
Ligtas filed a Motion for Reconsideration, which the Court of Appeals denied
54
on February 2, 2012.
II
On April 4, 2012, Ligtas filed this Petition assailing the Court of Appeals
55
Decision and Resolution. This court required People of the Philippines to file its
56
Comment on the Petition within 10 days from notice.
The issues for consideration of this court are:
First, whether questions of fact may be raised in a petition for review
on certiorari under Rule 45 of the Rules of Court;cralawlawlibrary
Second, whether the DARAB Decision, finding petitioner Monico Ligtas as
tenant of the land owned by private complainant Anecita Pacate and located at
Sitio Lamak, Barangay San Juan, Sogod, Southern Leyte is conclusive or can
be taken judicial notice of in a criminal case for theft; and
Third, whether the Court of Appeals committed reversible error when it upheld
the conviction of petitioner Monico Ligtas for theft under Article 308 of the
Revised Penal Code.
The Petition is meritorious.
III
Petitioner argues that the findings of fact of both the trial court and Court of
Appeals must be revisited for being "conclusions without citation of specific
evidence on record and premised on the supposed absence of evidence on the
57
claim of petitioner [as] tenant."
58
Only questions of law are allowed in a petition for review under Rule 45 of the
59
Rules of Court. Factual findings of the Regional Trial Court are conclusive and
60
binding on this court when affirmed by the Court of Appeals. This court has
differentiated between a question of law and question of
fact:chanRoblesvirtualLawlibrary
A question of law exists when the doubt or controversy concerns the correct
application of law or jurisprudence to a certain set of facts; or when the issue
does not call for an examination of the probative value of the evidence
presented, the truth or falsehood of facts being admitted. A question of
fact exists when the doubt or difference arises as to the truth or falsehood of
facts or when the query invites calibration of the whole evidence considering
mainly the credibility of the witnesses, the existence and relevancy of specific
surrounding circumstances as well as their relation to each other and to the
61
whole, and the probability of the situation. (Emphasis
supplied)ChanRoblesVirtualawlibrary
Petitioner admits that the Petition raises substantially factual issues that are
62
beyond the scope of the Rule he seeks redress from. However, there are
exceptions to the rule that only questions of law should be the subject of a
petition for review under Rule 45:chanRoblesvirtualLawlibrary
(1) when the findings are grounded entirely on speculation, surmises or
conjectures, (2) when the inference made is manifestly mistaken, absurd or
impossible, (3) when there is grave abuse of discretion, (4) when the judgment
is based on misapprehension of facts, (5) when the findings of fact are
conflicting, (6) when in making its findings, the CA went beyond the issues of the
case, or its findings are contrary to the admissions of both the appellant and the
appellee, (7) when the CA's findings are contrary to those by the trial court, (8)
when the findings are conclusions without citation of specific evidence on which
they are based, (9) when the acts set forth in the petition as well as in the
petitioner's main and reply briefs are not disputed by the respondent, (10) when
the findings of fact are premised on the supposed absence of evidence and
contradicted by the evidence on record, or (11) when the CA manifestly
overlooked certain relevant facts not disputed by the parties, which, if properly
63
considered, would justify a different conclusion. (Emphasis supplied, citation
omitted)ChanRoblesVirtualawlibrary
This court has held before that a re-examination of the facts of the case is
justified "when certain material facts and circumstances had been overlooked by
the trial court which, if taken into account, would alter the result of the case in
that they would introduce an element of reasonable doubt which would entitle
64
the accused to acquittal."
The issue of tenancy, in that whether a person is an agricultural tenant or not, is
65
generally a question of fact. To be precise, however, the existence of a
tenancy relationship is a legal conclusion based on facts presented
66
corresponding to the statutory elements of tenancy.
The Court of Appeals committed reversible error in its assailed Decision when it
held that all the essential elements of the crime of theft were duly proven by the
prosecution despite petitioner having been pronounced a bona fide tenant of the
67
land from which he allegedly stole. A review of the records of the case is, thus,
proper to arrive at a just and equitable resolution.
IV
Petitioner claims that private complainant's filing of criminal charges was
68
motivated by ill will and revenge. The charges were designed to remove
69
petitioner from the land he has legitimately occupied as tenant. Telling is the
fact that petitioner filed his Complaint before the DARAB on November 21, 2000,
 70
while the Information for Theft was filed on December 8, 2000.
Petitioner argues that he has sufficiently established his status as private
71
complainant's tenant. The DARAB Decision is entitled to respect, even finality,
as the Department of Agrarian Reform is the administrative agency vested with
primary jurisdiction and has acquired expertise on matters relating to tenancy
72
relationship.
73
The findings of the DARAB were also supported by substantial evidence. To
require petitioner to prove tenancy relationship through evidence other than the
DARAB Decision and the testimonies of the witnesses is absurd and goes
74
beyond the required quantum of evidence, which is substantial evidence.
Also, according to petitioner, the DARAB Decision has attained finality since
private complainant did not file an appeal. The DARAB's finding as to the
75
parties' tenancy relationship constitutes as res judicata.
On the other hand, respondent argues that the Court of Appeals correctly
76
disregarded the DARAB Decision. The trial court could not have taken judicial
notice of the DARAB Decision:chanRoblesvirtualLawlibrary
While the DARAB . . . ruled that petitioner is a bonafide tenant of Pacate, courts
are not authorized to take judicial notice of the contents of the records of other
cases even when such cases have been tried or are pending in the same court,
and notwithstanding the fact that both cases may have been heard or are
77
actually pending before the same judge. (Citation
omitted)ChanRoblesVirtualawlibrary
Moreover, according to respondent, petitioner invokes conflicting defenses: that
there is a legitimate tenancy relationship between him and private complainant
78
and that he did not take the abaca hemp. Nevertheless, respondent maintains
that petitioner failed to prove all the essential elements of a tenancy relationship
79
between him and private complainant. Private complainant did not consent to
80
the alleged tenancy relationship. Petitioner also failed to provide evidence as
81
to any sharing of harvest between the parties.
We hold that a DARAB decision on the existence of a tenancy relationship is
conclusive and binding on courts if supported by substantial evidence.
Generally, decisions in administrative cases are not binding on criminal
proceedings. This court has ruled in a number of cases
that:chanRoblesvirtualLawlibrary
It is indeed a fundamental principle of administrative law that administrative
cases are independent from criminal actions for the same act or omission. Thus,
an absolution from a criminal charge is not a bar to an administrative
prosecution, or vice versa. One thing is administrative liability; quite another
thing is the criminal liability for the same act.
....
Thus, considering the difference in the quantum of evidence, as well as the
procedure followed and the sanctions imposed in criminal and administrative
proceedings, the findings and conclusions in one should not necessarily be
binding on the other. Notably, the evidence presented in the administrative case
may not necessarily be the same evidence to be presented in the criminal
82
cases. (Emphasis supplied, citations omitted)ChanRoblesVirtualawlibrary
However, this case does not involve an administrative charge stemming from
the same set of facts involved in a criminal proceeding. This is not a case where
one act results in both criminal and administrative liability. DARAB Case No.
VIII-319-SL-2000 involves a determination of whether there exists a tenancy
relationship between petitioner and private complainant, while Criminal Case
No. R-225 involves determination of whether petitioner committed theft.
However, the tenancy relationship is a factor in determining whether all the
elements of theft were proven by the prosecution.
In its Decision dated January 22, 2002, the DARAB
found:chanRoblesvirtualLawlibrary
All the necessary requisites in order to establish tenancy relationship as required
in the above-quoted Supreme Court ruling, has been established by the
evidence submitted by plaintiff; And these evidences were not controverted by
any evidence submitted by the respondent.
In fine, this board found plaintiff a bonafide tenant of the land in question and as
such is entitled to a security of tenure, in which case he shall not be
dispossessed of his holdings by the landowner except for any of the causes
provided by law and only after the same has been proved before, and the
dispossession is authorized by the Court and in the judgment that is final and
83
executory[.] (Citations omitted)ChanRoblesVirtualawlibrary
The dispositive portion of the DARAB Decision
provides:chanRoblesvirtualLawlibrary
WHEREFORE, premises being considered, judgment is hereby rendered,
finding Monico Ligtas a bonafide tenant of the land subject in this case and well
described in paragraph three (3) in the complaint, and ordering as follows, to wit:
1. The respondent and all other persons acting for and in her behalf to
maintain plaintiff in the peaceful possession of the land in
dispute;cralawlawlibrary
2. The MARO of Sogod, Southern Leyte, and concurrently the cluster
Manager of Sogod Bay DAR Cluster to call the parties and assist them
in the execution of a leasehold contract covering the land in dispute, and
for the parties to respect and obey such call of the said MARO in
compliance with the legal mandate.
3. Ordering the respondent to pay plaintiff the amount of Five Thousand
(P5,000.00) Pesos representing the expenses incurred by plaintiff in
vindicating his right and other actual expenses incurred in this litigation.
Other relief sought are hereby ordered dismissed for lack of evidence.
No cost.
84
SO DECIDED. ChanRoblesVirtualawlibrary
Private complainant did not appeal the DARAB's findings.
Findings of fact of administrative agencies in the exercise of their quasi-judicial
85
powers are entitled to respect if supported by substantial evidence. This court
is not tasked to weigh again "the evidence submitted before the administrative
86
body and to substitute its own judgment [as to] the sufficiency of evidence."
V In administrative law, a quasi-judicial proceeding involves (a) taking and
The DARAB is the quasi-judicial tribunal that has the primary jurisdiction to
determine whether there is a tenancy relationship between adverse
87
parties. This court has held that "judicial determinations [of the a DARAB] have
the same binding effect as judgments and orders of a regular judicial
88
body." Disputes under the jurisdiction of the DARAB include controversies
relating to:chanRoblesvirtualLawlibrary
tenurial arrangements, whether leasehold, tenancy, stewardship or otherwise,
over lands devoted to agriculture, including disputes concerning farmworkers
associations or representation of persons in negotiating, fixing, maintaining,
changing or seeking to arrange terms or conditions of such tenurial
89
arrangements. ChanRoblesVirtualawlibrary
90
In Salazar v. De Leon, this court upheld the Department of Agrarian Reform's
primary jurisdiction over agrarian disputes, which includes the relationship
91
between landowners and tenants. The DARAB Decision is conclusive and
92
binding on courts when supported by substantial evidence. This court ruled
that administrative res judicata exists in that case:chanRoblesvirtualLawlibrary
Significantly, respondent did not appeal the Decision dated 17 November 1995
of the DARAB in DARAB Case # II-380-ISA'94; consequently, the same has
attained finality and constitutes res judicata on the issue of petitioner's status as
a tenant of respondent.
Res judicata is a concept applied in the review of lower court decisions in
accordance with the hierarchy of courts. But jurisprudence has also recognized
the rule of administrative res judicata: "The rule which forbids the reopening of a
matter once judicially determined by competent authority applies as well to the
judicial and quasi-judicial facts of public, executive or administrative officers and
boards acting within their jurisdiction as to the judgments of courts having
general judicial powers. It has been declared that whenever final adjudication of
persons invested with power to decide on the property and rights of the citizen is
examinable by the Supreme Court, upon a writ of error or a certiorari , such final
adjudication may be pleaded as res judicata." To be sure, early jurisprudence
was already mindful that the doctrine of res judicata cannot be said to apply
exclusively to decisions rendered by what are usually understood as courts
without unreasonably circumscribing the scope thereof; and that the more
equitable attitude is to allow extension of the defense to decisions of bodies
93
upon whom judicial powers have been conferred. (Emphasis supplied,
citations omitted)ChanRoblesVirtualawlibrary
94
In Encinas v. Agustin, Jr., this court clarified that res judicata applies only to
decisions rendered by agencies in judicial or quasi-judicial proceedings and not
to purely administrative proceedings:chanRoblesvirtualLawlibrary
The CA was correct in ruling that the doctrine of res judicata applies only to
judicial or quasi-judicial proceedings, and not to the exercise of administrative
powers. Administrative powers here refer to those purely administrative in
nature, as opposed to administrative proceedings that take on a quasi-judicial
character.
evaluating evidence; (b) determining facts based upon the evidence presented;
and (c) rendering an order or decision supported by the facts proved. The
exercise of quasi-judicial functions involves a determination, with respect to the
matter in controversy, of what the law is; what the legal rights and obligations of
the contending parties are; and based thereon and the facts obtaining, the
95
adjudication of the respective rights and obligations of the parties. (Citations
omitted)ChanRoblesVirtualawlibrary
We find it necessary to clarify the two concepts of res judicata: bar by prior
judgment and conclusiveness of judgment. In Social Security Commission v.
96
Rizal Poultry and Livestock Association, Inc., et al., this court discussed and
differentiated the two concepts of res judicata:chanRoblesvirtualLawlibrary
Res judicata embraces two concepts: (1) bar by prior judgment as enunciated in
Rule 39, Section 47(b) of the Rules of Civil Procedure; and (2) conclusiveness of
judgment in Rule 39, Section 47(c).
There is "bar by prior judgment" when, as between the first case where the
judgment was rendered and the second case that is sought to be barred, there
is identity of parties, subject matter, and causes of action. In this instance, the
judgment in the first case constitutes an absolute bar to the second action.
But where there is identity of parties in the first and second cases, but no identity
of causes of action, the first judgment is conclusive only as to those matters
actually and directly controverted and determined and not as to matters merely
involved therein. This is the concept of res judicata known as "conclusiveness of
judgment." Stated differently, any right, fact or matter in issue directly
adjudicated or necessarily involved in the determination of an action before a
competent court in which judgment is rendered on the merits is conclusively
settled by the judgment therein and cannot again be litigated between the
parties and their privies, whether or not the claim, demand, purpose, or subject
matter of the two actions is the same.
Thus, if a particular point or question is in issue in the second action, and the
judgment will depend on the determination of that particular point or question, a
former judgment between the same parties or their privies will be final and
conclusive in the second if that same point or question was in issue and
adjudicated in the first suit. Identity of cause of action is not required but merely
identity of issue.
The elements of res judicata are: (1) the judgment sought to bar the new action
must be final; (2) the decision must have been rendered by a court having
jurisdiction over the subject matter and the parties; (3) the disposition of the
case must be a judgment on the merits; and (4) there must be as between the
first and second action, identity of parties, subject matter, and causes of
action. Should identity of parties, subject matter, and causes of action be shown
in the two cases, then res judicata in its aspect as a "bar by prior judgment"
would apply. If as between the two cases, only identity of parties can be shown,
but not identical causes of action, then res judicata as "conclusiveness of
97
judgment" applies. (Emphasis supplied, citations
omitted)ChanRoblesVirtualawlibrary
98
In Martillano v. Court of Appeals, the DARAB Decision finding for the existence
of a tenancy relationship between the parties was declared by this court as
99 100
conclusive on the parties. As in this case, the DARAB Decision in Martillano
101
attained finality when the landowner did not appeal the Decision. This court
ruled that the doctrine of res judicata applies:chanRoblesvirtualLawlibrary
Under the afore-cited sections of RA 6657, the Department of Agrarian Reform
is empowered, through its adjudicating arm the regional and provincial
adjudication boards, to resolve agrarian disputes and controversies on all
matters pertaining to the implementation of the agrarian law. Section 51 thereof
provides that the decision of the DARAB attains finality after the lapse of fifteen
(15) days and no appeal was interposed therefrom by any of the parties.
In the instant case, the determination of the DARAB in DARAB Case No. 062-
Bul '89, there being no appeal interposed therefrom, attained finality.
Accordingly, the matter regarding the status of Martillano as a tenant farmer and
the validity of the CLT and Emancipation Patents issued in his favor are settled
and no longer open to doubt and controversy.
....
We recall that DARAB Case 062-Bul '89 was for the cancellation of petitioner's
CLT and Emancipation patents. The same effect is sought with the institution of
DARAB Case No. 512-Bul '94, which is an action to withdraw and/or cancel
administratively the CLT and Emancipation Patents issued to petitioner.
Considering that DARAB Case 062-Bul '89 has attained finality prior to the filing
of DARAB Case No. 512-Bul '94, no strenuous legal interpretation is necessary
to understand that the issues raised in the prior case, i.e., DARAB Case No.
062-Bul '89, which have been resolved with finality, may not be litigated anew.
The instant case is complicated by the failure of the complainant to include
Martillano as party-defendant in the case before the adjudication board and the
DARAB, although he was finally impleaded on appeal before the Court of
Appeals.
The belated inclusion of Martillano as respondent in the petition will not affect
the applicability of the doctrine of bar by prior judgment. What is decisive is that
the issues which have already been litigated in a final and executory judgment
precludes, by the principle of bar by prior judgment, an aspect of the doctrine of
res judicata, and even under the doctrine of "law of the case," the re-litigation of
the same issue in another action. It is well established that when a right or fact
has been judicially tried and determined by a court of competent jurisdiction, so
long as it remains unreversed, it should be conclusive upon the parties and
those in privity with them. The dictum therein laid down became the law of the
case and what was once irrevocably established as the controlling legal rule or
decision, continues to be binding between the same parties as long as the facts
on which the decision was predicated, continue to be the facts of the case
before the court. Hence, the binding effect and enforceability of that dictum can
no longer be resurrected anew since said issue had already been resolved and
finally laid to rest, if not by the principle of res judicata, at least by
102
conclusiveness of judgment. (Emphasis supplied, citations
omitted)ChanRoblesVirtualawlibrary
103
In Co v. People, et al., this court held that "the doctrine of conclusiveness of
104
judgment also applies in criminal cases." Petitioner in that case was charged
with the violation of Republic Act No. 1161, as amended, for the alleged non-
105
remittance of Social Security System contributions. This court upheld the
findings of the National Labor Relations Commission in a separate case, which
declared the absence of an employer-employee relationship and had attained
106
finality. This court held that:chanRoblesvirtualLawlibrary
The reasons for establishing the principle of "collusiveness of judgment" are
founded on sound public policy. ... It is allowable to reason back from a
judgment to the basis on which it stands, upon the obvious principle that where
a conclusion is indisputable, and could have been drawn only from certain
premises, the premises are equally indisputable with the conclusion. When a
fact has been once determined in the course of a judicial proceeding, and a final
judgment has been rendered in accordance therewith, it cannot be again
litigated between the same parties without virtually impeaching the correctness
of the former decision, which, from motives of public policy, the law does not
permit to be done.
Res judicata has two concepts. The first is bar by prior judgment under Rule 39,
Section 47 (b), and the second is conclusiveness of judgment under Rule 39,
Section 47 (c). Both concepts are founded on the principle of estoppel, and are
based on the salutary public policy against unnecessary multiplicity of suits. Like
the splitting of causes of action, res judicata is in pursuance of such policy.
Matters settled by a Court's final judgment should not be litigated upon or
invoked again. Relitigation of issues already settled merely burdens the Courts
and the taxpayers, creates uneasiness and confusion, and wastes valuable time
107
and energy that could be devoted to worthier cases. (Citations
omitted)ChanRoblesVirtualawlibrary
108
In VHJ Construction and Development Corporation v. Court of Appeals, this
court ruled that tenancy relationship must be duly
proven:chanRoblesvirtualLawlibrary
[A] tenancy relationship cannot be presumed. There must be evidence to prove
this allegation. The principal factor in determining whether a tenancy relationship
exists is intent. Tenancy is not a purely factual relationship dependent on what
109
the alleged tenant does upon the land. It is also a legal relationship. (Citation
omitted)ChanRoblesVirtualawlibrary
The DARAB, in DARAB Case No. VIII-319-SL-2000, held that all the essential
110
elements of a tenancy relationship were proven by petitioner. It found that
there was substantial evidence to support petitioner's claim as tenant of the
111
land. In rendering the Decision, the DARAB examined pleadings and
112
affidavits of both petitioner and private complainant. It was convinced by
petitioner's evidence, which consisted of sworn statements of petitioner's
witnesses that petitioner was installed as tenant by Andres Pacate sometime in
113
1993. Petitioner and Andres Pacate had an agreement to share the produce
114
after harvest. However, Andres Pacate had died before the first
115
harvest. Petitioner then gave the landowner's share to private complainant,
and had done so every harvest until he was disturbed in his cultivation of the
116
land on June 29, 2000.
We emphasize that after filing her Answer before the DARAB, private
complainant failed to heed the Notices sent to her and refused to attend the
117
scheduled hearings. The DARAB even quoted in its Decision the reason
offered by private complainant's counsel in his Motion to Withdraw as
counsel:chanRoblesvirtualLawlibrary
That as early as the preliminary hearings of the case, the respondent has
already shown her intention not to participate the proceedings of the case for
reasons known only to her;cralawlawlibrary
That despite the advi[c]e of the undersigned, respondent stood pat with her
decision not to participate in the proceedings of the case;cralawlawlibrary
That in view of this predicament, the undersigned can do nothing except to
withdraw as he is now withdrawing as counsel for the respondent of the above-
118
entitled casef.] ChanRoblesVirtualawlibrary
It is true that trial courts are not mandated to take judicial notice of decisions of
other courts or even records of other cases that have been tried or are pending
119
in the same court or before the same judge. In declaring that the DARAB's
findings on the tenancy relationship between petitioner and private complainant
120
are immaterial to the criminal case for theft, the Court of Appeals relied
121
on Rollo, et al. v. Leal Realty Centrum Co., Inc., et al.
In Rollo, petitioners, who were farmers of a 21-hectare agricultural land in Tarlac
that was principally devoted to sugar and rice and who claim the rights of their
predecessors-in-interest, filed separate Complaints before the Provincial
Adjudication Board of Region III in Tarlac, Tarlac. They claimed that when the
registered owner of the land, Josefina Roxas Omaña, sold the land to
respondents, respondents were aware of the tenancy relationship between
122
petitioners and Josefina Roxas Omaña.
Respondents offered a compensation package to petitioners in exchange for the
renunciation of their tenancy rights under the Comprehensive Agrarian Reform
Law. However, they failed to comply with their obligations under the terms of the
123
compensation package. Petitioners then filed a series of Complaints before
the DARAB. The cases were consolidated and resolved by the Provincial
124
Adjudicator.
The Provincial Adjudicator ruled, among other things, that "there was no tenancy
125
relationship [that] existed between the parties." He found that petitioners and
their predecessors-in-interest were mere hired laborers, not tenants. Tenancy
126
cannot be presumed from respondents' offer of a compensation package.
On appeal, the DARAB reversed the Decision of the Provincial Adjudicator. It
found that there was an implied tenancy between the parties. Petitioners were
deemed tenants of the land for more than 30 years. They were entitled to
127
security of tenure.
The Court of Appeals reversed the DARAB Decision and reinstated the
Provincial Adjudicator's Decision. It held that there was no substantial evidence
to prove that all the requisites of tenancy relationship existed. However, despite
the lack of tenancy relationship, the compensation package agreement must be
128
upheld.
129
This court affirmed the Court of Appeals Decision. It held that petitioners
failed to overcome the burden of proving the existence of a tenancy
relationship:chanRoblesvirtualLawlibrary
At the outset, the parties do not appear to be the landowner and the tenants.
While it appears that there was personal cultivation by petitioners and their
predecessors-in-interest of the subject landholding, what was established was
that petitioners' claim of tenancy was founded on the self-serving testimony of
petitioner Rodolfo Rollo that his predecessors-in-interest had been in
possession of the landholding for more than 30 years and had engaged in a "50-
50" sharing scheme with JOSEFINA and JOSEFINA's grandmother, the
previous owner thereof. Self-serving statements in pleadings are inadequate;
proof must be adduced. Such claims do not suffice absent concrete evidence to
support them. The burden rests on the shoulders of petitioners to prove their
affirmative allegation of tenancy, which burden they failed to discharge with
substantial evidence. Such a juridical tie must be aptly shown. Simply put, he
who alleges the affirmative of the issue has the burden of proof, and from the
plaintiff in a civil case, the burden of proof never parts. The same rule applies to
administrative cases. In fact, if the complainant, upon whom rests the burden of
proving his cause of action, fails to show in a satisfactory manner the facts upon
which he bases his claim, the respondent is under no obligation to prove his
exception or defense....
Neither was it shown to the satisfaction of this Court that there existed a sharing
of harvests in the context of a tenancy relationship between petitioners and/or
their predecessors-in-interest and JOSEFINA. Jurisprudence is illuminating to
the effect that to prove such sharing of harvests, a receipt or any other evidence
must be presented. None was shown. No receipts were presented as
testaments to the claimed sharing of harvests. The only evidence submitted to
establish the purported sharing of harvests was the testimony of petitioner
Rodolfo Rollo. The sharing arrangement cannot be deemed to have existed on
the basis alone of petitioner Rodolfo Rollo's claim. It is self-serving and is
without evidentiary value. Self-serving statements are deemed inadequate;
competent proof must be adduced. If at all, the fact alone of sharing is not
sufficient to establish a tenancy relationship.
We also sustain the conclusion reached by the Provincial Adjudicator and the
Court of Appeals that the testimony of Araceli Pascua, an employee of the DAR
in Victoria, Tarlac, that the subject landholding was tenanted cannot overcome
substantial evidence to the contrary. To prove the alleged tenancy no reliance
may be made upon the said public officer's testimony. What cannot be ignored
is the precedent ruling of this Court that the findings of or certifications issued by
the Secretary of Agrarian Reform, or his authorized representative, in a given
locality concerning the presence or absence of a tenancy relationship between
the contending parties, are merely preliminary or provisional and are not binding
upon the courts. This ruling holds with greater effect in the instant case in light of
the fact that petitioners, as herein shown, were not able to prove the presence of
130
all the indispensable elements of tenancy. (Emphasis supplied, citations
omitted)ChanRoblesVirtualawlibrary
Thus, in Rollo, this court did not categorically hold that the DARAB's findings
were merely provisional and, thus, not binding on courts. What was deemed as
a preliminary determination of tenancy was the testimony of the Department of
Agrarian Reform employee stating that the land involved was tenanted. Further,
the tribunals had conflicting findings on whether petitioners were bona fide
tenants.
In this case, records are bereft as to whether private complainant appealed the
DARAB Decision. Thus, it is presumed that the Decision has long lapsed into
131
finality. It is also established that private complainant participated in the initial
132
stages of the DARAB proceedings. Therefore, the issue of the existence of a
tenancy relationship is final as between the parties. We cannot collaterally
review the DARAB's findings at this stage. The existence of the final Decision
that tenancy exists creates serious doubts as to the guilt of the accused.
VI
According to petitioner, the elements of theft under Article 308 of the Revised
Penal Code were not established since he was a bona fide tenant of the
133
land. The DARAB's recognition of petitioner as a legitimate tenant necessarily
"implie[d] that he ha[d] the authority to harvest the abaca hemp from [private
134
complainant's land]." This shows that petitioner had no criminal intent.
As to the existence of another element of theft—that the taking was done
without the consent of the owner—petitioner argues that this, too, was negated
by his status as private complainant's tenant:chanRoblesvirtualLawlibrary
The purported lack of consent on the part of the private complainant as alleged
by the prosecution, is misplaced. In fact, it was even improper for Anecita
Pacate to stop or prevent petitioner from harvesting the produce of the
landholding because as tenant, petitioner is entitled to security of tenure. This
right entitled him to continue working on his landholding until the leasehold
relation is terminated or until his eviction is authorized by the DARAB in a
135
judgment that is final and executory. (Citation
omitted)ChanRoblesVirtualawlibrary
Petitioner argues that the constitutional presumption of innocence must be
upheld:chanRoblesvirtualLawlibrary
Well-settled is the rule that where "inculpatory facts and circumstances are
capable of two or more explanations, one of which is consistent with the
innocence of the accused and the other consistent with his guilt, then the
evidence does not fulfill the test of moral certainty and is not sufficient to support
a conviction." In acquitting an appellant, we are not saying that he is lily-white, or
pure as driven snow. Rather, we are declaring his innocence because the
prosecution's evidence failed to show his guilt beyond reasonable doubt. For
that is what the basic law requires. Where the evidence is insufficient to
overcome the presumption of innocence in favour of the accused, then his
136
"acquittal must follow in faithful obeisance to the fundamental law." (Citations
omitted)ChanRoblesVirtualawlibrary
The Court of Appeals erred when it affirmed the findings of the trial court finding
petitioner guilty beyond reasonable doubt of theft.
Article 308 of the Revised Penal Code provides:chanRoblesvirtualLawlibrary
ARTICLE. 308. Who are Liable for Theft. — Theft is committed by any person
who, with intent to gain but without violence against or intimidation of persons
nor force upon things, shall take personal property of another without the latter's
consent.
Theft is likewise committed by:
1. Any person who, having found lost property, shall fail to deliver the
same to the local authorities or to its owner;cralawlawlibrary
2. Any person who, after having maliciously damaged the property of
another, shall remove or make use of the fruits or object of the damage
caused by him; and
3. Any person who shall enter an enclosed estate or a field where trespass
is forbidden or which belongs to another and without the consent of its
owner, shall hunt or fish upon the same or shall gather fruits, cereals, or
other forest or farm products.
The essential elements of theft are: (1) taking of personal property; (2) the In view of petitioner's acquittal based on reasonable doubt, we find it
property taken belongs to another; (3) the taking was done without the owner's unnecessary to discuss further the other errors raised by petitioner.
consent; (4) there was intent to gain; and (5) the taking was done without
137
violence against or intimidation of the person or force upon things. WHEREFORE, the Petition is GRANTED. The Court of Appeals Decision dated
March 16, 2010 and the Resolution dated February 2, 2012
Tenants have been defined as:chanRoblesvirtualLawlibrary are REVERSED and SET ASIDE. Petitioner Monico Ligtas is ACQUITTED of
persons who — in themselves and with the aid available from within their the crime of theft under Article 308 of the Revised Penal Code. If detained, he is
immediate farm households — cultivate the land belonging to or possessed by ordered immediately RELEASED, unless he is confined for any other lawful
another, with the latter's consent, for purposes of production, sharing the cause. Any amount paid by way of a bailbond is ordered RETURNED.
produce with the landholder under the share tenancy system, or paying to the
landholder a price certain or ascertainable in produce or money or both under SO ORDERED.chanroblesvirtuallawlibrary
138
the leasehold tenancy system. (Citation omitted)ChanRoblesVirtualawlibrary
Under this definition, a tenant is entitled to the products of the land he or she
cultivates. The landowner's share in the produce depends on the agreement
between the parties. Hence, the harvesting done by the tenant is with the
landowner's consent.

The existence of the DARAB Decision adjudicating the issue of tenancy

between petitioner and private complainant negates the existence of the
element that the taking was done without the owner's consent. The DARAB
Decision implies that petitioner had legitimate authority to harvest the abaca.
The prosecution, therefore, failed to establish all the elements of theft.
139
In Pit-og v. People, this court acquitted petitioner of theft of sugarcane and
140
banana crops on the basis of reasonable doubt. The prosecution failed to
141
prove lack of criminal intent on petitioner's part. It failed to clearly identify "the
person who, as a result of a criminal act, without his knowledge and consent,
142
was wrongfully deprived of a thing belonging to him." There were doubts as to
whether the plants taken by petitioner were indeed planted on private
complainant's lot when petitioner had planted her own plants adjacent to
143
it. Thus, it was not proven beyond reasonable doubt that the property
belonged to private complainant. This court found that petitioner "took the
sugarcane and bananas believing them to be her own. That being the case, she
144
could not have had a criminal intent."

In this case, petitioner harvested the abaca, believing that he was entitled to the
produce as a legitimate tenant cultivating the land owned by private
complainant. Personal property may have been taken, but it is with the consent
of the owner.

No less than the Constitution provides that the accused shall be presumed
145
innocent of the crime until proven guilty. "[I]t is better to acquit ten guilty
146
individuals than to convict one innocent person." Thus, courts must consider
147
"[e]very circumstance against guilt and in favor of innocence[.]" Equally
settled is that "[w]here the evidence admits of two interpretations, one of which
is consistent with guilt, and the other with innocence, the accused must be given
148
the benefit of doubt and should be acquitted."

G.R. No. 215723 July 27, 2016
DOREEN GRACE PARILLA MEDINA, a.k.a. "DOREEN GRACE MEDINA
KOIKE," Petitioner
vs.
MICHIYUKI KOIKE, THE LOCAL CIVIL REGISTRAR OF QUEZON CITY,
METRO MANILA, and THE ADMINISTRATOR AND CIVIL REGISTRAR
GENERAL OF THE NATIONAL STATISTICS OFFICE, Respondents
DECISION
PERLAS-BERNABE, J.:
1 2
Assailed in this petition for review on certiorari are the Decision dated July 31,
3
2014 and the Resolution dated November 28, 2014, of the Regional Trial Court
of Quezon City, Branch 106 (RTC), in Sp. Proc. No. Q-13-72692, denying
petitioner's petition for judicial recognition of foreign divorce and declaration of
capacity to remarry pursuant to Article 26 of the Family Code.
The Facts
Petitioner Doreen Grace Parilla (Doreen), a Filipino citizen, and respondent
Michiyuki Koike (Michiyuki), a Japanese national, were married on June 14,
4
2005 in Quezon City, Philippines. Their union bore two children, Masato Koike,
who was born on January 23, 2006, and Fuka Koike who was born on April 4,
5
2007.
On June 14, 2012, Doreen and Michiyuki, pursuant to the laws of Japan, filed for
6
divorce before the Mayor of Ichinomiya City, Aichi Prefecture, Japan. They
7 24
were divorced on even date as appearing in the Divorce Certificate and the
8
same was duly recorded in the Official Family Register ofMichiyuki Koike.
Seeking to have the said Divorce Certificate annotated on her Certificate of
9
Marriage on file with the Local Civil Registrar of Quezon City, Doreen filed on
10
February 7, 2013 a petition for judicial recognition of ioreign divorce and
declaration of capacity to remarry pursuant to the second paragraph of Article 26
11
of the Family Code before the RTC, docketed as Sp. Proc. No. Q-13-72692.
12
At the hearing, no one appeared to oppose the petition. On the other hand,
Doreen presented several foreign documents, namely, "Certificate of Receiving/
13
Certificate of Acceptance of Divorce" and "Family Register of Michiyuki
14
Koike" both issued by the Mayor of Ichinomiya City and duly authenticated by
the Consul of the Republic of the Philippines for Osaka, Japan. She also
presented a certified machine copy of a document entitled "Divorce Certificate"
issued by the Consul for the Ambassador of Japan in Manila that was
authenticated by the Department of the Foreign Affairs, as well as a
15
Certification issued by the City Civil Registry Office in Manila that the original
of said divorce certificate was filed and recorded in the said Office. In addition,
photocopies of the Civil Code of Japan and their corresponding English
translation, as well as two (2) books entitled "The Civil Code of Japan 2000" 16
17
and "The Civil Code of Japan 2009" were likewise submitted as proof of the
18
existence of Japan's law on divorce.
The RTC Ruling
19
In a Decision dated July 31, 2014, the RTC denied Doreen's petition, ruling
that in an action for recognition of foreign divorce decree pursuant to Article 26
of the Family Code, the foreign divorce decree and the national law of the alien
recognizing his or her capacity to obtain a divorce must be proven in accordance
20 21
with Sections 24 and 25 of Rule 132 of the Revised Rules on Evidence. The
RTC ruled that while the divorce documents presented by Doreen were
successfully proven to be public or official records of Japan, she nonetheless fell
short of proving the national law of her husband, particularly the existence of the
law on divorce. The RTC observed that the "The Civil Code of Japan 2000" and
"The Civil Code of Japan 2009," presented were not duly authenticated by the
Philippine Consul in Japan as required by Sections 24 and 25 of the said Rules,
adding too that the testimony of Doreen relative to the applicable provisions
found therein and its effect on the matrimonial relations was insufficient since
she was not presented as a qualified expert witness nor was shown to have, at
the very least, a working knowledge of the laws of Japan, particularly those on
family relations and divorce. It likewise did not consider the said books as
22
learned treatises pursuant to Section 46, Rule 130 of the Revised Rules on
Evidence, since no expert witness on the subject matter was presented and
considering further that Philippine courts cannot take judicial notice of
23
foreignjudgments and law.
25
Doreen's motion for reconsideration was denied in a Resolution dated
November 28, 2014; hence, this petition.
The Issue Before the Court
The core issue for the Court's resolution is whether or not the RTC erred in
denying the petition for judicial recognition of foreign divorce.1âwphi1
The Court's Ruling
At the outset, it bears stressing that Philippine law does not provide for absolute
divorce; hence, our courts cannot grant it. However, Article 26 of the Family
Code - which addresses foreign marriages or mixed marriages involving a
Filipino and a foreigner - allows a Filipino spouse to contract a subsequent
marriage in case the divorce is validly obtained abroad by an alien spouse
capacitating him or her to remarry. The provision reads:
Art. 26. All marriages solemnized outside the Philippines in accordance with the
laws in force in the country where they were solemnized, and valid there as
such, shall also be valid in this country, except those prohibited under Articles
35(1), (4), (5) and (6), 36, 37 and 38.
Where a marriage between a Filipino citizen and a foreigner is validly
celebrated and a divorce is thereafter validly obtained abroad by the alien
spouse capacitating him or her to remarry, the Filipino spouse shall
likewise have capacity to remarry under Philippine law. (Emphasis supplied)
Under the above-highlighted paragraph, the law confers jurisdiction on
Philippine courts to extend the effect of a foreign divorce decree to a Filipino
spouse without undergoing trial to determine the validity of the dissolution of the
26
marriage.
27
In Corpuz v. Sta. Tomas, the Court had the occasion to rule that:
The starting point in any recognition of a foreign divorce judgment is the
acknowledgment that our courts do not take judicial notice of foreign judgments
and laws.1âwphi1 Justice Herrera explained that, as a rule, "no sovereign is
bound to give effect within its dominion to a judgment rendered by a tribunal of
another country." This means that the foreign judgment and its authenticity
must be proven as facts under our rules on evidence, together with the
alien's applicable national law to show the effect of the judgment on the
alien himself or herself. The recognition may be made in an action instituted
specifically for the purpose or in another action where a party invokes the
28
foreign decree as an integral aspect of his claim or defense. (Emphasis and
underscoring supplied; citation omitted)
29
Thus, in Garcia v. Recio, it was pointed out that in order for a divorce obtained
abroad by the alien spouse to be recognized in our jurisdiction, it must be shown
that the divorce decree is valid according to the national law of the foreigner.
Both the divorce decree and the governing personal law of the alien spouse who
30
obtained the divorce must be proven. Since our courts do not take judicial
notice of foreign laws and judgment, our law on evidence requires that both the
divorce decree and the national law of the alien must be alleged and proven
31
like any other fact.
Considering that the validity of the divorce decree between Doreen and
Michiyuki, as well as the existence of pertinent laws of Japan on the matter are
essentially factual that calls for a re-evaluation of the evidence presented before
the RTC, the issue raised in the instant appeal is obviously a question of fact
that is beyond the ambit of a Rule 45 petition for review.
Well entrenched is the rule that this Court is not a trier of facts. The resolution of
factual issues is the function of the lower courts, whose findings on these
matters are received with respect and are in fact binding subject to certain
32
exceptions. In this regard, it is settled that appeals taken from judgments or
final orders rendered by RTC in the exercise of its original jurisdiction raising
questions of fact or mixed questions of fact and law should be brought to the
33
Court of Appeals (CA) in accordance with Rule 41 of the Rules of Court.
Nonetheless, despite the procedural restrictions on Rule 45 appeals as above-
adverted, the Court may refer the case to the CA under paragraph 2, Section 6
of Rule 56 of the Rules of Court, which provides:
SEC. 6. Disposition of improper appeal. -x x x
An appeal by certiorari taken to the Supreme Court from the Regional Trial
Court submitting issues of fact may be referred to the Court of Appeals for
decision or appropriate action. The determination of the Supreme Court on
whether or not issues of fact are involved shall be final.
This, notwithstanding the express provision under Section 5 (f) thereof that an
appeal likewise "may" be dismissed when there is error irr the choice or mode of
34
appeal.
Since the said Rules denote discretion on the part of the Court to either dismiss
the appeal or refer the case to the CA, the question of fact involved in the instant
appeal and substantial ends of justice warrant that the case be referred to the
CA for further appropriate proceedings. It bears to stress that procedural rules
were intended to ensure proper administration of law and justice. The rules of
procedure ought not to be applied in a very rigid, technical sense, for they are
adopted to help secure, not override, substantial justice. A deviation from its
rigid enforcement may thus be allowed to attain its prime objective, for after all,
35
the dispensation of justice is the core reason for the existence of the courts.
WHEREFORE, in the interest of orderly procedure and substantial justice, the
case is hereby REFERRED to the Court of Appeals for appropriate action
including the reception of evidence to DETERMINE and RESOLVE the pertinent
factual issues in accordance with this Decision.
SO ORDERED.
G. R. No. 183622 February 8, 2012
MEROPE ENRIQUEZ VDA. DE CATALAN, Petitioner,
vs.
LOUELLA A. CATALAN-LEE, Respondent.
RESOLUTION
SERENO, J.:
Before us is a Petition for Review assailing the Court of Appeals (CA)
1 2
Decision and Resolution regarding the issuance of letters of administration of
the intestate estate of Orlando B. Catalan.
The facts are as follows:
Orlando B. Catalan was a naturalized American citizen. After allegedly obtaining
a divorce in the United States from his first wife, Felicitas Amor, he contracted a
second marriage with petitioner herein.
On 18 November 2004, Orlando died intestate in the Philippines.
Thereafter, on 28 February 2005, petitioner filed with the Regional Trial Court
(RTC) of Dagupan City a Petition for the issuance of letters of administration for
her appointment as administratrix of the intestate estate of Orlando. The case
was docketed as Special Proceedings (Spec. Proc.) No. 228.
On 3 March 2005, while Spec. Proc. No. 228 was pending, respondent Louella
A. Catalan-Lee, one of the children of Orlando from his first marriage, filed a
similar petition with the RTC docketed as Spec. Proc. No. 232.
The two cases were subsequently consolidated.
Petitioner prayed for the dismissal of Spec. Proc. No. 232 on the ground of litis
pendentia, considering that Spec. Proc. No. 228 covering the same estate was
already pending.
On the other hand, respondent alleged that petitioner was not considered an
interested person qualified to file a petition for the issuance of letters of
administration of the estate of Orlando. In support of her contention, respondent
alleged that a criminal case for bigamy was filed against petitioner before
Branch 54 of the RTC of Alaminos, Pangasinan, and docketed as Crim. Case
No. 2699-A.
Apparently, Felicitas Amor filed a Complaint for bigamy, alleging that petitioner
contracted a second marriage to Orlando despite having been married to one
Eusebio Bristol on 12 December 1959.
3
On 6 August 1998, the RTC had acquitted petitioner of bigamy. The trial court
ruled that since the deceased was a divorced American citizen, and since that
divorce was not recognized under Philippine jurisdiction, the marriage between
him and petitioner was not valid.
Furthermore, it took note of the action for declaration of nullity then pending
action with the trial court in Dagupan City filed by Felicitas Amor against the
deceased and petitioner. It considered the pending action to be a prejudicial
question in determining the guilt of petitioner for the crime of bigamy.
Finally, the trial court found that, in the first place, petitioner had never been
married to Eusebio Bristol.
On 26 June 2006, Branch 70 of the RTC of Burgos, Pangasinan dismissed the
Petition for the issuance of letters of administration filed by petitioner and
granted that of private respondent. Contrary to its findings in Crim. Case No.
2699-A, the RTC held that the marriage between petitioner and Eusebio Bristol
was valid and subsisting when she married Orlando. Without expounding, it
reasoned further that her acquittal in the previous bigamy case was fatal to her
cause. Thus, the trial court held that petitioner was not an interested party who
4
may file a petition for the issuance of letters of administration.
After the subsequent denial of her Motion for Reconsideration, petitioner
elevated the matter to the Court of Appeals (CA) via her Petition for Certiorari,
alleging grave abuse of discretion on the part of the RTC in dismissing her
Petition for the issuance of letters of administration.
Petitioner reiterated before the CA that the Petition filed by respondent should
have been dismissed on the ground of litis pendentia. She also insisted that,
while a petition for letters of administration may have been filed by an
"uninterested person," the defect was cured by the appearance of a real party-
in-interest. Thus, she insisted that, to determine who has a better right to
administer the decedent’s properties, the RTC should have first required the
parties to present their evidence before it ruled on the matter.
On 18 October 2007, the CA promulgated the assailed Decision. First, it held
that petitioner undertook the wrong remedy. She should have instead filed a
petition for review rather than a petition for certiorari. Nevertheless, since the
Petition for Certiorari was filed within the fifteen-day reglementary period for
filing a petition for review under Sec. 4 of Rule 43, the CA allowed the Petition
and continued to decide on the merits of the case. Thus, it ruled in this wise:
As to the issue of litis pendentia, we find it not applicable in the case. For litis
pendentia to be a ground for the dismissal of an action, there must be: (a)
identity of the parties or at least such as to represent the same interest in both
actions; (b) identity of rights asserted and relief prayed for, the relief being
founded on the same acts, and (c) the identity in the two cases should be such
that the judgment which may be rendered in one would, regardless of which
party is successful, amount to res judicata in the other. A petition for letters of
administration is a special proceeding. A special proceeding is an application or
proceeding to establish the status or right of a party, or a particular fact. And, in
contrast to an ordinary civil action, a special proceeding involves no defendant
or respondent. The only party in this kind of proceeding is the petitioner of the
applicant. Considering its nature, a subsequent petition for letters of
administration can hardly be barred by a similar pending petition involving the
estate of the same decedent unless both petitions are filed by the same person.
In the case at bar, the petitioner was not a party to the petition filed by the
private respondent, in the same manner that the latter was not made a party to
the petition filed by the former. The first element of litis pendentia is wanting.
The contention of the petitioner must perforce fail.
Moreover, to yield to the contention of the petitioner would render nugatory the
provision of the Rules requiring a petitioner for letters of administration to be an
"interested party," inasmuch as any person, for that matter, regardless of
whether he has valid interest in the estate sought to be administered, could be
appointed as administrator for as long as he files his petition ahead of any other
person, in derogation of the rights of those specifically mentioned in the order of
preference in the appointment of administrator under Rule 78, Section 6 of the
Revised Rules of Court, which provides:
xxx xxx xxx
The petitioner, armed with a marriage certificate, filed her petition for letters of
administration. As a spouse, the petitioner would have been preferred to
administer the estate of Orlando B. Catalan. However, a marriage certificate, like
any other public document, is only prima facie evidence of the facts stated
therein. The fact that the petitioner had been charged with bigamy and was
acquitted has not been disputed by the petitioner. Bigamy is an illegal
marriage committed by contracting a second or subsequent marriage before the
first marriage has been dissolved or before the absent spouse has been
declared presumptively dead by a judgment rendered in a proper
proceedings. The deduction of the trial court that the acquittal of the
petitioner in the said case negates the validity of her subsequent marriage
with Orlando B. Catalan has not been disproved by her. There was not
even an attempt from the petitioner to deny the findings of the trial
court. There is therefore no basis for us to make a contrary finding. Thus, not
being an interested party and a stranger to the estate of Orlando B. Catalan, the
dismissal of her petition for letters of administration by the trial court is in place.
xxx xxx xxx
WHEREFORE, premises considered, the petition is DISMISSED for lack of
merit. No pronouncement as to costs.
5
SO ORDERED. (Emphasis supplied)
6
Petitioner moved for a reconsideration of this Decision. She alleged that the
reasoning of the CA was illogical in stating, on the one hand, that she was
acquitted of bigamy, while, on the other hand, still holding that her marriage with
Orlando was invalid. She insists that with her acquittal of the crime of bigamy,
the marriage enjoys the presumption of validity.
On 20 June 2008, the CA denied her motion.
Hence, this Petition.
At the outset, it seems that the RTC in the special proceedings failed to
appreciate the finding of the RTC in Crim. Case No. 2699-A that petitioner was
never married to Eusebio Bristol. Thus, the trial court concluded that, because
petitioner was acquitted of bigamy, it follows that the first marriage with Bristol
still existed and was valid. By failing to take note of the findings of fact on the
nonexistence of the marriage between petitioner and Bristol, both the RTC and
CA held that petitioner was not an interested party in the estate of Orlando.
Second, it is imperative to note that at the time the bigamy case in Crim. Case
No. 2699-A was dismissed, we had already ruled that under the principles of
comity, our jurisdiction recognizes a valid divorce obtained by a spouse of
foreign nationality. This doctrine was established as early as 1985 in Van Dorn
7
v. Romillo, Jr. wherein we said:
It is true that owing to the nationality principle embodied in Article 15 of the Civil
Code, only Philippine nationals are covered by the policy against absolute
divorces[,] the same being considered contrary to our concept of public policy
and morality. However, aliens may obtain divorces abroad, which may be
recognized in the Philippines, provided they are valid according to their
national law. In this case, the divorce in Nevada released private
respondent from the marriage from the standards of American law, under
which divorce dissolves the marriage. xxx
8
We reiterated this principle in Llorente v. Court of Appeals, to wit:
In Van Dorn v. Romillo, Jr. we held that owing to the nationality principle
embodied in Article 15 of the Civil Code, only Philippine nationals are covered
by the policy against absolute divorces, the same being considered contrary to
our concept of public policy and morality. In the same case, the Court ruled
that aliens may obtain divorces abroad, provided they are valid according
to their national law.
Citing this landmark case, the Court held in Quita v. Court of Appeals, that
once proven that respondent was no longer a Filipino citizen when he
obtained the divorce from petitioner, the ruling in Van Dorn would become
applicable and petitioner could "very well lose her right to inherit" from
him.
In Pilapil v. Ibay-Somera, we recognized the divorce obtained by the respondent
in his country, the Federal Republic of Germany. There, we stated that divorce
and its legal effects may be recognized in the Philippines insofar as
respondent is concerned in view of the nationality principle in our civil law
on the status of persons.
For failing to apply these doctrines, the decision of the Court of Appeals must be
reversed. We hold that the divorce obtained by Lorenzo H. Llorente from
his first wife Paula was valid and recognized in this jurisdiction as a matter
of comity. xxx
Nonetheless, the fact of divorce must still first be proven as we have enunciated
9 had lived and worked in that country for quite a long time. Besides, the
in Garcia v. Recio, to wit:
Respondent is getting ahead of himself. Before a foreign judgment is given
presumptive evidentiary value, the document must first be presented and
admitted in evidence. A divorce obtained abroad is proven by the divorce decree
itself. Indeed the best evidence of a judgment is the judgment itself. The decree
purports to be a written act or record of an act of an official body or tribunal of a
foreign country.
Under Sections 24 and 25 of Rule 132, on the other hand, a writing or document
may be proven as a public or official record of a foreign country by either (1) an
official publication or (2) a copy thereof attested by the officer having legal
custody of the document. If the record is not kept in the Philippines, such copy
must be (a) accompanied by a certificate issued by the proper diplomatic or
consular officer in the Philippine foreign service stationed in the foreign country
in which the record is kept and (b) authenticated by the seal of his office.
The divorce decree between respondent and Editha Samson appears to be an
authentic one issued by an Australian family court. However, appearance is not
sufficient; compliance with the aforementioned rules on evidence must be
demonstrated.
Fortunately for respondent's cause, when the divorce decree of May 18, 1989
was submitted in evidence, counsel for petitioner objected, not to its
admissibility, but only to the fact that it had not been registered in the Local Civil
Registry of Cabanatuan City. The trial court ruled that it was admissible, subject
to petitioner's qualification. Hence, it was admitted in evidence and accorded
weight by the judge. Indeed, petitioner's failure to object properly rendered the
divorce decree admissible as a written act of the Family Court of Sydney,
Australia.
Compliance with the quoted articles (11, 13 and 52) of the Family Code is not
necessary; respondent was no longer bound by Philippine personal laws after
he acquired Australian citizenship in 1992. Naturalization is the legal act of
adopting an alien and clothing him with the political and civil rights belonging to
a citizen. Naturalized citizens, freed from the protective cloak of their former
states, don the attires of their adoptive countries. By becoming an Australian,
respondent severed his allegiance to the Philippines and the vinculum juris that
had tied him to Philippine personal laws.
Burden of Proving Australian Law
Respondent contends that the burden to prove Australian divorce law falls upon
petitioner, because she is the party challenging the validity of a foreign
judgment. He contends that petitioner was satisfied with the original of the
divorce decree and was cognizant of the marital laws of Australia, because she
Australian divorce law is allegedly known by Philippine courts; thus, judges may
take judicial notice of foreign laws in the exercise of sound discretion.
We are not persuaded. The burden of proof lies with the "party who alleges the
existence of a fact or thing necessary in the prosecution or defense of an
action." In civil cases, plaintiffs have the burden of proving the material
allegations of the complaint when those are denied by the answer; and
defendants have the burden of proving the material allegations in their answer
when they introduce new matters. Since the divorce was a defense raised by
respondent, the burden of proving the pertinent Australian law validating it falls
squarely upon him.
It is well-settled in our jurisdiction that our courts cannot take judicial notice of
foreign laws.1âwphi1 Like any other facts, they must be alleged and proved.
Australian marital laws are not among those matters that judges are supposed
to know by reason of their judicial function. The power of judicial notice must be
exercised with caution, and every reasonable doubt upon the subject should be
resolved in the negative. (Emphasis supplied)
It appears that the trial court no longer required petitioner to prove the validity of
Orlando’s divorce under the laws of the United States and the marriage between
petitioner and the deceased. Thus, there is a need to remand the proceedings to
the trial court for further reception of evidence to establish the fact of divorce.
Should petitioner prove the validity of the divorce and the subsequent marriage, SO ORDERED.
she has the preferential right to be issued the letters of administration over the
estate. Otherwise, letters of administration may be issued to respondent, who is
undisputedly the daughter or next of kin of the deceased, in accordance with
Sec. 6 of Rule 78 of the Revised Rules of Court.

10
This is consistent with our ruling in San Luis v. San Luis, in which we said:

Applying the above doctrine in the instant case, the divorce decree allegedly
obtained by Merry Lee which absolutely allowed Felicisimo to remarry, would
have vested Felicidad with the legal personality to file the present petition as
Felicisimo's surviving spouse. However, the records show that there is
insufficient evidence to prove the validity of the divorce obtained by Merry
Lee as well as the marriage of respondent and Felicisimo under the laws of
the U.S.A. In Garcia v. Recio, the Court laid down the specific guidelines for
pleading and proving foreign law and divorce judgments. It held that
presentation solely of the divorce decree is insufficient and that proof of its
authenticity and due execution must be presented. Under Sections 24 and 25 of
Rule 132, a writing or document may be proven as a public or official record of a
foreign country by either (1) an official publication or (2) a copy thereof attested
by the officer having legal custody of the document. If the record is not kept in
the Philippines, such copy must be (a) accompanied by a certificate issued by
the proper diplomatic or consular officer in the Philippine foreign service
stationed in the foreign country in which the record is kept and (b) authenticated
by the seal of his office.

With regard to respondent's marriage to Felicisimo allegedly solemnized in

California, U.S.A., she submitted photocopies of the Marriage Certificate and the
annotated text of the Family Law Act of California which purportedly show that
their marriage was done in accordance with the said law. As stated in Garcia,
however, the Court cannot take judicial notice of foreign laws as they must be
alleged and proved.

Therefore, this case should be remanded to the trial court for further
reception of evidence on the divorce decree obtained by Merry Lee and the
marriage of respondent and Felicisimo. (Emphasis supplied)

Thus, it is imperative for the trial court to first determine the validity of the
divorce to ascertain the rightful party to be issued the letters of administration
over the estate of Orlando B. Catalan.

WHEREFORE, premises considered, the Petition is hereby PARTIALLY

GRANTED. The Decision dated 18 October 2007 and the Resolution dated 20
June 2008 of the Court of Appeals are hereby REVERSED and SET ASIDE. Let
this case be REMANDED to Branch 70 of the Regional Trial Court of Burgos,
Pangasinan for further proceedings in accordance with this Decision.
G.R. No. 178551 October 11, 2010 under Kuwait’s Civil Service Laws. Petitioners further contended that Ikdal
should not be liable as an officer of petitioner ATCI.
ATCI OVERSEAS CORPORATION, AMALIA G. IKDAL and MINISTRY OF
6
PUBLIC HEALTH-KUWAITPetitioners, By Decision of March 30, 2007, the appellate court affirmed the NLRC
vs. Resolution.
MA. JOSEFA ECHIN, Respondent.
In brushing aside petitioners’ contention that they only acted as agent of the
DECISION Ministry and that they cannot be held jointly and solidarily liable with it, the
appellate court noted that under the law, a private employment agency shall
CARPIO MORALES, J.: assume all responsibilities for the implementation of the contract of employment
of an overseas worker, hence, it can be sued jointly and severally with the
Josefina Echin (respondent) was hired by petitioner ATCI Overseas Corporation foreign principal for any violation of the recruitment agreement or contract of
employment.
in behalf of its principal-co-petitioner, the Ministry of Public Health of Kuwait (the
Ministry), for the position of medical technologist under a two-year contract,
denominated as a Memorandum of Agreement (MOA), with a monthly salary of As to Ikdal’s liability, the appellate court held that under Sec. 10 of Republic Act
US$1,200.00. No. 8042, the "Migrant and Overseas Filipinos’ Act of 1995," corporate officers,
directors and partners of a recruitment agency may themselves be jointly and
1 solidarily liable with the recruitment agency for money claims and damages
Under the MOA, all newly-hired employees undergo a probationary period of
awarded to overseas workers.
one (1) year and are covered by Kuwait’s Civil Service Board Employment
Contract No. 2.
Petitioners’ motion for reconsideration having been denied by the appellate court
7
Respondent was deployed on February 17, 2000 but was terminated from by Resolution of June 27, 2007, the present petition for review on certiorari was
filed.
employment on February 11, 2001, she not having allegedly passed the
probationary period.
Petitioners maintain that they should not be held liable because respondent’s
As the Ministry denied respondent’s request for reconsideration, she returned to employment contract specifically stipulates that her employment shall be
the Philippines on March 17, 2001, shouldering her own air fare. governed by the Civil Service Law and Regulations of Kuwait. They thus
conclude that it was patent error for the labor tribunals and the appellate court to
apply the Labor Code provisions governing probationary employment in deciding
On July 27, 2001, respondent filed with the National Labor Relations the present case.
2
Commission (NLRC) a complaint for illegal dismissal against petitioner ATCI as
the local recruitment agency, represented by petitioner, Amalia Ikdal (Ikdal), and
the Ministry, as the foreign principal. Further, petitioners argue that even the Philippine Overseas Employment Act
(POEA) Rules relative to master employment contracts (Part III, Sec. 2 of the
3 POEA Rules and Regulations) accord respect to the "customs, practices,
By Decision of November 29, 2002, the Labor Arbiter, finding that petitioners company policies and labor laws and legislation of the host country."
neither showed that there was just cause to warrant respondent’s dismissal nor
that she failed to qualify as a regular employee, held that respondent was
Finally, petitioners posit that assuming arguendo that Philippine labor laws are
illegally dismissed and accordingly ordered petitioners to pay her US$3,600.00,
applicable, given that the foreign principal is a government agency which is
representing her salary for the three months unexpired portion of her contract.
immune from suit, as in fact it did not sign any document agreeing to be held
jointly and solidarily liable, petitioner ATCI cannot likewise be held liable, more
On appeal of petitioners ATCI and Ikdal, the NLRC affirmed the Labor Arbiter’s so since the Ministry’s liability had not been judicially determined as jurisdiction
4
decision by Resolution of January 26, 2004. Petitioners’ motion for was not acquired over it.
5
reconsideration having been denied by Resolution of April 22, 2004, they
appealed to the Court of Appeals, contending that their principal, the Ministry,
The petition fails.
being a foreign government agency, is immune from suit and, as such, the
immunity extended to them; and that respondent was validly dismissed for her
failure to meet the performance rating within the one-year period as required
Petitioner ATCI, as a private recruitment agency, cannot evade responsibility for
the money claims of Overseas Filipino workers (OFWs) which it deploys abroad
by the mere expediency of claiming that its foreign principal is a government
agency clothed with immunity from suit, or that such foreign principal’s liability
must first be established before it, as agent, can be held jointly and solidarily
liable.
In providing for the joint and solidary liability of private recruitment agencies with
their foreign principals, Republic Act No. 8042 precisely affords the OFWs with a
recourse and assures them of immediate and sufficient payment of what is due
8
them. Skippers United Pacific v. Maguad explains:
. . . [T]he obligations covenanted in the recruitment agreement entered into
by and between the local agent and its foreign principal are not
coterminous with the term of such agreement so that if either or both of the
parties decide to end the agreement, the responsibilities of such parties towards
the contracted employees under the agreement do not at all end, but the same
extends up to and until the expiration of the employment contracts of the
employees recruited and employed pursuant to the said recruitment
agreement. Otherwise, this will render nugatory the very purpose for which
the law governing the employment of workers for foreign jobs abroad was
enacted. (emphasis supplied)
The imposition of joint and solidary liability is in line with the policy of the state to
9
protect and alleviate the plight of the working class. Verily, to allow petitioners
to simply invoke the immunity from suit of its foreign principal or to wait for the
judicial determination of the foreign principal’s liability before petitioner can be
held liable renders the law on joint and solidary liability inutile.
As to petitioners’ contentions that Philippine labor laws on probationary
employment are not applicable since it was expressly provided in respondent’s
employment contract, which she voluntarily entered into, that the terms of her
engagement shall be governed by prevailing Kuwaiti Civil Service Laws and
Regulations as in fact POEA Rules accord respect to such rules, customs and
practices of the host country, the same was not substantiated.
Indeed, a contract freely entered into is considered the law between the parties
who can establish stipulations, clauses, terms and conditions as they may deem
convenient, including the laws which they wish to govern their respective
obligations, as long as they are not contrary to law, morals, good customs,
public order or public policy.
It is hornbook principle, however, that the party invoking the application of a
foreign law has the burden of proving the law, under the doctrine of processual
presumption which, in this case, petitioners failed to discharge. The Court’s
10
ruling in EDI-Staffbuilders Int’l., v. NLRC illuminates:
In the present case, the employment contract signed by Gran specifically states
that Saudi Labor Laws will govern matters not provided for in the contract (e.g.
specific causes for termination, termination procedures, etc.). Being the law
intended by the parties (lex loci intentiones) to apply to the contract, Saudi Labor
Laws should govern all matters relating to the termination of the employment of
Gran.
In international law, the party who wants to have a foreign law applied to a
dispute or case has the burden of proving the foreign law. The foreign law is
treated as a question of fact to be properly pleaded and proved as the judge or
labor arbiter cannot take judicial notice of a foreign law. He is presumed to know
only domestic or forum law.
Unfortunately for petitioner, it did not prove the pertinent Saudi laws on the
matter; thus, the International Law doctrine of presumed-identity
approach or processual presumption comes into play. Where a foreign law is not
pleaded or, even if pleaded, is not proved, the presumption is that foreign law is
the same as ours. Thus, we apply Philippine labor laws in determining the
issues presented before us. (emphasis and underscoring supplied)
The Philippines does not take judicial notice of foreign laws, hence, they must
not only be alleged; they must be proven. To prove a foreign law, the party
invoking it must present a copy thereof and comply with Sections 24 and 25 of
Rule 132 of the Revised Rules of Court which reads:
SEC. 24. Proof of official record. — The record of public documents referred to
in paragraph (a) of Section 19, when admissible for any purpose, may be
evidenced by an official publication thereof or by a copy attested by the officer
having the legal custody of the record, or by his deputy, and accompanied, if the
record is not kept in the Philippines, with a certificate that such officer has the
custody. If the office in which the record is kept is in a foreign country, the
certificate may be made by a secretary of the embassy or legation, consul
general, consul, vice consul, or consular agent or by any officer in the foreign
service of the Philippines stationed in the foreign country in which the record is
kept, and authenticated by the seal of his office. (emphasis supplied)
SEC. 25. What attestation of copy must state. — Whenever a copy of a
document or record is attested for the purpose of the evidence, the attestation
must state, in substance, that the copy is a correct copy of the original, or a
specific part thereof, as the case may be. The attestation must be under the
official seal of the attesting officer, if there be any, or if he be the clerk of a court
having a seal, under the seal of such court.
To prove the Kuwaiti law, petitioners submitted the following: MOA between
respondent and the Ministry, as represented by ATCI, which provides that the
employee is subject to a probationary period of one (1) year and that the host
 11
country’s Civil Service Laws and Regulations apply; a translated copy (Arabic money claims or damages that may be awarded to the workers. If the
to English) of the termination letter to respondent stating that she did not pass recruitment/placement agency is a juridical being, the corporate officers and
the probation terms, without specifying the grounds therefor, and a translated directors and partners as the case may be, shall themselves be jointly and
12
copy of the certificate of termination, both of which documents were certified solidarily liable with the corporation or partnership for the aforesaid claims and
by Mr. Mustapha Alawi, Head of the Department of Foreign Affairs-Office of damages. (emphasis and underscoring supplied)
Consular Affairs Inslamic Certification and Translation Unit; and respondent’s
13
letter of reconsideration to the Ministry, wherein she noted that in her first eight WHEREFORE, the petition is DENIED.
(8) months of employment, she was given a rating of "Excellent" albeit it
changed due to changes in her shift of work schedule. SO ORDERED.

These documents, whether taken singly or as a whole, do not sufficiently prove

that respondent was validly terminated as a probationary employee under
Kuwaiti civil service laws. Instead of submitting a copy of the pertinent
Kuwaiti labor laws duly authenticated and translated by Embassy officials
thereat, as required under the Rules, what petitioners submitted were mere
certifications attesting only to the correctness of the translations of the
MOA and the termination letter which does not prove at all that Kuwaiti
civil service laws differ from Philippine laws and that under such Kuwaiti
laws, respondent was validly terminated. Thus the subject certifications read:

xxxx

This is to certify that the herein attached translation/s from Arabic to

English/Tagalog and or vice versa was/were presented to this Office for review
and certification and the same was/were found to be in order. This Office,
however, assumes no responsibility as to the contents of the document/s.

This certification is being issued upon request of the interested party for
whatever legal purpose it may serve. (emphasis supplied)1avvphi1

Respecting Ikdal’s joint and solidary liability as a corporate officer, the same is in
order too following the express provision of R.A. 8042 on money claims, viz:

SEC. 10. Money Claims.—Notwithstanding any provision of law to the contrary,

the Labor Arbiters of the National Labor Relations Commission (NLRC) shall
have the original and exclusive jurisdiction to hear and decide, within ninety (90)
calendar days after the filing of the complaint, the claims arising out of an
employer-employee relationship or by virtue of any law or contract involving
Filipino workers for overseas deployment including claims for actual moral,
exemplary and other forms of damages.

The liability of the principal/employer and the recruitment/placement agency for

any and all claims under this section shall be joint and several. This provision
shall be incorporated in the contract for overseas employment and shall be a
condition precedent for its approval. The performance bond to be filed by the
recruitment/placement agency, as provided by law, shall be answerable for all
G.R. No. 175021 June 15, 2011 On November 5, 1997, the respondent, through counsel, sent a letter dated
18
October 20, 1997 to the PNP, demanding the payment of ₱2,288,562.60 for
REPUBLIC OF THE PHILIPPINES, represented by the Chief of the the construction materials MGM procured for the PNP under their December
Philippine National Police, Petitioner, 1995 Contract.
vs.
19
THI THU THUY T. DE GUZMAN, Respondent. On November 17, 1997, the PNP, through its Officer-in-Charge, replied to
respondent’s counsel, informing her of the payment made to MGM via Land
20
DECISION Bank of the Philippines (LBP) Check No. 0000530631, as evidenced by
21 22
Receipt No. 001, issued by the respondent to the PNP on April 23, 1996.
LEONARDO-DE CASTRO, J.:
On November 26, 1997, respondent, through counsel, responded by reiterating
23
1
This is a Petition for Review on Certiorari filed by Republic of the Philippines, as her demand and denying having ever received the LBP check, personally or
through an authorized person. She also claimed that Receipt No. 001, a copy of
represented by the Chief of the Philippine National Police (PNP), of the
2 which was attached to the PNP’s November 17, 1997 letter, could not support
September 27, 2006 Decision of the Court of Appeals in CA-G.R. CV No.
3 the PNP’s claim of payment as the aforesaid receipt belonged to Montaguz
80623, which affirmed with modification the September 8, 2003 Decision of the
Builders, her other company, which was also doing business with the PNP, and
Regional Trial Court (RTC), Branch 222, of Quezon City in Civil Case No. Q99-
37717. not to MGM, with which the contract was made.

4 On May 5, 1999, respondent filed a Complaint for Sum of Money against the
Respondent is the proprietress of Montaguz General Merchandise (MGM), a
petitioner, represented by the Chief of the PNP, before the RTC, Branch 222 of
contractor accredited by the PNP for the supply of office and construction 24
Quezon City. This was docketed as Civil Case No. Q99-37717.
materials and equipment, and for the delivery of various services such as
printing and rental, repair of various equipment, and renovation of buildings, 25
5 The petitioner filed a Motion to Dismiss on July 5, 1999, on the ground that the
facilities, vehicles, tires, and spare parts.
claim or demand set forth in respondent’s complaint had already been paid or
26
extinguished, as evidenced by LBP Check No. 0000530631 dated April 18,
On December 8, 1995, the PNP Engineering Services (PNPES), released a
6 1996, issued by the PNP to MGM, and Receipt No. 001, which the respondent
Requisition and Issue Voucher for the acquisition of various building materials
amounting to Two Million Two Hundred Eighty-Eight Thousand Five Hundred correspondingly issued to the PNP. The petitioner also argued that aside from
Sixty-Two Pesos and Sixty Centavos (₱2,288,562.60) for the construction of a the fact that the respondent, in her October 20, 1997 letter, demanded the
7 incorrect amount since it included the withholding tax paid to the BIR, her delay
four-storey condominium building with roof deck at Camp Crame, Quezon City.
in making such demand "[did] not speak well of the worthiness of the cause she
27
espouse[d]."
Respondent averred that on December 11, 1995, MGM and petitioner,
represented by the PNP, through its chief, executed a Contract of
8
Agreement (the Contract) wherein MGM, for the price of ₱2,288,562.60, Respondent opposed petitioner’s motion to dismiss in her July 12, 1999
28
Opposition and September 10, 1999 Supplemental Opposition to Motion to
undertook to procure and deliver to the PNP the construction materials itemized 29
9 Dismiss. Respondent posited that Receipt No. 001, which the petitioner
in the purchase order attached to the Contract. Respondent claimed that after
10 claimed was issued by MGM upon respondent’s receipt of the LBP check, was,
the PNP Chief approved the Contract and purchase order, MGM, on March 1,
1996, proceeded with the delivery of the construction materials, as evidenced by first, under the business name "Montaguz Builders," an entity separate from
11 12
Delivery Receipt Nos. 151-153, Sales Invoice Nos. 038 and 041, and the MGM. Next, petitioner’s allegation that she received the LBP check on April 19,
13 1996 was belied by the fact that Receipt No. 001, which was supposedly issued
"Report of Public Property Purchase" issued by the PNP’s Receiving and
for the check, was dated four days later, or April 23, 1996. Moreover,
Accounting Officers to their Internal Auditor Chief. Respondent asseverated that
14 respondent averred, the PNP’s own Checking Account Section Logbook or the
following the PNP’s inspection of the delivered materials on March 4, 1996, the
Warrant Register, showed that it was one Edgardo Cruz (Cruz) who signed for
PNP issued two Disbursement Vouchers; one in the amount of ₱2,226,147.26 in 30
15 16
favor of MGM, and the other, in the amount of ₱62,415.34, representing the the check due to MGM, contrary to her usual practice of personally receiving
three percent (3%) withholding tax, in favor of the Bureau of Internal Revenue and signing for checks payable to her companies.
17
(BIR).
After conducting hearings on the Motion to Dismiss, the RTC issued an
31
Order on May 4, 2001, denying the petitioner’s motion for lack of merit. The
32
petitioner thereafter filed its Answer, wherein it restated the same allegations in
its Motion to Dismiss.
Trial on the merits followed the pre-trial conference, which was terminated on
33
June 25, 2002 when the parties failed to arrive at an amicable settlement.
On September 3, 2002, shortly after respondent was sworn in as a witness, and
after her counsel formally offered her testimony in evidence, Atty. Norman
Bueno, petitioner’s counsel at that time, made the following stipulations in open
court:
Atty. Bueno (To Court)
Your Honor, in order to expedite the trial, we will admit that this witness was
contracted to deliver the construction supplies or materials. We will admit that
she complied, that she actually delivered the materials. We will admit that Land
Bank Corporation check was issued although we will not admit that the check
was not released to her, as [a] matter of fact, we have the copy of the check. We
will admit that Warrant Register indicated that the check was released although
we will not admit that the check was not received by the [respondent].
Court (To Atty. Albano)
So, the issues here are whether or not the [respondent] received the check for
the payment of the construction materials or supplies and who received the
same. That is all.
Atty. Albano (To Court)
Yes, your Honor.
Court (To Atty. Albano)
34
I think we have an abbreviated testimony here. Proceed. (Emphasis ours.)
The stipulations made by the petitioner through Atty. Bueno were in consonance
with the admissions it had previously made, also through Atty. Bueno, in its
35 36
Answer, and pre-trial brief :
Answer:
IX
It ADMITS the allegation in paragraph 9 of the Complaint that [respondent]
delivered to the PNP Engineering Service the construction materials. It also
ADMITS the existence of Receipt Nos. 151, 152 and 153 alleged in the same
paragraph, copies of which are attached to the Complaint as Annexes "G," "G-1"
37
and "G-2." (Emphasis ours.)
Pre-trial Brief:
III
ADMISSIONS
3.1. Facts and/or documents admitted
For brevity, [petitioner] admit[s] only the allegations in [respondent’s] Complaint
38
and the annexes thereto that were admitted in the Answer. (Emphases ours.)
With the issue then confined to whether respondent was paid or not, the RTC
proceeded with the trial.
Respondent, in her testimony, narrated that on April 18, 1996, she went to the
PNP Finance Center to claim a check due to one of her companies, Montaguz
Builders. As the PNP required the issuance of an official receipt upon claiming
its checks, respondent, in preparation for the PNP check she expected, already
signed Montaguz Builders Official Receipt No. 001, albeit the details were still
blank. However, upon arriving at the PNP Finance Center, respondent was told
that the check was still with the LBP, which could not yet release it. Respondent
then left for the Engineering Services Office to see Captain Rama, along with
39
Receipt No. 001, which she had not yet issued. Respondent claimed that after
some time, she left her belongings, including her receipt booklet, at a bench in
Captain Rama’s office when she went around the Engineering Office to talk to
40
some other people. She reasoned that since she was already familiar and
comfortable with the people in the PNPES Office, she felt no need to ask
41
anyone to look after her belongings, as it was her "normal practice" to leave
her belongings in one of the offices there. The next day, respondent alleged that
when she returned for the check due to Montaguz Builders that she was not able
to claim the day before, she discovered for the first time that Receipt No. 001,
which was meant for that check, was missing. Since she would not be able to
claim her check without issuing a receipt, she just informed the releaser of the
42
missing receipt and issued Receipt No. 002 in its place. After a few months,
respondent inquired with the PNP Finance Center about the payment due to
MGM under the Contract of December 1995 and was surprised to find out that
the check payable to MGM had already been released. Upon making some
inquiries, respondent learned that the check, payable to MGM, in the amount of
₱2,226,147.26, was received by Cruz, who signed the PNP’s Warrant Register.
Respondent admitted to knowing Cruz, as he was connected with Highland
Enterprises, a fellow PNP-accredited contractor. However, she denied ever
having authorized Cruz or Highland Enterprises to receive or claim any of the
43
checks due to MGM or Montaguz Builders. When asked why she had not filed
a case against Cruz or Herminio Reyes, the owner of Highland Enterprises,
considering the admitted fact that Cruz claimed the check due to her,
respondent declared that there was no reason for her to confront them as it was
the PNP’s fault that the check was released to the wrong person. Thus, it was
the PNP’s problem to find out where the money had gone, while her course of
action was to go after the PNP, as the party involved in the Contract.
44
On April 29, 2003, petitioner presented Ms. Jesusa Magtira, who was then the
45
"check releaser" of the PNP, to prove that the respondent received the LBP
46
check due to MGM, and that respondent herself gave the check to Cruz. Ms.
Magtira testified that on April 23, 1996, she released the LBP check payable to
the order of MGM, in the amount of ₱2,226,147.26, to the respondent herein,
whom she identified in open court. She claimed that when she released the
check to respondent, she also handed her a voucher, and a logbook also known
47
as the Warrant Register, for signing. When asked why Cruz was allowed to
sign for the check, Ms. Magtira explained that this was allowed since the
respondent already gave her the official receipt for the check, and it was
48
respondent herself who gave the logbook to Cruz for signing.
The petitioner next presented Edgardo Cruz for the purpose of proving that the
payment respondent was claiming rightfully belonged to Highland Enterprises.
Cruz testified that Highland Enterprises had been an accredited contractor of the
PNP since 1975. In 1995, Cruz claimed that the PNPES was tasked to construct
"by administration" a condominium building. This meant that the PNPES had to
do all the work, from the canvassing of the materials to the construction of the
building. The PNPES allegedly lacked the funds to do this and so asked for
49
Highland Enterprises’s help. In a meeting with its accredited contractors, the
PNPES asked if the other contractors would agree to the use of their business
50
name for a two percent (2%) commission of the purchase order price to avoid
the impression that Highland Enterprises was monopolizing the supply of labor
51
and materials to the PNP. Cruz alleged that on April 23, 1996, he and the
respondent went to the PNP Finance Center to claim the LBP check due to
MGM. Cruz said that the respondent handed him the already signed Receipt No.
001, which he filled up. He claimed that the respondent knew that the LBP check
was really meant for Highland Enterprises as she had already been paid her 2%
52
commission for the use of her business name in the concerned transaction.
On September 8, 2003, the RTC rendered its Decision, the dispositive of which
reads:
WHEREFORE, premises considered, judgment is hereby rendered in favor of
[respondent] and against [petitioner] ordering the latter to pay [respondent] the
following sums:
(1) ₱2,226,147.26 representing the principal sum plus interest at 14%
per annum from April 18, 1996 until the same shall have been fully paid;
(2) 20% of the sum to be collected as attorney’s fees; and,
53
(3) Costs of suit.
The RTC declared that while Cruz’s testimony seemed to offer a plausible
explanation on how and why the LBP check ended up with him, the petitioner,
already admitted in its Answer, and Pre-trial Brief, that MGM, did in fact deliver
the construction materials worth ₱2,288,562.60 to the PNP. The RTC also
pointed out the fact that the petitioner made the same admissions in open court
to expedite the trial, leaving only one issue to be resolved: whether the
respondent had been paid or not. Since this was the only issue, the RTC said
that it had no choice but to go back to the documents and the "documentary
evidence clearly indicates that the check subject of this case was never received
54
by [respondent]." In addition, the PNP’s own Warrant Register showed that it
was Edgardo Cruz who received the LBP check, and Receipt No. 001 submitted
by the petitioner to support its claim was not issued by MGM, but by Montaguz
Builders, a different entity. Finally, the RTC held that Cruz’s testimony, which
appeared to be an afterthought to cover up the PNP’s blunder, were
irreconcilable with the petitioner’s earlier declarations and admissions, hence,
not credit-worthy.
The petitioner appealed this decision to the Court of Appeals, which affirmed
with modification the RTC’s ruling on September 27, 2006:
WHEREFORE, the decision appealed from is AFFIRMED with the
MODIFICATION that the 14% interest per annum imposed on the principal
amount is ordered reduced to 12%, computed from November 16, 1997 until
fully paid. The order for the payment of attorney’s fees and costs of the suit is
55
DELETED.
The Court of Appeals, in deciding against the petitioner, held that the petitioner’s
admissions and declarations, made in various stages of the proceedings are
express admissions, which cannot be overcome by allegations of respondent’s
implied admissions. Moreover, petitioner cannot controvert its own admissions
and it is estopped from denying that it had a contract with MGM, which MGM
duly complied with. The Court of Appeals agreed with the RTC that the real
issue for determination was whether the petitioner was able to discharge its
contractual obligation with the respondent. The Court of Appeals held that while
the PNP’s own Warrant Register disclosed that the payment due to MGM was
received by Cruz, on behalf of Highland Enterprises, the PNP’s contract was
clearly with MGM, and not with Highland Enterprises. Thus, in order to
extinguish its obligation, the petitioner should have directed its payment to MGM
unless MGM authorized a third person to accept payment on its behalf.
The petitioner is now before this Court, praying for the reversal of the lower
courts’ decisions on the ground that "the Court of Appeals committed a serious
56
error in law by affirming the decision of the trial court."
THE COURT’S RULING:
This case stemmed from a contract executed between the respondent and the
petitioner. While the petitioner, in proclaiming that the respondent’s claim had
already been extinguished, initially insisted on having fulfilled its contractual
obligation, it now contends that the contract it executed with the respondent is
actually a fictitious contract to conceal the fact that only one contractor will be
supplying all the materials and labor for the PNP condominium project.
Both the RTC and the Court of Appeals upheld the validity of the contract
between the petitioner and the respondent on the strength of the documentary
evidence presented and offered in Court and on petitioner’s own stipulations and
admissions during various stages of the proceedings.
It is worthy to note that while this petition was filed under Rule 45 of the Rules of
Court, the assertions and arguments advanced herein are those that will
necessarily require this Court to re-evaluate the evidence on record.
It is a well-settled rule that in a petition for review under Rule 45, only questions
57
of law may be raised by the parties and passed upon by this Court.
This Court has, on many occasions, distinguished between a question of law
and a question of fact. We held that when there is doubt as to what the law is on
a certain state of facts, then it is a question of law; but when the doubt arises as
58
to the truth or falsity of the alleged facts, then it is a question of fact. "Simply
put, when there is no dispute as to fact, the question of whether or not the
59
conclusion drawn therefrom is correct, is a question of law." To elucidate
60
further, this Court, in Hko Ah Pao v. Ting said:
One test to determine if there exists a question of fact or law in a given case is
whether the Court can resolve the issue that was raised without having to review
or evaluate the evidence, in which case, it is a question of law; otherwise, it will
be a question of fact. Thus, the petition must not involve the calibration of the
probative value of the evidence presented. In addition, the facts of the case
must be undisputed, and the only issue that should be left for the Court to
decide is whether or not the conclusion drawn by the CA from a certain set of
61
facts was appropriate. (Emphases ours.)
In this case, the circumstances surrounding the controversial LBP check are
central to the issue before us, the resolution of which, will require a perusal of
the entire records of the case including the transcribed testimonies of the
witnesses. Since this is an appeal via certiorari, questions of fact are not
reviewable. As a rule, the findings of fact of the Court of Appeals are final and
62
conclusive and this Court will only review them under the following recognized
exceptions: (1) when the inference made is manifestly mistaken, absurd or
impossible; (2) when there is a grave abuse of discretion; (3) when the finding is
grounded entirely on speculations, surmises or conjectures; (4) when the
judgment of the Court of Appeals is based on misapprehension of facts; (5)
when the findings of fact are conflicting; (6) when the Court of Appeals, in
making its findings, went beyond the issues of the case and the same is contrary
to the admissions of both appellant and appellee; (7) when the findings of the
Court of Appeals are contrary to those of the trial court; (8) when the findings of
fact are conclusions without citation of specific evidence on which they are
based; (9) when the Court of Appeals manifestly overlooked certain relevant
facts not disputed by the parties and which, if properly considered, would justify
a different conclusion; and (10) when the findings of fact of the Court of Appeals
are premised on the absence of evidence and are contradicted by the evidence
on record.
63
Although petitioner’s sole ground to support this petition was stated in such a
manner as to impress upon this Court that the Court of Appeals committed an
error in law, what the petitioner actually wants us to do is to review and re-
examine the factual findings of both the RTC and the Court of Appeals.
Since the petitioner has not shown this Court that this case falls under any of the
enumerated exceptions to the rule, we are constrained to uphold the facts as
established by both the RTC and the Court of Appeals, and, consequently, the
conclusions reached in the appealed decision.
Nonetheless, even if we were to exercise utmost liberality and veer away from
the rule, the records will show that the petitioner had failed to establish its case
64
by a preponderance of evidence. Section 1, Rule 133 of the Revised Rules of
Court provides the guidelines in determining preponderance of evidence:
SECTION 1. Preponderance of evidence, how determined.— In civil cases, the
party having the burden of proof must establish his case by a preponderance of
evidence. In determining where the preponderance or superior weight of
evidence on the issues involved lies, the court may consider all the facts and
circumstances of the case, the witnesses’ manner of testifying, their intelligence,
their means and opportunity of knowing the facts to which they are testifying, the
nature of the facts to which they testify, the probability or improbability of their
testimony, their interest or want of interest, and also their personal credibility so
far as the same may legitimately appear upon the trial. The court may also
consider the number of witnesses, though the preponderance is not necessarily
with the greater number.
Expounding on the concept of preponderance of evidence, this Court in Encinas
65
v. National Bookstore, Inc., held:
"Preponderance of evidence" is the weight, credit, and value of the aggregate
evidence on either side and is usually considered to be synonymous with the
term "greater weight of the evidence" or "greater weight of the credible
evidence." Preponderance of evidence is a phrase which, in the last analysis,
means probability of the truth. It is evidence which is more convincing to the
66
court as worthy of belief than that which is offered in opposition thereto.
The petitioner avers that the Court of Appeals should not have relied "heavily, if
67
not solely" on the admissions made by petitioner’s former counsel, thereby
losing sight of the "secret agreement" between the respondent and Highland
Enterprises, which explains why all the documentary evidence were in
68
respondent’s name.
The petitioner relies mainly on Cruz’s testimony to support its allegations. Not
only did it not present any other witness to corroborate Cruz, but it also failed to
present any documentation to confirm its story. It is doubtful that the petitioner or
the contractors would enter into any "secret agreement" involving millions of
pesos based purely on verbal affirmations. Meanwhile, the respondent not only
presented all the documentary evidence to prove her claims, even the petitioner
repeatedly admitted that respondent had fully complied with her contractual
obligations.
The petitioner argued that the Court of Appeals should have appreciated the
clear and adequate testimony of Cruz, and should have given it utmost weight
and credit especially since his testimony was a "judicial admission against
interest – a primary evidence which should have been accorded full evidentiary
69
value."
The trial court’s appreciation of the witnesses’ testimonies is entitled to the
70
highest respect since it was in a better position to assess their credibility. The
71
RTC held Cruz’s testimony to be "not credit worthy" for being irreconcilable
with petitioner’s earlier admissions. Contrary to petitioner’s contentions, Cruz’s
testimony cannot be considered as a judicial admission against his interest as
he is neither a party to the case nor was his admission against his own interest,
but actually against either the petitioner’s or the respondent’s interest.
Petitioner’s statements on the other hand, were deliberate, clear, and
unequivocal and were made in the course of judicial proceedings; thus, they
72 73
qualify as judicial admissions. In Alfelor v. Halasan, this Court held that:
A party who judicially admits a fact cannot later challenge that fact as judicial
admissions are a waiver of proof; production of evidence is dispensed with. A
judicial admission also removes an admitted fact from the field of controversy.
Consequently, an admission made in the pleadings cannot be controverted by
the party making such admission and are conclusive as to such party, and all
proofs to the contrary or inconsistent therewith should be ignored, whether
objection is interposed by the party or not. The allegations, statements or
admissions contained in a pleading are conclusive as against the pleader. A
party cannot subsequently take a position contrary of or inconsistent with what
74
was pleaded.
The petitioner admitted to the existence and validity of the Contract of
Agreement executed between the PNP and MGM, as represented by the
respondent, on December 11, 1995. It likewise admitted that respondent
delivered the construction materials subject of the Contract, not once, but
several times during the course of the proceedings. The only matter petitioner
assailed was respondent’s allegation that she had not yet been paid. If Cruz’s
testimony were true, the petitioner should have put respondent in her place the
moment she sent a letter to the PNP, demanding payment for the construction
materials she had allegedly delivered. Instead, the petitioner replied that it had
already paid respondent as evidenced by the LBP check and the receipt she
supposedly issued. This line of defense continued on, with the petitioner
assailing only the respondent’s claim of nonpayment, and not the rest of
respondent’s claims, in its motion to dismiss, its answer, its pre-trial brief, and
even in open court during the respondent’s testimony. Section 4, Rule 129 of the
Rules of Court states:
SECTION 4. Judicial Admissions.–An admission, verbal or written, made by a
party in the course of the proceedings in the same case, does not require proof.
The admission may be contradicted only by showing that it was made through
palpable mistake or that no such admission was made.
Petitioner’s admissions were proven to have been made in various stages of the
proceedings, and since the petitioner has not shown us that they were made
through palpable mistake, they are conclusive as to the petitioner. Hence, the
only question to be resolved is whether the respondent was paid under the
December 1995 Contract of Agreement.
The RTC and the Court of Appeals correctly ruled that the petitioner’s obligation
has not been extinguished. The petitioner’s obligation consists of payment of a
sum of money. In order for petitioner’s payment to be effective in extinguishing
its obligation, it must be made to the proper person. Article 1240 of the Civil
Code states:
Art. 1240. Payment shall be made to the person in whose favor the obligation
has been constituted, or his successor in interest, or any person authorized to
receive it.
75
In Cembrano v. City of Butuan, this Court elucidated on how payment will
effectively extinguish an obligation, to wit:
Payment made by the debtor to the person of the creditor or to one authorized
by him or by the law to receive it extinguishes the obligation. When payment is
made to the wrong party, however, the obligation is not extinguished as to the
creditor who is without fault or negligence even if the debtor acted in utmost
good faith and by mistake as to the person of the creditor or through error
induced by fraud of a third person.
In general, a payment in order to be effective to discharge an obligation, must be
made to the proper person. Thus, payment must be made to the obligee himself
or to an agent having authority, express or implied, to receive the particular
payment. Payment made to one having apparent authority to receive the money
will, as a rule, be treated as though actual authority had been given for its
receipt. Likewise, if payment is made to one who by law is authorized to act for
the creditor, it will work a discharge. The receipt of money due on a judgment by
76
an officer authorized by law to accept it will, therefore, satisfy the debt.
The respondent was able to establish that the LBP check was not received by
her or by her authorized personnel. The PNP’s own records show that it was
claimed and signed for by Cruz, who is openly known as being connected to
Highland Enterprises, another contractor. Hence, absent any showing that the
respondent agreed to the payment of the contract price to another person, or
that she authorized Cruz to claim the check on her behalf, the payment, to be
77
effective must be made to her.
The petitioner also challenged the RTC’s findings, on the ground that it
"overlooked material fact and circumstance of significant weight and
78
substance." Invoking the doctrine of adoptive admission, the petitioner pointed
out that the respondent’s inaction towards Cruz, whom she has known to have
claimed her check as early as 1996, should be taken against her. Finally, the
petitioner contends that Cruz’s testimony should be taken against respondent as
well, under Rule 130, Sec. 32 of the Revised Rules on Evidence, since she has
not presented any "controverting evidence x x x notwithstanding that she
79
personally heard it."
The respondent has explained her inaction towards Cruz and Highland
Enterprises. Both the RTC and the Court of Appeals have found her explanation
sufficient and this Court finds no cogent reason to overturn the assessment by
the trial court and the Court of Appeals of the respondent’s testimony. It may be
recalled that the respondent argued that since it was the PNP who owed her
money, her actions should be directed towards the PNP and not Cruz or
80
Highland Enterprises, against whom she has no adequate proof. Respondent
has also adequately explained her delay in filing an action against the petitioner,
particularly that she did not want to prejudice her other pending transactions with
81
the PNP.
The petitioner claims that the RTC "overlooked material fact and circumstance
82
of significant weight and substance," but it ignores all the documentary
evidence, and even its own admissions, which are evidence of the greater
weight and substance, that support the conclusions reached by both the RTC
and the Court of Appeals.
We agree with the Court of Appeals that the RTC erred in the interest rate and
other monetary sums awarded to respondent as baseless. However, we must
further modify the interest rate imposed by the Court of Appeals pursuant to the
83
rule laid down in Eastern Shipping Lines, Inc. v. Court of Appeals :
I. When an obligation, regardless of its source, i.e., law, contracts, quasi-
contracts, delicts or quasi-delicts is breached, the contravenor can be held liable
for damages. The provisions under Title XVIII on "Damages" of the Civil Code
govern in determining the measure of recoverable damages.
II. With regard particularly to an award of interest in the concept of actual and
compensatory damages, the rate of interest, as well as the accrual thereof, is
imposed, as follows:
1. When the obligation is breached, and it consists in the payment of a
sum of money, i.e., a loan or forbearance of money, the interest due
should be that which may have been stipulated in writing. Furthermore,
the interest due shall itself earn legal interest from the time it is judicially
demanded. In the absence of stipulation, the rate of interest shall be
12% per annum to be computed from default, i.e., from judicial or
extrajudicial demand under and subject to the provisions of Article 1169
of the Civil Code.
2. When an obligation, not constituting a loan or forbearance of money,
is breached, an interest on the amount of damages awarded may be
imposed at the discretion of the court at the rate of 6% per annum. No
interest, however, shall be adjudged on unliquidated claims or damages
except when or until the demand can be established with reasonable
certainty. Accordingly, where the demand is established with reasonable
certainty, the interest shall begin to run from the time the claim is made
judicially or extrajudicially (Art. 1169, Civil Code) but when such
certainty cannot be so reasonably established at the time the demand is
made, the interest shall begin to run only from the date the judgment of
the court is made (at which time the quantification of damages may be
deemed to have been reasonably ascertained). The actual base for the
computation of legal interest shall, in any case, be on the amount finally
adjudged.
3. When the judgment of the court awarding a sum of money becomes
final and executory, the rate of legal interest, whether the case falls
under paragraph 1 or paragraph 2, above, shall be 12% per annum from
such finality until its satisfaction, this interim period being deemed to be
84
by then an equivalent to a forbearance of credit.
Since the obligation herein is for the payment of a sum of money, the legal
interest rate to be imposed, under Article 2209 of the Civil Code is six percent
(6%) per annum:

Art. 2209. If the obligation consists in the payment of a sum of money, and the
debtor incurs in delay, the indemnity for damages, there being no stipulation to
the contrary, shall be the payment of the interest agreed upon, and in the
absence of stipulation, the legal interest, which is six per cent per annum.

Following the guidelines above, the legal interest of 6% per annum is to be

imposed from November 16, 1997, the date of the last demand, and 12% in lieu
of 6% from the date this decision becomes final until fully paid.lawphi1

Petitioner’s allegations of sham dealings involving our own government

agencies are potentially disturbing and alarming. If Cruz’s testimony were true,
this should be a lesson to the PNP not to dabble in spurious transactions.
Obviously, if it can afford to give a 2% commission to other contractors for the
mere use of their business names, then the petitioner is disbursing more money
than it normally would in a legitimate transaction. It is recommended that the
proper agency investigate this matter and hold the involved personnel
accountable to avoid any similar occurrence in the future.

WHEREFORE, the Petition is hereby DENIED and the Decision of the Court of
Appeals in C.A. G.R. CV No. 80623 dated September 27, 2006 is AFFIRMED
with the MODIFICATION that the legal interest to be paid is SIX PERCENT (6%)
per annum on the amount of ₱2,226,147.26, computed from the date of the last
demand or on November 16, 1997. A TWELVE PERCENT (12%) per annum
interest in lieu of SIX PERCENT (6%) shall be imposed on such amount upon
finality of this decision until the payment thereof.

SO ORDERED.
G.R. Nos. 180631-33 February 22, 2012
PHILIPPINE CHARTER INSURANCE CORPORATION, Petitioner,
vs.
CENTRAL COLLEGES OF THE PHILIPPINES and DYNAMIC PLANNERS
AND CONSTRUCTION CORPORATION, Respondents.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil
1
Procedure challenging the June 29, 2007 Decision and November 19, 2007
2
Resolution of the Court of Appeals (CA) in the consolidated cases CA-G.R. SP
Nos. 90361, 90383 and 90384.
THE FACTS
On May 16, 2000, Central Colleges of the Philippines (CCP), an educational
institution, contracted the services of Dynamic Planners and Construction
Corporation (DPCC) to be its general contractor for the construction of its five
(5)-storey school building at No. 39 Aurora Boulevard, Quezon City, with a total
3
contract price of ₱248,000,000.00. As embodied in a Contract Agreement, the
construction of the entire building would be done in two phases with each phase
valued at ₱124,000,000.00.
To guarantee the fulfillment of the obligation, DPCC posted three (3) bonds, all
issued by the Philippine Charter Insurance Corporation (PCIC), namely: (1)
Surety Bond No. PCIC-45542, dated June 25, 2003, amounting to
4 5
₱7,031,460.74; (2) Performance Bond No. PCIC-45541 in the amount of
₱2,929,775.31 which was subsequently increased to ₱6,199,999.99 through
6
Bond Endorsement No. E-2003/12527; and (3) Performance Bond No. PCIC-
7
46172 for ₱692,890.74. All the bonds were callable on demand and set to
expire on October 30, 2003.
The Phase 1 of the project was completed without issue. Thereafter, CCP paid
DPCC ₱14,880,000.00 or 12% of the agreed price of ₱124,000,000.00 with a
check dated March 14, 2002 as downpayment for the Phase 2 of the project.
The Phase 2 of the project, however, encountered numerous delays. When CCP
audited DPCC on July 25, 2003, only 47% of the work to be done was actually
finished.
Thus, in a letter dated October 29, 2003 addressed to DPCC and PCIC, CCP
informed them of the breach in the contract and its plan to claim on the
construction bonds. Pertinent portions of the letter are herein quoted:
You are both hereby NOTIFIED that the Bonds referred to above for the faithful
performance of a Contract, dated 16 May 2000 for the construction of CCP
EXTENSION BLDG. (Phase 2) at 39 Aurora Blvd., Quezon City, Metro Manila
and the Variation Order No. 2 has been breached by the CONTRACTOR for
which reason, the CENTRAL COLLEGES OF THE PHILIPPINES, as owner,
hereby gives NOTICE that it will file an action on the said performance and
8
surety bonds.
On November 6, 2003, CCP notified DPCC and PCIC that only 51% of the
project was completed, which was way behind the construction schedule,
prompting it to declare the occurrence of default against DPCC. It formally
9
requested PCIC to remit the proceeds of the bonds.
On November 14, 2003, DPCC wrote PCIC confirming the finding that Phase 2
was only 51% finished and, at the same time, requesting for the extension of its
performance and surety bonds because the supposed revision of the plans
10
would require more days.
In a letter dated November 21, 2003, CCP notified PCIC that because of
DPCC’s inability to complete the project on time, it decided to terminate its
contract with the latter and to continue the construction on its own. The full text
of the letter is herein reproduced:
We acknowledge the receipt of your letter dated November 14, 2003 and we are
in the process of compiling the documents you requested. The said documents
will be submitted as soon as possible.
Furthermore, we would like to reiterate that your principal, the Dynamic Planners
& Construction Corporation has breached the Contract of Agreement dated May
16, 2000 by having completed only an estimated 51% of the construction of the
5-storey CCP Extension Building, Phase 2 and has therefore failed to perform
the work within the agreed schedule.
In view thereof, as stated in our earlier letter of 6 November 2003, we were
compelled to declare the occurrence of a default on the part of your principal,
and have terminated their contract. Please remit to us the proceeds of the
captioned Bonds within the earliest possible time.
The Central Colleges of the Philippines will complete the construction of the 5-
11
storey CCP Extension Building, Phase 2 on its own.
Meanwhile, on December 5, 2003, PCIC informed DPCC that it had approved its
12
request for extension of the bonds.
Eventually, negotiations to continue on with the construction between CCP and
DPCC reached a dead end. CCP hired another contractor to work on the school
site.
On August 13, 2004, CCP sent a letter to PCIC of its final demand for the
13
payment of ₱13,924,351.47 as indicated in the bonds.
14
On August 20, 2004, PCIC denied CCP’s claims against the three bonds.
Thus, on October 28, 2004, CCP filed a complaint with request for arbitration
before the Construction Industry Arbitration Commission (CIAC) against DPCC
15
and PCIC. In its complaint, CCP prayed that CIAC hold DPCC and PCIC,
jointly and severally liable, against the following bonds:
1. Under Surety Bond No. 45542, the amount of Php7,031,460.74 plus
legal interest from the date of demand until full payment thereof;
2. Under Performance Bond Nos. PCIC-45541 [Bond Endorsement Nos.
E-2003/12527] and PCIC-46172, the amount of Php6,892,890.73 plus
legal interest from the date of demand until full payment thereof; and
16
3. Php100,000.00 as and for attorney’s fees.
17
In their Answer, DPCC and PCIC denied any liability and proffered that CCP
unlawfully withheld the materials, equipment, formworks and scaffoldings left at
the premises amounting to ₱4,232,264.12.
On June 3, 2005, the CIAC rendered a decision in favor of CCP. It gave the
following reasons:
1. Claimant was legally justified in terminating the Contract;
2. On the issue of whether claimant faithfully complied with its
contractual obligation in respect of (a) the release of the downpayment,
(b) the delivery of the drawings for construction, and (c) the payment of
progress billings, there is no record that Dynamic protested the delay in
the delivery of the site, the delay in the submission of technical plans
and demanded as a result thereof the corresponding adjustment of the
Contract Period or the Contract Price. The issue of delay in the
reduction of the down payment is moot since Dynamic acquiesced in the
reduction of the down payment from 15% to 12% and the issue of
payment of the 12th progress billing arose as a consequence of a
legitimate issue as to the percentage of completion of the work by
Dynamic as of August 2003.
3. Dynamic’s percentage of accomplishment as of the date of the
termination of the Contract was 57.33% at ₱71,089,200.
4. The original Contract Price was ₱124,000,000. To this amount shall
be added the price of Variation Order No. 2 of ₱13,857,814.87 or an
adjusted Contract Price of ₱137,857,814.87. Deducting
₱110,000,792.87, the overpayment to Dynamic is ₱27,779,022.00.
However, Claimant is entitled to an award not exceeding the amount of
its claims in its Complaint and in the Terms of Reference.
5. Dynamic failed to produce evidence to show that it was not paid the
balance of the Contract Price for Phase 1 of the Project.
6. Surety is liable to Claimant under the Performance and Surety Bonds
it issued in favor of Claimant. The liability of Surety is to indemnify
Claimant for the un-recouped down payment [which] shall not exceed
₱7,031,460.74 under the Surety Bond and for not more than
₱6,892,890.73 under the Performance Bonds.
7. If Surety is obliged to pay these amounts to Claimant, it is entitled, on
its cross-claim, to indemnity from Dynamic.
8. Claimant’s claims under the Surety and Performance Bonds are not
time-barred.
9. Surety is not barred by estoppel from denying liability under the
Surety and Performance Bonds.
10. Claimant’s request to Dynamic to extend the term of these bonds,
Dynamic’s request to Surety to extend their terms and Surety’s grant of
the extension requested have no adverse legal effect upon the rights
and obligations of the parties.
11. The contractual time-bar embodied in the bonds is valid and binding.
12. Dynamic is entitled to its claims for the payment of ₱1,732,264.14
for materials and of ₱2,500,000.00 for the equipment, formworks and
scaffolding left at the site.
13. The claims for payment of moral, exemplary and temperate
damages and for attorney’s fees are denied.
18
14. The parties shall bear their own cost of arbitration.

Thus, CIAC disposed of the case finding DPCC liable to pay CCP
₱7,031,460.74 from the Surety Bond representing the unrecouped
downpayment and ₱6,892,890.73 from its Performance Bond for a total of
₱13,924,351.47. The CIAC likewise ordered CCP to pay DPCC ₱1,732,264.12
corresponding to the construction materials left at the site and ₱2,500,000.00 for
the cost of equipment, formworks and scaffoldings appropriated by CCP or a
total of ₱4,232,264.12. The fallo reads:
WHEREFORE, award is hereby made against Respondent Dynamic Planners
and Construction Corporation and Respondent Philippine Charter Insurance
Corporation, ordering them, jointly and severally, to pay Claimant, Central
Colleges of the Philippines the amount of ₱7,031,460.74 under the Surety Bond
as un-recouped down payment, and the amount of ₱6,892,890.73 under the
Performance Bond or the total amount of ₱13,924,351.47.
Award is likewise made against Claimant, Central Colleges of the Philippines,
ordering the latter to pay Respondent Dynamic Planners and Construction
Corporation, the amount of ₱1,732,264.12 for the latter’s materials left at the
Project Site and the amount of ₱2,500,000.00 as the cost of its equipment,
formworks and scaffoldings which were appropriated by the former or the total
amount of ₱4,232,264.12.
Offsetting the amount due claimant Central Colleges of the Philippines from
Respondent Dynamic Planners and Construction Corporation and that due the
latter from the former, there is a net amount of ₱9,692,087.37 which
Respondent Dynamic Planners and Construction Corporation is hereby ordered
to pay Claimant Central Colleges of the Philippines with interest at the rate of
6% per annum from the date of this Final Award and 12% per annum from the
time this Final Award becomes final and executory and until it is fully paid in
accordance with Eastern Shipping Lines, Inc. vs. Court of Appeals (1994) 234
SCRA 78.
The joint and several liability of Respondent Philippine Charter Insurance
Corporation with Respondent Dynamic Planners and Construction Corporation
is accordingly reduced to ₱9,692,087.37. In the event of payment by
Respondent Philippine Charter Insurance Corporation, the latter is entitled to
indemnity from its co-Respondent Dynamic Planners and Construction
Corporation up to the full amount of such payment. In the event of delay in
making payment to indemnify Respondent Philippine Charter Insurance
Corporation, Respondent Dynamic Planners Charter Insurance Corporation
shall pay interest at the rate of 21% per annum in accordance with the Indemnity
Agreement between them.
All other claims, counterclaims and cross-claims not otherwise determined in
this Final Award are deemed denied for lack of merit.
19
SO ORDERED.
All the parties appealed the CIAC decision to the CA. PCIC’s appeal was
20
docketed as CA-G.R. SP No. 90361; CCP’s appeal was docketed as CA-G.R.
21
SP No. 90383; and DPCC’s appeal was docketed as CA-G.R. SP No.
22 23
90384. Eventually, the cases were consolidated.
24
On June 29, 2007, the CA modified CIAC’s earlier decision. The CA found that
DPCC was already in delay for managing to complete only 51% of the
construction work necessary to finish the Phase 2 of the project. It held that due
to DPCC’s inexcusable delay, CCP was legally within its rights to terminate the
contract with it. It likewise did not give weight to PCIC’s defense that Bond No.
46172 was already released because the said issue was never raised before the
25
CIAC and was raised for the first time on appeal. The CA, however, deleted
the award of cost of the materials, equipment, formworks and scaffoldings
allegedly left by DPCC at the work site for its failure to prove the actual costs of
26
said materials. It added, "In any event, the cost of such materials, equipment,
formworks and scaffoldings cannot be deducted from Philippine Charter’s
liability on the bond, as the credit does not belong to the latter but to
27
Dynamic." Accordingly, the decretal portion of the CA decision reads:
WHEREFORE, the Final Award, dated 03 June 2005, of the Construction
Industry Arbitration Commission (CIAC) in CIAC Case No. 36-2004 is
AFFIRMED with MODIFICATION, in that the award to Dynamic Planners and
Construction Corporation of its counterclaim for materials, equipment, formworks
and scaffoldings left at the work site in the total amount of ₱4,232,264.12 is
DELETED.
Philippine Charter Insurance Corporation and Dynamic Planners and
Construction Corporation are ORDERED jointly and severally to pay Central
Colleges of the Philippines the total amount of ₱13,924,351.47 under Surety
Bond No. PCIC-45542, Performance Bond No. PCIC-45541 (as modified by
Bond Endorsement No. E-2003/12527), and Performance Bond No. PCIC-
46172. Said amount shall bear interest at the rate of 6% per annum from the
date of demand made on 29 October 2003. However, for any amount not yet
paid after the date of the finality of this decision, the rate of interest on the
payable amount shall be increased to 12% per annum from the date when this
decision becomes final and executory until it is fully paid.
28
SO ORDERED.
PCIC moved for the reconsideration of the said decision, but the CA disposed of
it with a denial in its November 19, 2007 Resolution.
29
Hence, this petition.
 30
In its Memorandum, PCIC submits the following issues for resolution: ATTY. G. Q. ENRIQUEZ:

1st Issue: Whether or not the CA grossly erred in sustaining the CIAC award Performance Bond in the amount of-
finding petitioner liable to respondent CCP under the performance bonds and
the surety bond? MR. CRISPINO P. REYES:

2nd Issue: Whether or not the CA grossly erred in upholding the CIAC award We’re interested in 45542 and we’re interested in 45541. What we’re no
pronouncing respondent CCP as rightfully and justifiably entitled to terminate the longer interested in, we have to be candid to this Honorable Tribunal, we
contract agreement? are no longer interested, [we] no longer want to collect on Performance
Bond 46172.
3rd Issue: Whether or not the CA grossly erred in deleting the counterclaim of
respondent DPCC covering the costs of materials, equipment, formworks and 36
ATTY. A.V. CAMARA:
scaffoldings left at site and in denying petitioner to benefit from the
31
counterclaim?
At this point in time, we would like to be of record that although that Bond 46172
covering the amount of ₱692,890.74 per their declaration had already been
PCIC argues that the CA erred in sustaining the award of ₱692,890.74 satisfied that is why only two bonds now are being…
representing Performance Bond PCIC-46172 because the obligation guaranteed
by said performance bond was already completed, therefore, no liability should
32 ATTY. J.N. RABOCA:
attach against the said bond.
May I make a qualification with that, your Honor? It’s not that it was satisfied. It’s
In this regard, the petitioner has a point. that the Claimant is not claiming anymore because all the works under this bond
were already accomplished.
Although this particular issue was not expressly raised in the parties’ Terms of
33
Reference, nevertheless, the issue on Performance Bond PCIC- 46172 was
ATTY. G. Q. ENRIQUEZ:
extensively discussed during the arbitral tribunal’s hearing of February 21, 2005.
To accurately reflect what transpired on said hearing, relevant portions of the
transcript of stenographic notes are herein quoted: Yes, because you have already a Certificate of Acceptance.

ATTY. G. Q. ENRIQUEZ:
34 ATTY. J.N. RABOCA:

I am calling your attention to Bond PCIC-45542. Correct.

MR. CRISPINO P. REYES:

35 ATTY. G. Q. ENRIQUEZ:

You are calling my attention where? So, we’re just narrowing down into two bonds.

ATTY. G. Q. ENRIQUEZ: ATTY. A.V. CAMARA:

In the terms of Reference, can we please get the copy of that so that we can be The two bonds.
reminded?
ATTY. G. Q. ENRIQUEZ:
ATTY. B.G. FAJARDO:
Okay.
There are only two, Counsel-the Performance and the Surety Bond.
ATTY. A.V. CAMARA:
Then therefore the liability on 46172 should be released. They are only
covered by the pleadings especially the Complaint.
MR. CRISPINO P. REYES:
37
We do not dispute this. [Emphases supplied]
It is clear from the testimony of Crispino P. Reyes, CCP’s President, that the
school no longer wants to collect on Performance Bond PCIC 46172 (with a
value of ₱692,890.74). This statement before the arbitral tribunal is a judicial
admission effectively settling the issue with respect to PCIC 46172. Section 4,
Rule 129 of the Rules of Court provides:
Sec. 4. Judicial admissions. – An admission, verbal or written, made by a party
in the course of the proceedings in the same case, does not require proof. The
admission may be contradicted only by showing that it was made through
palpable mistake or that no such admission was made.
A party may make judicial admissions in (a) the pleadings; (b) during the trial,
either by verbal or written manifestations or stipulations; or (c) in other stages of
38
the judicial proceeding. It is an established principle that judicial admissions
39
cannot be contradicted by the admitter who is the party himself and binds the
person who makes the same, and absent any showing that this was made thru
40
palpable mistake, no amount of rationalization can offset it.
Since CCP, through its President, judicially admitted that it is no longer
interested in pursuing PCIC-46172, the scope of its claim will just be confined to
Surety Bond No. PCIC-45542 and Performance Bond No. PCIC-45541.
PCIC claims that DPCC was already in default as early as September 4,
41
2003, hence, the ten-day reglementary period to file a claim on the bonds
should have been reckoned from such date and filed on September 14, 2003.
PCIC claims that CCP notified them only on October 29, 2003 which is already
beyond the limitation that any claim on the bonds should be presented in writing
within ten (10) days from the expiration of the bond or from the occurrence of the
42
default or failure of the principal, whichever is earliest.
The Court finds itself unable to agree. Article 1169 of the New Civil Code
provides:
Art. 1169. Those obliged to deliver or to do something incur in delay from the
time the obligee judicially or extrajudicially demands from them the fulfillment of
their obligation.
The civil law concept of delay or default commences from the time the obligor
demands, judicially or extrajudicially, the fulfillment of the obligation from the
obligee. In legal parlance, demand is the assertion of a legal or procedural
43
right. Hence, DPCC incurred delay from the time CCP called its attention that it
had breached the contract and extrajudicially demanded the fulfillment of its
commitment against the bonds.
It is the obligor’s culpable delay, not merely the time element, which gives the
obligee the right to seek the performance of the obligation. As such, CCP’s
cause of action accrued from the time that DPCC became in culpable delay as
contemplated in the surety and performance bonds. In fact, Surety Bond PCIC-
44 45
45542, Performance Bond PCIC-45541 and PCIC-46172 each specified how
claims should be made against it:
46
Surety Bond PCIC-45542
The liability of PHILIPPINE CHARTER INSURANCE CORPORATION, under
this bond will expire on October 30, 2003; Furthermore, it is hereby agreed and
understood that PHILIPPINE CHARTER INSURANCE CORPORATION will not
be liable for any claim not presented to it in writing within FIFTEEN (15) DAYS
from the expiration of this bond, and that the Obligee hereby waives its right to
claim or file any court action against the surety after the termination of FIFTEEN
(15) DAYS from the time its cause of action accrues.
47 48
Performance Bond PCIC-45541 and PCIC-46172:
The liability of PHILIPPINE CHARTER INSURANCE CORPORATION, under
this bond will expire on October 30, 2003; Furthermore, it is hereby agreed and
understood that PHILIPPINE CHARTER INSURANCE CORPORATION will not
be liable for any claim not presented to it in writing within TEN (10) DAYS from
the expiration of this bond or from the occurrence of the default or failure of the
Principal, whichever is the earliest, and the Obligee hereby waives its right to file
any claims against the Surety after termination of the period of ten (10) DAYS
above mentioned after which time this bond shall definitely terminate and be
deemed absolutely cancelled.
Thus, DPCC became in default on October 29, 2003 when CCP informed it in
writing of the breach of the contract agreement and demanded the fulfillment of
its obligation against the bonds. Consequently, the November 6, 2003 letter that
CCP sent to PCIC properly complied with the notice of claim requirement set
forth in the said bonds.
Upon notice of default of obligor DPCC, PCIC’s liability, as surety, was already
attached. A surety under Article 2047 of the New Civil Code solidarily binds itself
with the principal debtor to assure the fulfillment of the obligation:
Art. 2047. By guaranty a person, called the guarantor, binds himself to the
creditor to fulfill the obligation of the principal debtor in case the latter should fail
to do so.
If a person binds himself solidarily with the principal debtor, the provisions of
Section 4, Chapter 3, Title I of this Book shall be observed. In such case the
contract is called a suretyship. [Emphasis supplied]
The case of Asset Builders Corporation v. Stronghold Insurance Company,
49
Inc. explains how a surety agreement works:
As provided in Article 2047, the surety undertakes to be bound solidarily with the
principal obligor. That undertaking makes a surety agreement an ancillary
contract as it presupposes the existence of a principal
contract.1âwphi1 Although the contract of a surety is in essence secondary only
to a valid principal obligation, the surety becomes liable for the debt or duty of
another although it possesses no direct or personal interest over the obligations
50
nor does it receive any benefit therefrom. Let it be stressed that
notwithstanding the fact that the surety contract is secondary to the principal
51
obligation, the surety assumes liability as a regular party to the undertaking.
Stronghold Insurance Company, Inc. v. Republic-Asahi Glass
52 53
Corporation, reiterating the ruling in Garcia v. Court of Appeals, expounds on
the nature of the surety’s liability:
x x x. The surety’s obligation is not an original and direct one for the
performance of his own act, but merely accessory or collateral to the obligation
contracted by the principal. Nevertheless, although the contract of a surety is in
essence secondary only to a valid principal obligation, his liability to the creditor
or promisee of the principal is said to be direct, primary and absolute; in other
words, he is directly and equally bound with the principal.
Suretyship, in essence, contains two types of relationship – the principal
relationship between the obligee and the obligor, and the accessory surety
relationship between the principal and the surety. In this arrangement, the
obligee accepts the surety’s solidary undertaking to pay if the obligor does not
pay. Such acceptance, however, does not change in any material way the
obligee’s relationship with the principal obligor. Neither does it make the
surety an active party to the principal obligee-obligor relationship. Thus,
the acceptance does not give the surety the right to intervene in the
principal contract. The surety’s role arises only upon the obligor’s default,
at which time, it can be directly held liable by the obligee for payment as a
54
solidary obligor. [Emphases supplied]
Having acted as a surety, PCIC is duty bound to perform what it has guaranteed
on its surety and performance bonds, all of which are callable on demand,
occasioned by its principal’s default.
PCIC also proffers that CCP did not file any claim against the bonds after its
55
extension.
The Court is not persuaded. CCP need not file another claim as to the supposed
extended bonds because the October 29, 2003 letter was sufficient notice to
PCIC and DPCC of the latter’s default and its intention to proceed against the
surety and performance bonds. Moreover, the extension of the bonds was only
approved and relayed by PCIC to DPCC on December 5, 2003 or after the
October 29, 2003 Notice of Default.
As to whether CCP was legally warranted in terminating the contract with DPCC
for its failure to comply with its obligation, the Court affirms the CA’s disquisition.
The option to terminate the contract is clearly apparent in the parties’
agreement. Specifically, Article 16 of the Contract Agreement provides:
ARTICLE 16
Termination
16.1 The OWNER shall have the right to terminate this CONTRACT
after giving fifteen (15) days notice in writing for any of the following
causes:
16.1.1. Substantial failure on the part of the CONTRACTOR in fulfilling
its obligation;
16.1.2. Assignment or sub-contracting of any of the works herein by the
CONTRACTOR without approval by the OWNER;
16.1.3 The CONTRACTOR is willfully violating any of the material
conditions, stipulations and covenants of this CONTRACT and/or the
attachments hereto. In the event of termination of this CONTRACT
pursuant to the above, any amount owing to the CONTRACTOR at the
time of such termination for services already rendered and/or materials
delivered and taken over by the OWNER shall be withheld by the
OWNER pending the determination of value of damages sustained by
the OWNER by reason of such termination and payment of such
damages by the CONTRACTOR.
The Court also finds nothing improper in the deletion by the CA of the award of
actual damages in favor of DPCC. Actual or compensatory damages means the
adequate compensation for pecuniary loss suffered and for profits the obligee
failed to obtain. To be entitled to actual or compensatory damages, it is basic
 56
that there must be pleading and proof of actual damages suffered. Equally vital
to the fact that the amount of loss must be capable of proof, such loss must also
be actually proven with a reasonable degree of certainty, premised upon
57
competent proof or the best evidence obtainable. The burden of proof of the
58
damage suffered is, consequently, imposed on the party claiming it who, in
turn, should present the best evidence available in support of his claim. It could
include sales and delivery receipts, cash and check vouchers and other pieces
of documentary evidence of the same nature pertaining to the items he is
seeking to recover. In the absence of corroborative evidence, it has been held
that self-serving statements of account are not sufficient basis for an award of
59
actual damages. Moreover, a claim for actual damages cannot be predicated
60
on flimsy, remote, speculative, and insubstantial proof. Thus, courts are
61
required to state the factual bases of the award.

In this case, DPCC was not able to establish that it is entitled to the actual
damages that it prayed for in its counterclaim. As the CA put it, "while Dynamic
(DPCC) presented receipts issued by its suppliers of materials, equipment,
formworks and scaffoldings, it failed to prove that the items in the receipts
62
correspond to the items allegedly left at the work site." Besides, the Court
cannot grant a relief in its favor because DPCC did not appeal the decision of
the CA.

WHEREFORE, the petition is PARTLY GRANTED. The June 29, 2007 Decision
of the Court of Appeals in CA-G.R. SP Nos. 90361, 90383 and 90384
is MODIFIED to read as follows:

Philippine Charter Insurance Corporation and Dynamic Planners and

Construction Corporation are ordered to, jointly and severally, pay Central
Colleges of the Philippines the total amount of ₱13,231,460.73 under Surety
Bond No. PCIC-45542 and Performance Bond No. PCIC-45541 (as modified by
Bond Endorsement No. E-2003/12527). Said amount shall bear interest at the
rate of 6% per annum from the date of demand made on October 29, 2003. For
any amount not yet paid after the date of the finality of this decision, however,
the rate of interest on the payable amount shall be increased to 12% per annum
from the date when this decision becomes final and executory until it is fully
paid.

SO ORDERED.
G.R. No. 203984 June 18, 2014 alighted therefrom, fired their guns towards them (police officers) and ran away.
PO1 Mariano and PO3 Ramirez chased them but they were subdued. PO1
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, Mariano recovered from Calantiao a black bag containing two (2) bricks of dried
vs. marijuana fruiting tops and a magazine of super 38 stainless with ammos, while
MEDARIO CALANTIAO y DIMALANTA, Accused-Appellant. PO3 Ramirez recovered from Calantiao’s companion [a] .38 revolver.

DECISION The suspects and the confiscated items were then turned over to SPO3 PABLO
TEMENA, police investigator at Bagong Barrio Police Station for investigation.
LEONARDO-DE CASTRO, J.: Thereat, PO1 Mariano marked the bricks of marijuana contained in a black bag
with his initials, "NM". Thereafter, said specimen were forwarded to the PNP
1 Crime Laboratory for chemical analysis. The result of the examination conducted
This is an appeal from the January 1 7, 2012 Decision of the Court of Appeals by P/SINSP. JESSSE DELA ROSA revealed that the same was positive for
2
in CA-G.R. CR.-H.C. No. 04069, affirming in toto the July 23, 2009 Decision of marijuana, a dangerous drug.
the Regional Trial Court (RTC) of Caloocan City, Branch 127, finding accused-
appellant Medario Calantiao y Dimalanta (Calantiao) guilty beyond reasonable
The foregoing testimony of PO1 MARIANO was corroborated by PO3 RAMIREZ
doubt of violating Section 11, Article II of Republic Act No. 9165 or the
who testified that he personally saw those bricks of marijuana confiscated from
Comprehensive Dangerous Drugs Act of 2002.
the accused. He confirmed that he was with PO1 Mariano when they
apprehended said accused and his companion and testified that while PO1
On November 13, 2003, Calantiao was charged before the RTC of violation of Mariano recovered from the accused a black bag containing marijuana, on his
3
Section 11, Article II of Republic Act No. 9165 in an Information, the pertinent part, he confiscated from accused’s companion a .38 revolver.
portion of which reads: That on or about the 11th day of November, 2003 in
Caloocan City, Metro Manila, Philippines and within the jurisdiction of this
Honorable Court, the above-named accused, without any authority of law, did MR. CRISENDO AMANSEC, the driver of the taxi where the suspects boarded
then and there willfully, unlawfully and feloniously have in his possession, was also presented in open court and testified as to what he knows about the
incident. He confirmed that on that date, two (2) persons boarded on his taxi and
custody and control two (2) bricks of dried marijuana fruiting tops with a total
upon reaching C-3 Road, they alighted and fired three (3) shots and ran away.
weight of 997 .9 grams, knowing the same to be a dangerous drug.

The facts, as synthesized by the RTC and adopted by the Court of Appeals, are Aside from the oral testimonies of the witnesses, the prosecution also offered
as follows: the following documentary evidence to boost their charge against the accused:

Exh. "A" – Request for Laboratory Examination dated November 12,

EVIDENCE OF THE PROSECUTION
2003
On November 13, 2003[,] at around 5:30 x x x in the afternoon, while PO1
Exh. "B" – Physical Sciences Report No. D-1423-03 dated November
NELSON MARIANO and PO3 EDUARDO RAMIREZ were on duty, a certain
12, 2003
EDWIN LOJERA arrived at their office and asked for police assistance regarding
a shooting incident. Per report of the latter, it appears that while driving a towing
truck and traversing along EDSA, Balintawak, Quezon City, he had a traffic Exh. "C-1" – Picture of First brick of marijuana fruiting tops
dispute (gitgitan) with a white taxi cab prompting him to follow said vehicle until
they reached along 8th Avenue Street corner C-3 Road, Caloocan City. Thereat, Exh. "C-2" – Picture of Second brick of marijuana fruiting tops
the passengers of said taxi cab, one of them was accused Calantiao, alighted
and fired their guns. Surprised, Lojera could not do anything but continued his Exh. "D" – Referral Slip dated November 12, 2003
driving until he reached a police station nearby where he reported the incident.
Exh. "E" – Pinagsamang Sinumpaang Salaysay dated November 12,
The police officers on duty then were PO1 NELSON MARIANO and PO3 2003 of PO3 Eduardo Ramirez and PO1 Nelson Mariano
EDUARDO RAMIREZ. PO1 Mariano testified that they immediately responded
to said complaint by proceeding to 5th Avenue corner 8th Street, Caloocan City Exh. "E-1" – Their respective signatures
where they found the white taxi. While approaching said vehicle, two armed men
 Exh. "F" – Sinumpaang Salaysay of Crisendo Amansec (Erroneously
marked as Exh. "E")
EVIDENCE OF THE DEFENSE
The accused offered a different version of the story. According to his testimony,
this instant case originated from a traffic mishap where the taxi he and his
companion Rommel Reyes were riding almost collided with another car. Reyes
then opened the window and made a "fuck you" sign against the persons on
board of that car. That prompted the latter to chase them and when they were
caught in a traffic jam, PO1 Nelson Mariano, one of the persons on board of that
other car alighted and kicked their taxi. Calantiao and Reyes alighted and PO1
Mariano slapped the latter and uttered, "Putang ina mo bakit mo ako pinakyu
hindi mo ba ako kilala?" Said police officer poked his gun again[st] Reyes and
when Calantiao tried to grab it, the gun fired. Calantiao and Reyes were then
handcuffed and were brought to the police station. Thereat, they were subjected
to body frisking and their wallets and money were taken. PO1 Mariano then
prepared some documents and informed them that they will be charged for
drugs. A newspaper containing marijuana was shown to them and said police
officer told them that it would be sufficient evidence against them. They were
detained and subjected to medical examination before they were submitted for
inquest at the prosecutor’s office.
4 Ruling of the Court of Appeals
Ruling of the RTC
On July 23, 2009, the RTC rendered its Decision giving credence to the
prosecution’s case. The dispositive portion of the Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered declaring
accused MEDARIO CALANTIAO y DIMALANTA, GUILTY BEYOND
REASONABLE DOUBT of the offense of Violation of Section 11, Article II, R.A.
9165, for illegally possessing997.9 grams of marijuana fruiting tops. Henceforth,
this Court hereby sentences him to suffer the penalty of life imprisonment and a
5
fine of Five Hundred Thousand Pesos (Php500,000.00).
In convicting Calantiao, the RTC held that the illegal drug seized was admissible
in evidence as it was discovered during a body search after Calantiao was
caught in flagrante delicto of possessing a gun and firing at the police officers.
Moreover, the RTC found all the elements of the offense to have been duly
established by the prosecution.
6 xxxx
7
Aggrieved, Calantiao appealed his conviction to the Court of Appeals, assigning
the following errors:
I 11
THE COURT A QUOGRAVELY ERRED IN FINDING THE ACCUSED-
APPELLANT GUILTY BEYOND REASONABLE DOUBT FOR
VIOLATION OF SECTION 11, ARTICLE II, REPUBLIC ACT NO. 9165,
NOTWITHSTANDING THE FACT THAT THE ALLEGEDLY SEIZED
ITEMS ARE INADMISSIBLE IN EVIDENCE.
II
THE COURT A QUOGRAVELY ERRED IN CONVICTING THE
ACCUSED-APPELLANT DESPITE THE ARRESTING OFFICERS’
PATENT NON-COMPLIANCE WITHTHE REQUIREMENTS FOR THE
PROPER CUSTODY OF SEIZED DANGEROUS DRUGS.
III
THE COURT A QUOGRAVELY ERRED IN CONVICTING THE
ACCUSED-APPELLANT DESPITE THE PROSECUTION’S FAILURE
TO PROVE THE PROPER CHAIN OF CUSTODY OF THE SEIZED
8
DANGEROUS DRUGS.
The Court of Appeals found no reason to overturn Calantiao’s conviction. It
found that there was sufficient reason to justify a warrantless arrest, as the
police officers were acting on a legitimate complaint and had a reasonable
suspicion that the persons identified at the scene were the perpetrators of the
offense. Likewise, the Court of Appeals held that the search and subsequent
seizure of the marijuana in question was lawful and valid, being incidental to a
9
lawful arrest. Finding that all the elements of the charge of illegal possession of
10
dangerous drugs to be present and duly proven, the Court of Appeals, on
January 17, 2012, promulgated its Decision, affirming in toto the RTC’s ruling.
Undaunted, Calantiao is now before this Court praying for an acquittal, adding
the following arguments in support of his position:
First, the plain view doctrine is not an exception to a search incident to a valid
warrantless arrest.
Second, Calantiao did not waive the inadmissibility of the seized items.
xxxx
Finally, the seized items’ custodial chain is broken.
In essence, Calantiao is questioning the admissibility of the marijuana found in
his possession, as evidence against him on the grounds of either it was
discovered via an illegal search, or because its custodial chain was broken.
Ruling of this Court
This Court finds no merit in Calantiao’s arguments.
Search and Seizure of
Marijuana valid
This Court cannot subscribe to Calantiao’s contention that the marijuana in his
possession cannot be admitted as evidence against him because it was illegally
discovered and seized, not having been within the apprehending officers’ "plain
12
view."
Searches and seizure incident to a lawful arrest are governed by Section 13,
Rule 126 of the Revised Rules of Criminal Procedure, to wit:
Section 13.Search incident to lawful arrest.– A person lawfully arrested may be
searched for dangerous weapons or anything which may have been used or
constitute proof in the commission of an offense without a search warrant.
The purpose of allowing a warrantless search and seizure incident to a lawful
arrest is "to protect the arresting officer from being harmed by the person
arrested, who might be armed with a concealed weapon, and to prevent the
13
latter from destroying evidence within reach." It is therefore a reasonable
exercise of the State’s police power to protect (1) law enforcers from the injury
that may be inflicted on them by a person they have lawfully arrested; and (2)
evidence from being destroyed by the arrestee. It seeks to ensure the safety of
the arresting officers and the integrity of the evidence under the control and
within the reach of the arrestee.
14
In People v. Valeroso, this Court had the occasion to reiterate the permissible
reach of a valid warrantless search and seizure incident to a lawful arrest, viz:
When an arrest is made, it is reasonable for the arresting officer to search the
person arrested in order to remove any weapon that the latter might use in order
to resist arrest or effect his escape. Otherwise, the officer’s safety might well be
endangered, and the arrest itself frustrated. In addition, it is entirely reasonable
for the arresting officer to search for and seize any evidence on the arrestee’s
person in order to prevent its concealment or destruction.
Moreover, in lawful arrests, it becomes both the duty and the right of the
apprehending officers to conduct a warrantless search not only on the person of
the suspect, but also in the permissible area within the latter’s reach. Otherwise
stated, a valid arrest allows the seizure of evidence or dangerous weapons
either on the person of the one arrested or within the area of his immediate
control. The phrase "within the area of his immediate control" means the area
from within which he might gain possession of a weapon or destructible
evidence. A gun on a table or in a drawer in front of one who is arrested can be
as dangerous to the arresting officer as one concealed in the clothing of the
person arrested. (Citations omitted.)
In Valeroso, however, the Court held that the evidence searched and seized
from him could not be used against him because they were discovered in a
room, different from where he was being detained, and was in a locked cabinet.
Thus, the area searched could not be considered as one within his immediate
control that he could take any weapon or destroy any evidence against him.
15
In the case at bar, the marijuana was found in a black bag in Calantiao’s
possession and within his immediate control. He could have easily taken any
weapon from the bag or dumped it to destroy the evidence inside it. As the black
bag containing the marijuana was in Calantiao’s possession, it was within the
permissible area that the apprehending officers could validly conduct a
warrantless search.
Calantiao’s argument that the marijuana cannot be used as evidence against
him because its discovery was in violation of the Plain View Doctrine, is
misplaced.
The Plain View Doctrine is actually the exception to the inadmissibility of
evidence obtained in a warrantless search incident to a lawful arrest outside the
suspect’s person and premises under his immediate control. This is so because
"[o]bjects in the ‘plain view’ of an officer who has the right to be in the position to
have that view are subject to seizure and may be presented as
16
evidence." "The doctrine is usually applied where a police officer is not
searching for evidence against the accused, but nonetheless inadvertently
comes across an incriminating object x x x. [It] serves to supplement the prior
justification – whether it be a warrant for another object, hot pursuit, search
incident to lawful arrest, or some other legitimate reason for being present
unconnected with a search directed against the accused – and permits the
17
warrantless seizure."
The Plain View Doctrine thus finds no applicability in Calantiao’s situation
because the police officers purposely searched him upon his arrest. The police
officers did not inadvertently come across the black bag, which was in
Calantiao’s possession; they deliberately opened it, as part of the search
incident to Calantiao’s lawful arrest.
Inventory and Chain of
Custody of Evidence
Calantiao claims that even if the search and seizure were validly effected, the
marijuana is still inadmissible as evidence against him for failure of the
apprehending officers to comply with the rules on chain of custody, as the item
18
was marked at the police station.
The pertinent provisions of Republic Act No. 9165 provide as follows:
Section 21. Custody and Disposition of Confiscated, Seized, and/or Surrendered
Dangerous Drugs, Plant Sources of Dangerous Drugs, Controlled Precursors
and Essential Chemicals, Instruments/Paraphernalia and/or Laboratory
Equipment. – The PDEA shall take charge and have custody of all dangerous
drugs, plant sources of dangerous drugs, controlled precursors and essential
chemicals, as well as instruments/paraphernalia and/or laboratory equipment so
confiscated, seized and/or surrendered, for proper disposition in the following
manner:
(1) The apprehending team having initial custody and control of the
drugs shall, immediately after seizure and confiscation, physically
inventory and photograph the same in the presence of the accused or
the person/s from whom such items were confiscated and/or seized, or
his/her representative or counsel, a representative from the media and
the Department of Justice (DOJ), and any elected public official who
shall be required to sign the copies of the inventory and be given a copy
thereof[.]
Its Implementing Rules and Regulations state:
SECTION 21. Custody and Disposition of Confiscated, Seized and/or
Surrendered Dangerous Drugs, Plant Sources of Dangerous Drugs, Controlled
Precursors and Essential Chemicals, Instruments/Paraphernalia and/or
Laboratory Equipment. — The PDEA shall take charge and have custody of all
dangerous drugs, plant sources of dangerous drugs, controlled precursors and
essential chemicals, as well as instruments/paraphernalia and/or laboratory
equipment so confiscated, seized and/or surrendered, for proper disposition in
the following manner:
(a) The apprehending officer/team having initial custody and control of
the drugs shall, immediately after seizure and confiscation, physically
inventory and photograph the same in the presence of the accused or
the person/s from whom such items were confiscated and/or seized, or
his/her representative or counsel, a representative from the media and
the Department of Justice (DOJ), and any elected public official who
shall be required to sign the copies of the inventory and be given a copy
thereof; Provided, that the physical inventory and photograph shall be
conducted at the place where the search warrant is served; or at the
nearest police station or at the nearest office of the apprehending
officer/team, whichever is practicable, in case of warrantless seizures;
Provided, further, that non-compliance with these requirements under
justifiable grounds, as long as the integrity and the evidentiary value of
the seized items are properly preserved by the apprehending
officer/team, shall not render void and invalid such seizures of and
custody over said items[.] (Emphasis supplied.)
This Court has held that the failure to strictly comply with Section 21, Article II of
Republic Act No. 9165, such as immediately marking seized drugs, will not
automatically impair the integrity of chain of custody because what is of utmost
importance is the preservation of the integrity and the evidentiary value of the
seized items, as these would be utilized in the determination of the guilt or
19
innocence of the accused.
Section 21 and its IRR do not even mention "marking." What they require are (1)
physical inventory, and (2) taking of photographs. As this Court held in People v.
20
Ocfemia :
What Section 21 of R.A. No. 9165 and its implementing rule do not expressly
specify is the matter of "marking" of the seized items in warrantless seizures to
ensure that the evidence seized upon apprehension is the same evidence
subjected to inventory and photography when these activities are undertaken at
the police station rather than at the place of arrest. Consistency with the "chain
of custody" rule requires that the "marking" of the seized items – to truly ensure
that they are the same items that enter the chain and are eventually the ones
offered in evidence – should be done (1) in the presence of the apprehended
violator (2) immediately upon confiscation.
The prosecution was able to establish the chain of custody of the seized
marijuana from the time the police officers confiscated it, to the time it was
turned over to the investigating officer, up to the time it was brought to the
21
forensic chemist for laboratory examination. This Court has no reason to
overrule the RTC and the Court of Appeals, which both found the chain of
custody of the seized drugs to have not been broken so as to render the
marijuana seized from Calantiao inadmissible in evidence.
Furthermore, unless it can be shown that there was bad faith, ill will, or
tampering of the evidence, the presumption that the integrity of the evidence has
been preserved will remain. The burden of showing the foregoing to overcome
the presumption that the police officers handled the seized drugs with regularity,
and that they properly discharged their duties is on Calantiao. Unfortunately,
22
Calantiao failed to discharge such burden.
It is worthy to note that these arguments were only raised by Calantiao on his
23
appeal. He himself admits this. His theory, from the very beginning, was that
he did not do it, and that he was being framed for having offended the police
officers. Simply put, his defense tactic was one of denial and frame-up.
However, those defenses have always been frowned upon by the Court, to wit:

The defenses of denial and frame-up have been invariably viewed by this Court
with disfavor for it can easily be concocted and is a common and standard
defense ploy in prosecutions for violation of Dangerous Drugs Act. In order to
prosper, the defenses of denial and frame-up must be proved with strong and
convincing evidence. In the cases before us, appellant failed to present sufficient
evidence in support of his claims. Aside from his self-serving assertions, no
24
plausible proof was presented to bolster his allegations.

Hence, as Calantiao failed to show clear and convincing evidence that the
apprehending officers were stirred by illicit motive or failed to properly perform
25
their duties, their testimonies deserve full faith and credit.

WHEREFORE, premises considered, the Court hereby AFFIRMS the January

17, 2012 Decision of the Court of Appeals in CA-G.R. CR.-H.C. No. 04069.

SO ORDERED.
G.R. No. 206366 August 13, 2014
PEOPLE OF THE PHILIPPINES, Appellee,
vs.
EDUARDO BALAQUIOT y BALDERAMA, Appellant.
DECISION
PEREZ, J.:
1 2
At bench is an appeal assailing the Decision dated 29 August 2012 of the
Court of Appeals (CA) in CA-G.R. CR-H.C. No. 04595. In the said decision, the
appellate court affirmed the conviction of herein appellant Eduardo B. Balaquit
for violation of Section 5 of Republic Act No. 9165 or the Comprehensive
Dangerous Drugs Act of 2002.
The facts are as follows:
On 11 June 2008, appellant was arrested during a buy bust operation performed
by officers of the Philippine National Police (PNP) in Camiling, Tarlac. He was
thereafter charged with the offense of illegal sale of shabu under an Information
3
filed before the Regional Trial Court (RTC) of Tarlac. The Information reads:
That on June 11, 2008 at on or about 10 AM at Bobon 1st , in the Municipality of
Camiling, Province of Tarlac, Philippines, and within the jurisdiction of this
Honorable Court, the said accused, did then and there willfully and feloniously
sell to one another one (1) heat sealed plastic sachet containing 0.049 grams of
met[h]amphetamine hydrochloride commonly known as "shabu", a dangerous
drug, without being authorized by law.
Appellant was arraigned on 26 August 2008 and entered a plea of not guilty.
Trial thereafter ensued.
During trial, the prosecution presented, among others, the following object
evidence:
1. One (1) heat-sealed transparent plastic sachet containing 0.049
grams of white crystalline substance.The plastic sachet is dated "11
4
June 2008" and marked with "JSE-EBB," and
5 7
2. Chemistry Report D-184-08
The foregoing object evidence weresupplemented by the testimonies of Police
Officer Jay Espiritu (PO3 Espiritu), Special Police Officer Noli Daraman (SPO1
Daraman) and police chemist Jebie Timario (Mr. Timario).
PO3 Espiritu and SPO1 Daraman were the police officers who conducted the
buy-bust operation that led tothe arrest of the appellant. Their testimonies
6
recounted the following events:
1. On 11 June 2008, PO3 Espiritu and SPO1 Daraman engaged in a
buy-bust operation against appellantafter receiving confirmation from
the Chief Intelligence Officer(CIO) of the Camiling PNP that the former
was involved in the peddling of shabu. The confirmation from the CIO
came at the heels of a week-long surveillance on the appellant
conducted by the Camiling PNP.
2. As the designated poseur-buyer of the operation, PO3 Espiritu met
with the appellant outside the latter’s residence at Bobon 1st, Camiling,
Tarlac. SPO1 Daraman,on the other hand, hid behind a tree about ten
(10) to twenty(20) meters from where PO3 Espiritu and appellant were
standing.
3. PO3 Espiritu was able to negotiate and successfully purchase from
the appellant one (1) heat-sealed transparent plastic sachet.1âwphi1 In
exchange, PO3 Espiritu handed to the appellant a previously marked
₱500 bill. After the transaction, PO3 Espiritu proceeded to arrest
appellant. SPO1 Daraman, who was able to witness the exchange,
emerged from his hiding place and aided in the arrest of the appellant.
4. PO3 Espiritu and SPO1 Daraman retrieved from appellant the
marked ₱500 bill. They then proceeded to call the barangay officials of
the place to witness the inventory of the plastic sachet containing white
crystalline substance and the marked money. Photographs of the plastic
sachet, the marked bill and of the appellant were also taken.
5. PO3 Espiritu and SPO1 Daraman brought the appellant and the
recovered items to the Camiling PNP station. The plastic sachet
containing white crystalline substance were then dated "11 June 2008"
and marked with "JSE-EBB"—the initials of both PO3 Espiritu and the
appellant. 6. On 12 June 2008, PO3 Espiritu and SPO1 forwarded to the
PNP Crime Laboratory the plastic sachet, now dated "11 June 2008"
and marked "JSE-EBB," along with a request for laboratory
examination.
In his testimony, PO3 Espiritu also identified the plastic sachet dated "11 June
2008" and marked with "JSE-EBB" presented by the prosecution as the very
one he retrieved from the appellant during the buy-bust.
Mr. Timario, on the other hand, isa police chemist for the Camiling PNP and the
one who conducted laboratory examination on the contents of the plastic sachet
dated "11 June 2008" and marked "JSE-EBB." He is also the signatory of
Chemistry Report D-184-08. Mr. Timario testified that per Chemistry Report D-
184-08, hewas able to confirm that the contents of the plastic sachet dated "11
June 2008" and marked "JSE-EBB" are positive for methamphetamine
8
hydrochloride or shabu.
The defense, for its part, relied on the testimonies of the appellant and his
brother, Exequil Balaquit (Exequil).
In substance, appellantdenied being caught, in flagrante, selling shabuand
claimed that he was merely a victim of a police frame-up. He professed the
9
following version of events:
1. On the date and time of the supposed buy-bust, he was in a day care
center where he bought some sopasfor his children. On his way home,
he encountered two (2) men aboard a motorcycle. 2. One of the two (2)
men aboard the motorcycle alighted and drew a gun at him. At that
point, SPO1 Daraman arrived and introduced himself and the one
pointing a gun at him as policemen.
3. Afterwards, SPO1 Daraman and other police officers led him to an
alley. One of the police officers twisted his arms. At the alley, he was
forced to sign a report. Later, the barangay captain also arrived and
signed the same report.
4. He was then brought to the Camiling PNP station where he was
detained.
Exequil corroborated the denial of his brother. He recounted that he saw the
10
appellant, arm-twisted and all, being led to an alley by police officers.
11
On 24 June 2010, the RTC rendered a decision finding appellant guilty beyond
12
reasonable doubt of the offense of illegal sale of shabuunder Section 5 of the
Comprehensive Dangerous Drugs Act of 2002. In doing so, the RTC gave full
faith and credenceto the version of the prosecution as established by the
testimonies of PO3 Espiritu, SPO1 Daraman and Mr. Timario. Accordingly, the
RTC sentenced appellant to suffer the penalty of life imprisonment and to pay a
fine of ₱500,000.00.
Aggrieved, appellant appealedthe RTC decision to the CA.
On 29 August 2012, the CA rendered a decision affirming the RTC. Hence, this
appeal.
In this appeal, appellant claims that the RTC and the CA erred in giving full faith
and credence to the version of the prosecution. To support his claim, he cites
three (3) circumstances:
1. The prosecution never presented as a witness the CIO of the
Camiling PNP.
2. The Camiling PNP never coordinated with the Philippine Drug
Enforcement Agency (PDEA).
3. The representation by the prosecution that the appellant was under
surveillance prior to the buy-bust is not believable. If it were true, then
the Camiling PNP could have just applied for a search warrant against
the appellant.
These circumstances, the appellant believes, destroy the credibility of the
prosecution story that the Camiling PNP really undertook a genuine buybust
operation and also lend trustworthiness to his own version that he was merely a
victim of a frame-up.
At any rate, the appellant adds thathis acquittal for the two charges is in order
because the prosecution failed to prove the corpus delicti of the offense
charged. Appellant claims that the identity of the shabuthat was presented by
the prosecution in evidence issuspect in view of the failure by PO3 Espiritu and
SPO1 Daraman to mark the plastic sachet they allegedly retrieved during the
13
buy-bust immediately thereat as required by Section 21 of the Comprehensive
Dangerous Drugs Act of 2002. Appellant points out that PO3 Espiritu and SPO1
Daraman, by their own testimonies, admitted to marking such plastic sachetonly
after bringing the same to the police station.
OUR RULING
We deny the appeal.
The RTC and the Court of Appeals did not err in giving full faith and credence to
the testimony of the prosecution witnesses
We find no error on the part of the RTC and the CA in sustaining the
prosecution’s version of events. The circumstances cited by the appellant does
not at all destroy its credibility:
First. The non-presentation as a witness of the CIO of the Camiling PNP does
not discount that a legitimate buy-bust operation was undertaken in this case.
The conduct of the buy-bust operation was already adequately established by
the testimonies of PO3 Espiritu and SPO1 Daraman who were the very
participants of such operation. Indeed, the testimony of the CIO would, at most,
merely corroborate the testimonies of PO3 Espiritu and SPO1 Daraman.
Second. The appellant’s qualm regarding the absence of coordination between
14
the Camiling PNP and the PDEA is also immaterial. In People v. Roa, this
Court ruled that prior coordination with the PDEA is not a condition sine qua
nonfor the validity of every entrapment operation conducted by police
authorities:
In the first place, coordination with the PDEA is not an indispensable
requirement before police authorities may carry out a buy-bust
15
operation.1âwphi1 While it is true that Section 86 of Republic Act No. 9165
requires the National Bureau of Investigation, PNP and the Bureau of Customs
to maintain "close coordination with the PDEA on all drug related matters," the
provision does not, by so saying, make PDEA’s participation a condition sine
qua nonfor every buy-bust operation. After all, a buy-bust is just a form of an in
16
flagrante arrest sanctioned by Section 5, Rule 113 of the Rules of the Court,
which police authorities may rightfully resort to in apprehending violators of
17
Republic Act No. 9165 in support of the PDEA. A buy-bust operation is not
invalidated by mere non-coordination with the PDEA.
Third. The assertion that the Camiling PNP could have just applied for a search
warrant instead of conducting a buy-bust operation is irrelevant to the issue of
whether a legitimate buy-bust operation was, in fact, undertaken. The decision
whether to apply for a search warrant or to conduct instead a buy-bust operation
on any given case is a matter rightfully addressed to the sound discretion of the
police officers. Certainly, police officers have the right to choose which legal
means or processes are best suited, given the circumstances, in accomplishing
the task they are called upon to perform.
Verily, appellant is left with only his denial to fend off the serious accusations
against him. Such denial, by itself, however, cannot overcome the weight
traditionally accorded toaffirmative testimonies by police officers with unsullied
18
credibility. The RTC and the CAwere, therefore, correct in giving full faith and
credit to the open court narrations of PO3 Espiritu and SPO1 Daraman.
Corpus delicti of the offense
proven beyond reasonable doubt
We also find that the corpus delictiof the offense was adequately proven in this
case.
A review of the evidence on recordwill show that the prosecution was able to
establish an unbroken chain of custody over the shabuthat it claims as having
been sold by the appellant:
1. PO3 Espiritu testified that he was able to buy ₱500.00 worth of
shabuinside a transparent plastic sachet from appellant, which he
19
brought to the Camiling PNP station.
2. Upon arrival at the station, PO3 Espiritu Espiritu testified that he
dated the plastic sachet "11 June 2008" a marked it with "JSE-EBB."
20
Afterwards, a request for laboratory examination was prepared.
3. The next day, plastic sachet dated "11 June 2008" and marked "JSE-
EBB" was sent to the PNP Crime Laboratory along with the request for
21
laboratory examination.
4. At the PNP Crime Laboratory, Mr. Timario conducted examination on
the contents of the plastic sachet dated "11 June 2008" and marked
22
"JSE-EBB" that yielded positive results for shabu.
5. Afterwards, the shabuwas retrieved for purposes of the trial.
23
Evidently, the prosecution was able to account for each and every link in the
chain of custody over the shabu, from the moment it was retrieved during the
buy-bust operation up to the time it was presented before the court as proof of
the corpus delicti.
Contrary to appellant’s assertion, the failure by PO3 Espiritu and SPO1
Daraman to mark the seized shabuimmediately at the place where the buy-bust
was conducted will notautomatically impair the integrity of the chain of custody
so established. Strictly speaking, marking the seized contraband at the nearest
police station,rather than at the place where the buy-bust operation was
conducted, is not even a violation of the procedure set forth in Section 21 of the
Comprehensive Dangerous Drugs Act of 2002. Thus, in People v.
24
Resurreccion, this Court explained:
Accused-appellant broaches the view that SA Isidoro’s failure to mark the
confiscated shabuimmediately after seizure creates a reasonable doubt as to
25
the drug’s identity. People v. Sanchez, however, explains that RA 9165 does
not specify a time frame for "immediate marking," or where said marking should
be done:
What Section 21 of R.A. No. 9165 and its implementing rule do not expressly
specify is the matter of "marking" of the seized items in warrantless seizures to
ensure that the evidence seized upon apprehension is the same evidence
subjected to inventory and photography when these activities are undertaken at
the police station rather than at the place of arrest. Consistency with the enter
the chain and are eventually the ones offered in evidence - should be done ( 1)
in the presence of the apprehended violator (2) immediately upon
confiscation.1âwphi1
To be able to create a first link in the chain of custody, then, what is required is
that the marking be made in the presence of the accused and upon immediate
confiscation. "Immediate confiscation" has no exact definition. Thus, in People v.
 26
Gum-Oyen, testimony that included the marking of the seized items at the
police station and in the presence of the accused was sufficient in showing
compliance with the rules on chain of custody. Marking upon immediate
confiscation contemplates even marking at the nearest police station or office of
the apprehending team. (Emphasis supplied)

Verily, We are satisfied that the corpus delicti of the offense in this case was
proven beyond reasonable doubt.

WHEREFORE, premises considered, the instant appeal is DENIED. The

Decision dated 29 August 2012 of the Court of Appeals in CA-G.R. CR-H.C. No.
04595 is hereby AFFIRMED.

SO ORDERED.
G.R. No. 209588 February 18, 2015 On July 3, 2004, the police authorities received information that again drugs
were being distributed at Purok 3, Barangay Poblacion, Villanueva, Misamis
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, Oriental. Thus, at 5:30 o’clock in the afternoon, the Provincial Anti-Illegal Drugs
vs. Special Operation Task Unit (PAID-SOTU) elements led by SPO4 Lorenzo Larot
ERIC ROSAURO y BONGCAWIL, Accused-Appellant. and PO3 Juancho Dizon positioned themselves in the house of their confidential
agent.
DECISION
There, the PAID-SOTU elements saw Rosauro negotiate with the confidential
PEREZ, J.: agent. In exchange for the one (1) sachet of shabu given by Rosauro to the
confidential agent, the latter gave him a marked 100-peso bill with serial number
1 YZ7 12579.
For the consideration of the Court is an appeal of the Decision dated 19 June
2013 of the Court of Appeals (CA) in CA-G.R. CR-H.C. No. 00552- MIN, which
2 After the transaction, Larot and Dizon came out of their hiding place and
affirmed the Judgment dated 24 November 2006 of the Regional Trial Court
arrested Rosauro. Thereafter, the confidential agent handed the sachet to Larot,
(RTC), Cagayan de Oro City, Branch 25 in Criminal Case No. 2004-856, finding
who taped it, mark edit with the marking "Exhibit A", and placed it inside his
accused-appellant Eric Rosauro y Bongcawil (accused-appellant) guilty beyond
pocket. He also took pictures of Rosauro and the drugs. In the police station, he
reasonable doubt of illegal sale of shabu under Sec. 5, Article II of Republic Act
No. 9165 (R.A. No. 9165) or the Comprehensive Dangerous Drugs Act of 2002, prepared a Certificate of Inventory and a Request for Laboratory Examination.
sentencing him to suffer the penalty of life imprisonment and ordering him to pay Both the drugs and Rosauro were then turned over to the Crime laboratory.
a fine of ₱500,000.00.
On the basis of the request made by Larot, Police Chief Inspector Ma. Leocy
3 Mag-abo, the Forensic Chemical Officer of PNP Crime Laboratory conducted a
In an Amended Information dated 21 February 2005, accused-appellant was
charged with violation of Sec. 5, Art. II of R. A. No. 9165, to wit: laboratory examination on the contents of the sachet, on accused-appellant, and
the marked money. The examination of the seized item yielded positive result for
methamphetamine hydrochloride (shabu); while the accused-appellant and the
That on the 3rd day of July, 2004at about 5:30 o’clock in the afternoon, more or marked money tested positive for the presence of ultra-violet fluorescent
less, at Purok 3, Barangay Poblacion, Municipality of Villanueva, Province of powder.
6
Misamis Oriental, Republic of the Philippines, and within the jurisdiction of this
Honorable Court, the above-named accused, not being authorized by law to
possess and to sell any dangerous drugs, knowingly, willfully and feloniously, For his part, accused-appellant claims that he was merely a victim of instigation:
did then and there, sell and convey to a third person, who acted as a decoy in a
buy bust operation, one (1) sachet of shabu, containing 0.04 grams (sic) of Accused-appellant Rosauro, on the other hand, tells a different tale. He testified
shabu, which when examined gave POSITIVE result to test for the presence of that on July 3, 2004, the police asset went to his house four (4) times and
4 convinced him to do an errand for him. Rosauro refused to buy shabu as he did
Methamphetamine Hydrochloride (Shabu), a dangerous drug.
not know where to buy one. It was the confidential informant who told him to buy
the prohibited drug from a certain "Kael" and to deliver it to the former’s house.It
Upon re-arraignment, accused-appellant pleaded not guilty to the crime
5 was also the informant who gave the money to Rosauro to buy the shabu. But
charged. Thereafter, pre-trial and trial on the merits ensued.
Rosauro was not able to meet or buy directly from Kael because it was a young
man who got and handed to him the shabu on the road. When Rosauro went to
Based on the records, the prosecution’s version of the facts is as follows: the house of the confidential informant as instructed, he was arrested by SPO4
Larot and Dizon. The sachet of shabu was not even recovered from him but
7
On October 13, 2002, on the basis of unconfirmed reports that accused- from the confidential informant.
appellant Eric Rosauro (Rosauro for brevity) was selling and distributing drugs,
the Provincial Drug Enforcement Unit of Misamis Oriental conducted a test-buy Finding the evidence of the prosecution sufficient to establish the guilt of
operation in the Municipality of Villanueva, Misamis Oriental using a confidential accused-appellant, the RTC rendered a judgment of conviction, viz.:
agent. The confidential agent bought shabu from Rosauro at Purok 2, Barangay
Katipunan, Villanueva, Misamis Oriental. The substance bought from Rosauro
IN THE LIGHT OF THE FOREGOING, this Court hereby renders Judgment
was examined by the PNP crime laboratory and yielded a positive result for
finding accused ERIC ROSAURO y BONGCAWIL, "guilty" beyond reasonable
Methamphetamine Hydrochloride (commonly known as shabu).
doubt of the crime charged in the information for selling and delivering a sachet
of shabu to the poseur buyer a Violation of Section 5, Article II of R.A. 9165 and
imposes a penalty of life imprisonment and a fine of Five Hundred Thousand
(PhP 500,000.00) Pesos and to pay the cost.
The accused ERIC B. ROSAURO who has undergone preventive imprisonment
shall be credited in the service of his sentence consisting of deprivation of
liberty, with the full time during which he has undergone preventive
imprisonment if the detention prisoner agrees voluntarily in writing to abide by
the same disciplinary rule imposed upon convicted prisoners, except those
disqualified by law.
The sachet of shabu, Exh. "A" is confiscated and forfeited in favor of the
8
government to be destroyed in accordance with law.
Accused-appellant appealed before the CA, assigning a lone error:
I As here, the solicitation of drugs from appellant by the informant utilized by the
THE COURT A QUO GRAVELY ERRED IN CONVICTING THE ACCUSED-
APPELLANT WHEN HIS GUILT WAS NOT PROVEN BEYOND REASONABLE
DOUBT.
9 appellant. There was no showing that the informant induced the appellant to sell
After a review of the records, the CA affirmed the RTC Judgment. The appellate
court ruled that what transpired in the case at bar was an entrapment and not an
10
instigation; that all the elements of illegal sale of regulated or prohibited drugs
11
were duly proven; that the non-presentation of the confidential agent in court is
12
not fatal; that the inconsistencies in the testimony of the lone witness of the
13
prosecution do not affect the result of the case; and that the apprehending
team was able to preserve the integrity of the subject drug and that the
prosecution was able to present the required unbroken chain in the custody of
14
the subject drug. Thus, the CA held:
WHEREFORE, the Judgment dated November 24, 2006 of the Regional Trial
Court, Branch 25, Cagayan de Oro City in Criminal Case No. 2004-856 is
15
hereby AFFIRMED.
Accused-appellant is now before the Court seeking a review of his conviction.
After a thorough review of the records, however, we dismiss the appeal.
It is apropos to reiterate here that where there is no showing that the trial court
overlooked or misinterpreted some material facts or that it gravely abused its
discretion, the Court will not disturb the trial court’s assessment of the facts and
the credibility of the witnesses since the RTC was in a better position to assess
and weigh the evidence presented during trial. Settled too is the rule that the
factual findings of the appellate court sustaining those of the trial court are
binding on this Court, unless there is a clear showing that such findings are
16
tainted with arbitrariness, capriciousness or palpable error.
The RTC and the CA both found the arrest of accused-appellant to be the result
of a legitimate entrapment procedure, and we find nothing in the records as to
17
warrant a contrary finding. In People v. Bartolome, we had the occasion to
discuss the legitimacy of a "decoy solicitation," to wit:
It is no defense to the perpetrator of a crime that facilities for its commission
were purposely placed in his way, or that the criminal act was done at the
"decoy solicitation" of persons seeking to expose the criminal, or that detectives
feigning complicity in the act were present and apparently assisting its
commission. Especially is this true in that class of cases where the office is one
habitually committed, and the solicitation merely furnishes evidence of a course
of conduct.
police merely furnishes evidence of a course of conduct. The police received an
intelligence report that appellant has been habitually dealing in illegal drugs.
They duly acted on it by utilizing an informant to effect a drug transaction with
illegal drugs to him.1âwphi1
Similarly, the presentation of an informant as witness is not regarded as
indispensable to the success of a prosecution of a drug-dealing accused. As a
rule, the informant is not presented in court for security reasons, in view of the
need to protect the informant from the retaliation of the culprit arrested through
his efforts. Thereby, the confidentiality of the informant’s identity is protected in
deference to his invaluable services to law enforcement. Only when the
testimony of the informant is considered absolutely essential in obtaining the
conviction of the culprit should the need to protect his security be
18
disregarded. In the present case, as the buy-bust operation was duly
witnessed by the Provincial Anti-Illegal Drugs Special Operation Task Unit
(PAID-SOTU) elements led by SPO4 Lorenzo Larot (SPO4 Larot) and PO3
Juancho Dizon, their testimonies can take the place of that of the confidential
informant.
As to whether accused-appellant’s guilt was established beyond reasonable
doubt, we rule in the affirmative.
In a catena of cases, this Court laid down the essential elements to be duly
established for a successful prosecution of offenses involving the illegal sale of
dangerous or prohibited drugs, like shabu, under Section 5, Article II of R.A. No.
9165, to wit: (1) the identity of the buyer and the seller, the object of the sale,
and the consideration; and (2) the delivery of the thing sold and payment
therefor. Briefly, the delivery of the illicit drug to the poseur-buyer and the receipt
of the marked money by the seller successfully consummate the buy-bust
transaction. What is material, therefore, is the proof that the transaction or sale
19
transpired, coupled with the presentation in court of the corpus delicti.
Verily, all the elements for a conviction of illegal sale of dangerous or prohibited
drugs were proven by the prosecution: the identity of accused-appellant as the
seller, and that of the confidential informant as poseur-buyer were established,
as well as the exchange of the sachet of shabu and the marked money. It was
also ascertained that the seized item was positive for shabu, a dangerous drug,
and that the same item was properly identified in open court by SPO4 Larot.
Moreover, the ₱100.00 bill with serial number YZ712579, or the subject marked
money, as well as the living body of the accused-appellant revealed a positive
result for ultraviolet fluorescent powder.
Accused-appellant avers that the prosecution was not able to prove the corpus
delicti, and that the statutory safeguards provided for in Sec. 21 of R.A. No.
9165 were not followed.
20
Indeed, as we held in People v. Torres, equally important in every prosecution
for illegal sale of dangerous or prohibited drugs is the presentation of evidence
of the seized drug as the corpus delicti. The identity of the prohibited drug must
be proved with moral certainty. It must also be established with the same degree
of certitude that the substance bought or seized during the buy-bust operation is
the same item offered in court as exhibit. In this regard, paragraph 1, Section 21,
Article II of R. A. No. 9165 (the chain of custody rule) provides for safeguards for
the protection of the identity and integrity of dangerous drugs seized, to wit:
SEC. 21. Custody and Disposition of Confiscated, Seized, and/or Surrendered
Dangerous Drugs, Plant Sources of Dangerous Drugs, Controlled Precursors
and Essential Chemicals, Instruments/Paraphernalia and/or Laboratory
Equipment. – The PDEA shall take charge and have custody of all dangerous
drugs, plant sources of dangerous drugs, controlled precursors and essential
chemicals, as well as instruments/paraphernalia and/or laboratory equipment so
confiscated, seized and/or surrendered, for proper disposition in the following
manner:
(1) The apprehending team having initial custody and control of the drugs shall,
immediately after seizure and confiscation, physically inventory and photograph
the same in the presence of the accused or the person/s from whom such items
were confiscated and/or seized, or his/her representative or counsel, a
representative from the media and the Department of Justice (DOJ), and any
elected public official who shall be required to sign the copies of the inventory
and be given a copy thereof.
However, this Court has, in many cases, held that while the chain of custody
should ideally be perfect, in reality it is "almost always impossible to obtain an
unbroken chain." The most important factor is the preservation of the integrity
and the evidentiary value of the seized items as they will be used to determine
the guilt or innocence of the accused. Hence, the prosecution’s failure to submit
in evidence the physical inventory and photograph of the seized drugs as
required under Article 21 of R. A. No. 9165, will not render the accused’s arrest
21
illegal or the items seized from him inadmissible.
The chain of custody is not established solely by compliance with the prescribed
physical inventory and photographing of the seized drugs in the presence of the
enumerated persons. The Implementing Rules and Regulations of R. A. No.
9165 on the handling and disposition of seized dangerous drugs states:
x x x Provided, further, that non-compliance with these requirements under
justifiable grounds, as long as the integrity and evidentiary value of the seized
items are properly preserved by the apprehending officer/team, shall not render
22
void and invalid such seizures of and custody over said items. (Italics,
emphasis, undescoring omitted)
In the case at bar, after the sale was consummated, the confidential informant
gave the seized item to SPO4 Larot who placed tape on the sachet and marked
it "Exhibit A." Upon reaching the police station, SPO4 Larot executed the
Certificate of Inventory, as well as the request for laboratory examination. The
request, the specimen, as well as the marked money and accused-appellant
were then brought to the PNP Crime Laboratory for examination. They were
received. by SPO2 Ricardo Maisog, the Receiving Clerk of the PNP Crime
Laboratory Office, who then forwarded them to Police Inspector Ma. Leocy
Jabonillo Mag-abo, the Forensic Chemical Officer of the PNP Crime
23
Laboratory. Moreover, the seized item was duly identified by SPO4 Larot in
open court as the same item seized from accused-appellant.
Accused-appellant's guilt having been established, we likewise affirm the
penalty imposed by the RTC and the CA. Under the law, the offense of illegal
sale of shabu carries with it the penalty of life imprisonment to death and a fine
ranging from Five Hundred Thousand Pesos (₱500,000.00) to Ten Million Pesos
24
(₱10,000,000.00), regardless of the quantity and purity of the substance. Thus,
the RTC and CA were within bounds when they imposed the penalty of life
imprisonment and a fine of Five Hundred Thousand Pesos (₱500,000.00).
WHEREFORE, premises considered, the present appeal is DISMISSED.
SO ORDERED.
G.R. No. 200987 August 20, 2014
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,
vs.
RONALDO BAYAN y NERI, Accused-Appellant.
DECISION
PEREZ, J.:
1 5
On appeal is the Decision of the Court of Appeals promulgated on 19 July 2011
2
affirming the conviction by the Regional Trial Court (RTC) of Quezon City,
Branch 82, of appellant Ronaldo Bayan y Neri for violation of Section 5, Article II
of Republic Act No. 9165 and sentencing him to suffer life imprisonment and to
pay a ₱500,000.00 fine.
Appellant was charged following a "buy-bust" operation.
The accusatory portion of the Information against appellant reads:
That on or about the 5th day of July 2003, in Quezon City, Philippines, the said
accused, not authorized by law to sell, dispense, deliver, transport or distribute
any dangerous drug, did then and there, willfully and unlawfully sell, dispense,
deliver, transport, distribute or act as broker in the said transaction, zeropoint
zero three (0.03) grams of Methylamphetamine Hydrochlorideknown as Shabu,
3
a dangerous drug.
When arraigned, appellant pleaded not guilty. Trial ensued.
The prosecution presented as witnesses PO2 Emeterio Mendoza, Jr. (PO2
Mendoza), who acted as poseur-buyer, and PO3 Ferdinand de Guzman (PO3
de Guzman), a back-up operative who assisted PO2 Mendoza. Their
testimonies sought to establish the following facts:
Police operatives from the Station Drug Enforcement Unit (SDEU) of the
Novaliches Police Station conducted a buy-bust operation on 5 July 2003 based
on a tip from an informant thata certain Ronaldo Bayan and Irene Bayan (Irene)
were engaged in illegal drug trade in BarangayCapri, Novaliches, Quezon City.
The team leader, PO3 de Guzman, narrated that the buy-bust team conducted a
surveillance at BarangayCapri where they were able to confirm that an illegal
drug activity was ongoing in the house of appellant. PO2 Mendoza prepared the
pre-operation report which was submitted to the Philippine Drug Enforcement
4
Agency. PO2 Mendoza was assigned as the poseur-buyer while PO3 de
Guzmanacted as one of his backups. At about 7:40 p.m. of the same day, the
team proceeded to the target place. The buy-bust team was strategically
positioned in the area while the informant and PO2 Mendoza went directly to the
house of appellant. When appellant opened the door, the informant introduced
PO2 Mendoza to appellant as the buyer of shabu. Appellant’s live-in partner,
Irene, was likewise present during the introduction. PO2 Mendoza readily gave
the 100-peso bill to appellant in exchange for the small plastic sachet containing
shabu. Immediately after the exchange, PO2 Mendoza placed his hand on
appellant’s shoulder, introduced himself as a police officer and arrested
appellant. Irene meanwhile tried to escape but PO3 de Guzman was able to
arrest her. PO3 de Guzmanrecovered from Irene’s possession dried marijuana
leaves wrapped in a newspaper.Appellant and Irene were brought to the police
station where PO2 Mendoza put his markings "EM" on the plastic sachet he
received from appellant. Thereafter, they brought the plastic sachet to the crime
laboratory.
The forensic chemist issued anInitial Laboratory Report which revealed that the
heat-sealed transparent plastic sachet with markings "EM" containing 0.03 gram
of white crystalline substance was found positive for shabu.
6
In his defense, appellant denied the charge against him. He claimed that he and
Irene were walking on their way home when they were blocked by five men at
the corner of Guyabano Street and Amparo Capri Street. Appellant recognized
one of them as Isagani Mateo, who frequently displaces them whenever they
sell inthe market. The five men frisked, handcuffed, and brought them to Station
4, Novaliches, Quezon City. Thereat, they were asked to remove their clothes
and they were frisked again. Appellant saw a sachet of shabuand marijuanaon
top of a table. They were forced by one of the policeman to point to the objects
under threat of physical harm, while their photographs were being taken. They
were also asked to sign a document which they were not able to read. Later that
night, they were brought to the fiscal’s office for inquest without the presence of
7
counsel.
On 20 February 2007, the RTC rendered a Decision finding appellant guilty of
violation of Section 5, Article II of Republic Act No. 9165 and sentencing him to
suffer life imprisonment and to pay a ₱500,000.00 fine. Irene was likewise found
guilty for violation of Section 11, Article II of Republic Act No. 9165 and was
sentenced to suffer the indeterminate penalty of imprisonment of twelve
(12)years and one (1) day as minimum to thirteen (13) years as maximum and
8
to pay a fine in the amount ₱300,000.00. The trial court gave credence to the
testimonies of the members of the buy-bust team.
After receiving a copy of the trial court's Decision, the two accused seasonably
9
filed a Notice of Appeal before the Court of Appeals. On 19 July 2011, the
appellate court acquitted Irene for violation of Section 11, Article II of Republic
Act No. 9165 but appellant’s conviction was affirmed in toto.
The appellate court held that the prosecution established the consummation of
the sale through the testimony of the poseur-buyer.
Appellant appealed his conviction before this Court, adopting the same Q: Where was that?
arguments in his Brief before the Court of Appeals.
A: No. 17 Guyabano Street, Barangay [Capril], Novaliches, Quezon City.
Appellant maintains that the prosecution failed to prove beyond reasonable
doubt the guilt of appellant dueto the glaring inconsistencies in the testimonies Q: What time was that, what time did you arrive there?
of the prosecution’s witnesses. Appellant points out that PO2 Mendoza spoke of
an alleged informant while PO3 de Guzman mentioned a concerned citizen who A: About 7:40.
called the police station to inform them of an illegal drug trade. Appellant asserts
that the prosecution failed to present the buy-bust money as proof of the illegal
sale of shabu. Appellant argues that since the buy-bust money was the COURT:
consideration of the alleged sale, failure to adduce it in evidence is tantamount
to failure to establish the elements of the crime. 7:40 in the evening? A: Yes, your Honor.

Appellant’s arguments deserve scant consideration. Jurisprudence dictates that PROS. ANTERO:
minor inconsistencies do not affect the credibility of the witness. We have held
that "discrepancies and inconsistencies in the testimonies of witnesses referring What happened when you arrived there?
to minor details, and not in actuality touching upon the central fact of the crime,
do not impair their credibility. Testimonies of witnesses need only corroborate A: The informant introduced me to Ronaldo Bayan.
each other on important and relevant details concerning the principal
occurrence. In fact, such minor inconsistencies may even serve to strengthen
Q: Where did you get contact with the subject?
the witnesses’ credibility as they negate any suspicion that the testimonies have
10
been rehearsed."
A: At No. 17 Guyabano Street.
Failure to present the buy-bust money is not fatal to the prosecution’s cause. It
is not indispensable in drugcases since it is merely corroborative evidence, and Q: How were you introduced to the subject by the informant?
the absence thereof does not create a hiatus inthe evidence for the prosecution
provided the sale of dangerous drugs is adequately proven and the drug subject A: I was introduced as buyer of shabu.
of the transaction ispresented before the court. Neither law nor jurisprudence
11
requires the presentation of any money used in the buy-bust operation. Q: To whom?

In every prosecution for illegal sale of shabu, the following elements must be A: Ronaldo Bayan, sir.
sufficiently proved: (1) the identity of the buyer and the seller, the object and the
consideration; and (2) the delivery of the thing sold and the payment Q: Is this Ronaldo Bayan inside this courtroom?
12
therefor. Indeed, all these elements were duly established.
A: Yes, sir.
Appellant was caught in flagrante delictoselling shabuthrough a buy-bust
operation conducted by the operatives of SDEU of the Novaliches Police
Station. Q: Can you point to him?

The poseur-buyer, PO2 Mendoza, positively testified that the sale took place INTERPRETER:
and appellant was the author thereof, thus:
The witness is going to a man inyellow shirt who answered by the name of?
Q: What happened after you were tasked as poseur-buyer?
ACCUSED:
A: We proceeded to the subject of our operation.
RONALDO BAYAN.
INTERPRETER: Q: What did this Ronaldo Bayan do after you handed him this ₱100.00?

RONALDO BAYAN. A: He gave me shabu, sir.

COURT: COURT:

Who were present when you were introduced by the informant to Ronaldo Where was it contained?
Bayan?
A: Small plastic sachet, your Honor.
A: The live-in partner, Irene Bayan, me, the informant and Ronaldo Bayan, your
Honor. PROS. ANTERO:

PROS. ANTERO: He gave you a small plastic sachet?

Is this Irene Bayan inside this courtroom? A: Yes, sir.

A: Yes, sir. Q: What happened after he gaveyou a small plastic sachet?

Q: Can you point to her? A: I introduced myself as policeman.

INTERPRETER: Q: What happened after you introduced yourself asa policeman?

The witness is [pointing] to a woman who answered by the name of? A: I placed my hand on his shoulder and introduced myself as a policeman and
13
told him of his mistake and of his rights.
ACCUSED 2:
Appellant produced the plastic sachet containing shabuand handed it to the
IRENE BAYAN. poseur-buyer in exchange for ₱100.00. This transaction was witnessed by PO3
de Guzman who acted as one of the back-ups.
INTERPRETER:
Furthermore, the prosecution was ableto preserve the integrity and evidentiary
Irene Bayan. value of the said illegal drugs.1âwphi1 The prosecution was able to sufficiently
establish the following circumstances showing an unbroken chain of custody
over the shabuthat was seized from herein accusedappellant: (1) P02 Mendoza,
PROS. ANTERO:
who acted as the poseur-buyer during the buybust operation, was the one who
received the transparent plastic sachet containing shabu from the
What happened after you were introduced to Ronaldo Bayan by the informant? 14
appellant; (2) the said transparent plastic sachet was then brought by PO2
15
Mendoza to the police station where he placed his initials "EM"; (3) thereafter,
A: I gave the ₱100.00, sir. 16
said sachet was brought to the crime laboratory for examination; and (4) the
laboratory examination was conducted by Police Inspector Abraham Verde
17
A: Ronaldo Bayan, sir. Tecson.

Q: You gave it to whom? The result of the laboratory examination confirmed the presence of
methylamphetamine hydrochloride on the white crystalline substance inside the
A: To Ronaldo Bayan, sir. plastic sachet confiscated from appellant. The delivery of the illicit drug to the
poseur-buyer and the receipt by the seller of the marked money successfully
consummated the buy-bust transaction.

Appellant’s defense, which is predicated on a bare denial, deserves scant

consideration in light of the positive testimonies of the police officers. The
defense of frame-up or denial in drug cases requires strong and convincing
evidence because of the presumption that the law enforcement agencies acted
18
in the regular performance of their official duties. Bare denials of appellant
cannot prevail over the positive testimonies of the three police
19
officers. Moreover, there is no evidence of any improper motive on the part of
the police officers who conducted the buy-bust operation to falsely testify against
appellant.

Generally, factual findings of trial courts especially those which revolve matters
of credibility of witnesses deserve to be respected when no glaring errors
bordering on a gross misapprehension of the facts, or where no speculative,
arbitrary and unsupported conclusions, can be gleaned from such
20
findings. The evaluation of the credibility of witnesses and their testimonies are
best undertaken by the trial court because of its unique opportunity to observe
the witnesses’deportment, demeanor, conduct and attitude under grilling
21
examination.

We do not find any cogent reason to reverse the lower courts.

In fine, it has been established by proof beyond reasonable doubt that

appellants sold shabu. Under Section 5, Article II of Republic Act No. 9165, the
penalty of life imprisonment to death and fine ranging from ₱500,000.00 to
₱1,000,000.00 shall be imposed upon any person, who, unless authorized by
law, shall sell, trade, administer, dispense, deliver, give away to another,
distribute dispatch in transit or transport any dangerous drug, including any and
all species of opium poppyregardless of the quantity and purity involved. Hence,
the trial court, as affirmed by the Court of Appeals, correctly imposed the penalty
of life imprisonment and a fine of ₱500,000.00.

WHEREFORE, the Decision dated 19 July 2011 of the Court of Appeals

affirming the conviction of appellant Ronaldo Bayan y Neri by the RTC of
Quezon City, Branch 82 for violation of Section 5, Article II of Republic Act No.
9165 and sentencing him to suffer the penalty of LIFE IMPRISONMENT and to
pay a fine of ₱500,000.00 is hereby AFFIRMED.

SO ORDERED.
 March 11, 2015
G.R. No. 189296
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,
vs.
RECTO ANGNGAO y MAKAY and ROBERT CARLIN y
PECDASEN, Accused,
RECTO ANGNGAO y MAKAY, Accused-Appellant.
DECISION
BERSAMIN, J.:
The State bears the burden of establishing the chain of custody of the
dangerous drugs confiscated during a buy-bust operation. The evidence of the
chain of custody must meet the test of proof beyond reasonable doubt.
The Case
1
In its decision promulgated on November 28, 2008, the Court of Appeals (CA)
affirmed the conviction of Recto Angngao y Makay aka Amboy under the
judgment rendered on December 14, 2006 by the Regional Trial Court, Branch
61 (RTC), in Baguio City for the illegal sale of 250 grams of marijuana resin or
hashish (Criminal Case Nos. 22317-R), and for the illegal possession of 500
milliliters of hashish oil (Criminal Case Nos. 22318-R), and sentencing him in
2
each case to life imprisonment and to pay a fine of P500,000.00.
Hence, this appeal.
Antecedents
According to the CA, the established antecedent facts are as follows:
On 23 November 2003, SPO4 Marquez Madlon, member of the Philippine Drug
Enforcement Agency in the Cordillera Autonomous Region (PDEA-CAR),
received a call on his cellular phone from a caller who identified himself as
Amboy. Amboy, who turned out to be appellant Recto Angngao y Makay, was
asking for the whereabouts of a certain Jun Buguias, from whom he allegedly
got SPO4 Madlon’s number. Recalling that Buguias was one of those arrested
by the PDEA-CAR for selling marijuana hashish, SPO4 Madlon took interest in
the caller and made up a story by telling him that he was also waiting for
Buguias to deliver to him his order of marijuana hashish. Believing SPO4
Madlon’s story, appellant disclosed that he had marijuana resin which was
supposed to be delivered to Buguias. Appellant likewise proposed that SPO4
Madlon should deal with him directly since Buguias is (sic) nowhere to be found.
Appellant offered SPO4 Madlon to sell two hundred fifty (250) grams of
marijuana resin for Fifty Thousand Pesos (P50,000.00) and one (1) liter of
marijuana hashish oil for One Hundred Fifty Thousand Pesos (P150,000.00). He
agreed to deliver them to SPO4 Madlon on the same day, between 7:30 and
8:30 in the evening at the Petron Gasoline Station in Baguio General Hospital
along Marcos Highway.
Forthwith, SPO4 Madlon reported his conversation with appellant to his superior,
Police Supt. Danilo Flordeliza, Regional Director of PDEA-CAR.
Acting on SPO4 Madlon’s report, P/Supt Flordeliza conducted a briefing for a
buy-bust operation. A buy-bust team was thereafter formed with Police Senior
Inspector Edgar Apalla as the team leader, SPO4 Arthur Lucas as the back-up
guard, SPO2 Cabili Agbayani as the seizing officer, Police Officer Akia as the
arresting officer and SPO4 Madlon as the poseur buyer. The group brought with
them the buy-bust money consisting of ten (10) Five Hundred (P500.00) peso
bills, amounting to Five thousand Pesos (P5,000.00), mixed with one (1) bundle
of boodle money.
Around 7:15 in the evening, SPO4 Madlon proceeded to the target area on
board a rented Tamaraw FX Taxi, while the rest of the police operatives used
another vehicle. Upon arriving at the Petron Gasoline Station, SPO4 Madlon
called up appellant and informed him that he was already at the area waiting for
him.
After waiting for a while, SPO4 Madlon noticed a tamaraw FX Taxi at the vicinity
of the gasoline station. A man with a backpack alighted from the vehicle. He was
with another man and he seemed to be looking for somebody. To make sure
that it was appellant, SPO4 Madlon dialed appellant’s cellphone number. The
man, who turned out to be appellant, answered the call. SPO4 Madlon therefore
instructed him to meet him at the Pancake House located within the vicinity of
the Petron gasoline Station.
SPO4 Madlon sat and waited outside the Pancake House. Thereafter, appellant
arrived and introduced his companion, who was later identified as appellant’s
co-accused Robert Carlin y Pecdasen. Carlin sat beside SPO4 Madlon while
appellant took a seat opposite SPO4 Madlon. SPO4 Madlon then inquired about
their transaction and asked appellant if he could get a discount on the price of
the marijuana resin. Appellant refused. SPO4 Madlon then told appellant that he
wanted to inspect the marijuana resin and check if it was of good quality.
Appellant was at first hesitant but later on prevailed upon to bring out a brick of
marijuana resin from his backpack. He showed it to SPO4 Madlon, who after
confirming that it was indeed marijuana resin, took out the buy-bust money and
gave it to Carlin. Carlin, who, all the while was merely observing the transaction,
handed over the money to appellant. Thereafter, SPO4 Madlon stood up, as a
pre-arranged signal to the police operatives that the transaction had been and the costs, and Criminal Case No. 22318-R finding the accused Recto
completed. Angngao y Makay likewise GUILTY beyond reasonable doubt and he is hereby
sentenced to suffer Life Imprisonment and to pay a fine of P500,000.00 and the
The back-up police officers, who were strategically positioned from a seeing costs.
distance, rushed to the aid of SPO4 Madlon and arrested appellant and Carlin.
Upon frisking appellant, the police operatives recovered from him the buy-bust The accused Roberty (sic) Carlin is ACQUITTED on grounds of reasonable
money and a bottle of dark-green viscous liquid suspected to be marjuana doubt and is ORDERED RELEASED from custody unless otherwise being held
hashish oil. The confiscated items were marked with the initials "MKM" lawfully for some other offense requiring continued detention.
representing the initials of SPO4 Marquez Kilit Madlon, "CJA" for SPO2 Cabili
Julian Agbayani, "AAL" for SPO4 Arthur Apil Lucas and "DEA" for Police Officer 8
3
SO ORDERED.
Daniel Esteban Akia.
Decision of the CA
The confiscated substances, when brought to the Benguet Provincial Crime
Laboratory Office in Baguio City for processing and identification, tested positive 9
On November 28, 2008, the CA promulgated its assailed judgment affirming the
for marijuana, a dangerous drug. The brick of marijuana resin weighed 251.02
conviction of Angngao handed down by the RTC, to wit:
grams, while the bottle containing the dark green glutinous substance contained
4
450 milliliters of marijuana hashish oil.
WHEREFORE, the Decision of the Regional Trial Court of Baguio City, Branch
61, dated 14 December 2006, in Criminal Cases Nos. 22317-R and 22318-R, is
The Office of the City Prosecutor of Baguio City filed in the RTC two
AFFIRMED.
informations against Angngao and Robert Carlin y Pecdasen, charging them
with the illegal sale of marijuana resin and illegal possession of marijuana
hashish oil in violation of Republic Act No. 9165 (Comprehensive Dangerous SO ORDERED.
Drugs Act of 2002).
Issues
During the trial, Angngao denied the accusations, clarifying that he had been 10
working as a construction worker in Quirino Hill, Baguio City at the time, and that In this appeal, Angngao claims that the CA:
on the day of the arrest, was visiting his cousin who had been confined at the
Baguio City General Hospital; and that he was then suddenly accosted and I
arrested by police officers in the Pancake House near the hospital where he was
5
having a snack. x x x GRAVELY ERRED IN FINDING THE ACCUSED-APPELLANT GUILTY
BEYOND REASONABLE DOUBT OF THE CRIMES CHARGED.
For his part, Carlin, also denying the charges, insisted that he did not know
Angngao; that he was only accompanying a town mate who visited a friend II
confined at the Baguio City General Hospital; that after coming from the hospital,
he and his friend had gone to the Pancake House to eat when a commotion
x x x GRAVELY ERRED IN CONVICTING THE ACCUSED- APPELLANT
occurred inside the restaurant caused by police officers arresting a customer,
DESPITE THE PROSECUTIONS’S FAILURE TO ESTABLISH THE CHAIN OF
who turned out to be Angngao; and that the policemen then turned to him and
6 CUSTODY OF THE ALLEGED CONFISCATED DRUGS.
arrested him allegedly for being the cohort of Angngao.

In the appellee’s brief filed in the CA, which the Office of the Solicitor General
Judgment of the RTC
(OSG) adopted in this appeal, the State seeks the affirmance of the decision of
7 the CA by insisting that the police officers who comprised the entrapment team
On December 14, 2006, the RTC convicted Angngao but acquitted Carlin, viz.: were entitled to the presumption of the regularity of the performance of their
official duty.
WHEREFORE, judgment is rendered in Criminal Case No. 22317-R finding the
accused Recto Angngao y Makay GUILTY beyond reasonable doubt and he is Ruling of the Court
hereby sentenced to suffer Life Imprisonment and to pay a fine of P500,000.00
The appeal is meritorious.
To ensure a conviction for the illegal sale of dangerous drugs, the following
elements constituting the crime must be present, namely: (a) the identities of the
buyer and seller, the object of the sale, and the consideration; and (b) the
delivery of the thing sold and the payment for the thing. Such prosecution for the
sale of illegal drugs requires more than the hasty presentation of evidence to
prove each element of the crime. The presentation of the drugs as evidence in
court is indispensable in every prosecution for the illegal sale of dangerous
11
drugs because the drugs are the corpus delicti of the crime. As such, the State
should establish beyond doubt the identity of the dangerous drugs by showing
that the dangerous drugs offered in court as evidence were the same
12
substances bought during the buy-bust operation. This requirement is
complied with by ensuring that the custody of the seized drugs from the time of
confiscation until presentation in court is safeguarded under what is referred to
as the chain of custody by Republic Act No. 9165, whose objective is to remove
13
unnecessary doubts concerning the identity of the evidence.
Should the State not definitively establish that the dangerous drugs presented in
court were the very same substances actually recovered from the accused, the
criminal prosecution for drug pushing should fail because the guilt of the
14
accused was not established beyond reasonable doubt. According to People v.
15
Catalan, the Prosecution does not comply with the indispensable requirement
of proving the violation of Section 5 of Republic Act No. 9165 if the dangerous
drugs are missing, or if there are substantial gaps in the chain of custody of the
seized dangerous drugs that raise doubts about the authenticity of the evidence
presented in court. Indeed, the non- presentation of the dangerous drugs that
constitute the corpus delicti would render the conviction unfounded.
As the means for the establishment of the chain of custody, Section 21
(1)of R.A. No. 9165 provides thus:
(1)The apprehending team having initial custody and control of the drugs shall,
immediately after seizure and confiscation, physically inventory and photograph
the same in the presence of the accused or the person/s from whom such items
were confiscated and/or seized, or his/her representative or counsel, a
representative from the media and the Department of Justice (DOJ), and any
elected public official who shall be required to sign the copies of the inventory
and be given a copy thereof.
Complementing Section 21 (1) of R.A. No. 9165 is the following guideline under
the Implementing Rules and Regulations (IRR) of R.A. No. 9165, to wit:
(a) The apprehending officer/team having initial custody and control of the drugs
shall, immediately after seizure and confiscation, physically inventory and
photograph the same in the presence of the accused or the person/s from whom
such items were confiscated and/or seized, or his/her representative or counsel,
a representative from the media and the Department of Justice (DOJ), and any
elected public official who shall be required to sign the copies of the inventory
and be given a copy thereof: Provided, that the physical inventory and
photograph shall be conducted at the place where the search warrant is served;
or at the nearest police station or at the nearest office of the apprehending
officer/team, whichever is practicable, in case of warrantless seizures; Provided,
further, that non-compliance with these requirements under justifiable grounds,
as long as the integrity and the evidentiary value of the seized items are properly
preserved by the apprehending officer/team, shall not render void and invalid
such seizures of and custody over said items;
The manner and timing of the marking of the seized drugs or related items in
accordance with the foregoing statutory rules are crucial in proving the chain of
custody. The marking by the arresting officer of the drugs, being the starting
point in the custodial link, should be made immediately upon the seizure, or, if
that is not possible, as close to the time and place of the seizure as practicable
under the obtaining circumstances. This immediate marking is essential
because the succeeding handlers of the drugs would use the markings as their
reference to the seizure, and because it further serves to segregate the marked
seized drugs from all other evidence from the time and point of seizure until the
drugs are disposed of at the end of the criminal proceedings. The deliberate
taking of these identifying steps is statutorily aimed at obviating switching,
16
"planting" or contamination of the evidence. Verily, the preservation of the
chain of custody vis-à-vis the drugs ensures the integrity of the evidence
incriminating the accused, and fulfills the element of relevancy as a requisite for
the admissibility of the evidence.
The Court accepts that "while the chain of custody should ideally be perfect, in
reality it is not, ‘as it is almost always impossible to obtain an unbroken
17
chain.’" This limitation on the chain of custody is well recognized in Section 21
of R.A. No. 9165’s IRR, which states that non- compliance with the rules’
requirements under justifiable grounds shall not render void and invalid such
seizures of and custody over said items as long as the integrity and evidentiary
value of the seized items are properly preserved by the apprehending
officer/team. In resolving drug-related offenses, therefore, the courts should
deem to be essential "the preservation of the integrity and the evidentiary value
of the seized items, as the same would be utilized in the determination of the
guilt or innocence of the accused."
18
The conviction would have been watertight. SPO4 Madlon, who acted as the
poseur-buyer in the buy-bust operation, succeeded in purchasing from the
appellant the brick of marijuana resin weighing 251.02 grams, more or less, for a
total consideration of P50,000.00. The payment was received by the appellant
through Carlin. The ensuing physical search conducted on the appellant further
yielded the marijuana hash oil. The elements constituting the crime of illegal sale from him? [SPO4 MADLON]
of dangerous drugs were seemingly established.
A:The marijuana hashish together with 1 liter marijuana hash oil, sir.
However, the conviction must have to be undone. The integrity of the evidence
presented – the corpus delicti no less – became suspicious by the mysterious xxxx
silence of the record on what transpired after the transaction. On its part, the
RTC, after reliving the buy-bust operation, uncharacteristically jumped to the Q:So after you have already effected the arrest and the search was made in the
conclusion that the accused was guilty as charged by declaring that "the persons of the accused, what happen (sic) next?
prosecution was able to establish these elements [of illegal sale of dangerous
19
drugs] beyond moral certainty," and that the accused "was validly searched by
the police officers after his lawful arrest and same yielded approximately one- A:We prepared for physical examination request, for chemical analysis of the
20
half liter of the potent dangerous drug hash oil or resin." In the same breath, confiscated dangerous drugs from the suspect, request for drug test, the
the RTC rejected the accused’s denial and alibi as inherently weak inventory of the evidences (sic) confiscated on the suspect and our Affidavit of
22
21
defenses. In turn, the CA devoted little, if any, discussion on the chain of Arrest, sir.
custody vis-à-vis the seized drugs.
xxxx
Such treatment by the two lower courts of a matter as essential to the conviction
as the chain of custody is not surprising.1âwphi1 An examination of the record Q:Actually who among you conducted the search in the person of the 2
indicates that no testimony on the links in the chain of custody from the time the accused?
drugs were confiscated up to the time they were offered as evidence in court
was given by the arresting lawmen and the others who could have handled the [SPO4 LUCAS]
drugs. This omission deprived the lower courts of the means of knowing the
details as to every person who touched the drugs, as to how and from whom the A:SPO2 Agbayani, sir. x x x
drugs were received, as to where the drugs were at any given point in that
interval, and as to what happened to the drugs while in the possession of each
Q:And after that what happen (sic) next?
handler, including the relative condition in which the drugs were received and
the state in which they were delivered to the next links in the chain. It is quite
notable that the officers who served as the only witnesses to the buy-bust A:We proceeded in our office, sir.
operation neither described the precautions taken to ensure that there had been
no change in the condition of the drugs nor specified that there was no Q:And at your office what happen (sic)?
opportunity for any person not in the chain to have possession of the drugs.
A:For documentation that’s the time we were able to identify the suspect as
23
To be more specific, the assailed decisions of both the RTC and the CA do not Recto Angngao and Robert Carlin, sir.
show that the arresting lawmen had marked the seized drugs immediately upon
confiscation at the site of the arrest, or even later on in the police station. In fact, xxxx
the RTC did not advert to any markings at all. Although the CA noted that the
drugs were marked with the initials of the apprehending police officers, the Q: There are markings here, CJA, what does that represent? [SPO2
circumstances attendant to such markings, like when and where the markings AGBAYANI]
were done, were not sufficiently revealed. In particular, SPO4 Madlon, SPO4
Lucas and SPO2 Agbayani did not indicate whether the seized items had been
marked right away following the confiscation, or later on in the police station, as A:My initials, Sir.
the following excerpts of their testimonies show:
Q:Who placed that?
PROSECUTOR [CATRAL]
A:I was the one, Sir.
Q:As far as Amboy is concerned, what items were retrieved
Q:How about this MKM?
A:Marquez K. Madlon, Sir.
Q:How about AEL?
A:Arthur E. Lucas, Sir.
Q:How about DEA?
A:Daniel E. Akia, Sir.
Q:How about this entry?
24
A:That is during the arrest of the suspect, Sir.
xxxx
Other than the response of SPO2 Agbayani to the question pertaining to the
date appearing on the markings, nothing shows how such markings were
obtained and the circumstances surrounding that important link in the chain. The
members of the buy-bust team did not even mention in the Joint Affidavit of
Arrest or in the Affidavit of Poseur-Buyer that they had marked the drugs.
The Prosecution cannot avoid confronting the issue of the broken chain of
custody by embellishing its case with the presumption of regularity. This
presumption, which is not conclusive, vanishes upon the slightest hint or taint of
25
irregularity. It stands only when nothing suggests that the law enforcers
involved deviated from the standard conduct of official duty as provided for in the
law. But where, like here, the official act in question is irregular on its face, the
26
presumption does not arise as a matter of course. As such, the non-conformity
with the requirements for preserving the chain of custody on the part of the
arresting lawmen closed the door to the application of the presumption of
regularity.
There were other indicia of non-conformity with the requirements. It is beyond
dispute, for one, that no photograph was taken of the recovered items for
documentation purposes. It was also not shown why, despite the requirement of
the law itself, no representative from the media, from the Department of Justice,
or any elective official was present to serve as a witness during the arrest. The
Prosecution’s testimonial evidence is actually bereft of the showing of the efforts
undertaken by the law enforcers to see to the presence of any of such
representatives during the operation against the appellant from his
apprehension until the seizure of the drugs.
It is true that Section 21 of the IRR of R.A. No. 9165 only requires a substantial
compliance with the requirements of markings and photographing instead of an
absolute or literal compliance. Hence, an accused can still be held guilty
provided that a justifiable ground for excusing the non-compliance with the
27
requirements has been satisfactorily established by the Prosecution.
Such justifiable ground is wanting here. SPO4 Madlon and the rest of the buy-
bust team tendered no explanation for the non-compliance. They were required
to render sufficient reasons for their non-compliance during the trial; otherwise,
the persons they charged would be acquitted on the ground of reasonable
28
doubt. Yet, they even seemed unaware that such requirements existed at all.
We are aghast at their dismissive treatment of the requirements.
There is no question that the State had the responsibility to explain the lapses in
the procedures taken to preserve the chain of custody of the dangerous drugs.
Without the explanation by the State, the evidence of the corpus delicti became
unreliable, and the acquittal of the accused should follow on the ground that his
29
guilt had not been shown beyond reasonable doubt. Absent the justification by
the arresting lawmen for their non- compliance with the requirement of an intact
chain of custody, the trial court and the CA did not fairly convict the appellant in
whose favor the safeguards have been erected by the law. As the Court well
30
stated in People v. Relato:
Statutory rules on preserving the chain of custody of confiscated prohibited
drugs and related items are designed to ensure the integrity and reliability of the
evidence to be presented against the accused. Their observance is the key to
the successful prosecution of illegal possession or illegal sale of prohibited
drugs.
Consequently, we reverse the conviction of the appellant for possession of or for
the sale of illegal drugs under R.A. No. 9165 for failure to prove his guilt beyond
reasonable doubt.
WHEREFORE, the Court REVERSES and SETS ASIDE the November 28,
2008 decision of the Court of Appeals affirming the conviction of Recto Angngao
y Makay by the Regional Trial Court, Branch 61, in Baguio City for the illegal
sale of 250 grams of marijuana resin or hashish (Criminal Case Nos. 22317-R),
and for the illegal possession of 500 milliliters of hashish oil (Criminal Case Nos.
22318-R); and ACQUITS him of the offenses charged based on reasonable
doubt.
The Director of the Bureau of Prisons is ORDERED to IMMEDIATELY
RELEASE Recto Angngao y Makay from custody upon receipt hereof, unless he
is being held for some other lawful cause.
SO ORDERED.
G.R. No. 181045 July 2, 2014
SPOUSES EDUARDO and LYDIA SILOS, Petitioners,
vs.
PHILIPPINE NATIONAL BANK, Respondent.
DECISION
DEL CASTILLO, J.:
In loan agreements, it cannot be denied that the rate of interest is a principal
condition, if not the most important component. Thus, any modification thereof
must be mutually agreed upon; otherwise, it has no binding effect. Moreover, the
Court cannot consider a stipulation granting a party the option to prepay the loan
if said party is not agreeable to the arbitrary interest rates imposed. Premium
may not be placed upon a stipulation in a contract which grants one party the
right to choose whether to continue with or withdraw from the agreement if it
discovers that what the other party has been doing all along is improper or
illegal.
1 2
This Petition for Review on Certiorari questions the May 8, 2007 Decision of
the Court of Appeals (CA) in CA-G.R. CV No. 79650, which affirmed with
3 4
modifications the February 28, 2003 Decision and the June 4, 2003 Order of
the Regional Trial Court (RTC), Branch 6 of Kalibo, Aklan in Civil Case No.
5975.
Factual Antecedents
Spouses Eduardo and Lydia Silos (petitioners) have been in business for about
two decades of operating a department store and buying and selling of ready-to-
wear apparel. Respondent Philippine National Bank (PNB) is a banking
corporation organized and existing under Philippine laws.
To secure a one-year revolving credit line of ₱150,000.00 obtained from PNB,
5
petitioners constituted in August 1987 a Real Estate Mortgage over a 370-
square meter lot in Kalibo, Aklan covered by Transfer Certificate of Title No.
(TCT) T-14250. In July 1988,the credit line was increased to ₱1.8 million and the
mortgage was correspondingly increased to ₱1.8 million.
6 7. 7th Promissory Note dated March 1, 1991 – 30%; and
7
And in July 1989, a Supplement to the Existing Real Estate Mortgage was
executed to cover the same credit line, which was increased to ₱2.5 million, and
additional security was given in the form of a 134-square meter lot covered by
8
TCT T-16208. In addition, petitioners issued eight Promissory Notes and signed
9
a Credit Agreement. This July 1989 Credit Agreement contained a stipulation
on interest which provides as follows:
1.03. Interest. (a) The Loan shall be subject to interest at the rate of 19.5% per
annum. Interest shall be payable in advance every one hundred twenty days at
the rate prevailing at the time of the renewal.
(b) The Borrower agrees that the Bank may modify the interest rate in the Loan
depending on whatever policy the Bank may adopt in the future, including
without limitation, the shifting from the floating interest rate system to the fixed
interest rate system, or vice versa. Where the Bank has imposed on the Loan
interest at a rate per annum, which is equal to the Bank’s spread over the
current floating interest rate, the Borrower hereby agrees that the Bank may,
without need of notice to the Borrower, increase or decrease its spread over the
floating interest rate at any time depending on whatever policy it may adopt in
10
the future. (Emphases supplied)
The eight Promissory Notes, on the other hand, contained a stipulation granting
PNB the right to increase or reduce interest rates "within the limits allowed by
11
law or by the Monetary Board."
The Real Estate Mortgage agreement provided the same right to increase or
reduce interest rates "at any time depending on whatever policy PNB may adopt
12
in the future."
Petitioners religiously paid interest on the notes at the following rates:
1. 1st Promissory Note dated July 24, 1989 – 19.5%;
2. 2nd Promissory Note dated November 22, 1989 – 23%;
3. 3rd Promissory Note dated March 21, 1990 – 22%;
4. 4th Promissory Note dated July 19, 1990 – 24%;
5. 5th Promissory Note dated December 17, 1990 – 28%;
6. 6th Promissory Note dated February 14, 1991 – 32%;
13
8. 8th Promissory Note dated July 11, 1991 – 24%.
14
In August 1991, an Amendment to Credit Agreement was executed by the
parties, with the following stipulation regarding interest:
1.03. Interest on Line Availments. (a) The Borrowers agree to pay interest on
each Availment from date of each Availment up to but not including the date of
full payment thereof at the rate per annum which is determined by the Bank to
be prime rate plus applicable spread in effect as of the date of each
15
Availment. (Emphases supplied)
Under this Amendment to Credit Agreement, petitioners issued in favor of PNB
the following 18 Promissory Notes, which petitioners settled – except the last
(the note covering the principal) – at the following interest rates:
1. 9th Promissory Note dated November 8, 1991 – 26%;
2. 10th Promissory Note dated March 19, 1992 – 25%;
3. 11th Promissory Note dated July 11, 1992 – 23%;
4. 12th Promissory Note dated November 10, 1992 – 21%;
5. 13th Promissory Note dated March 15, 1993 – 21%;
6. 14th Promissory Note dated July 12, 1993 – 17.5%;
7. 15th Promissory Note dated November 17, 1993 – 21%;
8. 16th Promissory Note dated March 28, 1994 – 21%;
9. 17th Promissory Note dated July 13, 1994 – 21%;
10. 18th Promissory Note dated November 16, 1994 – 16%;
11. 19th Promissory Note dated April 10, 1995 – 21%;
12. 20th Promissory Note dated July 19, 1995 – 18.5%;
13. 21st Promissory Note dated December 18, 1995 – 18.75%;
14. 22nd Promissory Note dated April 22, 1996 – 18.5%;
15. 23rd Promissory Note dated July 22, 1996 – 18.5%;
16. 24th Promissory Note dated November 25, 1996 – 18%;
17. 25th Promissory Note dated May 30, 1997 – 17.5%; and
16
18. 26th Promissory Note (PN 9707237) dated July 30, 1997 – 25%.
The 9th up to the 17th promissory notes provide for the payment of interest at
the "rate the Bank may at any time without notice, raise within the limits allowed
17
by law x x x."
On the other hand, the 18th up to the 26th promissory notes – including PN
9707237, which is the 26th promissory note – carried the following provision:
x x x For this purpose, I/We agree that the rate of interest herein stipulated may
be increased or decreased for the subsequent Interest Periods, with prior notice
to the Borrower in the event of changes in interest rate prescribed by law or the
Monetary Board of the Central Bank of the Philippines, or in the Bank’s overall
cost of funds. I/We hereby agree that in the event I/we are not agreeable to the
interest rate fixed for any Interest Period, I/we shall have the option top repay
the loan or credit facility without penalty within ten (10) calendar days from the
18
Interest Setting Date. (Emphasis supplied)
Respondent regularly renewed the line from 1990 up to 1997, and petitioners
made good on the promissory notes, religiously paying the interests without
objection or fail. But in 1997, petitioners faltered when the interest rates soared
due to the Asian financial crisis. Petitioners’ sole outstanding promissory note for
₱2.5 million – PN 9707237 executed in July 1997 and due 120 days later or on
October 28, 1997 – became past due, and despite repeated demands,
petitioners failed to make good on the note.
Incidentally, PN 9707237 provided for the penalty equivalent to 24% per annum
in case of default, as follows:
Without need for notice or demand, failure to pay this note or any installment
thereon, when due, shall constitute default and in such cases or in case of
garnishment, receivership or bankruptcy or suit of any kind filed against me/us
by the Bank, the outstanding principal of this note, at the option of the Bank and
without prior notice of demand, shall immediately become due and payable and
shall be subject to a penalty charge of twenty four percent (24%) per annum
19
based on the defaulted principal amount. x x x (Emphasis supplied)
20
PNB prepared a Statement of Account as of October 12, 1998, detailing the
amount due and demandable from petitioners in the total amount of
₱3,620,541.60, broken down as follows:
Principal P 2,500,000.00
Interest 538,874.94
Penalties 581,666.66
 Total P 3,620,541.60
Despite demand, petitioners failed to pay the foregoing amount. Thus, PNB
foreclosed on the mortgage, and on January 14, 1999, TCTs T-14250 and T-
21
16208 were sold to it at auction for the amount of ₱4,324,172.96. The sheriff’s
certificate of sale was registered on March 11, 1999.
More than a year later, or on March 24, 2000, petitioners filed Civil Case No.
5975, seeking annulment of the foreclosure sale and an accounting of the PNB
credit. Petitioners theorized that after the first promissory note where they
agreed to pay 19.5% interest, the succeeding stipulations for the payment of
interest in their loan agreements with PNB – which allegedly left to the latter the
sole will to determine the interest rate – became null and void. Petitioners added
that because the interest rates were fixed by respondent without their prior
consent or agreement, these rates are void, and as a result, petitioners should
only be made liable for interest at the legal rate of 12%. They claimed further
that they overpaid interests on the credit, and concluded that due to this
overpayment of steep interest charges, their debt should now be deemed paid,
and the foreclosure and sale of TCTs T-14250 and T-16208 became
unnecessary and wrongful. As for the imposed penalty of ₱581,666.66,
petitioners alleged that since the Real Estate Mortgage and the Supplement
thereto did not include penalties as part of the secured amount, the same should
be excluded from the foreclosure amount or bid price, even if such penalties are
22
provided for in the final Promissory Note, or PN 9707237.
In addition, petitioners sought to be reimbursed an alleged overpayment of
₱848,285.00 made during the period August 21, 1991 to March 5, 1998,resulting
from respondent’s imposition of the alleged illegal and steep interest rates. They
23
also prayed to be awarded ₱200,000.00 by way of attorney’s fees.
24
In its Answer, PNB denied that it unilaterally imposed or fixed interest rates;
that petitioners agreed that without prior notice, PNB may modify interest rates
depending on future policy adopted by it; and that the imposition of penalties
was agreed upon in the Credit Agreement. It added that the imposition of
penalties is supported by the all-inclusive clause in the Real Estate Mortgage
agreement which provides that the mortgage shall stand as security for any and
all other obligations of whatever kind and nature owing to respondent, which
thus includes penalties imposed upon default or non-payment of the principal
and interest on due date.
On pre-trial, the parties mutually agreed to the following material facts, among
others:
a) That since 1991 up to 1998, petitioners had paid PNB the total
25
amount of ₱3,484,287.00; and
b) That PNB sent, and petitioners received, a March 10, 2000 demand
26
letter.
During trial, petitioner Lydia Silos (Lydia) testified that the Credit Agreement, the
Amendment to Credit Agreement, Real Estate Mortgage and the Supplement
thereto were all prepared by respondent PNB and were presented to her and
her husband Eduardo only for signature; that she was told by PNB that the latter
alone would determine the interest rate; that as to the Amendment to Credit
Agreement, she was told that PNB would fill up the interest rate portion thereof;
that at the time the parties executed the said Credit Agreement, she was not
informed about the applicable spread that PNB would impose on her account;
that the interest rate portion of all Promissory Notes she and Eduardo issued
were always left in blank when they executed them, with respondent’s mere
assurance that it would be the one to enter or indicate thereon the prevailing
interest rate at the time of availment; and that they agreed to such arrangement.
She further testified that the two Real Estate Mortgage agreements she signed
did not stipulate the payment of penalties; that she and Eduardo consulted with
a lawyer, and were told that PNB’s actions were improper, and so on March 20,
2000, they wrote to the latter seeking a recomputation of their outstanding
27
obligation; and when PNB did not oblige, they instituted Civil Case No. 5975.
On cross-examination, Lydia testified that she has been in business for 20
years; that she also borrowed from other individuals and another bank; that it
was only with banks that she was asked to sign loan documents with no
indicated interest rate; that she did not bother to read the terms of the loan
documents which she signed; and that she received several PNB statements of
account detailing their outstanding obligations, but she did not complain; that
28
she assumed instead that what was written therein is correct.
For his part, PNB Kalibo Branch Manager Diosdado Aspa, Jr. (Aspa), the sole
witness for respondent, stated on cross-examination that as a practice, the
determination of the prime rates of interest was the responsibility solely of PNB’s
Treasury Department which is based in Manila; that these prime rates were
simply communicated to all PNB branches for implementation; that there are a
multitude of considerations which determine the interest rate, such as the cost of
money, foreign currency values, PNB’s spread, bank administrative costs,
profitability, and the practice in the banking industry; that in every repricing of
each loan availment, the borrower has the right to question the rates, but that
this was not done by the petitioners; and that anything that is not found in the
29
Promissory Note may be supplemented by the Credit Agreement.
Ruling of the Regional Trial Court
On February 28, 2003, the trial court rendered judgment dismissing Civil Case
30
No. 5975.
It ruled that:
1. While the Credit Agreement allows PNB to unilaterally increase its
spread over the floating interest rate at any time depending on whatever
policy it may adopt in the future, it likewise allows for the decrease at
any time of the same. Thus, such stipulation authorizing both the
increase and decrease of interest rates as may be applicable is
31
valid, as was held in Consolidated Bank and Trust Corporation
32
(SOLIDBANK) v. Court of Appeals;
WHEREFORE, judgment is hereby rendered upholding the validity of the
interest rate charged by the respondent as well as the extra-judicial foreclosure
proceedings and the Certificate of Sale. However, respondent is directed to
refund to the petitioner the amount of ₱356,589.90 representing the excess
interest charged against the latter.
No pronouncement as to costs.
40
SO ORDERED.

2. Banks are allowed to stipulate that interest rates on loans need not be Ruling of the Court of Appeals
fixed and instead be made dependent on prevailing rates upon which to
33
peg such variable interest rates;
Petitioners appealed to the CA, which issued the questioned Decision with the
following decretal portion:
3. The Promissory Note, as the principal contract evidencing petitioners’
loan, prevails over the Credit Agreement and the Real Estate Mortgage. WHEREFORE, in view of the foregoing, the instant appeal is PARTLY
GRANTED. The modified Decision of the Regional Trial Court per Order dated
As such, the rate of interest, penalties and attorney’s fees stipulated in June 4, 2003 is hereby AFFIRMED with MODIFICATIONS, to wit:
the Promissory Note prevail over those mentioned in the Credit
34
Agreement and the Real Estate Mortgage agreements;
1. [T]hat the interest rate to be applied after the expiration of the first 30-
day interest period for PN. No. 9707237 should be 12% per annum;
4. Roughly, PNB’s computation of the total amount of petitioners’
35
obligation is correct;
2. [T]hat the attorney’s fees of10% is valid and binding; and

5. Because the loan was admittedly due and demandable, the 3. [T]hat [PNB] is hereby ordered to reimburse [petitioners] the excess in
36
foreclosure was regularly made; the bid price of ₱377,505.99 which is the difference between the total
amount due [PNB] and the amount of its bid price.
6. By the admission of petitioners during pre-trial, all payments made to
37
PNB were properly applied to the principal, interest and penalties. 41
SO ORDERED.

The dispositive portion of the trial court’s Decision reads:

IN VIEW OF THE FOREGOING, judgment is hereby rendered in favor of the
respondent and against the petitioners by DISMISSING the latter’s petition.
Costs against the petitioners.
On the other hand, respondent did not appeal the June 4,2003 Order of the trial
court which reduced its award of attorney’s fees. It simply raised the issue in its
appellee’s brief in the CA, and included a prayer for the reversal of said Order.
In effect, the CA limited petitioners’ appeal to the following issues:

38
SO ORDERED.
39
Petitioners moved for reconsideration. In an Order dated June 4, 2003, the trial
court granted only a modification in the award of attorney’s fees, reducing the
same from 10% to 1%. Thus, PNB was ordered to refund to petitioner the
excess in attorney’s fees in the amount of ₱356,589.90, viz:
1) Whether x x x the interest rates on petitioners’ outstanding obligation
were unilaterally and arbitrarily imposed by PNB;
2) Whether x x x the penalty charges were secured by the real estate
mortgage; and
3) Whether x x x the extrajudicial foreclosure and sale are valid.
42
The CA noted that, based on receipts presented by petitioners during trial, the
latter dutifully paid a total of ₱3,027,324.60 in interest for the period August 7,
1991 to August 6, 1997, over and above the ₱2.5 million principal obligation.
And this is exclusive of payments for insurance premiums, documentary stamp
taxes, and penalty. All the while, petitioners did not complain nor object to the
imposition of interest; they in fact paid the same religiously and without fail for
seven years. The appellate court ruled that petitioners are thus estopped from
questioning the same.
The CA nevertheless noted that for the period July 30, 1997 to August 14, 1997,
PNB wrongly applied an interest rate of 25.72% instead of the agreed 25%; thus
it overcharged petitioners, and the latter paid, an excess of ₱736.56 in interest.
On the issue of penalties, the CA ruled that the express tenor of the Real Estate
Mortgage agreements contemplated the inclusion of the PN 9707237-stipulated
24% penalty in the amount to be secured by the mortgaged property, thus –
For and in consideration of certain loans, overdrafts and other credit
accommodations obtained from the MORTGAGEE and to secure the payment of
the same and those others that the MORTGAGEE may extend to the
MORTGAGOR, including interest and expenses, and other obligations owing by
the MORTGAGOR to the MORTGAGEE, whether direct or indirect, principal or
secondary, as appearing in the accounts, books and records of the
MORTGAGEE, the MORTGAGOR does hereby transfer and convey by way of
43
mortgage unto the MORTGAGEE x x x (Emphasis supplied)
The CA believes that the 24% penalty is covered by the phrase "and other
obligations owing by the mortgagor to the mortgagee" and should thus be added
to the amount secured by the mortgages.
44
The CA then proceeded to declare valid the foreclosure and sale of properties
covered by TCTs T-14250 and T-16208, which came as a necessary result of
45
petitioners’ failure to pay the outstanding obligation upon demand. The CA saw
fit to increase the trial court’s award of 1% to 10%, finding the latter rate to be
reasonable and citing the Real Estate Mortgage agreement which authorized the
46
collection of the higher rate.
Finally, the CA ruled that petitioners are entitled to ₱377,505.09 surplus, which
is the difference between PNB’s bid price of ₱4,324,172.96 and petitioners’ total
computed obligation as of January 14, 1999, or the date of the auction sale, in
47
the amount of ₱3,946,667.87.
Hence, the present Petition.
Issues
The following issues are raised in this Petition:
I
A. THE COURT OF APPEALS AS WELL AS THE LOWER
COURT ERRED IN NOT NULLIFYING THE INTEREST RATE
PROVISION IN THE CREDIT AGREEMENT DATED JULY 24,
1989 X X X AND IN THE AMENDMENT TO CREDIT
AGREEMENT DATEDAUGUST 21, 1991 X X X WHICH LEFT
TO THE SOLE UNILATERAL DETERMINATION OF THE
RESPONDENT PNB THE ORIGINAL FIXING OF INTEREST
RATE AND ITS INCREASE, WHICH AGREEMENT IS
CONTRARY TO LAW, ART. 1308 OF THE [NEW CIVIL CODE],
AS ENUNCIATED IN PONCIANO ALMEIDA V. COURT OF
APPEALS,G.R. [NO.] 113412, APRIL 17, 1996, AND
CONTRARY TO PUBLIC POLICY AND PUBLIC INTEREST,
AND IN APPLYING THE PRINCIPLE OF ESTOPPEL ARISING
FROM THE ALLEGED DELAYED COMPLAINT OF
PETITIONER[S], AND [THEIR] PAYMENT OF THE INTEREST
CHARGED.
B. CONSEQUENTLY, THE COURT OF APPEALS AND THE
LOWER COURT ERRED IN NOT DECLARING THAT PNB IS
NOT AT ALL ENTITLED TO ANY INTEREST EXCEPT THE
LEGAL RATE FROM DATE OF DEMAND, AND IN NOT
APPLYING THE EXCESS OVER THE LEGAL RATE OF THE
ADMITTED PAYMENTS MADE BY PETITIONER[S] FROM
1991-1998 IN THE ADMITTED TOTAL AMOUNT OF
₱3,484,287.00, TO PAYMENT OF THE PRINCIPAL OF
₱2,500,000.[00] LEAVING AN OVERPAYMENT
OF₱984,287.00 REFUNDABLE BY RESPONDENT TO
PETITIONER[S] WITH INTEREST OF 12% PER ANNUM.
II
THE COURT OF APPEALS AND THE LOWER COURT ERRED IN HOLDING
THAT PENALTIES ARE INCLUDEDIN THE SECURED AMOUNT, SUBJECT
TO FORECLOSURE, WHEN NO PENALTIES ARE MENTIONED [NOR]
PROVIDED FOR IN THE REAL ESTATE MORTGAGE AS A SECURED
AMOUNT AND THEREFORE THE AMOUNT OF PENALTIES SHOULDHAVE
BEEN EXCLUDED FROM [THE] FORECLOSURE AMOUNT.
III
THE COURT OF APPEALS ERRED IN REVERSING THE RULING OF THE
LOWER COURT, WHICH REDUCED THE ATTORNEY’S FEES OF 10% OF
THE TOTAL INDEBTEDNESS CHARGED IN THE X X X EXTRAJUDICIAL
48
FORECLOSURE TOONLY 1%, AND [AWARDING] 10% ATTORNEY’S FEES.
Petitioners’ Arguments
Petitioners insist that the interest rate provision in the Credit Agreement and the
Amendment to Credit Agreement should be declared null and void, for they
relegated to PNB the sole power to fix interest rates based on arbitrary criteria or
factors such as bank policy, profitability, cost of money, foreign currency values,
and bank administrative costs; spaces for interest rates in the two Credit
Agreements and the promissory notes were left blank for PNB to unilaterally fill,
and their consent or agreement to the interest rates imposed thereafter was not
obtained; the interest rate, which consists of the prime rate plus the bank
spread, is determined not by agreement of the parties but by PNB’s Treasury
Department in Manila. Petitioners conclude that by this method of fixing the
interest rates, the principle of mutuality of contracts is violated, and public policy
49
as well as Circular 905 of the then Central Bank had been breached.
Petitioners question the CA’s application of the principle of estoppel, saying that
no estoppel can proceed from an illegal act. Though they failed to timely
question the imposition of the alleged illegal interest rates and continued to pay
the loan on the basis of these rates, they cannot be deemed to have
50
acquiesced, and hence could recover what they erroneously paid.
Petitioners argue that if the interest rates were nullified, then their obligation to
PNB is deemed extinguished as of July 1997; moreover, it would appear that
they even made an over payment to the bank in the amount of ₱984,287.00.
Next, petitioners suggest that since the Real Estate Mortgage agreements did
not include nor specify, as part of the secured amount, the penalty of 24%
authorized in PN 9707237, such amount of ₱581,666.66 could not be made
answerable by or collected from the mortgages covering TCTs T-14250 and T-
16208. Claiming support from Philippine Bank of Communications [PBCom] v.
51
Court of Appeals, petitioners insist that the phrase "and other obligations
52
owing by the mortgagor to the mortgagee" in the mortgage agreements cannot
embrace the ₱581,666.66 penalty, because, as held in the PBCom case, "[a]
penalty charge does not belong to the species of obligations enumerated in the
mortgage, hence, the said contract cannot be understood to secure the
53
penalty"; while the mortgages are the accessory contracts, what items are
secured may only be determined from the provisions of the mortgage contracts,
and not from the Credit Agreement or the promissory notes.
Finally, petitioners submit that the trial court’s award of 1% attorney’s fees
should be maintained, given that in foreclosures, a lawyer’s work consists
merely in the preparation and filing of the petition, and involves minimal
54
study. To allow the imposition of a staggering ₱396,211.00 for such work
would be contrary to equity. Petitioners state that the purpose of attorney’s fees
in cases of this nature "is not to give respondent a larger compensation for the
loan than the law already allows, but to protect it against any future loss or
damage by being compelled to retain counsel x x x to institute judicial
55
proceedings for the collection of its credit." And because the instant case
involves a simple extrajudicial foreclosure, attorney’s fees may be equitably
tempered.
Respondent’s Arguments
For its part, respondent disputes petitioners’ claim that interest rates were
unilaterally fixed by it, taking relief in the CA pronouncement that petitioners are
deemed estopped by their failure to question the imposed rates and their
continued payment thereof without opposition. It adds that because the Credit
Agreement and promissory notes contained both an escalation clause and a de-
escalation clause, it may not be said that the bank violated the principle of
mutuality. Besides, the increase or decrease in interest rates have been
mutually agreed upon by the parties, as shown by petitioners’ continuous
payment without protest. Respondent adds that the alleged unilateral imposition
of interest rates is not a proper subject for review by the Court because the
issue was never raised in the lower court.
As for petitioners’ claim that interest rates imposed by it are null and void for the
reasons that 1) the Credit Agreements and the promissory notes were signed in
blank; 2) interest rates were at short periods; 3) no interest rates could be
charged where no agreement on interest rates was made in writing; 4) PNB
fixed interest rates on the basis of arbitrary policies and standards left to its
choosing; and 5) interest rates based on prime rate plus applicable spread are
indeterminate and arbitrary – PNB counters:
a. That Credit Agreements and promissory notes were signed by
petitioner[s] in blank – Respondent claims that this issue was never
raised in the lower court. Besides, documentary evidence prevails over
testimonial evidence; Lydia Silos’ testimony in this regard is self-serving,
unsupported and uncorroborated, and for being the lone evidence on
this issue. The fact remains that these documents are in proper form,
presumed regular, and endure, against arbitrary claims by Silos – who is
an experienced business person – that she signed questionable loan
documents whose provisions for interest rates were left blank, and yet
she continued to pay the interests without protest for a number of
56
years.
b. That interest rates were at short periods – Respondent argues that
the law which governs and prohibits changes in interest rates made
57
more than once every twelve months has been removed with the
58
issuance of Presidential Decree No. 858.
 c. That no interest rates could be charged where no agreement on
interest rates was made in writing in violation of Article 1956 of the Civil
Code, which provides that no interest shall be due unless it has been
expressly stipulated in writing – Respondent insists that the stipulated
25% per annum as embodied in PN 9707237 should be imposed during
the interim, or the period after the loan became due and while it remains
59
unpaid, and not the legal interest of 12% as claimed by petitioners.
d. That PNB fixed interest rates on the basis of arbitrary policies and
standards left to its choosing – According to respondent, interest rates
were fixed taking into consideration increases or decreases as provided
by law or by the Monetary Board, the bank’s overall costs of funds, and
upon agreement of the parties.
60
e. That interest rates based on prime rate plus applicable spread are
indeterminate and arbitrary – On this score, respondent submits there
are various factors that influence interest rates, from political events to
economic developments, etc.; the cost of money, profitability and foreign
61
currency transactions may not be discounted.
On the issue of penalties, respondent reiterates the trial court’s finding that
during pre-trial, petitioners admitted that the Statement of Account as of October
12, 1998 – which detailed and included penalty charges as part of the total
outstanding obligation owing to the bank – was correct. Respondent justifies the
imposition and collection of a penalty as a normal banking practice, and the
standard rate per annum for all commercial banks, at the time, was 24%.
Respondent adds that the purpose of the penalty or a penal clause for that
matter is to ensure the performance of the obligation and substitute for damages
62
and the payment of interest in the event of non-compliance. And the
promissory note – being the principal agreement as opposed to the mortgage,
which is a mere accessory – should prevail. This being the case, its inclusion as
part of the secured amount in the mortgage agreements is valid and necessary.
Regarding the foreclosure of the mortgages, respondent accuses petitioners of
pre-empting consolidation of its ownership over TCTs T-14250 and T-16208;
that petitioners filed Civil Case No. 5975 ostensibly to question the foreclosure
and sale of properties covered by TCTs T-14250 and T-16208 in a desperate
move to retain ownership over these properties, because they failed to timely
redeem them.
Respondent directs the attention of the Court to its petition in G.R. No.
63
181046, where the propriety of the CA’s ruling on the following issues is
squarely raised:
1. That the interest rate to be applied after the expiration of the first 30-
day interest period for PN 9707237 should be 12% per annum; and
2. That PNB should reimburse petitioners the excess in the bid price of
₱377,505.99 which is the difference between the total amount due to
PNB and the amount of its bid price.
Our Ruling
The Court grants the Petition.
Before anything else, it must be said that it is not the function of the Court to re-
examine or re-evaluate evidence adduced by the parties in the proceedings
below. The rule admits of certain well-recognized exceptions, though, as when
the lower courts’ findings are not supported by the evidence on record or are
based on a misapprehension of facts, or when certain relevant and undisputed
facts were manifestly overlooked that, if properly considered, would justify a
different conclusion. This case falls within such exceptions.
The Court notes that on March 5, 2008, a Resolution was issued by the Court’s
First Division denying respondent’s petition in G.R. No. 181046, due to late
filing, failure to attach the required affidavit of service of the petition on the trial
court and the petitioners, and submission of a defective verification and
certification of non-forum shopping. On June 25, 2008, the Court issued another
Resolution denying with finality respondent’s motion for reconsideration of the
March 5, 2008 Resolution. And on August 15, 2008, entry of judgment was
made. This thus settles the issues, as above-stated, covering a) the interest rate
– or 12% per annum– that applies upon expiration of the first 30 days interest
period provided under PN 9707237, and b)the CA’s decree that PNB should
reimburse petitioner the excess in the bid price of ₱377,505.09.
It appears that respondent’s practice, more than once proscribed by the Court,
has been carried over once more to the petitioners. In a number of decided
cases, the Court struck down provisions in credit documents issued by PNB to,
or required of, its borrowers which allow the bank to increase or decrease
interest rates "within the limits allowed by law at any time depending on
whatever policy it may adopt in the future." Thus, in Philippine National Bank v.
64
Court of Appeals, such stipulation and similar ones were declared in violation
65
of Article 1308 of the Civil Code. In a second case, Philippine National Bank v.
66
Court of Appeals, the very same stipulations found in the credit agreement and
the promissory notes prepared and issued by the respondent were again
invalidated. The Court therein said:
The Credit Agreement provided inter alia, that —
(a) The BANK reserves the right to increase the interest rate within the limits
allowed by law at any time depending on whatever policy it may adopt in the
future; Provided, that the interest rate on this accommodation shall be
correspondingly decreased in the event that the applicable maximum interest is
reduced by law or by the Monetary Board. In either case, the adjustment in the
interest rate agreed upon shall take effect on the effectivity date of the increase
or decrease in the maximum interest rate.
The Promissory Note, in turn, authorized the PNB to raise the rate of interest, at
any time without notice, beyond the stipulated rate of 12% but only "within the
limits allowed by law."
The Real Estate Mortgage contract likewise provided that —
(k) INCREASE OF INTEREST RATE: The rate of interest charged on the
obligation secured by this mortgage as well as the interest on the amount which
may have been advanced by the MORTGAGEE, in accordance with the
provision hereof, shall be subject during the life of this contract to such an
increase within the rate allowed by law, as the Board of Directors of the
MORTGAGEE may prescribe for its debtors.
xxxx
In making the unilateral increases in interest rates, petitioner bank relied on the
escalation clause contained in their credit agreement which provides, as follows:
The Bank reserves the right to increase the interest rate within the limits allowed
by law at any time depending on whatever policy it may adopt in the future and
provided, that, the interest rate on this accommodation shall be correspondingly
decreased in the event that the applicable maximum interest rate is reduced by
law or by the Monetary Board. In either case, the adjustment in the interest rate
agreed upon shall take effect on the effectivity date of the increase or decrease
in maximum interest rate.
This clause is authorized by Section 2 of Presidential Decree (P.D.) No. 1684
which further amended Act No. 2655 ("The Usury Law"), as amended, thus:
Section 2. The same Act is hereby amended by adding a new section after
Section 7, to read as follows:
Sec. 7-a. Parties to an agreement pertaining to a loan or forbearance of money,
goods or credits may stipulate that the rate of interest agreed upon may be
increased in the event that the applicable maximum rate of interest is increased
bylaw or by the Monetary Board; Provided, That such stipulation shall be valid
only if there is also a stipulation in the agreement that the rate of interest agreed
upon shall be reduced in the event that the applicable maximum rate of interest
is reduced by law or by the Monetary Board; Provided further, That the
adjustment in the rate of interest agreed upon shall take effect on or after the
effectivity of the increase or decrease in the maximum rate of interest.
Section 1 of P.D. No. 1684 also empowered the Central Bank’s Monetary Board
to prescribe the maximum rates of interest for loans and certain forbearances.
Pursuant to such authority, the Monetary Board issued Central Bank (C.B.)
Circular No. 905, series of 1982, Section 5 of which provides:
Sec. 5. Section 1303 of the Manual of Regulations (for Banks and Other
Financial Intermediaries) is hereby amended to read as follows:
Sec. 1303. Interest and Other Charges.
— The rate of interest, including commissions, premiums, fees and other
charges, on any loan, or forbearance of any money, goods or credits, regardless
of maturity and whether secured or unsecured, shall not be subject to any ceiling
prescribed under or pursuant to the Usury Law, as amended.
P.D. No. 1684 and C.B. Circular No. 905 no more than allow contracting parties
to stipulate freely regarding any subsequent adjustment in the interest rate that
shall accrue on a loan or forbearance of money, goods or credits. In fine, they
can agree to adjust, upward or downward, the interest previously stipulated.
However, contrary to the stubborn insistence of petitioner bank, the said law and
circular did not authorize either party to unilaterally raise the interest rate without
the other’s consent.
It is basic that there can be no contract in the true sense in the absence of the
element of agreement, or of mutual assent of the parties. If this assent is
wanting on the part of the one who contracts, his act has no more efficacy than if
it had been done under duress or by a person of unsound mind.
Similarly, contract changes must be made with the consent of the contracting
parties. The minds of all the parties must meet as to the proposed modification,
especially when it affects an important aspect of the agreement. In the case of
loan contracts, it cannot be gainsaid that the rate of interest is always a vital
component, for it can make or break a capital venture. Thus, any change must
be mutually agreed upon, otherwise, it is bereft of any binding effect.
We cannot countenance petitioner bank’s posturing that the escalation clause at
bench gives it unbridled right to unilaterally upwardly adjust the interest on
private respondents’ loan. That would completely take away from private
respondents the right to assent to an important modification in their agreement,
and would negate the element of mutuality in contracts. In Philippine National
Bank v. Court of Appeals, et al., 196 SCRA 536, 544-545 (1991) we held —
x x x The unilateral action of the PNB in increasing the interest rate on the
private respondent’s loan violated the mutuality of contracts ordained in Article
1308 of the Civil Code:
Art. 1308. The contract must bind both contracting parties; its validity or
compliance cannot be left to the will of one of them.
In order that obligations arising from contracts may have the force of law
between the parties, there must be mutuality between the parties based on their
essential equality. A contract containing a condition which makes its fulfillment
dependent exclusively upon the uncontrolled will of one of the contracting
parties, is void . . . . Hence, even assuming that the . . . loan agreement between
the PNB and the private respondent gave the PNB a license (although in fact
there was none) to increase the interest rate at will during the term of the loan,
that license would have been null and void for being violative of the principle of
mutuality essential in contracts. It would have invested the loan agreement with
the character of a contract of adhesion, where the parties do not bargain on
equal footing, the weaker party’s (the debtor) participation being reduced to the
alternative "to take it or leave it" . . . . Such a contract is a veritable trap for the
weaker party whom the courts of justice must protect against abuse and
67
imposition. (Emphases supplied)
68
Then again, in a third case, Spouses Almeda v. Court of Appeals, the Court
invalidated the very same provisions in the respondent’s prepared Credit
Agreement, declaring thus:
The binding effect of any agreement between parties to a contract is premised
on two settled principles: (1) that any obligation arising from contract has the
force of law between the parties; and (2) that there must be mutuality between
the parties based on their essential equality. Any contract which appears to be
heavily weighed in favor of one of the parties so as to lead to an unconscionable
result is void. Any stipulation regarding the validity or compliance of the contract
which is left solely to the will of one of the parties, is likewise, invalid.
It is plainly obvious, therefore, from the undisputed facts of the case that
respondent bank unilaterally altered the terms of its contract with petitioners by
increasing the interest rates on the loan without the prior assent of the latter. In
fact, the manner of agreement is itself explicitly stipulated by the Civil Code
when it provides, in Article 1956 that "No interest shall be due unless it has been
expressly stipulated in writing." What has been "stipulated in writing" from a
perusal of interest rate provision of the credit agreement signed between the
parties is that petitioners were bound merely to pay 21% interest, subject to a
possible escalation or de-escalation, when 1) the circumstances warrant such
escalation or de-escalation; 2) within the limits allowed by law; and 3) upon
agreement.
Indeed, the interest rate which appears to have been agreed upon by the parties
to the contract in this case was the 21% rate stipulated in the interest provision.
Any doubt about this is in fact readily resolved by a careful reading of the credit
agreement because the same plainly uses the phrase "interest rate agreed
upon," in reference to the original 21% interest rate. x x x
xxxx
Petitioners never agreed in writing to pay the increased interest rates demanded
by respondent bank in contravention to the tenor of their credit agreement. That
an increase in interest rates from 18% to as much as 68% is excessive and
unconscionable is indisputable. Between 1981 and 1984, petitioners had paid an
amount equivalent to virtually half of the entire principal (₱7,735,004.66) which
was applied to interest alone. By the time the spouses tendered the amount of
₱40,142,518.00 in settlement of their obligations; respondent bank was
demanding ₱58,377,487.00 over and above those amounts already previously
paid by the spouses.
Escalation clauses are not basically wrong or legally objectionable so long as
they are not solely potestative but based on reasonable and valid grounds.
Here, as clearly demonstrated above, not only [are] the increases of the interest
rates on the basis of the escalation clause patently unreasonable and
unconscionable, but also there are no valid and reasonable standards upon
which the increases are anchored.
xxxx
In the face of the unequivocal interest rate provisions in the credit agreement
and in the law requiring the parties to agree to changes in the interest rate in
writing, we hold that the unilateral and progressive increases imposed by
respondent PNB were null and void. Their effect was to increase the total
obligation on an eighteen million peso loan to an amount way over three times
that which was originally granted to the borrowers. That these increases,
occasioned by crafty manipulations in the interest rates is unconscionable and
neutralizes the salutary policies of extending loans to spur business cannot be
69
disputed. (Emphases supplied)
70
Still, in a fourth case, Philippine National Bank v. Court of Appeals, the above
doctrine was reiterated:
The promissory note contained the following stipulation:
For value received, I/we, [private respondents] jointly and severally promise to
pay to the ORDER of the PHILIPPINE NATIONAL BANK, at its office in San
Jose City, Philippines, the sum of FIFTEEN THOUSAND ONLY (₱15,000.00),
Philippine Currency, together with interest thereon at the rate of 12% per annum
until paid, which interest rate the Bank may at any time without notice, raise
within the limits allowed by law, and I/we also agree to pay jointly and severally
____% per annum penalty charge, by way of liquidated damages should this
note be unpaid or is not renewed on due dated.
Payment of this note shall be as follows:
*THREE HUNDRED SIXTY FIVE DAYS* AFTER DATE
On the reverse side of the note the following condition was stamped:
All short-term loans to be granted starting January 1, 1978 shall be made
subject to the condition that any and/or all extensions hereof that will leave any
portion of the amount still unpaid after 730 days shall automatically convert the
outstanding balance into a medium or long-term obligation as the case may be
and give the Bank the right to charge the interest rates prescribed under its
policies from the date the account was originally granted.
To secure payment of the loan the parties executed a real estate mortgage
contract which provided:
(k) INCREASE OF INTEREST RATE:
The rate of interest charged on the obligation secured by this mortgage as well
as the interest on the amount which may have been advanced by the
MORTGAGEE, in accordance with the provision hereof, shall be subject during
the life of this contract to such an increase within the rate allowed by law, as the
Board of Directors of the MORTGAGEE may prescribe for its debtors.
xxxx
To begin with, PNB’s argument rests on a misapprehension of the import of the
appellate court’s ruling. The Court of Appeals nullified the interest rate increases
not because the promissory note did not comply with P.D. No. 1684 by providing
for a de-escalation, but because the absence of such provision made the clause
so one-sided as to make it unreasonable.
That ruling is correct. It is in line with our decision in Banco Filipino Savings &
Mortgage Bank v. Navarro that although P.D. No. 1684 is not to be retroactively
applied to loans granted before its effectivity, there must nevertheless be a de-
escalation clause to mitigate the one-sidedness of the escalation clause. Indeed
because of concern for the unequal status of borrowers vis-à-vis the banks, our
cases after Banco Filipino have fashioned the rule that any increase in the rate
of interest made pursuant to an escalation clause must be the result of
agreement between the parties.
Thus in Philippine National Bank v. Court of Appeals, two promissory notes
authorized PNB to increase the stipulated interest per annum" within the limits
allowed by law at any time depending on whatever policy [PNB] may adopt in
the future; Provided, that the interest rate on this note shall be correspondingly
decreased in the event that the applicable maximum interest rate is reduced by
law or by the Monetary Board." The real estate mortgage likewise provided:
The rate of interest charged on the obligation secured by this mortgage as well
as the interest on the amount which may have been advanced by the
MORTGAGEE, in accordance with the provisions hereof, shall be subject during
the life of this contract to such an increase within the rate allowed by law, as the
Board of Directors of the MORTGAGEE may prescribe for its debtors.
Pursuant to these clauses, PNB successively increased the interest from 18% to
32%, then to 41% and then to 48%. This Court declared the increases
unilaterally imposed by [PNB] to be in violation of the principle of mutuality as
embodied in Art.1308 of the Civil Code, which provides that "[t]he contract must
bind both contracting parties; its validity or compliance cannot be left to the will
of one of them." As the Court explained:
In order that obligations arising from contracts may have the force of law
between the parties, there must be mutuality between the parties based on their
essential equality. A contract containing a condition which makes its fulfillment
dependent exclusively upon the uncontrolled will of one of the contracting
parties, is void (Garcia vs. Rita Legarda, Inc., 21 SCRA 555). Hence, even
assuming that the ₱1.8 million loan agreement between the PNB and the private
respondent gave the PNB a license (although in fact there was none) to
increase the interest rate at will during the term of the loan, that license would
have been null and void for being violative of the principle of mutuality essential
in contracts. It would have invested the loan agreement with the character of a
contract of adhesion, where the parties do not bargain on equal footing, the
weaker party’s (the debtor) participation being reduced to the alternative "to take
it or leave it" (Qua vs. Law Union & Rock Insurance Co., 95 Phil. 85). Such a
contract is a veritable trap for the weaker party whom the courts of justice must
protect against abuse and imposition.
A similar ruling was made in Philippine National Bank v. Court of Appeals. The
credit agreement in that case provided:
The BANK reserves the right to increase the interest rate within the limits
allowed by law at any time depending on whatever policy it may adopt in the
future: Provided, that the interest rate on this accommodation shall be
correspondingly decreased in the event that the applicable maximum interest is
reduced by law or by the Monetary Board. . . .
As in the first case, PNB successively increased the stipulated interest so that
what was originally 12% per annum became, after only two years, 42%. In
declaring the increases invalid, we held:
We cannot countenance petitioner bank’s posturing that the escalation clause at
bench gives it unbridled right to unilaterally upwardly adjust the interest on
private respondents’ loan. That would completely take away from private
respondents the right to assent to an important modification in their agreement,
and would negate the element of mutuality in contracts.
Only recently we invalidated another round of interest increases decreed by
PNB pursuant to a similar agreement it had with other borrowers:
[W]hile the Usury Law ceiling on interest rates was lifted by C.B. Circular 905,
nothing in the said circular could possibly be read as granting respondent bank
carte blanche authority to raise interest rates to levels which would either
enslave its borrowers or lead to a hemorrhaging of their assets.
In this case no attempt was made by PNB to secure the conformity of private
respondents to the successive increases in the interest rate. Private
respondents’ assent to the increases can not be implied from their lack of
response to the letters sent by PNB, informing them of the increases. For as
stated in one case, no one receiving a proposal to change a contract is obliged
71
to answer the proposal. (Emphasis supplied)
We made the same pronouncement in a fifth case, New Sampaguita Builders
72
Construction, Inc. v. Philippine National Bank, thus –
Courts have the authority to strike down or to modify provisions in promissory
notes that grant the lenders unrestrained power to increase interest rates,
penalties and other charges at the latter’s sole discretion and without giving prior
notice to and securing the consent of the borrowers. This unilateral authority is
anathema to the mutuality of contracts and enable lenders to take undue
advantage of borrowers. Although the Usury Law has been effectively repealed,
courts may still reduce iniquitous or unconscionable rates charged for the use of
money. Furthermore, excessive interests, penalties and other charges not
revealed in disclosure statements issued by banks, even if stipulated in the
promissory notes, cannot be given effect under the Truth in Lending
73
Act. (Emphasis supplied)
Yet again, in a sixth disposition, Philippine National Bank v. Spouses
74
Rocamora, the above pronouncements were reiterated to debunk PNB’s
repeated reliance on its invalidated contract stipulations:
We repeated this rule in the 1994 case of PNB v. CA and Jayme Fernandez and
the 1996 case of PNB v. CA and Spouses Basco. Taking no heed of these
rulings, the escalation clause PNB used in the present case to justify the
increased interest rates is no different from the escalation clause assailed in the
1996 PNB case; in both, the interest rates were increased from the agreed 12%
per annum rate to 42%. x x x
xxxx
On the strength of this ruling, PNB’s argument – that the spouses Rocamora’s
failure to contest the increased interest rates that were purportedly reflected in
the statements of account and the demand letters sent by the bank amounted to
their implied acceptance of the increase – should likewise fail.
Evidently, PNB’s failure to secure the spouses Rocamora’s consent to the
increased interest rates prompted the lower courts to declare excessive and
illegal the interest rates imposed. Togo around this lower court finding, PNB
alleges that the ₱206,297.47 deficiency claim was computed using only the
original 12% per annum interest rate. We find this unlikely. Our examination of
PNB’s own ledgers, included in the records of the case, clearly indicates that
PNB imposed interest rates higher than the agreed 12% per annum rate. This
confirmatory finding, albeit based solely on ledgers found in the records,
reinforces the application in this case of the rule that findings of the RTC, when
75
affirmed by the CA, are binding upon this Court. (Emphases supplied)
Verily, all these cases, including the present one, involve identical or similar
provisions found in respondent’s credit agreements and promissory notes. Thus,
the July 1989 Credit Agreement executed by petitioners and respondent
contained the following stipulation on interest:
1.03. Interest. (a) The Loan shall be subject to interest at the rate of 19.5% [per
annum]. Interest shall be payable in advance every one hundred twenty days at
the rate prevailing at the time of the renewal.
(b) The Borrower agrees that the Bank may modify the interest rate in the Loan
depending on whatever policy the Bank may adopt in the future, including
without limitation, the shifting from the floating interest rate system to the fixed
interest rate system, or vice versa. Where the Bank has imposed on the Loan
interest at a rate per annum which is equal to the Bank’s spread over the current
floating interest rate, the Borrower hereby agrees that the Bank may, without
need of notice to the Borrower, increase or decrease its spread over the floating
interest rate at any time depending on whatever policy it may adopt in the
76
future. (Emphases supplied)
while the eight promissory notes issued pursuant thereto granted PNB the right
to increase or reduce interest rates "within the limits allowed by law or the
77
Monetary Board" and the Real Estate Mortgage agreement included the same
right to increase or reduce interest rates "at any time depending on whatever
78
policy PNB may adopt in the future."
On the basis of the Credit Agreement, petitioners issued promissory notes which
they signed in blank, and respondent later on entered their corresponding
interest rates, as follows:
1st Promissory Note dated July 24, 1989 – 19.5%;
2nd Promissory Note dated November 22, 1989 – 23%;
3rd Promissory Note dated March 21, 1990 – 22%;
4th Promissory Note dated July 19, 1990 – 24%;
5th Promissory Note dated December 17, 1990 – 28%;
6th Promissory Note dated February 14, 1991 – 32%;
7th Promissory Note dated March 1, 1991 – 30%; and
79
8th Promissory Note dated July 11, 1991 – 24%.
On the other hand, the August 1991 Amendment to Credit Agreement contains
the following stipulation regarding interest:
1.03. Interest on Line Availments. (a) The Borrowers agree to pay interest on
each Availment from date of each Availment up to but not including the date of
full payment thereof at the rate per annum which is determined by the Bank to
be prime rate plus applicable spread in effect as of the date of each
80
Availment. (Emphases supplied)
and under this Amendment to Credit Agreement, petitioners again executed and
signed the following promissory notes in blank, for the respondent to later on
enter the corresponding interest rates, which it did, as follows:
9th Promissory Note dated November 8, 1991 – 26%;
10th Promissory Note dated March 19, 1992 – 25%;
11th Promissory Note dated July 11, 1992 – 23%;
12th Promissory Note dated November 10, 1992 – 21%;
13th Promissory Note dated March 15, 1993 – 21%;
14th Promissory Note dated July 12, 1993 – 17.5%;
15th Promissory Note dated November 17, 1993 – 21%;
16th Promissory Note dated March 28, 1994 – 21%;
17th Promissory Note dated July 13, 1994 – 21%;
18th Promissory Note dated November 16, 1994 – 16%;
19th Promissory Note dated April 10, 1995 – 21%;
20th Promissory Note dated July 19, 1995 – 18.5%;
21st Promissory Note dated December 18, 1995 – 18.75%;
22nd Promissory Note dated April 22, 1996 – 18.5%;
23rd Promissory Note dated July 22, 1996 – 18.5%;
24th Promissory Note dated November 25, 1996 – 18%;
25th Promissory Note dated May 30, 1997 – 17.5%; and
26th Promissory Note (PN 9707237) dated July 30, 1997 – 25%.
81
The 9th up to the 17th promissory notes provide for the payment of interest at
the "rate the Bank may at any time without notice, raise within the limits allowed
82
by law x x x." On the other hand, the 18th up to the 26th promissory notes –
which includes PN 9707237 – carried the following provision:
x x x For this purpose, I/We agree that the rate of interest herein stipulated may
be increased or decreased for the subsequent Interest Periods, with prior notice
to the Borrower in the event of changes in interest rate prescribed by law or the
Monetary Board of the Central Bank of the Philippines, or in the Bank’s overall
cost of funds. I/We hereby agree that in the event I/we are not agreeable to the
interest rate fixed for any Interest Period, I/we shall have the option to prepay
the loan or credit facility without penalty within ten (10) calendar days from the
83
Interest Setting Date. (Emphasis supplied)
These stipulations must be once more invalidated, as was done in previous
cases. The common denominator in these cases is the lack of agreement of the
parties to the imposed interest rates. For this case, this lack of consent by the
petitioners has been made obvious by the fact that they signed the promissory
notes in blank for the respondent to fill. We find credible the testimony of Lydia
in this respect. Respondent failed to discredit her; in fact, its witness PNB Kalibo
Branch Manager Aspa admitted that interest rates were fixed solely by its
Treasury Department in Manila, which were then simply communicated to all
PNB branches for implementation. If this were the case, then this would explain
why petitioners had to sign the promissory notes in blank, since the imposable
interest rates have yet to be determined and fixed by respondent’s Treasury
Department in Manila.
Moreover, in Aspa’s enumeration of the factors that determine the interest rates
PNB fixes – such as cost of money, foreign currency values, bank administrative
costs, profitability, and considerations which affect the banking industry – it can
be seen that considerations which affect PNB’s borrowers are ignored. A
borrower’s current financial state, his feedback or opinions, the nature and
purpose of his borrowings, the effect of foreign currency values or fluctuations
on his business or borrowing, etc. – these are not factors which influence the
fixing of interest rates to be imposed on him. Clearly, respondent’s method of
fixing interest rates based on one-sided, indeterminate, and subjective criteria
such as profitability, cost of money, bank costs, etc. is arbitrary for there is no
fixed standard or margin above or below these considerations.
The stipulation in the promissory notes subjecting the interest rate to review
does not render the imposition by UCPB of interest rates on the obligations of
the spouses Beluso valid. According to said stipulation:
The interest rate shall be subject to review and may be increased or decreased
by the LENDER considering among others the prevailing financial and monetary
conditions; or the rate of interest and charges which other banks or financial
institutions charge or offer to charge for similar accommodations; and/or the
resulting profitability to the LENDER after due consideration of all dealings with
the BORROWER.
It should be pointed out that the authority to review the interest rate was given
[to] UCPB alone as the lender. Moreover, UCPB may apply the considerations
enumerated in this provision as it wishes. As worded in the above provision,
UCPB may give as much weight as it desires to each of the following
considerations: (1) the prevailing financial and monetary condition;(2) the rate of
interest and charges which other banks or financial institutions charge or offer to
charge for similar accommodations; and/or(3) the resulting profitability to the
LENDER (UCPB) after due consideration of all dealings with the BORROWER
(the spouses Beluso). Again, as in the case of the interest rate provision, there
is no fixed margin above or below these considerations.
In view of the foregoing, the Separability Clause cannot save either of the two
options of UCPB as to the interest to be imposed, as both options violate the
84
principle of mutuality of contracts. (Emphases supplied)
To repeat what has been said in the above-cited cases, any modification in the
contract, such as the interest rates, must be made with the consent of the
contracting parties.1âwphi1 The minds of all the parties must meet as to the
proposed modification, especially when it affects an important aspect of the
agreement. In the case of loan agreements, the rate of interest is a principal
condition, if not the most important component. Thus, any modification thereof
must be mutually agreed upon; otherwise, it has no binding effect.
What is even more glaring in the present case is that, the stipulations in question
no longer provide that the parties shall agree upon the interest rate to be fixed; -
instead, they are worded in such a way that the borrower shall agree to
whatever interest rate respondent fixes. In credit agreements covered by the
above-cited cases, it is provided that:
The Bank reserves the right to increase the interest rate within the limits allowed
by law at any time depending on whatever policy it may adopt in the future:
Provided, that, the interest rate on this accommodation shall be correspondingly
decreased in the event that the applicable maximum interest rate is reduced by
law or by the Monetary Board. In either case, the adjustment in the interest rate
agreed upon shall take effect on the effectivity date of the increase or decrease
85
in maximum interest rate. (Emphasis supplied)
Whereas, in the present credit agreements under scrutiny, it is stated that:
IN THE JULY 1989 CREDIT AGREEMENT
(b) The Borrower agrees that the Bank may modify the interest rate on the Loan
depending on whatever policy the Bank may adopt in the future, including
without limitation, the shifting from the floating interest rate system to the fixed
interest rate system, or vice versa. Where the Bank has imposed on the Loan
interest at a rate per annum, which is equal to the Bank’s spread over the
current floating interest rate, the Borrower hereby agrees that the Bank may,
without need of notice to the Borrower, increase or decrease its spread over the
floating interest rate at any time depending on whatever policy it may adopt in
86
the future. (Emphases supplied)
IN THE AUGUST 1991 AMENDMENT TO CREDIT AGREEMENT
1.03. Interest on Line Availments. (a) The Borrowers agree to pay interest on
each Availment from date of each Availment up to but not including the date of
full payment thereof at the rate per annum which is determined by the Bank to
be prime rate plus applicable spread in effect as of the date of each
87
Availment. (Emphasis supplied)
Plainly, with the present credit agreement, the element of consent or agreement
by the borrower is now completely lacking, which makes respondent’s unlawful
act all the more reprehensible.
Accordingly, petitioners are correct in arguing that estoppel should not apply to
them, for "[e]stoppel cannot be predicated on an illegal act. As between the
parties to a contract, validity cannot be given to it by estoppel if it is prohibited by
88
law or is against public policy."
It appears that by its acts, respondent violated the Truth in Lending Act, or
Republic Act No. 3765, which was enacted "to protect x x x citizens from a lack
of awareness of the true cost of credit to the user by using a full disclosure of
such cost with a view of preventing the uninformed use of credit to the detriment
89
of the national economy." The law "gives a detailed enumeration of the specific
information required to be disclosed, among which are the interest and other
90
charges incident to the extension of credit." Section 4 thereof provides that a
disclosure statement must be furnished prior to the consummation of the
transaction, thus:
SEC. 4. Any creditor shall furnish to each person to whom credit is extended,
prior to the consummation of the transaction, a clear statement in writing setting
forth, to the extent applicable and in accordance with rules and regulations
prescribed by the Board, the following information:
(1) the cash price or delivered price of the property or service to be
acquired;
(2) the amounts, if any, to be credited as down payment and/or trade-in;
(3) the difference between the amounts set forth under clauses (1) and
(2);
(4) the charges, individually itemized, which are paid or to be paid by
such person in connection with the transaction but which are not
incident to the extension of credit;
(5) the total amount to be financed;
(6) the finance charge expressed in terms of pesos and centavos; and
(7) the percentage that the finance bears to the total amount to be
financed expressed as a simple annual rate on the outstanding unpaid
balance of the obligation.
Under Section 4(6), "finance charge" represents the amount to be paid by the
debtor incident to the extension of credit such as interest or discounts, collection
fees, credit investigation fees, attorney’s fees, and other service charges. The
total finance charge represents the difference between (1) the aggregate
consideration (down payment plus installments) on the part of the debtor, and
91
(2) the sum of the cash price and non-finance charges.
By requiring the petitioners to sign the credit documents and the promissory
notes in blank, and then unilaterally filling them up later on, respondent violated
the Truth in Lending Act, and was remiss in its disclosure obligations. In one
case, which the Court finds applicable here, it was held:
UCPB further argues that since the spouses Beluso were duly given copies of
the subject promissory notes after their execution, then they were duly notified of
the terms thereof, in substantial compliance with the Truth in Lending Act.
Once more, we disagree. Section 4 of the Truth in Lending Act clearly provides
that the disclosure statement must be furnished prior to the consummation of the
transaction:
SEC. 4. Any creditor shall furnish to each person to whom credit is extended,
prior to the consummation of the transaction, a clear statement in writing setting
forth, to the extent applicable and in accordance with rules and regulations
prescribed by the Board, the following information:
(1) the cash price or delivered price of the property or service to be
acquired;
(2) the amounts, if any, to be credited as down payment and/or trade-in;
(3) the difference between the amounts set forth under clauses (1) and
(2);
(4) the charges, individually itemized, which are paid or to be paid by
such person in connection with the transaction but which are not
incident to the extension of credit;
(5) the total amount to be financed;
(6) the finance charge expressed in terms of pesos and centavos; and
 (7) the percentage that the finance bears to the total amount to be
financed expressed as a simple annual rate on the outstanding unpaid
balance of the obligation.
The rationale of this provision is to protect users of credit from a lack of
awareness of the true cost thereof, proceeding from the experience that banks
are able to conceal such true cost by hidden charges, uncertainty of interest
rates, deduction of interests from the loaned amount, and the like. The law
thereby seeks to protect debtors by permitting them to fully appreciate the true
cost of their loan, to enable them to give full consent to the contract, and to
properly evaluate their options in arriving at business decisions. Upholding
UCPB’s claim of substantial compliance would defeat these purposes of the
Truth in Lending Act. The belated discovery of the true cost of credit will too
often not be able to reverse the ill effects of an already consummated business
decision.
In addition, the promissory notes, the copies of which were presented to the
spouses Beluso after execution, are not sufficient notification from UCPB. As
earlier discussed, the interest rate provision therein does not sufficiently indicate
with particularity the interest rate to be applied to the loan covered by said
92
promissory notes. (Emphases supplied)
However, the one-year period within which an action for violation of the Truth in
Lending Act may be filed evidently prescribed long ago, or sometime in 2001,
one year after petitioners received the March 2000 demand letter which
contained the illegal charges.
The fact that petitioners later received several statements of account detailing its
outstanding obligations does not cure respondent’s breach. To repeat, the
belated discovery of the true cost of credit does not reverse the ill effects of an
93
already consummated business decision.
Neither may the statements be considered proposals sent to secure the
petitioners’ conformity; they were sent after the imposition and application of the
interest rate, and not before. And even if it were to be presumed that these are
proposals or offers, there was no acceptance by petitioners. "No one receiving a
proposal to modify a loan contract, especially regarding interest, is obliged to
94
answer the proposal."
Loan and credit arrangements may be made enticing by, or "sweetened" with,
offers of low initial interest rates, but actually accompanied by provisions written
in fine print that allow lenders to later on increase or decrease interest rates
unilaterally, without the consent of the borrower, and depending on complex and
subjective factors. Because they have been lured into these contracts by initially
low interest rates, borrowers get caught and stuck in the web of subsequent
steep rates and penalties, surcharges and the like. Being ordinary individuals or
entities, they naturally dread legal complications and cannot afford court
litigation; they succumb to whatever charges the lenders impose. At the very
least, borrowers should be charged rightly; but then again this is not possible in
a one-sided credit system where the temptation to abuse is strong and the
willingness to rectify is made weak by the eternal desire for profit.
Given the above supposition, the Court cannot subscribe to respondent’s
argument that in every repricing of petitioners’ loan availment, they are given the
right to question the interest rates imposed. The import of respondent’s line of
reasoning cannot be other than that if one out of every hundred borrowers
questions respondent’s practice of unilaterally fixing interest rates, then only the
loan arrangement with that lone complaining borrower will enjoy the benefit of
review or re-negotiation; as to the 99 others, the questionable practice will
continue unchecked, and respondent will continue to reap the profits from such
unscrupulous practice. The Court can no more condone a view so perverse.
This is exactly what the Court meant in the immediately preceding cited case
when it said that "the belated discovery of the true cost of credit does not
95
reverse the ill effects of an already consummated business decision;" as to the
99 borrowers who did not or could not complain, the illegal act shall have
become a fait accompli– to their detriment, they have already suffered the
oppressive rates.
Besides, that petitioners are given the right to question the interest rates
imposed is, under the circumstances, irrelevant; we have a situation where the
petitioners do not stand on equal footing with the respondent. It is doubtful that
any borrower who finds himself in petitioners’ position would dare question
respondent’s power to arbitrarily modify interest rates at any time. In the second
place, on what basis could any borrower question such power, when the criteria
or standards – which are really one-sided, arbitrary and subjective – for the
exercise of such power are precisely lost on him?
For the same reasons, the Court cannot validly consider that, as stipulated in the
18th up to the 26th promissory notes, petitioners are granted the option to
prepay the loan or credit facility without penalty within 10 calendar days from the
Interest Setting Date if they are not agreeable to the interest rate fixed. It has
been shown that the promissory notes are executed and signed in blank,
meaning that by the time petitioners learn of the interest rate, they are already
bound to pay it because they have already pre-signed the note where the rate is
subsequently entered.
Besides, premium may not be placed upon a stipulation in a contract which
grants one party the right to choose whether to continue with or withdraw from
the agreement if it discovers that what the other party has been doing all along
is improper or illegal.
Thus said, respondent’s arguments relative to the credit documents – that
documentary evidence prevails over testimonial evidence; that the credit
documents are in proper form, presumed regular, and endure, against arbitrary
claims by petitioners, experienced business persons that they are, they signed
questionable loan documents whose provisions for interest rates were left blank,
and yet they continued to pay the interests without protest for a number of years
– deserve no consideration.
With regard to interest, the Court finds that since the escalation clause is
annulled, the principal amount of the loan is subject to the original or stipulated
rate of interest, and upon maturity, the amount due shall be subject to legal
interest at the rate of 12% per annum. This is the uniform ruling adopted in
96
previous cases, including those cited here. The interests paid by petitioners
should be applied first to the payment of the stipulated or legal and unpaid
97
interest, as the case may be, and later, to the capital or principal. Respondent
should then refund the excess amount of interest that it has illegally imposed
upon petitioners; "[t]he amount to be refunded refers to that paid by petitioners
98
when they had no obligation to do so." Thus, the parties’ original agreement
stipulated the payment of 19.5% interest; however, this rate was intended to
apply only to the first promissory note which expired on November 21, 1989 and
was paid by petitioners; it was not intended to apply to the whole duration of the
loan. Subsequent higher interest rates have been declared illegal; but because
only the rates are found to be improper, the obligation to pay interest subsists,
the same to be fixed at the legal rate of 12% per annum. However, the 12%
interest shall apply only until June 30, 2013. Starting July1, 2013, the prevailing
rate of interest shall be 6% per annum pursuant to our ruling in Nacar v. Gallery
99
Frames and Bangko Sentral ng Pilipinas-Monetary Board Circular No. 799.
Now to the issue of penalty. PN 9707237 provides that failure to pay it or any
installment thereon, when due, shall constitute default, and a penalty charge of
24% per annum based on the defaulted principal amount shall be imposed.
Petitioners claim that this penalty should be excluded from the foreclosure
amount or bid price because the Real Estate Mortgage and the Supplement
thereto did not specifically include it as part of the secured amount. Respondent
justifies its inclusion in the secured amount, saying that the purpose of the
penalty or a penal clause is to ensure the performance of the obligation and
substitute for damages and the payment of interest in the event of non-
100
compliance. Respondent adds that the imposition and collection of a penalty
is a normal banking practice, and the standard rate per annum for all
commercial banks, at the time, was 24%. Its inclusion as part of the secured
amount in the mortgage agreements is thus valid and necessary.
The Court sustains petitioners’ view that the penalty may not be included as part
of the secured amount. Having found the credit agreements and promissory
notes to be tainted, we must accord the same treatment to the mortgages. After
all, "[a] mortgage and a note secured by it are deemed parts of one transaction
101
and are construed together." Being so tainted and having the attributes of a
contract of adhesion as the principal credit documents, we must construe the
mortgage contracts strictly, and against the party who drafted it. An examination
of the mortgage agreements reveals that nowhere is it stated that penalties are
to be included in the secured amount. Construing this silence strictly against the
respondent, the Court can only conclude that the parties did not intend to
include the penalty allowed under PN 9707237 as part of the secured amount.
Given its resources, respondent could have – if it truly wanted to – conveniently
prepared and executed an amended mortgage agreement with the petitioners,
thereby including penalties in the amount to be secured by the encumbered
properties. Yet it did not.
With regard to attorney’s fees, it was plain error for the CA to have passed upon
the issue since it was not raised by the petitioners in their appeal; it was the
respondent that improperly brought it up in its appellee’s brief, when it should
have interposed an appeal, since the trial court’s Decision on this issue is
adverse to it. It is an elementary principle in the subject of appeals that an
appellee who does not himself appeal cannot obtain from the appellate court
any affirmative relief other than those granted in the decision of the court below.
x x x [A]n appellee, who is at the same time not an appellant, may on appeal be
permitted to make counter assignments of error in ordinary actions, when the
purpose is merely to defend himself against an appeal in which errors are
alleged to have been committed by the trial court both in the appreciation of
facts and in the interpretation of the law, in order to sustain the judgment in his
favor but not when his purpose is to seek modification or reversal of the
judgment, in which case it is necessary for him to have excepted to and
102
appealed from the judgment.
Since petitioners did not raise the issue of reduction of attorney’s fees, the CA
possessed no authority to pass upon it at the instance of respondent. The ruling
of the trial court in this respect should remain undisturbed.
For the fixing of the proper amounts due and owing to the parties – to the
respondent as creditor and to the petitioners who are entitled to a refund as a
consequence of overpayment considering that they paid more by way of interest
103
charges than the 12% per annum herein allowed – the case should be
remanded to the lower court for proper accounting and computation, applying
the following procedure:
1. The 1st Promissory Note with the 19.5% interest rate is deemed
proper and paid;
2. All subsequent promissory notes (from the 2nd to the 26th promissory
104
notes) shall carry an interest rate of only 12% per annum. Thus,
interest payment made in excess of 12% on the 2nd promissory note
shall immediately be applied to the principal, and the principal shall be
accordingly reduced. The reduced principal shall then be subjected to
105
the 12% interest on the 3rd promissory note, and the excess over
12% interest payment on the 3rd promissory note shall again be applied
to the principal, which shall again be reduced accordingly. The reduced
principal shall then be subjected to the 12% interest on the 4th
promissory note, and the excess over12% interest payment on the 4th
promissory note shall again be applied to the principal, which shall again
be reduced accordingly. And so on and so forth;
3. After the above procedure is carried out, the trial court shall be able to
conclude if petitioners a) still have an OUTSTANDING
BALANCE/OBLIGATION or b) MADE PAYMENTS OVER AND ABOVE
THEIR TOTAL OBLIGATION (principal and interest);
4. Such outstanding balance/obligation, if there be any, shall then be
subjected to a 12% per annum interest from October 28, 1997 until
January 14, 1999, which is the date of the auction sale;
5. Such outstanding balance/obligation shall also be charged a 24% per
annum penalty from August 14, 1997 until January 14, 1999. But from
this total penalty, the petitioners’ previous payment of penalties in the
106
amount of ₱202,000.00made on January 27, 1998 shall be
DEDUCTED;
6. To this outstanding balance (3.), the interest (4.), penalties (5.), and
the final and executory award of 1% attorney’s fees shall be ADDED;
7. The sum total of the outstanding balance (3.), interest (4.) and 1%
attorney’s fees (6.) shall be DEDUCTED from the bid price of
₱4,324,172.96. The penalties (5.) are not included because they are not
included in the secured amount;
8. The difference in (7.) [₱4,324,172.96 LESS sum total of the
outstanding balance (3.), interest (4.), and 1% attorney’s fees (6.)] shall
be DELIVERED TO THE PETITIONERS;
9. Respondent may then proceed to consolidate its title to TCTs T-
14250 and T-16208;
10. ON THE OTHER HAND, if after performing the procedure in (2.), it
turns out that petitioners made an OVERPAYMENT, the interest (4.),
penalties (5.), and the award of 1% attorney’s fees (6.) shall be
DEDUCTED from the overpayment. There is no outstanding
balance/obligation precisely because petitioners have paid beyond the
amount of the principal and interest;
11. If the overpayment exceeds the sum total of the interest (4.),
penalties (5.), and award of 1% attorney’s fees (6.), the excess shall be
RETURNED to the petitioners, with legal interest, under the principle of
107
solutio indebiti;
12. Likewise, if the overpayment exceeds the total amount of interest
(4.) and award of 1% attorney’s fees (6.), the trial court shall
INVALIDATE THE EXTRAJUDICIAL FORECLOSURE AND SALE;
13. HOWEVER, if the total amount of interest (4.) and award of 1%
attorney’s fees (6.) exceed petitioners’ overpayment, then the excess
shall be DEDUCTED from the bid price of ₱4,324,172.96;
14. The difference in (13.) [₱4,324,172.96 LESS sum total of the interest
(4.) and 1% attorney’s fees (6.)] shall be DELIVERED TO THE
PETITIONERS;
15. Respondent may then proceed to consolidate its title to TCTs T-
14250 and T-16208. The outstanding penalties, if any, shall be collected
by other means.
From the above, it will be seen that if, after proper accounting, it turns
out that the petitioners made payments exceeding what they actually
owe by way of principal, interest, and attorney’s fees, then the
mortgaged properties need not answer for any outstanding secured
amount, because there is not any; quite the contrary, respondent must
refund the excess to petitioners.1âwphi1 In such case, the extrajudicial
foreclosure and sale of the properties shall be declared null and void for
obvious lack of basis, the case being one of solutio indebiti instead. If,
on the other hand, it turns out that petitioners’ overpayments in interests
do not exceed their total obligation, then the respondent may
consolidate its ownership over the properties, since the period for
redemption has expired. Its only obligation will be to return the
difference between its bid price (₱4,324,172.96) and petitioners’ total
obligation outstanding – except penalties – after applying the latter’s
overpayments.
WHEREFORE, premises considered, the Petition is GRANTED. The May 8,
2007 Decision of the Court of Appeals in CA-G.R. CV No. 79650 is ANNULLED
and SET ASIDE. Judgment is hereby rendered as follows:
1. The interest rates imposed and indicated in the 2nd up to the 26th
Promissory Notes are DECLARED NULL AND VOID, and such notes
shall instead be subject to interest at the rate of twelve percent (12%)
per annum up to June 30, 2013, and starting July 1, 2013, six percent
(6%) per annum until full satisfaction;
 2. The penalty charge imposed in Promissory Note No. 9707237 shall
be EXCLUDED from the amounts secured by the real estate mortgages;

3. The trial court’s award of one per cent (1%) attorney’s fees is
REINSTATED;

4. The case is ordered REMANDED to the Regional Trial Court, Branch

6 of Kalibo, Aklan for the computation of overpayments made by
petitioners spouses Eduardo and Lydia Silos to respondent Philippine
National Bank, taking into consideration the foregoing dispositions, and
applying the procedure hereinabove set forth;

5. Thereafter, the trial court is ORDERED to make a determination as to

the validity of the extrajudicial foreclosure and sale, declaring the same
null and void in case of overpayment and ordering the release and
return of Transfer Certificates of Title Nos. T-14250 and TCT T-16208 to
petitioners, or ordering the delivery to the petitioners of the difference
between the bid price and the total remaining obligation of petitioners, if
any;

6. In the meantime, the respondent Philippine National Bank is

ENJOINED from consolidating title to Transfer Certificates of Title Nos.
T-14250 and T-16208 until all the steps in the procedure above set forth
have been taken and applied;

7. The reimbursement of the excess in the bid price of ₱377,505.99,

which respondent Philippine National Bank is ordered to reimburse
petitioners, should be HELD IN ABEYANCE until the true amount owing
to or owed by the parties as against each other is determined;

8. Considering that this case has been pending for such a long time and
that further proceedings, albeit uncomplicated, are required, the trial
court is ORDERED to proceed with dispatch.

SO ORDERED.
G.R. No. 201001 November 10, 2014
MCMP CONSTRUCTION CORP., Petitioner,
vs.
MONARK EQUIPMENT CORP., Respondent.
RESOLUTION
VELASCO, JR., J.:
For consideration of the Court is a Petition for Review on Certiorari dated April
20, 20li filed by MCMP Construction Corp. under Rule 45 of the Rules of Court.
2 that it had an agreement with Monark that it would not be charged for the whole
The petition seeks the reversal of the Decision dated October 14, 2011 and
3 time that the leased equipment was in its possession but rather only for the
Resolution dated March 9, 2012 issued by the Court of Appeals (CA) in CA
G.R. CV No. 91860 entitled Monark Equipment Corporation v. MCMP
Construction Corporation. The CA Decision affirmed the Decision dated
4 5
November 20, 2007 and Order dated April 28, 2008 issued by the Regional
Trial Court, Branch 96 in Quezon City (RTC) in Civil Case No. Q-02-4 7092
entitled Monark Equipment Corporation v. MCMP Construction Corporation.
The facts of the case are as follows:
MCMP Construction Corporation (MCMP) leased heavy equipment from Monark
Equipment Corporation (Monark) for various periods in 2000, the lease covered
by a Rental Equipment Contract (Contract). Thus, Monark delivered five (5)
pieces of heavy equipment to the project site of MCMP in Tanay, Rizal and
Llavac, Quezon, the delivery evidenced by invoices as well as Documents
Acknowledgment Receipt Nos. 04667 and 5706, received and signed by
representatives of MCMP, namely, Jorge Samonte on December 5, 2000 and
Rose Takahashi on January 29, 2001, respectively. Notably, the invoices state:
"Credit sales are payable within 30 days from the date of invoice. Customer
agrees to pay interest at 24% p.a. on all amounts. In addition, customer agrees
to pay a collection fee of 1% compounded monthly and 2% per month penalty
charge for late payment on amounts overdue. Customer agrees to pay a sum
equal to 25% of any amount due as attorney’s fees in case of suit, and expressly
submit to the jurisdiction of the courts of Quezon City, Makati, Pasig or Manila,
Metro Manila, for any legal action arising from, this transactions."
Despite the lapse of the thirty (30)-day period indicated in the invoices, MCMP
failed to pay the rental fees. Upon demands made upon MCMP to pay the
amount due, partial payments were made in the amount of Ph₱100,000.00 on
April 15, 2001 and Ph₱100,000.00 on August 15, 2001. Further demands went
unheeded. As of April 30, 2002, MCMP owed Monark the amount of
Ph₱1,282,481.83, broken down as follows:
Principal Accumulated PhP 765,380.33
Interest (2%) 253,226.17
2% Monthly Penalty Charge 253,226.17
Collection Fee (1%) 10,649.16
===============
6
Ph₱1,282,481.83
Thus, on June 18, 2002, Monark filed a suit for a Sum of Money with the RTC
7
docketed as Civil Case No. Q-02-47092. In its Answer filed on July 5,
8
2002, MCMP alleged in defense thatthe complaint was premature as Monark
has refused to give a detailed breakdown of its claims. MCMP further averred
actual time that the equipment was used although still on the project site.
MCMP, however, admitted that this agreement was not contained in the
Contract.
During trial, Monark presented asone of its witnesses, Reynaldo Peregrino
(Peregrino), its Senior Account Manager. Peregrino testified that there were two
(2) original copies ofthe Contract, one retained by Monark, while the other was
given to MCMP. He further testified that Monark’s copy had been lost and that
diligent efforts to recover the copy proved futile. Instead, Peregrino presented a
photocopy of the Contract which he personally had on file. MCMP objected to
the presentation of secondary evidence to prove the contents of the Contract
arguing that there were no diligent efforts to search for the original copy.
Notably, MCMP did not present its copy of the Contract notwithstanding the
9
directive of the trial court to produce the same.
On November 20, 2007, the RTC issued its Decision finding for Monark as
plaintiff, the dispositive portion of which reads:
"WHEREFORE, in view of the foregoing findings and legal premises, judgment
is hereby rendered in favor of the plaintiff, and ordering the defendant to pay the
former:
1. PhP 1,282,481.83 as balance for the rental fees of the subject heavy
equipments (sic) as of April 30, 2002, inclusive of the interests thereof;
2. Twenty-Five percent (25%) of the total amount to be recovered as
payment for the attorney’s fees; and,
3. The costs of suit.
SO ORDERED."
From this Decision of the RTC, MCMP filed a Motion for Reconsideration dated
January 31, 2008 while Monark interposed a Motion for Clarification and/or
10
Partial Reconsideration. On April 28, 2008, the RTC issued an Order,
disposing as follows:
"WHEREFORE, in light of the foregoing, the Court finds no reversible error in
the assailed decision henceforth, the Motion for Reconsideration of defendant is
hereby DENIED for lack of merit. On the other hand, the plaintiff’s Motion for
Clarification and/or Partial Reconsideration is hereby GRANTED for being
meritorious. Therefore, in the dispositive portion of the assailed decision dated
20 November 2007, the following should be included:
‘The payment of interests, charges and fees due after April 30, 2002 and up to
the time when all the obligations of the defendant to the plaintiff shall have been
fully paid, computed in accordance with the stipulations entered into between
the parties under Exhibits "A" to "G", and uniformly stated in the following wise:
Credit sales are payable within 30 days from the date of invoice. Customer
agreesto pay interest at 24% p.a. on all amounts. In addition, customer agrees
to pay a collection fee of 1% compounded monthly and 2% per month penalty
charge for late payment on amounts overdue. Customer agrees to pay a sum
equal to 25% of any amount due as attorney’s fees in case of suit, and expressly
submit to the jurisdiction of the courts of Quezon City, Makati, Pasig or Manila,
Metro Manila, for any legal action arising from, this transactions.’
SO ORDERED."
Unsatisfied, MCMP appealed the RTC’s Decision and Order to the Court of
Appeals (CA). Eventually, the appellate court, by a Decision dated October 14,
2011, affirmed in totothe Decision and Order of the RTC. MCMP’s motion for
reconsideration of the CA Decision was denied by the CA in its Resolution dated
March 9, 2012.
Hence, the instant petition.
MCMP challenges the ruling of the CA arguing that the appellate court should
have disallowed the presentation of secondary evidence to prove the existence
of the Contract, following the Best Evidence Rule. MCMP specifically argues
that based on the testimony of Peregrino, Monark did not diligently search for
the original copy of the Contract as evidenced by the fact that: 1) the actual
custodian of the document was not presented; 2) the alleged loss was not even
reported to management or the police; and 3) Monark only searched for the
original copy of the document for the purposes of the instant case.
Petitioner’s contention is erroneous.
The Best Evidence Rule, a basic postulate requiring the production of the
original document whenever its contents are the subject of inquiry, is contained
in Section 3 of Rule 130 ofthe Rules of Court which provides:
"Section 3. Original document must be produced; exceptions. — When the
subject of inquiry is the contents of a document, no evidence shall be admissible
other than the original document itself, except in the following cases:
(a) When the original has been lost or destroyed, or cannot be produced
in court, without bad faith on the part of the offeror;
(b) When the original is in the custody or under the control of the party
against whom the evidence is offered, and the latter fails to produce it
after reasonable notice;
(c) When the original consists of numerous accounts or other
documents which cannot be examined in court without great loss of time
and the fact sought to be established from them is only the general
result of the whole; and
(d) When the original is a public record in the custody of a public officer
or is recorded in a public office. (Emphasis supplied)"
Relative thereto, Sections 5 and 6 of Rule 130 provide the relevant rules on the
presentation of secondary evidence to prove the contents of a lost document:
"Section 5. When original document is unavailable. — When the original
document has been lost ordestroyed, or cannot be produced in court, the
offeror, upon proof of its execution or existence and the cause of its
unavailability without bad faith on his part, may prove its contents by a copy, or
by a recital of its contents in some authentic document, or by the testimony of
witnesses in the order stated. (4a)
Section 6. When original document is in adverse party's custody or control. — If
the document is inthe custody or under the control of adverse party, he must
have reasonable notice to produce it. If after such notice and after satisfactory
proof of its existence, he fails to produce the document, secondary evidence
may be presented as in the case of its loss."
11
In Country Bankers Insurance Corporation v. Lagman, the Court set down the
requirements before a party may present secondary evidence to prove the
contents of the original document whenever the original copy has been lost:
Before a party is allowed to adduce secondary evidence to prove the contents of
the original, the offeror must prove the following: (1) the existence or due
execution of the original; (2) the loss and destruction of the original or the reason
for its non-production in court; and (3) on the part of the offeror, the absence of
bad faith to which the unavailability of the original can be attributed. The correct
order of proof is as follows: existence, execution, loss, and contents.
In the instant case, the CA correctlyruled that the above requisites are present.
Both the CA and the RTC gave credence to the testimony of Peregrino that the
original Contract in the possession of Monark has been lost and that diligent
efforts were exerted to find the same but to no avail. Such testimony has
remained uncontroverted. As has been repeatedly held by this Court, "findings
offacts and assessment ofcredibility of witnesses are matters best left to the trial
12
court." Hence, the Court will respect the evaluation of the trial court on the
credibility of Peregrino.
MCMP, to note, contends that the Contract presented by Monark is not the
contract that they entered into. Yet, it has failed to present a copy of the
Contract even despite the request ofthe trial court for it to produce its copy of the
13
Contract. Normal business practice dictates that MCMP should have asked for
and retained a copy of their agreement. Thus, MCMP’s failure to present the
same and even explain its failure, not only justifies the presentation by Monark
of secondary evidence in accordance with Section 6 of Rule 130 of the Rules of
Court, butit also gives rise to the disputable presumption adverse to MCMP
under Section 3 (e) of Rule 131 of the Rules of Court that "evidence willfully
suppressed would be adverse if produced."
Next, MCMP claims that the piecesof equipment were not actually delivered to it
by Monark. It bears pointing out, however, that the witnesses of MCMP itself,
Jorge Samonte, a Budget Supervisor of MCMP, and Engr. Horacio A. Martinez,
Sr., General Manager of MCMP, both acknowledged the delivery of the
14
equipment to the project sites. Clearly, the contention of MCMP is false.
Evidently, the instant petition must be dismissed.
Nevertheless, the Court takes notice that the trial court imposed upon MCMP a
24% per annum interest on the rental fees as well as a collection fee of 1% per
month compounded monthly and a 2% per month penalty charge. In all then, the
effective interest rate foisted upon MCMP is 60% per annum. On top of this,
MCMP was assessedfor attorney’s fees at the rate of 25% of the total amount
due. These are exorbitant and unconscionable rates and, following
jurisprudence, must be equitably reduced.
15
In Macalinao v. Bank of the Philippine Islands, the Court reduced the interest
imposed by the bank of 36% for being excessive and unconscionable:
"x x x Nevertheless, it should be noted that this is not the first time that this
Court has considered the interest rate of 36% per annum as excessive and
unconscionable. We held in Chua vs. Timan:
The stipulated interest rates of 7% and 5% per month imposed on respondents’
loans mustbe equitably reduced to 1% per month or 12% per annum. We need
not unsettle the principle we had affirmed in a plethora of cases that stipulated
interest rates of 3% per month and higher are excessive, iniquitous,
unconscionable and exorbitant. Such stipulations are void for being contrary to
morals, if not against the law. While C.B. Circular No. 905-82, which took effect
on January 1, 1983, effectively removed the ceiling on interest rates for both
secured and unsecured loans, regardless of maturity, nothing in the said circular
could possibly be read as granting carte blanche authority to lenders to raise
interest rates to levels which would either enslave their borrowers or lead to a
hemorrhaging of their assets. (Emphasis supplied.)
Since the stipulation on the interest rate is void, it is as if there was no express
contract thereon. Hence, courts may reduce the interest rate as reason and
equity demand.
The same is true with respect tothe penalty charge. Notably, under the Terms
and Conditions Governing the Issuance and Use of the BPI Credit Card, it was
also stated therein that respondent BPI shall impose an additional penalty
charge of 3% per month. Pertinently, Article 1229 of the Civil Code states:
Art. 1229. The judge shall equitably reduce the penalty when the principal
obligation has been partly or irregularly complied with by the debtor. Even if
there has been no performance, the penalty may also be reduced by the courts
if it is iniquitous or unconscionable. In exercising this power to determine what is
iniquitous and unconscionable, courts must consider the circumstances of each
case since what may be iniquitous and unconscionable in one may be totally just
and equitable in another."
In the more recent case of Pentacapital Investment Corporation v.
16
Mahinay, the Court reduced the interest and penalties imposed in a contract as
follows:
"Aside from the payment of the principal obligation of ₱1,936,800.00, the parties
agreed that respondent pay interest at the rate of 25% from February 17, 1997
until fully paid. Such rate, however, is excessive and thus, void. Since the
stipulation on the interest rate is void, it is as if there was no express contract
thereon. To be sure, courts may reduce the interest rate as reason and equity
demand. In this case, 12% interest is reasonable.
The promissory notes likewise required the payment of a penalty charge of 3%
per month or 36% per annum. We find such rates unconscionable. This Court
has recognized a penalty clause as an accessory obligation which the parties
attach to a principal obligation for the purpose of ensuring the performance
thereof by imposing on the debtor a special prestation (generallyconsisting of
the payment of a sum of money) in case the obligation is not fulfilled or is
irregularly or inadequately fulfilled. However, a penalty charge of 3% per month 2. Interest of 12% per annum on the unpaid rental fees to be computed
17
is unconscionable; hence, we reduce it to1% per month or 12% per annum, from March 1, 2001 until payment;
pursuant to Article 1229 of the Civil Code which states:
3. Penalty and collection charge of 6% per annum on the unpaid rental
Art. 1229. The judge shall equitably reduce the penalty when the principal fees to be computed from March 1, 2001;
obligation has been partly or irregularly complied with by the debtor. Even if
there has been no performance, the penalty may also be reduced by the courts 4. Attorney's Fees of five percent (5%) of the total amount to be
if it is iniquitous or unconscionable. recovered; and,

Lastly, respondent promised to pay 25% of his outstanding obligations as 5. The costs of suit.
attorney’s fees in case of non-payment thereof. Attorney’s fees here are in the
nature of liquidated damages. As long as said stipulation does not contravene SO ORDERED.
law, morals, or public order, it is strictly binding upon respondent. Nonetheless,
courts are empowered to reduce such rate if the same is iniquitous or
unconscionable pursuant to the above-quoted provision. This sentiment is
echoed inArticle 2227 of the Civil Code, to wit:

Art. 2227. Liquidated damages, whether intended as an indemnity or a penalty,

shall be equitably reduced if they are iniquitous or unconscionable.

Hence, we reduce the stipulated attorney's fees from 25% to 10%."

Following the above principles previously laid down by the Court, the interest
and penalty charges imposed upon MCMP must also be considered as
iniquitous, unconscionable and, therefore, void. As such, the rates may validly
be reduced. Thus, the interest rate of 24% per annum is hereby reduced to 12%
per annum. Moreover, the interest shall start to accrue thirty (30) days after
receipt of the second set of invoices on January 21, 2001, or March 1, 2001 in
accordance with the provisions in the invoices themselves.

Additionally, the penalty and collection charge of 3% per month, or 36% per
annum, is also reduced to 6% per annum.1âwphi1 And the amount of attorney's
fees is reduced from 25% of the total amount due to 5%.

WHEREFORE, premises considered, the instant petition is hereby DENIED for

lack of merit with the MODIFICATION that the dispositive portion of the RTC's
Decision dated November 20, 2007, as amended in an Order dated April 28,
2008, should read:

WHEREFORE, in view of the foregoing findings and legal premises, judgment is

hereby rendered in favor of the plaintiff, and ordering the defendant to pay the
former:

1. PhP 765,380.33 representing the unpaid rental fees;

G.R. No. 191696 April 10, 2013
ROGELIO DANTIS, Petitioner,
vs.
JULIO MAGHINANG, JR., Respondent.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari seeking to reverse and set aside the
1 2
January 25, 2010 Decision and the March 23, 2010 Resolution of the Court of
Appeals (CA). in CA-G.R. CV No. 85258, reversing the March 2, 2005
3 Transfer Certificate of Title No. T-125918, issued by the Register of Deeds of
Decision of the Regional Trial Court, Branch 18, Malolos, Bulacan (RTC), in an
action for quieting of title and recovery of possession with damages.
The Facts
4
The case draws its origin from a complaint for quieting of title and recovery of
possession with damages filed by petitioner Rogelio Dantis (Rogelio) against
respondent Julio Maghinang, Jr. (Julio, Jr.) before the RTC, docketed as Civil
Case No. 280-M-2002. Rogelio alleged that he was the registered owner of a
parcel of land covered by Transfer Certificate of Title (TCT) No. T-125918, with
an area of 5,657 square meters, located in Sta. Rita, San Miguel, Bulacan; that
he acquired ownership of the property through a deed of extrajudicial partition of
the estate of his deceased father, Emilio Dantis (Emilio), dated December 22,
1993; that he had been paying the realty taxes on the said property; that Julio,
Jr. occupied and built a house on a portion of his property without any right at
all; that demands were made upon Julio, Jr. that he vacate the premises but the
same fell on deaf ears; and that the acts of Julio, Jr. had created a cloud of
doubt over his title and right of possession of his property. He, thus, prayed that
judgment be rendered declaring him to be the true and real owner of the parcel
of land covered by TCT No. T-125918; ordering Julio, Jr. to deliver the
possession of that portion of the land he was occupying; and directing Julio, Jr.
to pay rentals from October 2000 and attorney’s fees of ₱100,000.00.
He added that he was constrained to institute an ejectment suit against Julio, Jr.
before the Municipal Trial Court of San Miguel, Bulacan (MTC), but the
complaint was dismissed for lack of jurisdiction and lack of cause of action.
5 ₱50,000.00 as attorney’s fees. Since 1953, he has not declared the property as
In his Answer, Julio, Jr. denied the material allegations of the complaint. By way
of an affirmative defense, he claimed that he was the actual owner of the 352
square meters (subject lot) of the land covered by TCT No. T-125918 where he
was living; that he had been in open and continuous possession of the property
for almost thirty (30) years; the subject lot was once tenanted by his ancestral
relatives until it was sold by Rogelio’s father, Emilio, to his father, Julio
Maghinang, Sr. (Julio, Sr.); that later, he succeeded to the ownership of the
subject lot after his father died on March 10, 1968; and that he was entitled to a
separate registration of the subject lot on the basis of the documentary evidence
of sale and his open and uninterrupted possession of the property.
As synthesized by the RTC from the respective testimonies of the principal
witnesses, their diametrically opposed positions are as follows:
Plaintiff Rogelio Dantis testified that he inherited 5,657 square meters of land,
identified as Lot 6-D-1 of subdivision plan Psd-031421-054315, located at Sta.
Rita, San Miguel, Bulacan, through an Extrajudicial Partition of Estate of Emilio
Dantis, executed in December 1993 which land was titled later on under his
name, Rogelio Dantis, married to Victoria Payawal, as shown by copy of
Bulacan on September 29, 1998, declared for taxation purposes as Tax
Declaration with ARP No. C20-22-043-07-046. According to him, defendant and
his predecessor-in-interest built the house located on said lot. When he first saw
it, it was only a small hut but when he was about 60 years old, he told defendant
not to build a bigger house thereon because he would need the land and
defendant would have to vacate the land. Plaintiff, however, has not been in
physical possession of the premises.
Defendant Julio Maghinang, Jr., presented by plaintiff as adverse witness,
testified that he has no title over the property he is occupying. He has not paid
realty taxes thereon. He has not paid any rental to anybody. He is occupying
about 352 square meters of the lot. He presented an affidavit executed on
September 3, 1953 by Ignacio Dantis, grandfather of Rogelio Dantis and the
father of Emilio Dantis. The latter was, in turn, the father of Rogelio Dantis.
The affidavit, according to affiant Ignacio Dantis, alleged that Emilio Dantis
agreed to sell 352 square meters of the lot to Julio Maghinang on installment.
Defendant was then 11 years old in 1952.
Defendant Julio Maghinang, Jr. likewise testified for the defendant’s case as
follows: He owns that house located at Sta. Rita, San Miguel, Bulacan, on a 352
square meter lot. He could not say that he is the owner because there is still
question about the lot. He claimed that his father, Julio Maghinang (Sr.), bought
the said lot from the parents of Rogelio Dantis. He admitted that the affidavit was
not signed by the alleged vendor, Emilio Dantis, the father of Rogelio Dantis.
The receipt he presented was admittedly a mere photocopy. He spent
his nor paid the taxes thereon because there is a problem.
6
On March 2, 2005, the RTC rendered its decision declaring Rogelio as the true
owner of the entire 5,657-square meter lot located in Sta. Rita, San Miguel,
Bulacan, as evidenced by his TCT over the same. The RTC did not lend any
probative value on the documentary evidence of sale adduced by Julio, Jr.
consisting of: 1) an affidavit allegedly executed by Ignacio Dantis (Ignacio),
Rogelio’s grandfather, whereby said affiant attested, among others, to the sale
7
of the subject lot made by his son, Emilio, to Julio, Sr. (Exhibit "3") ; and 2) an
undated handwritten receipt of initial downpayment in the amount of ₱100.00
supposedly issued by Emilio to Julio, Sr. in connection with the sale of the
8
subject lot (Exhibit "4"). The RTC ruled that even if these documents were
adjudged as competent evidence, still, they would only serve as proofs that the
purchase price for the subject lot had not yet been completely paid and, hence,
Rogelio was not duty-bound to deliver the property to Julio, Jr. The RTC found
Julio, Jr. to be a mere possessor by tolerance. The dispositive portion of the
RTC decision reads:
WHEREFORE, Judgment is hereby rendered as follows:
1. quieting the title and removing whatever cloud over the title on the parcel of
land, with area of 5,647 sq. meters, more or less, located at Sta. Rita, San
Miguel, Bulacan, covered by Transfer Certificate of Title No. T-125918 issued by
the Register of Deeds of Bulacan in the name of "Rogelio Dantis, married to
Victoria Payawal";
2. declaring that Rogelio Dantis, married to Victoria Payawal, is the true and
lawful owner of the aforementioned real property; and
3. ordering defendant Julio Maghinang, Jr. and all persons claiming under him to
peacefully vacate the said real property and surrender the possession thereof to
plaintiff or latter’s successors-in-interest.
No pronouncement as to costs in this instance.
9
SO ORDERED.
Julio, Jr. moved for a reconsideration of the March 2, 2005 Decision, but the
motion was denied by the RTC in its May 3, 2005 Order.10 Feeling aggrieved,
Julio, Jr. appealed the decision to the CA.
On January 25, 2010, the CA rendered the assailed decision in CA-G.R. CV NO.
85258, finding the appeal to be impressed with merit. It held that Exhibit "4" was
an indubitable proof of the sale of the 352-square meter lot between Emilio and
Julio, Sr. It also ruled that the partial payment of the purchase price, coupled
with the delivery of the res, gave efficacy to the oral sale and brought it outside
the operation of the statute of frauds. Finally, the court a quo declared that Julio,
Jr. and his predecessors-in-interest had an equitable claim over the subject lot
which imposed on Rogelio and his predecessors-in-interest a personal duty to
convey what had been sold after full payment of the selling price. The decretal
portion of the CA decision reads:
IN VIEW OF THE FOREGOING, the decision appealed from is reversed. The
heirs of Julio Maghinang Jr. are declared the owners of the 352-square meter
portion of the lot covered by TCT No. T-125968 where the residence of
defendant Julio Maghinang is located, and the plaintiff is ordered to reconvey
the aforesaid portion to the aforesaid heirs, subject to partition by agreement or
action to determine the exact metes and bounds and without prejudice to any
legal remedy that the plaintiff may take with respect to the unpaid balance of the
price.
11
SO ORDERED.
12
The motion for reconsideration filed by Rogelio was denied by the CA in its
March 23, 2010 Resolution. Unfazed, he filed this petition for review on certiorari
before this Court.
Issues:
The fundamental question for resolution is whether there is a perfected contract
of sale between Emilio and Julio, Sr. The determination of this issue will settle
the rightful ownership of the subject lot.
Rogelio submits that Exhibit "3" and Exhibit "4" are devoid of evidentiary value
and, hence, deserve scant consideration. He stresses that Exhibit "4" is
inadmissible in evidence being a mere photocopy, and the existence and due
execution thereof had not been established. He argues that even if Exhibit "4"
would be considered as competent and admissible evidence, still, it would not
be an adequate proof of the existence of the alleged oral contract of sale
because it failed to provide a description of the subject lot, including its metes
13
and bounds, as well as its full price or consideration.
Rogelio argues that while reconveyance may be availed of by the owner of a
real property wrongfully included in the certificate of title of another, the remedy
is not obtainable herein since he is a transferee in good faith, having acquired
the land covered by TCT No. T-125918, through a Deed of Extrajudicial Partition
14
of Estate. He asserts that he could not be considered a trustee as he was not
privy to Exhibit "4." In any event, he theorizes that the action for reconveyance
on the ground of implied trust had already prescribed since more than 10 years
had lapsed since the execution of Exhibit "4" in 1953. It is the petitioner’s stance
that Julio, Jr. did not acquire ownership over the subject lot by acquisitive
prescription contending that prescription does not lie against a real property
covered by a Torrens title. He opines that his certificate of title to the subject lot
cannot be collaterally attacked because a Torrens title is indefeasible and must
15
be respected unless challenged in a direct proceeding.
The Court’s Ruling
In the case at bench, the CA and the RTC reached different conclusions on the
question of whether or not there was an oral contract of sale. The RTC ruled that
Rogelio Dantis was the sole and rightful owner of the parcel of land covered by
TCT No. T-125918 and that no oral contract of sale was entered into between
Emilio Dantis and Julio Maghinang, Sr. involving the 352-square meter portion of
the said property. The CA was of the opposite view. The determination of
whether there existed an oral contract of sale is essentially a question of fact.
In petitions for review under Rule 45, the Court, as a general rule, does not
venture to re-examine the evidence presented by the contending parties during
the trial of the case considering that it is not a trier of facts and the findings of
fact of the CA are conclusive and binding upon this Court. The rule, however,
admits of several exceptions. One of which is when the findings of the CA are
16
contrary to those of the trial court. Considering the incongruent factual
conclusions of the CA and the RTC, this Court is constrained to reassess the
factual circumstances of the case and reevaluate them in the interest of justice.
The petition is meritorious.
It is an age-old rule in civil cases that he who alleges a fact has the burden of
17
proving it and a mere allegation is not evidence. After carefully sifting through
the evidence on record, the Court finds that Rogelio was able to establish a
prima facie case in his favor tending to show his exclusive ownership of the
parcel of land under TCT No. T-125918 with an area of 5,657 square meters,
which included the 352-square meter subject lot. From the records, it appears
that TCT No. T-125918 is a derivative of TCT No. T-256228, which covered a
bigger area of land measuring 30,000 square meters registered in the name of
Emilio Dantis; that Emilio died intestate on November 13, 1952; that Emilio’s five
heirs, including Rogelio, executed an extra-judicial partition of estate on
December 22, 1993 and divided among themselves specific portions of the
property covered by TCT No. T-256228, which were already set apart by metes
and bounds; that the land known as Lot 6-D-1 of the subdivision plan Psd-
031421-054315 with an area of 5,657 sq. m. went to Rogelio, the property now
covered by TCT No. T-125918; and that the property was declared for realty tax
purpose in the name of Rogelio for which a tax declaration was issued in his
name; and that the same had not been transferred to anyone else since its
issuance.
In light of Rogelio’s outright denial of the oral sale together with his insistence of
ownership over the subject lot, it behooved upon Julio, Jr. to contravene the
former’s claim and convince the court that he had a valid defense. The burden of
evidence shifted to Julio, Jr. to prove that his father bought the subject lot from
18
Emilio Dantis. In Jison v. Court of Appeals, the Court held:
Simply put, he who alleges the affirmative of the issue has the burden of proof,
and upon the plaintiff in a civil case, the burden of proof never parts. However, in
the course of trial in a civil case, once plaintiff makes out a prima facie case in
his favor, the duty or the burden of evidence shifts to defendant to controvert
plaintiff’s prima facie case, otherwise, a verdict must be returned in favor of
plaintiff. Moreover, in civil cases, the party having the burden of proof must
produce a preponderance of evidence thereon, with plaintiff having to rely on the
strength of his own evidence and not upon the weakness of the defendant’s.
The concept of "preponderance of evidence" refers to evidence which is of
greater weight, or more convincing, that which is offered in opposition to it; at
19
bottom, it means probability of truth.
Julio, Jr. failed to discharge this burden. His pieces of evidence, Exhibit "3" and
Exhibit "4," cannot prevail over the array of documentary and testimonial
evidence that were adduced by Rogelio. The totality of Julio, Jr.’s evidence
leaves much to be desired.
To begin with, Exhibit "3," the affidavit of Ignacio, is hearsay evidence and, thus,
cannot be accorded any evidentiary weight. Evidence is hearsay when its
probative force depends on the competency and credibility of some persons
other than the witness by whom it is sought to be produced. The exclusion of
hearsay evidence is anchored on three reasons: 1) absence of cross-
20
examination; 2) absence of demeanor evidence; and 3) absence of oath.
Jurisprudence dictates that an affidavit is merely hearsay evidence where its
21
affiant/maker did not take the witness stand. The sworn statement of Ignacio is
of this kind. The affidavit was not identified and its averments were not affirmed
by affiant Ignacio. Accordingly, Exhibit "3" must be excluded from the judicial
proceedings being an inadmissible hearsay evidence. It cannot be deemed a
declaration against interest for the matter to be considered as an exception to
the hearsay rule because the declarant was not the seller (Emilio), but his father
(Ignacio). Exhibit "4," on the other hand, is considered secondary evidence
being a mere photocopy which, in this case, cannot be admitted to prove the
contents of the purported undated handwritten receipt. The best evidence rule
requires that the highest available degree of proof must be produced. For
documentary evidence, the contents of a document are best proved by the
production of the document itself to the exclusion of secondary or substitutionary
22
evidence, pursuant to Rule 130, Section 3 .
A secondary evidence is admissible only upon compliance with Rule 130,
Section 5, which states that: when the original has been lost or destroyed, or
cannot be produced in court, the offeror, upon proof of its execution or existence
and the cause of its unavailability without bad faith on his part, may prove its
contents by a copy, or by a recital of its contents in some authentic document, or
by the testimony of witnesses in the order stated. Accordingly, the offeror of the
secondary evidence is burdened to satisfactorily prove the predicates thereof,
namely: (1) the execution or existence of the original; (2) the loss and
destruction of the original or its non-production in court; and (3) the unavailability
of the original is not due to bad faith on the part of the proponent/offeror. Proof
of the due execution of the document and its subsequent loss would constitute
 23
the basis for the introduction of secondary evidence. In MCC Industrial Sales A: What I can say that it is a Sale, Sir.
24
Corporation v. Ssangyong Corporation, it was held that where the missing
document is the foundation of the action, more strictness in proof is required Q: So, when you said that you witnessed an alleged sale you are referring to
than where the document is only collaterally involved. Exhibit "4"?

Guided by these norms, the Court holds that Julio, Jr. failed to prove the due A: Yes, Sir.25 (Emphasis supplied)
execution of the original of Exhibit "4" as well as its subsequent loss. A nexus of
logically related circumstance rendered Julio, Jr.’s evidence highly suspect. Second, Julio, Jr.’s testimony pertinent to the alleged loss of the original of
Also, his testimony was riddled with improbabilities and contradictions which
Exhibit "4" is laden with inconsistencies that detract from his credibility. His
tend to erode his credibility and raise doubt on the veracity of his evidence.
testimony bears the earmarks of falsehood and, hence, not reliable. Julio, Jr.
testified in this wise:
First, the claim of Julio, Jr. that Emilio affixed his signature on the original of
Exhibit "4" in 1953 is highly improbable because record shows that Emilio died
Atty. Roldan Villacorta
even before that year, specifically, on November 13, 1952. Excerpts from Julio,
Jr.’s testimony relative to this matter are as follows:
(On Direct examination)
Atty. Vicente Millora
Q: Mr. Witness, I noticed that this document marked as Exhibit "4" is only a
photocopy, where is the original of this document?
(On Cross-examination)
A: The original was with the safekeeping of my parents because of the lapse of
Q: You don’t remember how old you were when this according to you you time the original was misplaced, Sir.
26
witnessed Emilio Dantis signed this?
The above testimony of Julio, Jr. tends to give the impression that the original of
A: Eleven years old, Sir.
the document was lost while it was in the possession of his parents. During
cross-examination, however, he testified that it was lost while it was in his
Q: So that was 1953? possession.

A: Yes, Sir. Atty. Vicente Millora

Q: And you were then…? (On Cross-examination)

A: I was born October 1942, Sir. Q: x x x Where did you keep that document?

Q: You were eleven (11) years old? A: I was the one keeping that document because I live in different places, [the
said] it was lost or misplaced, Sir.
A: Yes, Sir.
Q: In other words, it was lost while the same was in your possession??
Q: And you mean to say that you witnessed the signing allegedly of the original
of Exhibit "4" when you were eleven (11) years old? 27
A: Yes, Sir. (Emphasis supplied)

A: Yes, Sir. Still, later, Julio, Jr. claimed that his sister was the one responsible for the loss of
the original of Exhibit "4" after borrowing the same from him. Atty. Vicente
Q: And you remember what was signed in this receipt. From your memory can Millora
you tell the title of this Exhibit "4"?
(On Cross-examination) Q: When did you get this Exhibit "4" now, the photocopy from your sister?

Q: So, who is your sister to whom you gave the original? A: When the interment of my mother in September 1993, Sir.

A: Benedicta Laya, Sir. Q: Now, let us reform. Which one did you get after the interment of your mother,
this Exhibit "4" or the original?
Q: In other words now, you did not lost the document or the original of Exhibit
"4" but you gave it to your sister, am I correct? A: I asked that xerox copy because I have lost the original and I could not find
the same, Sir.
A: I just lent to her the original copy, Sir.
Q: So, from the safe of your mother after her interment, what used you found
Q: So, you lent this original of Exhibit "4" to your sister and your sister never and got this Exhibit "4"?
returned the same to you?
A: Yes, Sir, from my sister.
A: Yes, Sir, because it was lost, that was the only one left in her custody.
Q: So, not from your mother safe?
Interpreter:
A: The original was taken from the safe of my mother, Sir.
Witness referring to the xerox copy.
Q: So after your mother’s death you never saw the original?
Atty. Vicente Millora
A: I did not see it anymore because the original was lost before she died,
30
Q: In other words, it was your sister who lost the original, is that correct? Sir. (Underscoring supplied)

28
A: Yes, Sir, when I lent the original.
The Court also notes the confused narration of Julio, Jr. regarding the last time
he saw the original of Exhibit "4."
Atty. Vicente Millora
(On Cross-examination)
Q: And when did you last see the original?
Third, it is quite strange that two receipts were prepared for the initial payment of
(Emphasis supplied)
₱100.00 in connection with the sale of the subject lot. The Court notes that the
31
contents of Exhibit "4" were similar to those of Annex "A" of Julio, Jr.’s Answer,
dated June 9, 2002. Annex "A," however, was typewritten and the name of the
recipient indicated therein was a certain Cornelio A. Dantis, whose identity and
participation in the alleged sale was never explained.
Fourth, apart from the lone testimony of Julio, Jr., no other witness who knew or
read Exhibit "4," much less saw it executed, was presented. In the absence of
any shred of corroborative evidence, the Court cannot help but entertain doubts
on the truthfulness of Julio, Jr.’s naked assertion.

A: When my mother died in 1993 that was the last time I tried to see the original Assuming, in gratia argumenti, that Exhibit "4" is admissible in evidence, there
of the document after her interment, Sir. will still be no valid and perfected oral contract for failure of Julio, Jr. to prove the
concurrence of the essential requisites of a contract of sale by adequate and
Q: Where did you see this document? competent evidence.

29
A: From the safekeeping of my mother, Sir. By the contract of sale, one of the contracting parties obligates himself to
transfer the ownership of, and to deliver, a determinate thing, and the other to
32
xxxx pay therefor a price certain in money or its equivalent. A contract of sale is a
consensual contract and, thus, is perfected by mere consent which is
manifested by the meeting of the offer and the acceptance upon the thing and
33
the cause which are to constitute the contract. Until the contract of sale is
perfected, it cannot, as an independent source of obligation, serve as a binding
34
juridical relation between the parties. The essential elements of a contract of
sale are: a) consent or meeting of the minds, that is, consent to transfer
ownership in exchange for the price; b) determinate subject matter; and c) price
35
certain in money or its equivalent. The absence of any of the essential
36
elements shall negate the existence of a perfected contract of sale.
Seemingly, Julio, Jr. wanted to prove the sale by a receipt when it should be the
receipt that should further corroborate the existence of the sale. At best, his
testimony only alleges but does not prove the existence of the verbal
agreement. Julio, Jr. miserably failed to establish by preponderance of evidence
that there was a meeting of the minds of the parties as to the subject matter and
the purchase price.
The chief evidence of Julio, Jr. to substantiate the existence of the oral contract
of sale is Exhibit "4." For a better understanding and resolution of the issue at
hand, Exhibit "4" is being reproduced here:
Alamin ng sino mang
Makababasa
Akong si Emilio Dantis may sapat na Gulang may asawa naninirahan sa Sta
Rita San Miguel Bul. ay kusang nagsasasay ng sumosunod.
Na ako Tumanggap Kay Julio Maghinang ng ₱100.00 peso cuartang Pilipino,
bilang paunang bayad sa Lupa niyang nilote sa akin 400 apat na raan mahigit
na metro cudrado.
Testigo Tumangap,
Emilio a Dantis
A perusal of the above document would readily show that it does not specify a
determinate subject matter. Nowhere does it provide a description of the
property subject of the sale, including its metes and bounds, as well as its total
area. The Court notes that while Julio, Jr. testified that the land subject of the
sale consisted of 352 square meters, Exhibit "4," however, states that it’s more
than 400 square meters. Moreover, Exhibit "4" does not categorically declare the
price certain in money. Neither does it state the mode of payment of the
purchase price and the period for its payment.
37
In Swedish Match, AB v. Court of Appeals, the Court ruled that the manner of
payment of the purchase price was an essential element before a valid and
binding contract of sale could exist. Albeit the Civil Code does not explicitly
provide that the minds of the contracting parties must also meet on the terms or
manner of payment of the price, the same is needed, otherwise, there is no
38
sale. An agreement anent the manner of payment goes into the price so much
so that a disagreement on the manner of payment is tantamount to a failure to
39 40
agree on the price. Further, in Velasco v. Court of Appeals, where the parties
already agreed on the object of sale and on the purchase price, but not on how
and when the downpayment and the installment payments were to be paid, this
Court ruled:
Such being the situation, it cannot, therefore, be said that a definite and firm
sales agreement between the parties had been perfected over the lot in
question. Indeed, this Court has already ruled before that a definite agreement
on the manner of payment of the purchase price is an essential element in the
formation of a binding and enforceable contract of sale. The fact, therefore, that
the petitioners delivered to the respondent the sum of ₱10,000.00 as part of the
down-payment that they had to pay cannot be considered as sufficient proof of
the perfection of any purchase and sale agreement between the parties herein
under Art. 1482 of the new Civil Code, as the petitioners themselves admit that
some essential matter - the terms of payment - still had to be mutually
41
covenanted.
The CA held that partial performance of the contract of sale- giving of a
downpayment coupled with the delivery of the res - took the oral contract out of
the scope of the Statute of Frauds. This conclusion arose from its erroneous
finding that there was a perfected contract of sale. The above disquisition,
however, shows that there was none. There is, therefore, no basis for the
application of the Statute of Frauds. The application of the Statute of Frauds
42
presupposes the existence of a perfected contract. As to the delivery of the
res, it does not appear to be a voluntary one pursuant to the purported sale. If
Julio, Jr. happened to be there, it was because his ancestors tenanted the land.
It must be noted that when Julio, Jr. built his house, Rogelio protested.
WHEREFORE, the petition is GRANTED. The assailed January 25, 2010
Decision and the March 23, 2010 Resolution of the Court Appeals, in CA-G.R.
CV No. 85258, are REVERSED and SET ASIDE. The March 2, 2005 Decision
of the Regional Trial Court of Malolos, Bulacan, Branch 18, in Civil Case No.
280-M-2002, is REINSTATED.
SO ORDERED.
G.R. No. 165487 July 13, 2011
COUNTRY BANKERS INSURANCE CORPORATION, Petitioner,
vs.
ANTONIO LAGMAN, Respondent.
DECISION
PEREZ, J.:
This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil
1 2
Procedure, assailing the Decision and Resolution of the Court of Appeals dated
21 June 2004 and 24 September 2004, respectively.
These are the undisputed facts.
Nelson Santos (Santos) applied for a license with the National Food Authority
(NFA) to engage in the business of storing not more than 30,000 sacks of palay
valued at ₱5,250,000.00 in his warehouse at Barangay Malacampa, Camiling,
Tarlac. Under Act No. 3893 or the General Bonded Warehouse Act, as
3
amended, the approval for said license was conditioned upon posting of a cash
bond, a bond secured by real estate, or a bond signed by a duly authorized
bonding company, the amount of which shall be fixed by the NFA Administrator
at not less than thirty-three and one third percent (33 1/3%) of the market value
of the maximum quantity of rice to be received.
Accordingly, Country Bankers Insurance Corporation (Country Bankers) issued
4
Warehouse Bond No. 03304 for ₱1,749,825.00 on 5 November 1989 and
5
Warehouse Bond No. 02355 for ₱749,925.00 on 13 December 1989 (1989
Bonds) through its agent, Antonio Lagman (Lagman). Santos was the bond
principal, Lagman was the surety and the Republic of the Philippines, through
the NFA was the obligee. In consideration of these issuances, corresponding
6
Indemnity Agreements were executed by Santos, as bond principal, together
with Ban Lee Lim Santos (Ban Lee Lim), Rhosemelita Reguine (Reguine) and
Lagman, as co-signors. The latter bound themselves jointly and severally liable
to Country Bankers for any damages, prejudice, losses, costs, payments,
advances and expenses of whatever kind and nature, including attorney’s fees
and legal costs, which it may sustain as a consequence of the said bond; to
reimburse Country Bankers of whatever amount it may pay or cause to be paid
or become liable to pay thereunder; and to pay interest at the rate of 12% per
annum computed and compounded monthly, as well as to pay attorney’s fees of
7
20% of the amount due it.
8 obligation under the Indemnity Agreements, he is likewise liable for damages as
Santos then secured a loan using his warehouse receipts as collateral. When
the loan matured, Santos defaulted in his payment. The sacks of palay covered
9
by the warehouse receipts were no longer found in the bonded warehouse. By
virtue of the surety bonds, Country Bankers was compelled to pay
10
₱1,166,750.37.
Consequently, Country Bankers filed a complaint for a sum of money docketed
as Civil Case No. 95-73048 before the Regional Trial Court (RTC) of Manila. In
his Answer, Lagman alleged that the 1989 Bonds were valid only for 1 year from
the date of their issuance, as evidenced by receipts; that the bonds were never
renewed and revived by payment of premiums; that on 5 November 1990,
Country Bankers issued Warehouse Bond No. 03515 (1990 Bond) which was
also valid for one year and that no Indemnity Agreement was executed for the
purpose; and that the 1990 Bond supersedes, cancels, and renders no force
and effect the 1989 Bonds.
11
The bond principals, Santos and Ban Lee Lim, were not served with summons
12
because they could no longer be found. The case was eventually dismissed
13
against them without prejudice. The other co-signor, Reguine, was declared in
14
default for failure to file her answer.
On 21 September 1998, the trial court rendered judgment declaring Reguine
and Lagman jointly and severally liable to pay Country Bankers the amount of
15 16
₱2,400,499.87. The dispositive portion of the RTC Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered, ordering
defendants Rhomesita [sic] Reguine and Antonio Lagman, jointly and severally
liable to pay plaintiff, Country Bankers Assurance Corporation, the amount of
₱2,400,499.87, with 12% interest from the date the complaint was filed until fully
satisfied plus 20% of the amount due plaintiff as and for attorney’s fees and to
pay the costs.
As the Court did not acquire jurisdiction over the persons of defendants Nelson
Santos and Ban Lee Lim Santos, let the case against them be DISMISSED.
Defendant Antonio Lagman’s counterclaim is likewise DISMISSED, for lack of
17
merit.
In holding Lagman and Reguine solidarily liable to Country Bankers, the trial
court relied on the express terms of the Indemnity Agreement that they jointly
and severally bound themselves to indemnify and make good to Country
Bankers any liability which the latter may incur on account of or arising from the
18
execution of the bonds.
The trial court rationalized that the bonds remain in force unless cancelled by
the Administrator of the NFA and cannot be unilaterally cancelled by Lagman.
The trial court emphasized that for the failure of Lagman to comply with his
a consequence of the breach.
Lagman filed an appeal to the Court of Appeals, docketed as CA G.R. CV No.
61797. He insisted that the lifetime of the 1989 Bonds, as well as the
corresponding Indemnity Agreements was only 12 months. According to
Lagman, the 1990 Bond was not pleaded in the complaint because it was not
19
covered by an Indemnity Agreement and it superseded the two prior bonds.
On 21 June 2004, the Court of Appeals rendered the assailed Decision
reversing and setting aside the Decision of the RTC and ordering the dismissal
20
of the complaint filed against Lagman.
The appellate court held that the 1990 Bond superseded the 1989 Bonds. The
appellate court observed that the 1990 Bond covers 33.3% of the market value
of the palay, thereby manifesting the intention of the parties to make the latter
bond more comprehensive. Lagman was also exonerated by the appellate court
from liability because he was not a signatory to the alleged Indemnity
Agreement of 5 November 1990 covering the 1990 Bond. The appellate court
rejected the argument of Country Bankers that the 1989 bonds were continuing,
finding, as reason therefor, that the receipts issued for the bonds indicate that
they were effective for only one-year.
Country Bankers sought reconsideration which was denied in a Resolution
21
dated 24 September 2004.
Expectedly, Country Bankers filed the instant petition attributing two (2) errors to
the Court of Appeals, to wit:
A.
THE HONORABLE COURT OF APPEALS seriously erred in
disregarding the express provisions of Section 177 of the insurance
code when it held that the subject surety bonds were superseded by a
subsequent bond notwithstanding the non-cancellation thereof by the
bond obligee.
B.
The honorable court of appeals seriously erred in holding that receipts
for the payment of premiums prevail over the express provision of the
22
surety bond that fixes the term thereof.
Country Bankers maintains that by the express terms of the 1989 Bonds, they
shall remain in full force until cancelled by the Administrator of the NFA. As
continuing bonds, Country Bankers avers that Section 177 of the Insurance
Code applies, in that the bond may only be cancelled by the obligee, by the
Insurance Commissioner or by a competent court.
Country Bankers questions the existence of a third bond, the 1990 Bond, which
allegedly cancelled the 1989 Bonds on the following grounds: First, Lagman
failed to produce the original of the 1990 Bond and no basis has been laid for
the presentation of secondary evidence; Second, the issuance of the 1990 Bond
was not approved and processed by Country Bankers; Third, the NFA as bond
obligee was not in possession of the 1990 Bond. Country Bankers stresses that
the cancellation of the 1989 Bonds requires the participation of the bond obligee.
Ergo, the bonds remain subsisting until cancelled by the bond obligee. Country
Bankers further assert that Lagman also failed to prove that the NFA accepted
the 1990 Bond in replacement of the 1989 Bonds.
Country Bankers notes that the receipts issued for the 1989 Bonds are mere
evidence of premium payments and should not be relied on to determine the
period of effectivity of the bonds. Country Bankers explains that the receipts only
represent the transactions between the bond principal and the surety, and does
not involve the NFA as bond obligee.
Country Bankers calls this Court’s attention to the incontestability clause
contained in the Indemnity Agreements which prohibits Lagman from
questioning his liability therein.
In his Comment, Lagman raises the issue of novation by asserting that the 1989
Bonds were superseded by the 1990 Bond, which did not include Lagman as
party. Therefore, Lagman argues, Country Bankers has no cause of action
against him. Lagman also reiterates that because of novation, the 1989 bonds
are neither perpetual nor continuing.
Lagman anchors his defense on two (2) arguments: 1) the 1989 Bonds have
expired and 2) the 1990 Bond novates the 1989 Bonds.
The Court of Appeals held that the 1989 bonds were effective only for one (1)
year, as evidenced by the receipts on the payment of premiums.
We do not agree.
The official receipts in question serve as proof of payment of the premium for
one year on each surety bond. It does not, however, automatically mean that the
surety bond is effective for only one (1) year. In fact, the effectivity of the bond is
not wholly dependent on the payment of premium. Section 177 of the Insurance
Code expresses:
Sec. 177. The surety is entitled to payment of the premium as soon as the
contract of suretyship or bond is perfected and delivered to the obligor. No
contract of suretyship or bonding shall be valid and binding unless and until the
premium therefor has been paid, except where the obligee has accepted the
bond, in which case the bond becomes valid and enforceable irrespective
of whether or not the premium has been paid by the obligor to the
surety: Provided, That if the contract of suretyship or bond is not accepted by,
or filed with the obligee, the surety shall collect only reasonable amount, not
exceeding fifty per centum of the premium due thereon as service fee plus the
cost of stamps or other taxes imposed for the issuance of the contract or
bond: Provided, however, That if the non-acceptance of the bond be due to the
fault or negligence of the surety, no such service fee, stamps or taxes shall be
collected. (Emphasis supplied)
The 1989 Bonds have identical provisions and they state in very clear terms the
effectivity of these bonds, viz:
NOW, THEREFORE, if the above-bounded Principal shall well and truly deliver
to the depositors PALAY received by him for STORAGE at any time that
demand therefore is made, or shall pay the market value therefore in case he is
unable to return the same, then this obligation shall be null and void; otherwise it
shall remain in full force and effect and may be enforced in the manner provided
by said Act No. 3893 as amended by Republic Act No. 247 and P.D. No. 4. This
bond shall remain in force until cancelled by the Administrator of National Food
23
Authority.
This provision in the bonds is but in compliance with the second paragraph of
Section 177 of the Insurance Code, which specifies that a continuing bond, as in
this case where there is no fixed expiration date, may be cancelled only by the
obligee, which is the NFA, by the Insurance Commissioner, and by the court.
Thus:
In case of a continuing bond, the obligor shall pay the subsequent annual
premium as it falls due until the contract of suretyship is cancelled by the obligee
or by the Commissioner or by a court of competent jurisdiction, as the case may
be.
By law and by the specific contract involved in this case, the effectivity of the
bond required for the obtention of a license to engage in the business of
receiving rice for storage is determined not alone by the payment of premiums
but principally by the Administrator of the NFA. From beginning to end, the
Administrator’s brief is the enabling or disabling document.
The clear import of these provisions is that the surety bonds in question cannot
be unilaterally cancelled by Lagman. The same conclusion was reached by the
trial court and we quote:
As there appears no record of cancellation of the Warehouse Bonds No. 03304
and No. 02355 either by the administrator of the NFA or by the Insurance
Commissioner or by the Court, the Warehouse Bonds are valid and binding and
cannot be unilaterally cancelled by defendant Lagman as general agent of the
24
plaintiff.
While the trial court did not directly rule on the existence and validity of the 1990
Bond, it upheld the 1989 Bonds as valid and binding, which could not be
unilaterally cancelled by Lagman. The Court of Appeals, on the other hand,
acknowledged the 1990 Bond as having cancelled the two previous bonds by
novation. Both courts however failed to discuss their basis for rejecting or
admitting the 1990 Bond, which, as we indicated, is bone to pick in this case.
Lagman’s insistence on novation depends on the validity, nay, existence of the
allegedly novating 1990 Bond. Country Bankers understandably impugns both.
We see the point. Lagman presented a mere photocopy of the 1990 Bond. We
rule as inadmissible such copy.
Under the best evidence rule, the original document must be produced
25
whenever its contents are the subject of inquiry. The rule is encapsulated in
Section 3, Rule 130 of the Rules of Court, as follow:
Sec. 3. Original document must be produced; exceptions. — When the subject
of inquiry is the contents of a documents, no evidence shall be admissible other
than the original document itself, except in the following cases:
(a) When the original has been lost or destroyed, or cannot be produced
in court, without bad faith on the part of the offeror;
(b) When the original is in the custody or under the control of the party
against whom the evidence is offered, and the latter fails to produce it
after reasonable notice;
(c) When the original consists of numerous accounts or other
documents which cannot be examined in court without great loss of time
and the fact sought to be established from them is only the general
result of the whole; and
(d) When the original is a public record in the custody of a public officer
26
or is recorded in a public office.
A photocopy, being a mere secondary evidence, is not admissible unless it is
27
shown that the original is unavailable. Section 5, Rule 130 of the Rules of
Court states:
SEC.5 When original document is unavailable. — When the original document
has been lost or destroyed, or cannot be produced in court, the offeror, upon
proof of its execution or existence and the cause of its unavailability without bad
faith on his part, may prove its contents by a copy, or by a recital of its contents
in some authentic document, or by the testimony of witnesses in the order
stated.
Before a party is allowed to adduce secondary evidence to prove the contents of
the original, the offeror must prove the following: (1) the existence or due
execution of the original; (2) the loss and destruction of the original or the reason
for its non-production in court; and (3) on the part of the offeror, the absence of
bad faith to which the unavailability of the original can be attributed. The correct
28
order of proof is as follows: existence, execution, loss, and contents.
In the case at bar, Lagman mentioned during the direct examination that there
are actually four (4) duplicate originals of the 1990 Bond: the first is kept by the
NFA, the second is with the Loan Officer of the NFA in Tarlac, the third is with
29
Country Bankers and the fourth was in his possession. A party must first
present to the court proof of loss or other satisfactory explanation for the non-
30
production of the original instrument. When more than one original copy exists,
it must appear that all of them have been lost, destroyed, or cannot be produced
in court before secondary evidence can be given of any one. A photocopy may
31
not be used without accounting for the other originals.
Despite knowledge of the existence and whereabouts of these duplicate
originals, Lagman merely presented a photocopy. He admitted that he kept a
copy of the 1990 Bond but he could no longer produce it because he had
already severed his ties with Country Bankers. However, he did not explain why
severance of ties is by itself reason enough for the non-availability of his copy of
the bond considering that, as it appears from the 1989 Bonds, Lagman himself
is a bondsman. Neither did Lagman explain why he failed to secure the original
from any of the three other custodians he mentioned in his testimony. While he
apparently was able to find the original with the NFA Loan Officer, he was
merely contented with producing its photocopy. Clearly, Lagman failed to exert
diligent efforts to produce the original.
Fueling further suspicion regarding the existence of the 1990 Bond is the
absence of an Indemnity Agreement. While Lagman argued that a 1990 Bond
novates the 1989 Bonds, he raises the defense of "non-existence of an
indemnity agreement" which would conveniently exempt him from liability. The
trial court deemed this defense as indicia of bad faith, thus:
To the observation of the Court, defendant Lagman contended that being a
general agent (which requires a much higher qualification than an ordinary
agent), he is expected to have attended seminars and workshops on general
insurance wherein he is supposed to have acquired sufficient knowledge of the
general principles of insurance which he had fully practised or implemented from
experience. It somehow appears to the Court’s assessment of his reneging
liability of the bonds in question, that he is still short of having really understood
the principle of suretyship with reference to the transaction of indemnity in which
he is a signatory. If, as he alleged, that he is well-versed in insurance, the Court
finds no excuse for him to stand firm in denying his liability over the claim
against the bonds with indemnity provision. If he insists in not recognizing that
liability, the more that this Court is convinced that his knowledge that insurance
operates under the principle of good faith is inadequate. He missed the
exception provided by Section 177 of the Insurance Code, as amended, wherein
non-payment of premium would not have the same essence in his mind that the
agreements entered into would not have full force or effect. It could be glimpsed,
therefore, that the mere fact of cancelling bonds with indemnity agreements and
replacing them (absence of the same) to escape liability clearly manifests bad
32
faith on his part. (Emphasis supplied.)
Having discounted the existence and/or validity of the 1990 Bond, there can be
no novation to speak of. Novation is the extinguishment of an obligation by the
substitution or change of the obligation by a subsequent one which extinguishes
or modifies the first, either by changing the object or principal conditions, or by
substituting another in place of the debtor, or by subrogating a third person in
the rights of the creditor. For novation to take place, the following requisites
must concur: 1) There must be a previous valid obligation; 2) The parties
concerned must agree to a new contract; 3) The old contract must be
33
extinguished; and 4) There must be a valid new contract.
In this case, only the first element of novation exists. Indeed, there is a previous
valid obligation, i.e., the 1989 Bonds. There is however neither a valid new
contract nor a clear agreement between the parties to a new contract since the
very existence of the 1990 Bond has been rendered dubious. Without the new
contract, the old contract is not extinguished.
Implied novation necessitates a new obligation with which the old is in total
incompatibility such that the old obligation is completely superseded by the new
34
one. Quite obviously, neither can there be implied novation. In this case, there
is no new obligation.
The liability of Lagman is expressed in Indemnity Agreements executed in
consideration of the 1989 Bonds which we have considered as continuing
contracts. Under both Indemnity Agreements, Lagman, as co-signor, together
with Santos, Ban Lee Lim and Reguine, bound themselves jointly and severally
to Country Bankers to indemnify it for any damage or loss sustained on the
account of the execution of the bond, among others. The pertinent identical
stipulations of the Indemnity Agreements state:
INDEMNITY: ─ To indemnify and make good to the COMPANY jointly and
severally, any damages, prejudice, loss, costs, payments advances and
expenses of whatever kind and nature, including attorney’s fees and legal costs,
which the COMPANY may, at any time, sustain or incur, as well as to reimburse
to said COMPANY all sums and amounts of money which the COMPANY or its
representatives shall or may pay or cause to be paid or become liable to pay, on
account of or arising from the execution of the above-mentioned BOND or any
extension, renewal, alteration or substitution thereof made at the instance of the
35
undersigned or anyone of them.

Moreover, the Indemnity Agreements also contained identical Incontestability

Clauses which provide:

INCONTESTABILITY OF PAYMENTS MADE BY THE COMPANY: ─ Any

payment or disbursement made by the COMPANY on account of the above-
mentioned Bond, its renewals, extensions, alterations or substitutions either in
the belief that the COMPANY was obligated to make such payment or in the
belief that said payment was necessary or expedient in order to avoid greater
losses or obligations for which the COMPANY might be liable by virtue of the
terms of the above-mentioned Bond, its renewals, extensions, alterations, or
substitutions, shall be final and shall not be disputed by the undersigned, who
hereby jointly and severally bind themselves to indemnify [Country Bankers] of
any and all such payments, as stated in the preceding clauses.

In case the COMPANY shall have paid[,] settled or compromised any liability,
loss, costs, damages, attorney’s fees, expenses, claims[,] demands, suits, or
judgments as above-stated, arising out of or in connection with said bond, an
itemized statement thereof, signed by an officer of the COMPANY and other
evidence to show said payment, settlement or compromise, shall be prima facie
evidence of said payment, settlement or compromise, as well as the liability of
the undersigned in any and all suits and claims against the undersigned arising
36
out of said bond or this bond application. 1awphil

Lagman is bound by these Indemnity Agreements. Payments made by Country

Bankers by virtue of the 1989 Bonds gave rise to Lagman’s obligation to
reimburse it under the Indemnity Agreements. Lagman, being a solidary debtor,
is liable for the entire obligation.

WHEREFORE, the petition is GRANTED. The assailed Decision and Resolution

of the Court of Appeals in CA-G.R. CV No. 61797 are SET ASIDE and the
Decision dated 21 September 1998 of the RTC is hereby REINSTATED.

SO ORDERED.
G.R. No. 170604 September 2, 2013
HEIRS OF MARGARITA PRODON, PETITIONERS,
vs.
HEIRS OF MAXIMO S. ALVAREZ AND VALENTINA CLAVE, REPRESENTED
BY REV. MAXIMO ALVAREZ, JR.,RESPONDENTS.
DECISION
BERSAMIN, J.:
The Best Evidence Rule applies only when the terms of a written document are
the subject of the inquiry. In an action for quieting of title based on the
inexistence of a deed of sale with right to repurchase that purportedly cast a
cloud on the title of a property, therefore, the Best Evidence Rule does not
apply, and the defendant is not precluded from presenting evidence other than
the original document.
The Case
This appeal seeks the review and reversal of the decision promulgated on
1
August 18, 2005, whereby the Court of Appeals (CA) reversed the judgment
rendered on November 5, 1997 by the Regional Trial Court (RTC), Branch 35, in
Manila in Civil Case No. 96-78481 entitled Heirs of Maximo S Alvarez and
Valentina Clave, represented by Rev. Maximo S. Alvarez and Valentina Clave,
represented by Rev. Maximo Alvarez, Jr. v. Margarita Prodon and the Register
of Deeds of the City of Manila dismissing the respondents’ action for quieting of
2 6
title.
Antecedents
In their complaint for quieting of title and damages against Margarita
3 existence and of the cause of its unavailability being without bad faith. It found
Prodon, the respondents averred as the plaintiffs that their parents, the late
spouses Maximo S. Alvarez, Sr. and Valentina Clave, were the registered
owners of that parcel of land covered by Transfer Certificate of Title (TCT) No.
84797 of the Register of Deeds of Manila; that their parents had been in
possession of the property during their lifetime; that upon their parents’ deaths,
they had continued the possession of the property as heirs, paying the real
property taxes due thereon; that they could not locate the owner’s duplicate
copy of TCT No. 84797, but the original copy of TCT No. 84797 on file with the
Register of Deeds of Manila was intact; that the original copy contained an entry
stating that the property had been sold to defendant Prodon subject to the right
of repurchase; and that the entry had been maliciously done by Prodon because
the deed of sale with right to repurchase covering the property did not exist.
Consequently, they prayed that the entry be cancelled, and that Prodon be
adjudged liable for damages.
The entry sought to be cancelled reads:
ENTRY NO. 3816/T-84797 – SALE W/ RIGHT TO REPURCHASE IN FAVOR
OF: MARGARITA PRODON, SINGLE, FOR THE SUM OF ₱120,000.00, THE
HEREIN REGISTERED OWNER RESERVING FOR HIMSELF THE RIGHTS
TO REPURCHASE SAID PROPERTY FOR THE SAME AMOUNT WITHIN THE
PERIOD OF SIX MONTH (sic) FROM EXECUTION THEREOF. OTHER
CONDITION SET FORTH IN (DOC. NO. 321, PAGE 66, BOOK NO. VIII OF
LISEO A. RAZON, NOT.PUB. OF MANILA)
DATE OF INSTRUMENT – SEPT. 9, 1975
DATE OF INSCRIPTION – SEPT. 10, 1975,
4
AT 3:42 P.M.
5
In her answer, Prodon claimed that the late Maximo Alvarez, Sr. had executed
on September 9, 1975 the deed of sale with right to repurchase; that the deed
had been registered with the Register of Deeds and duly annotated on the title;
that the late Maximo Alvarez, Sr. had been granted six months from September
9, 1975 within which to repurchase the property; and that she had then become
the absolute owner of the property due to its non-repurchase within the given 6-
month period.
During trial, the custodian of the records of the property attested that the copy of
the deed of sale with right to repurchase could not be found in the files of the
Register of Deeds of Manila.
On November 5, 1997, the RTC rendered judgment, finding untenable the
plaintiffs’ contention that the deed of sale with right to repurchase did not exist. It
opined that although the deed itself could not be presented as evidence in court,
its contents could nevertheless be proved by secondary evidence in accordance
with Section 5, Rule 130 of the Rules of Court, upon proof of its execution or
that the defendant had established the execution and existence of the deed, to
wit:
In the case under consideration, the execution and existence of the disputed
deed of sale with right to repurchase accomplished by the late Maximo Alvarez
in favor of defendant Margarita Prodon has been adequately established by
reliable and trustworthy evidences (sic). Defendant Prodon swore that on
September 9, 1975 she purchased the land covered by TCT No. 84747 (Exhibit
1) from its registered owners Maximo S. Alvarez, Sr. and Valentina Clave (TSN,
Aug. 1, 1997, pp.5-7); that the deed of sale with right to repurchase was drawn
and prepared by Notary Public Eliseo Razon (Ibid., p. 9); and that on September
10, 1975, she registered the document in the Register of Deeds of Manila (Ibid.,
pp.18-19).
The testimony of Margarita Prodon has been confirmed by the Notarial Register
of Notary Public Eliseo Razon dated September 10, 1975 (Exhibit 2), and by the
Primary Entry Book of the Register of Deeds of Manila (Exhibit 4).
Page 66 of Exhibit 2 discloses, among others, the following entries, to wit: "No.
321; Nature of Instrument: Deed of Sale with Right to Repurchase; Name of
Persons: Maximo S. Alvarez and Valentina Alvarez (ack.); Date and Month: 9
Sept." (Exhibit 2-a).
Exhibit 4, on the other hand, also reveals the following data, to wit: ‘Number of
Entry: 3816; Month, Day and Year: Sept. 10, 1975; Hour and Minute: 3:42 p.m.;
Nature of Contract: Sale with Right to Repurchase; Executed by: Maximo S.
Alvarez; In favor: Margarita Prodon; Date of Document: 9-9-75; Contract value:
120,000.’ (Exhibit 4-a). Under these premises the Court entertains no doubt
about the execution and existence of the controverted deed of sale with right to
7 RTC, and ruling as follows:
repurchase.
The RTC rejected the plaintiffs’ submission that the late Maximo Alvarez, Sr.
could not have executed the deed of sale with right to repurchase because of
illness and poor eyesight from cataract. It held that there was no proof that the
illness had rendered him bedridden and immobile; and that his poor eyesight
could be corrected by wearing lenses.
The RTC concluded that the original copy of the deed of sale with right to
repurchase had been lost, and that earnest efforts had been exerted to produce
it before the court. It believed Jose Camilon’s testimony that he had handed the
original to one Atty. Anacleto Lacanilao, but that he could not anymore retrieve
such original from Atty. Lacanilao because the latter had meanwhile suffered
from a heart ailment and had been recuperating.
Ruling of the CA
On appeal, the respondents assigned the following errors, namely:
A.
THE TRIAL COURT GRAVELY ERRED IN FINDING THAT THE DUE
EXECUTION AND EXISTENCE OF THE QUESTIONED DEED OF SALE WITH
RIGHT TO REPURCHASE HAS BEEN DULY PROVED BY THE DEFENDANT.
B.
THE TRIAL COURT GRAVELY ERRED IN ADMITTING THE PIECES OF
EVIDENCE PRESENTED BY THE DEFENDANTS AS PROOFS OF THE DUE
EXECUTION AND EXISTENCE OF THE QUESTIONED DEED OF SALE WITH
RIGHT TO REPURCHASE.
C.
THE TRIAL COURT SERIOUSLY ERRED IN FINDING THAT THE
QUESTIONED DEED OF SALE WITH RIGHT TO REPURCHASE HAS BEEN
LOST OR OTHERWISE COULD NOT BE PRODUCED IN COURT WITHOUT
THE FAULT OF THE DEFENDANT.
D.
THE TRIAL COURT GRAVELY ERRED IN REJECTING THE PLAINTIFFS’
CLAIM THAT THEIR FATHER COULD NOT HAVE EXECUTED THE
8
QUESTIONED DOCUMENT AT THE TIME OF ITS ALLEGED EXECUTION.
On August 18, 2005, the CA promulgated its assailed decision, reversing the
The case of the Department of Education Culture and Sports (DECS) v. Del
Rosario in GR No. 146586 (January 26, 2005) is instructive in resolving this
issue. The said case held:
"Secondary evidence of the contents of a document refers to evidence other
than the original document itself. A party may introduce secondary evidence of
the contents of a written instrument not only when the original is lost or
destroyed, but also when it cannot be produced in court, provided there is no
bad faith on the part of the offeror. However, a party must first satisfactorily
explain the loss of the best or primary evidence before he can resort to
secondary evidence. A party must first present to the court proof of loss or other
satisfactory explanation for non-production of the original instrument. The
correct order of proof is as follows: existence, execution, loss, contents,
although the court in its discretion may change this order if necessary."
It is clear, therefore, that before secondary evidence as to the contents of a
document may be admitted in evidence, the existence of [the] document must
first be proved, likewise, its execution and its subsequent loss.
In the present case, the trial court found all three (3) prerequisites ha[ve] been
established by Margarita Prodon. This Court, however, after going through the
records of the case, believes otherwise. The Court finds that the following
circumstances put doubt on the very existence of the alleged deed of sale.
Evidence on record showed that Maximo Alvarez was hospitalized between
August 23, 1975 to September 3, 1975 (Exhibit "K"). It was also established by
said Exhibit "L" that Maximo Alvarez suffered from paralysis of half of his body
and blindness due to cataract. It should further be noted that barely 6 days later,
on September 15, 1975, Maximo Alvarez was again hospitalized for the last time
because he died on October of 1975 without having left the hospital. This lends
credence to plaintiffs-appellants’ assertion that their father, Maximo Alvarez, was
not physically able to personally execute the deed of sale and puts to serious
doubt [on] Jose Camilion’s testimony that Maximo Alvarez, with his wife, went to
his residence on September 5, 1975 to sell the property and that again they met
on September 9, 1975 to sign the alleged deed of sale (Exhibits "A" and "1").
The Court also notes that from the sale in 1975 to 1996 when the case was
finally filed, defendant-appellee never tried to recover possession of the property
nor had she shown that she ever paid Real Property Tax thereon. Additionally,
the Transfer Certificate of Title had not been transferred in the name of the
alleged present owner. These actions put to doubt the validity of the claim of
ownership because their actions are contrary to that expected of legitimate
owners of property.
Moreover, granting, in arguendo, that the deed of sale did exist, the fact of its
loss had not been duly established. In De Vera, et al. v Sps. Aguilar (218 SCRA
1993
602 ), the Supreme Court held that after proof of the execution of the Deed it
must also be established that the said document had been lost or destroyed,
thus:
"After the due execution of the document has been established, it must next be
proved that said document has been lost or destroyed. The destruction of the
instrument may be proved by any person knowing the fact. The loss may be
shown by any person who knew the fact of its loss, or by anyone who had made,
in the judgment of the court, a sufficient examination in the place or places
where the document or papers of similar character are usually kept by the
person in whose custody the document lost was, and has been unable to find it;
or who has made any other investigation which is sufficient to satisfy the court
that the instrument is indeed lost.
However, all duplicates or counterparts must be accounted for before using
copies. For, since all the duplicates or multiplicates are parts of the writing itself
to be proved, no excuse for non-production of the writing itself can be regarded
as established until it appears that all of its parts are unavailable (i.e. lost,
retained by the opponent or by a third person or the like).
In the case at bar, Atty. Emiliano Ibasco, Jr., notary public who notarized the
document testified that the alleged deed of sale has about four or five original
copies. Hence, all originals must be accounted for before secondary evidence
can be given of any one. This[,] petitioners failed to do. Records show that
petitioners merely accounted for three out of four or five original copies." (218
SCRA at 607-608)
In the case at bar, Jose Camilion’s testimony showed that a copy was given to
Atty. Anacleto Lacanilao but he could not recover said copy. A perusal of the
testimony does not convince this Court that Jose Camilion had exerted sufficient
effort to recover said copy. x x x
xxxx
The foregoing testimony does not convince this Court that Jose Camilion had
exerted sufficient effort to obtain the copy which he said was with Atty.
Lacanilao. It should be noted that he never claimed that Atty. Lacanilao was
already too sick to even try looking for the copy he had. But even assuming this
is to be so, Jose Camilion did not testify that Atty. Lacanilao had no one in his
office to help him find said copy. In fine, this Court believes that the trial court
erred in admitting the secondary evidence because Margarita Prodon failed to
prove the loss or destruction of the deed.
In fine, the Court finds that the secondary evidence should not have been
admitted because Margarita Prodon failed to prove the existence of the original
deed of sale and to establish its loss.
xxxx
WHEREFORE, in view of the foregoing, the Decision of the Regional Trial Court
of Manila, Branch 35 in Civil Case No. 96-78481 is hereby REVERSED and a
new one entered ordering the cancellation of Entry No. 3816/T-84797 inscribed
at the back of TCT No. 84797 in order to remove the cloud over plaintiff-
appellants’ title.
9
SO ORDERED.
The heirs of Margarita Prodon (who meanwhile died on March 3, 2002) filed an
Omnibus Motion for Substitution of Defendant and for Reconsideration of the
10
Decision, wherein they alleged that the CA erred: (a) in finding that the pre-
requisites for the admission of secondary evidence had not been complied with;
(b) in concluding that the late Maximo Alvarez, Sr. had been physically
incapable of personally executing the deed of sale with right to repurchase; and
(c) in blaming them for not recovering the property, for not paying the realty
taxes thereon, and for not transferring the title in their names.
11
On November 22, 2005, the CA issued itsresolution, allowing the substitution
of the heirs of Margarita Prodon, and denying their motion for reconsideration for
its lack of merit.
Hence, the heirs of Margarita Prodon (petitioners) have appealed to the Court
through petition for review on certiorari.
Issues
In this appeal, the petitioners submit the following as issues, namely: (a)
whether the pre-requisites for the admission of secondary evidence had been
complied with; (b) whether the late Maximo Alvarez, Sr. had been physically
incapable of personally executing the deed of sale with right to repurchase;and
12
(c) whether Prodon’s claim of ownership was already barred by laches.
Ruling
The appeal has no merit.
1.
Best Evidence Rulewas not applicable herein
We focus first on an unseemly error on the part of the CA that, albeit a harmless
one, requires us to re-examine and rectify in order to carry out our essential
responsibility of educating the Bench and the Bar on the admissibility of
evidence. An analysis leads us to conclude that the CA and the RTC both
misapplied the Best Evidence Rule to this case, and their misapplication
diverted the attention from the decisive issue in this action for quieting of title.
We shall endeavor to correct the error in order to turn the case to the right track.
Section 3, Rule 130 of the Rules of Court embodies the Best Evidence
Rule, to wit:
Section 3. Original document must be produced; exceptions. — When the
subject of inquiry is the contents of a document, no evidence shall be admissible
other than the original document itself, except in the following cases:
(a) When the original has been lost or destroyed, or cannot be produced
in court, without bad faith on the part of the offeror;
(b) When the original is in the custody or under control of the party
against whom the evidence is offered, and the latter fails to produce it
after reasonable notice;
(c) When the original consists of numerous accounts or other
documents which cannot be examined in court without great loss of time
and the fact sought to be established from them is only the general
result of the whole; and
(d) When the original is a public record in the custody of a public officer
or is recorded in a public office.
The Best Evidence Rule stipulates that in proving the terms of a written
document the original of the document must be produced in court. The rule
excludes any evidence other than the original writing to prove the contents
thereof, unless the offeror proves: (a) the existence or due execution of the
original; (b) the loss and destruction of the original, or the reason for its non-
production in court; and (c) the absence of bad faith on the part of the offeror to
13
which the unavailability of the original can be attributed.
The primary purpose of the Best Evidence Rule is to ensure that the exact
14
contents of a writing are brought before the court, considering that (a) the
precision in presenting to the court the exact words of the writing is of more than
average importance, particularly as respects operative or dispositive
instruments, such as deeds, wills and contracts, because a slight variation in
words may mean a great difference in rights; (b) there is a substantial hazard of
inaccuracy in the human process of making a copy by handwriting or
typewriting; and (c) as respects oral testimony purporting to give from memory
the terms of a writing, there is a special risk of error, greater than in the case of
15
attempts at describing other situations generally. The rule further acts as an
16
insurance against fraud. Verily, if a party is in the possession of the best
evidence and withholds it, and seeks to substitute inferior evidence in its place,
the presumption naturally arises that the better evidence is withheld for
17
fraudulent purposes that its production would expose and defeat. Lastly, the
rule protects against misleading inferences resulting from the intentional or
18
unintentional introduction of selected portions of a larger set of writings.
But the evils of mistransmission of critical facts, fraud, and misleading inferences
arise only when the issue relates to the terms of the writing. Hence, the Best
Evidence Rule applies only when the terms of a writing are in issue. When the
evidence sought to be introduced concerns external facts, such as the
existence, execution or delivery of the writing, without reference to its terms, the
19
Best Evidence Rule cannot be invoked. In such a case, secondary evidence
may be admitted even without accounting for the original.
This case involves an action for quieting of title, a common-law remedy for the
removal of any cloud or doubt or uncertainty on the title to real property by
reason of any instrument, record, claim, encumbrance, or proceeding that is
apparently valid or effective, but is, in truth and in fact, invalid, ineffective,
voidable, or unenforceable, and may be prejudicial to said title. In such an
action, the competent court is tasked to determine the respective rights of the
complainant and other claimants to place things in their proper place and to
make the one who has no rights to said immovable respect and not disturb the
other. The action is for the benefit of both, so that he who has the right would
see every cloud of doubt over the property dissipated, and he can thereafter
fearlessly introduce any desired improvements, as well as use, and even abuse
the property. For an action to quiet title to prosper, two indispensable requisites
must concur, namely: (a) the plaintiff or complainant has a legal or an equitable
title to or interest in the real property subject of the action; and (b) the deed,
claim, encumbrance, or proceeding claimed to be casting cloud on his title must
be shown to be in fact invalid or inoperative despite its prima facie appearance
20
of validity or legal efficacy.
The action for quieting of title may be based on the fact that a deed is invalid,
ineffective, voidable, or unenforceable. The terms of the writing may or may not
be material to an action for quieting of title, depending on the ground alleged by
the plaintiff. For instance, when an action for quieting of title is based on the
unenforceability of a contract for not complying with the Statute of Frauds,
Article 1403 of the Civil Code specifically provides that evidence of the
agreement cannot be received without the writing, or a secondary evidence of its
contents. There is then no doubt that the Best Evidence Rule will come into play.
It is not denied that this action does not involve the terms or contents of the
deed of sale with right to repurchase. The principal issue raised by the
respondents as the plaintiffs, which Prodon challenged head on, was whether or
not the deed of sale with right to repurchase, duly executed by the late Maximo
Alvarez, Sr., had really existed. They alleged in the complaint that:
xxxx
9. Such entry which could have been maliciously and deliberately done by the
defendant Margarita Prodon created cloud and [is] prejudicial to the title of the
property subject matter of this case, since while it is apparently valid or effective,
but in truth and in fact it is invalid, ineffective or unenforceable inasmuch that the
instrument purporting to be a Deed of Sale with right of repurchase mentioned in
21
the said entry does not exist.
xxxx
On her part, Prodon specifically denied the allegation, averring in her answer
that "sometime [o]n September 9, 1975, deceased Maximo S. Alvarez lawfully
entered into a Contract of Sale with Right to Repurchase, object of which is the
22
titled lot located at Endaya Street, Tondo, Manila, in favor of defendant." In the
pre-trial order, the RTC defined the issue to be tried as "[w]hether or not the
alleged document mentioned in the said entry is existing, valid or
23
unenforceable," and did not include the terms of the deed of sale with right to
repurchase among the issues.
Apparently, the parties were fully cognizant of the issues as defined, for none of
them thereafter ventured to present evidence to establish the terms of the deed
of sale with right to repurchase. In the course of the trial, however, a question
was propounded to Prodon as to who had signed or executed the deed, and the
question was objected to based on the Best Evidence Rule. The RTC then
24
sustained the objection. At that point began the diversion of the focus in the
case. The RTC should have outrightly overruled the objection because the fact
sought to be established by the requested testimony was the execution of the
25
deed, not its terms. Despite the fact that the terms of the writing were not in
issue, the RTC inexplicably applied the Best Evidence Rule to the case and
proceeded to determine whether the requisites for the admission of secondary
evidence had been complied with, without being clear as to what secondary
evidence was sought to be excluded. In the end, the RTC found in its judgment
that Prodon had complied with the requisites for the introduction of secondary
evidence, and gave full credence to the testimony of Jose Camilon explaining
the non-production of the original. On appeal, the CA seconded the RTC’s
mistake by likewise applying the Best Evidence Rule, except that the CA
concluded differently, in that it held that Prodon had not established the
existence, execution, and loss of the original document as the pre-requisites for
the presentation of secondary evidence. Its application of the Best Evidence
Rule naturally led the CA to rule that secondary evidence should not have been
admitted, but like the RTC the CA did not state what excluded secondary
evidence it was referring to.
Considering that the Best Evidence Rule was not applicable because the terms
of the deed of sale with right to repurchase were not the issue, the CA did not
have to address and determine whether the existence, execution, and loss, as
pre-requisites for the presentation of secondary evidence, had been established
by Prodon’s evidence. It should have simply addressed and determined whether
or not the "existence" and "execution" of the deed as the facts in issue had been
proved by preponderance of evidence.
Indeed, for Prodon who had the burden to prove the existence and due
execution of the deed of sale with right to repurchase, the presentation of
evidence other than the original document, like the testimonies of Prodon and
Jose Camilon, the Notarial Register of Notary Eliseo Razon, and the Primary
Entry Book of the Register of Deeds, would have sufficed even without first
proving the loss or unavailability of the original of the deed.
2.
Prodon did not preponderantly establish the existence and due execution of the
deed of sale with right to repurchase
The foregoing notwithstanding, good trial tactics still required Prodon to
establish and explain the loss of the original of the deed of sale with right to
26
repurchase to establish the genuineness and due execution of the deed. This
was because the deed, although a collateral document, was the foundation of
27
her defense in this action for quieting of title. Her inability to produce the
original logically gave rise to the need for her to prove its existence and due
execution by other means that could only be secondary under the rules on
evidence. Towards that end, however, it was not required to subject the proof of
the loss of the original to the same strict standard to which it would be subjected
had the loss or unavailability been a precondition for presenting secondary
evidence to prove the terms of a writing.
A review of the records reveals that Prodon did not adduce proof sufficient to What was the purpose of the spouses Maximo and Valentina in meeting you on
show the lossor explain the unavailability of the original as to justify the that date?
presentation of secondary evidence. Camilon, one of her witnesses, testified
that he had given the original to her lawyer, Atty. Anacleto Lacanilao, but that he A
(Camilon) could not anymore retrieve the original because Atty. Lacanilao had
been recuperating from his heart ailment. Such evidence without showing the
They were selling a piece of land, sir.
inability to locate the original from among Atty. Lacanilao’s belongings by himself
or by any of his assistants or representatives was inadequate. Moreover, a
duplicate original could have been secured from Notary Public Razon, but no xxxx
effort was shown to have been exerted in that direction.
Q
In contrast, the records contained ample indicia of the improbability of the
existence of the deed. Camilon claimed that the late Maximo Alvarez, Sr. had At the time when the spouses Maximo Alvarez, Sr. and Valentina Clave
twice gone to his residence in Meycauayan, Bulacan, the first on September 5, approached you to sell their piece of land located at Endaya, Tondo, Manila,
1975, to negotiate the sale of the property in question, and the second on what document, if any, did they show you?
September 9, 1975, to execute the deed of sale with right to repurchase, viz:
A
Q
The title of the land, sir.
Do you also know the deceased plaintiff in this case, Maximo Alvarez, Sr. and
his wife Valentina Clave, Mr. Witness? xxxx

A Q

Yes, sir. You said that on the first week of September or September 5, 1975 spouses
Maximo and Valentina approached you at the time, what did you tell the
Q spouses, if any?

A A

Q I asked them to come back telling them that I was going to look for a buyer, sir.

Under what circumstance were you able to know the deceased plaintiff Maximo xxxx
Alvarez, Sr. and his wife?
Q
When they went to our house, sir.
You said that you told the spouse[s] Alvarez to just come back later and that you
When was this specifically? will look for a buyer, what happened next, if any?

A A

Sometime the first week of September or about September 5, 1975, sir. I went to see my aunt Margarita Prodon, sir.

Q Q
A And did the meeting occur?

What did you tell your aunt Margarita Prodon? WITNESS

I convinced her to buy the lot. A

ATTY. REAL Yes, sir.

Q ATTY. REAL

What was the reply of Margarita Prodon, if any? Q

A What happened at the meeting?

She agreed, provided that she should meet the spouses, sir. A

Q I told Valentina Clave in front of the aunt of my wife that they, the spouses,
wanted to sell the land, sir.
After Margarita Prodon told you that[,] what happened next, if any?
Q
A
What was the reply of your aunt Margarita Prodon at the time?
I waited for the spouses Alvarez to bring them to my aunt, sir.
A
Q
That Valentina Clave should come back with her husband because she was
28
Were you able to finally bring the spouses before Margarita Prodon? going to buy the lot, sir.

A The foregoing testimony could not be credible for the purpose of proving the due
execution of the deed of sale with right to repurchase for three reasons.1âwphi1
Valentina Clave returned to our house and asked me if they can now sell the
piece of land, sir. The first is that the respondents preponderantly established that the late Maximo
Alvarez, Sr. had been in and out of the hospital around the time that the deed of
sale with right to repurchase had been supposedly executed on September 9,
Q
1975. The records manifested that he had been admitted to the Veterans
Memorial Hospital in Quezon City on several occasions, and had then been
What did you tell Valentina Clave? diagnosed with the serious ailments or conditions, as follows:

A
Period of confinement Diagnosis
Q March 31 – May 19, 1975 • Prostatitis, chronic
• Arteriosclerotic heart disease
We went to the house of my aunt so she can meet her personally, sir. • Atrial fibrillation
• Congestive heart failure
 • CFC III
29 registration does not require that only valid instruments be registered, because
36
the purpose of registration is only to give notice.
June 2- June 6, 1975 • Chest pains (Atrial Flutter)
30
• Painful urination (Chronic prostatitis) By the same token, the entry in the notarial register of Notary Public Razon
could only be proof that a deed of sale with right to repurchase had been
August 23-September 3, 1975 • Arteriosclerotic heart disease notarized by him, but did not establish the due execution of the deed.
• Congestive heart failure, mild
• Atrial fibrillation
31 The third is that the respondents’ remaining in the peaceful possession of the
• Cardiac functional capacity III-B
property was further convincing evidence demonstrating that the late Maximo
September 15-October 2, 1975 • Arteriosclerotic heart disease Alvarez, Sr. did not execute the deed of sale with right to repurchase. Otherwise,
• Atrial fibrillation Prodon would have herself asserted and exercised her right to take over the
• Congestive heart failure property, legally and physically speaking, upon the expiration in 1976 of the
• Pneumonia repurchase period stipulated under the deed, including transferring the TCT in
• Urinary tract infection her name and paying the real property taxes due on the properly. Her inaction
• Cerebrovascular accident, old was an index of the falsity of her claim against the respondents.
• Upper GI bleeding probably secondary
32
to stress ulcers In view of the foregoing circumstances, we concur with the CA that the
respondents preponderantly, proved that the deed of sale with right to
repurchase executed by the late Maximo Alvarez, Sr. did not exist in fact.
The medical history showing the number of very serious ailments the late
Maximo Alvarez, Sr. had been suffering from rendered it highly improbable for
WHEREFORE, the Court AFFIRMS the decision promulgated on August 18,
him to travel from Manila all the way to Meycauayan, Bulacan, where Prodon
2005 by the Court of Appeals in C.A.-G.R. CV No. 58624 entitled Heirs of
and Camilon were then residing in order only to negotiate and consummate the
Maximo S. Alvarez and Valentina Clave, represented by Rev. Maximo Alvarez,
sale of the property. This high improbability was fully confirmed by his son,
Jr. v. Margarita Prodon and the Register of Deeds of the City Manila; and
Maximo, Jr., who attested that his father had been seriously ill, and had been in
33 ORDERS the petitioners to pay the costs of suit.
and out of the hospital in 1975. The medical records revealed, too, that on
September 12, 1975, or three days prior to his final admission to the hospital,
the late Maximo Alvarez, Sr. had suffered from "[h]igh grade fever, accompanied SO ORDERED.
by chills, vomiting and cough productive of whitish sticky sputum;"had been
observed to be "conscious" but "weak" and "bedridden" with his heart having
"faint" sounds, irregular rhythm, but no murmurs; and his left upper extremity
34
and left lower extremity had suffered 90% motor loss. Truly, Prodon’s
allegation that the deed of sale with right to repurchase had been executed on
September 9, 1975 could not command belief.

The second is that the annotation on TCT No. 84797 of the deed of sale with
right to repurchase and the entry in the primary entry book of the Register of
Deeds did not themselves establish the existence of the deed. They proved at
best that a document purporting to be a deed of sale with right to repurchase
had been registered with the Register of Deeds. Verily, the registration alone of
the deed was not conclusive proof of its authenticity or its due execution by the
registered owner of the property, which was precisely the issue in this case. The
explanation for this is that registration, being a specie of notice, is simply a
ministerial act by which an instrument is inscribed in the records of the Register
of Deeds and annotated on the dorsal side of the certificate of title covering the
35
land subject of the instrument. It is relevant to mention that the law on land

[G.R. No. 150905. September 23, 2003]
CITIBANK, N.A. MASTERCARD, petitioner, vs. EFREN S.
TEODORO, respondent.
DECISION
PANGANIBAN, J.:
Before secondary evidence may be admitted to prove the contents of original
documents, the offeror must prove the due execution and the subsequent loss
or unavailability of the original.
The Case
[1] [2]
The Petition for Review before us assails the July 31, 2001 Decision and the
[3]
November 22, 2001 Resolution of the Court of Appeals (CA) in CA-GR SP No.
62891. The dispositive portion of the challenged Decision reads as follows:
WHEREFORE, premises considered, the Petition is GRANTED; and
the Decisions of the trial courts are hereby REVERSED and SET ASIDE. No
costs.
[4]
The assailed Resolution denied petitioners Motion for Reconsideration.
The Facts
Petitioner operates a credit card system through which it extends credit
accommodations to its cardholders for the purchase of goods and services from
its member establishments. The purchases are later on paid for by cardholders
upon receipt of the billings or statements of account from the
company. Respondent Efren S. Teodoro was one such cardholder. On
December 14, 1990, he applied for membership with petitioner. After his
application was approved, he was issued Citibank, N.A. Mastercard No. 5423-
3920-4457-7009.
Under the terms and conditions governing the use of the Citibank credit card,
the cardholder undertakes to pay all the purchases made using the card within
the period indicated on the statement of account or within thirty (30) days from
the date or dates of its use. Charges that remain unpaid within the period fixed
in the monthly statement of account shall earn interest at the rate of 3.5 percent
per month plus a penalty fee equivalent to 5 percent of the amount due for every
month or even a fraction of a months delay.
Respondent made various purchases through his credit card. Accordingly, he
was billed by petitioner for those purchases, for which he tendered various
payments.
Petitioner claims that as of January 20, 1995, the obligations of respondent
stood at P191,693.25, inclusive of interest and service charges. Several times it
demanded payment from him, but he refused to pay, claiming that the amount
demanded did not correspond to his actual obligations. His refusal prompted
petitioner to file a Complaint for collection on January 25, 1996 before the
Regional Trial Court (RTC) of Makati City. The case was docketed as Civil Case
No. 96-092 and raffled to Branch 133.
The RTC, in an Order dated April 23, 1996, dismissed the Complaint for lack of
jurisdiction over the amount involved. The case was then transferred to the
Metropolitan Trial Court (MTC) of Makati City, where it was docketed as Civil
Case No. 51586 and raffled to Branch 66.
During the trial, petitioner presented several sales invoices or charge slips,
which added up to only P24,388.36. Although mere photocopies of the originals,
the invoices were marked in evidence as Exhibits F to F-4. Because all these
copies appeared to bear the signatures of respondent, the trial court deemed
them sufficient proof of his purchases with the use of the credit
[5]
card. Accordingly, the MTC in its July 25, 2000 Decision ordered him to pay
petitioner the amount of P24,388.36 plus interest and penalty fee. The material
portion of the Decision reads:
[Petitioner] is claiming that [respondent] made use of its credit card. And as of
January 20, 1995, [respondents] obligation to [petitioner] ballooned to the sum of
P191,693.25.
This is clear according to [petitioner] as shown by the Statement of Accounts.
To the mind of this Court, the Statement of Account alone will not prove that
[respondent] has an outstanding obligation to [petitioner] in the amount of
P191,693.95. This must be substantiated by the Sales Invoices which unearthed
the purchases made by [respondent] when he availed himself of the credit card
of [petitioner].
While it is true that [petitioner] has offered the Sales Invoices (Exhibits F, F-1, F-
4) to show the purchases made by [respondent], it is equally true also that
adding all the amount in said invoices, the sum of P191,693.95 which according
to [petitioner] is the outstanding obligation of [respondent], is hardly
met. [Petitioner] even admitted that it could not produce all the invoices. Without
the other Sales Invoices, there is a cloud of doubt hovering over the claim of
[petitioner] to [respondent].
In fact, summing up all the amount[s] indicated in the aforesaid Sales Invoices
the fact that the [respondent] has incurred to [petitioner] an obligation in the
amount of P24,388.36 as a result of the formers availment of the credit card of
the latter.
It is elementary procedure that [petitioner] must prove [its] case with
preponderance of evidence. Without all the other Sales Invoices to uncover the
purchases made by [respondent] when he used the credit card of [petitioner], it
is undeniable x x x that [petitioner] is caught in the web of doubt with respect to
the accuracy of its claim to the [respondent].
WHEREFORE, premises considered, this Court hereby renders judgment as
follows:
1. Ordering [respondent] to pay [petitioner] P24,388.36 with an interest of 3.5%
and a penalty fee equivalent to another 5% of the amount due for every month
due or a fraction of a months delay starting February 21, 1995 until the entire
obligation is fully paid;
2. Ordering [respondent] to pay [petitioner] 25% of any and all amounts due and
[6]
payable as agreed attorneys fees plus cost of suit.
Thereafter, respondent appealed the MTC judgment to the RTC of Makati City,
where the appeal was docketed as Civil Case No. 00-1051 and raffled to Branch
[7]
146. In its October 30, 2000 Decision, the RTC affirmed the MTC Decision in
toto.
Ruling of the Court of Appeals
The focal issue of the case according to the CA was whether the photocopies of
the sales invoices or charge slips, marked as Exhibits F to F-4, were competent
proofs of the obligations of respondent. These were the only evidence presented
by petitioner that could prove the actual amount of obligation he had incurred in
favor of the former. In reversing the trial courts, the CA ruled that this evidence
was insufficient to prove any liability on respondents part.
According to Sections 3 and 5 of Rule 130 of the Rules of Court, whenever the
subject of inquiry is the content of a document, its original must be produced, as
it is the best evidence to prove such content. Secondary evidence, like the
subject photocopies, is inadmissible. It will be admissible only if the offeror
proves (a) any of the exceptions enumerated in Section 3 and (b) the conditions
for its admissibility set forth in Section 5 of Rule 130. For secondary evidence to
be admissible, there must be satisfactory proof of (1) the due execution of the
original; (2) the originals loss, destruction or unavailability that is not due to the
offerors bad faith; and (3) reasonable diligence and good faith in the search for
or attempt to produce the original.
Although petitioner was able to prove the existence of the original sales
invoices, it failed to prove their due execution or to account for their loss or
unavailability.
[8]
Hence, this Petition.
Issues
Petitioner raises the following issues for our consideration:
I. Whether or not the Court of Appeals erred in reversing and
setting aside the decision of the trial courts for insufficiency of
evidence to support its findings.
II. Whether or not the Court of Appeals erred in holding that
petitioner failed to prove the due execution and the cause of the
unavailability and non-production of the charge slips marked in
[9]
evidence as Exhibits F to F-4.
In brief, the main issue boils down to whether the photocopies of the sales
invoices or charge slips marked during trial as Exhibits F to F-4 are admissible in
evidence.
The Courts Ruling
The Petition has no merit.
Main Issue:
Admissibility of Photocopies
[10]
Petitioner contends that the testimony of its principal witness - Mark
Hernando, assistant manager of Citibank, N.A. Mastercard -- proves the
following:
a) the existence or due execution of the original sales invoices
which sufficiently proved respondents liability of P24,388.36;
 b) the loss or unavailability of the original sales invoices; and
c) petitioners reasonable diligence and good faith in the search for
or attempt to produce the originals.
It further argues that Hernando competently identified the signatures of
respondent on the sales invoices, having recognized them as identical to the
signature on the latters credit card application form.
On the other hand, respondent maintains that petitioner failed to prove the due
execution of the sales invoices. According to him, Hernando was not privy to
such execution and could not have properly or competently declared that the
signatures on the invoices and on the application form belonged to the
former. The latter was not the person before whom the application form was
signed, executed or acknowledged; he was not even present then. As to the
sales invoices and respondents alleged signatures thereon, he saw them only
after the Complaint had been filed in court or long after those invoices had been
executed. He was therefore not competent to identify the signatures.
Because Hernandez had not actually witnessed the execution of the sales
invoices and the application form, respondent concludes that petitioner failed to
observe Section 5 of Rule 130 of the Rules of Court, which provides that the
contents of the original may be proven by the testimony of witnesses.
Finally, respondent contends that the alleged loss or unavailability of the original
sales invoices was not sufficiently established.Allegedly, Hernandez had
requested the originals from Equitable Credit Card Network, Inc., but failed to
show in court that he had followed up his request as advised by another witness,
Zen Hipolito. Therefore, the requirement of reasonable diligence and good faith
in the search for or attempt to produce the originals was not satisfied, because
he had shown no proof of having followed up the request.
The burden of proof rests upon petitioner, as plaintiff, to establish its case based
on a preponderance of evidence. It is well-settled that in civil cases, the party
[11]
that alleges a fact has the burden of proving it. Petitioner failed to prove that
respondent had an obligation in the principal amount of P24,388.36, because
the photocopies of the original sales invoices it had presented in court were
inadmissible in evidence. Moreover, had they been admissible, they would still
[12]
have had little probative value.
The original copies of the sales invoices are the best evidence to prove the
alleged obligation. Photocopies thereof are mere secondary evidence. As such,
they are inadmissible because petitioner, as the offeror, failed to prove any of
[13]
the exceptions provided under Section 3 of Rule 130 of the Rules of Court, as
well s the conditions of their admissibility. Because of the inadmissibility of the
photocopies in the absence of the originals, respondents obligation was not
established.
Section 5 of Rule 130 of the Rules of Court states:
SEC. 5. When original document is unavailable. When the original document
has been lost or destroyed, or cannot be produced in court, the offeror, upon
proof of its execution or existence and the cause of its unavailability without bad
faith on his part, may prove its contents by a copy, or by a recital of its contents
in some authentic document, or by the testimony of witnesses in the order
stated.
Applying the above Rule to the present case, before a party is allowed to
adduce secondary evidence to prove the contents of the original sales invoices,
the offeror must prove the following: (1) the existence or due execution of the
original; (2) the loss and destruction of the original or the reason for its
nonproduction in court; and (3) on the part of the offeror, the absence of bad
[14]
faith to which the unavailability of the original can be attributed. The correct
order of proof is as follows: existence, execution, loss, and contents. At the
sound discretion of the court, this order may be changed if necessary.
[15]
In the present case, the existence of the original sales invoices was established
by the photocopies and the testimony of Hernandez.Petitioner, however, failed
to prove that the originals had been lost or could not be produced in court after
reasonable diligence and good faith in searching for them.
Indeed, the loss of the originals and reasonable diligence in the search for them
were conditions that were not met, because the sales invoices might have been
found by Equitable. Hernandez, testifying that he had requested the originals
from Equitable, failed to show that he had subsequently followed up the
request.
[16]
Finally, when more than one original copy exists, it must appear that all of them
have been lost, destroyed, or cannot be produced in court before secondary
evidence can be given of any one. A photocopy may not be used without
[17]
accounting for the other originals.
[18]
In Santos v. Santos the Court upheld the pronouncement of the CA that
before the appellees therein could be allowed to adduce secondary evidence to
prove the contents of the original, they had to prove -- with the requisite
quantum of evidence -- the loss, the destruction or the unavailability
of all original copies of the document.
In the present case, triplicates were produced, although the cardholder signed
[19]
the sales invoice only once. During the trial, Hernandez explained that an
original copy had gone to respondent, another to the merchant, and still another
[20]
to petitioner.
Each of these three copies is regarded as an original in accordance with Section
[21]
4 (b) of Rule 130 of the Rules of Court. Petitioner failed to show that all three
original copies were unavailable, and that due diligence had been exercised in
the search for them.
WHEREFORE, the Petition is DENIED. Costs against petitioner.
SO ORDERED.
G.R. No. 170491 April 4, 2007
NATIONAL POWER CORPORATION, Petitioner,
vs.
HON. RAMON G. CODILLA, JR., Presiding Judge, RTC of Cebu, Br. 19,
BANGPAI SHIPPING COMPANY, and WALLEM SHIPPING,
INCORPORATED, Respondents.
DECISION
CHICO-NAZARIO, J.:
Before Us is a Petition for Review on Certiorari under Rule 45 of the Rules of
1
Civil Procedure, assailing the Decision of the Court of Appeals in CA-G.R.
CEB-SP No. 00848, dated 9 November 2005, which dismissed the Petition for
Certiorari filed by the National Power Corporation seeking to set aside the
2
Order issued by the Regional Trial Court (RTC) of Cebu, Branch 19 dated 16
November 2004, denying admission and excluding from the records plaintiff’s
(herein petitioner) Exhibits "A", "C", "D", "E", "H" and its sub-markings, "I", "J",
and its sub-markings, "K", "L", "M" and its sub-markings, "N" and its sub-
markings, "O", "P" and its sub-markings, "Q" and its sub-markings, "R" and "S"
and its sub-markings.
On 20 April 1996, M/V Dibena Win, a vessel of foreign registry owned and
operated by private respondent Bangpai Shipping, Co., allegedly bumped and
damaged petitioner’s Power Barge 209 which was then moored at the Cebu
International Port. Thus, on 26 April 1996, petitioner filed before the Cebu RTC a
complaint for damages against private respondent Bangpai Shipping Co., for the
alleged damages caused on petitioner’s power barges.
Thereafter, petitioner filed an Amended Complaint dated 8 July 1996 impleading
herein private respondent Wallem Shipping, Inc., as additional defendant,
contending that the latter is a ship agent of Bangpai Shipping Co. On 18
September 1996, Wallem Shipping, Inc. filed a Motion to Dismiss which was
subsequently denied by public respondent Judge in an Order dated 20 October
1998. Bangpai Shipping Co. likewise filed a Motion to Dismiss which was also
denied by public respondent Judge in an Order issued on 24 January 2003.
Petitioner, after adducing evidence during the trial of the case, filed a formal
offer of evidence before the lower court on 2 February 2004 consisting of
Exhibits "A" to "V" together with the sub-marked portions thereof. Consequently,
private respondents Bangpai Shipping Co. and Wallem Shipping, Inc. filed their
respective objections to petitioner’s formal offer of evidence.
On 16 November 2004, public respondent judge issued the assailed order
denying the admission and excluding from the records petitioner’s Exhibits "A",
"C", "D", "E", "H" and its sub-markings, "I", "J" and its sub-markings, "K", "L", "M"
and its sub-markings, "N" and its sub-markings, "O", "P" and its sub-markings,
"Q" and its sub-markings, "R" and "S" and its sub-markings. According to the
court a quo:
The Court finds merit in the objections raised and the motion to strike out filed
respectively by the defendants. The record shows that the plaintiff has been
given every opportunity to present the originals of the Xerox or photocopies of
the documents it offered. It never produced the originals. The plaintiff attempted
to justify the admission of the photocopies by contending that "the photocopies
offered are equivalent to the original of the document" on the basis of the
Electronic Evidence (Comment to Defendant Wallem Philippines’ Objections and
Motion to Strike). But as rightly pointed out in defendant Wallem’s Reply to the
Comment of Plaintiff, the Xerox copies do not constitute the electronic evidence
defined in Section 1 of Rule 2 of the Rules on Electronic Evidence as follows:
"(h) "Electronic document" refers to information or the representation of
information, data, figures, symbols or other models of written expression,
described or however represented, by which a right is established or an
obligation extinguished, or by which a fact may be proved and affirmed, which is
received, recorded, transmitted, stored, processed, retrieved or produced
electronically. It includes digitally signed documents and any printout, readable
by sight or other means which accurately reflects the electronic data message or
electronic document. For the purpose of these Rules, the term "electronic
document" may be used interchangeably with "electronic data message".
The information in those Xerox or photocopies was not received, recorded,
retrieved or produced electronically. Moreover, such electronic evidence must
be authenticated (Sections 1 and 2, Rule 5, Rules on Electronic Evidence),
which the plaintiff failed to do. Finally, the required Affidavit to prove the
admissibility and evidentiary weight of the alleged electronic evidence (Sec. 1,
Rule 9, Ibid) was not executed, much less presented in evidence.
The Xerox or photocopies offered should, therefore, be stricken off the record.
Aside from their being not properly identified by any competent witness, the loss
of the principals thereof was not established by any competent proof.
xxxx
WHEREFORE, plaintiff’s Exhibits "A", "C", "D", "E", "H" and its sub-markings, "I",
"J", and its sub-markings, "K", "L", "M" and its sub-markings, "N" and its sub-
markings, "O", "P" and its sub-markings, "Q" and its sub-markings, and "R" are
hereby DENIED admission and excluded from the records. However, these
excluded evidence should be attached to the records of this case to enable the
appellate court to pass upon them should an appeal be taken from the decision
on the merits to be rendered upon the termination of the trial of this case.
Exhibits "S" and its sub-markings are also DENIED admission for lack of proper
identification since the witness who brought these pictures expressly admitted
that he was not present when the photos were taken and had not knowledge
3
when the same where taken.
Upon denial of petitioner’s Motion for Reconsideration in an Order dated 20 April
2005, petitioner filed a Petition for Certiorari under Rule 65 of the Rules of Civil
Procedure before the Court of Appeals maintaining that public respondent Judge
acted with grave abuse of discretion amounting to lack or excess of jurisdiction
in denying the admission of its Exhibits "A", "C", "D", "E", "H" and its sub-
markings, "I", "J" and its sub-markings, "K", "L", "M" and its sub-markings, "N"
and its sub-markings, "O", "P" and its sub-markings, "Q" and its sub-markings,
"R", and "S" and its sub-markings.
On 9 November 2005, the appellate court issued a Decision dismissing
petitioner’s petition for certiorari, the pertinent portions of which elucidate:
After a judicious scrutiny of the record of the case on hand, together with the
rules and jurisprudence which are applicable in the premises, we have come up
with a finding that the petition for certiorari filed in this case is not meritorious.
It appears that there is no sufficient showing by the petitioner that the
respondent judge acted with grave abuse of discretion in issuing the assailed
orders in Civil Case No. CEB-18662. As what our jurisprudence tells us, grave
abuse of discretion is meant such capricious and whimsical exercise of
judgment as would be equivalent to lack of jurisdiction x x x.
In the case at bench, what has been shown to the contrary by the totality of the
record on hand is that the respondent judge acted correctly and within the pale
of his sound discretion in issuing the assailed order, dated November 16, 2004,
in Civil Case No. CEB-18662.
Indeed, it appears that the pieces of petitioner’s documentary evidence which
were denied admission by the respondent judge were not properly identified by
any competent witness. As pointed out by the respondent Bangpai Shipping
Company in its comment on the petition filed in this case which reproduces
some excerpts of the testimonies in the court a quo of Atty. Marianito De Los
Santos, Engr. Nestor Enriquez, Jr. and Mr. Rodulfo I. Pagaling, the said
witnesses did not have personal knowledge of and participation in the
preparation and making of the pieces of documentary evidence denied
admission by respondent judge x x x. In other words, there was lack of proper
identification of said pieces of documentary evidence. x x x.
Then another ground for denying admission of petitioner’s Exhibits A, C, D, E, H,
I, J, K, L, M, N, O, P, Q, R, and S by the respondent judge is that said pieces of
documentary evidence were merely photocopies of purported documents or
papers. There is no gainsaying the fact that the respondent judge acted within
the pale of his discretion when he denied admission of said documentary
evidence. Section 3 of Rule 130 of the Rules of Court of the Philippines is very
explicit in providing that, when the subject of inquiry are the contents of
documents, no evidence shall be admissible other than the original documents
themselves, except in certain cases specifically so enumerated therein, and the
petitioner has not shown that the non-presentation or non-production of its
original documentary pieces of evidence falls under such exceptions. As aptly
pointed out by the respondent judge in the order issued by him on November 16,
2004:
"x x x The record shows that the plaintiff (petitioner herein) has been given every
opportunity to present the originals of the Xerox or photocopies of the
documents it offered. It never produced said originals."
So, the petitioner has only itself to blame for the respondent judge’s denial of
admission of its aforementioned documentary evidence.
Of course, the petitioner tries to contend that the photocopies of documents
offered by it are equivalent to the original documents that it sought to offer in
evidence, based on the Rules on Electronic Evidence which were in force and
effect since August 1, 2001. However, such a contention is devoid of merit. The
pieces of documentary evidence offered by the petitioner in Civil Case CEB-
18662 which were denied admission by the respondent judge do not actually
constitute as electronic evidence as defined in the Rules on Electronic Evidence.
The informations therein were not received, retrieved or produced electronically.
The petitioner has not adequately established that its documentary evidence
were electronic evidence. it has not properly authenticated such evidence as
electronic documents, assuming arguendo that they are. Lastly, the petitioner
has not properly established by affidavit pursuant to Rule 9 of the Rules on
Electronic Evidence the admissibility and evidentiary weight of said documentary
evidence.
Thus, by any legal yardstick, it is manifest that the respondent judge did not
commit grave abuse of discretion in denying admission of the aforementioned
documentary evidence of petitioner.
But even if it be granted just for the sake of argument that the respondent judge
committed an error in denying the aforementioned documentary evidence of the
petitioner, still the petition for certiorari filed in this case must fail. Such error
would at most be only an error of law and not an error of jurisdiction. In Lee vs.
People, 393 SCRA 397, the Supreme Court of the Philippines said that certiorari
will not lie in case of an error of law. x x x.
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered
by us DISMISSING the petition filed in this case and AFFIRMING the assailed
4
orders issued by respondent judge in Civil Case No. CEB-18662.
Aggrieved by the aforequoted decision, petitioner filed the instant petition.
The focal point of this entire controversy is petitioner’s obstinate contention that
the photocopies it offered as formal evidence before the trial court are the
functional equivalent of their original based on its inimitable interpretation of the
Rules on Electronic Evidence.
Petitioner insists that, contrary to the rulings of both the trial court and the
appellate court, the photocopies it presented as documentary evidence actually
constitute electronic evidence based on its own premise that an "electronic
document" as defined under Section 1(h), Rule 2 of the Rules on Electronic
Evidence is not limited to information that is received, recorded, retrieved or
produced electronically. Rather, petitioner maintains that an "electronic
document" can also refer to other modes of written expression that is produced
electronically, such as photocopies, as included in the section’s catch-all
proviso: "any print-out or output, readable by sight or other means".
We do not agree.
In order to shed light to the issue of whether or not the photocopies are indeed
electronic documents as contemplated in Republic Act No. 8792 or the
Implementing Rules and Regulations of the Electronic Commerce Act, as well as
the Rules on Electronic Evidence, we shall enumerate the following documents
offered as evidence by the petitioner, to wit:
1. Exhibit "A" is a photocopy of a letter manually signed by a certain
Jose C. Troyo, with "RECEIVED" stamped thereon, together with a
handwritten date;
2. Exhibit "C" is a photocopy of a list of estimated cost of damages of
petitioner’s power barges 207 and 209 prepared by Hopewell Mobile
Power Systems Corporation and manually signed by Messrs. Rex
Malaluan and Virgilio Asprer;
3. Exhibit "D" is a photocopy of a letter manually signed by a certain
Nestor G. Enriquez, Jr., with "RECEIVED" stamped thereon, together
with a handwritten notation of the date it was received;
4. Exhibit "E" is a photocopy of a Standard Marine Protest Form which
was filled up and accomplished by Rex Joel C. Malaluan in his own
handwriting and signed by him. Portions of the Jurat were handwritten,
and manually signed by the Notary Public;
5. Exhibit "H" is a photocopy of a letter manually signed by Mr. Nestor
G. Enriquez, Jr. with "RECEIVED" stamped thereon, together with a
handwritten notation of the date it was received;
6. Exhibit "I" is a photocopy of a computation of the estimated energy
loss allegedly suffered by petitioner which was manually signed by Mr.
Nestor G. Enriquez, Jr.;
7. Exhibit "J" is a photocopy of a letter containing the breakdown of the
cost estimate, manually signed by Mr. Nestor G. Enriquez, Jr., with
"RECEIVED" stamped thereon, together with a handwritten notation of
the date it was received, and other handwritten notations;
8. Exhibit "K" is a photocopy of the Subpoena Duces Tecum Ad
Testificandum written using a manual typewriter, signed manually by
Atty. Ofelia Polo-De Los Reyes, with a handwritten notation when it was
received by the party;
9. Exhibit "L" is a photocopy of a portion of the electricity supply and
operation and maintenance agreement between petitioner and
Hopewell, containing handwritten notations and every page containing
three unidentified manually placed signatures;
10. Exhibit "M" is a photocopy of the Notice of Termination with
attachments addressed to Rex Joel C. Malaluan, manually signed by
Jaime S. Patinio, with a handwritten notation of the date it was received.
The sub-markings also contain manual signatures and/or handwritten
notations;
11. Exhibit "N" is a photocopy of a letter of termination with attachments
addressed to VIrgilio Asprer and manually signed by Jaime S. Patino.
The sub-markings contain manual signatures and/or handwritten
notations;
12. Exhibit "O" is the same photocopied document marked as Annex C;
13. Exhibit "P" is a photocopy of an incident report manually signed by
Messrs. Malaluan and Bautista and by the Notary Public, with other
handwritten notations;
14. Exhibit "Q" is a photocopy of a letter manually signed by Virgilio
Asprer and by a Notary Public, together with other handwritten
notations.
On the other hand, an "electronic document" refers to information or the
representation of information, data, figures, symbols or other models of written
expression, described or however represented, by which a right is established or
an obligation extinguished, or by which a fact may be proved and affirmed,
which is received, recorded, transmitted, stored, processed, retrieved or
5
produced electronically. It includes digitally signed documents and any printout,
readable by sight or other means which accurately reflects the electronic data
6
message or electronic document.
The rules use the word "information" to define an electronic document received,
recorded, transmitted, stored, processed, retrieved or produced electronically.
This would suggest that an electronic document is relevant only in terms of the
information contained therein, similar to any other document which is presented
7 evidence is offered, and the latter fails to produce it after reasonable
in evidence as proof of its contents. However, what differentiates an electronic
document from a paper-based document is the manner by which the information
is processed; clearly, the information contained in an electronic document is
received, recorded, transmitted, stored, processed, retrieved or produced
electronically.
A perusal of the information contained in the photocopies submitted by petitioner
will reveal that not all of the contents therein, such as the signatures of the
persons who purportedly signed the documents, may be recorded or produced
electronically. By no stretch of the imagination can a person’s signature affixed
manually be considered as information electronically received, recorded,
transmitted, stored, processed, retrieved or produced. Hence, the argument of
petitioner that since these paper printouts were produced through an electronic
process, then these photocopies are electronic documents as defined in the
Rules on Electronic Evidence is obviously an erroneous, if not preposterous,
interpretation of the law. Having thus declared that the offered photocopies are
not tantamount to electronic documents, it is consequential that the same may
not be considered as the functional equivalent of their original as decreed in the
law.
Furthermore, no error can be ascribed to the court a quo in denying admission
and excluding from the records petitioner’s Exhibits "A", "C", "D", "E", "H" and its
sub-markings, "I", "J" and its sub-markings, "K", "L", "M" and its sub-markings,
"N" and its sub-markings, "O", "P" and its sub-markings, "Q" and its sub-
markings, and "R". The trial court was correct in rejecting these photocopies as
they violate the best evidence rule and are therefore of no probative value being
incompetent pieces of evidence. Before the onset of liberal rules of discovery,
and modern technique of electronic copying, the best evidence rule was
designed to guard against incomplete or fraudulent proof and the introduction of
8
altered copies and the withholding of the originals. But the modern justification
for the rule has expanded from the prevention of fraud to a recognition that
9
writings occupy a central position in the law. The importance of the precise
terms of writings in the world of legal relations, the fallibility of the human
memory as reliable evidence of the terms, and the hazards of inaccurate or
10
incomplete duplicate are the concerns addressed by the best evidence rule.
Moreover, as mandated under Section 2, Rule 130 of the Rules of Court:
"SECTION 2. Original writing must be produced; exceptions. — There can be no
evidence of a writing the contents of which is the subject of inquiry, other than
the original writing itself, except in the following cases:
(a) When the original has been lost, destroyed, or cannot be produced
in court;
(b) When the original is in the possession of the party against whom the
notice;
(c) When the original is a record or other document in the custody of a
public officer;
(d) When the original has been recorded in an existing record a certified
copy of which is made evidence by law;
(e) When the original consists of numerous accounts or other
documents which cannot be examined in court without great loss of time
and the fact sought to be established from them is only the general
result of the whole."
When the original document has been lost or destroyed, or cannot be produced
in court, the offeror, upon proof of its execution or existence and the cause of its
unavailability without bad faith on his part, may prove its contents by a copy, or
by a recital of its contents in some authentic document, or by the testimony of
11
witnesses in the order stated. The offeror of secondary evidence is burdened
to prove the predicates thereof: (a) the loss or destruction of the original without
bad faith on the part of the proponent/offeror which can be shown by
12
circumstantial evidence of routine practices of destruction of documents; (b)
the proponent must prove by a fair preponderance of evidence as to raise a
reasonable inference of the loss or destruction of the original copy; and (c) it
must be shown that a diligent and bona fide but unsuccessful search has been
13
made for the document in the proper place or places. However, in the case at
bar, though petitioner insisted in offering the photocopies as documentary
evidence, it failed to establish that such offer was made in accordance with the
exceptions as enumerated under the abovequoted rule. Accordingly, we find no
error in the Order of the court a quo denying admissibility of the photocopies
offered by petitioner as documentary evidence.
Finally, it perplexes this Court why petitioner continued to obdurately disregard
the opportunities given by the trial court for it to present the originals of the
photocopies it presented yet comes before us now praying that it be allowed to
present the originals of the exhibits that were denied admission or in case the
same are lost, to lay the predicate for the admission of secondary evidence. Had
petitioner presented the originals of the documents to the court instead of the
photocopies it obstinately offered as evidence, or at the very least laid the
predicate for the admission of said photocopies, this controversy would not have
unnecessarily been brought before the appellate court and finally to this Court
for adjudication. Had it not been for petitioner’s intransigence, the merits of
petitioner’s complaint for damages would have been decided upon by the trial
court long ago. As aptly articulated by the Court of Appeals, petitioner has only
itself to blame for the respondent judge’s denial of admission of its
aforementioned documentary evidence and consequently, the denial of its
prayer to be given another opportunity to present the originals of the documents
that were denied admission nor to lay the predicate for the admission of
secondary evidence in case the same has been lost.

WHEREFORE, premises considered, the instant petition is hereby DENIED. The

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

SO ORDERED.

G.R. No. 170633 October 17, 2007
MCC INDUSTRIAL SALES CORPORATION, petitioner,
vs.
SSANGYONG CORPORATION, respondents.
DECISION
NACHURA, J.:
1
Before the Court is a petition for review on certiorari of the Decision of the Court
2
of Appeals in CA-G.R. CV No. 82983 and its Resolution denying the motion for
reconsideration thereof.
Petitioner MCC Industrial Sales (MCC), a domestic corporation with office at
Binondo, Manila, is engaged in the business of importing and wholesaling
3
stainless steel products. One of its suppliers is the Ssangyong Corporation
4 5
(Ssangyong), an international trading company with head office in Seoul,
6 L/C details and a cable copy thereof that day. Ssangyong sent a separate
South Korea and regional headquarters in Makati City, Philippines. The two
corporations conducted business through telephone calls and facsimile or
7
telecopy transmissions. Ssangyong would send the pro forma invoices
containing the details of the steel product order to MCC; if the latter conforms
thereto, its representative affixes his signature on the faxed copy and sends it
8 principal in Korea was already in a difficult situation because of the failure of
back to Ssangyong, again by fax.
9
On April 13, 2000, Ssangyong Manila Office sent, by fax, a letter addressed to
10
Gregory Chan, MCC Manager [also the President of Sanyo Seiki Stainless
Steel Corporation], to confirm MCC's and Sanyo Seiki's order of 220 metric
tons (MT) of hot rolled stainless steel under a preferential rate
of US$1,860.00 per MT. Chan, on behalf of the corporations, assented and
affixed his signature on the conforme portion of the letter.
11
On April 17, 2000, Ssangyong forwarded to MCC Pro Forma Invoice No. ST2-
12
POSTSO401 containing the terms and conditions of the transaction. MCC sent
13
back by fax to Ssangyong the invoice bearing the conformity signature of
Chan. As stated in the pro forma invoice, payment for the ordered steel products
would be made through an irrevocable letter of credit (L/C) at sight in favor of
14
Ssangyong. Following their usual practice, delivery of the goods was to be
made after the L/C had been opened.
In the meantime, because of its confirmed transaction with MCC, Ssangyong
placed the order with its steel manufacturer, Pohang Iron and Steel Corporation
15
(POSCO), in South Korea and paid the same in full.
Because MCC could open only a partial letter of credit, the order for 220MT of
16
steel was split into two, one for 110MT covered by Pro Forma Invoice No. ST2-
17 18
POSTS0401-1 and another for 110MT covered by ST2-POSTS0401-2, both
dated April 17, 2000.
On June 20, 2000, Ssangyong, through its Manila Office, informed Sanyo Seiki
and Chan, by way of a fax transmittal, that it was ready to ship 193.597MT of
stainless steel from Korea to the Philippines. It requested that the opening of the
19
L/C be facilitated. Chan affixed his signature on the fax transmittal and
20
returned the same, by fax, to Ssangyong.
Two days later, on June 22, 2000, Ssangyong Manila Office informed Sanyo
Seiki, thru Chan, that it was able to secure a US$30/MT price adjustment on the
contracted price of US$1,860.00/MT for the 200MT stainless steel, and that the
goods were to be shipped in two tranches, the first 100MT on that day and the
second 100MT not later than June 27, 2000. Ssangyong reiterated its request
21
for the facilitation of the L/C's opening.
Ssangyong later, through its Manila Office, sent a letter, on June 26, 2000, to
the Treasury Group of Sanyo Seiki that it was looking forward to receiving the
22
letter of the same date to Sanyo Seiki requesting for the opening of the L/C
23
covering payment of the first 100MT not later than June 28, 2000. Similar
24
letters were transmitted by Ssangyong Manila Office on June 27, 2000. On
June 28, 2000, Ssangyong sent another facsimile letter to MCC stating that its
25
Sanyo Seiki and MCC to open the L/C's.
The following day, June 29, 2000, Ssangyong received, by fax, a letter signed
by Chan, requesting an extension of time to open the L/C because MCC's credit
line with the bank had been fully availed of in connection with another
26
transaction, and MCC was waiting for an additional credit line. On the same
date, Ssangyong replied, requesting that it be informed of the date when the L/C
would be opened, preferably at the earliest possible time, since its Steel Team 2
in Korea was having problems and Ssangyong was incurring warehousing
27
costs. To maintain their good business relationship and to support MCC in its
financial predicament, Ssangyong offered to negotiate with its steel
manufacturer, POSCO, another US$20/MT discount on the price of the stainless
steel ordered. This was intimated in Ssangyong's June 30, 2000 letter to
28 29
MCC. On July 6, 2000, another follow-up letter for the opening of the L/C was
sent by Ssangyong to MCC.
However, despite Ssangyong's letters, MCC failed to open a letter of
30
credit. Consequently, on August 15, 2000, Ssangyong, through counsel, wrote
Sanyo Seiki that if the L/C's were not opened, Ssangyong would be compelled
to cancel the contract and hold MCC liable for damages for breach thereof
amounting to US$96,132.18, inclusive of warehouse expenses, related interests
31
and charges.
 32
Later, Pro Forma Invoice Nos. ST2-POSTS080-1 and ST2-POSTS080-
33
2 dated August 16, 2000 were issued by Ssangyong and sent via fax to MCC.
The invoices slightly varied the terms of the earlier pro forma invoices (ST2-
POSTSO401, ST2-POSTS0401-1 and ST2-POSTS0401-2), in that the quantity
was now officially 100MT per invoice and the price was reduced
to US$1,700.00 per MT. As can be gleaned from the photocopies of the said
August 16, 2000 invoices submitted to the court, they both bear the conformity
signature of MCC Manager Chan.
On August 17, 2000, MCC finally opened an L/C with PCIBank for
US$170,000.00 covering payment for 100MT of stainless steel coil under Pro
34
Forma Invoice No. ST2-POSTS080-2. The goods covered by the said invoice
35
were then shipped to and received by MCC.
MCC then faxed to Ssangyong a letter dated August 22, 2000 signed by Chan,
requesting for a price adjustment of the order stated in Pro Forma Invoice No.
ST2-POSTS080-1, considering that the prevailing price of steel at that time was
36
US$1,500.00/MT, and that MCC lost a lot of money due to a recent strike.
Ssangyong rejected the request, and, on August 23, 2000, sent a demand
37
letter to Chan for the opening of the second and last L/C of US$170,000.00
with a warning that, if the said L/C was not opened by MCC on August 26, 2000,
Ssangyong would be constrained to cancel the contract and hold MCC liable for
US$64,066.99 (representing cost difference, warehousing expenses, interests
and charges as of August 15, 2000) and other damages for breach. Chan failed
to reply.
Exasperated, Ssangyong through counsel wrote a letter to MCC, on September
11, 2000, canceling the sales contract under ST2-POSTS0401-1 /ST2-
POSTS0401-2, and demanding payment of US$97,317.37 representing losses,
38
warehousing expenses, interests and charges.
Ssangyong then filed, on November 16, 2001, a civil action for damages due to
breach of contract against defendants MCC, Sanyo Seiki and Gregory Chan
39
before the Regional Trial Court of Makati City. In its complaint, Ssangyong
alleged that defendants breached their contract when they refused to open the
L/C in the amount of US$170,000.00 for the remaining 100MT of steel under Pro
Forma Invoice Nos. ST2-POSTS0401-1 and ST2-POSTS0401-2.
After Ssangyong rested its case, defendants filed a Demurrer to
40
Evidence alleging that Ssangyong failed to present the original copies of
the pro forma invoices on which the civil action was based. In an Order dated
April 24, 2003, the court denied the demurrer, ruling that the documentary
evidence presented had already been admitted in the December 16, 2002
41
Order and their admissibility finds support in Republic Act (R.A.) No. 8792,
otherwise known as the Electronic Commerce Act of 2000. Considering that
both testimonial and documentary evidence tended to substantiate the material
allegations in the complaint, Ssangyong's evidence sufficed for purposes of a
42
prima facie case.
43
After trial on the merits, the RTC rendered its Decision on March 24, 2004, in
favor of Ssangyong. The trial court ruled that when plaintiff agreed to sell and
defendants agreed to buy the 220MT of steel products for the price of US$1,860
per MT, the contract was perfected. The subject transaction was evidenced
by Pro Forma Invoice Nos. ST2-POSTS0401-1 and ST2-POSTS0401-2, which
were later amended only in terms of reduction of volume as well as the price per
MT, following Pro Forma Invoice Nos. ST2-POSTS080-1 and ST2-POSTS080-
2. The RTC, however, excluded Sanyo Seiki from liability for lack of competent
evidence. The fallo of the decision reads:
WHEREFORE, premises considered, Judgment is hereby rendered
ordering defendants MCC Industrial Sales Corporation and Gregory
Chan, to pay plaintiff, jointly and severally the following:
1) Actual damages of US$93,493.87 representing the outstanding
principal claim plus interest at the rate of 6% per annum from March 30,
2001.
2) Attorney's fees in the sum of P50,000.00 plus P2,000.00 per
counsel's appearance in court, the same being deemed just and
equitable considering that by reason of defendants' breach of their
obligation under the subject contract, plaintiff was constrained to litigate
to enforce its rights and recover for the damages it sustained, and
therefore had to engage the services of a lawyer.
3) Costs of suit.
No award of exemplary damages for lack of sufficient basis.
44
SO ORDERED.
On April 22, 2004, MCC and Chan, through their counsel of record, Atty. Eladio
45
B. Samson, filed their Notice of Appeal. On June 8, 2004, the law office of
Castillo Zamora & Poblador entered its appearance as their collaborating
counsel.
46
In their Appeal Brief filed on March 9, 2005, MCC and Chan raised before the
CA the following errors of the RTC:
I. THE HONORABLE COURT A QUO PLAINLY ERRED IN FINDING
THAT APPELLANTS VIOLATED THEIR CONTRACT WITH APPELLEE
 A. THE HONORABLE COURT A QUO PLAINLY ERRED IN
FINDING THAT APPELLANTS AGREED TO PURCHASE 200
METRIC TONS OF STEEL PRODUCTS FROM APPELLEE,
INSTEAD OF ONLY 100 METRIC TONS.
1. THE HONORABLE COURT A QUO PLAINLY
ERRED IN ADMITTING IN EVIDENCE THE PRO
FORMA INVOICES WITH REFERENCE NOS. ST2-
POSTS0401-1 AND ST2-POSTS0401-2.
II. THE HONORABLE COURT A QUO PLAINLY ERRED
AWARDING ACTUAL DAMAGES TO APPELLEE.
III. THE HONORABLE COURT A QUO PLAINLY ERRED
AWARDING ATTORNEY'S FEES TO APPELLEE.
IV. THE HONORABLE COURT A QUO PLAINLY ERRED IN FINDING
APPELLANT GREGORY CHAN JOINTLY AND SEVERALLY LIABLE
47
WITH APPELLANT MCC.
48
On August 31, 2005, the CA rendered its Decision affirming the ruling of the
trial court, but absolving Chan of any liability. The appellate court ruled, among
others, that Pro Forma Invoice Nos. ST2-POSTS0401-1 and ST2-POSTS0401-
2 (Exhibits "E", "E-1" and "F") were admissible in evidence, although they were
49
mere facsimile printouts of MCC's steel orders. The dispositive portion of the
appellate court's decision reads:
WHEREFORE, premises considered, the Court holds:
(1) The award of actual damages, with interest, attorney's fees and
costs ordered by the lower court is hereby AFFIRMED.
(2) Appellant Gregory Chan is hereby ABSOLVED from any liability.
50
SO ORDERED.
A copy of the said Decision was received by MCC's and Chan's principal
51
counsel, Atty. Eladio B. Samson, on September 14, 2005. Their collaborating
52
counsel, Castillo Zamora & Poblador, likewise, received a copy of the CA
53
decision on September 19, 2005.
On October 4, 2005, Castillo Zamora & Poblador, on behalf of MCC, filed a
54
motion for reconsideration of the said decision. Ssangyong opposed the
motion contending that the decision of the CA had become final and executory
on account of the failure of MCC to file the said motion within the reglementary
period. The appellate court resolved, on November 22, 2005, to deny the motion
55
on its merits, without, however, ruling on the procedural issue raised.
56
Aggrieved, MCC filed a petition for review on certiorari before this Court,
imputing the following errors to the Court of Appeals:
THE COURT OF APPEALS DECIDED A LEGAL QUESTION NOT IN
ACCORDANCE WITH JURISPRUDENCE AND SANCTIONED A
DEPARTURE FROM THE USUAL AND ACCEPTED COURSE OF
JUDICIAL PROCEEDINGS BY REVERSING THE COURT A
IN QUO'S DISMISSAL OF THE COMPLAINT IN CIVIL CASE NO. 02-124
CONSIDERING THAT:
IN I. THE COURT OF APPEALS ERRED IN SUSTAINING THE
ADMISSIBILITY IN EVIDENCE OF THE PRO-FORMA
INVOICES WITH REFERENCE NOS. ST2-POSTSO401-1 AND
ST2-POSTSO401-2, DESPITE THE FACT THAT THE SAME
WERE MERE PHOTOCOPIES OF FACSIMILE PRINTOUTS.
II. THE COURT OF APPEALS FAILED TO APPRECIATE THE
OBVIOUS FACT THAT, EVEN ASSUMING PETITIONER
BREACHED THE SUPPOSED CONTRACT, THE FACT IS
THAT PETITIONER FAILED TO PROVE THAT IT SUFFERED
ANY DAMAGES AND THE AMOUNT THEREOF.
III. THE AWARD OF ACTUAL DAMAGES IN THE AMOUNT OF
US$93,493.87 IS SIMPLY UNCONSCIONABLE AND SHOULD
HAVE BEEN AT LEAST REDUCED, IF NOT DELETED BY
57
THE COURT OF APPEALS.
In its Comment, Ssangyong sought the dismissal of the petition, raising the
following arguments: that the CA decision dated 15 August 2005 is already final
and executory, because MCC's motion for reconsideration was filed beyond the
reglementary period of 15 days from receipt of a copy thereof, and that, in any
case, it was a pro formamotion; that MCC breached the contract for the
purchase of the steel products when it failed to open the required letter of credit;
that the printout copies and/or photocopies of facsimile or telecopy
transmissions were properly admitted by the trial court because they are
considered original documents under R.A. No. 8792; and that MCC is liable for
actual damages and attorney's fees because of its breach, thus, compelling
Ssangyong to litigate.
The principal issues that this Court is called upon to resolve are the following:
I – Whether the CA decision dated 15 August 2005 is already final and
executory;
II – Whether the print-out and/or photocopies of facsimile transmissions are
electronic evidence and admissible as such;
III – Whether there was a perfected contract of sale between MCC and
Ssangyong, and, if in the affirmative, whether MCC breached the said contract;
and
IV – Whether the award of actual damages and attorney's fees in favor of
Ssangyong is proper and justified.
-I-
58
It cannot be gainsaid that in Albano v. Court of Appeals, we held that receipt of
a copy of the decision by one of several counsels on record is notice to all, and
the period to appeal commences on such date even if the other counsel has not
yet received a copy of the decision. In this case, when Atty. Samson received a
copy of the CA decision on September 14, 2005, MCC had only fifteen (15) days
within which to file a motion for reconsideration conformably with Section 1, Rule
52 of the Rules of Court, or to file a petition for review on certiorari in
accordance with Section 2, Rule 45. The period should not be reckoned from
September 29, 2005 (when Castillo Zamora & Poblador received their copy of
the decision) because notice to Atty. Samson is deemed notice to collaborating
counsel.
We note, however, from the records of the CA, that it was Castillo Zamora &
Poblador, not Atty. Samson, which filed both MCC's and Chan's Brief and Reply
Brief. Apparently, the arrangement between the two counsels was for the
collaborating, not the principal, counsel to file the appeal brief and subsequent
pleadings in the CA. This explains why it was Castillo Zamora & Poblador which
filed the motion for the reconsideration of the CA decision, and they did so on
October 5, 2005, well within the 15-day period from September 29, 2005, when
they received their copy of the CA decision. This could also be the reason why
the CA did not find it necessary to resolve the question of the timeliness of
petitioner's motion for reconsideration, even as the CA denied the same.
Independent of this consideration though, this Court assiduously reviewed the
records and found that strong concerns of substantial justice warrant the
relaxation of this rule.
In Philippine Ports Authority v. Sargasso Construction and Development
59
Corporation, we ruled that:
In Orata v. Intermediate Appellate Court, we held that where strong
considerations of substantive justice are manifest in the petition, this
Court may relax the strict application of the rules of procedure in the
exercise of its legal jurisdiction. In addition to the basic merits of the
main case, such a petition usually embodies justifying circumstance
which warrants our heeding to the petitioner's cry for justice in spite of
the earlier negligence of counsel. As we held in Obut v. Court of
Appeals:
[W]e cannot look with favor on a course of action which would
place the administration of justice in a straight jacket for then
the result would be a poor kind of justice if there would be
justice at all. Verily, judicial orders, such as the one subject of
this petition, are issued to be obeyed, nonetheless a non-
compliance is to be dealt with as the circumstances attending
the case may warrant. What should guide judicial action is the
principle that a party-litigant is to be given the fullest opportunity
to establish the merits of his complaint or defense rather than
for him to lose life, liberty, honor or property on technicalities.
The rules of procedure are used only to secure and not override or
frustrate justice. A six-day delay in the perfection of the appeal, as in
this case, does not warrant the outright dismissal of the appeal.
In Development Bank of the Philippines vs. Court of Appeals, we gave
due course to the petitioner's appeal despite the late filing of its brief in
the appellate court because such appeal involved public interest. We
stated in the said case that the Court may exempt a particular case from
a strict application of the rules of procedure where the appellant failed to
perfect its appeal within the reglementary period, resulting in the
appellate court's failure to obtain jurisdiction over the case. In Republic
vs. Imperial, Jr., we also held that there is more leeway to exempt a
case from the strictness of procedural rules when the appellate court
has already obtained jurisdiction over the appealed case. We
emphasize that:
[T]he rules of procedure are mere tools intended to facilitate the
attainment of justice, rather than frustrate it. A strict and rigid
application of the rules must always be eschewed when it would
subvert the rule's primary objective of enhancing fair trials and
expediting justice. Technicalities should never be used to defeat
the substantive rights of the other party. Every party-litigant
must be afforded the amplest opportunity for the proper and just
determination of his cause, free from the constraints of
60
technicalities.
Moreover, it should be remembered that the Rules were promulgated to set
guidelines in the orderly administration of justice, not to shackle the hand that
dispenses it. Otherwise, the courts would be consigned to being mere slaves to
technical rules, deprived of their judicial discretion. Technicalities must take a
backseat to substantive rights. After all, it is circumspect leniency in this respect
that will give the parties the fullest opportunity to ventilate the merits of their
respective causes, rather than have them lose life, liberty, honor or property on
61
sheer technicalities.
The other technical issue posed by respondent is the alleged pro forma nature
of MCC's motion for reconsideration, ostensibly because it merely restated the
arguments previously raised and passed upon by the CA.
In this connection, suffice it to say that the mere restatement of arguments in a
motion for reconsideration does not per se result in a pro forma motion.
62
In Security Bank and Trust Company, Inc. v. Cuenca, we held that a motion for
reconsideration may not be necessarily pro forma even if it reiterates the
arguments earlier passed upon and rejected by the appellate court. A movant
may raise the same arguments precisely to convince the court that its ruling was
erroneous. Furthermore, the pro forma rule will not apply if the arguments were
not sufficiently passed upon and answered in the decision sought to be
reconsidered.
- II -
The second issue poses a novel question that the Court welcomes. It provides
the occasion for this Court to pronounce a definitive interpretation of the equally
innovative provisions of the Electronic Commerce Act of 2000 (R.A. No.
8792) vis-à-vis the Rules on Electronic Evidence.
Although the parties did not raise the question whether the original facsimile
transmissions are "electronic data messages" or "electronic documents" within
the context of the Electronic Commerce Act (the petitioner merely assails as
inadmissible evidence the photocopies of the said facsimile transmissions), we
deem it appropriate to determine first whether the said fax transmissions are
indeed within the coverage of R.A. No. 8792 before ruling on whether the
photocopies thereof are covered by the law. In any case, this Court has ample
authority to go beyond the pleadings when, in the interest of justice or for the
promotion of public policy, there is a need to make its own findings in order to
63
support its conclusions.
Petitioner contends that the photocopies of the pro forma invoices presented by
respondent Ssangyong to prove the perfection of their supposed contract of sale
are inadmissible in evidence and do not fall within the ambit of R.A. No. 8792,
because the law merely admits as the best evidence the original fax transmittal.
On the other hand, respondent posits that, from a reading of the law and the
Rules on Electronic Evidence, the original facsimile transmittal of the pro
forma invoice is admissible in evidence since it is an electronic document and,
therefore, the best evidence under the law and the Rules. Respondent further
claims that the photocopies of these fax transmittals (specifically ST2-
POSTS0401-1 and ST2-POSTS0401-2) are admissible under the Rules on
Evidence because the respondent sufficiently explained the non-production of
the original fax transmittals.
In resolving this issue, the appellate court ruled as follows:
Admissibility of Pro Forma
Invoices; Breach of Contract
by Appellants
Turning first to the appellants' argument against the admissibility of the
Pro Forma Invoices with Reference Nos. ST2-POSTS0401-1 and ST2-
POSTS0401-2 (Exhibits "E", "E-1" and "F", pp. 215-218, Records),
appellants argue that the said documents are inadmissible (sic) being
violative of the best evidence rule.
The argument is untenable.
The copies of the said pro-forma invoices submitted by the appellee are
admissible in evidence, although they are mere electronic facsimile
printouts of appellant's orders. Such facsimile printouts are considered
Electronic Documents under the New Rules on Electronic Evidence,
which came into effect on August 1, 2001. (Rule 2, Section 1 [h], A.M.
No. 01-7-01-SC).
"(h) 'Electronic document' refers to information or the
representation of information, data, figures, symbols or other
modes of written expression, described or however
represented, by which a right is established or an obligation
extinguished, or by which a fact may be proved and affirmed,
which is received, recorded, transmitted, stored, processed,
retrieved or produced electronically. It includes digitally signed
documents and any printout or output, readable by sight or
other means, which accurately reflects the electronic data
message or electronic document. For purposes of these Rules,
the term 'electronic document' may be used interchangeably
with 'electronic data message'.
An electronic document shall be regarded as the equivalent of an
original document under the Best Evidence Rule, as long as it is a
printout or output readable by sight or other means, showing to reflect
the data accurately. (Rule 4, Section 1, A.M. No. 01-7-01-SC)
64
The ruling of the Appellate Court is incorrect. R.A. No. 8792, otherwise known
as the Electronic Commerce Act of 2000, considers an electronic data message
or an electronic document as the functional equivalent of a written document for
65 66
evidentiary purposes. The Rules on Electronic Evidence regards an
electronic document as admissible in evidence if it complies with the rules on
admissibility prescribed by the Rules of Court and related laws, and is
67
authenticated in the manner prescribed by the said Rules. An electronic
document is also the equivalent of an original document under the Best
Evidence Rule, if it is a printout or output readable by sight or other means,
68
shown to reflect the data accurately.
Thus, to be admissible in evidence as an electronic data message or to be
considered as the functional equivalent of an original document under the Best
Evidence Rule, the writing must foremost be an "electronic data message" or an
"electronic document."
The Electronic Commerce Act of 2000 defines electronic data message and
electronic document as follows:
Sec. 5. Definition of Terms. For the purposes of this Act, the following
terms are defined, as follows:
xxx
c. "Electronic Data Message" refers to information generated, sent,
received or stored by electronic, optical or similar means.
xxx
f. "Electronic Document" refers to information or the representation of
information, data, figures, symbols or other modes of written expression,
described or however represented, by which a right is established or an
obligation extinguished, or by which a fact may be proved and affirmed,
which is received, recorded, transmitted, stored, processed, retrieved or
produced electronically.
69
The Implementing Rules and Regulations (IRR) of R.A. No. 8792, which was
signed on July 13, 2000 by the then Secretaries of the Department of Trade and
Industry, the Department of Budget and Management, and then Governor of
the Bangko Sentral ng Pilipinas, defines the terms as:
Sec. 6. Definition of Terms. For the purposes of this Act and these
Rules, the following terms are defined, as follows:
xxx
(e) "Electronic Data Message" refers to information generated, sent,
received or stored by electronic, optical or similar means, but not limited
to, electronic data interchange (EDI), electronic mail, telegram, telex or
telecopy. Throughout these Rules, the term "electronic data message"
shall be equivalent to and be used interchangeably with "electronic
document."
xxxx
(h) "Electronic Document" refers to information or the representation of
information, data, figures, symbols or other modes of written expression,
described or however represented, by which a right is established or an
obligation extinguished, or by which a fact may be proved and affirmed,
which is received, recorded, transmitted, stored, processed, retrieved or
produced electronically. Throughout these Rules, the term "electronic
document" shall be equivalent to and be used interchangeably with
"electronic data message."
The phrase "but not limited to, electronic data interchange (EDI), electronic mail,
telegram, telex or telecopy" in the IRR's definition of "electronic data message"
is copied from the Model Law on Electronic Commerce adopted by the United
70
Nations Commission on International Trade Law (UNCITRAL), from which
71
majority of the provisions of R.A. No. 8792 were taken. While Congress
deleted this phrase in the Electronic Commerce Act of 2000, the drafters of the
IRR reinstated it. The deletion by Congress of the said phrase is significant and
pivotal, as discussed hereunder.
The clause on the interchangeability of the terms "electronic data message" and
"electronic document" was the result of the Senate of the Philippines' adoption,
in Senate Bill 1902, of the phrase "electronic data message" and the House of
Representative's employment, in House Bill 9971, of the term "electronic
72
document." In order to expedite the reconciliation of the two versions, the
technical working group of the Bicameral Conference Committee adopted both
73
terms and intended them to be the equivalent of each one. Be that as it may,
there is a slight difference between the two terms. While "data message" has
reference to information electronically sent, stored or transmitted, it does not
necessarily mean that it will give rise to a right or extinguish an
74
obligation, unlike an electronic document. Evident from the law, however, is
the legislative intent to give the two terms the same construction.
The Rules on Electronic Evidence promulgated by this Court defines the said
terms in the following manner:
SECTION 1. Definition of Terms. – For purposes of these Rules, the
following terms are defined, as follows:
xxxx
 (g) "Electronic data message" refers to information generated, sent,
received or stored by electronic, optical or similar means.
(h) "Electronic document" refers to information or the representation of
information, data, figures, symbols or other modes of written expression,
described or however represented, by which a right is established or an
obligation extinguished, or by which a fact may be proved and affirmed,
which is received, recorded, transmitted, stored, processed, retrieved or
produced electronically. It includes digitally signed documents and print-
out or output, readable by sight or other means, which accurately
reflects the electronic data message or electronic document. For
purposes of these Rules, the term "electronic document" may be used
interchangeably with "electronic data message."
Given these definitions, we go back to the original question: Is an original
printout of a facsimile transmission an electronic data message or electronic
document?
The definitions under the Electronic Commerce Act of 2000, its IRR and the
Rules on Electronic Evidence, at first glance, convey the impression
that facsimile transmissions are electronic data messages or electronic
documents because they are sent by electronic means. The expanded definition
of an "electronic data message" under the IRR, consistent with the UNCITRAL
Model Law, further supports this theory considering that the enumeration "xxx
[is] not limited to, electronic data interchange (EDI), electronic mail, telegram,
telex or telecopy." And to telecopy is to send a document from one place to
75
another via a fax machine.
As further guide for the Court in its task of statutory construction, Section 37 of
the Electronic Commerce Act of 2000 provides that
Unless otherwise expressly provided for, the interpretation of this
Act shall give due regard to its international origin and the need to
promote uniformity in its application and the observance of good faith in
international trade relations. The generally accepted principles of
international law and convention on electronic commerce shall likewise
be considered.
Obviously, the "international origin" mentioned in this section can only refer to
the UNCITRAL Model Law, and the UNCITRAL's definition of "data message":
"Data message" means information generated, sent, received or stored
by electronic, optical or similar means including, but not limited to,
electronic data interchange (EDI), electronic mail, telegram, telex or
76
telecopy.
is substantially the same as the IRR's characterization of an "electronic data
message."
However, Congress deleted the phrase, "but not limited to, electronic data
interchange (EDI), electronic mail, telegram, telex or telecopy," and replaced the
term "data message" (as found in the UNCITRAL Model Law ) with "electronic
data message." This legislative divergence from what is assumed as the term's
"international origin" has bred uncertainty and now impels the Court to make an
inquiry into the true intent of the framers of the law. Indeed, in the construction
or interpretation of a legislative measure, the primary rule is to search for and
77
determine the intent and spirit of the law. A construction should be rejected
that gives to the language used in a statute a meaning that does not accomplish
the purpose for which the statute was enacted, and that tends to defeat the ends
78
which are sought to be attained by the enactment.
Interestingly, when Senator Ramon B. Magsaysay, Jr., the principal author of
Senate Bill 1902 (the predecessor of R.A. No. 8792), sponsored the bill on
second reading, he proposed to adopt the term "data message" as formulated
79
and defined in the UNCITRAL Model Law. During the period of amendments,
however, the term evolved into "electronic data message," and the phrase "but
not limited to, electronic data interchange (EDI), electronic mail, telegram, telex
or telecopy" in the UNCITRAL Model Law was deleted. Furthermore, the term
"electronic data message," though maintaining its description under the
UNCITRAL Model Law, except for the aforesaid deleted phrase, conveyed a
different meaning, as revealed in the following proceedings:
xxxx
Senator Santiago. Yes, Mr. President. I will furnish a copy together with
the explanation of this proposed amendment.
And then finally, before I leave the Floor, may I please be allowed to go
back to Section 5; the Definition of Terms. In light of the acceptance by
the good Senator of my proposed amendments, it will then become
necessary to add certain terms in our list of terms to be defined. I would
like to add a definition on what is "data," what is "electronic record" and
what is an "electronic record system."
If the gentleman will give me permission, I will proceed with the
proposed amendment on Definition of Terms, Section 5.
Senator Magsaysay. Please go ahead, Senator Santiago.
Senator Santiago. We are in Part 1, short title on the Declaration of
Policy, Section 5, Definition of Terms.
At the appropriate places in the listing of these terms that have to be
defined since these are arranged alphabetically, Mr. President, I would
like to insert the term DATA and its definition. So, the amendment will
read: "DATA" MEANS REPRESENTATION, IN ANY FORM, OF
INFORMATION OR CONCEPTS.
The explanation is this: This definition of "data" or "data" as it is now
fashionably pronounced in America - - the definition of "data" ensures
that our bill applies to any form of information in an electronic record,
whether these are figures, facts or ideas.
So again, the proposed amendment is this: "DATA" MEANS
REPRESENTATIONS, IN ANY FORM, OF INFORMATION OR
CONCEPTS.
Senator Magsaysay. May I know how will this affect the definition of
"Data Message" which encompasses electronic records, electronic
writings and electronic documents?
Senator Santiago. These are completely congruent with each other.
These are compatible. When we define "data," we are simply reinforcing
the definition of what is a data message.
Senator Magsaysay. It is accepted, Mr. President.
Senator Santiago. Thank you. The next term is "ELECTRONIC
RECORD." The proposed amendment is as follows:
"ELECTRONIC RECORD" MEANS DATA THAT IS RECORDED OR
STORED ON ANY MEDIUM IN OR BY A COMPUTER SYSTEM OR
OTHER SIMILAR DEVICE, THAT CAN BE READ OR PERCEIVED BY
A PERSON OR A COMPUTER SYSTEM OR OTHER SIMILAR
DEVICE. IT INCLUDES A DISPLAY, PRINTOUT OR OTHER OUTPUT
OF THAT DATA.
The explanation for this term and its definition is as follows: The term
"ELECTRONIC RECORD" fixes the scope of our bill. The record is the
data. The record may be on any medium. It is electronic because it is
recorded or stored in or by a computer system or a similar device.
The amendment is intended to apply, for example, to data on magnetic
strips on cards or in Smart cards. As drafted, it would not apply to
telexes or faxes, except computer-generated faxes, unlike the
United Nations model law on electronic commerce. It would also not
apply to regular digital telephone conversations since the information is
not recorded. It would apply to voice mail since the information has been
recorded in or by a device similar to a computer. Likewise, video records
are not covered. Though when the video is transferred to a website, it
would be covered because of the involvement of the computer. Music
recorded by a computer system on a compact disc would be covered.
In short, not all data recorded or stored in digital form is covered. A
computer or a similar device has to be involved in its creation or
storage. The term "similar device" does not extend to all devices that
create or store data in digital form. Although things that are not recorded
or preserved by or in a computer system are omitted from this bill, these
may well be admissible under other rules of law. This provision focuses
on replacing the search for originality proving the reliability of systems
instead of that of individual records and using standards to show
systems reliability.
Paper records that are produced directly by a computer system such as
printouts are themselves electronic records being just the means of
intelligible display of the contents of the record. Photocopies of the
printout would be paper record subject to the usual rules about copies,
but the original printout would be subject to the rules of admissibility of
this bill.
However, printouts that are used only as paper records and whose
computer origin is never again called on are treated as paper records. In
that case, the reliability of the computer system that produces the record
is irrelevant to its reliability.
Senator Magsaysay. Mr. President, if my memory does not fail me,
earlier, the lady Senator accepted that we use the term "Data Message"
rather than "ELECTRONIC RECORD" in being consistent with the
UNCITRAL term of "Data Message." So with the new amendment of
defining "ELECTRONIC RECORD," will this affect her accepting of the
use of "Data Message" instead of "ELECTRONIC RECORD"?
Senator Santiago. No, it will not. Thank you for reminding me. The term
I would like to insert is ELECTRONIC DATA MESSAGE in lieu of
"ELECTRONIC RECORD."
Senator Magsaysay. Then we are, in effect, amending the term of the
definition of "Data Message" on page 2A, line 31, to which we have
no objection.
Senator Santiago. Thank you, Mr. President.
xxxx
 Senator Santiago. Mr. President, I have proposed all the amendments
that I desire to, including the amendment on the effect of error or
change. I will provide the language of the amendment together with the
explanation supporting that amendment to the distinguished sponsor
and then he can feel free to take it up in any session without any further
intervention.
Senator Magsaysay. Before we end, Mr. President, I understand from
the proponent of these amendments that these are based on
the Canadian E-commerce Law of 1998. Is that not right?
80
Senator Santiago. That is correct.
Thus, when the Senate consequently voted to adopt the term "electronic data
message," it was consonant with the explanation of Senator Miriam Defensor-
Santiago that it would not apply "to telexes or faxes, except computer-generated
faxes, unlike the United Nations model law on electronic commerce." In
explaining the term "electronic record" patterned after the E-Commerce Law of
Canada, Senator Defensor-Santiago had in mind the term "electronic data
message." This term then, while maintaining part of the UNCITRAL Model Law's
terminology of "data message," has assumed a different context, this time,
consonant with the term "electronic record" in the law of Canada. It accounts for
the addition of the word "electronic" and the deletion of the phrase "but not
limited to, electronic data interchange (EDI), electronic mail, telegram, telex or
telecopy." Noteworthy is that the Uniform Law Conference of Canada, explains
the term "electronic record," as drafted in the Uniform Electronic Evidence Act,
in a manner strikingly similar to Sen. Santiago's explanation during the Senate
deliberations:
"Electronic record" fixes the scope of the Act. The record is the data.
The record may be any medium. It is "electronic" because it is recorded
or stored in or by a computer system or similar device. The Act is
intended to apply, for example, to data on magnetic strips on cards, or in
smart cards. As drafted, it would not apply to telexes or faxes (except
computer-generated faxes), unlike the United Nations Model Law on
Electronic Commerce. It would also not apply to regular digital
telephone conversations, since the information is not recorded. It would
apply to voice mail, since the information has been recorded in or by a
device similar to a computer. Likewise video records are not covered,
though when the video is transferred to a Web site it would be, because
of the involvement of the computer. Music recorded by a computer
system on a compact disk would be covered.
In short, not all data recorded or stored in "digital" form is covered. A
computer or similar device has to be involved in its creation or storage.
The term "similar device" does not extend to all devices that create or
store data in digital form. Although things that are not recorded or
preserved by or in a computer system are omitted from this Act, they
may well be admissible under other rules of law. This Act focuses on
replacing the search for originality, proving the reliability of systems
instead of that of individual records, and using standards to show
systems reliability.
Paper records that are produced directly by a computer system, such as
printouts, are themselves electronic records, being just the means of
intelligible display of the contents of the record. Photocopies of the
printout would be paper records subject to the usual rules about copies,
but the "original" printout would be subject to the rules of admissibility of
this Act.
However, printouts that are used only as paper records, and whose
computer origin is never again called on, are treated as paper records.
See subsection 4(2). In this case the reliability of the computer system
81
that produced the record is relevant to its reliability.
There is no question then that when Congress formulated the term "electronic
data message," it intended the same meaning as the term "electronic record" in
the Canada law. This construction of the term "electronic data message,"
which excludes telexes or faxes, except computer-generated faxes, is in
harmony with the Electronic Commerce Law's focus on "paperless"
82
communications and the "functional equivalent approach" that it espouses. In
fact, the deliberations of the Legislature are replete with discussions on
paperless and digital transactions.
Facsimile transmissions are not, in this sense, "paperless," but verily are paper-
based.
83
A facsimile machine, which was first patented in 1843 by Alexander Bain, is a
device that can send or receive pictures and text over a telephone line. It works
by digitizing an image—dividing it into a grid of dots. Each dot is either on or off,
depending on whether it is black or white. Electronically, each dot is represented
by a bit that has a value of either 0 (off) or 1 (on). In this way, the fax machine
translates a picture into a series of zeros and ones (called a bit map) that can be
transmitted like normal computer data. On the receiving side, a fax machine
reads the incoming data, translates the zeros and ones back into dots, and
84
reprints the picture. A fax machine is essentially an image scanner, a modem
and a computer printer combined into a highly specialized package. The
scanner converts the content of a physical document into a digital image, the
modem sends the image data over a phone line, and the printer at the other end
85
makes a duplicate of the original document. Thus, in Garvida v. Sales,
86
Jr., where we explained the unacceptability of filing pleadings through fax
machines, we ruled that:
 A facsimile or fax transmission is a process involving the transmission
and reproduction of printed and graphic matter by scanning an original
copy, one elemental area at a time, and representing the shade or tone
of each area by a specified amount of electric current. The current is
transmitted as a signal over regular telephone lines or via microwave
relay and is used by the receiver to reproduce an image of the
elemental area in the proper position and the correct shade. The
receiver is equipped with a stylus or other device that produces a
printed record on paper referred to as a facsimile.
x x x A facsimile is not a genuine and authentic pleading. It is, at best,
an exact copy preserving all the marks of an original. Without the
original, there is no way of determining on its face whether the facsimile
pleading is genuine and authentic and was originally signed by the party
87
and his counsel. It may, in fact, be a sham pleading.
Accordingly, in an ordinary facsimile transmission, there exists an original paper-
based information or data that is scanned, sent through a phone line, and re-
printed at the receiving end. Be it noted that in enacting the Electronic
Commerce Act of 2000, Congress intended virtual or paperless writings to be
the functional equivalent and to have the same legal function as paper-based
88
documents. Further, in a virtual or paperless environment, technically, there is
no original copy to speak of, as all direct printouts of the virtual reality are the
89
same, in all respects, and are considered as originals. Ineluctably, the law's
definition of "electronic data message," which, as aforesaid, is interchangeable
with "electronic document," could not have included facsimile transmissions,
which have an original paper-based copy as sent and a paper-based
facsimile copy as received. These two copies are distinct from each other, and
have different legal effects. While Congress anticipated future developments in
90
communications and computer technology when it drafted the law, it excluded
the early forms of technology, like telegraph, telex and telecopy (except
computer-generated faxes, which is a newer development as compared to the
ordinary fax machine to fax machine transmission), when it defined the term
"electronic data message."
Clearly then, the IRR went beyond the parameters of the law when it adopted
verbatim the UNCITRAL Model Law's definition of "data message," without
considering the intention of Congress when the latter deleted the phrase "but not
limited to, electronic data interchange (EDI), electronic mail, telegram, telex or
telecopy." The inclusion of this phrase in the IRR offends a basic tenet in the
exercise of the rule-making power of administrative agencies. After all, the
power of administrative officials to promulgate rules in the implementation of a
statute is necessarily limited to what is found in the legislative enactment itself.
The implementing rules and regulations of a law cannot extend the law or
expand its coverage, as the power to amend or repeal a statute is vested in the
91
Legislature. Thus, if a discrepancy occurs between the basic law and an
implementing rule or regulation, it is the former that prevails, because the law
cannot be broadened by a mere administrative issuance—an administrative
92
agency certainly cannot amend an act of Congress. Had the Legislature really
wanted ordinary fax transmissions to be covered by the mantle of the Electronic
Commerce Act of 2000, it could have easily lifted without a bit of tatter the entire
wordings of the UNCITRAL Model Law.
Incidentally, the National Statistical Coordination Board Task Force on the
93
Measurement of E-Commerce, on November 22, 2006, recommended a
working definition of "electronic commerce," as "[a]ny commercial transaction
conducted through electronic, optical and similar medium, mode, instrumentality
and technology. The transaction includes the sale or purchase of goods and
services, between individuals, households, businesses and governments
conducted over computer-mediated networks through the Internet, mobile
phones, electronic data interchange (EDI) and other channels through open and
closed networks." The Task Force's proposed definition is similar to the
Organization of Economic Cooperation and Development's (OECD's) broad
definition as it covers transactions made over any network, and, in addition, it
adopted the following provisions of the OECD definition: (1) for transactions, it
covers sale or purchase of goods and services; (2) for channel/network, it
considers any computer-mediated network and NOT limited to Internet alone;
(3) it excludes transactions received/placed using fax, telephone or non-
interactive mail; (4) it considers payments done online or offline; and (5) it
considers delivery made online (like downloading of purchased books, music or
94
software programs) or offline (deliveries of goods).
We, therefore, conclude that the terms "electronic data message" and
"electronic document," as defined under the Electronic Commerce Act of 2000,
do not include a facsimile transmission. Accordingly, a facsimile
transmissioncannot be considered as electronic evidence. It is not the
functional equivalent of an original under the Best Evidence Rule and is not
admissible as electronic evidence.
Since a facsimile transmission is not an "electronic data message" or an
"electronic document," and cannot be considered as electronic evidence by the
Court, with greater reason is a photocopy of such a fax transmission not
electronic evidence. In the present case, therefore, Pro Forma Invoice
Nos. ST2-POSTS0401-1 and ST2-POSTS0401-2 (Exhibits "E" and "F"), which
are mere photocopies of the original fax transmittals, are not electronic
evidence, contrary to the position of both the trial and the appellate courts.
- III -
Nevertheless, despite the pro forma invoices not being electronic evidence, this
Court finds that respondent has proven by preponderance of evidence the
existence of a perfected contract of sale.
In an action for damages due to a breach of a contract, it is essential that the as coming from defendant
claimant proves (1) the existence of a perfected contract, (2) the breach thereof MCC on 26 Apr 00 08:41AM
by the other contracting party and (3) the damages which he/she sustained due E-2 Conforme signature of Mr. To show that defendants sent their
to such breach. Actori incumbit onus probandi. The burden of proof rests on the Gregory Chan, contained in confirmation of the (i) delivery to it
95
party who advances a proposition affirmatively. In other words, a plaintiff in a facsimile/thermal paper faxed of the total of 220MT specified
civil action must establish his case by a preponderance of evidence, that is, by defendants to plaintiff stainless steel products, (ii)
evidence that has greater weight, or is more convincing than that which is showing the printed defendants' payment thereof by
96
offered in opposition to it. transmission details on the way of an irrevocable letter of
97
upper portion of said paper credit in favor of plaintiff, among
In general, contracts are perfected by mere consent, which is manifested by as coming from defendant other conditions.
the meeting of the offer and the acceptance upon the thing and the cause which MCC on 26 Apr 00 08:41AM
are to constitute the contract. The offer must be certain and the acceptance F Pro forma Invoice dated 17 To show that defendants
98
absolute. They are, moreover, obligatory in whatever form they may have been April 2000 with Contract contracted with plaintiff for delivery
entered into, provided all the essential requisites for their validity are No. ST2-POSTSO401-
99 of another 110 MT of stainless
present. Sale, being a consensual contract, follows the general rule that it is 2, photocopy steel from Korea payable by way
perfected at the moment there is a meeting of the minds upon the thing which is
of an irrevocable letter of credit in
the object of the contract and upon the price. From that moment, the parties may
favor of plaintiff, among other
reciprocally demand performance, subject to the provisions of the law governing conditions.
100
the form of contracts.
G Letter to defendant SANYO To prove that defendants were
SEIKE dated 20 June informed of the date of L/C
The essential elements of a contract of sale are (1) consent or meeting of the
2000, contained in opening and
minds, that is, to transfer ownership in exchange for the price, (2) object certain
facsimile/thermal paper defendant's conforme/approval
which is the subject matter of the contract, and (3) cause of the obligation which
101 G-1 Signature of defendant thereof.
is established.
Gregory Chan, contained in
facsimile/thermal paper.
In this case, to establish the existence of a perfected contract of sale between
the parties, respondent Ssangyong formally offered in evidence the testimonies H Letter to defendants dated 22 To prove that defendants were
of its witnesses and the following exhibits: June 2000, original informed of the successful price
adjustments secured by plaintiff in
favor of former and were advised
Exhibit Description Purpose of the schedules of its L/C
E Pro forma Invoice dated 17 To show that defendants opening.
April 2000 with Contract contracted with plaintiff for the
I Letter to defendants dated 26 To prove that plaintiff repeatedly
No. ST2-POSTS0401- delivery of 110 MT of stainless June 2000, original requested defendants for the
1, photocopy steel from Korea payable by way
of an irrevocable letter of credit in J Letter to defendants dated 26 agreed opening of the Letters of
June 2000, original Credit, defendants' failure and
favor of plaintiff, among other refusal to comply with their
conditions. K Letter to defendants dated 27
obligations and the problems of
E-1 Pro forma Invoice dated 17 To show that defendants sent their June 2000, original
plaintiff is incurring by reason of
April 2000 with Contract confirmation of the (i) delivery to it L Facsimile message to defendants' failure and refusal to
No. ST2- of the specified stainless steel defendants dated 28 June open the L/Cs.
POSTS0401, contained in products, (ii) defendants' payment 2000, photocopy
facsimile/thermal paper faxed thereof by way of an irrevocable M Letter from defendants dated To prove that defendants admit of
by defendants to plaintiff letter of credit in favor of plaintiff, 29 June 2000, contained in their liabilities to plaintiff, that they
showing the printed among other conditions. facsimile/thermal paper faxed requested for "more extension" of
transmission details on the by defendants to plaintiff time for the opening of the Letter
upper portion of said paper showing the printed of Credit, and begging for
 transmission details on the favorable understanding and 2000, with fax back from 220 metric tons of steel products
upper portion of said paper consideration. defendants SANYO at the price of US$1,860/ton.
as coming from defendant SEIKI/MCC to plaintiff
MCC on 29 June 00 11:12 SSANGYONG, contained in
AM facsimile/thermal paper with
M-1 Signature of defendant back-up photocopy
Gregory Chan, contained in W-1 Conforme signature of To prove that defendants, acting
facsimile/thermal paper faxed defendant Gregory Chan, through Gregory Chan, agreed to
by defendants to plaintiff contained in the sale and purchase of 220
showing the printed facsimile/thermal paper with metric tons of steel products at the
transmission details on the back-up photocopy price of US$1,860/ton.
upper portion of said paper W-2 Name of sender MCC To prove that defendants sent
as coming from defendant Industrial Sales Corporation their conformity to the sale and
MCC on June 00 11:12 AM purchase agreement by facsimile
N Letter to defendants dated 29 transmission.
June 2000, original X Pro forma Invoice dated 16 To prove that defendant MCC agreed
O Letter to defendants dated 30 To prove that plaintiff reiterated its August 2000, photocopy to adjust and split the confirmed
June 2000, photocopy request for defendants to L/C purchase order into 2 shipments at
opening after the latter's request 100 metric tons each at the
for extension of time was granted, discounted price of US$1,700/ton.
defendants' failure and refusal to X-1 Notation "1/2", photocopy To prove that the present Pro forma
comply therewith extension of time Invoice was the first of 2 pro forma
notwithstanding. invoices.
P Letter to defendants dated 06 X-2 Ref. No. ST2-POSTS080- To prove that the present Pro
July 2000, original 1, photocopy formaInvoice was the first of 2 pro
Q Demand letter to defendants To prove that plaintiff was formainvoices.
dated 15 Aug 2000, original constrained to engaged services X-3 Conforme signature of To prove that defendant MCC, acting
of a lawyer for collection efforts. defendant Gregory through Gregory Chan, agreed to the
R Demand letter to defendants To prove that defendants opened Chan, photocopy sale and purchase of the balance of
dated 23 Aug 2000, original the first L/C in favor of plaintiff, 100 metric tons at the discounted
requested for further price of US$1,700/ton, apart from the
postponement of the final L/C and other order and shipment of 100
for minimal amounts, were urged metric tons which was delivered by
to open the final L/C on time, and plaintiff SSANGYONG and paid for
were informed that failure to by defendant MCC.
comply will cancel the contract. DD Letter from defendant MCC To prove that there was a perfected
S Demand letter to defendants To show defendants' refusal and to plaintiff SSANGYONG sale and purchase agreement
dated 11 Sept 2000, original failure to open the final L/C on dated 22 August between plaintiff SSANGYONG and
time, the cancellation of the 2000, contained in defendant MCC for the balance of
contract as a consequence facsimile/thermal paper with 100 metric tons, apart from the other
thereof, and final demand upon back-up photocopy order and shipment of 100 metric
defendants to remit its obligations. tons which was delivered by plaintiff
W Letter from plaintiff To prove that there was a SSANGYONG and paid for by
SSANGYONG to defendant perfected sale and purchase defendant MCC.
SANYO SEIKI dated 13 April agreement between the parties for DD- Ref. No. ST2-POSTS080- To prove that there was a perfected
 1 1, contained in sale and purchase agreement
facsimile/thermal paper with between plaintiff SSANGYONG and
back-up photocopy defendant MCC for the balance of
100 metric tons, apart from the other
order and shipment of 100 metric
tons which was delivered by plaintiff
SSANGYONG and paid for by
defendant MCC.
DD- Signature of defendant To prove that defendant MCC, acting
2 Gregory Chan, contained in through Gregory Chan, agreed to the
facsimile/thermal paper with sale and purchase of the balance of
back-up photocopy 100 metric tons, apart from the other
order and shipment of 100 metric
tons which was delivered by plaintiff
Ssangyong and paid for by defendant
102
MCC.
Significantly, among these documentary evidence presented by respondent,
MCC, in its petition before this Court, assails the admissibility only of Pro
Forma Invoice Nos. ST2-POSTS0401-1 and ST2-POSTS0401-2 (Exhibits "E"
and "F"). After sifting through the records, the Court found that these invoices
are mere photocopies of their original fax transmittals. Ssangyong avers that
these documents were prepared after MCC asked for the splitting of the original
order into two, so that the latter can apply for an L/C with greater facility. It,
however, failed to explain why the originals of these documents were not
presented.
To determine whether these documents are admissible in evidence, we apply
the ordinary Rules on Evidence, for as discussed above we cannot apply the
Electronic Commerce Act of 2000 and the Rules on Electronic Evidence.
Because these documents are mere photocopies, they are simply secondary
evidence, admissible only upon compliance with Rule 130, Section 5, which
states, "[w]hen the original document has been lost or destroyed, or cannot be
produced in court, the offeror, upon proof of its execution or existence and the
cause of its unavailability without bad faith on his part, may prove its contents by
a copy, or by a recital of its contents in some authentic document, or by the
testimony of witnesses in the order stated." Furthermore, the offeror of
secondary evidence must prove the predicates thereof, namely: (a) the loss or
destruction of the original without bad faith on the part of the proponent/offeror
which can be shown by circumstantial evidence of routine practices of
destruction of documents; (b) the proponent must prove by a fair preponderance
of evidence as to raise a reasonable inference of the loss or destruction of the
original copy; and (c) it must be shown that a diligent and bona fide but
unsuccessful search has been made for the document in the proper place or
places. It has been held that where the missing document is the foundation of
the action, more strictness in proof is required than where the document is only
103
collaterally involved.
Given these norms, we find that respondent failed to prove the existence of the
original fax transmissions of Exhibits E and F, and likewise did not sufficiently
prove the loss or destruction of the originals. Thus, Exhibits E and F cannot be
admitted in evidence and accorded probative weight.
It is observed, however, that respondent Ssangyong did not rely merely on
Exhibits E and F to prove the perfected contract. It also introduced in evidence a
variety of other documents, as enumerated above, together with the testimonies
of its witnesses. Notable among them are Pro Forma Invoice Nos. ST2-
POSTS080-1 and ST2-POSTS080-2 which were issued by Ssangyong and sent
via fax to MCC. As already mentioned, these invoices slightly varied the terms of
the earlier invoices such that the quantity was now officially 100MT per invoice
and the price reduced to US$1,700.00 per MT. The copies of the said August
16, 2000 invoices submitted to the court bear the conformity signature of MCC
Manager Chan.
Pro Forma Invoice No. ST2-POSTS080-1 (Exhibit "X"), however, is a mere
photocopy of its original. But then again, petitioner MCC does not assail the
admissibility of this document in the instant petition. Verily, evidence not
objected to is deemed admitted and may be validly considered by the court in
104
arriving at its judgment. Issues not raised on appeal are deemed abandoned.
As to Pro Forma Invoice No. ST2-POSTS080-2 (Exhibits "1-A" and "2-C"), which
105
was certified by PCIBank as a true copy of its original, it was, in fact,
petitioner MCC which introduced this document in evidence. Petitioner MCC
paid for the order stated in this invoice. Its admissibility, therefore, is not open to
question.
These invoices (ST2-POSTS0401, ST2-POSTS080-1 and ST2-POSTS080-2),
along with the other unchallenged documentary evidence of respondent
Ssangyong, preponderate in favor of the claim that a contract of sale was
perfected by the parties.
This Court also finds merit in the following observations of the trial court:
Defendants presented Letter of Credit (Exhibits "1", "1-A" to "1-R")
referring to Pro Forma Invoice for Contract No. ST2POSTS080-2, in the
amount of US$170,000.00, and which bears the signature of Gregory
Chan, General Manager of MCC. Plaintiff, on the other hand, presented
Pro Forma Invoice referring to Contract No. ST2-POSTS080-1, in the
amount of US$170,000.00, which likewise bears the signature of
Gregory Chan, MCC. Plaintiff accounted for the notation "1/2" on the
right upper portion of the Invoice, that is, that it was the first of two (2)
 pro forma invoices covering the subject contract between plaintiff and
the defendants. Defendants, on the other hand, failed to account for the
notation "2/2" in its Pro Forma Invoice (Exhibit "1-A"). Observably
further, both Pro Forma Invoices bear the same date and details, which
106
logically mean that they both apply to one and the same transaction.
Indeed, why would petitioner open an L/C for the second half of the transaction if
there was no first half to speak of?
The logical chain of events, as gleaned from the evidence of both parties,
started with the petitioner and the respondent agreeing on the sale and
purchase of 220MT of stainless steel at US$1,860.00 per MT. This initial
contract was perfected. Later, as petitioner asked for several extensions to pay,
adjustments in the delivery dates, and discounts in the price as originally
agreed, the parties slightly varied the terms of their contract, without necessarily
novating it, to the effect that the original order was reduced to 200MT, split into
two deliveries, and the price discounted to US$1,700 per MT. Petitioner,
however, paid only half of its obligation and failed to open an L/C for the other
100MT. Notably, the conduct of both parties sufficiently established the
existence of a contract of sale, even if the writings of the parties, because of
their contested admissibility, were not as explicit in establishing a
107
contract. Appropriate conduct by the parties may be sufficient to establish an
agreement, and while there may be instances where the exchange of
correspondence does not disclose the exact point at which the deal was closed,
the actions of the parties may indicate that a binding obligation has been
108
undertaken.
With our finding that there is a valid contract, it is crystal-clear that when
petitioner did not open the L/C for the first half of the transaction (100MT),
despite numerous demands from respondent Ssangyong, petitioner breached its
contractual obligation. It is a well-entrenched rule that the failure of a buyer to
furnish an agreed letter of credit is a breach of the contract between buyer and
seller. Indeed, where the buyer fails to open a letter of credit as stipulated, the
seller or exporter is entitled to claim damages for such breach. Damages for
failure to open a commercial credit may, in appropriate cases, include the loss of
profit which the seller would reasonably have made had the transaction been
109
carried out.
- IV -
This Court, however, finds that the award of actual damages is not in accord
with the evidence on record. It is axiomatic that actual or compensatory
damages cannot be presumed, but must be proven with a reasonable degree of
110 111
certainty. In Villafuerte v. Court of Appeals, we explained that:
Actual or compensatory damages are those awarded in order to
compensate a party for an injury or loss he suffered. They arise out of a
sense of natural justice and are aimed at repairing the wrong done.
Except as provided by law or by stipulation, a party is entitled to an
adequate compensation only for such pecuniary loss as he has duly
proven. It is hornbook doctrine that to be able to recover actual
damages, the claimant bears the onus of presenting before the court
actual proof of the damages alleged to have been suffered, thus:
A party is entitled to an adequate compensation for such
pecuniary loss actually suffered by him as he has duly proved.
Such damages, to be recoverable, must not only be capable of
proof, but must actually be proved with a reasonable degree of
certainty. We have emphasized that these damages cannot be
presumed and courts, in making an award must point out
specific facts which could afford a basis for measuring whatever
112
compensatory or actual damages are borne.
In the instant case, the trial court awarded to respondent Ssangyong
US$93,493.87 as actual damages. On appeal, the same was affirmed by the
appellate court. Noticeably, however, the trial and the appellate courts, in
making the said award, relied on the following documents submitted in evidence
by the respondent: (1) Exhibit "U," the Statement of Account dated March 30,
2001; (2) Exhibit "U-1," the details of the said Statement of Account); (3) Exhibit
"V," the contract of the alleged resale of the goods to a Korean corporation; and
(4) Exhibit "V-1," the authentication of the resale contract from the Korean
Embassy and certification from the Philippine Consular Office.
The statement of account and the details of the losses sustained by respondent
due to the said breach are, at best, self-serving. It was respondent Ssangyong
itself which prepared the said documents. The items therein are not even
substantiated by official receipts. In the absence of corroborative evidence, the
said statement of account is not sufficient basis to award actual damages. The
court cannot simply rely on speculation, conjecture or guesswork as to the fact
and amount of damages, but must depend on competent proof that the claimant
113
had suffered, and on evidence of, the actual amount thereof.
Furthermore, the sales contract and its authentication certificates, Exhibits "V"
and "V-1," allegedly evidencing the resale at a loss of the stainless steel subject
of the parties' breached contract, fail to convince this Court of the veracity of its
114
contents. The steel items indicated in the sales contract with a Korean
corporation are different in all respects from the items ordered by petitioner
MCC, even in size and quantity. We observed the following discrepancies:
List of commodities as stated in Exhibit "V":
 COMMODITY: Stainless Steel HR Sheet in Coil, Slit Edge are 'recoverable where a legal right is technically violated and must be
SPEC: SUS304 NO. 1 vindicated against an invasion that has produced no actual present loss of any
SIZE/Q'TY: kind or where there has been a breach of contract and no substantial injury or
117
actual damages whatsoever have been or can be shown.'" Accordingly, the
2.8MM X 1,219MM X C 8.193MT Court awards nominal damages of P200,000.00 to respondent Ssangyong.
3.0MM X 1,219MM X C 7.736MT
3.0MM X 1,219MM X C 7.885MT As to the award of attorney's fees, it is well settled that no premium should be
3.0MM X 1,219MM X C 8.629MT placed on the right to litigate and not every winning party is entitled to an
automatic grant of attorney's fees. The party must show that he falls under one
4.0MM X 1,219MM X C 7.307MT 118
of the instances enumerated in Article 2208 of the Civil Code. In the instant
4.0MM X 1,219MM X C 7.247MT case, however, the Court finds the award of attorney's fees proper, considering
4.5MM X 1,219MM X C 8.450MT that petitioner MCC's unjustified refusal to pay has compelled respondent
4.5MM X 1,219MM X C 8.870MT Ssangyong to litigate and to incur expenses to protect its rights.
5.0MM X 1,219MM X C 8.391MT
WHEREFORE, PREMISES CONSIDERED, the appeal is PARTIALLY
6.0MM X 1,219MM X C 6.589MT GRANTED. The Decision of the Court of Appeals in CA-G.R. CV No. 82983
6.0MM X 1,219MM X C 7.878MT is MODIFIED in that the award of actual damages is DELETED. However,
6.0MM X 1,219MM X C 8.397MT petitioner is ORDERED to pay respondent NOMINAL DAMAGES in the amount
TOTAL: 95.562MT
115 of P200,000.00, and the ATTORNEY'S FEES as awarded by the trial court.

SO ORDERED.
List of commodities as stated in Exhibit "X" (the invoice that was not
paid):

DESCRIPTION: Hot Rolled Stainless Steel Coil SUS 304

SIZE AND QUANTITY:
2.6 MM X 4' X C 10.0MT
3.0 MM X 4' X C 25.0MT
4.0 MM X 4' X C 15.0MT
4.5 MM X 4' X C 15.0MT
5.0 MM X 4' X C 10.0MT
6.0 MM X 4' X C 25.0MT
116
TOTAL: 100MT

From the foregoing, we find merit in the contention of MCC that Ssangyong did
not adequately prove that the items resold at a loss were the same items
ordered by the petitioner. Therefore, as the claim for actual damages was not
proven, the Court cannot sanction the award.

Nonetheless, the Court finds that petitioner knowingly breached its contractual
obligation and obstinately refused to pay despite repeated demands from
respondent. Petitioner even asked for several extensions of time for it to make
good its obligation. But in spite of respondent's continuous accommodation,
petitioner completely reneged on its contractual duty. For such inattention and
insensitivity, MCC must be held liable for nominal damages. "Nominal damages
G.R. No. 171601 April 8, 2015 LUCIA PARAS, of legal age, Filipino, married and resident of Poblacion, Toledo
City, Province of Cebu, hereinafter referred to as the SUPPLIER:
SPOUSES BONIFACIO AND LUCIA PARAS, Petitioners,
vs. -and-
KIMWA CONSTRUCTION AND DEVELOPMENT
CORPORATION, Respondent. KIMWA CONSTRUCTION AND DEVELOPMENT CORP., a corporation duly
organized and existing under the laws of the Philippines with office address at
DECISION Subangdaku, Mandaue City, hereinafter represented by its President MRS.
CORAZON Y. LUA, of legal age, Filipino and a resident of Subangdaku,
LEONEN, J.: Mandaue City[,] hereinafter referred to as the CONTRACTOR;

1 W I T N E S S E T H:
This resolves the Petition for Review on Certiorari under Rule 45 of the 1997
2
Rules of Civil Procedure praying that the assailed Decision dated July 4, 2005
3
and Resolution dated February 9, 2006 of the Court of Appeals Special 20th That the SUPPLIER is [sic] Special Permittee of (Rechanelling Block # VI of
Division in CA-G.R. CV No. 74682 be reversed and set aside, and that the Sapang Daco River along Barangay Ilihan) located at Toledo City under the
4
Decision of Branch 55 of the Regional Trial Court, Mandaue City dated May 16, terms and conditions:
5
2001 in Civil Case No. MAN-2412 be reinstated.
1. That the aggregates is [sic] to be picked-up by the
The trial court's May 16, 2001 Decision ruled in favor of petitioners Spouses CONTRACTOR at the SUPPLIER [sic] permitted area at the
Bonifacio and Lucia Paras (plaintiffs before the Regional Trial Court) in their rate of TWO HUNDRED FORTY (P 240.00) PESOS per truck
action for breach of contract with damages against respondent Kimwa load;
6
Construction and Development Corporation (Kimwa). The assailed Decision of
the Court of Appeals reversed and set aside the trial court’s May 16, 2001 2. That the volume allotted by the SUPPLIER to the
7
Decision and dismissed Spouses Paras’ Complaint. The Court of Appeals’ CONTRACTOR is limited to 40,000 cu.m.; 3. That the said
8
assailed Resolution denied Spouses Paras’ Motion for Reconsideration. Aggregates is [sic] for the exclusive use of the Contractor;

Lucia Paras (Lucia) was a "concessionaire of a sand and gravel permit at 4. That the terms of payment is Fifteen (15) days after the
9
Kabulihan, Toledo City[.]" Kimwa is a "construction firm that sells concrete receipt of billing;
10
aggregates to contractors and haulers in . . . Cebu."
5. That there is [sic] no modification, amendment, assignment or
On December 6, 1994, Lucia and Kimwa entered into a contract denominated transfer of this Agreement after acceptance shall be binding
"Agreement for Supply of Aggregates" (Agreement) where 40,000 cubic meters upon the SUPPLIER unless agreed to in writing by and between
11 12
of aggregates were "allotted" by Lucia as supplier to Kimwa. Kimwa was to the CONTRACTOR and SUPPLIER.
13
pick up the allotted aggregates at Lucia’s permitted area in Toledo City at
14
₱240.00 per truckload.
IN WITNESS WHEREOF, we have hereunto affixed our signatures this 6th day
of December, 1994 at Mandaue City, Cebu, Philippines.
The entirety of this Agreement reads:
LUCIA PARAS(sgd.) CORAZON Y. LUA(sgd.)
AGREEMENT FOR SUPPLY OF AGGREGATES Supplier Contractor

KNOW ALL MEN BY THESE PRESENTS:

(Emphasis supplied)
This Agreement made and entered into by and between:
Pursuant to the Agreement, Kimwa hauled 10,000 cubic meters of aggregates.
16
Sometime after this, however, Kimwa stopped hauling aggregates.
Claiming that in so doing, Kimwa violated the Agreement, Lucia, joined by her that Kimwa must have been aware that the 40,000 cubic meters of aggregates
17
husband, Bonifacio, filed the Complaint for breach of contract with damages allotted to it must necessarily be hauled by May 15, 1995. As it failed to do so, it
that is now subject of this Petition. was liable to Spouses Paras for the total sum of ₱720,000.00, the value of the
30,000 cubic meters of aggregates that Kimwa did not haul, in addition to
33
In their Complaint, Spouses Paras alleged that sometime in December 1994, attorney’s fees and costs of suit.
Lucia was approached by Kimwa expressing its interest to purchase gravel and
18 19
sand from her. Kimwa allegedly asked that it be "assured" of 40,000 cubic On appeal, the Court of Appeals reversed the Regional Trial Court’s Decision. It
20
meters worth of aggregates. Lucia countered that her concession area was faulted the trial court for basing its findings on evidence presented which were
due to be rechanneled on May 15,1995, when her Special Permit supposedly in violation of the Parol Evidence Rule. It noted that the Agreement
21
expires. Thus, she emphasized that she would be willing to enter into a was clear that Kimwa was under no obligation to haul 40,000 cubic meters of
34
contract with Kimwa "provided the forty thousand cubic meter[s] w[ould] be aggregates by May 15, 1995.
22
withdrawn or completely extracted and hauled before 15 May 1995[.]" Kimwa
then assured Lucia that it would take only two to three months for it to In a subsequent Resolution, the Court of Appeals denied reconsideration to
23
completely haul the 40,000 cubic meters of aggregates. Convinced of Kimwa’s Spouses Paras.
35
24
assurances, Lucia and Kimwa entered into the Agreement.
Hence, this Petition was filed.
Spouses Paras added that within a few days, Kimwa was able to extract and
haul 10,000 cubic meters of aggregates. However, after extracting and hauling The issue for resolution is whether respondent Kimwa Construction and
this quantity, Kimwa allegedly transferred to the concession area of a certain
Development Corporation is liable to petitioners Spouses Paras for (admittedly)
Mrs. Remedios dela Torre in violation of their Agreement. They then addressed
failing to haul 30,000 cubic meters of aggregates from petitioner Lucia Paras’
demand letters to Kimwa. As these went unheeded, Spouses Paras filed their
25 permitted area by May 15, 1995.
Complaint.

26 To resolve this, it is necessary to determine whether petitioners Spouses Paras

In its Answer, Kimwa alleged that it never committed to obtain 40,000 cubic
were able to establish that respondent Kimwa was obliged to haul a total of
meters of aggregates from Lucia. It argued that the controversial quantity of
40,000 cubic meters of aggregates on or before May 15, 1995.
40,000 cubic meters represented only an upper limit or the maximum quantity
27
that it could haul. It likewise claimed that it neither made any commitment to
haul 40,000 cubic meters of aggregates before May 15, 1995 nor represented We reverse the Decision of the Court of Appeals and reinstate that of the
28
that the hauling of this quantity could be completed in two to three months. It Regional Trial Court. Respondent Kimwa is liable for failing to haul the
denied that the hauling of 10,000 cubic meters of aggregates was completed in remainder of the quantity which it was obliged to acquire from petitioner Lucia
a matter of days and countered that it took weeks to do so. It also denied Paras.
29
transferring to the concession area of a certain Mrs. Remedios dela Torre.
I
Kimwa asserted that the Agreement articulated the parties’ true intent that
40,000 cubic meters was a maximum limit and that May 15, 1995 was never set Rule 130, Section 9 of the Revised Rules on Evidence provides for the Parol
as a deadline. Invoking the Parol Evidence Rule, it insisted that Spouses Paras Evidence Rule, the rule on admissibility of documentary evidence when the
were barred from introducing evidence which would show that the parties had terms of an agreement have been reduced into writing:
30
agreed differently.
Section 9. Evidence of written agreements. — When the terms of an agreement
On May 16, 2001, the Regional Trial Court rendered the Decision in favor of have been reduced to writing, it is considered as containing all the terms agreed
Spouses Paras. The trial court noted that the Agreement stipulated that the upon and there can be, between the parties and their successors in interest, no
allotted aggregates were set aside exclusively for Kimwa. It reasoned that it was evidence of such terms other than the contents of the written agreement.
contrary to human experience for Kimwa to have entered into an Agreement
with Lucia without verifying the latter’s authority as a However, a party may present evidence to modify, explain or add to the terms of
31 32
concessionaire. Considering that the Special Permit granted to Lucia written agreement if he puts in issue in his pleading:
(petitioners’ Exhibit "A" before the trial court) clearly indicated that her authority
was good for only six (6) months from November 14, 1994, the trial court noted
 (a) An intrinsic ambiguity, mistake or imperfection in the written
agreement;
(b) The failure of the written agreement to express the true intent and
agreement of the parties thereto;
(c) The validity of the written agreement; or
(d) The existence of other terms agreed to by the parties or their
successors in interest after the execution of the written agreement.
The term "agreement" includes wills.
Per this rule, reduction to written form, regardless of the formalities
36
observed, "forbids any addition to, or contradiction of, the terms of a written
agreement by testimony or other evidence purporting to show that different
terms were agreed upon by the parties, varying the purport of the written
37
contract."
This rule is animated by a perceived wisdom in deferring to the contracting
parties’ articulated intent. In choosing to reduce their agreement into writing,
they are deemed to have done so meticulously and carefully, employing specific
— frequently, even technical — language as are appropriate to their context.
From an evidentiary standpoint, this is also because "oral testimony . . . coming
from a party who has an interest in the outcome of the case, depending
exclusively on human memory, is not as reliable as written or documentary
evidence. Spoken words could be notoriously unreliable unlike a written contract
38
which speaks of a uniform language." As illustrated in Abella v. Court of
39
Appeals:
Without any doubt, oral testimony as to a certain fact, depending as it does
exclusively on human memory, is not as reliable as written or documentary
evidence.1âwphi1 "I would sooner trust the smallest slip of paper for truth," said
Judge Limpkin of Georgia, "than the strongest and most retentive memory ever
bestowed on mortal man." This is especially true in this case where such oral
testimony is given by . . . a party to the case who has an interest in its outcome,
and by . . . a witness who claimed to have received a commission from the
40
petitioner.
This, however, is merely a general rule. Provided that a party puts in issue in its
pleading any of the four(4) items enumerated in the second paragraph of Rule
130, Section 9, "a party may present evidence to modify, explain or add to the
41
terms of the agreement[.]" Raising any of these items as an issue in a pleading
such that it falls under the exception is not limited to the party initiating an action.
42
In Philippine National Railways v. Court of First Instance of Albay, this court
noted that "if the defendant set up the affirmative defense that the contract
mentioned in the complaint does not express the true agreement of the parties,
then parol evidence is admissible to prove the true agreement of the
43
parties[.]" Moreover, as with all possible objections to the admission of
evidence, a party’s failure to timely object is deemed a waiver, and parol
evidence may then be entertained.
Apart from pleading these exceptions, it is equally imperative that the parol
evidence sought to be introduced points to the conclusion proposed by the party
presenting it. That is, it must be relevant, tending to "induce belief in [the]
44
existence" of the flaw, true intent, or subsequent extraneous terms averred by
the party seeking to introduce parol evidence.
In sum, two (2) things must be established for parol evidence to be admitted:
first, that the existence of any of the four (4) exceptions has been put in issue in
a party’s pleading or has not been objected to by the adverse party; and second,
that the parol evidence sought to be presented serves to form the basis of the
conclusion proposed by the presenting party.
II
Here, the Court of Appeals found fault in the Regional Trial Court for basing its
findings "on the basis of evidence presented in violation of the parol evidence
45
rule." It proceeded to fault petitioners Spouses Paras for showing "no proof . . .
46
of [respondent Kimwa’s] obligation." Then, it stated that "[t]he stipulations in
47
the agreement between the parties leave no room for interpretation."
The Court of Appeals is in serious error.
At the onset, two (2) flaws in the Court of Appeals’ reasoning must be
emphasized. First, it is inconsistent to say, on one hand, that the trial court erred
48
on the basis of "evidence presented" (albeit supposedly in violation of the
Parol Evidence Rule),and, on the other, that petitioners Spouses Paras showed
49
"no proof." Second, without even accounting for the exceptions provided by
Rule 130, Section 9, the Court of Appeals immediately concluded that whatever
evidence petitioners Spouses Paras presented was in violation of the Parol
Evidence Rule.
Contrary to the Court of Appeal’s conclusion, petitioners Spouses Paras pleaded
in the Complaint they filed before the trial court a mistake or imperfection in the
Agreement, as well as the Agreement’s failure to express the true intent of the
parties. Further, respondent Kimwa, through its Answer, also responded to
petitioners Spouses Paras’ pleading of these issues. This is, thus, an
exceptional case allowing admission of parol evidence.
Paragraphs 6 to 10 of petitioners’ Complaint read:
 6. Sensing that the buyers-contractors and haulers alike could easily
consumed [sic] the deposits defendant proposed to the plaintiff-wife that
it be assured of a forty thousand (40,000) cubic meter [sic];
7. Plaintiff countered that the area is scheduled to be rechanneled on 15
May 1995 and by that time she will be prohibited to sell the aggregates;
8. She further told the defendant that she would be willing to enter into a
contract provided the forty thousand cubic meter [sic] will be withdrawn
or completely extracted and hauled before 15 May 1995, the scheduled
rechanneling;
9. Defendant assured her that it will take them only two to three months
to haul completely the desired volume as defendant has all the trucks
needed;
10. Convinced of the assurances, plaintiff-wife and the defendant
entered into a contract for the supply of the aggregates sometime on 6
December 1994 or thereabouts, at a cost of Two Hundred Forty
50
(₱240.00) Pesos per truckload[.]
It is true that petitioners Spouses Paras’ Complaint does not specifically state
words and phrases such as "mistake," "imperfection," or "failure to express the
true intent of the parties." Nevertheless, it is evident that the crux of petitioners
Spouses Paras’ Complaint is their assertion that the Agreement "entered into . .
51
. on 6 December 1994 or thereabouts" was founded on the parties’ supposed
understanding that the quantity of aggregates allotted in favor of respondent
Kimwa must be hauled by May 15, 1995, lest such hauling be rendered
impossible by the rechanneling of petitioner Lucia Paras’ permitted area. This
assertion is the very foundation of petitioners’ having come to court for relief.
Proof of how petitioners Spouses Paras successfully pleaded and put this in
issue in their Complaint is how respondent Kimwa felt it necessary to respond to
it or address it in its Answer. Paragraphs 2 to 5 of respondent Kimwa’s Answer
read:
2. The allegation in paragraph six of the complaint is admitted subject to
the qualification that when defendant offered to buy aggregates from the
concession of the plaintiffs, it simply asked the plaintiff concessionaire if
she could sell a sufficient supply of aggregates to be used in
defendant’s construction business and plaintiff concessionaire agreed to
sell to the defendant aggregates from her concession up to a limit of
40,000 cubic meters at the price of ₱240.00 per cubic meter.
3. The allegations in paragraph seven and eight of the complaint are
vehemently denied by the defendant. The contract which was entered
into by the plaintiffs and the defendant provides only that the former
supply the latter the volume of 40,000.00 cubic meters of aggregates.
There is no truth to the allegation that the plaintiff wife entered into the
contract under the condition that the aggregates must be quarried and
hauled by defendant completely before May 15, 1995, otherwise this
would have been unequivocally stipulated in the contract.
4. The allegation in paragraph nine of the complaint is hereby denied.
The defendant never made any assurance to the plaintiff wife that it will
take only two to three months to haul the aforesaid volume of
aggregates. Likewise, the contract is silent on this aspect for in fact
there is no definite time frame agreed upon by the parties within which
defendant is to quarry and haul aggregates from the concession of the
plaintiffs.
5. The allegation in paragraph ten of the complaint is admitted insofar as
the execution of the contract is concerned. However, the contract was
executed, not by reason of the alleged assurances of the defendant to
the plaintiffs, as claimed by the latter, but because of the intent and
willingness of the plaintiffs to supply and sell aggregates to it. It was
upon the instance of the plaintiff that the defendant sign the subject
contract to express in writing their agreement that the latter would haul
aggregates from plaintiffs’ concession up to such point in time that the
maximum limit of 40,000 cubic meters would be quarried and hauled
without a definite deadline being set. Moreover, the contract does not
obligate the defendant to consume the allotted volume of 40,000 cubic
meters.
52
Considering how the Agreement’s mistake, imperfection, or supposed failure to
express the parties’ true intent was successfully put in issue in petitioners
Spouses Paras’ Complaint (and even responded to by respondent Kimwa in its
Answer), this case falls under the exceptions provided by Rule 130, Section 9 of
the Revised Rules on Evidence. Accordingly, the testimonial and documentary
parol evidence sought to be introduced by petitioners Spouses Paras, which
attest to these supposed flaws and what they aver to have been the parties’ true
intent, may be admitted and considered.
III
Of course, this admission and availability for consideration is no guarantee of
how exactly the parol evidence adduced shall be appreciated by a court. That is,
they do not guarantee the probative value, if any, that shall be attached to them.
In any case, we find that petitioners have established that respondent Kimwa
was obliged to haul 40,000 cubic meters of aggregates on or before May 15,
1995. Considering its admission that it did not haul 30,000 cubic meters of
aggregates, respondent Kimwa is liable to petitioners.
The Pre-Trial Order issued by the Regional Trial Court in Civil Case No. MAN-
2412 attests to respondent Kimwa’s admission that:
6) Prior to or during the execution of the contract[,] the Plaintiffs furnished the
Defendant all the documents and requisite papers in connection with the
contract, one of which was a copy of the Plaintiff’s [sic] special permit indicating
that the Plaintiff’s [sic] authority was only good for (6) months from November
53
14, 1994.
This Special Permit was, in turn, introduced by petitioners in evidence as their
54
Exhibit "A," with its date of issuance and effectivity being specifically identified
55
as their Exhibit "A-1." Relevant portions of this Special Permit read:
To All Whom It May Concern:
PERMISSION is hereby granted to:
Name Address
LUCIA PARAS Poblacion, Toledo City
to undertake the rechannelling of Block No. VI of Sapang Daco River along
Barangay Ilihan, Toledo City, subject to following terms and conditions:
1. That the volume to be extracted from the area is approximately 40,000 cubic
meters;
....
This permit which is valid for six (6) months from the date hereof is revocable
anytime upon violation of any of the foregoing conditions or in the interest of
public peace and order.
56
Cebu Capitol, Cebu City, November 14, 1994.
Having been admittedly furnished a copy of this Special Permit, respondent
Kimwa was well aware that a total of only about 40,000 cubic meters of
aggregates may be extracted by petitioner Lucia from the permitted area, and
that petitioner Lucia Paras’ operations cannot extend beyond May 15, 1995,
when the Special Permit expires.
The Special Permit’s condition that a total of only about 40,000 cubic meters of
aggregates may be extracted by petitioner Lucia Paras from the permitted area
lends credence to the position that the aggregates "allotted" to respondent
Kimwa was in consideration of its corresponding commitment to haul all 40,000
cubic meters. This is so, especially in light of the Agreement’s own statement
57
that "the said Aggregates is for the exclusive use of [respondent Kimwa.]" By
allotting the entire 40,000 cubic meters, petitioner Lucia Paras bound her entire
business to respondent Kimwa. Rational human behavior dictates that she must
have done so with the corresponding assurances from it. It would have been
irrational, if not ridiculous, of her to oblige herself to make this allotment without
respondent Kimwa’s concomitant undertaking that it would obtain the entire
amount allotted.
Likewise, the condition that the Special Permit shall be valid for only six (6)
months from November 14,1994 lends credence to petitioners Spouses Paras’
assertion that, in entering into the Agreement with respondent Kimwa, petitioner
Lucia Paras did so because of respondent Kimwa's promise that hauling can be
completed by May 15, 1995. Bound as she was by the Special Permit, petitioner
Lucia Paras needed to make it eminently clear to any party she was transacting
with that she could supply aggregates only up to May 15, 1995 and that the
other party's hauling must be completed by May 15, 1995. She was merely
acting with due diligence, for otherwise, any contract she would enter into would
be negated; any commitment she would make beyond May 15, 1995 would
make her guilty of misrepresentation, and any prospective income for her would
be rendered illusory.
Our evidentiary rules impel us to proceed from the position (unless convincingly
shown otherwise) that individuals act as rational human beings, i.e, "[t]hat a
58
person takes ordinary care of his concerns[.]" This basic evidentiary stance,
taken with the. supporting evidence petitioners Spouses Paras adduced,
respondent Kimwa's awareness of the conditions under which petitioner Lucia
Paras was bound, and the Agreement's own text specifying exclusive allotment
for respondent Kimwa, supports petitioners Spouses Paras' position that
respondent Kimwa was obliged to haul 40,000 cubic meters of aggregates on or
before May 15, 1995. As it admittedly hauled only 10,000 cubic meters,
respondent Kimwa is liable for breach of contract in respect of the remaining
30,000 cubic meters.
WHEREFORE, the Petition is GRANTED. The assailed Decision dated July 4,
2005 and Resolution dated February 9, 2006 of the Court of Appeals Special
20th Division in CA-G.R. CV No. 74682 are REVERSED and SET ASIDE. The
Decision of Branch 55 of the Regional Trial Court, Mandaue City dated May 16,
2001 in Civil Case No. MAN-2412 is REINSTATED.
A legal interest of 6% per annum shall likewise be imposed on the total
judgment award from the finality of this Decision until full satisfaction.
SO ORDERED
July 8, 2015
G.R. No. 195166
SPOUSES SALVADOR ABELLA AND ALMA ABELLA, Petitioners,
vs.
SPOUSES ROMEO ABELLA AND ANNIE ABELLA, Respondents.
DECISION
LEONEN, J.:
This resolves a Petition for Review on Certiorari under Rule 45 of the Rules of
Court praying that judgment be rendered reversing and setting aside the
1 2
September 30, 2010 Decision and the January 4, 2011 Resolution of the Court
of Appeals Nineteenth Division in CA-G.R. CV No. 01388. The Petition also
prays that respondents Spouses Romeo and Annie Abella be ordered to pay
petitioners Spouses Salvador and Alma Abella 2.5% monthly interest plus the
remaining balance of the amount loaned.
The assailed September 30, 2010 Decision of the Court of Appeals reversed
and set aside the December 28, 2005 Decision3 of the Regional Trial Court,
Branch 8, Kalibo, Aklan in Civil Case No. 6627. It directed petitioners to pay
respondents P148,500.00 (plus interest), which was the amount respondents
supposedly overpaid. The assailed January 4, 2011 Resolution of the Court of
Appeals denied petitioners’ Motion for Reconsideration.
The Regional Trial Court’s December 28, 2005 Decision ordered respondents to
pay petitioners the supposedly unpaid loan balance of P300,000.00 plus the
allegedly stipulated interest rate of 30% per annum, as well as litigation
4
expenses and attorney’s fees.
On July 31, 2002, petitioners Spouses Salvador and Alma Abella filed a
5
Complaint for sum of money and damages with prayer for preliminary
attachment against respondents Spouses Romeo and Annie Abella before the
Regional Trial Court, Branch 8, Kalibo, Aklan. The case was docketed as Civil
6
Case No. 6627.
In their Complaint, petitioners alleged that respondents obtained a loan from
them in the amount of P500,000.00. The loan was evidenced by an
acknowledgment receipt dated March 22, 1999 and was payable within one (1)
year. Petitioners added that respondents were able to pay a total of
P200,000.00— P100,000.00 paid on two separate occasions—leaving an
unpaid balance of P300,000.00.
7 On respondents’ appeal, the Court of Appeals ruled that while respondents had
8 liable to pay the outstanding amount of P300,000.00.
In their Answer (with counterclaim and motion to dismiss), respondents alleged
that the amount involved did not pertain to a loan they obtained from petitioners
9
but was part of the capital for a joint venture involving the lending of money.
Specifically, respondents claimed that they were approached by petitioners, who
proposed that if respondents were to "undertake the management of whatever
money [petitioners] would give them, [petitioners] would get 2.5% a month with a
10
2.5% service fee to [respondents]." The 2.5% that each party would be
receiving represented their sharing of the 5% interest that the joint venture was
supposedly going to charge against its debtors. Respondents further alleged
that the one year averred by petitioners was not a deadline for payment but the
term within which they were to return the money placed by petitioners should the
joint venture prove to be not lucrative. Moreover, they claimed that the entire
amount of P500,000.00 was disposed of in accordance with their agreed terms
and conditions and that petitioners terminated the joint venture, prompting them
to collect from the joint venture’s borrowers. They were, however, able to collect
only to the extent of P200,000.00; hence, the P300,000.00 balance remained
11
unpaid.
12
In the Decision dated December 28, 2005, the Regional Trial Court ruled in
favor of petitioners. It noted that the terms of the acknowledgment receipt
executed by respondents clearly showed that: (a) respondents were indebted to
the extent of P500,000.00; (b) this indebtedness was to be paid within one (1)
year; and (c) the indebtedness was subject to interest. Thus, the trial court
concluded that respondents obtained a simple loan, although they later invested
13
its proceeds in a lending enterprise. The Regional Trial Court adjudged
respondents solidarily liable to petitioners. The dispositive portion of its Decision
reads:
WHEREFORE, premises considered, judgment is hereby rendered:
1. Ordering the defendants jointly and severally to pay the plaintiffs the
sum of P300,000.00 with interest at the rate of 30% per annum from the
time the complaint was filed on July 31, 2002 until fully paid;
2. Ordering the defendants to pay the plaintiffs the sum of P2,227.50 as
reimbursement for litigation expenses, and another sum of P5,000.00 as
attorney’s fees.
For lack of legal basis, plaintiffs’ claim for moral and exemplary damages has to
14
be denied, and for lack of merit the counter-claim is ordered dismissed.
15
In the Order dated March 13, 2006, the Regional Trial Court denied
respondents’ Motion for Reconsideration.
indeed entered into a simple loan with petitioners, respondents were no longer
16
The Court of Appeals reasoned that the loan could not have earned interest,
whether as contractually stipulated interest or as interest in the concept of actual
or compensatory damages. As to the loan’s not having earned stipulated
interest, the Court of Appeals anchored its ruling on Article 1956 of the Civil
17
Code, which requires interest to be stipulated in writing for it to be due. The
Court of Appeals noted that while the acknowledgement receipt showed that
18
interest was to be charged, no particular interest rate was specified. Thus, at
the time respondents were making interest payments of 2.5% per month, these
interest payments were invalid for not being properly stipulated by the parties.
As to the loan’s not having earned interest in the concept of actual or
compensatory damages, the Court of Appeals, citing Eusebio-Calderon v.
19
People, noted that interest in the concept of actual or compensatory damages
accrues only from the time that demand (whether judicial or extrajudicial) is
made. It reasoned that since respondents received petitioners’ demand letter
only on July 12, 2002, any interest in the concept of actual or compensatory
damages due should be reckoned only from then. Thus, the payments for the
2.5% monthly interest made after the perfection of the loan in 1999 but before
20
the demand was made in 2002 were invalid.
Since petitioners’ charging of interest was invalid, the Court of Appeals
reasoned that all payments respondents made by way of interest should be
21
deemed payments for the principal amount of P500,000.00.
The Court of Appeals further noted that respondents made a total payment of
P648,500.00, which, as against the principal amount of P500,000.00, entailed
an overpayment of P148,500.00. Applying the principle of solutio indebiti, the
Court of Appeals concluded that petitioners were liable to reimburse
22
respondents for the overpaid amount of P148,500.00. The dispositive portion
of the assailed Court of Appeals Decision reads:
WHEREFORE, the Decision of the Regional Trial Court is
hereby REVERSED and SET ASIDE, and a new one issued, finding that the
Spouses Salvador and Alma Abella are DIRECTED to jointly and severally pay
Spouses Romeo and Annie Abella the amount of P148,500.00, with interest of
6% interest (sic) per annum to be computed upon receipt of this decision, until
full satisfaction thereof. Upon finality of this judgment, an interest as the rate of
12% per annum, instead of 6%, shall be imposed on the amount due, until full
23
payment thereof.
24
In the Resolution dated January 4, 2011, the Court of Appeals denied
petitioners’ Motion for Reconsideration.
25
Aggrieved, petitioners filed the present appeal where they claim that the Court
of Appeals erred in completely striking off interest despite the parties’ written
agreement stipulating it, as well as in ordering them to reimburse and pay
interest to respondents.
In support of their contentions, petitioners cite Article 1371 of the Civil
26
Code, which calls for the consideration of the contracting parties’
contemporaneous and subsequent acts in determining their true intention.
Petitioners insist that respondents’ consistent payment of interest in the year
following the perfection of the loan showed that interest at 2.5% per month was
properly agreed upon despite its not having been expressly stated in the
acknowledgment receipt. They add that during the proceedings before the
27
Regional Trial Court, respondents admitted that interest was due on the loan.
28
In their Comment, respondents reiterate the Court of Appeals’ findings that no
interest rate was ever stipulated by the parties and that interest was not due and
demandable at the time they were making interest payments.
29
30
In their Reply, petitioners argue that even though no interest rate was
stipulated in the acknowledgment receipt, the case fell under the exception to
the Parol Evidence Rule. They also argue that there exists convincing and
sufficiently credible evidence to supplement the imperfection of the
31
acknowledgment receipt.
For resolution are the following issues:
First, whether interest accrued on respondents’ loan from petitioners. If so, at
what rate?
Second, whether petitioners are liable to reimburse respondents for the latter’s
supposed excess payments and for interest.
I
As noted by the Court of Appeals and the Regional Trial Court, respondents
entered into a simple loan or mutuum, rather than a joint venture, with
petitioners.
Respondents’ claims, as articulated in their testimonies before the trial court,
cannot prevail over the clear terms of the document attesting to the relation of
the parties. "If the terms of a contract are clear and leave no doubt upon the
intention of the contracting parties, the literal meaning of its stipulations shall
32
control."
Articles 1933 and 1953 of the Civil Code provide the guideposts that determine if
a contractual relation is one of simple loan or mutuum:
Art. 1933. By the contract of loan, one of the parties delivers to another, either
something not consumable so that the latter may use the same for a certain time
and return it, in which case the contract is called a commodatum; or money or
other consumable thing, upon the condition that the same amount of the same
kind and quality shall be paid, in which case the contract is simply called a loan
or mutuum.
Commodatum is essentially gratuitous.
Simple loan may be gratuitous or with a stipulation to pay interest.
In commodatum the bailor retains the ownership of the thing loaned, while in
simple loan, ownership passes to the borrower.
....
Art. 1953. A person who receives a loan of money or any other fungible thing
acquires the ownership thereof, and is bound to pay to the creditor an equal
amount of the same kind and quality. (Emphasis supplied)
On March 22, 1999, respondents executed an acknowledgment receipt to
petitioners, which states:
Batan, Aklan
March 22, 1999
This is to acknowledge receipt of the Amount of Five Hundred Thousand
(P500,000.00) Pesos from Mrs. Alma R. Abella, payable within one (1) year from
date hereof with interest.
33
Annie C. Abella (sgd.) Romeo M. Abella (sgd.) (Emphasis supplied)
The text of the acknowledgment receipt is uncomplicated and straightforward. It
attests to: first, respondents’ receipt of the sum of P500,000.00 from petitioner
Alma Abella; second, respondents’ duty to pay back this amount within one (1)
year from March 22, 1999; and third, respondents’ duty to pay interest.
Consistent with what typifies a simple loan, petitioners delivered to respondents
with the corresponding condition that respondents shall pay the same amount to
petitioners within one (1) year.
II
Although we have settled the nature of the contractual relation between
petitioners and respondents, controversy persists over respondents’ duty to pay
conventional interest, i.e., interest as the cost of borrowing money.
34
Article 1956 of the Civil Code spells out the basic rule that "[n]o interest shall be
due unless it has been expressly stipulated in writing."
On the matter of interest, the text of the acknowledgment receipt is simple, plain,
and unequivocal. It attests to the contracting parties’ intent to subject to interest
the loan extended by petitioners to respondents. The controversy, however,
stems from the acknowledgment receipt’s failure to state the exact rate of
interest.
Jurisprudence is clear about the applicable interest rate if a written instrument
35
fails to specify a rate. In Spouses Toring v. Spouses Olan, this court clarified
the effect of Article 1956 of the Civil Code and noted that the legal rate of
interest (then at 12%) is to apply: "In a loan or forbearance of money, according
to the Civil Code, the interest due should be that stipulated in writing, and in the
absence thereof, the rate shall be 12% per annum."
36
Spouses Toring cites and restates (practically verbatim) what this court settled
in Security Bank and Trust Company v. Regional Trial Court of Makati, Branch
61: "In a loan or forbearance of money, the interest due should be that stipulated
37
in writing, and in the absence thereof, the rate shall be 12% per annum."
Security Bank also refers to Eastern Shipping Lines, Inc. v. Court of Appeals,
38
which, in turn, stated:
1. When the obligation is breached, and it consists in the payment of a sum of
money, i.e., a loan or forbearance of money, the interest due should be that
which may have been stipulated in writing. Furthermore, the interest due shall
itself earn legal interest from the time it is judicially demanded. In the absence of
stipulation, the rate of interest shall be 12% per annum to be computed from
default, i.e., from judicial or extrajudicial demand under and subject to the
39
provisions of Article 1169 of the Civil Code. (Emphasis supplied)
The rule is not only definite; it is cast in mandatory language. From Eastern
Shipping to Security Bank to Spouses Toring, jurisprudence has repeatedly
used the word "shall," a term that has long been settled to denote something
40
imperative or operating to impose a duty. Thus, the rule leaves no room for
alternatives or otherwise does not allow for discretion. It requires the application
of the legal rate of interest.
41
Our intervening Decision in Nacar v. Gallery Frames recognized that the legal
rate of interest has been reduced to 6% per annum:
Recently, however, the Bangko Sentral ng Pilipinas Monetary Board (BSP-MB),
in its Resolution No. 796 dated May 16, 2013, approved the amendment of
Section 2 of Circular No. 905, Series of 1982 and, accordingly, issued Circular
No. 799, Series of 2013, effective July 1, 2013, the pertinent portion of which
reads:
The Monetary Board, in its Resolution No. 796 dated 16 May 2013, approved
the following revisions governing the rate of interest in the absence of stipulation
in loan contracts, thereby amending Section 2 of Circular No. 905, Series of
1982:
Section 1. The rate of interest for the loan or forbearance of any money, goods
or credits and the rate allowed in judgments, in the absence of an express
contract as to such rate of interest, shall be six percent (6%) per annum.
Section 2. In view of the above, Subsection X305.1 of the Manual of
Regulations for Banks and Sections 4305Q.1, 4305S.3 and 4303P.1 of the
Manual of Regulations for
Non-Bank Financial Institutions are hereby amended accordingly.
This Circular shall take effect on 1 July 2013.
Thus, from the foregoing, in the absence of an express stipulation as to the rate
of interest that would govern the parties, the rate of legal interest for loans or
forbearance of any money, goods or credits and the rate allowed in judgments
shall no longer be twelve percent (12%) per annum — as reflected in the case of
Eastern Shipping Lines and Subsection X305.1 of the Manual of Regulations for
Banks and Sections 4305Q.1,= 4305S.3 and 4303P.1 of the Manual of
Regulations for Non- Bank Financial Institutions, before its amendment by BSP-
MB Circular No. 799 — but will now be six percent (6%) per annum effective
July 1, 2013. It should be noted, nonetheless, that the new rate could only be
applied prospectively and not retroactively. Consequently, the twelve percent
(12%) per annum legal interest shall apply only until June 30, 2013. Come July
1, 2013 the new rate of six percent (6%) per annum shall be the prevailing rate
42
of interest when applicable. (Emphasis supplied, citations omitted)
Nevertheless, both Bangko Sentral ng Pilipinas Circular No. 799, Series of 2013
and Nacar retain the definite and mandatory framing of the rule articulated
in Eastern Shipping, Security Bank, and Spouses Toring. Nacar even
restates Eastern Shipping:
To recapitulate and for future guidance, the guidelines laid down in the case
of Eastern Shipping Lines are accordingly modified to embody BSP-MB Circular
No. 799, as follows:
....
1. When the obligation is breached, and it consists in the payment of a sum of
money, i.e., a loan or forbearance of money, the interest due should be that
which may have been stipulated in writing. Furthermore, the interest due shall
itself earn legal interest from the time it is judicially demanded. In the absence of
stipulation, the rate of interest shall be 6% per annum to be computed from
default, i.e., from judicial or extrajudicial demand under and subject to the
43
provisions of Article 1169 of the Civil Code. (Emphasis supplied, citations
omitted)
Thus, it remains that where interest was stipulated in writing by the debtor and
creditor in a simple loan or mutuum, but no exact interest rate was mentioned,
the legal rate of interest shall apply. At present, this is 6% per annum, subject
to Nacar’s qualification on prospective application.
Applying this, the loan obtained by respondents from petitioners is deemed
subjected to conventional interest at the rate of 12% per annum, the legal rate of
interest at the time the parties executed their agreement. Moreover, should
conventional interest still be due as of July 1, 2013, the rate of 12% per annum
shall persist as the rate of conventional interest.
This is so because interest in this respect is used as a surrogate for the parties’
intent, as expressed as of the time of the execution of their contract. In this
sense, the legal rate of interest is an affirmation of the contracting parties’ intent;
that is, by their contract’s silence on a specific rate, the then prevailing legal rate
of interest shall be the cost of borrowing money. This rate, which by their
contract the parties have settled on, is deemed to persist regardless of shifts in
the legal rate of interest. Stated otherwise, the legal rate of interest, when
applied as conventional interest, shall always be the legal rate at the time the
agreement was executed and shall not be susceptible to shifts in rate.
Petitioners, however, insist on conventional interest at the rate of 2.5% per
month or 30% per annum. They argue that the acknowledgment receipt fails to
show the complete and accurate intention of the contracting parties. They rely
on Article 1371 of the Civil Code, which provides that the contemporaneous and
subsequent acts of the contracting parties shall be considered should there be a
44
need to ascertain their intent. In addition, they claim that this case falls under
the exceptions to the Parol Evidence Rule, as spelled out in Rule 130, Section 9
45
of the Revised Rules on Evidence.
It is a basic precept in legal interpretation and construction that a rule or
provision that treats a subject with specificity prevails over a rule or provision
46
that treats a subject in general terms.
The rule spelled out in Security Bank and Spouses Toring is anchored on Article
1956 of the Civil Code and specifically governs simple loans or mutuum.
Mutuum is a type of nominate contract that is specifically recognized by the Civil
Code and for which the Civil Code provides a specific set of governing rules:
Articles 1953 to 1961. In contrast, Article 1371 is among the Civil Code
provisions generally dealing with contracts. As this case particularly involves a
simple loan, the specific rule spelled out in Security Bank and Spouses
Toring finds preferential application as against Article 1371.
Contrary to petitioners’ assertions, there is no room for entertaining extraneous
(or parol) evidence. In Spouses Bonifacio and Lucia Paras v. Kimwa
47
Construction and Development Corporation, we spelled out the requisites for
the admission of parol evidence:
In sum, two (2) things must be established for parol evidence to be admitted:
first, that the existence of any of the four (4) exceptions has been put in issue in
a party’s pleading or has not been objected to by the adverse party; and second,
that the parol evidence sought to be presented serves to form the basis of the
48
conclusion proposed by the presenting party.
The issue of admitting parol evidence is a matter that is proper to the trial, not
the appellate, stage of a case. Petitioners raised the issue of applying the
exceptions to the Parol Evidence Rule only in the Reply they filed before this
court. This is the last pleading that either of the parties has filed in the entire
string of proceedings culminating in this Decision. It is, therefore, too late for
petitioners to harp on this rule. In any case, what is at issue is not admission of
evidence per se, but the appreciation given to the evidence adduced by the
parties. In the Petition they filed before this court, petitioners themselves
acknowledged that checks supposedly attesting to payment of monthly interest
at the rate of 2.5% were admitted by the trial court (and marked as Exhibits "2,"
49
"3," "4," "5," "6," "7," and "8"). What petitioners have an issue with is not the
admission of these pieces of evidence but how these have not been appreciated
in a manner consistent with the conclusions they advance.
Even if it can be shown that the parties have agreed to monthly interest at the
50
rate of 2.5%, this is unconscionable. As emphasized in Castro v. Tan, the
willingness of the parties to enter into a relation involving an unconscionable
interest rate is inconsequential to the validity of the stipulated rate:
The imposition of an unconscionable rate of interest on a money debt, even if
knowingly and voluntarily assumed, is immoral and unjust. It is tantamount to a
repugnant spoliation and an iniquitous deprivation of property, repulsive to the
common sense of man. It has no support in law, in principles of justice, or in the
human conscience nor is there any reason whatsoever which may justify such
imposition as righteous and as one that may be sustained within the sphere of
51
public or private morals.
The imposition of an unconscionable interest rate is void ab initio for being
52
"contrary to morals, and the law."
In determining whether the rate of interest is unconscionable, the mechanical
application of pre-established floors would be wanting. The lowest rates that
have previously been considered unconscionable need not be an impenetrable
minimum. What is more crucial is a consideration of the parties’ contexts.
Moreover, interest rates must be appreciated in light of the fundamental nature
of interest as compensation to the creditor for money lent to another, which he
or she could otherwise have used for his or her own purposes at the time it was
lent. It is not the default vehicle for predatory gain. As such, interest need only
be reasonable. It ought not be a supine mechanism for the creditor’s unjust
enrichment at the expense of another.
Petitioners here insist upon the imposition of 2.5% monthly or 30% annual
interest. Compounded at this rate, respondents’ obligation would have more
than doubled—increased to 219.7% of the principal—by the end of the third year
after which the loan was contracted if the entire principal remained unpaid. By
the end of the ninth year, it would have multiplied more than tenfold (or
increased to 1,060.45%). In 2015, this would have multiplied by more than 66
times (or increased to 6,654.17%). Thus, from an initial loan of only
P500,000.00, respondents would be obliged to pay more than P33 million. This
is grossly unfair, especially since up to the fourth year from when the loan was
obtained, respondents had been assiduously delivering payment. This reduces
their best efforts to satisfy their obligation into a protracted servicing of a
rapacious loan.
The legal rate of interest is the presumptive reasonable compensation for
borrowed money. While parties are free to deviate from this, any deviation must
be reasonable and fair. Any deviation that is far-removed is suspect. Thus, in
cases where stipulated interest is more than twice the prevailing legal rate of
interest, it is for the creditor to prove that this rate is required by prevailing
market conditions. Here, petitioners have articulated no such justification.
In sum, Article 1956 of the Civil Code, read in light of established jurisprudence,
prevents the application of any interest rate other than that specifically provided
for by the parties in their loan document or, in lieu of it, the legal rate. Here, as
the contracting parties failed to make a specific stipulation, the legal rate must
apply. Moreover, the rate that petitioners adverted to is unconscionable. The
conventional interest due on the principal amount loaned by respondents from
petitioners is held to be 12% per annum.
III
Apart from respondents’ liability for conventional interest at the rate of 12% per
annum, outstanding conventional interest—if any is due from respondents—
shall itself earn legal interest from the time judicial demand was made by
petitioners, i.e., on July 31, 2002, when they filed their Complaint. This is
consistent with Article 2212 of the Civil Code, which provides:
Art. 2212. Interest due shall earn legal interest from the time it is judicially
demanded, although the obligation may be silent upon this point.
So, too, Nacar states that "the interest due shall itself earn legal interest from
53
the time it is judicially demanded."
Consistent with Nacar, as well as with our ruling in Rivera v. Spouses
54
Chua, the interest due on conventional interest shall be at the rate of 12% per
annum from July 31, 2002 to June 30, 2013. Thereafter, or starting July 1, 2013,
this shall be at the rate of 6% per annum.
IV
Proceeding from these premises, we find that respondents made an
overpayment in the amount of P3,379.17.
As acknowledged by petitioner Salvador Abella, respondents paid a total of
P200,000.00, which was charged against the principal amount of P500,000.00.
55
The first payment of P100,000.00 was made on June 30, 2001, while the
56
second payment of P100,000.00 was made on December 30, 2001.
The Court of Appeals’ September 30, 2010 Decision stated that respondents
57
paid P6,000.00 in March 1999.
The Pre-Trial Order dated December 2, 2002,58 stated that the parties admitted
that "from the time the principal sum of P500,000.00 was borrowed from
59
[petitioners], [respondents] ha[d] been religiously paying" what was supposedly
60
interest "at the rate of 2.5% per month."
From March 22, 1999 (after the loan was perfected) to June 22, 2001 (before
respondents’ payment of P100,000.00 on June 30, 2001, which was deducted
from the principal amount of P500,000.00), the 2.5% monthly "interest" was
pegged to the principal amount of P500,000.00. These monthly interests, thus,
amounted to P12,500.00 per month. Considering that the period from March
1999 to June 2001 spanned twenty seven (27) months, respondents paid a total
61
of P337,500.00.
From June 22, 2001 up to December 22, 2001 (before respondents’ payment of
another P100,000.00 on December 30, 2001, which was deducted from the
remaining principal amount of P400,000.00), the 2.5% monthly "interest" was
pegged to the remaining principal amount of P400,000.00. These monthly
interests, thus, amounted to P10,000.00 per month. Considering that this period
62
spanned six (6) months, respondents paid a total of P60,000.00.
From after December 22, 2001 up to June 2002 (when petitioners filed their
Complaint), the 2.5% monthly "interest" was pegged to the remaining principal
amount of P300,000.00. These monthly interests, thus, amounted to P7,500.00
per month. Considering that this period spanned six (6) months, respondents
63
paid a total of P45,000.00.
Applying these facts and the properly applicable interest rate (for conventional
interest, 12% per annum; for interest on conventional interest, 12% per annum
from July 31, 2002 up to June 30, 2013 and 6% per annum henceforth), the
following conclusions may be drawn:
By the end of the first year following the perfection of the loan, or as of March
21, 2000, P560,000.00 was due from respondents. This consisted of the
principal of P500,000.00 and conventional interest of P60,000.00.
Within this first year, respondents made twelve (12) monthly payments totalling
P150,000.00 (P12,500.00 each from April 1999 to March 2000). This was in
addition to their initial payment of P6,000.00 in March 1999.
Application of payments must be in accordance with Article 1253 of the Civil
Code, which reads:
Art. 1253. If the debt produces interest, payment of the principal shall not be
deemed to have been made until the interests have been covered.
Thus, the payments respondents made must first be reckoned as interest
payments. Thereafter, any excess payments shall be charged against the
principal. As respondents paid a total of P156,000.00 within the first year, the
conventional interest of P60,000.00 must be deemed fully paid and the
remaining amount that respondents paid (i.e., P96,000.00) is to be charged
against the principal. This yields a balance of P404,000.00. By the end of the
second year following the perfection of the loan, or as of March 21, 2001,
P452,480.00 was due from respondents. This consisted of the outstanding
principal of P404,000.00 and conventional interest of P48,480.00.
Within this second year, respondents completed another round of twelve (12)
monthly payments totaling P150,000.00.
Consistent with Article 1253 of the Civil Code, as respondents paid a total of
P156,000.00 within the second year, the conventional interest of P48,480.00
must be deemed fully paid and the remaining amount that respondents paid
(i.e., P101,520.00) is to be charged against the principal. This yields a balance
of P302,480.00.
By the end of the third year following the perfection of the loan, or as of March
21, 2002, P338,777.60 was due from respondents. This consists of the
outstanding principal of P302,480.00 and conventional interest of P36,297.60.
Within this third year, respondents paid a total of P320,000.00, as follows:
(a) Between March 22, 2001 and June 30, 2001, respondents
completed three (3) monthly payments of P12,500.00 each, totaling
P37,500.00.
(b) On June 30, 2001, respondents paid P100,000.00, which was
charged as principal payment.
(c) Between June 30, 2001 and December 30, 2001, respondents
delivered monthly payments of P10,000.00 each. At this point, the
monthly payments no longer amounted to P12,500.00 each because the
supposed monthly interest payments were pegged to the supposedly
remaining principal of P400,000.00. Thus, during this period, they paid a
total of six (6) monthly payments totaling P60,000.00.
(d) On December 30, 2001, respondents paid P100,000.00, which, like
the June 30, 2001 payment, was charged against the principal.
(e) From the end of December 2002 to the end of February 2002,
respondents delivered monthly payments of P7,500.00 each. At this
point, the supposed monthly interest payments were now pegged to the
supposedly remaining principal of P300,000.00. Thus, during this
period, they delivered three (3) monthly payments totaling P22,500.00.
Consistent with Article 1253 of the Civil Code, as respondents paid a total of
P320,000.00 within the third year, the conventional interest of P36,927.50 must
be deemed fully paid and the remaining amount that respondents paid (i.e.,
P283,702.40) is to be charged against the principal. This yields a balance of
P18,777.60.
By the end of the fourth year following the perfection of the loan, or as of March
21, 2003, P21,203.51 would have been due from respondents. This consists of:
(a) the outstanding principal of P18,777.60, (b) conventional interest of
P2,253.31, and (c) interest due on conventional interest starting from July 31,
2002, the date of judicial demand, in the amount of P172.60. The last (i.e.,
interest on interest) must be pro-rated. There were only 233 days from July 31,
2002 (the date of judicial demand) to March 21, 2003 (the end of the fourth
year); this left 63.83% of the fourth year, within which interest on interest might
have accrued. Thus, the full annual interest on interest of 12% per annum could
not have been completed, and only the proportional amount of 7.66% per
annum may be properly imposed for the remainder of the fourth year.
From the end of March 2002 to June 2002, respondents delivered three (3)
more monthly payments of P7,500.00 each. Thus, during this period, they
delivered three (3) monthly payments totalling P22,500.00.
At this rate, however, payment would have been completed by respondents
even before the end of the fourth year. Thus, for precision, it is more
appropriate to reckon the amounts due as against payments made on a
monthly, rather than an annual, basis.
By April 21, 2002, _18,965.38 (i.e., remaining principal of P18,777.60 plus pro-
rated monthly conventional interest at 1%, amounting to P187.78) would have
been due from respondents. Deducting the monthly payment of P7,500.00 for
the preceding month in a manner consistent with Article 1253 of the Civil Code
would yield a balance of P11,465.38.
By May 21, 2002, _11,580.03 (i.e., remaining principal of P11,465.38 plus pro-
rated monthly conventional interest at 1%, amounting to P114.65) would have
been due from respondents. Deducting the monthly payment of P7,500.00 for
the preceding month in a manner consistent with Article 1253 of the Civil Code
would yield a balance of P4,080.03.
By June 21, 2002, P4,120.83 (i.e., remaining principal of P4,080.03 plus pro-
rated monthly conventional interest at 1%, amounting to P40.80) would have
been due from respondents. Deducting the monthly payment of P7,500.00 for
the preceding month in a manner consistent with Article 1253 of the Civil Code
would yield a negative balance of P3,379.17.
Thus, by June 21, 2002, respondents had not only fully paid the principal and all
the conventional interest that had accrued on their loan. By this date, they also
overpaid P3,379.17. Moreover, while hypothetically, interest on conventional
interest would not have run from July 31, 2002, no such interest accrued since
there was no longer any conventional interest due from respondents by then.
V
As respondents made an overpayment, the principle of solutio indebiti as
64
provided by Article 2154 of the Civil Code applies. Article 2154 reads:
Article 2154. If something is received when there is no right to demand it, and it
was unduly delivered through mistake, the obligation to return it arises.
65
In Moreno-Lentfer v. Wolff, this court explained the application of solutio
indebiti:
The quasi-contract of solutio indebiti harks back to the ancient principle that no
one shall enrich himself unjustly at the expense of another. It applies where (1) a
payment is made when there exists no binding relation between the payor, who
has no duty to pay, and the person who received the payment, and (2) the
payment is made through mistake, and not through liberality or some other
66
cause.
As respondents had already fully paid the principal and all conventional interest A legal interest of 6% per annum shall likewise be imposed on the total
that had accrued, they were no longer obliged to make further judgment award from the finality of this Decision until its full satisfaction.
payments.1awp++i1 Any further payment they made was only because of a
mistaken impression that they were still due. Accordingly, petitioners are now SO ORDERED.
bound by a quasi-contractual obligation to return any and all excess payments
delivered by respondents.

Nacar provides that "[w]hen an obligation, not constituting a loan or forbearance

of money, is breached, an interest on the amount of damages awarded may be
67
imposed at the discretion of the court at the rate of 6% per annum." This
applies to obligations arising from quasi-contracts such as solutio indebiti.

Further, Article 2159 of the Civil Code provides:

Art. 2159. Whoever in bad faith accepts an undue payment, shall pay legal
interest if a sum of money is involved, or shall be liable for fruits received or
which should have been received if the thing produces fruits.

He shall furthermore be answerable for any loss or impairment of the thing from
any cause, and for damages to the person who delivered the thing, until it is
recovered.

Consistent however, with our finding that the excess payment made by
respondents were borne out of a mere mistake that it was due, we find it in the
better interest of equity to no longer hold petitioners liable for interest arising
from their quasi-contractual obligation.

Nevertheless, Nacar also provides:

3. When the judgment of the court awarding a sum of money becomes final and
executory, the rate of legal interest, whether the case falls under paragraph 1 or
paragraph 2, above, shall be 6% per annum from such finality until its
satisfaction, this interim period being deemed to be by then an equivalent to a
68
forbearance of credit.

Thus, interest at the rate of 6% per annum may be properly imposed on the total
judgment award. This shall be reckoned from the finality of this Decision until its
full satisfaction.

WHEREFORE, the assailed September 30, 2010 Decision and the January 4,
2011 Resolution of the Court of Appeals Nineteenth Division in CA-G.R. CV No.
01388 are SET ASIDE. Petitioners Spouses Salvador and Alma Abella
are DIRECTED to jointly and severally reimburse respondents Spouses Romeo
and Annie Abella the amount of P3,379.17, which respondents have overpaid.
 THIRD DIVISION
[G.R. No. 79962 : December 10, 1990.]
192 SCRA 209
LUCIO R. CRUZ, Petitioner, vs. COURT OF APPEALS AND CONRADO Q.
SALONGA, Respondents.
DECISION
CRUZ, J.:
The private respondent Conrado Salonga filed a complaint for collection and
damages against petitioner Lucio Cruz ** in the Regional Trial Court of Lucena
City alleging that in the course of their business transactions of buying and
selling fish, the petitioner borrowed from him an amount of P35,000.00,
evidenced by a receipt dated May 4, 1982, marked as Exhibit D, reading as
follows:
5/4/82
Received the amount of Thirty Five Thousand Cash from Rodrigo Quiambao
and Conrado Salonga on the day of May 4, 1982.
Sgd. Lucio Cruz
The plaintiff claimed that of this amount, only P20,000.00 had been paid, leaving
a balance of P10,000.00; that in August 1982, he and the defendant agreed that
the latter would grant him an exclusive right to purchase the harvest of certain
fishponds leased by Cruz in exchange for certain loan accommodations; that
pursuant thereto, Salonga delivered to Cruz various loans totaling P15,250.00,
evidenced by four receipts and an additional P4,000.00, the receipt of which had
been lost; and that Cruz failed to comply with his part of the agreement by
refusing to deliver the alleged harvest of the fishpond and the amount of his
indebtedness.
Cruz denied having contracted any loan from Salonga. By way of special
defense, he alleged that he was a lessee of several hectares of a fishpond
owned by Nemesio Yabut and that sometime in May 1982, he entered into an
agreement with Salonga whereby the latter would purchase (pakyaw) fish in
certain areas of the fishpond from May 1982 to August 15, 1982. They also
agreed that immediately thereafter, Salonga would sublease (bubuwisan) the
same fishpond for a period of one year. Cruz admitted having received on May
4, 1982, the amount of P35,000.00 and on several occasions from August 15,
1982, to September 30, 1982, an aggregate amount of P15,250.00. He
contended however, that these amounts were received by him not as loans but
as consideration for their "pakyaw" agreement and payment for the sublease of
the fishpond. He added that it was the private respondent who owed him money
since Salonga still had unpaid rentals for the 10-month period that he actually
occupied the fishpond. Cruz also claimed that Salonga owed him an additional
P4,000.00 arising from another purchase of fish from other areas of his leased
fishpond.
In a pre-trial conference held on August 24, 1984, petitioner and private
respondent entered into the following partial stipulation of facts.
COURT:
Plaintiff and defendant, through their respective counsel, during the pre-trial
conference, agreed on the following stipulation of facts:
1) That plaintiff Conrado Salonga entered into a contract of what is commonly
called as 'pakyawan' with defendant Lucio Cruz on the fishes contained in a
fishpond which defendant Lucio Cruz was taking care of as lessee from the
owner Mr. Nemesio Yabut, with a verbal contract for the sum of P28,000.00
sometime in May 1982.
2) That because of the necessity, defendant Lucio Cruz at that time needed
money, he requested plaintiff Conrado Salonga to advance the money of not
only P28,000.00 but P35,000.00 in order that Lucio Cruz could meet his
obligation with the owner of the fishpond in question, Mr. Nemesio Yabut;
3) That the amount of P35,000.00 as requested by defendant Lucio Cruz was
in fact delivered by plaintiff Conrado Salonga duly received by the defendant
Lucio Cruz, as evidenced by a receipt dated May 4, 1982, duly signed by
defendant Lucio Cruz
4) That pursuant to said contract of "pakyaw," plaintiff Conrado Salonga was
able to harvest the fishes contained in the fishpond administered by Lucio
Cruz in August 1982.
5) Immediately thereafter the aforesaid harvest thereon, they entered again on
a verbal agreement whereby plaintiff Conrado Salonga and defendant Lucio
Cruz had agreed that defendant Lucio Cruz will sublease and had in fact
subleased the fishpond of Nemesio Yabut to the herein plaintiff for the amount
of P28,000.00 for a period of one year beginning August 15, 1982.
6) That sometime on June 15, 1983, Mayor Nemesio Yabut, who is the owner
of the fishpond, took back the subject matter of this case from the defendant
Lucio Cruz.
7) That defendant Lucio Cruz in compliance with their verbal sublease
agreement had received from the plaintiff Conrado Salonga the following
sums of money:
a) P8,000.00 on August 15, 1982 as evidenced by Annex "B" of the
Complaint. (Exh. E);
b) The sum of P500.00 on September 4, 1982, as evidenced by Annex
"C" of the complaint (Exh. F);
 c) The sum of P3,000.00 on September 19, 1982 as evidenced by
Annex "D" of the complaint (Exh. G); and
d) The sum of P3,750.00 on September 30, 1982 as Annex "E" of the
complaint (Exh. H).
At the trial, the private respondent claimed that aside from the amounts of
P35,000.00 (Exh. D), P8,000.00 (Exh. E), P500.00 (Exh. F), P3,000.00 (Exh. G)
and P3,750.00 (Exh. H) mentioned in the partial stipulation of facts, he also
delivered to the petitioner P28,000.00, which constituted the consideration for
their "pakyaw" agreement. This was evidenced by a receipt dated May 14, 1982
marked as Exhibit I and reading as follows:
May 14, 1982
Tinatanggap ko ang halagang dalawampu't walong libong piso
(P28,000.00) bilang halaga sa pakyaw nila sa akin sa sangla sa kahong
bilang #8 maliit at sa kaputol na sapa sa gawing may bomba. Ito ay
tatagal hanggang Agosto 1982.
SGD. LUCIO CRUZ
Salonga also claimed that he had paid Cruz the amount of P4,000 but the
receipt of which had been lost and denied being indebted to the petitioner for
P4,000 for the lease of other portions of the fishpond.
For his part, the petitioner testified that he entered into a "pakyaw" and sublease
agreement with the private respondent for a consideration of P28,000 for each
transaction. Out of the P35,000 he received from the private respondent on May
4, 1982, P28,000 covered full payment of their "pakyaw" agreement while the
remaining P7,000 constituted the advance payment for their sublease
agreement. The petitioner denied having received another amount of P28,000
from Salonga on May 14, 1982. He contended that the instrument dated May 14,
1982 (Exh. I) was executed to evidence their "pakyaw" agreement and to fix its
duration. He was corroborated by Sonny Viray, who testified that it was he who
prepared the May 4, 1982, receipt of P35,000.00, P28,000 of which was
payment for the "pakyaw" and the excess of P7,000.00 as advance for the
sublease.
The trial court ruled in favor of the petitioner and ordered the private respondent
to pay the former the sum of P3,054.00 plus P1,000.00 as litigation expenses
and attorney's fees, and the costs. Judge Eriberto U. Rosario, Jr. found that the
transactions between the petitioner and the private respondent were indeed
"pakyaw" and sublease agreements, each having a consideration of
P28,000.00, for a total of P56,000.00. Pursuant to these agreements, Salonga
paid Cruz P35,000.00 on May 4, 1982 (Exh. D); P8,000.00 on August 15, 1982
(Exh. E); P500.00 on September 4, 1982 (Exh. F); P3,000 on September 19,
1982; P3,750 on September 30, 1982 (Exh. H) and P4,000.00 on an unspecified
date. The trial court noted an earlier admission of the private respondent that on
an unspecified date he received the sum of P6,000.00 from the petitioner. This
amount was credited to the petitioner and deducted from the total amount paid
by the private respondent. As the one-year contract of sublease was pre-
terminated two months short of the stipulated period, the rentals were
correspondingly reduced.
On appeal, the decision of the trial court was reversed. The respondent court
instead ordered the petitioner to pay the private respondent the sum of
P24,916.00 plus P1,500.00 as litigation expenses and attorney's fees, on the
following justification:
Exhibit "I" is very clear in its non-reference to the transaction behind Exhibit "D."
What only gives the semblance that Exhibit "I" is an explanation of the
transaction behind Exhibit "D" are the oral testimonies given by the defendant
and his two witnesses. On the other hand, Exhibit "I" is very clear in its
language. Thus, its tenor must not be clouded by any parol evidence introduced
by the defendant. And with the tenor of Exhibit "I" remaining unembellished, the
conclusion that Exhibit "D" is a mere tentative receipt becomes untenable.
The trial court erred when it relied on the self-serving testimonies of the
defendant and his witness as against the receipts both parties presented and
adopted as their own exhibits. As said before, Exhibit "I" is very clear in its tenor.
And if it is really the intention of Exhibit "I" to explain the contents of Exhibit "D",
such manifestation or intention is not found in the four corners of the former
document.
The respondent court also found that the amounts of P35,000.00, P8,000.00,
P500.00, P3,000.00, P3,750.00 and P4,000.00 were not payments for the
"pakyaw" and sublease agreement but for loans extended by Salonga to Cruz. It
also accepted Salonga's claim that the amount of P28,000.00 was delivered to
the petitioner on May 14, 1982, as payment on the "pakyaw" agreement apart
from the P35,000.00 (Exh. D) that was paid on May 4, 1982. However, it agreed
that the amount of P6,000.00 received by the private respondent from the
petitioner should be credited in favor of the latter.
The petitioner is now before this Court, raising the following issues:
1. The public respondent Court of Appeals gravely erred in (1)
disregarding parol evidence to Exhibits "D" and "I" despite the fact that
these documents fall under the exceptions provided for in Sec. 7, Rule
130 of the Rules of Court and thereby in (2) making a sweeping
conclusion that the transaction effected between the private respondent
and petitioner is one of contract of loan and not a contract of lease.
2. Assuming for the sake of argument that exhibits "D" and "I" evidence
separate transactions, the latter document should be disregarded, the
same not having been pleaded as a cause of action.
3. Whether or not the Stipulation of Facts entered into by the parties
herein relative to their executed transactions during the hearing of their
case a quo, are binding upon them and as well as, upon the public
respondent?
Our ruling follows:
Rule 130, Sec. 7, of the Revised Rules of Court provides: 1
Sec. 7. Evidence of Written Agreements. — When the terms of an agreement
have been reduced to writing, it is to be considered as containing all such terms,
and therefore, there can be, between the parties and their successors in
interest, no evidence of the terms of the agreement other than the contents of
the writing, except in the following cases:
a) When a mistake or imperfection of the writing or its failure to express the true
intent and agreement of the parties, or the validity of the agreement is put in
issue by the pleadings;
b) When there is an intrinsic ambiguity in the writing. The term "agreement"
includes wills.
The reason for the rule is the presumption that when the parties have reduced
their agreement to writing they have made such writing the only repository and
memorial of the truth, and whatever is not found in the writing must be
understood to have been waived or abandoned. 2
The rule, however, is not applicable in the case at bar, Section 7, Rule 130 is
predicated on the existence of a document embodying the terms of an
agreement, but Exhibit D does not contain such an agreement. It is only a
receipt attesting to the fact that on May 4, 1982, the petitioner received from the
private respondent the amount of P35,000. It is not and could have not been
intended by the parties to be the sole memorial of their agreement. As a matter
of fact, Exhibit D does not even mention the transaction that gave rise to its
issuance. At most, Exhibit D can only be considered a casual memorandum of a
transaction between the parties and an acknowledgment of the receipt of money
executed by the petitioner for the private respondent's satisfaction. A writing of
this nature, as Wigmore observed is not covered by the parol evidence rule.
A receipt — i.e. a written acknowledgment, handed by one party to the other, of
the manual custody of money or other personality — will in general fall without
the line of the rule; i.e. it is not intended to be an exclusive memorial, and the
facts may be shown irrespective of the terms of the receipt. This is because
usually a receipt is merely a written admission of a transaction independently
existing, and, like other admissions, is not conclusive. 3
The "pakyaw" was mentioned only in Exhibit I, which also declared the
petitioner's receipt of the amount of P28,000.00 as consideration for the
agreement. The petitioner and his witnesses testified to show when and under
what circumstances the amount of P28,000.00 was received. Their testimonies
do not in any way vary or contradict the terms of Exhibit I. While Exhibit I is
dated May 14, 1982, it does not make any categorical declaration that the
amount of P28,000.00 stated therein was received by the petitioner on that
same date. That date may not therefore be considered conclusive as to when
the amount of P28,000.00 was actually received.
A deed is not conclusive evidence of everything it may contain. For instance, it is
not the only evidence of the date of its execution, nor its omission of a
consideration conclusive evidence that none passed, nor is its acknowledgment
of a particular consideration an objection to other proof of other and consistent
considerations; and, by analogy, the acknowledgment in a deed is not
conclusive of the fact. 4
A distinction should be made between a statement of fact expressed in the
instrument and the terms of the contractual act. The former may be varied by
parol evidence but not the latter. 5 Section 7 of Rule 130 clearly refers to the
terms of an agreement and provides that "there can be, between the parties and
their successors in interest, no evidence of the terms of the agreement other
than the contents of the writing."
The statement in Exhibit I of the petitioner's receipt of the P28,000.00 is just a
statement of fact. It is a mere acknowledgment of the distinct act of payment
made by the private respondent. Its reference to the amount of P28,000.00 as
consideration of the "pakyaw" contract does not make it part of the terms of their
agreement. Parol evidence may therefore be introduced to explain Exhibit I,
particularly with respect to the petitioner's receipt of the amount of P28,000.00
and of the date when the said amount was received.
Even if it were assumed that Exhibits D and I are covered by the parol evidence
rule, its application by the Court of Appeals was improper. The record shows
that no objection was made by the private respondent when the petitioner
introduced evidence to explain the circumstances behind the execution and
issuance of the said instruments. The rule is that objections to evidence must be
made as soon as the grounds therefor become reasonably apparent. 6 In the
case of testimonial evidence, the objection must be made when the
objectionable question is asked or after the answer is given if the objectionable
features become apparent only by reason of such answer. 7
For failure of the private respondent to object to the evidence introduced by the
petitioner, he is deemed to have waived the benefit of the parol evidence rule.
Thus, in Abrenica v. Gonda, 8 this Court held:
. . . it has been repeatedly laid down as a rule of evidence that a protest or
objection against the admission of any evidence must be made at the proper
time, and that if not so made it will be understood to have been waived. The
proper time to make a protest or objection is when, from the question addressed
to the witness, or from the answer thereto, or from the presentation of proof, the
inadmissibility of evidence is, or may be inferred.
It is also settled that the court cannot disregard evidence which would ordinarily
be incompetent under the rules but has been rendered admissible by the failure
of a party to object thereto. Thus:
. . . The acceptance of an incompetent witness to testify in a civil suit, as well as
the allowance of improper questions that may be put to him while on the stand is
a matter resting in the discretion of the litigant. He may assert his right by timely
objection or he may waive it, expressly or by silence. In any case the option
rests with him. Once admitted, the testimony is in the case for what it is worth
and the judge has no power to disregard it for the sole reason that it could have
been excluded, if it had been objected to, nor to strike it out on its own motion.
(Emphasis supplied.) 9
We find that it was error for the Court of Appeals to disregard the parol evidence
introduced by the petitioner and to conclude that the amount of P35,000.00
received on May 4, 1982 by the petitioner was in the nature of a loan
accommodation. The Court of Appeals should have considered the partial
stipulation of facts and the testimonies of the witnesses which sought to explain
the circumstances surrounding the execution of Exhibits D and I and their
relation to one another.
We are satisfied that the amount of P35,000.00 was received by the petitioner
as full payment of their "pakyaw" agreement for P28,000.00 and the remaining
P7,000.00 as advance rentals for their sublease agreement. The claim that the
excess of P7,000.00 was advance payment of the sublease agreement is
bolstered by the testimony of the private respondent himself when during the
cross examination he testified that:
ATTY. CRUZ:
Q And during the time you were leasing the fishpond, is it not a fact that you pay
lease rental to the defendant?
SALONGA:
A No sir, because I have already advanced him money.
Q What advance money are you referring to?
A Thirty-Five Thousand Pesos (P35,000.00), sir. 10
It was also error to treat the amounts received by the petitioner from August 15,
1982, to September 30, 1982, from the private respondent as loan
accommodations when the partial stipulation of facts clearly stated that these
were payments for the sublease agreement. The pertinent portions read:
7) That defendant Lucio Cruz in compliance with their verbal sublease
agreement had received from the plaintiff Conrado Salonga the following sums
of money: (Emphasis Supplied.)
(a) P8,000.00 on August 15, 1982, as evidenced by Annex "B" of the complaint;
(b) the sum of P500.00 on September 4, 1982, as evidenced by Annex "C" of
the complaint;
(c) the sum of P3,000.00 on September 19, 1982, as evidenced by Annex "D" of
the complaint;
(d) the sum of P3,750.00 on September 30, 1982, as Annex "E" of the
complaint; 11
These admissions bind not only the parties but also the court, unless modified
upon request before the trial to prevent manifest injustice.
We find, however, that the Court of Appeals did not act in excess of its
jurisdiction when it appreciated Exhibit I despite the fact that it was not pleaded
as a cause of action and was objected to by the petitioner. According to Rule 10
of the Rules of Court:
Sec. 5. Amendment to conform to or authorize presentation of evidence. —
When issues not raised by the pleadings are tried by express or implied consent
of the parties, they shall be treated in all respects, as if they had been raised in
the pleadings. Such amendment of the pleadings as may be necessary to cause
them to conform to the evidence and to raise these issues may be made upon
motion of any party at any time, even after judgment; but failure to amend does
not affect the result of the trial of these issues. If evidence is objected to at the
trial on the ground that it is not within the issues made by the pleadings, the
court may allow the pleadings to be amended and shall do so freely when the
presentation of the merits of the action will be subserved thereby and the
objecting party fails to satisfy the court that the admission of such evidence
would prejudice him in maintaining his action or defense upon the merits. The
court may grant a continuance to enable the objecting party to meet such
evidence.
In Co Tiamco v. Diaz, 12 the Supreme Court held:
. . . When evidence is offered on a matter not alleged in the pleadings, the court
may admit it even against the objection of the adverse party, when the latter fails
to satisfy the court that the admission of the evidence would prejudice him in
maintaining his defense upon the merits, and the court may grant him
continuance to enable him to meet the situation created by the evidence . . .
While it is true that the private respondent did not even file a motion to amend
his complaint in order that it could conform to the evidence presented, this did
not prevent the court from rendering a valid judgment on the issues proved. As
we held in the Co Tiamco case:
. . . where the failure to order an amendment does not appear to have caused a
surprise or prejudice to the objecting party, it may be allowed as a harmless
error. Well-known is the rule that departures from procedure may be forgiven
when they do not appear to have impaired the substantial rights of the parties.
The following computation indicates the accountability of the private respondent
to the petitioner:
Exh. D, May 4, 1982 — P35,000.00
Exh. E, Aug. 15, 1982 — 8,000.00
Exh. F, Sept. 4, 1982 — 500.00
Exh. G, Sept. 19, 1982 — 3,000.00
Exh. H, Sept. 30, 1982 — 3,750.00
Lost receipt 4,000.00
————
P54,250.00
Less: (amount received by the
private respondent from the
petitioner) (6,000.00)
————
Total amount paid by the
private respondent to
the petitioner 48,250.00
Amount to be paid by the private respondent to the petitioner:
1. Pakyaw P28,000.00
2. Sublease — 28,000 per annum
Less: 2 months: 4,666 23,334.00
————
Total amount to be paid by
the private respondent to
the petitioner P51,334.00
Total amount to be paid
by the private respondent P51,334.00
Total amount paid by
the private respondent 48,250.00
————
Deficiency in the amount paid by the private respondent P3,084.00
ACCORDINGLY, the decision of the respondent Court of Appeals is
REVERSED and that of the Regional Trial Court of Laguna AFFIRMED, with the
modification that the private respondent shall pay the petitioner the sum of
P3,084.00 instead of P3,054.00, plus costs. It is so ordered.
G.R. No. 181539 July 24, 2013
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,
vs.
EDWIN ALEMAN y LONGHAS, Accused-Appellant.
DECISION
LEONARDO-DE CASTRO, J.:
1 stated that the Nokia 3315 and Siemens S-45 cellular phones taken away from
Accused-appellant Edwin Aleman appeals from the Decision dated September
28, 2007 of the Court of Appeals in CA-G.R. CR.-H.C. No. 02100 affirming the
2
Decision dated November 16, 2005 of the Regional Trial Court (RTC) of
Quezon City, Branch 76 in Criminal Case No. Q-03-118348 which found him
guilty of the crime of robbery with homicide.
Accused-appellant was charged under the following Information:
That on or about the 10th day of February 2003, in Quezon City, Philippines, the
said accused, conspiring and confederating with another person whose true
name, identity and other personal circumstances have not as yet been
ascertained and mutually helping each other, did then and there willfully,
unlawfully and feloniously rob one RAMON JAIME BIROSEL y VILLA in the
following manner, to wit: on the date and place aforementioned while said victim
was inside his car having a conversation over his cellphone, the said accused
suddenly appeared and with intent to gain and by means of violence
approached the said vehicle and ordered said victim to open it and once opened
thereafter stabbed the said victim with a bladed weapon hitting him on the thorax
thereby inflicting upon him serious and mortal wounds which were the direct and
immediate cause of his untimely death, and thereupon took, stole and carried
away the following, to wit:
a) Two (2) NOKIA cellular phones
b) One (1) brown leather wallet
c) Undetermined amount of cash money
d) One (1) necklace
e) One (1) men’s ring all with undetermined value, belonging to said
RAMON JAIME BIROSEL y VILLA, to the damage and prejudice of
3
the heirs of said RAMON JAIME BIROSEL y VILLA.
4
Accused-appellant pleaded not guilty to the charge when arraigned. After pre-
trial was conducted, trial ensued.
The prosecution established that, as shown in the medico-legal report prepared
by Police Senior Inspector (P/S Insp.) Elizardo Daileg of the Philippine National
Police (PNP) Crime Laboratory who autopsied the victim’s cadaver, the cause of
death was "hemorrhagic shock secondary to multiple stab wounds in the
thorax." In particular, three penetrating stab wounds were inflicted on the upper
left portion of the victim’s chest, "piercing the upper lobe of the left lung and
perforating the heart." He also suffered stab wounds in the right eye, stomach
5
and left forearm and incised wounds in the left upper eyelid and left palm.
The victim, Ramon Jaime Birosel, was a 55-year old real estate broker at the
time of his death. He was survived by his widow, Maria Filomena Birosel, with
whom he had no child. Filomena spent a total of ₱477,054.30 in funeral
expenses in connection with the burial of her deceased husband. Filomena
Ramon were valued at ₱3,500.00 each, while the necklace snatched from him
was worth ₱20,000.00.
6
The prosecution’s case against accused-appellant hinges on the following
eyewitness account of Mark Almodovar:
On February 10, 2003, at about 7:00 o’clock in the evening, Mark went out of his
house to play ball in the basketball court. He walked to the basketball court,
played there, and at about 9:00 o’clock, he stopped playing as he then felt like
urinating. He went to a place near the basketball court where there were five
cars parked. While urinating, he saw a fat man walking towards a car. The fat
man was talking on his cellular phone. He then noticed two men following the fat
man, who entered a parked car. The two male persons who were then following
the fat man then separated: one went to the left side of the fat man’s car and
stood by the door at the driver’s side of the vehicle. While the other positioned
himself by the door at the opposite side of the car. Mark made a diagram,
rectangular shape and two circles on both sides, (Exhibit "L") depicting the car
and the positions of the two men. The man who stood by the door at the driver’s
side had a knife while his companion was armed with a gun. He then witnessed
the man with the knife in his hand stabbing the fat man repeatedly on different
parts of his body, while the man with the gun fired once. After taking the fat
man’s personal belongings, including his ring, watch, wallet and cellular phone,
the two men left. He followed them to a place which he described as far and
there, he saw them buried the knife and covered it with soil. He made a drawing
representing the place where he followed them (Exh. "M"). After burying the
knife in the ground, the men left and he followed them again to a place which he
described as near. While thereat, he saw one of the culprits uncovered his face.
He recognized him as the person who went to the left side of the car and
stabbed the victim who was later on identified as the accused Edwin Aleman.
After which, the two men left. He decided not to follow them and went home
instead. It was about 11:00 o’clock in the evening when he arrived home. After
waking up at 8:00 o’clock the following morning, he returned to the scene of the
incident. There were many people gathered in the area, including policemen. He
saw a chubby girl and requested her to call the policemen. He rode in a car with
the police officers and the chubby girl. They went to a house in a far place, but
no one was there. He recognized and identified the face of the fat man depicted
in the picture (Exhibit "N") shown to him.
On cross-examination, he stated that he did not receive any death threat. In the
year 2003, his grandfather died in Nueva Ecija and he attended the wake. He
stayed there until his father, grandmother and another person, whom he does
not know but of the same age as that of his father, fetched him on September
12, 2003. He was taken to Antipolo where he stayed at the house of the
relatives of the victim until December 10, 2003, the day he initially testified in
court. There was no sign language interpreter in the said house. The relatives of
the victim gave him some money which he used to buy for two shirts, two pants
and a pair of shoes.
Before going to the basketball court which is a little farther from their house at
7:00 o’clock in the evening, he already ate his evening meal at 6:00 o’clock.
There were six of them, boys and girls playing basketball. The basketball court
was a full court but they were not playing a real game, just running and shooting.
At about 8:00 o’clock, they stopped playing, they sat down and had soft drinks.
After finishing his soft drink, he urinated in the shrubbery near the five parked
cars.
He added that he is familiar with Sikatuna Bliss but he does not know what
building in Sikatuna Bliss was fronting the five cars that were parked near the
basketball court. It was the first time that he saw the fat man and the two male
persons who wore black bonnets which covered their whole face. The fat man
was already inside his car when he was repeatedly stabbed. The fat man was
not using his cell phone when the one with the knife knocked twice on the
window of the car. The window of the car was half-opened when the fat man
was immediately stabbed. The man with a gun was on the other side of the car
when he fired his gun once. He did not notice any argument between the fat
man and his attacker. He kept a distance of about eight to ten meters between
him and the two men as he followed them. There were no persons around when
the two men attacked the fat man. After witnessing the stabbing, his initial
reaction was to follow the culprits. He did not call his playmates because they
were still playing. In fleeing, the two male persons did not run. They just walked
fast. He had been [on] their trail for about nine minutes before they removed
their bonnets. He followed them for about thirty minutes.
When he gave his statements to the police, he did not tell them that the knife
was buried under the ground. It was 9:56 o’clock when the men took off their
bonnets. The man with the knife removed the bloodstained white t-shirt that he
was wearing and, along with his bonnet, threw it away in a place he described
as flowing or running water. At about 10:00 o’clock, the two men boarded a
motorcycle and left. It was the man with the gun who drove the motorcycle. He
took the same route when he walked back home. It was about 10:00 o’clock
when he passed by the car of the fat man again. There were no persons when
he went back to the basketball court. Thus, he just went home to sleep and the
following morning, he gave his statement to the police.
On re-direct examination, he was asked and he made a drawing (Exhibit "O")
showing the basketball court (Exhibit "O-1"), the five parked cars near the place
where he urinated (Exhibit "O-2"), the exact spot where he urinated (Exhibit "O-
3") and the car of the fat man (Exhibit "O-4"). When asked how he was able to
see the face of the accused, he answered that "there was light in the area which
he described as near the flowing water where the accused removed his bonnet."
He stated that the light near the flowing water came from a light bulb and the
distance from the witness stand up to second door outside the courtroom
represents how far he was from the man with the knife when the latter took off
7
his bonnet.
Mark was 14 years old when he testified. He is a deaf-mute. He was assisted in
his testimony by Daniel Catinguil, a licensed sign language interpreter from the
Philippine Registry of Interpreters for the Deaf who has been teaching in the
Philippine School for the Deaf since 1990. Catinguil had also completed a five-
year course at the Philippine Normal University with a degree in teaching special
8
education children.
Accused-appellant was 26 years old and a resident of Area 6, Barangay
Botocan, Project 2, Quezon City when he testified. He interposed denial and
alibi as his defenses. He claimed that, at the time the incident happened on
February 10, 2003, he was at the billiards hall which was a 15-minute walk from
9
his residence. A road separates the billiards hall from Sikatuna Bliss.
On that particular night, accused-appellant went to the billiards hall at around
7:00 in the evening and played billiards against a certain Ruben. They played
until around 10:00 in the evening. Just as they were finished playing, accused-
appellant’s sister, Hilda Aleman, arrived to fetch him for dinner. He went home
with her. The following morning, after having breakfast, he watched a basketball
game and talked to his friends. At around noon, while on his way back to his
house, a neighbor, Vangie Barsaga, called him and informed him that police
officers came to his house looking for him. At around 3:00 in the afternoon of
that day, he went to the nearest police station, Camp Karingal, where he
presented himself to Senior Police Officer (SPO) 1, at that time Police Officer 3,
Leonardo Pasco of that station’s District Police Intelligence Unit. He asked
SPO1 Pasco if they were looking for a certain Edwin Aleman and, upon
receiving a positive answer, he introduced himself. He was informed that he was
a suspect in a killing incident. He was told to stay put while they were waiting for
the alleged eyewitness to arrive. On February 13, 2003, he was twice made to
join a police line-up together with five others. In both instances, they were
ordered to turn around several times and they complied. Thereafter, he was
given a spot report: re: Voluntary Surrender of Alleged Suspect in a Robbery w/
Homicide Case by a police officer and was informed that he would be turned
10
over to the custody of the Criminal Investigation Division of Camp Karingal.
Accused-appellant’s testimony that he was at the billiards hall on February 10,
2003 playing against Ruben until around 10:00 in the evening was corroborated
by Filomena Fungo, grandmother of Ruben, who saw accused-appellant and
Ruben playing when she went to the billiards hall twice that night to fetch
11
Ruben. Hilda, accused-appellant’s sister, also corroborated accused-
appellant’s testimony that she fetched him from the billiards hall at around 10:00
in the evening of February 10, 2003. She further stated that, upon getting home,
she and accused-appellant ate dinner together and, thereafter, watched some
12
television shows until accused-appellant went to sleep some 30 minutes later.
Accused-appellant also attempted to show that the eyewitness, Mark, failed to
identify him during the police line-up. Defense witness SPO1 Leonardo Pasco
stated that he was the one who prepared the spot report although it was his
superior who signed it. He further stated that Mark failed to identify accused-
appellant during the police line-up. Another defense witness, barangay kagawad
Ricofredo Barrientos, stated that he was with Mark on February 13, 2003 when
Mark was asked to identify the robber-killer of the victim from a line-up.
According to Barrientos, a police officer made a gesture to Mark by slashing his
throat with the use of his hand and, after viewing the persons in the line-up,
Mark shook his head. The line-up was presented to Mark twice and he shook his
head in both instances.
13
After studying the parties’ respective evidence, the trial court rejected the
defenses of accused-appellant for their inherent weakness and implausibility. On
the other hand, it viewed the prosecution’s evidence favorably, particularly the
eyewitness testimony of Mark and his positive identification of accused-appellant
as the one who stabbed the victim. In particular, the trial court found Mark’s
testimony simple and credible. He had no ill motive that would make him testify
falsely against accused-appellant. While there were minor inconsistencies in his
testimony, the discrepancies were inconsequential and did not affect the
truthfulness of Mark’s narration. Thus, in its Decision dated November 16, 2005,
the trial court found accused-appellant guilty beyond reasonable doubt of the
crime of robbery with homicide. The dispositive portion of the Decision reads:
WHEREFORE, finding the accused Edwin Aleman guilty beyond reasonable
doubt of the crime of Robbery with Homicide, described and penalized under
Article 294 of the Revised Penal Code, as amended by Republic Act 7659, in
relation to Article 63 of the Revised Penal Code, the court hereby sentences him
to suffer the penalty of reclusion perpetua and to indemnify the heirs of Ramon
Jaime Birosel as follows:
1. The amount of FIFTY THOUSAND PESOS (₱50,000.00) as civil
indemnity for the death of the victim;
2. The amount of FIFTY THOUSAND PESOS (₱50,000.00) as moral
damages; and
3. The amount of FOUR HUNDRED SEVENTY-SEVEN THOUSAND
FIFTY-FOUR PESOS AND THIRTY CENTAVOS (₱477,054.30) as
actual damages.
He is also ordered to reimburse the heirs of the victim the amount of THREE
THOUSAND FIVE HUNDRED PESOS (₱3,500.00) representing the value of the
Nokia 3315 cellular phone, the amount of THREE THOUSAND FIVE HUNDRED
PESOS (₱3,500.00) representing the value of the S-45 Siemens cellular phone,
and the amount of TWENTY THOUSAND PESOS (₱20,000.00) representing
the value of the necklace, which were all taken from the victim.
14
With costs against the accused.
Accused-appellant appealed his case to the Court of Appeals. He anchored his
appeal on the claim that the trial court erred in convicting him for robbery with
homicide. His claim was four-pronged, all aimed at discrediting the eyewitness,
15
Mark.
First, accused-appellant questioned the qualification of Mark to be a witness.
Accused-appellant argued that, being a deaf-mute who cannot make known his
perception to others as he has no formal education on sign language, Mark is
unqualified to be a witness. In fact, he was unable to give a responsive answer
to some questions propounded to him through the interpreter such as when he
could not answer why he preferred to play in a basketball far from his house
16
than in a nearer one.
Second, accused-appellant asserted that Mark’s testimony was not corroborated
by his alleged playmates or by the "chubby girl" he mentioned in his testimony.
17
Such lack of corroboration weakened Mark’s testimony.
Third, accused-appellant contended that Mark admitted receiving money, new
clothes and shoes from the private complainant before he took the witness
18
stand. This made his testimony highly suspicious.
Fourth, accused-appellant highlighted Mark’s failure to identify him as the
perpetrator of the crime in the two instances that he was presented to Mark in a
line-up. This made Mark’s alleged positive identification of accused-appellant
19
doubtful.
In its Decision dated September 28, 2007, the Court of Appeals held that the
20
contentions of accused-appellant lacked merit.
The Court of Appeals declared that the capacity of a deaf-mute to testify has
long been recognized. The witness may communicate his perceptions to the
court through an interpreter. In this case, Mark’s testimony was facilitated by
Catinguil, a licensed sign language interpreter who has been teaching in the
Philippine School for the Deaf since 1990. With the help of Catinguil, the trial
court determined that Mark is not mentally deficient and that he was able to tell
time, space and distance. He was able to draw and make sketches in open court
to show the relative position of things and persons as he perceived like a normal
person. By using signs and signals, he was able to recount clearly what he
witnessed in the evening of February 10, 2003. According to the appellate court,
21
the above established Mark’s competence as a witness.
The Court of Appeals also found that Mark’s testimony was corroborated by the
findings of the medico-legal officer who autopsied the victim’s corpse that the
cause of death was hemorrhagic shock secondary to multiple stab wounds in
the thorax. This physical evidence is an eloquent manifestation of truth and its
22
evidentiary weight is far more than that of corroborative testimonies.
The Court of Appeals rejected as groundless accused-appellant’s imputation to
Mark of improper motive or bias. It also pointed out the irrelevance of non-
identification of an accused in a police line-up. What is important is the positive
identification of the accused as the perpetrator of the crime by the witness in
23
open court.
Thus, the Court of Appeals agreed with the trial court that the prosecution was
able to establish beyond reasonable doubt all the elements of robbery with
homicide. It upheld the conviction of accused-appellant for the said felony. The
decretal portion of the Decision dated September 28, 2007 reads:
WHEREFORE, premises considered, the decision dated November 16, 2005 of
the Regional Trial Court [(RTC)], National Capital Judicial Region, Branch 76,
24
Quezon City, in Criminal Case No. Q-03-118348 is AFFIRMED.
Accused-appellant is now before this Court insisting on the failure of the
prosecution to prove his guilt beyond reasonable doubt on the very same
grounds he raised in the Court of Appeals.
This Court is not persuaded.
Both the RTC and the Court of Appeals found that accused-appellant stabbed
the victim several times, causing the latter’s death, for the purpose of depriving
the victim of his personal properties, which personalties accused-appellant took
away with him before leaving the scene of the crime. The killing of the victim
was by reason of the robbery. It therefore constitutes the special complex crime
of robbery with homicide. This finding of the trial court as affirmed by the
appellate court is conclusive to this Court. Also, a review of the records show
that both the trial and the appellate courts did not miss, misapply or misinterpret
any relevant fact that would warrant an alteration of their identical conclusions
as to the criminal responsibility of accused-appellant.
25
The Court of Appeals has sufficiently addressed the concerns of accused-
appellant. Accused-appellant has presented no compelling reason that would
justify the reversal of his conviction.
The mere fact that Mark is a deaf-mute does not render him unqualified to be a
witness. The rule is that "all persons who can perceive, and perceiving, can
26
make known their perception to others, may be witnesses." A deaf-mute may
not be able to hear and speak but his/her other senses, such as his/her sense of
sight, remain functional and allow him/her to make observations about his/her
environment and experiences. The inability to hear and speak may prevent a
deaf-mute from communicating orally with others but he/she may still
communicate with others in writing or through signs and symbols and, as in this
case, sketches. Thus, a deaf-mute is competent to be a witness so long as
he/she has the faculty to make observations and he/she can make those
27
observations known to others. As this Court held in People v. Tuangco :
A deaf-mute is not incompetent as a witness. All persons who can perceive, and
perceiving, can make known their perception to others, may be witnesses. Deaf-
mutes are competent witnesses where they (1) can understand and appreciate
the sanctity of an oath; (2) can comprehend facts they are going to testify on;
and (3) can communicate their ideas through a qualified interpreter. Thus, in
People vs. De Leon and People vs. Sasota, the accused was convicted on the
basis of the testimony of a deaf-mute. x x x. (Citations omitted.)
When a deaf-mute testifies in court, "the manner in which the examination of a
deaf-mute should be conducted is a matter to be regulated and controlled by the
trial court in its discretion, and the method adopted will not be reviewed by the
appellate court in the absence of a showing that the complaining party was in
28
some way injured by reason of the particular method adopted."
In this case, both the trial and the appellate courts found that Mark understood
and appreciated the sanctity of an oath and that he comprehended the facts he
testified on. This Court sees no reason in ruling otherwise.
Mark communicated his ideas with the help of Catinguil, a licensed sign
language interpreter from the Philippine Registry of Interpreters for the Deaf who
has been teaching in the Philippine School for the Deaf since 1990 and
possessed special education and training for interpreting sign language. The
trial and the appellate courts found Catinguil qualified to act as interpreter for
Mark. No ground to disturb that finding exists.
Mark communicated a credible account of the things he perceived on that fateful
February 10, 2003 – the situation of the victim who had just boarded his car; the
respective positions of accused-appellant and his still unidentified cohort vis-à-
vis the victim; accused-appellant’s knock on the window of the victim’s car and
the sudden series of stabs accused-appellant inflicted upon the victim; the taking
of the victim’s various personal properties; accused-appellant’s walk away from
the crime scene; and, the revelation of accused-appellant’s identity when he
finally removed the bonnet that covered his face, unaware that someone was
secretly and silently watching. In this connection, the Court of Appeals correctly
observed that "despite intense and grueling cross-examinations, the eyewitness
responded with consistency upon material details that could only come from a
firsthand knowledge of the shocking events which unfolded before his
29
eyes." The imperfections or inconsistencies cited by accused-appellant were
due to the fact that there is some difficulty in eliciting testimony where the
30
witness is a deaf-mute. Besides they concerned material details which are
neither material nor relevant to the case. As such, those discrepancies do not
detract from the credibility of Mark’s testimony, much less justify the total
rejection of the same. What is material is that he positively identified accused-
appellant and personally saw what accused-appellant did to the victim on the
fateful night when the incident happened. The trial court’s assessment of the
credibility of Mark, which was affirmed by the appellate court, deserves the
highest respect of this Court.
Moreover, the Court of Appeals correctly observed that Mark’s testimony was
corroborated by the findings of the medico-legal officer who autopsied the
victim’s corpse that the cause of death was "hemorrhagic shock secondary to
31
multiple stab wounds in the thorax." The multiple mortal wounds inflicted on
the victim constitute physical evidence which further establish the truth of Mark’s
testimony. Its evidentiary value far outweighs any corroborative testimony which
accused-appellant requires of the prosecution. Moreover, the settled rule is that
the positive and credible testimony of a single witness is sufficient to secure the
32
conviction of an accused.
The RTC and the Court of Appeals saw no improper motive which would impel
Mark to testify falsely against accused-appellant. As the determination of bad
faith, malice or ill motive is a question of fact, this Court respects the unanimous
finding of the trial and the appellate courts on the matter.
Accused-appellant’s attempt to render doubtful Mark’s identification of him
fails.1âwphi1 Indeed, the law requires not simply an eyewitness account of the
act of committing the crime but the positive identification of the accused as the
33
perpetrator of the crime. Here, Mark has positively pointed to accused-
appellant as the perpetrator of the crime. The Court of Appeals correctly ruled
that Mark’s failure to identify accused-appellant in a police line-up on February
13, 2003 was of no moment. There is no law stating that a police line-up is
essential to proper identification. What matters is that the positive identification
of the accused as the perpetrator of the crime be made by the witness in open
34
court. Nevertheless, the records show that Mark identified accused-appellant
35
as the robber-killer of the victim in a police line-up on February 18, 2003 and,
more importantly, in open court in the course of Mark’s testimony.
In sum, the trial and the appellate courts correctly convicted accused-appellant
for the special complex crime of robbery with homicide. Accused-appellant’s
crime is punishable under Article 294(1) of the Revised Penal Code, as
amended by Republic Act No. 7659, by reclusion perpetua to death. Article 63 of
the Revised Penal Code states that when the law prescribes a penalty
consisting of two indivisible penalties, and the crime is not attended by any
36
aggravating circumstance, the lesser penalty shall be imposed. Considering
that no modifying circumstance attended the commission of the crime, the
penalty imposed by the trial and the appellate courts, reclusion perpetua, is
proper.
The civil indemnity is increased from ₱50,000.00 to ₱75,000.00, the current
37
amount of civil indemnity awarded in cases of murder. Robbery with homicide
belongs to that class of felony denominated as "Robbery with violence against
38
or intimidation of persons" under Article 294 of the Revised Penal Code and
the killing or death of a person is committed "by reason or on occasion of the
robbery." The increase in the amount of civil indemnity is called for as the
special complex crime of robbery with homicide, like murder, involves a greater
degree of criminal propensity than homicide alone where the civil indemnity
awarded is ₱50,000.00.
The ₱50,000.00 imposed as moral damages is proper and conforms to recent
jurisprudence.
39
The reimbursement of actual damages in the total amount of ₱477,054.30 for
various funeral-related expenses is proper as it is fully supported by evidence on
record. The same holds true for the payment of the value of the items taken from
the victim, namely, two cellphones at ₱3,500.00 each and the necklace at
₱20,000.00.
In addition, and in conformity with current policy, we also impose on all the
monetary awards for damages (namely, the civil indemnity, moral damages and
actual damages) interest at the legal rate of 6% per annum from date of finality
of this Decision until fully paid.
40
WHEREFORE, the Decision dated September 28, 2007 of the Court of Appeals
in CA-G.R. CR.-H.C. No. 02100 affirming the Decision dated November 16,
2005 of the Regional Trial Court of Quezon City, Branch 76 in Criminal Case No.
Q-03-118348 which found accused-appellant Edwin Aleman guilty beyond
reasonable doubt of the special complex crime of robbery with homicide is
AFFIRMED with MODIFICATION in so far as legal interest at the rate of 6% per
annum is imposed on the civil indemnity, moral damages and actual damages
awarded to the heirs of the victim, which shall commence from the date of
finality of this decision until fully paid.
SO ORDERED.
G.R. No. 198059 April 7, 2014
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,
vs.
ANTONIO LUJECO y MACANOQUIT alias "TONYO", Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:
Appellant Antonio Lujeco y Macanoquit was charged with the crime of
1 2
rape committed on June 29, 2002 against "AAA," a seven-year old
3
minor. Appellant pleaded not guilty when arraigned on February 27,
4
2003. After trial, the Regional Trial Court of Malaybalay, Branch 8, rendered a
5 6
Decision finding appellant guilty of statutory rape.
As found by the trial court, the prosecution has satisfactorily established that in
the morning of June 29, 2002, "AAA" was playing with her friends near the old
market at Don Carlos, Bukidnon, which was about 20 meters away from her
house. After her playmates left, appellant suddenly grabbed "AAA" and dragged
her to the house of his granddaughter which was located nearby. Inside the
house, appellant forcibly undressed "AAA," poked a knife at her, and then had
carnal knowledge of her. After satiating his lust, appellant told "AAA" to go
home.
Aggrieved, appellant appealed to the Court of Appeals which rendered its
7
Decision dated April 29, 2011 affirming in full the Decision of the trial court, viz:
WHEREFORE, the assailed Decision of the Regional Trial Court, Branch 8,
Malaybalay City, finding accused-appellant Antonio Lujeco alias Tonyo guilty
beyond reasonable doubt of the crime of rape is AFFIRMED in toto with costs
against accused-appellant.
8
SO ORDERED.
9
Hence, this appeal.
10
In his Supplemental Brief, appellant claims that the trial court and the appellate
11
court erred in giving credence to the testimony of "AAA". He argues that "AAA"
12
was "under pressure by her mother" or was coached as the latter was
embracing "AAA" while "AAA" was on the witness stand.
This contention deserves no consideration.
It is worth emphasizing that "AAA" was only seven years of age when raped;
and eight years old when placed on the witness stand. At the start of her
13
testimony, the trial judge asked if "AAA" needed a "support person." The
prosecution replied that her mother would act as her support. Notably, the
defense offered no objection. Thus, it is now too late in the proceedings for
appellant to assail the same.
14
Besides, we have perused the records and found that "AAA’s" mother never
uttered any word while "AAA" was testifying. If at all, the records only showed
that her mother was embracing "AAA" while the latter was testifying. There was
no coaching whatsoever. That she admitted during cross-examination that her
15
mother told her "to always remember" when testifying, does not diminish her
credibility. On the contrary, we interpret this as a mere reminder from her mother
for "AAA" to remember every detail so that appellant would stay in jail. For
reference, the pertinent testimony of "AAA" reads as follows:
Q. What did your mother tell you before you testified today?
A. She told me to always remember.
Q. What in particular was that she wanted you to always remember?
A. She said, "AAA, you have to remember always so that they will [be] put to
shame."
Q. Do you know who was that your mother was referring to be put to shame
when she told you to remember always something?
A. Yes.
Q. Who?
A. Them, Tonyo.
Q. Tonyo Lujeco, the one whom you pointed to earlier, am I correct?
A. Yes.
Q. What else did your mother tell you?
A. My mother told me that if I will not remember always, if I am not going to
16
remember always, that will cause Tonyo to be released.
More importantly, the records show that "AAA" testified in a categorical and
straightforward manner despite her youth. She was unequivocal in her narration
and in pointing to the appellant as the rapist. As correctly observed by the trial
court:
Her tender age notwithstanding, "AAA" nonetheless appeared to possess the
necessary intelligence and perceptiveness sufficient to invest her with the
competence to testify about her experience. She might have been an
impressionable child – as all others of her age are – but her narration of the
facts relating to the incident is clear. x x x Her demeanor as a witness –
manifested during trial by her unhesitant spontaneous and plain responses to
17
questions further enhanced her claim to credit and trustworthiness.
xxxx
x x x This court observed the clear, candid, and straightforward manner that the
victim narrated how the accused sexually violated her. This court finds no
cogent reason to deviate from that observation. Moreover the court finds simply
inconceivable for "AAA", eight (8) years of age, with all her naivete and
innocence, to fabricate a story of defloration, allow an examination of her private
parts, and thereafter submit herself to a public trial or ridicule, if she had not, in
fact, been a victim of rape and deeply motivated by a sincere desire to have the
18
culprit apprehended and punished. x x x
The Court of Appeals also correctly observed that:
Based on AAA’s testimony, it is clear that the appellant had carnal knowledge of
the victim who was under twelve (12) years old. AAA categorically recounted the
details of how appellant raped her by pushing hard to insert his penis into her
labia majora. She was only seven (7) years old when she was raped. It is
improbable that a victim of tender years, especially one unexposed to the ways
of the world as AAA must have been, would impute a crime as serious as rape if
it were not true. There is no doubt that AAA was impelled solely by a desire to
let justice find its way. In this regard, it is worthy to note that jurisprudence is one
in recognizing that when the offended parties are young and immature girls,
courts are inclined to lend credence to their version of what transpired,
considering not only their relative vulnerability but also the shame and
embarrassment to which they would be exposed by court trial if the matter about
19
which they testified is not true.
Besides, "AAA’s" testimony was corroborated by the medical findings of Dr.
Marichu Macias (Dr. Macias). Dr. Macias testified that "AAA" suffered
20 21
fresh hymenal lacerations; that the victim was "positive for sexual
22
molestation injury" as there were "contusion-hematoma x x x triangular in
23
shape found in both sides of the labia majora of the victim."
We find no merit in appellant’s argument that the contusion or hematoma in
"AAA’s" private part could have been caused by riding a bike. Even at her tender
age, "AAA" categorically testified that appellant inserted his penis into her
24
vagina and pushed it hard. Finally, appellant claims that his alibi, although
concededly a weak defense, should not be disregarded. We are not persuaded.
We agree with the ruling of the appellate court, viz:
As regards appellant’s contention that the trial court gravely erred in convicting
him despite the fact that during the time that the alleged rape was committed, he
was at the public market of Don Carlos, the Court finds the same wanting in
merit.
It has been held, time and again, that alibi, as a defense, is inherently weak and
crumbles in light of positive identification by truthful witnesses. It should be
noted that for alibi to prosper, it is not enough for the accused to prove that he
was in another place when the crime was committed. He must likewise prove
that it was physically impossible for him to be present at the crime scene or its
immediate vicinity at the time of its commission. As testified by the appellant, he
was at the public market of Don Carlos, Bukidnon x x x. Undoubtedly, x x x it
25
[was not] impossible for him to be at the crime scene x x x.
Both the trial court and the Court of Appeals properly convicted appellant of
26
statutory rape defined under Article 266-A of the Revised Penal Code. "The
elements of [statutory rape] are: (1) that the accused had carnal knowledge of a
27
woman; and (2) that the woman is below 12 years of age or is demented." In
this case, the prosecution satisfactorily established that appellant had carnal
knowledge of "AAA." It was also established beyond reasonable doubt that
28
"AAA" was below 12 years of age. "The sentence of reclusion perpetua
imposed upon accused-appellant by the [trial court], affirmed by the Court of
Appeals, for the crime of statutory rape x x x is in accordance with Article 266-B
29
of the Revised Penal Code, as amended." However, appellant is not eligible
30
for parole.
As regards the damages awarded by the trial court and affirmed by the Court of
Appeals, the same must be modified. The award of civil indemnity must be
reduced from ₱75,000.00 to ₱50,000.00 in line with the prevailing
31
jurisprudence. Likewise, the award of moral damages must be decreased from
32
₱75,000.00 to ₱50,000.00. The award of actual damages in the amount of
₱25,000.00 must be deleted for lack of basis. However, "AAA" is entitled to an
33
award of exemplary damages in the amount of ₱30,000.00. In addition, all the
damages awarded shall earn legal interest at the rate of 6% per annum from
34
date of finality of this Resolution until fully paid.
WHEREFORE, the appeal is DISMISSED. The April 29, 2011 Decision of the
Court of Appeals in CA-G.R. CR-H.C. No. 00772 finding appellant Antonio
Lujeco y Macanoquit guilty beyond reasonable doubt of the crime of statutory
rape and sentencing him to suffer the penalty of reclusion perpetua is
AFFIRMED with MODIFICATIONS that appellant is not eligible for parole; the
awards of civil indemnity and moral damages are each reduced to ₱50,000.00;
the award of actual damages in the amount of ₱25,000.00 is deleted for lack of
basis; instead, "AAA" is entitled to an award of exemplary damages in the
amount of ₱30,000.00; and all damages awarded shall earn interest at the rate
of 6% per annum from date of finality of judgment until fully paid.
SO ORDERED.
G.R. No. 200987 August 20, 2014
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,
vs.
RONALDO BAYAN y NERI, Accused-Appellant.
DECISION
PEREZ, J.:
1 5
On appeal is the Decision of the Court of Appeals promulgated on 19 July 2011
2
affirming the conviction by the Regional Trial Court (RTC) of Quezon City,
Branch 82, of appellant Ronaldo Bayan y Neri for violation of Section 5, Article II
of Republic Act No. 9165 and sentencing him to suffer life imprisonment and to
pay a ₱500,000.00 fine.
Appellant was charged following a "buy-bust" operation.
The accusatory portion of the Information against appellant reads:
That on or about the 5th day of July 2003, in Quezon City, Philippines, the said
accused, not authorized by law to sell, dispense, deliver, transport or distribute
any dangerous drug, did then and there, willfully and unlawfully sell, dispense,
deliver, transport, distribute or act as broker in the said transaction, zeropoint
zero three (0.03) grams of Methylamphetamine Hydrochlorideknown as Shabu,
3
a dangerous drug.
When arraigned, appellant pleaded not guilty. Trial ensued.
The prosecution presented as witnesses PO2 Emeterio Mendoza, Jr. (PO2
Mendoza), who acted as poseur-buyer, and PO3 Ferdinand de Guzman (PO3
de Guzman), a back-up operative who assisted PO2 Mendoza. Their
testimonies sought to establish the following facts:
Police operatives from the Station Drug Enforcement Unit (SDEU) of the
Novaliches Police Station conducted a buy-bust operation on 5 July 2003 based
on a tip from an informant thata certain Ronaldo Bayan and Irene Bayan (Irene)
were engaged in illegal drug trade in BarangayCapri, Novaliches, Quezon City.
The team leader, PO3 de Guzman, narrated that the buy-bust team conducted a
surveillance at BarangayCapri where they were able to confirm that an illegal
drug activity was ongoing in the house of appellant. PO2 Mendoza prepared the
pre-operation report which was submitted to the Philippine Drug Enforcement
4
Agency. PO2 Mendoza was assigned as the poseur-buyer while PO3 de
Guzmanacted as one of his backups. At about 7:40 p.m. of the same day, the
team proceeded to the target place. The buy-bust team was strategically
positioned in the area while the informant and PO2 Mendoza went directly to the
house of appellant. When appellant opened the door, the informant introduced
PO2 Mendoza to appellant as the buyer of shabu. Appellant’s live-in partner,
Irene, was likewise present during the introduction. PO2 Mendoza readily gave
the 100-peso bill to appellant in exchange for the small plastic sachet containing
shabu. Immediately after the exchange, PO2 Mendoza placed his hand on
appellant’s shoulder, introduced himself as a police officer and arrested
appellant. Irene meanwhile tried to escape but PO3 de Guzman was able to
arrest her. PO3 de Guzmanrecovered from Irene’s possession dried marijuana
leaves wrapped in a newspaper.Appellant and Irene were brought to the police
station where PO2 Mendoza put his markings "EM" on the plastic sachet he
received from appellant. Thereafter, they brought the plastic sachet to the crime
laboratory.
The forensic chemist issued anInitial Laboratory Report which revealed that the
heat-sealed transparent plastic sachet with markings "EM" containing 0.03 gram
of white crystalline substance was found positive for shabu.
6
In his defense, appellant denied the charge against him. He claimed that he and
Irene were walking on their way home when they were blocked by five men at
the corner of Guyabano Street and Amparo Capri Street. Appellant recognized
one of them as Isagani Mateo, who frequently displaces them whenever they
sell inthe market. The five men frisked, handcuffed, and brought them to Station
4, Novaliches, Quezon City. Thereat, they were asked to remove their clothes
and they were frisked again. Appellant saw a sachet of shabuand marijuanaon
top of a table. They were forced by one of the policeman to point to the objects
under threat of physical harm, while their photographs were being taken. They
were also asked to sign a document which they were not able to read. Later that
night, they were brought to the fiscal’s office for inquest without the presence of
7
counsel.
On 20 February 2007, the RTC rendered a Decision finding appellant guilty of
violation of Section 5, Article II of Republic Act No. 9165 and sentencing him to
suffer life imprisonment and to pay a ₱500,000.00 fine. Irene was likewise found
guilty for violation of Section 11, Article II of Republic Act No. 9165 and was
sentenced to suffer the indeterminate penalty of imprisonment of twelve
(12)years and one (1) day as minimum to thirteen (13) years as maximum and
8
to pay a fine in the amount ₱300,000.00. The trial court gave credence to the
testimonies of the members of the buy-bust team.
After receiving a copy of the trial court's Decision, the two accused seasonably
9
filed a Notice of Appeal before the Court of Appeals. On 19 July 2011, the
appellate court acquitted Irene for violation of Section 11, Article II of Republic
Act No. 9165 but appellant’s conviction was affirmed in toto.
The appellate court held that the prosecution established the consummation of
the sale through the testimony of the poseur-buyer.
Appellant appealed his conviction before this Court, adopting the same Q: Where was that?
arguments in his Brief before the Court of Appeals.
A: No. 17 Guyabano Street, Barangay [Capril], Novaliches, Quezon City.
Appellant maintains that the prosecution failed to prove beyond reasonable
doubt the guilt of appellant dueto the glaring inconsistencies in the testimonies Q: What time was that, what time did you arrive there?
of the prosecution’s witnesses. Appellant points out that PO2 Mendoza spoke of
an alleged informant while PO3 de Guzman mentioned a concerned citizen who A: About 7:40.
called the police station to inform them of an illegal drug trade. Appellant asserts
that the prosecution failed to present the buy-bust money as proof of the illegal
sale of shabu. Appellant argues that since the buy-bust money was the COURT:
consideration of the alleged sale, failure to adduce it in evidence is tantamount
to failure to establish the elements of the crime. 7:40 in the evening? A: Yes, your Honor.

Appellant’s arguments deserve scant consideration. Jurisprudence dictates that PROS. ANTERO:
minor inconsistencies do not affect the credibility of the witness. We have held
that "discrepancies and inconsistencies in the testimonies of witnesses referring What happened when you arrived there?
to minor details, and not in actuality touching upon the central fact of the crime,
do not impair their credibility. Testimonies of witnesses need only corroborate A: The informant introduced me to Ronaldo Bayan.
each other on important and relevant details concerning the principal
occurrence. In fact, such minor inconsistencies may even serve to strengthen
Q: Where did you get contact with the subject?
the witnesses’ credibility as they negate any suspicion that the testimonies have
10
been rehearsed."
A: At No. 17 Guyabano Street.
Failure to present the buy-bust money is not fatal to the prosecution’s cause. It
is not indispensable in drugcases since it is merely corroborative evidence, and Q: How were you introduced to the subject by the informant?
the absence thereof does not create a hiatus inthe evidence for the prosecution
provided the sale of dangerous drugs is adequately proven and the drug subject A: I was introduced as buyer of shabu.
of the transaction ispresented before the court. Neither law nor jurisprudence
11
requires the presentation of any money used in the buy-bust operation. Q: To whom?

In every prosecution for illegal sale of shabu, the following elements must be A: Ronaldo Bayan, sir.
sufficiently proved: (1) the identity of the buyer and the seller, the object and the
consideration; and (2) the delivery of the thing sold and the payment Q: Is this Ronaldo Bayan inside this courtroom?
12
therefor. Indeed, all these elements were duly established.
A: Yes, sir.
Appellant was caught in flagrante delictoselling shabuthrough a buy-bust
operation conducted by the operatives of SDEU of the Novaliches Police
Station. Q: Can you point to him?

The poseur-buyer, PO2 Mendoza, positively testified that the sale took place INTERPRETER:
and appellant was the author thereof, thus:
The witness is going to a man inyellow shirt who answered by the name of?
Q: What happened after you were tasked as poseur-buyer?
ACCUSED:
A: We proceeded to the subject of our operation.
RONALDO BAYAN.
INTERPRETER: Q: What did this Ronaldo Bayan do after you handed him this ₱100.00?

RONALDO BAYAN. A: He gave me shabu, sir.

COURT: COURT:

Who were present when you were introduced by the informant to Ronaldo Where was it contained?
Bayan?
A: Small plastic sachet, your Honor.
A: The live-in partner, Irene Bayan, me, the informant and Ronaldo Bayan, your
Honor. PROS. ANTERO:

PROS. ANTERO: He gave you a small plastic sachet?

Is this Irene Bayan inside this courtroom? A: Yes, sir.

A: Yes, sir. Q: What happened after he gaveyou a small plastic sachet?

Q: Can you point to her? A: I introduced myself as policeman.

INTERPRETER: Q: What happened after you introduced yourself asa policeman?

The witness is [pointing] to a woman who answered by the name of? A: I placed my hand on his shoulder and introduced myself as a policeman and
13
told him of his mistake and of his rights.
ACCUSED 2:
Appellant produced the plastic sachet containing shabuand handed it to the
IRENE BAYAN. poseur-buyer in exchange for ₱100.00. This transaction was witnessed by PO3
de Guzman who acted as one of the back-ups.
INTERPRETER:
Furthermore, the prosecution was ableto preserve the integrity and evidentiary
Irene Bayan. value of the said illegal drugs.1âwphi1 The prosecution was able to sufficiently
establish the following circumstances showing an unbroken chain of custody
over the shabuthat was seized from herein accusedappellant: (1) P02 Mendoza,
PROS. ANTERO:
who acted as the poseur-buyer during the buybust operation, was the one who
received the transparent plastic sachet containing shabu from the
What happened after you were introduced to Ronaldo Bayan by the informant? 14
appellant; (2) the said transparent plastic sachet was then brought by PO2
15
Mendoza to the police station where he placed his initials "EM"; (3) thereafter,
A: I gave the ₱100.00, sir. 16
said sachet was brought to the crime laboratory for examination; and (4) the
laboratory examination was conducted by Police Inspector Abraham Verde
17
A: Ronaldo Bayan, sir. Tecson.

Q: You gave it to whom? The result of the laboratory examination confirmed the presence of
methylamphetamine hydrochloride on the white crystalline substance inside the
A: To Ronaldo Bayan, sir. plastic sachet confiscated from appellant. The delivery of the illicit drug to the
poseur-buyer and the receipt by the seller of the marked money successfully
consummated the buy-bust transaction.

Appellant’s defense, which is predicated on a bare denial, deserves scant

consideration in light of the positive testimonies of the police officers. The
defense of frame-up or denial in drug cases requires strong and convincing
evidence because of the presumption that the law enforcement agencies acted
18
in the regular performance of their official duties. Bare denials of appellant
cannot prevail over the positive testimonies of the three police
19
officers. Moreover, there is no evidence of any improper motive on the part of
the police officers who conducted the buy-bust operation to falsely testify against
appellant.

Generally, factual findings of trial courts especially those which revolve matters
of credibility of witnesses deserve to be respected when no glaring errors
bordering on a gross misapprehension of the facts, or where no speculative,
arbitrary and unsupported conclusions, can be gleaned from such
20
findings. The evaluation of the credibility of witnesses and their testimonies are
best undertaken by the trial court because of its unique opportunity to observe
the witnesses’deportment, demeanor, conduct and attitude under grilling
21
examination.

We do not find any cogent reason to reverse the lower courts.

In fine, it has been established by proof beyond reasonable doubt that

appellants sold shabu. Under Section 5, Article II of Republic Act No. 9165, the
penalty of life imprisonment to death and fine ranging from ₱500,000.00 to
₱1,000,000.00 shall be imposed upon any person, who, unless authorized by
law, shall sell, trade, administer, dispense, deliver, give away to another,
distribute dispatch in transit or transport any dangerous drug, including any and
all species of opium poppyregardless of the quantity and purity involved. Hence,
the trial court, as affirmed by the Court of Appeals, correctly imposed the penalty
of life imprisonment and a fine of ₱500,000.00.

WHEREFORE, the Decision dated 19 July 2011 of the Court of Appeals

affirming the conviction of appellant Ronaldo Bayan y Neri by the RTC of
Quezon City, Branch 82 for violation of Section 5, Article II of Republic Act No.
9165 and sentencing him to suffer the penalty of LIFE IMPRISONMENT and to
pay a fine of ₱500,000.00 is hereby AFFIRMED.

SO ORDERED.
G.R. No. 143439 October 14, 2005 he successfully set the house on fire (sic) of Susan Ramirez knew that it was
occupied by Susan Ramirez, the members of the family as well as Esperanza
MAXIMO ALVAREZ, Petitioner, Alvarez, the estranged wife of the accused; that as a consequence of the
vs. accused in successfully setting the fire to the house of Susan Ramirez, the door
SUSAN RAMIREZ, Respondent. of said house was burned and together with several articles of the house,
including shoes, chairs and others.
DECISION
COURT:
SANDOVAL-GUTIERREZ, J.:
You may proceed.
1 2
Before us is a petition for review on certiorari assailing the Decision of the
Court of Appeals dated May 31, 2000 in CA-G.R. SP No. 56154, entitled "Susan xxx
Ramirez, petitioner, versus, Hon. Benjamin M. Aquino, Jr., as Judge RTC,
Malabon, MM, Br. 72, and Maximo Alvarez, respondents." DIRECT EXAMINATION

Susan Ramirez, herein respondent, is the complaining witness in Criminal Case ATTY. ALCANTARA:
3
No. 19933-MN for arson pending before the Regional Trial Court, Branch 72,
Malabon City. The accused is Maximo Alvarez, herein petitioner. He is the xxx
husband of Esperanza G. Alvarez, sister of respondent.
Q: When you were able to find the source, incidentally what was the source of
On June 21, 1999, the private prosecutor called Esperanza Alvarez to the that scent?
witness stand as the first witness against petitioner, her husband. Petitioner and
his counsel raised no objection.
A: When I stand by the window, sir, I saw a man pouring the gasoline in the
house of my sister (and witness pointing to the person of the accused inside the
Esperanza testified as follows: court room).

"ATTY. ALCANTARA:
We are calling Mrs. Esperanza Alvarez, the wife of the accused, Your Honor.
COURT:
Swear in the witness.
xxx
ATTY. MESIAH: (sic)
Your Honor, we are offering the testimony of this witness for the purpose of
proving that the accused Maximo Alvarez committed all the elements of the
crime being charged particularly that accused Maximo Alvarez pour on May 29,
1998 gasoline in the house located at Blk. 5, Lot 9, Phase 1-C, Dagat-dagatan,
Navotas, Metro Manila, the house owned by his sister-in-law Susan Ramirez;
that accused Maximo Alvarez after pouring the gasoline on the door of the
house of Susan Ramirez ignited and set it on fire; that the accused at the time
Q: For the record, Mrs. Witness, can you state the name of that person, if you
know?
A: He is my husband, sir, Maximo Alvarez.
Q: If that Maximo Alvarez you were able to see, can you identify him?
A: Yes, sir.
Q: If you can see him inside the Court room, can you please point him?
A: Witness pointing to a person and when asked to stand and asked his name,
4
he gave his name as Maximo Alvarez."
In the course of Esperanza’s direct testimony against petitioner, the latter
showed "uncontrolled emotions," prompting the trial judge to suspend the
proceedings.
 5
On June 30, 1999, petitioner, through counsel, filed a motion to disqualify
Esperanza from testifying against him pursuant to Rule 130 of the Revised
Rules of Court on marital disqualification.
6
Respondent filed an opposition to the motion. Pending resolution of the motion,
the trial court directed the prosecution to proceed with the presentation of the
other witnesses.
On September 2, 1999, the trial court issued the questioned Order disqualifying
Esperanza Alvarez from further testifying and deleting her testimony from the
7 harmony and tranquility fails. In such a case, identity of interests disappears and
records. The prosecution filed a motion for reconsideration but was denied in
8 the consequent danger of perjury based on that identity is non-existent.
the other assailed Order dated October 19, 1999.
This prompted respondent Susan Ramirez, the complaining witness in Criminal
Case No. 19933-MN, to file with the Court of Appeals a petition
9
for certiorari with application for preliminary injunction and temporary restraining
order.
10
On May 31, 2000, the Appellate Court rendered a Decision nullifying and setting
aside the assailed Orders issued by the trial court.
Hence, this petition for review on certiorari.
The issue for our resolution is whether Esperanza Alvarez can testify against her
husband in Criminal Case No. 19933-MN.
Section 22, Rule 130 of the Revised Rules of Court provides:
"Sec. 22. Disqualification by reason of marriage. – During their marriage, neither
the husband nor the wife may testify for or against the other without the consent
of the affected spouse, except in a civil case by one against the other, or in a
criminal case for a crime committed by one against the other or the latter’s direct
descendants or ascendants."
The reasons given for the rule are:
1. There is identity of interests between husband and wife;
2. If one were to testify for or against the other, there is consequent danger of
perjury;
3. The policy of the law is to guard the security and confidences of private life,
even at the risk of an occasional failure of justice, and to prevent domestic
disunion and unhappiness; and
4. Where there is want of domestic tranquility there is danger of punishing one
11
spouse through the hostile testimony of the other.
But like all other general rules, the marital disqualification rule has its own
exceptions, both in civil actions between the spouses and in criminal cases for
offenses committed by one against the other. Like the rule itself, the exceptions
are backed by sound reasons which, in the excepted cases, outweigh those in
support of the general rule. For instance, where the marital and domestic
relations are so strained that there is no more harmony to be preserved nor
peace and tranquility which may be disturbed, the reason based upon such
Likewise, in such a situation, the security and confidences of private life, which
the law aims at protecting, will be nothing but ideals, which through their
12
absence, merely leave a void in the unhappy home.
13
In Ordoño vs. Daquigan, this Court held:
"We think that the correct rule, which may be adopted in this jurisdiction, is that
laid down in Cargil vs. State, 35 ALR 133, 220 Pac. 64, 25 Okl. 314, wherein the
court said:
‘The rule that the injury must amount to a physical wrong upon the person is too
narrow; and the rule that any offense remotely or indirectly affecting domestic
harmony comes within the exception is too broad. The better rule is that, when
an offense directly attacks, or directly and vitally impairs, the conjugal relation, it
comes within the exception to the statute that one shall not be a witness against
the other except in a criminal prosecution for a crime committee (by) one against
the other.’"
Obviously, the offense of arson attributed to petitioner, directly impairs the
conjugal relation between him and his wife Esperanza. His act, as embodied in
the Information for arson filed against him, eradicates all the major aspects of
marital life such as trust, confidence, respect and love by which virtues the
conjugal relationship survives and flourishes.
As correctly observed by the Court of Appeals:
"The act of private respondent in setting fire to the house of his sister-in-law
Susan Ramirez, knowing fully well that his wife was there, and in fact with the
alleged intent of injuring the latter, is an act totally alien to the harmony and
confidences of marital relation which the disqualification primarily seeks to
protect. The criminal act complained of had the effect of directly and vitally
impairing the conjugal relation. It underscored the fact that the marital and
domestic relations between her and the accused-husband have become so
strained that there is no more harmony, peace or tranquility to be preserved.
The Supreme Court has held that in such a case, identity is non-existent. In
such a situation, the security and confidences of private life which the law aims
to protect are nothing but ideals which through their absence, merely leave a
void in the unhappy home. (People v. Castañeda, 271 SCRA 504). Thus, there
is no longer any reason to apply the Marital Disqualification Rule."

It should be stressed that as shown by the records, prior to the commission of

the offense, the relationship between petitioner and his wife was already
strained. In fact, they were separated de facto almost six months before the
incident. Indeed, the evidence and facts presented reveal that the preservation
of the marriage between petitioner and Esperanza is no longer an interest the
State aims to protect.

At this point, it bears emphasis that the State, being interested in laying the truth
before the courts so that the guilty may be punished and the innocent
exonerated, must have the right to offer the direct testimony of Esperanza, even
against the objection of the accused, because (as stated by this Court
14
in Francisco ), "it was the latter himself who gave rise to its necessity."

WHEREFORE, the Decision of the Court of Appeals is AFFIRMED. The trial

court, RTC, Branch 72, Malabon City, is ordered to allow Esperanza Alvarez to
testify against petitioner, her husband, in Criminal Case No. 19933-MN. Costs
against petitioner.

SO ORDERED.

G.R. No. 180843 April 17, 2013
APOLONIO GARCIA, in substitution of his deceased mother, Modesta
Garcia, and CRISTINA SALAMAT,Petitioners,
vs.
DOMINGA ROBLES VDA. DE CAPARAS, Respondent.
DECISION
DEL CASTILLO, J.:
Under the Dead Man's Statute Rule, "if one party to the alleged transaction is
precluded from testifying by death, insanity, or other mental disabilities, the other
party is not entitled to the undue advantage of giving his own uncontradicted and
1 reneged on their agreement and cultivated the land all by himself, deliberately
unexplained account of the transaction." Thus, the alleged admission of the
deceased Pedro Caparas (Pedro) that he entered into a sharing of leasehold
rights with the petitioners cannot be used as evidence against the herein
respondent as the latter would be unable to contradict or disprove the same.
2 Affidavit stating among others that Pedro assured her that he would not
This Petition for Review on Certiorari seeks to reverse and set aside the August
3 4
31, 2007 Decision of the Court of Appeals (CA) in CA-G.R. SP No. 90403; as
5
well as its December 13, 2007 Resolution denying petitioners' Motion for
Reconsideration.
Factual Antecedents
Flora Makapugay (Makapugay) is the owner of a 2.5-hectare farm in Barangay
Lugam, Malolos, Bulacan (the land) covered by Transfer Certificate of Title No.
6
(TCT) RT-65932 (T-25198) and being tilled by Eugenio Caparas (Eugenio) as
agricultural lessee under a leasehold agreement. Makapugay passed away and
was succeeded by her nephews and niece, namely Amanda dela Paz-Perlas
(Amanda), Justo dela Paz (Justo) and Augusto dela Paz (Augusto). On the other
hand, Eugenio’s children – Modesta Garcia (Garcia), Cristina Salamat (Salamat)
and Pedro – succeeded him.
Before she passed away, Makapugay appointed Amanda as her attorney-in-fact.
After Eugenio died, or in 1974, Amanda and Pedro entered into an agreement
7
entitled "Kasunduan sa Buwisan", followed by an April 19, 1979 Agricultural
8
Leasehold Contract, covering the land. In said agreements, Pedro was installed
and recognized as the lone agricultural lessee and cultivator of the land.
Pedro passed away in 1984, and his wife, herein respondent Dominga Robles
Vda. de Caparas (Dominga), took over as agricultural lessee.
On July 10, 1996, the landowners Amanda, Justo and Augusto, on the one
hand, and Pedro’s sisters Garcia and Salamat on the other, entered into a
9
"Kasunduan sa Buwisan ng Lupa" whereby Garcia and Salamat were
acknowledged as Pedro’s co-lessees.
On October 24, 1996, herein petitioners Garcia and Salamat filed a
10
Complaint for nullification of leasehold and restoration of rights as agricultural
lessees against Pedro’s heirs, represented by his surviving spouse and herein
respondent Dominga. Before the office of the Provincial Agrarian Reform
Adjudicator (PARAD) of Bulacan, the case was docketed as Department of
Agrarian Reform Adjudication Board (DARAB) Case No. R-03-02-3520-96.
In their Complaint, Garcia and Salamat claimed that when their father Eugenio
died, they entered into an agreement with their brother Pedro that they would
alternately farm the land on a "per-season basis"; that the landowner
Makapugay knew of this agreement; that when Makapugay passed away, Pedro
excluding them and misrepresenting to Amanda that he is Eugenio’s sole heir;
that as a result, Amanda was deceived into installing him as sole agricultural
lessee in their 1979 Agricultural Leasehold Contract; that when Amanda learned
of Pedro’s misrepresentations, she executed on July 10, 1996 an
11
deprive Garcia and Salamat of their "cultivatory rights"; that in order to correct
matters, Amanda, Justo and Augusto executed in their favor the 1996
"Kasunduan sa Buwisan ng Lupa", recognizing them as Pedro’s co-lessees; that
when Pedro passed away, Dominga took over the land and, despite demands,
continued to deprive them of their rights as co-lessees; that efforts to settle their
controversy proved futile, prompting the Barangay Agrarian Reform Committee
to issue the proper certification authorizing the filing of a case; and that they
suffered damages as a consequence. Petitioners prayed that the 1979
Agricultural Leasehold Contract between Pedro and Amanda be nullified; that
they be recognized as co-lessees and allowed to cultivate the land on an
alternate basis as originally agreed; and that they be awarded ₱50,000.00
attorney’s fees and costs of litigation.
12
In her Answer, herein respondent Dominga claimed that when her father-in-law
Eugenio died, only her husband Pedro succeeded and cultivated the land, and
that petitioners never assisted him in farming the land; that Pedro is the sole
agricultural lessee of the land; that Amanda’s July 10, 1996 Affidavit and
"Kasunduan sa Buwisan ng Lupa" of even date between her and the petitioners
are self-serving and violate the existing 1979 Agricultural Leasehold Contract;
13 14
that under Section 38 of Republic Act No. 3844 (RA 3844), petitioners’ cause
of action has prescribed. Dominga further claimed that Pedro has been in
possession of the land even while Eugenio lived; that petitioners have never
cultivated nor possessed the land even for a single cropping; that Pedro has
been the one paying the lease rentals as evidenced by receipts; that when
Pedro died in 1984, she succeeded in his rights as lessee by operation of law,
and that she had been remitting lease rentals to the landowners since 1985; and
that petitioners had no right to institute themselves as her co-lessees. She
prayed that the Complaint be dismissed; that the July 10, 1996 "Kasunduan sa
Buwisan ng Lupa" be nullified; that the execution of a new leasehold agreement
between her and the landowners be ordered; and by way of counterclaim, that
15
moral damages and litigation costs be awarded her.
Ruling of the PARAD
After hearing and consideration of the parties’ respective position papers and
16
other submissions, the PARAD issued on May 4, 1998 a Decision, which
decreed as follows:
WHEREFORE, premises considered, judgment is hereby rendered in favor of
the defendant and against the plaintiffs and Order is hereby issued:
1. ORDERING the dismissal of the case;
2. DECLARING defendant Dominga Robles Vda. de Caparas as lawful
successor-tenant;
3. ORDERING plaintiffs to maintain defendant in her peaceful
possession and cultivation of the subject landholding;
4. ORDERING the MARO of Malolos, Bulacan to execute a new
leasehold contract between the landowner and defendant Dominga
Robles Vda. de Caparas;
5. No pronouncement as to costs.
17
SO ORDERED.
The PARAD held that Amanda’s act of executing the July 10, 1996 Affidavit and
"Kasunduan sa Buwisan ng Lupa" amounted to dispossession of Pedro’s
landholding and rights without cause; that Amanda’s 1996 disclaimer, after
having installed Pedro as tenant in 1979, was belated and unjustified; that
petitioners have not shown by evidence that they actually cultivated the land, or
that they paid rentals to the landowners; that petitioners’ cause of action has
prescribed in accordance with Section 38 of RA 3844; that for failure to timely
question Pedro’s leasehold, his rights were transferred, by operation of law, to
Dominga upon his death. Finally, the PARAD held that petitioners’ July 10, 1996
"Kasunduan sa Buwisan ng Lupa" is null and void for being issued against
Pedro’s existing 1979 Agricultural Leasehold Contract, which has not been
cancelled by competent authority.
DARAB Case No. 03-03-10307-99
It appears that sometime after the execution of the July 10, 1996 "Kasunduan sa
Buwisan ng Lupa" and during the pendency of DARAB Case No. R-03-02-3520-
96, petitioners entered the land and began tilling the same. For this reason,
Dominga filed DARAB Case No. 03-03-10307-99, for maintenance of peaceful
possession with injunctive relief, against the landowners and petitioners. On
18
petitioners’ motion, the case was dismissed.
Ruling of the DARAB
Petitioners appealed the May 4, 1998 PARAD Decision in DARAB Case No. R-
03-02-3520-96 to the DARAB, where the case was docketed as DARAB Case
19
No. 9722 (DCN 9722). Dominga likewise appealed the dismissal of DARAB
Case No. 03-03-10307-99, which appeal was docketed as DARAB Case No.
11155 (DCN 11155). On motion, both appeals were consolidated.
20
On June 15, 2005, the DARAB issued its Decision, the dispositive portion of
which reads, as follows:
WHEREFORE, premises considered, a new judgment is hereby rendered:
1. DECLARING Dominga Robles Vda. de Caparas as the lawful
successor-tenant of Pedro Caparas over the subject landholding;
2. ORDERING the plaintiffs in DCN 9722 and the respondents in DCN
11155 or any person acting in their behalves [sic], to maintain Dominga
Robles Vda. de Caparas in peaceful possession and cultivation of the
subject landholding;
3. ORDERING the MARO of Malolos, Bulacan, to execute a new
leasehold contract between the landowner and Dominga Robles Vda.
de Caparas; and
4. ORDERING for the dismissal of DCN 11155 for being moot and
academic.
21
SO ORDERED.
In upholding the PARAD Decision, the DARAB held that contrary to petitioners’
claim, there was no alternate farming agreement between the parties, and thus
petitioners may not claim that they were co-lessees; that Pedro merely shared
his harvest with petitioners as an act of generosity, and Dominga’s act of
stopping this practice after succeeding Pedro prompted petitioners to file
DARAB Case No. R-03-02-3520-96 and claim the status of co-lessees; that
Amanda’s Affidavit and the 1996 "Kasunduan sa Buwisan ng Lupa" between the
landowners and petitioners cannot defeat Pedro’s 1979 Agricultural Leasehold
Contract and his rights as the sole tenant over the land; that for sleeping on their
rights, petitioners are now barred by laches from claiming that they are co-
lessees; and that petitioners’ 1996 "Kasunduan sa Buwisan ng Lupa" is null and
void for being contrary to law, morals, public policy, and Pedro’s 1979
Agricultural Leasehold Contract, which was subsisting and which has not been
cancelled by competent authority.
Ruling of the Court of Appeals
Petitioners filed before the CA a Petition for Certiorari, which was docketed as
CA-G.R. SP No. 90403, seeking to set aside the DARAB Decision. The sole
basis of their Petition rests on the argument that as a result of a May 9, 2005
Order issued by the Regional Technical Director (Region III) of the Department
of Environment and Natural Resources, the survey returns and plans covering
TCT RT-65932 have been cancelled, which thus rendered the June 15, 2005
DARAB Decision null and void and a proper subject of certiorari.
On August 31, 2007, the CA issued the assailed Decision which decreed as
follows:
IN LIGHT OF ALL THE FOREGOING, the instant petition is DENIED. The
assailed decision is AFFIRMED in toto.
22
SO ORDERED.
The CA held that the issue raised by petitioners – the cancellation of the survey
returns and plans covering TCT RT-65932 – was not part of their causes of
action in the PARAD or DARAB, and this new issue changed the theory of their
case against Dominga, which is not allowed. The CA added that it could not
decide the case on the basis of a question which was not placed in issue during
the proceedings below.
The CA held further that even granting that the issues are resolved on the
merits, the petition would fail; the cancellation of the survey returns and plans
covering TCT RT-65932 reverts the property to its original classification as
agricultural land which thus vindicates the leasehold agreements of the parties.
And speaking of leasehold agreements, the CA held that petitioners may not be
considered as Pedro’s co-lessees, for lack of proof that they actually tilled the
land and with petitioners’ own admission in their pleadings that they merely
received a share from Pedro’s harvests; that the original 1974 and 1979
leasehold agreements between Makapugay, Amanda and Pedro categorically
show that Pedro is the sole designated agricultural lessee; and that without
proper legal termination of Pedro’s lease in accordance with RA 3844, the
landowners cannot designate other tenants to the same land in violation of the
existing lessee’s rights.
Petitioners moved for reconsideration, arguing that the land has been re-
classified as residential land, and has been actually used as such. Petitioners
23
cited a 1997 ordinance, Malolos Municipal Resolution No. 41-97, which
adopted and approved the zoning ordinance and the Malolos Development Plan
prepared jointly by the Housing and Land Use Regulatory Board and the
Malolos Sangguniang Bayan. In the assailed December 13, 2007
24
Resolution, the CA denied the Motion for Reconsideration.
Issues
In this petition, the following errors are assigned:
1. x x x RESPONDENT’S ACT OF HAVING BUILT THREE (3)
HOUSES (FOR HERSELF AND TWO OF HER CHILDREN), WAS
"CONVERSION OF THE FARMHOLD INTO A HOUSING-
RESIDENTIAL SUBDIVISION" AND THEREFORE, SHE IS NOT
BEING PUT IN SURPRISE NOR IN UNFAIR SITUATION.
CONSEQUENTLY, SHE IS THE PARTY IN ESTOPPEL. AND FROM
THE TIME BY HER ACTS OF SELF-CONVERSION OF THE LAND, IN
THE EARLY ‘90S OR EARLIER, SHE "LOST HER SECURITY OF
TENURE" AS AGRICULTURAL LESSEE.
2. THE DECISIONS OF THE DARAB PROVINCIAL ADJUDICATOR,
DARAB CENTRAL OFFICE, AND THE HONORABLE COURT OF
APPEALS, SPEAK OF NO HOMELOT HAVING BEEN AWARDED BY
THE DEPARTMENT OF AGRARIAN REFORM TO PRIVATE
RESPONDENT.
3. ACTUAL PHYSICAL CHANGE IN THE USE OF THE LAND FROM
AGRICULTURAL TO "RESIDENTIAL" MAY OCCUR AFTER TRIAL,
BUT DURING THE APPEAL, WHICH THE HON. COURT OF APPEALS
MAY CONSIDER.
4. "CONVERSION" (WHICH REQUIRES PRIOR APPROVAL BY THE
DAR) HAVING BECOME A "FAIT ACCOMPLI", SECTION 220 OF THE
REAL ESTATE TAX CODE AND ARTICLE 217 OF THE LOCAL
GOVERNMENT CODE OF 1991 AFFIRM THE TRUSTWORTHINESS
OF THE TAX DECLARATION THAT IS, THE PREVIOUS FARMHOLD
HAS BEEN CONVERTED INTO "RESIDENTIAL" LAND, AND
CONFIRMED BY THE CITY ZONING DIRECTOR.
5. IN NOT HAVING CONSIDERED THE TAX DECLARATION AND
THE ZONING CERTIFICATION x x x, THE HON. COURT OF
25
APPEALS COMMITTED A VERY FUNDAMENTAL ERROR.
Petitioners’ Arguments
 26
In their Petition and Reply, petitioners this time argue that in building houses
upon the land for herself and her children without a homelot award from the
Department of Agrarian Reform, Dominga converted the same to residential
use; and by this act of conversion, Dominga violated her own security of tenure
and the land was removed from coverage of the land reform laws. They add that
the Malolos zoning ordinance and the tax declaration covering the land
effectively converted the property into residential land.
Petitioners justify their change of theory, the addition of new issues, and the
raising of factual issues, stating that the resolution of these issues are necessary
in order to arrive at a just decision and resolution of the case in its totality. They
add that the new issues were raised as a necessary consequence of
supervening events which took place after the Decisions of the PARAD and
DARAB were issued.
Respondent’s Arguments
27
In her Comment, Dominga argues that the Petition raises questions of fact
which are not the proper subject of a Petition under Rule 45 of the Rules. She
adds that petitioners raised anew issues which further changed the theory of
their case, and which issues may not be raised for the first time at this stage of
the proceedings.
Our Ruling
The Petition is denied.
DARAB Case No. R-03-02-3520-96, which was filed in 1996 or long after
Pedro’s death in 1984, has no leg to stand on other than Amanda’s declaration
in her July 10, 1996 Affidavit that Pedro falsely represented to Makapugay and
to her that he is the actual cultivator of the land, and that when she confronted
him about this and the alleged alternate farming scheme between him and
petitioners, Pedro allegedly told her that "he and his two sisters had an
understanding about it and he did not have the intention of depriving them of
28
their cultivatory rights." Petitioners have no other evidence, other than such
verbal declaration, which proves the existence of such arrangement. No written
memorandum of such agreement exists, nor have they shown that they actually
cultivated the land even if only for one cropping. No receipt evidencing payment
to the landowners of the latter’s share, or any other documentary evidence, has
been put forward.
What the PARAD, DARAB and CA failed to consider and realize is that
Amanda’s declaration in her Affidavit covering Pedro’s alleged admission and
recognition of the alternate farming scheme is inadmissible for being a violation
29
of the Dead Man’s Statute, which provides that "[i]f one party to the alleged
transaction is precluded from testifying by death, insanity, or other mental
disabilities, the other party is not entitled to the undue advantage of giving his
30
own uncontradicted and unexplained account of the transaction." Thus, since
Pedro is deceased, and Amanda’s declaration which pertains to the leasehold
agreement affects the 1996 "Kasunduan sa Buwisan ng Lupa" which she as
assignor entered into with petitioners, and which is now the subject matter of the
present case and claim against Pedro’s surviving spouse and lawful successor-
in-interest Dominga, such declaration cannot be admitted and used against the
latter, who is placed in an unfair situation by reason of her being unable to
contradict or disprove such declaration as a result of her husband-declarant
Pedro’s prior death.
If petitioners earnestly believed that they had a right, under their supposed
mutual agreement with Pedro, to cultivate the land under an alternate farming
scheme, then they should have confronted Pedro or sought an audience with
Amanda to discuss the possibility of their institution as co-lessees of the land;
and they should have done so soon after the passing away of their father
Eugenio. However, it was only in 1996, or 17 years after Pedro was installed as
tenant in 1979 and long after his death in 1984, that they came forward to
question Pedro’s succession to the leasehold. As correctly held by the PARAD,
petitioners slept on their rights, and are thus precluded from questioning Pedro’s
1979 agricultural leasehold contract.
Amanda, on the other hand, cannot claim that Pedro deceived her into believing
that he is the sole successor to the leasehold. Part of her duties as the
landowner’s representative or administrator was to know the personal
circumstances of the lessee Eugenio; more especially so, when Eugenio died.
She was duty-bound to make an inquiry as to who survived Eugenio, in order
that the landowner – or she as representative – could choose from among them
who would succeed to the leasehold. Under Section 9 of RA 3844, Makapugay,
or Amanda – as Makapugay’s duly appointed representative or administrator –
was required to make a choice, within one month from Eugenio’s death, who
would succeed as agricultural lessee. Thus:
Section 9. Agricultural Leasehold Relation Not Extinguished by Death or
Incapacity of the Parties - In case of death or permanent incapacity of the
agricultural lessee to work his landholding, the leasehold shall continue between
the agricultural lessor and the person who can cultivate the landholding
personally, chosen by the agricultural lessor within one month from such death
or permanent incapacity, from among the following: (a) the surviving spouse; (b)
the eldest direct descendant by consanguinity; or (c) the next eldest descendant
or descendants in the order of their age: Provided, That in case the death or
permanent incapacity of the agricultural lessee occurs during the agricultural
year, such choice shall be exercised at the end of that agricultural year:
Provided, further, That in the event the agricultural lessor fails to exercise his
choice within the periods herein provided, the priority shall be in accordance with
the order herein established.
In case of death or permanent incapacity of the agricultural lessor, the leasehold SO ORDERED.
shall bind his legal heirs. (Emphasis supplied)

Amanda may not claim ignorance of the above provision, as ignorance of the
31
law excuses no one from compliance therewith. Thus, when she executed the
1979 Agricultural Leasehold Contract with Pedro, she is deemed to have chosen
the latter as Eugenio’s successor, and is presumed to have diligently performed
her duties, as Makapugay’s representative, in conducting an inquiry prior to
making the choice.

The same holds true for petitioners. They should be held to a faithful compliance
with Section 9. If it is true that they entered into a unique arrangement with
Pedro to alternately till the land, they were thus obliged to inform Makapugay or
Amanda of their arrangement, so that in the process of choosing Eugenio’s
successor, they would not be left out. But evidently, they did not; they slept on
their rights, and true enough, they were excluded, if there was any such
alternate farming agreement between them. And after Pedro was chosen and
installed as Eugenio’s successor, they allowed 17 years to pass before coming
out to reveal this claimed alternate farming agreement and insist on the
same.1âwphi1

With the above pronouncements, there is no other logical conclusion than that
the 1996 "Kasunduan sa Buwisan ng Lupa" between Amanda and petitioners,
which is grounded on Pedro’s inadmissible verbal admission, and which
agreement was entered into without obtaining Dominga’s consent, constitutes
an undue infringement of Dominga’s rights as Pedro’s successor-in-interest
under Section 9, and operates to deprive her of such rights and dispossess her
32
of the leasehold against her will. Under Section 7 of RA 3844, Dominga is
33
entitled to sennity of tenure; and under Section 16, any modification of the
lease agreement must be done with the consent of both parties and without
prejudicing Dominga's security of tenure.

This Court shall not delve into the issue of re-classification or conversion of the
land. Re-classification/conversion changes nothing as between the landowners
and Dominga in regard to their agreement, rights and obligations. On the
contrary, re-classification/conversion can only have deleterious effects upon
petitioners' cause. Not being agricultural lessees of the land, petitioners may not
benefit at all, for under the law, only the duly designated lessee -herein
respondent - is entitled to disturbance compensation in case of re-
classification/conversion of the landholding into residential, commercial,
34
industrial or some other urban purposes. Besides, a valid re-classification of
the land not only erases petitioners' supposed leasehold rights; it renders them
illegal occupants and sowers in bad faith thereof, since from the position they
have taken as alleged lessees, they are not the owners of the land.

WHEREFORE, the Petition is DENIED. The assailed August 31, 2007 Decision
and December 13, 2007 Resolution of the Court of Appeals are AFFIRMED.
G.R. No. 172835 December 13, 2007 2. a. Contact Grease COG #2 115,236.00 5540 04/26/99
b. Connector CG 230,519.52 6327 08/05/99
AIR PHILIPPINES CORPORATION, Petitioner, Grease (fake)
vs.
PENNSWELL, INC. Respondent.
3. a. Trixohtropic EPC 81,876.96 4582 01/29/99
Grease EPC#2 81,876.96 5446 04/21/99
DECISION
b. Di-Electric
Strength Protective
CHICO-NAZARIO, J.: Coating (fake)

Petitioner Air Philippines Corporation seeks, via the instant Petition for Review
under Rule 45 of the Rules of Court, the nullification of the 16 February 2006 4. a. Dry Lubricant ASC-EP 87,346.52 5712 05/20/99
1 2
Decision and the 25 May 2006 Resolution of the Court of Appeals in CA-G.R. b. Anti-Seize ASC-EP 124,108.10 4763 & 02/16/99 &
3 Compound (fake) 2000 5890 06/24/99
SP No. 86329, which affirmed the Order dated 30 June 2004 of the Regional
Trial Court (RTC), Makati City, Branch 64, in Civil Case No. 00-561.

Petitioner Air Philippines Corporation is a domestic corporation engaged in the
business of air transportation services. On the other hand, respondent
Pennswell, Inc. was organized to engage in the business of manufacturing and
selling industrial chemicals, solvents, and special lubricants.
On various dates, respondent delivered and sold to petitioner sundry goods in
4 5 6 7
trade, covered by Sales Invoices No. 8846, 9105, 8962, and 8963, which
correspond to Purchase Orders No. 6433, 6684, 6634 and 6633, respectively.
Under the contracts, petitioner’s total outstanding obligation amounted to
₱449,864.98 with interest at 14% per annum until the amount would be fully
paid. For failure of the petitioner to comply with its obligation under said
8
contracts, respondent filed a Complaint for a Sum of Money on 28 April 2000
with the RTC.
According to petitioner, respondent’s products, namely Excellent Rust
Corrosion, Connector Grease, Electric Strength Protective Coating, and Anti-
Seize Compound, are identical with its Anti-Friction Fluid, Contact Grease,
Thixohtropic Grease, and Dry Lubricant, respectively. Petitioner asseverated
that had respondent been forthright about the identical character of the products,
it would not have purchased the items complained of. Moreover, petitioner
alleged that when the purported fraud was discovered, a conference was held
between petitioner and respondent on 13 January 2000, whereby the parties
agreed that respondent would return to petitioner the amount it previously paid.
However, petitioner was surprised when it received a letter from the respondent,
demanding payment of the amount of ₱449,864.94, which later became the
subject of respondent’s Complaint for Collection of a Sum of Money against
petitioner.

9 10
In its Answer, petitioner contended that its refusal to pay was not without valid During the pendency of the trial, petitioner filed a Motion to Compel respondent
and justifiable reasons. In particular, petitioner alleged that it was defrauded in to give a detailed list of the ingredients and chemical components of the
the amount of ₱592,000.00 by respondent for its previous sale of four items, following products, to wit: (a) Contact Grease and Connector Grease; (b)
covered by Purchase Order No. 6626. Said items were misrepresented by Thixohtropic Grease and Di-Electric Strength Protective Coating; and (c) Dry
11
respondent as belonging to a new line, but were in truth and in fact, identical Lubricant and Anti-Seize Compound. It appears that petitioner had earlier
with products petitioner had previously purchased from respondent. Petitioner requested the Philippine Institute of Pure and Applied Chemistry (PIPAC) for the
asserted that it was deceived by respondent which merely altered the names latter to conduct a comparison of respondent’s goods.
and labels of such goods. Petitioner specifically identified the items in question,
as follows: On 15 March 2004, the RTC rendered an Order granting the petitioner’s motion.
It disposed, thus:
Label/Description Item No. Amount P.O. Date
The Court directs [herein respondent] Pennswell, Inc. to give [herein petitioner]
1. a. Anti-Friction Fluid MPL-800 153,941.40 5714 05/20/99 Air Philippines Corporation[,] a detailed list of the ingredients or chemical
b. Excellent Rust MPL-008 155,496.00 5888 06/20/99 components of the following chemical products:
Corrosion (fake)
a. Contact Grease to be compared with Connector Grease;
 b. Thixohtropic Grease to be compared with Di-Electric Strength
Protective Coating; and
c. Dry Lubricant to be compared with Anti-Seize Compound[.]
[Respondent] Pennswell, Inc. is given fifteen (15) days from receipt of this Order
to submit to [petitioner] Air Philippines Corporation the chemical components of
12
all the above-mentioned products for chemical comparison/analysis.
Respondent sought reconsideration of the foregoing Order, contending that it
cannot be compelled to disclose the chemical components sought because the
matter is confidential. It argued that what petitioner endeavored to inquire upon
constituted a trade secret which respondent cannot be forced to divulge.
Respondent maintained that its products are specialized lubricants, and if their
components were revealed, its business competitors may easily imitate and
market the same types of products, in violation of its proprietary rights and to its
serious damage and prejudice.
The RTC gave credence to respondent’s reasoning, and reversed itself. It
issued an Order dated 30 June 2004, finding that the chemical components are
respondent’s trade secrets and are privileged in character. A priori, it
rationalized:
The Supreme Court held in the case of Chavez vs. Presidential Commission on
Good Government, 299 SCRA 744, p. 764, that "the drafters of the Constitution
also unequivocally affirmed that aside from national security matters and
intelligence information, trade or industrial secrets (pursuant to the Intellectual
Property Code and other related laws) as well as banking transactions (pursuant
to the Secrecy of Bank Deposit Act) are also exempted from compulsory
disclosure."
Trade secrets may not be the subject of compulsory disclosure. By reason of
[their] confidential and privileged character, ingredients or chemical components
of the products ordered by this Court to be disclosed constitute trade secrets lest
[herein respondent] would eventually be exposed to unwarranted business
competition with others who may imitate and market the same kinds of products
in violation of [respondent’s] proprietary rights. Being privileged, the detailed list
of ingredients or chemical components may not be the subject of mode of
discovery under Rule 27, Section 1 of the Rules of Court, which expressly
13
makes privileged information an exception from its coverage.
Alleging grave abuse of discretion on the part of the RTC, petitioner filed a
Petition for Certiorari under Rule 65 of the Rules of Court with the Court of
Appeals, which denied the Petition and affirmed the Order dated 30 June 2004
of the RTC.
The Court of Appeals ruled that to compel respondent to reveal in detail the list
of ingredients of its lubricants is to disregard respondent’s rights over its trade
secrets. It was categorical in declaring that the chemical formulation of
respondent’s products and their ingredients are embraced within the meaning of
"trade secrets." In disallowing the disclosure, the Court of Appeals expounded,
thus:
The Supreme Court in Garcia v. Board of Investments (177 SCRA 374 [1989])
held that trade secrets and confidential, commercial and financial information
are exempt from public scrutiny. This is reiterated in Chavez v. Presidential
Commission on Good Government (299 SCRA 744 [1998]) where the Supreme
Court enumerated the kinds of information and transactions that are recognized
as restrictions on or privileges against compulsory disclosure. There, the
Supreme Court explicitly stated that:
"The drafters of the Constitution also unequivocally affirmed that, aside from
national security matters and intelligence information, trade or industrial
secrets (pursuant to the Intellectual Property Code and other related laws) as
well as banking transactions (pursuant to the Secrecy of Bank Deposits Act) re
also exempt from compulsory disclosure."
It is thus clear from the foregoing that a party cannot be compelled to produce,
release or disclose documents, papers, or any object which are considered
trade secrets.
In the instant case, petitioner [Air Philippines Corporation] would have
[respondent] Pennswell produce a detailed list of ingredients or composition of
the latter’s lubricant products so that a chemical comparison and analysis
thereof can be obtained. On this note, We believe and so hold that the
ingredients or composition of [respondent] Pennswell’s lubricants are trade
secrets which it cannot be compelled to disclose.
[Respondent] Pennswell has a proprietary or economic right over the ingredients
or components of its lubricant products. The formulation thereof is not known to
the general public and is peculiar only to [respondent] Pennswell. The legitimate
and economic interests of business enterprises in protecting their manufacturing
and business secrets are well-recognized in our system.
[Respondent] Pennswell has a right to guard its trade secrets, manufacturing
formulas, marketing strategies and other confidential programs and information
against the public. Otherwise, such information can be illegally and unfairly
utilized by business competitors who, through their access to [respondent]
Pennswell’s business secrets, may use the same for their own private gain and
to the irreparable prejudice of the latter.
xxxx
In the case before Us, the alleged trade secrets have a factual basis, i.e., it
comprises of the ingredients and formulation of [respondent] Pennswell’s
lubricant products which are unknown to the public and peculiar only to
Pennswell.
All told, We find no grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of public respondent Judge in finding that the detailed list
of ingredients or composition of the subject lubricant products which petitioner
[Air Philippines Corporation] seeks to be disclosed are trade secrets of
14
[respondent] Pennswell; hence, privileged against compulsory disclosure.
Petitioner’s Motion for Reconsideration was denied.
Unyielding, petitioner brought the instant Petition before us, on the sole issue of:
WHETHER THE COURT OF APPEALS RULED IN ACCORDANCE WITH
PREVAILING LAWS AND JURISPRUDENCE WHEN IT UPHELD THE RULING
OF THE TRIAL COURT THAT THE CHEMICAL COMPONENTS OR
INGREDIENTS OF RESPONDENT’S PRODUCTS ARE TRADE SECRETS OR
INDUSTRIAL SECRETS THAT ARE NOT SUBJECT TO COMPULSORY
15
DISCLOSURE.
Petitioner seeks to convince this Court that it has a right to obtain the chemical
composition and ingredients of respondent’s products to conduct a comparative
analysis of its products. Petitioner assails the conclusion reached by the Court of
Appeals that the matters are trade secrets which are protected by law and
beyond public scrutiny. Relying on Section 1, Rule 27 of the Rules of Court,
petitioner argues that the use of modes of discovery operates with desirable
flexibility under the discretionary control of the trial court. Furthermore, petitioner
posits that its request is not done in bad faith or in any manner as to annoy,
embarrass, or oppress respondent.
A trade secret is defined as a plan or process, tool, mechanism or compound
known only to its owner and those of his employees to whom it is necessary to
16
confide it. The definition also extends to a secret formula or process not
patented, but known only to certain individuals using it in compounding some
17
article of trade having a commercial value. A trade secret may consist of any
formula, pattern, device, or compilation of information that: (1) is used in one's
business; and (2) gives the employer an opportunity to obtain an advantage over
18
competitors who do not possess the information. Generally, a trade secret is a
process or device intended for continuous use in the operation of the business,
for example, a machine or formula, but can be a price list or catalogue or
19
specialized customer list. It is indubitable that trade secrets constitute
proprietary rights. The inventor, discoverer, or possessor of a trade secret or
similar innovation has rights therein which may be treated as property, and
ordinarily an injunction will be granted to prevent the disclosure of the trade
secret by one who obtained the information "in confidence" or through a
20
"confidential relationship." American jurisprudence has utilized the following
21
factors to determine if an information is a trade secret, to wit:
(1) the extent to which the information is known outside of the
employer's business;
(2) the extent to which the information is known by employees and
others involved in the business;
(3) the extent of measures taken by the employer to guard the secrecy
of the information;
(4) the value of the information to the employer and to competitors;
(5) the amount of effort or money expended by the company in
developing the information; and
(6) the extent to which the information could be easily or readily
22
obtained through an independent source.
In Cocoland Development Corporation v. National Labor Relations
23
Commission, the issue was the legality of an employee’s termination on the
ground of unauthorized disclosure of trade secrets. The Court laid down the rule
that any determination by management as to the confidential nature of
technologies, processes, formulae or other so-called trade secrets must have a
substantial factual basis which can pass judicial scrutiny. The Court rejected the
employer’s naked contention that its own determination as to what constitutes a
trade secret should be binding and conclusive upon the NLRC. As a caveat, the
Court said that to rule otherwise would be to permit an employer to label almost
anything a trade secret, and thereby create a weapon with which he/it may
arbitrarily dismiss an employee on the pretext that the latter somehow disclosed
24
a trade secret, even if in fact there be none at all to speak of. Hence, in
Cocoland, the parameters in the determination of trade secrets were set to be
such substantial factual basis that can withstand judicial scrutiny.
The chemical composition, formulation, and ingredients of respondent’s special
lubricants are trade secrets within the contemplation of the law. Respondent was
established to engage in the business of general manufacturing and selling of,
and to deal in, distribute, sell or otherwise dispose of goods, wares,
merchandise, products, including but not limited to industrial chemicals,
solvents, lubricants, acids, alkalies, salts, paints, oils, varnishes, colors,
pigments and similar preparations, among others. It is unmistakable to our
minds that the manufacture and production of respondent’s products proceed
from a formulation of a secret list of ingredients. In the creation of its lubricants,
respondent expended efforts, skills, research, and resources. What it had
achieved by virtue of its investments may not be wrested from respondent on
the mere pretext that it is necessary for petitioner’s defense against a collection
for a sum of money. By and large, the value of the information to respondent is
crystal clear. The ingredients constitute the very fabric of respondent’s
production and business. No doubt, the information is also valuable to
respondent’s competitors. To compel its disclosure is to cripple respondent’s
business, and to place it at an undue disadvantage. If the chemical composition
of respondent’s lubricants are opened to public scrutiny, it will stand to lose the
backbone on which its business is founded. This would result in nothing less
than the probable demise of respondent’s business. Respondent’s proprietary
interest over the ingredients which it had developed and expended money and
effort on is incontrovertible. Our conclusion is that the detailed ingredients
sought to be revealed have a commercial value to respondent. Not only do we
acknowledge the fact that the information grants it a competitive advantage; we
also find that there is clearly a glaring intent on the part of respondent to keep
the information confidential and not available to the prying public.
We now take a look at Section 1, Rule 27 of the Rules of Court, which permits
parties to inspect documents or things upon a showing of good cause before the
court in which an action is pending. Its entire provision reads:
SECTION 1. Motion for production or inspection order. – Upon motion of any
party showing good cause therefore, the court in which an action is pending may
(a) order any party to produce and permit the inspection and copying or
photographing, by or on behalf of the moving party, of any designated
documents, papers, books, accounts, letters, photographs, objects or tangible
things, not privileged, which constitute or contain evidence material to any
matter involved in the action and which are in his possession, custody or control;
or (b) order any party to permit entry upon designated land or other property in
his possession or control for the purpose of inspecting, measuring, surveying, or
photographing the property or any designated relevant object or operation
thereon. The order shall specify the time, place and manner of making the
inspection and taking copies and photographs, and may prescribe such terms
and conditions as are just.
A more than cursory glance at the above text would show that the production or
inspection of documents or things as a mode of discovery sanctioned by the
Rules of Court may be availed of by any party upon a showing of good cause
therefor before the court in which an action is pending. The court may order any
party: a) to produce and permit the inspection and copying or photographing of
any designated documents, papers, books, accounts, letters, photographs,
25
objects or tangible things, which are not privileged; which constitute or contain
evidence material to any matter involved in the action; and which are in his
possession, custody or control; or b) to permit entry upon designated land or
other property in his possession or control for the purpose of inspecting,
measuring, surveying, or photographing the property or any designated relevant
object or operation thereon.
Rule 27 sets an unequivocal proviso that the documents, papers, books,
accounts, letters, photographs, objects or tangible things that may be produced
26
and inspected should not be privileged. The documents must not be privileged
27
against disclosure. On the ground of public policy, the rules providing for
production and inspection of books and papers do not authorize the production
or inspection of privileged matter; that is, books and papers which, because of
their confidential and privileged character, could not be received in
28
evidence. Such a condition is in addition to the requisite that the items be
specifically described, and must constitute or contain evidence material to any
matter involved in the action and which are in the party’s possession, custody or
control.
29
Section 24 of Rule 130 draws the types of disqualification by reason of
privileged communication, to wit: (a) communication between husband and wife;
(b) communication between attorney and client; (c) communication between
physician and patient; (d) communication between priest and penitent; and (e)
public officers and public interest. There are, however, other privileged matters
that are not mentioned by Rule 130. Among them are the following: (a) editors
may not be compelled to disclose the source of published news; (b) voters may
not be compelled to disclose for whom they voted; (c) trade secrets; (d)
30
information contained in tax census returns; and (d) bank deposits.
We, thus, rule against the petitioner. We affirm the ruling of the Court of Appeals
which upheld the finding of the RTC that there is substantial basis for
respondent to seek protection of the law for its proprietary rights over the
detailed chemical composition of its products.
That trade secrets are of a privileged nature is beyond quibble. The protection
that this jurisdiction affords to trade secrets is evident in our laws. The Interim
Rules of Procedure on Government Rehabilitation, effective 15 December 2000,
which applies to: (1) petitions for rehabilitation filed by corporations,
31
partnerships, and associations pursuant to Presidential Decree No. 902-A, as
amended; and (2) cases for rehabilitation transferred from the Securities and
Exchange Commission to the RTCs pursuant to Republic Act No. 8799,
otherwise known as The Securities Regulation Code, expressly provides that the
court may issue an order to protect trade secrets or other confidential research,
32
development, or commercial information belonging to the debtor. Moreover,
the Securities Regulation Code is explicit that the Securities and Exchange
Commission is not required or authorized to require the revelation of trade
secrets or processes in any application, report or document filed with the
33
Commission. This confidentiality is made paramount as a limitation to the right
of any member of the general public, upon request, to have access to all
34
information filed with the Commission.
Furthermore, the Revised Penal Code endows a cloak of protection to trade
secrets under the following articles:
Art. 291. Revealing secrets with abuse of office. — The penalty of arresto mayor
and a fine not exceeding 500 pesos shall be imposed upon any manager,
employee or servant who, in such capacity, shall learn the secrets of his
principal or master and shall reveal such secrets.
Art. 292. Revelation of industrial secrets. — The penalty of prision correccional
in its minimum and medium periods and a fine not exceeding 500 pesos shall be
imposed upon the person in charge, employee or workman of any
manufacturing or industrial establishment who, to the prejudice of the owner
thereof, shall reveal the secrets of the industry of
the latter.
Similarly, Republic Act No. 8424, otherwise known as the National Internal
Revenue Code of 1997, has a restrictive provision on trade secrets, penalizing
the revelation thereof by internal revenue officers or employees, to wit:
SECTION 278. Procuring Unlawful Divulgence of Trade Secrets. - Any person
who causes or procures an officer or employee of the Bureau of Internal
Revenue to divulge any confidential information regarding the business, income
or inheritance of any taxpayer, knowledge of which was acquired by him in the
discharge of his official duties, and which it is unlawful for him to reveal, and any
person who publishes or prints in any manner whatever, not provided by law,
any income, profit, loss or expenditure appearing in any income tax return, shall
be punished by a fine of not more than two thousand pesos (₱2,000), or suffer
imprisonment of not less than six (6) months nor more than five (5) years, or
both.
Republic Act No. 6969, or the Toxic Substances and Hazardous and Nuclear
Wastes Control Act of 1990, enacted to implement the policy of the state to
regulate, restrict or prohibit the importation, manufacture, processing, sale,
distribution, use and disposal of chemical substances and mixtures that present
unreasonable risk and/or injury to health or the environment, also contains a
provision that limits the right of the public to have access to records,
reports or information concerning chemical substances and mixtures
including safety data submitted and data on emission or discharge into
the environment, if the matter is confidential such that it would divulge
trade secrets, production or sales figures; or methods, production or
processes unique to such manufacturer, processor or distributor; or
would otherwise tend to affect adversely the competitive position of such
35
manufacturer, processor or distributor.
Clearly, in accordance with our statutory laws, this Court has declared that
intellectual and industrial property rights cases are not simple property
36
cases. Without limiting such industrial property rights to trademarks and trade
names, this Court has ruled that all agreements concerning intellectual property
37
are intimately connected with economic development. The protection of
industrial property encourages investments in new ideas and inventions and
stimulates creative efforts for the satisfaction of human needs. It speeds up
transfer of technology and industrialization, and thereby bring about social and
38
economic progress. Verily, the protection of industrial secrets is inextricably
linked to the advancement of our economy and fosters healthy competition in
trade.
Jurisprudence has consistently acknowledged the private character of trade
secrets.1âwphi1 There is a privilege not to disclose one’s trade
39
secrets. Foremost, this Court has declared that trade secrets and banking
transactions are among the recognized restrictions to the right of the people to
40
information as embodied in the Constitution. We said that the drafters of the
Constitution also unequivocally affirmed that, aside from national security
matters and intelligence information, trade or industrial secrets (pursuant to the
Intellectual Property Code and other related laws) as well as banking
transactions (pursuant to the Secrecy of Bank Deposits Act), are also exempted
41
from compulsory disclosure.
Significantly, our cases on labor are replete with examples of a protectionist
stance towards the trade secrets of employers. For instance, this Court upheld
the validity of the policy of a pharmaceutical company prohibiting its employees
from marrying employees of any competitor company, on the rationalization that
the company has a right to guard its trade secrets, manufacturing formulas,
marketing strategies and other confidential programs and information from
42
competitors. Notably, it was in a labor-related case that this Court made a
stark ruling on the proper determination of trade secrets.
43
In the case at bar, petitioner cannot rely on Section 77 of Republic Act 7394, or
the Consumer Act of the Philippines, in order to compel respondent to reveal the
chemical components of its products. While it is true that all consumer products
domestically sold, whether manufactured locally or imported, shall indicate their
general make or active ingredients in their respective labels of packaging, the
law does not apply to respondent. Respondent’s specialized lubricants --
namely, Contact Grease, Connector Grease, Thixohtropic Grease, Di-Electric
Strength Protective Coating, Dry Lubricant and Anti-Seize Compound -- are not
44
consumer products. "Consumer products," as it is defined in Article 4(q), refers
to goods, services and credits, debts or obligations which are primarily for
personal, family, household or agricultural purposes, which shall include, but not
be limited to, food, drugs, cosmetics, and devices. This is not the nature of
respondent’s products. Its products are not intended for personal, family,
household or agricultural purposes. Rather, they are for industrial use,
specifically for the use of aircraft propellers and engines.
Petitioner’s argument that Republic Act No. 8203, or the Special Law on
Counterfeit Drugs, requires the disclosure of the active ingredients of a drug is
45
also on faulty ground. Respondent’s products are outside the scope of the
46
cited law. They do not come within the purview of a drug which, as defined
therein, refers to any chemical compound or biological substance, other than
 52
food, that is intended for use in the treatment, prevention or diagnosis of disease public. To the mind of this Court, petitioner was not able to show a compelling
in man or animals. Again, such are not the characteristics of respondent’s reason for us to lift the veil of confidentiality which shields respondent’s trade
products. secrets.

What is clear from the factual findings of the RTC and the Court of Appeals is WHEREFORE, the Petition is DENIED. The Decision dated 16 February 2006,
that the chemical formulation of respondent’s products is not known to the and the Resolution dated 25 May 2006, of the Court of Appeals in CA-G.R. SP
general public and is unique only to it. Both courts uniformly ruled that these No. 86329 are AFFIRMED. No costs.
ingredients are not within the knowledge of the public. Since such factual
findings are generally not reviewable by this Court, it is not duty-bound to SO ORDERED.
analyze and weigh all over again the evidence already considered in the
47
proceedings below. We need not delve into the factual bases of such findings
as questions of fact are beyond the pale of Rule 45 of the Rules of Court.
Factual findings of the trial court when affirmed by the Court of Appeals, are
48
binding and conclusive on the Supreme Court.

49
We do not find merit or applicability in petitioner’s invocation of Section 12 of
the Toxic Substances and Hazardous and Nuclear Wastes Control Act of 1990,
which grants the public access to records, reports or information concerning
chemical substances and mixtures, including safety data submitted, and data on
50
emission or discharge into the environment. To reiterate, Section 12 of said
Act deems as confidential matters, which may not be made public, those that
would divulge trade secrets, including production or sales figures or methods;
production or processes unique to such manufacturer, processor or distributor,
or would otherwise tend to affect adversely the competitive position of such
manufacturer, processor or distributor. It is true that under the same Act, the
Department of Environment and Natural Resources may release information;
however, the clear import of the law is that said authority is limited by the right to
confidentiality of the manufacturer, processor or distributor, which information
may be released only to a medical research or scientific institution where the
information is needed for the purpose of medical diagnosis or treatment of a
person exposed to the chemical substance or mixture. The right to confidentiality
is recognized by said Act as primordial. Petitioner has not made the slightest
attempt to show that these circumstances are availing in the case at bar.

Indeed, the privilege is not absolute; the trial court may compel disclosure where
51
it is indispensable for doing justice. We do not, however, find reason to except
respondent’s trade secrets from the application of the rule on privilege. The
revelation of respondent’s trade secrets serves no better purpose to the
disposition of the main case pending with the RTC, which is on the collection of
a sum of money. As can be gleaned from the facts, petitioner received
respondent’s goods in trade in the normal course of business. To be sure, there
are defenses under the laws of contracts and sales available to petitioner. On
the other hand, the greater interest of justice ought to favor respondent as the
holder of trade secrets. If we were to weigh the conflicting interests between the
parties, we rule in favor of the greater interest of respondent. Trade secrets
should receive greater protection from discovery, because they derive economic
value from being generally unknown and not readily ascertainable by the
G.R. No. 179786 July 24, 2013
JOSIELENE LARA CHAN, Petitioner,
vs.
JOHNNY T. CHAN, Respondent.
DECISION
ABAD, J.:
This case is about the propriety of issuing a subpoena duces tecum for the
production and submission in court of the respondent husband's hospital record
in a case for declaration of nullity of marriage where one of the issues is his
mental fitness as a husband.
The Facts and the Case
On February 6, 2006 petitioner Josielene Lara Chan (Josielene) filed before the
Regional Trial Court (RTC) of Makati City, Branch 144 a petition for the
declaration of nullity of her marriage to respondent Johnny Chan (Johnny), the
dissolution of their conjugal partnership of gains, and the award of custody of
their children to her. Josielene claimed that Johnny failed to care for and support
his family and that a psychiatrist diagnosed him as mentally deficient due to
incessant drinking and excessive use of prohibited drugs. Indeed, she had
convinced him to undergo hospital confinement for detoxification and
rehabilitation.
Johnny resisted the action, claiming that it was Josielene who failed in her wifely
duties. To save their marriage, he agreed to marriage counseling but when he
and Josielene got to the hospital, two men forcibly held him by both arms while
another gave him an injection. The marriage relations got worse when the police
temporarily detained Josielene for an unrelated crime and released her only
after the case against her ended. By then, their marriage relationship could no
longer be repaired.
During the pre-trial conference, Josielene pre-marked the Philhealth Claim
1 following cases:
Form that Johnny attached to his answer as proof that he was forcibly confined
at the rehabilitation unit of a hospital. The form carried a physician’s handwritten
note that Johnny suffered from "methamphetamine and alcohol abuse."
Following up on this point, on August 22, 2006 Josielene filed with the RTC a
request for the issuance of a subpoena duces tecum addressed to Medical City,
covering Johnny’s medical records when he was there confined. The request
was accompanied by a motion to "be allowed to submit in evidence" the records
2
sought by subpoena duces tecum.
Johnny opposed the motion, arguing that the medical records were covered by
physician-patient privilege. On September 13, 2006 the RTC sustained the
opposition and denied Josielene’s motion. It also denied her motion for
reconsideration, prompting her to file a special civil action of certiorari before the
Court of Appeals (CA) in CA-G.R. SP 97913, imputing grave abuse of discretion
to the RTC.
3
On September 17, 2007 the CA denied Josielene’s petition. It ruled that, if
courts were to allow the production of medical records, then patients would be
left with no assurance that whatever relevant disclosures they may have made
to their physicians would be kept confidential. The prohibition covers not only
testimonies, but also affidavits, certificates, and pertinent hospital records. The
CA added that, although Johnny can waive the privilege, he did not do so in this
case. He attached the Philhealth form to his answer for the limited purpose of
showing his alleged forcible confinement.
Question Presented
The central question presented in this case is:
Whether or not the CA erred in ruling that the trial court correctly denied the
issuance of a subpoena duces tecum covering Johnny’s hospital records on the
ground that these are covered by the privileged character of the physician-
patient communication.
The Ruling of the Court
Josielene requested the issuance of a subpoena duces tecum covering the
hospital records of Johnny’s confinement, which records she wanted to present
in court as evidence in support of her action to have their marriage declared a
nullity. Respondent Johnny resisted her request for subpoena, however,
invoking the privileged character of those records. He cites Section 24(c), Rule
130 of the Rules of Evidence which reads:
SEC. 24. Disqualification by reason of privileged communication.— The
following persons cannot testify as to matters learned in confidence in the
xxxx
(c) A person authorized to practice medicine, surgery or obstetrics cannot in a
civil case, without the consent of the patient, be examined as to any advice or
treatment given by him or any information which he may have acquired in
attending such patient in a professional capacity, which information was
necessary to enable him to act in that capacity, and which would blacken the
reputation of the patient.
The physician-patient privileged communication rule essentially means that a
physician who gets information while professionally attending a patient cannot in
a civil case be examined without the patient’s consent as to any facts which
would blacken the latter’s reputation. This rule is intended to encourage the
patient to open up to the physician, relate to him the history of his ailment, and
give him access to his body, enabling the physician to make a correct diagnosis
of that ailment and provide the appropriate cure. Any fear that a physician could
be compelled in the future to come to court and narrate all that had transpired
between him and the patient might prompt the latter to clam up, thus putting his
4
own health at great risk.
1. The case presents a procedural issue, given that the time to object to the
admission of evidence, such as the hospital records, would be at the time they
are offered. The offer could be made part of the physician’s testimony or as
independent evidence that he had made entries in those records that concern
the patient’s health problems.
Section 36, Rule 132, states that objections to evidence must be made after the
offer of such evidence for admission in court. Thus:
SEC. 36. Objection.— Objection to evidence offered orally must be made
immediately after the offer is made.
Objection to a question propounded in the course of the oral examination of a
witness shall be made as soon as the grounds therefor shall become reasonably
apparent.
An offer of evidence in writing shall be objected to within three (3) days after
notice of the offer unless a different period is allowed by the court.
In any case, the grounds for the objections must be specified.
Since the offer of evidence is made at the trial, Josielene’s request for subpoena
duces tecum is premature. She will have to wait for trial to begin before making
a request for the issuance of a subpoena duces tecum covering Johnny’s
hospital records. It is when those records are produced for examination at the
trial, that Johnny may opt to object, not just to their admission in evidence, but
more so to their disclosure. Section 24(c), Rule 130 of the Rules of Evidence
quoted above is about non-disclosure of privileged matters.
2. It is of course possible to treat Josielene’s motion for the issuance of a
subpoena duces tecum covering the hospital records as a motion for production
of documents, a discovery procedure available to a litigant prior to trial. Section
1, Rule 27 of the Rules of Civil Procedure provides:
SEC. 1. Motion for production or inspection; order.— Upon motion of any party
showing good cause therefor, the court in which an action is pending may (a)
order any party to produce and permit the inspection and copying or
photographing, by or on behalf of the moving party, of any designated
documents, papers, books, accounts, letters, photographs, objects or tangible
things, not privileged, which constitute or contain evidence material to any
matter involved in the action and which are in his possession, custody or control;
or (b) order any party to permit entry upon designated land or other property in
his possession or control for the purpose of inspecting, measuring, surveying, or
photographing the property or any designated relevant object or operation
thereon. The order shall specify the time, place and manner of making the
inspection and taking copies and photographs, and may prescribe such terms
and conditions as are just. (Emphasis supplied)
But the above right to compel the production of documents has a limitation: the
documents to be disclosed are "not privileged."
Josielene of course claims that the hospital records subject of this case are not
privileged since it is the "testimonial" evidence of the physician that may be
regarded as privileged. Section 24(c) of Rule 130 states that the physician
"cannot in a civil case, without the consent of the patient, be examined"
regarding their professional conversation. The privilege, says Josielene, does
not cover the hospital records, but only the examination of the physician at the
trial.
To allow, however, the disclosure during discovery procedure of the hospital
records—the results of tests that the physician ordered, the diagnosis of the
patient’s illness, and the advice or treatment he gave him—would be to allow
access to evidence that is inadmissible without the
patient’s consent. Physician memorializes all these information in the patient’s
records. Disclosing them would be the equivalent of compelling the physician to
testify on privileged matters he gained while dealing with the patient, without the
latter’s prior consent.
3. Josielene argues that since Johnny admitted in his answer to the petition
before the RTC that he had been confined in a hospital against his will and in
fact attached to his answer a Philhealth claim form covering that confinement,
he should be deemed to have waived the privileged character of its records.
Josielene invokes Section 17, Rule 132 of the Rules of Evidence that provides:
SEC. 17. When part of transaction, writing or record given in evidence, the
remainder admissible.— When part of an act, declaration, conversation, writing
or record is given in evidence by one party, the whole of the same subject may
be inquired into by the other, and when a detached act, declaration,
conversation, writing or record is given in evidence, any other act, declaration,
conversation, writing or record necessary to its understanding may also be given
in evidence.1âwphi1

But, trial in the case had not yet begun. Consequently, it cannot be said that
Johnny had already presented the Philhealth claim form in evidence, the act
contemplated above which would justify Josielene into requesting an inquiry into
the details of his hospital confinement. Johnny was not yet bound to adduce
evidence in the case when he filed his answer. Any request for disclosure of his
hospital records would again be premature.

For all of the above reasons, the CA and the RTC were justified in denying
Josielene her request for the production in court of Johnny’s hospital records.

ACCORDINGLY, the Court DENIES the petition and AFFIRMS the Decision of
the Court of Appeals in CA-G.R. SP 97913 dated September 17, 2007.

SO ORDERED.
G.R. No. 107383 February 20, 1996 ordered petitioner to return them to private respondent and enjoined her from
using them in evidence. In appealing from the decision of the Court of Appeals
CECILIA ZULUETA, petitioner, affirming the trial court's decision, petitioner's only ground is that in Alfredo
1
vs. Martin v. Alfonso Felix, Jr., this Court ruled that the documents and papers
COURT OF APPEALS and ALFREDO MARTIN, respondents. (marked as Annexes A-1 to J-7 of respondent's comment in that case) were
admissible in evidence and, therefore, their use by petitioner's attorney, Alfonso
DECISION Felix did not constitute malpractice or gross misconduct, For this reason it is
contended that the Court of Appeals erred in affirming the decision of the trial
court instead of dismissing private respondent's complaint.
MENDOZA, J.:
Petitioner's contention has no merit. The case against Atty. Felix, Jr. was for
This is a petition to review the decision of the Court of Appeals, affirming the disbarment. Among other things, private respondent, Dr. Alfredo Martin, as
decision of the Regional Trial Court of Manila (Branch X) which ordered complainant in that case, charged that in using the documents in evidence, Atty.
petitioner to return documents and papers taken by her from private Felix, Jr. committed malpractice or gross misconduct because of the injunctive
respondent's clinic without the latter's knowledge and consent. order of the trial court. In dismissing the complaint against Atty. Felix, Jr., this
Court took note of the following defense of Atty. Felix; Jr. which it found to be
2
The facts are as follows: "impressed with merit:"

Petitioner Cecilia Zulueta is the wife of private respondent Alfredo Martin. On

March 26, 1982, petitioner entered the clinic of her husband, a doctor of
medicine, and in the presence of her mother, a driver and private respondent's On the alleged malpractice or gross misconduct of respondent [Alfonso
secretary, forcibly opened the drawers and cabinet in her husband's clinic and Felix, Jr.], he maintains that:
took 157 documents consisting of private correspondence between Dr. Martin
and his alleged paramours, greetings cards, cancelled checks, diaries, Dr.
....
Martin's passport, and photographs. The documents and papers were seized for
use in evidence in a case for legal separation and for disqualification from the
practice of medicine which petitioner had filed against her husband. 4. When respondent refiled Cecilia's case for legal separation before the
Pasig Regional Trial Court, there was admittedly an order of the Manila
Regional Trial Court prohibiting Cecilia from using the documents Annex
Dr. Martin brought this action below for recovery of the documents and papers
"A-1 to J-7." On September 6, 1983, however having appealed the said
and for damages against petitioner. The case was filed with the Regional Trial
order to this Court on a petition for certiorari, this Court issued a
Court of Manila, Branch X, which, after trial, rendered judgment for private
restraining order on aforesaid date which order temporarily set aside the
respondent, Dr. Alfredo Martin, declaring him "the capital/exclusive owner of the
properties described in paragraph 3 of plaintiff's Complaint or those further order of the trial court. Hence, during the enforceability of this Court's
described in the Motion to Return and Suppress" and ordering Cecilia Zulueta order, respondent's request for petitioner to admit the genuineness and
authenticity of the subject annexes cannot be looked upon as
and any person acting in her behalf to a immediately return the properties to Dr.
malpractice. Notably, petitioner Dr. Martin finally admitted the truth and
Martin and to pay him P5,000.00, as nominal damages; P5,000.00, as moral
authenticity of the questioned annexes, At that point in time, would it
damages and attorney's fees; and to pay the costs of the suit. The writ of
preliminary injunction earlier issued was made final and petitioner Cecilia have been malpractice for respondent to use petitioner's admission as
Zulueta and her attorneys and representatives were enjoined from "using or evidence against him in the legal separation case pending in the
Regional Trial Court of Makati? Respondent submits it is not
submitting/admitting as evidence" the documents and papers in question. On
malpractice.
appeal, the Court of Appeals affirmed the decision of the Regional Trial Court.
Hence this petition.
Significantly, petitioner's admission was done not thru his counsel but by
There is no question that the documents and papers in question belong to Dr. Martin himself under oath, Such verified admission constitutes an
affidavit, and, therefore, receivable in evidence against him. Petitioner
private respondent, Dr. Alfredo Martin, and that they were taken by his wife, the
became bound by his admission. For Cecilia to avail herself of her
herein petitioner, without his knowledge and consent. For that reason, the trial
court declared the documents and papers to be properties of private respondent,
 husband's admission and use the same in her action for legal SO ORDERED.
separation cannot be treated as malpractice.

Thus, the acquittal of Atty. Felix, Jr. in the administrative case amounts to no
more than a declaration that his use of the documents and papers for the
purpose of securing Dr. Martin's admission as to their genuiness and
authenticity did not constitute a violation of the injunctive order of the trial court.
By no means does the decision in that case establish the admissibility of the
documents and papers in question.

It cannot be overemphasized that if Atty. Felix, Jr. was acquitted of the charge of
violating the writ of preliminary injunction issued by the trial court, it was only
because, at the time he used the documents and papers, enforcement of the
order of the trial court was temporarily restrained by this Court. The TRO issued
by this Court was eventually lifted as the petition for certiorari filed by petitioner
against the trial court's order was dismissed and, therefore, the prohibition
against the further use of the documents and papers became effective again.

Indeed the documents and papers in question are inadmissible in evidence. The
constitutional injunction declaring "the privacy of communication and
3
correspondence [to be] inviolable" is no less applicable simply because it is the
wife (who thinks herself aggrieved by her husband's infidelity) who is the party
against whom the constitutional provision is to be enforced. The only exception
to the prohibition in the Constitution is if there is a "lawful order [from a] court or
4
when public safety or order requires otherwise, as prescribed by law." Any
violation of this provision renders the evidence obtained inadmissible "for any
5
purpose in any proceeding."

The intimacies between husband and wife do not justify any one of them in
breaking the drawers and cabinets of the other and in ransacking them for any
telltale evidence of marital infidelity. A person, by contracting marriage, does not
shed his/her integrity or his right to privacy as an individual and the constitutional
protection is ever available to him or to her.

The law insures absolute freedom of communication between the spouses by

making it privileged. Neither husband nor wife may testify for or against the other
6
without the consent of the affected spouse while the marriage subsists. Neither
may be examined without the consent of the other as to any communication
received in confidence by one from the other during the marriage, save for
7
specified exceptions. But one thing is freedom of communication; quite another
is a compulsion for each one to share what one knows with the other. And this
has nothing to do with the duty of fidelity that each owes to the other.

WHEREFORE, the petition for review is DENIED for lack of merit.

G.R. No. 195580 April 21, 2014
NARRA NICKEL MINING AND DEVELOPMENT CORP., TESORO MINING
AND DEVELOPMENT, INC., and MCARTHUR MINING, INC., Petitioners,
vs.
REDMONT CONSOLIDATED MINES CORP., Respondent.
DECISION
VELASCO, JR., J.:
Before this Court is a Petition for Review on Certiorari under Rule 45 filed by
Narra Nickel and Mining Development Corp. (Narra), Tesoro Mining and
Development, Inc. (Tesoro), and McArthur Mining Inc. (McArthur), which seeks
1 McArthur, Tesoro and Narra are owned and controlled by MBMI Resources, Inc.
to reverse the October 1, 2010 Decision and the February 15, 2011 Resolution
of the Court of Appeals (CA).
The Facts
Sometime in December 2006, respondent Redmont Consolidated Mines Corp.
(Redmont), a domestic corporation organized and existing under Philippine
laws, took interest in mining and exploring certain areas of the province of
Palawan. After inquiring with the Department of Environment and Natural
Resources (DENR), it learned that the areas where it wanted to undertake
exploration and mining activities where already covered by Mineral Production
Sharing Agreement (MPSA) applications of petitioners Narra, Tesoro and
McArthur.
Petitioner McArthur, through its predecessor-in-interest Sara Marie Mining, Inc.
(SMMI), filed an application for an MPSA and Exploration Permit (EP) with the
Mines and Geo-Sciences Bureau (MGB), Region IV-B, Office of the Department
of Environment and Natural Resources (DENR).
Subsequently, SMMI was issued MPSA-AMA-IVB-153 covering an area of over
1,782 hectares in Barangay Sumbiling, Municipality of Bataraza, Province of
Palawan and EPA-IVB-44 which includes an area of 3,720 hectares in Barangay
Malatagao, Bataraza, Palawan. The MPSA and EP were then transferred to
Madridejos Mining Corporation (MMC) and, on November 6, 2006, assigned to
2 owned by citizens of the Philippines: Provided, That a legally organized foreign-
petitioner McArthur.
Petitioner Narra acquired its MPSA from Alpha Resources and Development
Corporation and Patricia Louise Mining & Development Corporation (PLMDC)
which previously filed an application for an MPSA with the MGB, Region IV-B,
DENR on January 6, 1992. Through the said application, the DENR issued
MPSA-IV-1-12 covering an area of 3.277 hectares in barangays Calategas and
San Isidro, Municipality of Narra, Palawan. Subsequently, PLMDC conveyed,
transferred and/or assigned its rights and interests over the MPSA application in
favor of Narra.
Another MPSA application of SMMI was filed with the DENR Region IV-B,
labeled as MPSA-AMA-IVB-154 (formerly EPA-IVB-47) over 3,402 hectares in
Barangays Malinao and Princesa Urduja, Municipality of Narra, Province of
Palawan. SMMI subsequently conveyed, transferred and assigned its rights and
interest over the said MPSA application to Tesoro.
On January 2, 2007, Redmont filed before the Panel of Arbitrators (POA) of the
DENR three (3) separate petitions for the denial of petitioners’ applications for
MPSA designated as AMA-IVB-153, AMA-IVB-154 and MPSA IV-1-12.
In the petitions, Redmont alleged that at least 60% of the capital stock of
(MBMI), a 100% Canadian corporation. Redmont reasoned that since MBMI is a
considerable stockholder of petitioners, it was the driving force behind
petitioners’ filing of the MPSAs over the areas covered by applications since it
knows that it can only participate in mining activities through corporations which
are deemed Filipino citizens. Redmont argued that given that petitioners’ capital
stocks were mostly owned by MBMI, they were likewise disqualified from
engaging in mining activities through MPSAs, which are reserved only for
Filipino citizens.
In their Answers, petitioners averred that they were qualified persons under
Section 3(aq) of Republic Act No. (RA) 7942 or the Philippine Mining Act of 1995
which provided:
Sec. 3 Definition of Terms. As used in and for purposes of this Act, the following
terms, whether in singular or plural, shall mean:
xxxx
(aq) "Qualified person" means any citizen of the Philippines with capacity to
contract, or a corporation, partnership, association, or cooperative organized or
authorized for the purpose of engaging in mining, with technical and financial
capability to undertake mineral resources development and duly registered in
accordance with law at least sixty per cent (60%) of the capital of which is
owned corporation shall be deemed a qualified person for purposes of granting
an exploration permit, financial or technical assistance agreement or mineral
processing permit.
Additionally, they stated that their nationality as applicants is immaterial because
they also applied for Financial or Technical Assistance Agreements (FTAA)
denominated as AFTA-IVB-09 for McArthur, AFTA-IVB-08 for Tesoro and AFTA-
IVB-07 for Narra, which are granted to foreign-owned corporations.
Nevertheless, they claimed that the issue on nationality should not be raised
since McArthur, Tesoro and Narra are in fact Philippine Nationals as 60% of
their capital is owned by citizens of the Philippines. They asserted that though
MBMI owns 40% of the shares of PLMC (which owns 5,997 shares of
3 4
Narra), 40% of the shares of MMC (which owns 5,997 shares of McArthur) and
5
40% of the shares of SLMC (which, in turn, owns 5,997 shares of Tesoro), the
shares of MBMI will not make it the owner of at least 60% of the capital stock of
each of petitioners. They added that the best tool used in determining the
nationality of a corporation is the "control test," embodied in Sec. 3 of RA 7042
or the Foreign Investments Act of 1991. They also claimed that the POA of
DENR did not have jurisdiction over the issues in Redmont’s petition since they
are not enumerated in Sec. 77 of RA 7942. Finally, they stressed that Redmont
has no personality to sue them because it has no pending claim or application
over the areas applied for by petitioners.
On December 14, 2007, the POA issued a Resolution disqualifying petitioners
from gaining MPSAs. It held:
[I]t is clearly established that respondents are not qualified applicants to engage
in mining activities. On the other hand, [Redmont] having filed its own
applications for an EPA over the areas earlier covered by the MPSA application
of respondents may be considered if and when they are qualified under the law.
The violation of the requirements for the issuance and/or grant of permits over
mining areas is clearly established thus, there is reason to believe that the
cancellation and/or revocation of permits already issued under the premises is in
order and open the areas covered to other qualified applicants.
xxxx
WHEREFORE, the Panel of Arbitrators finds the Respondents, McArthur Mining
Inc., Tesoro Mining and Development, Inc., and Narra Nickel Mining and
Development Corp. as, DISQUALIFIED for being considered as Foreign
Corporations. Their Mineral Production Sharing Agreement (MPSA) are hereby
6
x x x DECLARED NULL AND VOID.
The POA considered petitioners as foreign corporations being "effectively
controlled" by MBMI, a 100% Canadian company and declared their MPSAs null
and void. In the same Resolution, it gave due course to Redmont’s EPAs.
7
Thereafter, on February 7, 2008, the POA issued an Order denying the Motion
for Reconsideration filed by petitioners.
Aggrieved by the Resolution and Order of the POA, McArthur and Tesoro filed a
8 9
joint Notice of Appeal and Memorandum of Appeal with the Mines Adjudication
10
Board (MAB) while Narra separately filed its Notice of Appeal and
11
Memorandum of Appeal.
In their respective memorandum, petitioners emphasized that they are qualified
persons under the law. Also, through a letter, they informed the MAB that they
had their individual MPSA applications converted to FTAAs. McArthur’s FTAA
12
was denominated as AFTA-IVB-09 on May 2007, while Tesoro’s MPSA
13
application was converted to AFTA-IVB-08 on May 28, 2007, and Narra’s
14
FTAA was converted to AFTA-IVB-07 on March 30, 2006.
Pending the resolution of the appeal filed by petitioners with the MAB, Redmont
15
filed a Complaint with the Securities and Exchange Commission (SEC),
seeking the revocation of the certificates for registration of petitioners on the
ground that they are foreign-owned or controlled corporations engaged in mining
in violation of Philippine laws. Thereafter, Redmont filed on September 1, 2008 a
Manifestation and Motion to Suspend Proceeding before the MAB praying for
the suspension of the proceedings on the appeals filed by McArthur, Tesoro and
Narra.
Subsequently, on September 8, 2008, Redmont filed before the Regional Trial
16
Court of Quezon City, Branch 92 (RTC) a Complaint for injunction with
application for issuance of a temporary restraining order (TRO) and/or writ of
preliminary injunction, docketed as Civil Case No. 08-63379. Redmont prayed
for the deferral of the MAB proceedings pending the resolution of the Complaint
before the SEC.
But before the RTC can resolve Redmont’s Complaint and applications for
injunctive reliefs, the MAB issued an Order on September 10, 2008, finding the
appeal meritorious. It held:
WHEREFORE, in view of the foregoing, the Mines Adjudication Board hereby
REVERSES and SETS ASIDE the Resolution dated 14 December 2007 of the
Panel of Arbitrators of Region IV-B (MIMAROPA) in POA-DENR Case Nos.
2001-01, 2007-02 and 2007-03, and its Order dated 07 February 2008 denying
the Motions for Reconsideration of the Appellants. The Petition filed by Redmont
Consolidated Mines Corporation on 02 January 2007 is hereby ordered
17
DISMISSED.
18
Belatedly, on September 16, 2008, the RTC issued an Order granting
Redmont’s application for a TRO and setting the case for hearing the prayer for
the issuance of a writ of preliminary injunction on September 19, 2008.
Meanwhile, on September 22, 2008, Redmont filed a Motion for
19
Reconsideration of the September 10, 2008 Order of the MAB. Subsequently,
20
it filed a Supplemental Motion for Reconsideration on September 29, 2008.
Before the MAB could resolve Redmont’s Motion for Reconsideration and
Supplemental Motion for Reconsideration, Redmont filed before the RTC a
21
Supplemental Complaint in Civil Case No. 08-63379.
 22
On October 6, 2008, the RTC issued an Order granting the issuance of a writ
of preliminary injunction enjoining the MAB from finally disposing of the appeals
of petitioners and from resolving Redmont’s Motion for Reconsideration and
Supplement Motion for Reconsideration of the MAB’s September 10, 2008
Resolution.
On July 1, 2009, however, the MAB issued a second Order denying Redmont’s
Motion for Reconsideration and Supplemental Motion for Reconsideration and
resolving the appeals filed by petitioners.
Hence, the petition for review filed by Redmont before the CA, assailing the
Orders issued by the MAB. On October 1, 2010, the CA rendered a Decision,
the dispositive of which reads:
WHEREFORE, the Petition is PARTIALLY GRANTED. The assailed Orders,
dated September 10, 2008 and July 1, 2009 of the Mining Adjudication Board
are reversed and set aside. The findings of the Panel of Arbitrators of the
Department of Environment and Natural Resources that respondents McArthur,
Tesoro and Narra are foreign corporations is upheld and, therefore, the rejection
of their applications for Mineral Product Sharing Agreement should be
recommended to the Secretary of the DENR.
With respect to the applications of respondents McArthur, Tesoro and Narra for
Financial or Technical Assistance Agreement (FTAA) or conversion of their
MPSA applications to FTAA, the matter for its rejection or approval is left for
determination by the Secretary of the DENR and the President of the Republic
of the Philippines.
SO ORDERED.
23
In a Resolution dated February 15, 2011, the CA denied the Motion for
Reconsideration filed by petitioners.
After a careful review of the records, the CA found that there was doubt as to the
nationality of petitioners when it realized that petitioners had a common major
investor, MBMI, a corporation composed of 100% Canadians. Pursuant to the
first sentence of paragraph 7 of Department of Justice (DOJ) Opinion No. 020,
Series of 2005, adopting the 1967 SEC Rules which implemented the
requirement of the Constitution and other laws pertaining to the exploitation of
natural resources, the CA used the "grandfather rule" to determine the
nationality of petitioners. It provided:
Shares belonging to corporations or partnerships at least 60% of the capital of
which is owned by Filipino citizens shall be considered as of Philippine
nationality, but if the percentage of Filipino ownership in the corporation or
partnership is less than 60%, only the number of shares corresponding to such
percentage shall be counted as of Philippine nationality. Thus, if 100,000 shares
are registered in the name of a corporation or partnership at least 60% of the
capital stock or capital, respectively, of which belong to Filipino citizens, all of
the shares shall be recorded as owned by Filipinos. But if less than 60%, or say,
50% of the capital stock or capital of the corporation or partnership, respectively,
belongs to Filipino citizens, only 50,000 shares shall be recorded as belonging
24
to aliens. (emphasis supplied)
In determining the nationality of petitioners, the CA looked into their corporate
structures and their corresponding common shareholders. Using the grandfather
rule, the CA discovered that MBMI in effect owned majority of the common
stocks of the petitioners as well as at least 60% equity interest of other majority
shareholders of petitioners through joint venture agreements. The CA found that
through a "web of corporate layering, it is clear that one common controlling
25
investor in all mining corporations involved x x x is MBMI." Thus, it concluded
that petitioners McArthur, Tesoro and Narra are also in partnership with, or
privies-in-interest of, MBMI.
Furthermore, the CA viewed the conversion of the MPSA applications of
petitioners into FTAA applications suspicious in nature and, as a consequence,
it recommended the rejection of petitioners’ MPSA applications by the Secretary
of the DENR.
With regard to the settlement of disputes over rights to mining areas, the CA
pointed out that the POA has jurisdiction over them and that it also has the
power to determine the of nationality of petitioners as a prerequisite of the
Constitution prior the conferring of rights to "co-production, joint venture or
production-sharing agreements" of the state to mining rights. However, it also
stated that the POA’s jurisdiction is limited only to the resolution of the dispute
and not on the approval or rejection of the MPSAs. It stipulated that only the
Secretary of the DENR is vested with the power to approve or reject applications
for MPSA.
Finally, the CA upheld the findings of the POA in its December 14, 2007
Resolution which considered petitioners McArthur, Tesoro and Narra as foreign
corporations. Nevertheless, the CA determined that the POA’s declaration that
the MPSAs of McArthur, Tesoro and Narra are void is highly improper.
While the petition was pending with the CA, Redmont filed with the Office of the
President (OP) a petition dated May 7, 2010 seeking the cancellation of
26
petitioners’ FTAAs. The OP rendered a Decision on April 6, 2011, wherein it
canceled and revoked petitioners’ FTAAs for violating and circumventing the
"Constitution x x x[,] the Small Scale Mining Law and Environmental Compliance
Certificate as well as Sections 3 and 8 of the Foreign Investment Act and E.O.
27
584." The OP, in affirming the cancellation of the issued FTAAs, agreed with
Redmont stating that petitioners committed violations against the
abovementioned laws and failed to submit evidence to negate them. The
Decision further quoted the December 14, 2007 Order of the POA focusing on
the alleged misrepresentation and claims made by petitioners of being domestic
or Filipino corporations and the admitted continued mining operation of PMDC
using their locally secured Small Scale Mining Permit inside the area earlier
applied for an MPSA application which was eventually transferred to Narra. It
also agreed with the POA’s estimation that the filing of the FTAA applications by
petitioners is a clear admission that they are "not capable of conducting a large
scale mining operation and that they need the financial and technical assistance
of a foreign entity in their operation, that is why they sought the participation of
28
MBMI Resources, Inc." The Decision further quoted:
The filing of the FTAA application on June 15, 2007, during the pendency of the
case only demonstrate the violations and lack of qualification of the respondent
corporations to engage in mining. The filing of the FTAA application conversion
which is allowed foreign corporation of the earlier MPSA is an admission that
indeed the respondent is not Filipino but rather of foreign nationality who is
disqualified under the laws. Corporate documents of MBMI Resources, Inc.
furnished its stockholders in their head office in Canada suggest that they are
29
conducting operation only through their local counterparts.
The Motion for Reconsideration of the Decision was further denied by the OP in
30
a Resolution dated July 6, 2011. Petitioners then filed a Petition for Review on
Certiorari of the OP’s Decision and Resolution with the CA, docketed as CA-
G.R. SP No. 120409. In the CA Decision dated February 29, 2012, the CA
affirmed the Decision and Resolution of the OP. Thereafter, petitioners appealed
the same CA decision to this Court which is now pending with a different
division.
Thus, the instant petition for review against the October 1, 2010 Decision of the
CA. Petitioners put forth the following errors of the CA:
I.
The Court of Appeals erred when it did not dismiss the case for
mootness despite the fact that the subject matter of the controversy, the
MPSA Applications, have already been converted into FTAA
applications and that the same have already been granted.
II.
The Court of Appeals erred when it did not dismiss the case for lack of
jurisdiction considering that the Panel of Arbitrators has no jurisdiction to
determine the nationality of Narra, Tesoro and McArthur.
III.
The Court of Appeals erred when it did not dismiss the case on account
of Redmont’s willful forum shopping.
IV.
The Court of Appeals’ ruling that Narra, Tesoro and McArthur are
foreign corporations based on the "Grandfather Rule" is contrary to law,
particularly the express mandate of the Foreign Investments Act of
1991, as amended, and the FIA Rules.
V.
The Court of Appeals erred when it applied the exceptions to the res
inter alios acta rule.
VI.
The Court of Appeals erred when it concluded that the conversion of the
MPSA Applications into FTAA Applications were of "suspicious nature"
as the same is based on mere conjectures and surmises without any
31
shred of evidence to show the same.
We find the petition to be without merit.
This case not moot and academic
The claim of petitioners that the CA erred in not rendering the instant case as
moot is without merit.
Basically, a case is said to be moot and/or academic when it "ceases to present
a justiciable controversy by virtue of supervening events, so that a declaration
32
thereon would be of no practical use or value." Thus, the courts "generally
33
decline jurisdiction over the case or dismiss it on the ground of mootness."
The "mootness" principle, however, does accept certain exceptions and the
mere raising of an issue of "mootness" will not deter the courts from trying a
case when there is a valid reason to do so. In David v. Macapagal-Arroyo
(David), the Court provided four instances where courts can decide an otherwise
moot case, thus:
1.) There is a grave violation of the Constitution;
2.) The exceptional character of the situation and paramount public
interest is involved;
 3.) When constitutional issue raised requires formulation of controlling
principles to guide the bench, the bar, and the public; and
34
4.) The case is capable of repetition yet evading review.
All of the exceptions stated above are present in the instant case. We of this
Court note that a grave violation of the Constitution, specifically Section 2 of
Article XII, is being committed by a foreign corporation right under our country’s
nose through a myriad of corporate layering under different, allegedly, Filipino
corporations. The intricate corporate layering utilized by the Canadian company,
MBMI, is of exceptional character and involves paramount public interest since it
undeniably affects the exploitation of our Country’s natural resources. The
corresponding actions of petitioners during the lifetime and existence of the
instant case raise questions as what principle is to be applied to cases with
similar issues. No definite ruling on such principle has been pronounced by the
Court; hence, the disposition of the issues or errors in the instant case will serve
35
as a guide "to the bench, the bar and the public." Finally, the instant case is
capable of repetition yet evading review, since the Canadian company, MBMI,
can keep on utilizing dummy Filipino corporations through various schemes of
corporate layering and conversion of applications to skirt the constitutional
prohibition against foreign mining in Philippine soil.
Conversion of MPSA applications to FTAA applications
We shall discuss the first error in conjunction with the sixth error presented by
petitioners since both involve the conversion of MPSA applications to FTAA
applications. Petitioners propound that the CA erred in ruling against them since
the questioned MPSA applications were already converted into FTAA
applications; thus, the issue on the prohibition relating to MPSA applications of
foreign mining corporations is academic. Also, petitioners would want us to
correct the CA’s finding which deemed the aforementioned conversions of
applications as suspicious in nature, since it is based on mere conjectures and
surmises and not supported with evidence.
We disagree.
The CA’s analysis of the actions of petitioners after the case was filed against
them by respondent is on point. The changing of applications by petitioners from
one type to another just because a case was filed against them, in truth, would
raise not a few sceptics’ eyebrows. What is the reason for such conversion? Did
the said conversion not stem from the case challenging their citizenship and to
have the case dismissed against them for being "moot"? It is quite obvious that it
is petitioners’ strategy to have the case dismissed against them for being
"moot."
Consider the history of this case and how petitioners responded to every action
done by the court or appropriate government agency: on January 2, 2007,
Redmont filed three separate petitions for denial of the MPSA applications of
petitioners before the POA. On June 15, 2007, petitioners filed a conversion of
their MPSA applications to FTAAs. The POA, in its December 14, 2007
Resolution, observed this suspect change of applications while the case was
pending before it and held:
The filing of the Financial or Technical Assistance Agreement application is a
clear admission that the respondents are not capable of conducting a large
scale mining operation and that they need the financial and technical assistance
of a foreign entity in their operation that is why they sought the participation of
MBMI Resources, Inc. The participation of MBMI in the corporation only proves
the fact that it is the Canadian company that will provide the finances and the
resources to operate the mining areas for the greater benefit and interest of the
same and not the Filipino stockholders who only have a less substantial financial
stake in the corporation.
xxxx
x x x The filing of the FTAA application on June 15, 2007, during the pendency
of the case only demonstrate the violations and lack of qualification of the
respondent corporations to engage in mining. The filing of the FTAA application
conversion which is allowed foreign corporation of the earlier MPSA is an
admission that indeed the respondent is not Filipino but rather of foreign
nationality who is disqualified under the laws. Corporate documents of MBMI
Resources, Inc. furnished its stockholders in their head office in Canada suggest
36
that they are conducting operation only through their local counterparts.
On October 1, 2010, the CA rendered a Decision which partially granted the
petition, reversing and setting aside the September 10, 2008 and July 1, 2009
Orders of the MAB. In the said Decision, the CA upheld the findings of the POA
of the DENR that the herein petitioners are in fact foreign corporations thus a
recommendation of the rejection of their MPSA applications were recommended
to the Secretary of the DENR. With respect to the FTAA applications or
conversion of the MPSA applications to FTAAs, the CA deferred the matter for
the determination of the Secretary of the DENR and the President of the
37
Republic of the Philippines.
In their Motion for Reconsideration dated October 26, 2010, petitioners prayed
for the dismissal of the petition asserting that on April 5, 2010, then President
Gloria Macapagal-Arroyo signed and issued in their favor FTAA No. 05-2010-
IVB, which rendered the petition moot and academic. However, the CA, in a
Resolution dated February 15, 2011 denied their motion for being a mere
38
"rehash of their claims and defenses." Standing firm on its Decision, the CA
affirmed the ruling that petitioners are, in fact, foreign corporations. On April 5,
2011, petitioners elevated the case to us via a Petition for Review on Certiorari
under Rule 45, questioning the Decision of the CA. Interestingly, the OP
rendered a Decision dated April 6, 2011, a day after this petition for review was
filed, cancelling and revoking the FTAAs, quoting the Order of the POA and
stating that petitioners are foreign corporations since they needed the financial
strength of MBMI, Inc. in order to conduct large scale mining operations. The OP
Decision also based the cancellation on the misrepresentation of facts and the
violation of the "Small Scale Mining Law and Environmental Compliance
Certificate as well as Sections 3 and 8 of the Foreign Investment Act and E.O.
39
584." On July 6, 2011, the OP issued a Resolution, denying the Motion for
Reconsideration filed by the petitioners.
Respondent Redmont, in its Comment dated October 10, 2011, made known to
the Court the fact of the OP’s Decision and Resolution. In their Reply, petitioners
chose to ignore the OP Decision and continued to reuse their old arguments
claiming that they were granted FTAAs and, thus, the case was moot.
Petitioners filed a Manifestation and Submission dated October 19,
40
2012, wherein they asserted that the present petition is moot since, in a
remarkable turn of events, MBMI was able to sell/assign all its shares/interest in
the "holding companies" to DMCI Mining Corporation (DMCI), a Filipino
corporation and, in effect, making their respective corporations fully-Filipino
owned.
Again, it is quite evident that petitioners have been trying to have this case
dismissed for being "moot." Their final act, wherein MBMI was able to allegedly
sell/assign all its shares and interest in the petitioner "holding companies" to
DMCI, only proves that they were in fact not Filipino corporations from the start.
The recent divesting of interest by MBMI will not change the stand of this Court
with respect to the nationality of petitioners prior the suspicious change in their
corporate structures. The new documents filed by petitioners are factual
evidence that this Court has no power to verify.
The only thing clear and proved in this Court is the fact that the OP declared that
petitioner corporations have violated several mining laws and made
misrepresentations and falsehood in their applications for FTAA which lead to
the revocation of the said FTAAs, demonstrating that petitioners are not beyond
going against or around the law using shifty actions and strategies. Thus, in this
instance, we can say that their claim of mootness is moot in itself because their
defense of conversion of MPSAs to FTAAs has been discredited by the OP
Decision.
Grandfather test
The main issue in this case is centered on the issue of petitioners’ nationality,
whether Filipino or foreign. In their previous petitions, they had been adamant in
insisting that they were Filipino corporations, until they submitted their
Manifestation and Submission dated October 19, 2012 where they stated the
alleged change of corporate ownership to reflect their Filipino ownership. Thus,
there is a need to determine the nationality of petitioner corporations.
Basically, there are two acknowledged tests in determining the nationality of a
corporation: the control test and the grandfather rule. Paragraph 7 of DOJ
Opinion No. 020, Series of 2005, adopting the 1967 SEC Rules which
implemented the requirement of the Constitution and other laws pertaining to the
controlling interests in enterprises engaged in the exploitation of natural
resources owned by Filipino citizens, provides:
Shares belonging to corporations or partnerships at least 60% of the capital of
which is owned by Filipino citizens shall be considered as of Philippine
nationality, but if the percentage of Filipino ownership in the corporation or
partnership is less than 60%, only the number of shares corresponding to such
percentage shall be counted as of Philippine nationality. Thus, if 100,000 shares
are registered in the name of a corporation or partnership at least 60% of the
capital stock or capital, respectively, of which belong to Filipino citizens, all of
the shares shall be recorded as owned by Filipinos. But if less than 60%, or say,
50% of the capital stock or capital of the corporation or partnership, respectively,
belongs to Filipino citizens, only 50,000 shares shall be counted as owned by
Filipinos and the other 50,000 shall be recorded as belonging to aliens.
The first part of paragraph 7, DOJ Opinion No. 020, stating "shares belonging to
corporations or partnerships at least 60% of the capital of which is owned by
Filipino citizens shall be considered as of Philippine nationality," pertains to the
control test or the liberal rule. On the other hand, the second part of the DOJ
Opinion which provides, "if the percentage of the Filipino ownership in the
corporation or partnership is less than 60%, only the number of shares
corresponding to such percentage shall be counted as Philippine nationality,"
pertains to the stricter, more stringent grandfather rule.
Prior to this recent change of events, petitioners were constant in advocating the
application of the "control test" under RA 7042, as amended by RA 8179,
otherwise known as the Foreign Investments Act (FIA), rather than using the
stricter grandfather rule. The pertinent provision under Sec. 3 of the FIA
provides:
SECTION 3. Definitions. - As used in this Act:
a.) The term Philippine national shall mean a citizen of the Philippines; or a
domestic partnership or association wholly owned by the citizens of the
Philippines; a corporation organized under the laws of the Philippines of which at
least sixty percent (60%) of the capital stock outstanding and entitled to vote is
wholly owned by Filipinos or a trustee of funds for pension or other employee
retirement or separation benefits, where the trustee is a Philippine national and
at least sixty percent (60%) of the fund will accrue to the benefit of Philippine
nationals: Provided, That were a corporation and its non-Filipino stockholders
own stocks in a Securities and Exchange Commission (SEC) registered
enterprise, at least sixty percent (60%) of the capital stock outstanding and
entitled to vote of each of both corporations must be owned and held by citizens
of the Philippines and at least sixty percent (60%) of the members of the Board
of Directors, in order that the corporation shall be considered a Philippine
national. (emphasis supplied)
The grandfather rule, petitioners reasoned, has no leg to stand on in the instant
case since the definition of a "Philippine National" under Sec. 3 of the FIA does
not provide for it. They further claim that the grandfather rule "has been
41
abandoned and is no longer the applicable rule." They also opined that the last
portion of Sec. 3 of the FIA admits the application of a "corporate layering"
scheme of corporations. Petitioners claim that the clear and unambiguous
wordings of the statute preclude the court from construing it and prevent the
court’s use of discretion in applying the law. They said that the plain, literal
meaning of the statute meant the application of the control test is obligatory.
We disagree. "Corporate layering" is admittedly allowed by the FIA; but if it is
used to circumvent the Constitution and pertinent laws, then it becomes illegal.
Further, the pronouncement of petitioners that the grandfather rule has already
been abandoned must be discredited for lack of basis.
Art. XII, Sec. 2 of the Constitution provides:
Sec. 2. All lands of the public domain, waters, minerals, coal, petroleum and
other mineral oils, all forces of potential energy, fisheries, forests or timber,
wildlife, flora and fauna, and other natural resources are owned by the State.
With the exception of agricultural lands, all other natural resources shall not be
alienated. The exploration, development, and utilization of natural resources
shall be under the full control and supervision of the State. The State may
directly undertake such activities, or it may enter into co-production, joint venture
or production-sharing agreements with Filipino citizens, or corporations or
associations at least sixty per centum of whose capital is owned by such
citizens. Such agreements may be for a period not exceeding twenty-five years,
renewable for not more than twenty-five years, and under such terms and
conditions as may be provided by law.
xxxx
The President may enter into agreements with Foreign-owned corporations
involving either technical or financial assistance for large-scale exploration,
development, and utilization of minerals, petroleum, and other mineral oils
according to the general terms and conditions provided by law, based on real
contributions to the economic growth and general welfare of the country. In such
agreements, the State shall promote the development and use of local scientific
and technical resources. (emphasis supplied)
The emphasized portion of Sec. 2 which focuses on the State entering into
different types of agreements for the exploration, development, and utilization of
natural resources with entities who are deemed Filipino due to 60 percent
ownership of capital is pertinent to this case, since the issues are centered on
the utilization of our country’s natural resources or specifically, mining. Thus,
there is a need to ascertain the nationality of petitioners since, as the
Constitution so provides, such agreements are only allowed corporations or
associations "at least 60 percent of such capital is owned by such citizens." The
deliberations in the Records of the 1986 Constitutional Commission shed light
on how a citizenship of a corporation will be determined:
Mr. BENNAGEN: Did I hear right that the Chairman’s interpretation of an
independent national economy is freedom from undue foreign control? What is
the meaning of undue foreign control?
MR. VILLEGAS: Undue foreign control is foreign control which sacrifices
national sovereignty and the welfare of the Filipino in the economic sphere.
MR. BENNAGEN: Why does it have to be qualified still with the word "undue"?
Why not simply freedom from foreign control? I think that is the meaning of
independence, because as phrased, it still allows for foreign control.
MR. VILLEGAS: It will now depend on the interpretation because if, for example,
we retain the 60/40 possibility in the cultivation of natural resources, 40 percent
involves some control; not total control, but some control.
MR. BENNAGEN: In any case, I think in due time we will propose some
amendments.
MR. VILLEGAS: Yes. But we will be open to improvement of the phraseology.
Mr. BENNAGEN: Yes.
Thank you, Mr. Vice-President.
xxxx
MR. NOLLEDO: In Sections 3, 9 and 15, the Committee stated local or Filipino
equity and foreign equity; namely, 60-40 in Section 3, 60-40 in Section 9, and
2/3-1/3 in Section 15.
MR. VILLEGAS: That is right.
MR. NOLLEDO: In teaching law, we are always faced with the question: ‘Where
do we base the equity requirement, is it on the authorized capital stock, on the
subscribed capital stock, or on the paid-up capital stock of a corporation’? Will
the Committee please enlighten me on this?
MR. VILLEGAS: We have just had a long discussion with the members of the
team from the UP Law Center who provided us with a draft. The phrase that is
contained here which we adopted from the UP draft is ‘60 percent of the voting
stock.’
MR. NOLLEDO: That must be based on the subscribed capital stock, because
unless declared delinquent, unpaid capital stock shall be entitled to vote.
MR. VILLEGAS: That is right.
MR. NOLLEDO: Thank you.
With respect to an investment by one corporation in another corporation, say, a
corporation with 60-40 percent equity invests in another corporation which is
permitted by the Corporation Code, does the Committee adopt the grandfather
rule?
MR. VILLEGAS: Yes, that is the understanding of the Committee.
MR. NOLLEDO: Therefore, we need additional Filipino capital?
42
MR. VILLEGAS: Yes. (emphasis supplied)
It is apparent that it is the intention of the framers of the Constitution to apply the
grandfather rule in cases where corporate layering is present.
Elementary in statutory construction is when there is conflict between the
Constitution and a statute, the Constitution will prevail. In this instance,
specifically pertaining to the provisions under Art. XII of the Constitution on
National Economy and Patrimony, Sec. 3 of the FIA will have no place of
application. As decreed by the honorable framers of our Constitution, the
grandfather rule prevails and must be applied.
Likewise, paragraph 7, DOJ Opinion No. 020, Series of 2005 provides:
The above-quoted SEC Rules provide for the manner of calculating the Filipino
interest in a corporation for purposes, among others, of determining compliance
with nationality requirements (the ‘Investee Corporation’). Such manner of
computation is necessary since the shares in the Investee Corporation may be
owned both by individual stockholders (‘Investing Individuals’) and by
corporations and partnerships (‘Investing Corporation’). The said rules thus
provide for the determination of nationality depending on the ownership of the
Investee Corporation and, in certain instances, the Investing Corporation.
Under the above-quoted SEC Rules, there are two cases in determining the
nationality of the Investee Corporation. The first case is the ‘liberal rule’, later
coined by the SEC as the Control Test in its 30 May 1990 Opinion, and pertains
to the portion in said Paragraph 7 of the 1967 SEC Rules which states, ‘(s)hares
belonging to corporations or partnerships at least 60% of the capital of which is
owned by Filipino citizens shall be considered as of Philippine nationality.’ Under
the liberal Control Test, there is no need to further trace the ownership of the
60% (or more) Filipino stockholdings of the Investing Corporation since a
corporation which is at least 60% Filipino-owned is considered as Filipino.
The second case is the Strict Rule or the Grandfather Rule Proper and pertains
to the portion in said Paragraph 7 of the 1967 SEC Rules which states, "but if
the percentage of Filipino ownership in the corporation or partnership is less
than 60%, only the number of shares corresponding to such percentage shall be
counted as of Philippine nationality." Under the Strict Rule or Grandfather Rule
Proper, the combined totals in the Investing Corporation and the Investee
Corporation must be traced (i.e., "grandfathered") to determine the total
percentage of Filipino ownership.
Moreover, the ultimate Filipino ownership of the shares must first be traced to
the level of the Investing Corporation and added to the shares directly owned in
the Investee Corporation x x x.
xxxx
In other words, based on the said SEC Rule and DOJ Opinion, the Grandfather
Rule or the second part of the SEC Rule applies only when the 60-40 Filipino-
foreign equity ownership is in doubt (i.e., in cases where the joint venture
corporation with Filipino and foreign stockholders with less than 60% Filipino
stockholdings [or 59%] invests in other joint venture corporation which is either
60-40% Filipino-alien or the 59% less Filipino). Stated differently, where the 60-
40 Filipino- foreign equity ownership is not in doubt, the Grandfather Rule will
not apply. (emphasis supplied)
After a scrutiny of the evidence extant on record, the Court finds that this case
calls for the application of the grandfather rule since, as ruled by the POA and
affirmed by the OP, doubt prevails and persists in the corporate ownership of
petitioners. Also, as found by the CA, doubt is present in the 60-40 Filipino
equity ownership of petitioners Narra, McArthur and Tesoro, since their common
investor, the 100% Canadian corporation––MBMI, funded them. However,
petitioners also claim that there is "doubt" only when the stockholdings of
43
Filipinos are less than 60%.
The assertion of petitioners that "doubt" only exists when the stockholdings are Michael T. American 1 PhP 1,000.00 PhP 1,000.00
less than 60% fails to convince this Court. DOJ Opinion No. 20, which Mason
petitioners quoted in their petition, only made an example of an instance where
"doubt" as to the ownership of the corporation exists. It would be ludicrous to Kenneth Canadian 1 PhP 1,000.00 PhP 1,000.00
limit the application of the said word only to the instances where the Cawkell
stockholdings of non-Filipino stockholders are more than 40% of the total
stockholdings in a corporation. The corporations interested in circumventing our Total 10,000 PhP PhP
laws would clearly strive to have "60% Filipino Ownership" at face value. It 10,000,000.00 2,708,174.60
would be senseless for these applying corporations to state in their respective (emphasis
articles of incorporation that they have less than 60% Filipino stockholders since supplied)
the applications will be denied instantly. Thus, various corporate schemes and
layerings are utilized to circumvent the application of the Constitution. Interestingly, looking at the corporate structure of MMC, we take note that it has
a similar structure and composition as McArthur. In fact, it would seem that
45
Obviously, the instant case presents a situation which exhibits a scheme MBMI is also a major investor and "controls" MBMI and also, similar nominal
employed by stockholders to circumvent the law, creating a cloud of doubt in the shareholders were present, i.e. Fernando B. Esguerra (Esguerra), Lauro L.
Court’s mind. To determine, therefore, the actual participation, direct or indirect, Salazar (Salazar), Michael T. Mason (Mason) and Kenneth Cawkell (Cawkell):
of MBMI, the grandfather rule must be used.
Madridejos Mining Corporation
McArthur Mining, Inc.
Name Nationality Number of Amount Amount Paid
To establish the actual ownership, interest or participation of MBMI in each of Shares Subscribed
petitioners’ corporate structure, they have to be "grandfathered."
Olympic Mines Filipino 6,663 PhP PhP 0
As previously discussed, McArthur acquired its MPSA application from MMC, & 6,663,000.00
which acquired its application from SMMI. McArthur has a capital stock of ten
million pesos (PhP 10,000,000) divided into 10,000 common shares at one Development
44
thousand pesos (PhP 1,000) per share, subscribed to by the following:
Corp.
Name Nationality Number of Amount Amount Paid MBMI Canadian 3,331 PhP PhP
Shares Subscribed Resources, 3,331,000.00 2,803,900.00
Madridejos Filipino 5,997 PhP PhP
Mining 5,997,000.00 825,000.00 Inc.
Corporation
Amanti Limson Filipino 1 PhP 1,000.00 PhP 1,000.00
MBMI Canadian 3,998 PhP 3,998,000.0 PhP
Fernando B. Filipino 1 PhP 1,000.00 PhP 1,000.00
Resources, 1,878,174.60
Inc.
Esguerra
Lauro L. Filipino 1 PhP 1,000.00 PhP 1,000.00
Salazar Lauro Salazar Filipino 1 PhP 1,000.00 PhP 1,000.00

Fernando B. Filipino 1 PhP 1,000.00 PhP 1,000.00 Emmanuel G. Filipino 1 PhP 1,000.00 PhP 1,000.00
Esguerra
Hernando
Manuel A. Filipino 1 PhP 1,000.00 PhP 1,000.00
Agcaoili Michael T. American 1 PhP 1,000.00 PhP 1,000.00
Mason
Kenneth Canadian 1 PhP 1,000.00 PhP 1,000.00 Name Nationality Number Amount Amount Paid
Cawkell of
Total 10,000 PhP PhP Subscribed
10,000,000.00 2,809,900.00 Shares

Sara Marie Filipino 5,997 PhP PhP 825,000.00

(emphasis
5,997,000.00
supplied)
Mining, Inc.

Noticeably, Olympic Mines & Development Corporation (Olympic) did not pay MBMI Canadian 3,998 PhP PhP
any amount with respect to the number of shares they subscribed to in the 3,998,000.00 1,878,174.60
corporation, which is quite absurd since Olympic is the major stockholder in Resources,
MMC. MBMI’s 2006 Annual Report sheds light on why Olympic failed to pay any Inc.
amount with respect to the number of shares it subscribed to. It states that
Olympic entered into joint venture agreements with several Philippine Lauro L. Filipino 1 PhP 1,000.00 PhP 1,000.00
companies, wherein it holds directly and indirectly a 60% effective equity interest Salazar
46
in the Olympic Properties. Quoting the said Annual report:
Fernando B. Filipino 1 PhP 1,000.00 PhP 1,000.00
On September 9, 2004, the Company and Olympic Mines & Development
Corporation ("Olympic") entered into a series of agreements including a Property Esguerra
Purchase and Development Agreement (the Transaction Documents) with
respect to three nickel laterite properties in Palawan, Philippines (the "Olympic Manuel A. Filipino 1 PhP 1,000.00 PhP 1,000.00
Properties"). The Transaction Documents effectively establish a joint venture
between the Company and Olympic for purposes of developing the Olympic
Agcaoili
Properties. The Company holds directly and indirectly an initial 60% interest in
the joint venture. Under certain circumstances and upon achieving certain
Michael T. American 1 PhP 1,000.00 PhP 1,000.00
milestones, the Company may earn up to a 100% interest, subject to a 2.5% net
47 Mason
revenue royalty. (emphasis supplied)
Kenneth Canadian 1 PhP 1,000.00 PhP 1,000.00
Thus, as demonstrated in this first corporation, McArthur, when it is Cawkell
"grandfathered," company layering was utilized by MBMI to gain control over
McArthur. It is apparent that MBMI has more than 60% or more equity interest in Total 10,000 PhP PhP
McArthur, making the latter a foreign corporation. 10,000,000.00 2,708,174.60

Tesoro Mining and Development, Inc. (emphasis

supplied)
Tesoro, which acquired its MPSA application from SMMI, has a capital stock of
ten million pesos (PhP 10,000,000) divided into ten thousand (10,000) common
shares at PhP 1,000 per share, as demonstrated below: Except for the name "Sara Marie Mining, Inc.," the table above shows exactly
the same figures as the corporate structure of petitioner McArthur, down to the
last centavo. All the other shareholders are the same: MBMI, Salazar, Esguerra,
[[reference
Agcaoili, Mason and Cawkell. The figures under "Nationality," "Number of
= http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2014/april20
Shares," "Amount Subscribed," and "Amount Paid" are exactly the same.
14/195580.pdf]]
Delving deeper, we scrutinize SMMI’s corporate structure:

Sara Marie Mining, Inc.

[[reference After subsequently studying SMMI’s corporate structure, it is not farfetched for
= http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2014/april20 us to spot the glaring similarity between SMMI and MMC’s corporate structure.
14/195580.pdf]] Again, the presence of identical stockholders, namely: Olympic, MBMI, Amanti
Limson (Limson), Esguerra, Salazar, Hernando, Mason and Cawkell. The
figures under the headings "Nationality," "Number of Shares," "Amount
Name Nationality Number Amount Amount Paid Subscribed," and "Amount Paid" are exactly the same except for the amount
of paid by MBMI which now reflects the amount of two million seven hundred
Subscribed ninety four thousand pesos (PhP 2,794,000). Oddly, the total value of the
Shares amount paid is two million eight hundred nine thousand nine hundred pesos
(PhP 2,809,900).
Olympic Mines Filipino 6,663 PhP PhP 0
& 6,663,000.00 Accordingly, after "grandfathering" petitioner Tesoro and factoring in Olympic’s
participation in SMMI’s corporate structure, it is clear that MBMI is in control of
Development Tesoro and owns 60% or more equity interest in Tesoro. This makes petitioner
Tesoro a non-Filipino corporation and, thus, disqualifies it to participate in the
Corp. exploitation, utilization and development of our natural resources.

MBMI Canadian 3,331 PhP PhP Narra Nickel Mining and Development Corporation
Resources, 3,331,000.00 2,794,000.00
Moving on to the last petitioner, Narra, which is the transferee and assignee of
Inc. PLMDC’s MPSA application, whose corporate structure’s arrangement is similar
to that of the first two petitioners discussed. The capital stock of Narra is ten
Amanti Limson Filipino 1 PhP 1,000.00 PhP 1,000.00 million pesos (PhP 10,000,000), which is divided into ten thousand common
shares (10,000) at one thousand pesos (PhP 1,000) per share, shown as
Fernando B. Filipino 1 PhP 1,000.00 PhP 1,000.00 follows:

Esguerra [[reference
= http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2014/april20
Lauro Salazar Filipino 1 PhP 1,000.00 PhP 1,000.00 14/195580.pdf]]

Emmanuel G. Filipino 1 PhP 1,000.00 PhP 1,000.00

Name Nationality Number Amount Amount Paid
Hernando of
Subscribed
Michael T. American 1 PhP 1,000.00 PhP 1,000.00 Shares
Mason
Patricia Louise Filipino 5,997 PhP PhP
Kenneth Canadian 1 PhP 1,000.00 PhP 1,000.00 5,997,000.00 1,677,000.00
Cawkell Mining &

Total 10,000 PhP PhP Development

10,000,000.00 2,809,900.00
Corp.
(emphasis
supplied) MBMI Canadian 3,998 PhP PhP
3,996,000.00 1,116,000.00
 of Shares Subscribed
Resources, Palawan Alpha Filipino 6,596 PhP PhP 0
Inc. South Resources 6,596,000.00
Development
Higinio C. Filipino 1 PhP 1,000.00 PhP 1,000.00 Corporation

Mendoza, Jr. MBMI Resources, Canadian 3,396 PhP PhP

3,396,000.00 2,796,000.00
Henry E. Filipino 1 PhP 1,000.00 PhP 1,000.00 Inc.
Higinio C. Mendoza, Filipino 1 PhP 1,000.00 PhP 1,000.00
Fernandez Jr.
Manuel A. Filipino 1 PhP 1,000.00 PhP 1,000.00 Fernando B. Filipino 1 PhP 1,000.00 PhP 1,000.00
Esguerra
Agcaoili
Henry E. Fernandez Filipino 1 PhP 1,000.00 PhP 1,000.00
Ma. Elena A. Filipino 1 PhP 1,000.00 PhP 1,000.00 Lauro L. Salazar Filipino 1 PhP 1,000.00 PhP 1,000.00

Bocalan Manuel A. Agcaoili Filipino 1 PhP 1,000.00 PhP 1,000.00

Bayani H. Agabin Filipino 1 PhP 1,000.00 PhP 1,000.00
Bayani H. Filipino 1 PhP 1,000.00 PhP 1,000.00
Agabin Michael T. Mason American 1 PhP 1,000.00 PhP 1,000.00

Robert L. American 1 PhP 1,000.00 PhP 1,000.00 Kenneth Cawkell Canadian 1 PhP 1,000.00 PhP 1,000.00
Total 10,000 PhP PhP
McCurdy 10,000,000.00 2,708,174.60
(emphasis
Kenneth Canadian 1 PhP 1,000.00 PhP 1,000.00 supplied)
Cawkell

Total 10,000 PhP PhP Yet again, the usual players in petitioners’ corporate structures are present.
10,000,000.00 2,800,000.00 Similarly, the amount of money paid by the 2nd tier majority stock holder, in this
(emphasis case, Palawan Alpha South Resources and Development Corp. (PASRDC), is
supplied) zero.

Studying MBMI’s Summary of Significant Accounting Policies dated October 31,

Again, MBMI, along with other nominal stockholders, i.e., Mason, Agcaoili and 2005 explains the reason behind the intricate corporate layering that MBMI
Esguerra, is present in this corporate structure. immersed itself in:

Patricia Louise Mining & Development Corporation JOINT VENTURES The Company’s ownership interests in various mining
ventures engaged in the acquisition, exploration and development of mineral
Using the grandfather method, we further look and examine PLMDC’s corporate properties in the Philippines is described as follows:
structure:
(a) Olympic Group
Name Nationality Number Amount Amount Paid
The Philippine companies holding the Olympic Property, and the ownership and
interests therein, are as follows:
Olympic- Philippines (the "Olympic Group")
Sara Marie Mining Properties Ltd. ("Sara Marie") 33.3%
Tesoro Mining & Development, Inc. (Tesoro) 60.0%
Pursuant to the Olympic joint venture agreement the Company holds directly
and indirectly an effective equity interest in the Olympic Property of 60.0%.
Pursuant to a shareholders’ agreement, the Company exercises joint control
over the companies in the Olympic Group.
(b) Alpha Group
The Philippine companies holding the Alpha Property, and the ownership
interests therein, are as follows:
Alpha- Philippines (the "Alpha Group")
Patricia Louise Mining Development Inc. ("Patricia") 34.0%
Narra Nickel Mining & Development Corporation (Narra) 60.4%
Under a joint venture agreement the Company holds directly and indirectly an
effective equity interest in the Alpha Property of 60.4%. Pursuant to a
shareholders’ agreement, the Company exercises joint control over the
48
companies in the Alpha Group. (emphasis supplied)
Concluding from the above-stated facts, it is quite safe to say that petitioners
McArthur, Tesoro and Narra are not Filipino since MBMI, a 100% Canadian
corporation, owns 60% or more of their equity interests. Such conclusion is
derived from grandfathering petitioners’ corporate owners, namely: MMI, SMMI
and PLMDC. Going further and adding to the picture, MBMI’s Summary of
Significant Accounting Policies statement– –regarding the "joint venture"
agreements that it entered into with the "Olympic" and "Alpha" groups––involves
SMMI, Tesoro, PLMDC and Narra. Noticeably, the ownership of the "layered"
corporations boils down to MBMI, Olympic or corporations under the "Alpha"
group wherein MBMI has joint venture agreements with, practically exercising
majority control over the corporations mentioned. In effect, whether looking at
the capital structure or the underlying relationships between and among the
corporations, petitioners are NOT Filipino nationals and must be considered
foreign since 60% or more of their capital stocks or equity interests are owned
by MBMI.
Application of the res inter alios acta rule
Petitioners question the CA’s use of the exception of the res inter alios acta or
the "admission by co-partner or agent" rule and "admission by privies" under the
Rules of Court in the instant case, by pointing out that statements made by
MBMI should not be admitted in this case since it is not a party to the case and
that it is not a "partner" of petitioners.
Secs. 29 and 31, Rule 130 of the Revised Rules of Court provide:
Sec. 29. Admission by co-partner or agent.- The act or declaration of a partner
or agent of the party within the scope of his authority and during the existence of
the partnership or agency, may be given in evidence against such party after the
partnership or agency is shown by evidence other than such act or declaration
itself. The same rule applies to the act or declaration of a joint owner, joint
debtor, or other person jointly interested with the party.
Sec. 31. Admission by privies.- Where one derives title to property from another,
the act, declaration, or omission of the latter, while holding the title, in relation to
the property, is evidence against the former.
Petitioners claim that before the above-mentioned Rule can be applied to a
case, "the partnership relation must be shown, and that proof of the fact must be
49
made by evidence other than the admission itself." Thus, petitioners assert
that the CA erred in finding that a partnership relationship exists between them
and MBMI because, in fact, no such partnership exists.
Partnerships vs. joint venture agreements
Petitioners claim that the CA erred in applying Sec. 29, Rule 130 of the Rules by
stating that "by entering into a joint venture, MBMI have a joint interest" with
Narra, Tesoro and McArthur. They challenged the conclusion of the CA which
pertains to the close characteristics of
"partnerships" and "joint venture agreements." Further, they asserted that before
this particular partnership can be formed, it should have been formally reduced
into writing since the capital involved is more than three thousand pesos (PhP
3,000). Being that there is no evidence of written agreement to form a
partnership between petitioners and MBMI, no partnership was created.
We disagree.
A partnership is defined as two or more persons who bind themselves to
contribute money, property, or industry to a common fund with the intention of
50
dividing the profits among themselves. On the other hand, joint ventures have
been deemed to be "akin" to partnerships since it is difficult to distinguish
between joint ventures and partnerships. Thus:
[T]he relations of the parties to a joint venture and the nature of their association
are so similar and closely akin to a partnership that it is ordinarily held that their
rights, duties, and liabilities are to be tested by rules which are closely
analogous to and substantially the same, if not exactly the same, as those which
govern partnership. In fact, it has been said that the trend in the law has been to
blur the distinctions between a partnership and a joint venture, very little law
51
being found applicable to one that does not apply to the other.
Though some claim that partnerships and joint ventures are totally different
animals, there are very few rules that differentiate one from the other; thus, joint
ventures are deemed "akin" or similar to a partnership. In fact, in joint venture
52
agreements, rules and legal incidents governing partnerships are applied.
Accordingly, culled from the incidents and records of this case, it can be
assumed that the relationships entered between and among petitioners and
MBMI are no simple "joint venture agreements." As a rule, corporations are
prohibited from entering into partnership agreements; consequently,
corporations enter into joint venture agreements with other corporations or
partnerships for certain transactions in order to form "pseudo partnerships."
Obviously, as the intricate web of "ventures" entered into by and among
petitioners and MBMI was executed to circumvent the legal prohibition against
corporations entering into partnerships, then the relationship created should be
deemed as "partnerships," and the laws on partnership should be applied. Thus,
a joint venture agreement between and among corporations may be seen as
similar to partnerships since the elements of partnership are present.
Considering that the relationships found between petitioners and MBMI are
considered to be partnerships, then the CA is justified in applying Sec. 29, Rule
130 of the Rules by stating that "by entering into a joint venture, MBMI have a
joint interest" with Narra, Tesoro and McArthur.
Panel of Arbitrators’ jurisdiction
We affirm the ruling of the CA in declaring that the POA has jurisdiction over the
instant case. The POA has jurisdiction to settle disputes over rights to mining
areas which definitely involve the petitions filed by Redmont against petitioners
Narra, McArthur and Tesoro. Redmont, by filing its petition against petitioners, is
asserting the right of Filipinos over mining areas in the Philippines against
alleged foreign-owned mining corporations. Such claim constitutes a "dispute"
found in Sec. 77 of RA 7942:
Within thirty (30) days, after the submission of the case by the parties for the
decision, the panel shall have exclusive and original jurisdiction to hear and
decide the following:
(a) Disputes involving rights to mining areas
(b) Disputes involving mineral agreements or permits
53
We held in Celestial Nickel Mining Exploration Corporation v. Macroasia Corp.:
The phrase "disputes involving rights to mining areas" refers to any adverse
claim, protest, or opposition to an application for mineral agreement. The POA
therefore has the jurisdiction to resolve any adverse claim, protest, or opposition
to a pending application for a mineral agreement filed with the concerned
Regional Office of the MGB. This is clear from Secs. 38 and 41 of the DENR AO
96-40, which provide:
Sec. 38.
xxxx
Within thirty (30) calendar days from the last date of publication/posting/radio
announcements, the authorized officer(s) of the concerned office(s) shall issue a
certification(s) that the publication/posting/radio announcement have been
complied with. Any adverse claim, protest, opposition shall be filed directly,
within thirty (30) calendar days from the last date of publication/posting/radio
announcement, with the concerned Regional Office or through any concerned
PENRO or CENRO for filing in the concerned Regional Office for purposes of its
resolution by the Panel of Arbitrators pursuant to the provisions of this Act and
these implementing rules and regulations. Upon final resolution of any adverse
claim, protest or opposition, the Panel of Arbitrators shall likewise issue a
certification to that effect within five (5) working days from the date of finality of
resolution thereof. Where there is no adverse claim, protest or opposition, the
Panel of Arbitrators shall likewise issue a Certification to that effect within five
working days therefrom.
xxxx
No Mineral Agreement shall be approved unless the requirements under this
Section are fully complied with and any adverse claim/protest/opposition is
finally resolved by the Panel of Arbitrators.
Sec. 41.
xxxx
Within fifteen (15) working days form the receipt of the Certification issued by
the Panel of Arbitrators as provided in Section 38 hereof, the concerned
Regional Director shall initially evaluate the Mineral Agreement applications in
areas outside Mineral reservations. He/She shall thereafter endorse his/her
findings to the Bureau for further evaluation by the Director within fifteen (15)
working days from receipt of forwarded documents. Thereafter, the Director shall
endorse the same to the secretary for consideration/approval within fifteen
working days from receipt of such endorsement.
In case of Mineral Agreement applications in areas with Mineral Reservations,
within fifteen (15) working days from receipt of the Certification issued by the
Panel of Arbitrators as provided for in Section 38 hereof, the same shall be
evaluated and endorsed by the Director to the Secretary for
consideration/approval within fifteen days from receipt of such endorsement.
(emphasis supplied)
It has been made clear from the aforecited provisions that the "disputes
involving rights to mining areas" under Sec. 77(a) specifically refer only to those
disputes relative to the applications for a mineral agreement or conferment of
mining rights.
The jurisdiction of the POA over adverse claims, protest, or oppositions to a
mining right application is further elucidated by Secs. 219 and 43 of DENR AO
95-936, which read:
Sec. 219. Filing of Adverse Claims/Conflicts/Oppositions.- Notwithstanding the
provisions of Sections 28, 43 and 57 above, any adverse claim, protest or
opposition specified in said sections may also be filed directly with the Panel of
Arbitrators within the concerned periods for filing such claim, protest or
opposition as specified in said Sections.
Sec. 43. Publication/Posting of Mineral Agreement.-
xxxx
The Regional Director or concerned Regional Director shall also cause the
posting of the application on the bulletin boards of the Bureau, concerned
Regional office(s) and in the concerned province(s) and municipality(ies), copy
furnished the barangays where the proposed contract area is located once a
week for two (2) consecutive weeks in a language generally understood in the
locality. After forty-five (45) days from the last date of publication/posting has
been made and no adverse claim, protest or opposition was filed within the said
forty-five (45) days, the concerned offices shall issue a certification that
publication/posting has been made and that no adverse claim, protest or
opposition of whatever nature has been filed. On the other hand, if there be any
adverse claim, protest or opposition, the same shall be filed within forty-five (45)
days from the last date of publication/posting, with the Regional Offices
concerned, or through the Department’s Community Environment and Natural
Resources Officers (CENRO) or Provincial Environment and Natural Resources
Officers (PENRO), to be filed at the Regional Office for resolution of the Panel of
Arbitrators. However previously published valid and subsisting mining claims are
exempted from posted/posting required under this Section.
No mineral agreement shall be approved unless the requirements under this
section are fully complied with and any opposition/adverse claim is dealt with in
writing by the Director and resolved by the Panel of Arbitrators. (Emphasis
supplied.)
It has been made clear from the aforecited provisions that the "disputes
involving rights to mining areas" under Sec. 77(a) specifically refer only to those
disputes relative to the applications for a mineral agreement or conferment of
mining rights.
The jurisdiction of the POA over adverse claims, protest, or oppositions to a
mining right application is further elucidated by Secs. 219 and 43 of DENRO AO
95-936, which reads:
Sec. 219. Filing of Adverse Claims/Conflicts/Oppositions.- Notwithstanding the
provisions of Sections 28, 43 and 57 above, any adverse claim, protest or
opposition specified in said sections may also be filed directly with the Panel of
Arbitrators within the concerned periods for filing such claim, protest or
opposition as specified in said Sections.
Sec. 43. Publication/Posting of Mineral Agreement Application.-
xxxx
The Regional Director or concerned Regional Director shall also cause the
posting of the application on the bulletin boards of the Bureau, concerned
Regional office(s) and in the concerned province(s) and municipality(ies), copy
furnished the barangays where the proposed contract area is located once a
week for two (2) consecutive weeks in a language generally understood in the
locality. After forty-five (45) days from the last date of publication/posting has
been made and no adverse claim, protest or opposition was filed within the said
forty-five (45) days, the concerned offices shall issue a certification that
publication/posting has been made and that no adverse claim, protest or
opposition of whatever nature has been filed. On the other hand, if there be any
adverse claim, protest or opposition, the same shall be filed within forty-five (45)
days from the last date of publication/posting, with the Regional offices
concerned, or through the Department’s Community Environment and Natural
Resources Officers (CENRO) or Provincial Environment and Natural Resources
Officers (PENRO), to be filed at the Regional Office for resolution of the Panel of
Arbitrators. However, previously published valid and subsisting mining claims
are exempted from posted/posting required under this Section.
No mineral agreement shall be approved unless the requirements under this
section are fully complied with and any opposition/adverse claim is dealt with in
writing by the Director and resolved by the Panel of Arbitrators. (Emphasis
supplied.)
These provisions lead us to conclude that the power of the POA to resolve any
adverse claim, opposition, or protest relative to mining rights under Sec. 77(a) of
RA 7942 is confined only to adverse claims, conflicts and oppositions relating to
applications for the grant of mineral rights.
POA’s jurisdiction is confined only to resolutions of such adverse claims,
conflicts and oppositions and it has no authority to approve or reject said
applications. Such power is vested in the DENR Secretary upon
recommendation of the MGB Director. Clearly, POA’s jurisdiction over "disputes
involving rights to mining areas" has nothing to do with the cancellation of
existing mineral agreements. (emphasis ours)
Accordingly, as we enunciated in Celestial, the POA unquestionably has
jurisdiction to resolve disputes over MPSA applications subject of Redmont’s
petitions. However, said jurisdiction does not include either the approval or
rejection of the MPSA applications, which is vested only upon the Secretary of
the DENR. Thus, the finding of the POA, with respect to the rejection of
petitioners’ MPSA applications being that they are foreign corporation, is valid.
Justice Marvic Mario Victor F. Leonen, in his Dissent, asserts that it is the
regular courts, not the POA, that has jurisdiction over the MPSA applications of
petitioners.
This postulation is incorrect.
It is basic that the jurisdiction of the court is determined by the statute in force at
54
the time of the commencement of the action.
Sec. 19, Batas Pambansa Blg. 129 or "The Judiciary Reorganization
Act of 1980" reads:
Sec. 19. Jurisdiction in Civil Cases.—Regional Trial Courts shall exercise
exclusive original jurisdiction:
1. In all civil actions in which the subject of the litigation is incapable of pecuniary
estimation.
On the other hand, the jurisdiction of POA is unequivocal from Sec. 77 of RA
7942:
Section 77. Panel of Arbitrators.—
x x x Within thirty (30) days, after the submission of the case by the
parties for the decision, the panel shall have exclusive and original
jurisdiction to hear and decide the following:
(c) Disputes involving rights to mining areas
(d) Disputes involving mineral agreements or permits
It is clear that POA has exclusive and original jurisdiction over any and all
disputes involving rights to mining areas. One such dispute is an MPSA
application to which an adverse claim, protest or opposition is filed by another
interested applicant.1âwphi1 In the case at bar, the dispute arose or originated
from MPSA applications where petitioners are asserting their rights to mining
areas subject of their respective MPSA applications. Since respondent filed 3
separate petitions for the denial of said applications, then a controversy has
developed between the parties and it is POA’s jurisdiction to resolve said
disputes.
Moreover, the jurisdiction of the RTC involves civil actions while what petitioners
filed with the DENR Regional Office or any concerned DENRE or CENRO are
MPSA applications. Thus POA has jurisdiction.
Furthermore, the POA has jurisdiction over the MPSA applications under the
doctrine of primary jurisdiction. Euro-med Laboratories v. Province of
55
Batangas elucidates:
The doctrine of primary jurisdiction holds that if a case is such that its
determination requires the expertise, specialized training and knowledge of an
administrative body, relief must first be obtained in an administrative proceeding
before resort to the courts is had even if the matter may well be within their
proper jurisdiction.
Whatever may be the decision of the POA will eventually reach the court system
via a resort to the CA and to this Court as a last recourse.
Selling of MBMI’s shares to DMCI
As stated before, petitioners’ Manifestation and Submission dated October 19,
2012 would want us to declare the instant petition moot and academic due to the
transfer and conveyance of all the shareholdings and interests of MBMI to
DMCI, a corporation duly organized and existing under Philippine laws and is at
56
least 60% Philippine-owned. Petitioners reasoned that they now cannot be
considered as foreign-owned; the transfer of their shares supposedly cured the
"defect" of their previous nationality. They claimed that their current FTAA
contract with the State should stand since "even wholly-owned foreign
57
corporations can enter into an FTAA with the State." Petitioners stress that
there should no longer be any issue left as regards their qualification to enter
into FTAA contracts since they are qualified to engage in mining activities in the
Philippines. Thus, whether the "grandfather rule" or the "control test" is used, the
nationalities of petitioners cannot be doubted since it would pass both tests.

The sale of the MBMI shareholdings to DMCI does not have any bearing in the
instant case and said fact should be disregarded. The manifestation can no
longer be considered by us since it is being tackled in G.R. No. 202877 pending
before this Court.1âwphi1 Thus, the question of whether petitioners, allegedly a
Philippine-owned corporation due to the sale of MBMI's shareholdings to DMCI,
are allowed to enter into FTAAs with the State is a non-issue in this case.

In ending, the "control test" is still the prevailing mode of determining whether or
not a corporation is a Filipino corporation, within the ambit of Sec. 2, Art. II of the
1987 Constitution, entitled to undertake the exploration, development and
utilization of the natural resources of the Philippines. When in the mind of the
Court there is doubt, based on the attendant facts and circumstances of the
case, in the 60-40 Filipino-equity ownership in the corporation, then it may apply
the "grandfather rule."

WHEREFORE, premises considered, the instant petition is DENIED. The

assailed Court of Appeals Decision dated October 1, 2010 and Resolution dated
February 15, 2011 are hereby AFFIRMED.

SO ORDERED.
G.R. No. 188314 January 10, 2011
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,
vs.
KHADDAFY JANJALANI, GAMAL B. BAHARAN a.k.a. Tapay, ANGELO
TRINIDAD a.k.a. Abu Khalil, GAPPAL BANNAH ASALI a.k.a. Maidan or
Negro, JAINAL SALI a.k.a. Abu Solaiman, ROHMAT ABDURROHIM a.k.a.
Jackie or Zaky, and other JOHN and JANE DOES, Accused,
GAMAL B. BAHARAN a.k.a. Tapay, ANGELO TRINIDAD a.k.a. Abu Khalil,
and ROHMAT ABDURROHIM a.k.a. Abu Jackie or Zaky, Accused-Appellants.
DECISION
SERENO, J.:
Before the Court is an appeal from the Decision of the Court of Appeals (CA)
dated 30 June 2008, which affirmed the Decision of the Regional Trial Court of
Makati City in Criminal Case Nos. 05-476 and 05-4777 dated 18 October 2005.
The latter Decision convicted the three accused-appellants – namely, Gamal B.
Baharan a.k.a. Tapay, Angelo Trinidad a.k.a. Abu Khalil, and Rohmat
Abdurrohim a.k.a. Abu Jackie or Zaky – of the complex crime of multiple murder
and multiple frustrated murder, and sentenced them to suffer the penalty of
death by lethal injection. The CA modified the sentence to reclusion perpetua as
required by Republic Act No. 9346 (Act Abolishing the Imposition of Death
Penalty).
Statement of Facts
The pertinent facts, as determined by the trial court, are as follows:
On 14 February 2005, an RRCG bus was plying its usual southbound route,
from its Navotas bus terminal towards its Alabang bus terminal via Epifanio de
los Santos Avenue (EDSA). Around 6:30 to 7:30 in the evening, while they were
about to move out of the Guadalupe-EDSA southbound bus stop, the bus
conductor noticed two men running after the bus. The two insisted on getting on
the bus, so the conductor obliged and let them in.
According to Elmer Andales, the bus conductor, he immediately became wary of
the two men, because, even if they got on the bus together, the two sat away
from each other – one sat two seats behind the driver, while the other sat at the
back of the bus. At the time, there were only 15 passengers inside the bus. He
also noticed that the eyes of one of the men were reddish. When he approached
the person near the driver and asked him whether he was paying for two
passengers, the latter looked dumb struck by the question. He then stuttered
and said he was paying for two and gave PhP20. Andales grew more concerned
when the other man seated at the back also paid for both passengers. At this
point, Andales said he became more certain that the two were up to no good,
and that there might be a holdup.
Afterwards, Andales said he became more suspicious because both men kept
on asking him if the bus was going to stop at Ayala Avenue. The witness also
noticed that the man at the back appeared to be slouching, with his legs
stretched out in front of him and his arms hanging out and hidden from view as if
he was tinkering with something. When Andales would get near the man, the
latter would glare at him. Andales admitted, however, that he did not report the
suspicious characters to the police.
As soon as the bus reached the stoplight at the corner of Ayala Avenue and
EDSA, the two men insisted on getting off the bus. According to Andales, the
bus driver initially did not want to let them off the bus, because a Makati
ordinance prohibited unloading anywhere except at designated bus stops.
Eventually, the bus driver gave in and allowed the two passengers to alight. The
two immediately got off the bus and ran towards Ayala Avenue. Moments after,
Andales felt an explosion. He then saw fire quickly engulfing the bus. He ran out
of the bus towards a nearby mall. After a while, he went back to where the bus
was. He saw their bus passengers either lying on the ground or looking
traumatized. A few hours after, he made a statement before the Makati Police
Station narrating the whole incident.
The prosecution presented documents furnished by the Department of Justice,
confirming that shortly before the explosion, the spokesperson of the Abu
Sayyaf Group – Abu Solaiman – announced over radio station DZBB that the
group had a Valentine’s Day "gift" for former President Gloria Macapagal-
Arroyo. After the bombing, he again went on radio and warned of more bomb
attacks.
As stipulated during pretrial, accused Trinidad gave ABS-CBN News Network an
exclusive interview some time after the incident, confessing his participation in
the Valentine’s Day bombing incident. In another exclusive interview on the
network, accused Baharan likewise admitted his role in the bombing incident.
Finally, accused Asali gave a television interview, confessing that he had
supplied the explosive devices for the 14 February 2005 bombing. The bus
conductor identified the accused Baharan and Trinidad, and confirmed that they
were the two men who had entered the RRCG bus on the evening of 14
February.
Members of the Abu Sayyaf Group – namely Khaddafy Janjalani, Gamal B.
Baharan, Angelo Trinidad, Gappal Bannah Asali, Jainal Asali, Rohmat
Abdurrohim a.k.a. Abu Jackie or Zaky, and other "John" and "Jane Does" – were
then charged with multiple murder and multiple frustrated murder. Only Baharan,
Trinidad, Asali, and Rohmat were arrested, while the other accused remain at-
large.
On their arraignment for the multiple murder charge (Crim. Case No. 05-476),
Baharan, Trinidad, and Asali all entered a plea of guilty. On the other hand,
upon arraignment for the multiple frustrated murder charge (Crim. Case No. 05-
477), accused Asali pled guilty. Accused Trinidad and Baharan pled not guilty.
Rohmat pled not guilty to both charges. During the pretrial hearing, the parties
stipulated the following:
1.) The jurisdiction of this court over the offenses charged.
2.) That all three accused namely alias Baharan, Trinidad, and Asali
admitted knowing one another before February 14, 2005.
3.) All the same three accused likewise admitted that a bomb exploded
in the RRCG bus while the bus was plying the EDSA route fronting the
MRT terminal which is in front of the Makati Commercial Center.
4.) Accused Asali admitted knowing the other accused alias Rohmat
whom he claims taught him how to make explosive devices.
5.) The accused Trinidad also admitted knowing Rohmat before the
February 14 bombing incident.
6.) The accused Baharan, Trinidad, and Asali all admitted to causing the
bomb explosion inside the RRCG bus which left four people dead and
more or less forty persons injured.
7.) Both Baharan and Trinidad agreed to stipulate that within the period
March 20-24 each gave separate interviews to the ABS-CBN news
network admitting their participation in the commission of the said
crimes, subject of these cases.
8.) Accused Trinidad and Baharan also admitted to pleading guilty to
these crimes, because they were guilt-stricken after seeing a man
carrying a child in the first bus that they had entered.
9.) Accused Asali likewise admitted that in the middle of March 2005 he
gave a television news interview in which he admitted that he supplied
the explosive devices which resulted in this explosion inside the RRCG
bus and which resulted in the filing of these charges.
10.) Finally, accused Baharan, Trinidad, and Asali admitted that they are
1
members of the Abu Sayyaf.
In the light of the pretrial stipulations, the trial court asked whether accused
Baharan and Trinidad were amenable to changing their "not guilty" pleas to the
charge of multiple frustrated murder, considering that they pled "guilty" to the
heavier charge of multiple murder, creating an apparent inconsistency in their
pleas. Defense counsel conferred with accused Baharan and Trinidad and
explained to them the consequences of the pleas. The two accused
acknowledged the inconsistencies and manifested their readiness for re-
arraignment. After the Information was read to them, Baharan and Trinidad pled
2
guilty to the charge of multiple frustrated murder.
After being discharged as state witness, accused Asali testified that while under
training with the Abu Sayyaf in 2004, Rohmat, a.k.a Abu Jackie or Zaky, and two
other persons taught him how to make bombs and explosives. The trainees
were told that they were to wage battles against the government in the city, and
that their first mission was to plant bombs in malls, the Light Railway Transit
(LRT), and other parts of Metro Manila.
As found by the trial court, Asali, after his training, was required by the Abu
Sayyaf leadership, specifically Abu Solaiman and Rohmat, to secure eight kilos
of TNT, a soldering gun, aluminum powder, a tester, and Christmas lights, all of
which he knew would be used to make a bomb. He then recalled that sometime
in November to December 2004, Trinidad asked him for a total of 4 kilos of TNT
– that is, 2 kilos on two separate occasions. Rohmat allegedly called Asali to
confirm that Trinidad would get TNT from Asali and use it for their first mission.
The TNT was allegedly placed in two buses sometime in December 2004, but
neither one of them exploded.
Asali then testified that the night before the Valentine’s Day bombing, Trinidad
and Baharan got another two kilos of TNT from him. Late in the evening of 14
February, he received a call from Abu Solaiman. The latter told Asali not to
leave home or go to crowded areas, since the TNT taken by Baharan and
Trinidad had already been exploded in Makati. Thirty minutes later, Trinidad
called Asali, repeating the warning of Abu Solaiman. The next day, Asali
allegedly received a call from accused Rohmat, congratulating the former on the
3
success of the mission. According to Asali, Abu Zaky specifically said, "Sa
wakas nag success din yung tinuro ko sayo."
Assignment of Errors
Accused-appellants raise the following assignment of errors:
I. The trial court gravely erred in accepting accused-appellants’ plea of guilt
despite insufficiency of searching inquiry into the voluntariness and full
comprehension of the consequences of the said plea.
II. The trial court gravely erred in finding that the guilt of accused-appellants for
4
the crimes charged had been proven beyond reasonable doubt.
First Assignment of Error
Accused-appellants Baharan and Trinidad argue that the trial court did not
conduct a searching inquiry after they had changed their plea from "not guilty" to
"guilty." The transcript of stenographic notes during the 18 April 2005 re-
arraignment before the Makati Regional Trial Court is reproduced below:
Court : Anyway, I think what we should have to do, considering the stipulations
that were agreed upon during the last hearing, is to address this matter of pleas
of not guilty entered for the frustrated murder charges by the two accused, Mr.
Trinidad and Mr. Baharan, because if you will recall they entered pleas of guilty
to the multiple murder charges, but then earlier pleas of not guilty for the
frustrated multiple murder charges remain… [I]s that not inconsistent
considering the stipulations that were entered into during the initial pretrial of this
case? [If] you will recall, they admitted to have caused the bomb explosion that
led to the death of at least four people and injury of about forty other persons
and so under the circumstances, Atty Peña, have you discussed this matter with
your clients?
………
Atty. Peña : Then we should be given enough time to talk with them. I haven’t
conferred with them about this with regard to the multiple murder case.
………
Court : Okay. So let us proceed now. Atty. Peña, can you assist the two accused
because if they are interested in withdrawing their [pleas], I want to hear it from
your lips.
Atty. Peña : Yes, your Honor.
(At this juncture, Atty. Peña confers with the two accused, namely Trinidad and
Baharan)
I have talked to them, your Honor, and I have explained to them the
consequence of their pleas, your Honor, and that the plea of guilt to the murder
case and plea of not guilty to the frustrated multiple murder actually are
inconsistent with their pleas.
Court : With matters that they stipulated upon?
Atty. Peña : Yes, your Honor. So, they are now, since they already plead guilt to
the murder case, then they are now changing their pleas, your Honor, from not
guilty to the one of guilt. They are now ready, your Honor, for re-arraignment.
………
INTERPRETER: (Read again that portion [of the information] and translated it in
Filipino in a clearer way and asked both accused what their pleas are).
Your Honor, both accused are entering separate pleas of guilt to the crime
charged.
COURT : All right. So after the information was re-read to the accused, they
have withdrawn their pleas of not guilty and changed it to the pleas of guilty to
the charge of frustrated murder. Thank you. Are there any matters you need to
address at pretrial now? If there are none, then I will terminate pretrial and
accommodate…
5
As early as in People v. Apduhan, the Supreme Court has ruled that "all trial
judges … must refrain from accepting with alacrity an accused's plea of guilty,
for while justice demands a speedy administration, judges are duty bound to be
extra solicitous in seeing to it that when an accused pleads guilty, he
understands fully the meaning of his plea and the import of an inevitable
6
conviction." Thus, trial court judges are required to observe the following
procedure under Section 3, Rule 116 of the Rules of Court:
SEC. 3. Plea of guilty to capital offense; reception of evidence. — When the
accused pleads guilty to a capital offense, the court shall conduct a searching
inquiry into the voluntariness and full comprehension of the consequences of his
plea and shall require the prosecution to prove his guilt and the precise degree
of culpability. The accused may also present evidence in his behalf. (Emphasis
supplied)
The requirement to conduct a searching inquiry applies more so in cases of re-
arraignment. In People v. Galvez, the Court noted that since accused-
appellant's original plea was "not guilty," the trial court should have exerted
7
careful effort in inquiring into why he changed his plea to "guilty." According to
the Court:
The stringent procedure governing the reception of a plea of guilt, especially in a
case involving the death penalty, is imposed upon the trial judge in order to
leave no room for doubt on the possibility that the accused might have
8
misunderstood the nature of the charge and the consequences of the plea.
Likewise, the requirement to conduct a searching inquiry should not be deemed
satisfied in cases in which it was the defense counsel who explained the
consequences of a "guilty" plea to the accused, as it appears in this case. In
People v. Alborida, this Court found that there was still an improvident plea of
guilty, even if the accused had already signified in open court that his counsel
had explained the consequences of the guilty plea; that he understood the
explanation of his counsel; that the accused understood that the penalty of
death would still be meted out to him; and that he had not been intimidated,
9
bribed, or threatened.
We have reiterated in a long line of cases that the conduct of a searching inquiry
remains the duty of judges, as they are mandated by the rules to satisfy
themselves that the accused had not been under coercion or duress; mistaken
impressions; or a misunderstanding of the significance, effects, and
10
consequences of their guilty plea. This requirement is stringent and
11
mandatory.
Nevertheless, we are not unmindful of the context under which the re-
arraignment was conducted or of the factual milieu surrounding the finding of
guilt against the accused. The Court observes that accused Baharan and
Trinidad previously pled guilty to another charge – multiple murder – based on
the same act relied upon in the multiple frustrated murder charge. The Court
further notes that prior to the change of plea to one of guilt, accused Baharan
and Trinidad made two other confessions of guilt – one through an extrajudicial
confession (exclusive television interviews, as stipulated by both accused during
pretrial), and the other via judicial admission (pretrial stipulation). Considering
the foregoing circumstances, we deem it unnecessary to rule on the sufficiency
of the "searching inquiry" in this instance. Remanding the case for re-
arraignment is not warranted, as the accused’s plea of guilt was not the sole
12
basis of the condemnatory judgment under consideration.
Second Assignment of Error
In People v. Oden, the Court declared that even if the requirement of conducting
a searching inquiry was not complied with, "[t]he manner by which the plea of
guilt is made … loses much of great significance where the conviction can be
based on independent evidence proving the commission by the person accused
13
of the offense charged." Thus, in People v. Nadera, the Court stated:
Convictions based on an improvident plea of guilt are set aside only if such plea
is the sole basis of the judgment. If the trial court relied on sufficient and credible
evidence to convict the accused, the conviction must be sustained, because
then it is predicated not merely on the guilty plea of the accused but on evidence
14
proving his commission of the offense charged. (Emphasis supplied.)
In their second assignment of error, accused-appellants assert that guilt was not
proven beyond reasonable doubt. They pointed out that the testimony of the
conductor was merely circumstantial, while that of Asali as to the conspiracy
was insufficient.
Insofar as accused-appellants Baharan and Trinidad are concerned, the
evidence for the prosecution, in addition to that which can be drawn from the
stipulation of facts, primarily consisted of the testimonies of the bus conductor,
Elmer Andales, and of the accused-turned-state-witness, Asali. Andales
positively identified accused Baharan and Trinidad as the two men who had
acted suspiciously while inside the bus; who had insisted on getting off the bus
in violation of a Makati ordinance; and who had scampered away from the bus
moments before the bomb exploded. On the other hand, Asali testified that he
had given accused Baharan and Trinidad the TNT used in the bombing incident
in Makati City. The guilt of the accused Baharan and Trinidad was sufficiently
established by these corroborating testimonies, coupled with their respective
judicial admissions (pretrial stipulations) and extrajudicial confessions (exclusive
television interviews, as they both stipulated during pretrial) that they were
15
indeed the perpetrators of the Valentine’s Day bombing. Accordingly, the Court
upholds the findings of guilt made by the trial court as affirmed by the Court of
Appeals.
Anent accused Rohmat, the evidence for the prosecution consisted of the
testimony of accused-turned-state-witness Asali. Below is a reproduction of the
transcript of stenographic notes on the state prosecutor’s direct examination of
state-witness Asali during the 26 May 2005 trial:
Q : You stated that Zaky trained you and Trinidad. Under what
circumstances did he train you, Mr. Witness, to assemble those
explosives, you and Trinidad?
A : Abu Zaky, Abu Solaiman, Khadaffy Janjalani, the three of them, that
Angelo Trinidad and myself be the one to be trained to make an
explosive, sir.
Q : Mr. witness, how long that training, or how long did it take that
training?
A : If I am not mistaken, we were thought to make bomb about one
month and two weeks.
………
Q : Now, speaking of that mission, Mr. witness, while you were still in
training at Mr. Cararao, is there any mission that you undertook, if any,
with respect to that mission?
………
A : Our first mission was to plant a bomb in the malls, LRT, and other
16
parts of Metro Manila, sir.
The witness then testified that he kept eight kilos of TNT for accused
Baharan and Trinidad.
Q : Now, going back to the bomb. Mr. witness, did you know what
happened to the 2 kilos of bomb that Trinidad and Tapay took from you
sometime in November 2004?
A : That was the explosive that he planted in the G-liner, which did not
explode.
Q : How did you know, Mr. witness?
A : He was the one who told me, Mr. Angelo Trinidad, sir.
………
Q : What happened next, Mr. witness, when the bomb did not explode,
as told to you by Trinidad?
A : On December 29, Angelo Trinidad got 2 more kilos of TNT bombs.
………
Q : Did Trinidad tell you why he needed another amount of explosive on
that date, December 29, 2004? Will you kindly tell us the reason why?
………
A : He told me that Abu Solaiman instructed me to get the TNT so that
he could detonate a bomb
………
Q : Were there any other person, besides Abu Solaiman, who called you
up, with respect to the taking of the explosives from you?
A : There is, sir… Abu Zaky, sir, called up also.
Q : What did Abu Zaky tell you when he called you up?
A : He told me that "this is your first mission."
Q : Please enlighten the Honorable Court. What is that mission you are
referring to?
A : That is the first mission where we can show our anger towards the
Christians.
………
Q : The second time that he got a bomb from you, Mr. witness, do you
know if the bomb explode?
A : I did not know what happened to the next 2 kilos taken by Angelo
Trinidad from me until after I was caught, because I was told by the
policeman that interviewed me after I was arrested that the 2 kilos were
planted in a bus, which also did not explode.
Q : So besides these two incidents, were there any other incidents that
Angelo Trinidad and Tapay get an explosive for you, Mr. witness?
………
A : If I am not mistaken, sir, on February 13, 2005 at 6:30 p.m.
Q : Who got from you the explosive Mr. witness?
A : It’s Angelo Trinidad and Tapay, sir.
………
Q : How many explosives did they get from you, Mr. witness, at that
time?
A : They got 2 kilos TNT bomb, sir.
Q : Did they tell you, Mr. witness, where are they going to use that
explosive?
A : No, sir.
Q : Do you know, Mr. witness, what happened to the third batch of
explosives, which were taken from you by Trinidad and Tapay?
………
A : That is the bomb that exploded in Makati, sir.
Q : Why did you know, Mr. witness?
A : Because I was called in the evening of February 14 by Abu
Solaiman. He told me not to leave the house because the explosive that
were taken by Tapay and Angelo Trinidad exploded.
………
Q : Was there any other call during that time, Mr. Witness?
………
A : I was told by Angelo Trinidad not to leave the house because the
explosive that he took exploded already, sir.
Q : How sure were you, Mr. witness, at that time, that indeed, the bomb
exploded at Makati, beside the call of Abu Solaiman and Trinidad?
A : It was told by Abu Solaiman that the bombing in Makati should
coincide with the bombing in General Santos.
………
A : He told it to me, sir… I cannot remember the date anymore, but I
know it was sometime in February 2005.
Q : Any other call, Mr. witness, from Abu Solaiman and Trinidad after
the bombing exploded in Makati, any other call?
………
A : There is, sir… The call came from Abu Zaky.
Q : What did Abu Zaky tell you, Mr. witness?
A : He just greeted us congratulations, because we have a successful
mission.
………
A : He told me that "sa wakas, nag success din yung tinuro ko sayo."
………
Q : By the way, Mr. witness, I would just like to clarify this. You stated
that Abu Zaky called you up the following day, that was February 15,
and congratulating you for the success of the mission. My question to
you, Mr. witness, if you know what is the relation of that mission,
wherein you were congratulated by Abu Zaky, to the mission, which
have been indoctrinated to you, while you were in Mt. Cararao, Mr.
witness?
A : They are connected, sir.
Q : Connected in what sense, Mr. witness?
A : Because when we were undergoing training, we were told that the
Abu Sayyaf should not wage war to the forest, but also wage our battles
in the city.
Q : Wage the battle against who, Mr. witness?
17
A : The government, sir.
What can be culled from the testimony of Asali is that the Abu Sayyaf Group
was determined to sow terror in Metro Manila, so that they could show their
18
"anger towards the Christians." It can also be seen that Rohmat, together with
Janjalani and Abu Solaiman, had carefully planned the Valentine’s Day bombing
incident, months before it happened. Rohmat had trained Asali and Trinidad to
make bombs and explosives. While in training, Asali and others were told that
their mission was to plant bombs in malls, the LRT, and other parts of Metro
Manila. According to Asali, Rohmat called him on 29 December 2004 to confirm
that Trinidad would get two kilos of TNT from Asali, as they were "about to
19
commence" their "first mission." They made two separate attempts to bomb a
bus in Metro Manila, but to no avail. The day before the Valentine’s Day
bombing, Trinidad got another two kilos of TNT from Asali. On Valentine’s Day,
the Abu Sayyaf Group announced that they had a gift for the former President,
Gloria Macapagal-Arroyo. On their third try, their plan finally succeeded. Right
after the bomb exploded, the Abu Sayyaf Group declared that there would be
more bombings in the future. Asali then received a call from Rohmat, praising
20
the former: "Sa wakas nag success din yung tinuro ko sayo."
In the light of the foregoing evidence, the Court upholds the finding of guilt
against Rohmat. Article 17 of the Revised Penal Code reads:
Art. 17. Principals. — The following are considered principals:
1. Those who take a direct part in the execution of the act
2. Those who directly force or induce others to commit it
3. Those who cooperate in the commission of the offense by another act without
which it would not have been accomplished
Accused Rohmat is criminally responsible under the second paragraph, or the
provision on "principal by inducement." The instructions and training he had
given Asali on how to make bombs – coupled with their careful planning and
persistent attempts to bomb different areas in Metro Manila and Rohmat’s
confirmation that Trinidad would be getting TNT from Asali as part of their
mission – prove the finding that Rohmat’s co-inducement was the determining
21
cause of the commission of the crime. Such "command or advice [was] of such
22
nature that, without it, the crime would not have materialized." lawphi1
Further, the inducement was "so influential in producing the criminal act that
23
without it, the act would not have been performed." In People v. Sanchez, et
al., the Court ruled that, notwithstanding the fact that Mayor Sanchez was not at
the crime scene, evidence proved that he was the mastermind of the criminal act
or the principal by inducement. Thus, because Mayor Sanchez was a co-
principal and co-conspirator, and because the act of one conspirator is the act of
24
all, the mayor was rendered liable for all the resulting crimes. The same finding
must be applied to the case at bar.
The Court also affirms the finding of the existence of conspiracy involving
accused Baharan, Trinidad, and Rohmat. Conspiracy was clearly established
from the "collective acts of the accused-appellants before, during and after the
commission of the crime." As correctly declared by the trial court in its Omnibus
Decision:
Asali’s clear and categorical testimony, which remains unrebutted on its major
points, coupled with the judicial admissions freely and voluntarily given by the
two other accused, are sufficient to prove the existence of a conspiracy hatched
between and among the four accused, all members of the terrorist group Abu
Sayyaf, to wreak chaos and mayhem in the metropolis by indiscriminately killing
and injuring civilian victims by utilizing bombs and other similar destructive
explosive devices.
While said conspiracy involving the four malefactors has not been expressly
admitted by accused Baharan, Angelo Trinidad, and Rohmat, more specifically
with respect to the latter’s participation in the commission of the crimes,
nonetheless it has been established by virtue of the aforementioned evidence,
which established the existence of the conspiracy itself and the indispensable
participation of accused Rohmat in seeing to it that the conspirators’ criminal
design would be realized.
It is well-established that conspiracy may be inferred from the acts of the
accused, which clearly manifests a concurrence of wills, a common intent or
design to commit a crime (People v. Lenantud, 352 SCRA 544). Hence, where
acts of the accused collectively and individually demonstrate the existence of a
common design towards the accomplishment of the same unlawful purpose,
conspiracy is evident and all the perpetrators will be held liable as principals
25
(People v. Ellado, 353 SCRA 643).
In People v. Geronimo, the Court pronounced that it would be justified in
concluding that the defendants therein were engaged in a conspiracy "when the
defendants by their acts aimed at the same object, one performing one part and
the other performing another part so as to complete it, with a view to the
attainment of the same object; and their acts, though apparently independent,
were in fact concerted and cooperative, indicating closeness of personal
26
association, concerted action and concurrence of sentiments."
Accused contend that the testimony of Asali is inadmissible pursuant to Sec. 30,
Rule 130 of the Rules of Court. It is true that under the rule, statements made by
a conspirator against a co-conspirator are admissible only when made during
the existence of the conspiracy. However, as the Court ruled in People v.
Buntag, if the declarant repeats the statement in court, his extrajudicial
confession becomes a judicial admission, making the testimony admissible as to
27
both conspirators. Thus, in People v. Palijon, the Court held the following:
… [W]e must make a distinction between extrajudicial and judicial confessions.
An extrajudicial confession may be given in evidence against the confessant but
not against his co-accused as they are deprived of the opportunity to cross-
examine him. A judicial confession is admissible against the declarant’s co-
accused since the latter are afforded opportunity to cross-examine the former.
Section 30, Rule 130 of the Rules of Court applies only to extrajudicial acts or
admissions and not to testimony at trial where the party adversely affected has
the opportunity to cross-examine the declarant. Mercene’s admission implicating
his co-accused was given on the witness stand. It is admissible in evidence
against appellant Palijon. Moreover, where several accused are tried together
for the same offense, the testimony of a co-accused implicating his co-accused
28
is competent evidence against the latter.
WHEREFORE, the Petition is DENIED. The Decision of the Regional Trial Court
of Makati, as affirmed with modification by the Court of Appeals, is hereby
AFFIRMED.
SO ORDERED.
G.R. No. 180197 June 23, 2009
FRANCISCO N. VILLANUEVA, Petitioner,
vs.
VIRGILIO P. BALAGUER and INTERCONTINENTAL BROADCASTING
CORPORATION CHANNEL-13,Respondents.
DECISION
YNARES-SANTIAGO, J.:
1
Assailed is the August 10, 2007 Decision of the Court of Appeals in CA-G.R.
CV No. 81657 which reversed the October 29, 2003 Decision and February 2,
2004 Resolution of the Regional Trial Court of Quezon City, Branch 89 finding
petitioner Francisco N. Villanueva entitled to damages. Also assailed is the
2
October 16, 2007 Resolution denying the motion for reconsideration.
On March 31, 1992, petitioner Francisco N. Villanueva, then Assistant Manager
for Operations of Intercontinental Broadcasting Corporation-Channel 13 (IBC-
13) was dismissed from employment on the ground of loss of confidence for
purportedly selling forged certificates of performance. Contesting his
termination, petitioner filed a complaint for illegal dismissal before the National
Labor Relations Commission.
During the pendency of the labor case, news articles about irregularities in IBC-
13 were published in the July 18, 1992 issue of the Manila Times and the
Philippine Star, and in the July 19, 1992 issue of the Manila Bulletin.
In these news articles, respondent Virgilio P. Balaguer, then President of IBC-
13, was quoted to have said that he uncovered various anomalies in IBC-13
during his tenure which led to the dismissal of an operations executive for selling
forged certificates of performance.
3
In the Manila Times, on July 18, 1992:
Anomalies at IBC-13 uncovered
INSIDER pilferage, malversation, overpricing and other irregularities have cost
government-owned Intercontinental Broadcasting Corporation (IBC) 13 more
than P108 million in losses for the period 1986-1989.
Gil P. Balaguer, IBC president, uncovered the anomalies after a long and
painstaking investigation when he took over the company in 1990.
The investigation uncovered irregularities ranging from selling forged certificates
of performance (CP’s) to non-remittance of sales collections, illegal and
unauthorized airing of movie trailer advertisements (MTA’s), illegal leasing of
electricity and machines to "friendly clients," millions worth of undocumented
transactions to movie suppliers, exorbitant fees against in-house productions,
abused overtime charges by certain employees.
The anomalies did not escape Balaguer when he came to IBC-13 backed by
hands-on experience in television management work.
IBC has had four presidents since 1986 after the EDSA revolution. Balaguer is
the fifth president.
A special investigative committee helped Balaguer uncover the anomalies in
IBC. It led to the dismissal of an operations executive who sold forged
certificates of performance, a former supervisor who pocketed IBC’s sales
collections, and station managers who did not remit payments on radio
advertisements.
Other anomalies committed against the government station include the loose
issuance of technical facilities orders (TFO’s) which practically leased the
network’s broadcast facilities to a "friendly client" for free.
Balaguer, sources said, succeeded in staying as president because of his
technical expertise in media and communications and his "managerial will" to
cleanse the ranks of the firm. (Emphasis supplied)
4
In the Philippine Star, on July 18, 1992:
IBC president uncovers anomalies at tv network
The government-owned International Broadcasting Corp.-Channel 13 lost more
than P108 million due to insider pilferage, malversation, overpricing and other
irregularities from 1986 to 1989.
IBC president Gil P. Balaguer uncovered the anomalies after "a long and
painstaking investigation" when he took over the television station in 1990.
Balaguer, in a statement, said the irregularities uncovered included the sale of
forged certificates of performance, non-remittance of sales collections, illegal
and unauthorized airing of movie advertisements, illegal lease of equipment to
"friendly" clients, exorbitant fees on in-house productions and abused overtime
charges by some employees.
Balaguer, the fifth IBC president since 1986, easily detected the anomalies as
he has a vast experience in television management work.
A special investigative committee helped Balaguer uncover the anomalies at
IBC, which has resulted in the dismissal of an operations executive who sold
forged certificates of performance, a former supervisor who pocketed sales
collections and a station manager who did not remit payments on radio
advertisements. (Emphasis supplied)
5
In the Manila Bulletin, on July 19, 1992:
Sequestered firm’s losses bared
The Intercontinental Broadcasting Corp. (IBC) 13, a sequestered firm, lost more
than P108 million for the period 1986-1989 due to pilferage, malversation, over-
pricing, and other irregularities perpetrated by a syndicate, according to Gil P.
Balaguer, IBC president, who took over the company in 1990.
He said the irregularities ranged from selling forged certificates of performance
to non-remittance of sales collections, illegal and unauthorized airing of movie
trailer advertisements, illegal leasing of electricity and machines to "friendly
clients," millions worth of undocumented transactions to movie suppliers,
exorbitant fees against in-house productions, and abused overtime charges by
certain employees.
IBC has had four presidents since 1986, Balaguer being the fifth.
A special probe committee that helped Balaguer said one dismissed executive
sold forged certificates of performance, a former supervisor pocketed IBC sales
collections, and some station managers did not remit payments on radio
advertisements.
The loose issuance of technical facilities orders practically leased the network’s
broadcast facilities to a "friendly client" for free.
Balaguer is credited with accelerating the network’s rank from number five in
1988 to number two or three under current ratings, despite the efforts of some
holdouts who tried to derail his administration. (Emphasis supplied)
In a letter dated July 20, 1992, petitioner urged respondents to confirm or deny if
he was the person alluded to in the news article as the operations executive of
6 1) the sum of Five Hundred Thousand (P500,000.00) Pesos by way of
IBC-13 who was dismissed for selling forged certificates of performance. None
of the respondents replied to the letter.
On September 25, 1992, petitioner filed before the Regional Trial Court of
7
Quezon City a complaint for damages against Balaguer, which was later
8
amended by impleading IBC-13 as additional defendant.
Petitioner claimed that respondents caused the publication of the subject news
articles which defamed him by falsely and maliciously referring to him as the
9
IBC-13 operations executive who sold forged certificates of performance. He
alleged that in causing these false and malicious publications, respondents
10
violated Articles 19, 20, 21, and 26 of the Civil Code.
11
Balaguer denied that he had anything to do with the publications. However, he
argued that the publications are not actionable because they are true and
12
without malice; are of legitimate public concern and interest because IBC-13 is
13
under sequestration; that petitioner is a newsworthy and public figure; and that
14
they are privileged communication. Balaguer filed a counterclaim against
15
petitioner for alleged malicious filing of the civil case.
IBC-13 also denied participation in the publications. It claimed that assuming
press statements were issued during a press conference, the same was done
16
solely by Balaguer without its authority or sanction. IBC-13 also filed a
17 18
counterclaim against petitioner and a cross-claim against Balaguer.
19
On August 31, 1993, the Labor Arbiter rendered a Decision finding petitioner’s
dismissal as illegal, which was affirmed by the National Labor Relations
Commission. The Commission, however, declared respondents to be acting in
good faith, hence, it deleted the award of moral and exemplary damages. On
20
December 6, 1994, the parties entered into a Compromise Agreement, with
IBC-13 proposing a scheme of payment for petitioner’s monetary claims, and
with IBC-13 and petitioner waiving any and all claims against each other arising
out of the labor case.
21
On October 29, 2003, the Regional Trial Court of Quezon City held that
22
petitioner is entitled to an award of damages, thus:
WHEREFORE, premises considered, judgment is rendered in favor of plaintiff
Francisco N. Villanueva and against defendants Balaguer and Intercontinental
Broadcasting Corporation (IBC-13).
Accordingly, defendants are hereby ordered to pay the plaintiff jointly and
severally, as follows:
moral damages;
2) the sum of One Hundred Thousand (P100,000.00) Pesos as and by
way of exemplary damages;
 3) the sum of Thirty Thousand (P30,000.00) Pesos by way of nominal
damages;
4) the sum of Ten Thousand (P10,000.00) Pesos by way of temperate
or moderate damages; and
5) the sum of One Hundred Thousand (P100,000.00) Pesos as and by
way of attorney’s fees.
With costs against defendants.
23
SO ORDERED.
24
Respondents moved for reconsideration but it was denied. Hence, they
appealed to the Court of Appeals which rendered the herein assailed Decision
on August 10, 2007, disposing thus:
WHEREFORE, premises considered, the appeal is hereby GRANTED. The
October 29, 2003 Decision and the February 2, 2004 Resolution with
Clarification issued by the Regional Trial Court, Br. 89, National Capital Judicial
Region, Quezon City, are hereby REVERSED. The Complaint, the
Counterclaim, and the Cross-claim in Civil Case No. Q-92-13680 are hereby
DISMISSED.
25
SO ORDERED.
Petitioner’s motion for reconsideration was denied. Hence, the instant petition
26
raising the following issues:
a) Does the failure of the addressee to respond to a letter containing
statements attributing to him commission of acts constituting actionable
wrong, hence, adverse to his interest, and of such nature as would call
for his reaction, reply, or comment if untrue, constitute his admission of
said statements, consequently, may be used in evidence against him?
b) Is the admission by a principal admissible against its agent? Is the
admission by a person jointly interested with a party admissible against
the latter?
c) Does the failure of an individual to disown the attribution to him by
newspaper publications, as the source of defamatory newspaper
reports, when he is free and very able to do so, constitute admission
that he, indeed, was the source of the said defamatory news reports?
The petition lacks merit.
As early as 1905, this Court has declared that it is the duty of the party seeking
to enforce a right to prove that their right actually exists. In varying language, our
Rules of Court, in speaking of burden of proof in civil cases, states that each
party must prove his own affirmative allegations and that the burden of proof lies
on the party who would be defeated if no evidence were given on either
27
side. Thus, in civil cases, the burden of proof is generally on the plaintiff, with
28
respect to his complaint.
In proving his claim, petitioner relied on the July 20, 1992 letter, the newspaper
articles, and the alleged admission of respondents. Based on the above pieces
of evidence, the Court finds that petitioner was unable to discharge his burden of
proof. As such, the Court of Appeals properly dismissed the complaint for
damages.
The July 20, 1992 letter sent by petitioner to respondents reads as follows:
29
20 July 1992
Mr. Virgilio Balaguer
Intercontinental Broadcasting Corporation
Broadcast City, Capitol Hills
Diliman, Quezon City
Dear Mr. Balaguer:
We write on behalf of our client, Mr. Francisco N. Villanueva.
You have caused to be published in the 18 July 1992 issue of The Philippine
Star and 19 July 1992 issue of Manila Bulletin, a news item wherein you stated
that you dismissed an Operations Executive because he "sold forged Certificate
of Performance". Our immediate impression is, you are referring to our client,
Francisco N. Villanueva, because he is the only Operations Executive in IBC,
Channel 13 you have illegally and despotically dismissed.
We urge you, therefore, to inform us, within forty-eight (48) hours from your
receipt of this letter that the Operations Executive you referred to in your press
statement is not our client, Francisco N. Villanueva. We shall construe your
failure/refusal to reply as your unequivocal admission that you are, in fact,
actually referring to our client, Mr. Francisco N. Villanueva, as the operations
executive who "sold forged Certificate of Performance". Accordingly, we shall
immediately proceed to take appropriate criminal and civil court actions against
you without further notice.
Very truly yours,
(signed)
REX G. RICO
cc: Mr. Francisco N. Villanueva
Board of Administrators, IBC-13
Petitioner argues that by not responding to the above letter which expressly
urged them to reply if the statements therein contained are untrue, respondents
in effect admitted the matters stated therein, pursuant to the rule on admission
30
by silence in Sec. 32, Rule 130, and the disputable presumption that
acquiescence resulted from a belief that the thing acquiesced in was
31
conformable to the law or fact.
Petitioner’s argument lacks merit. One cannot prove his claim by placing the
burden of proof on the other party. Indeed, "(a) man cannot make evidence for
himself by writing a letter containing the statements that he wishes to prove. He
does not make the letter evidence by sending it to the party against whom he
wishes to prove the facts [stated therein]. He no more can impose a duty to
answer a charge than he can impose a duty to pay by sending goods. Therefore
a failure to answer such adverse assertions in the absence of further
circumstances making an answer requisite or natural has no effect as an
32
admission."
Moreover, the rule on admission by silence applies to adverse statements in
writing if the party was carrying on a mutual correspondence with the declarant.
However, if there was no such mutual correspondence, the rule is relaxed on the
theory that while the party would have immediately reacted by a denial if the
statements were orally made in his presence, such prompt response can
33
generally not be expected if the party still has to resort to a written reply.
In the same manner, we also cannot assume an admission by silence on the
part of Balaguer by virtue of his failure to protest or disclaim the attribution to
him by the newspapers that he is the source of the articles. As explained above,
the rule on admission by silence is relaxed when the statement is not made
orally in one’s presence or when one still has to resort to a written reply, or when
there is no mutual correspondence between the parties.
As for the publications themselves, newspaper articles purporting to state what
the defendant said are inadmissible against him, since he cannot be held
34
responsible for the writings of third persons. As correctly observed by the
Court of Appeals, "while the subject news items indicated that Balaguer was the
source of the columnists, proving that he truly made such statements is another
35
matter." Petitioner failed to prove that Balaguer did make such statements.
Notably, petitioner did not implead the editorial staff and the publisher of the
36
alleged defamatory articles. Contrary to petitioner’s assertion, he should have
at least presented the authors of the news articles as witnesses to prove his
case against respondents in the absence of an express admission by the latter
that the subject news articles have been caused by them.
Petitioner also claims that respondents have admitted that they held a press
conference and caused the publication of the news articles, based on the
37
following testimony of Balaguer:
ATTY. JIMENEZ:
Okay, Let me ask another question. Now Mr. Balaguer this publication
referred to so called anomalies of 1986 to 1989 now how about the
termination.
A: 1991.
ATTY. JIMENEZ:
Yes.
WITNESS:
I think the termination of Mr. Villanueva has nothing to do with that press
statement release because the period that covers that report is from
specific date 1986 to 1989. (TSN, 07 November 2000, p. 19)
38
Admissions, however, should be clear and unambiguous which can hardly be
said of Balaguer’s above testimony. If Balaguer intended to admit the allegation
that he conducted a press conference and caused the publication of the news
articles, he could have done so. Instead, Balaguer specifically denied these
39
allegations in paragraphs 4 and 5 of his Answer.
40
Petitioner next argues that IBC-13’s Cross-Claim against Balaguer, in that:
11. The acts complained of by the plaintiff were done solely by co-defendant
Balaguer.
Balaguer resorted to these things in his attempt to stave off his impending
removal from IBC.
is an admission by IBC-13, which is admissible against Balaguer pursuant to
41
Sec. 29, Rule 130 as an admission by a co-partner or an agent.
Petitioner is mistaken. IBC-13’s cross-claim against Balaguer effectively created
an adverse interest between them. Hence, the admission of one defendant is
not admissible against his co-defendant. Besides, as already discussed, the
alleged acts imputed to Balaguer were never proven to have been committed,
much less maliciously, by Balaguer. Malice or bad faith implies a conscious and
intentional design to do a wrongful act for a dishonest purpose or moral
42
obliquity. Such must be substantiated by evidence.

In sum, we find that petitioner failed to discharge his burden of proof. No

satisfactory evidence was presented to prove by preponderance of evidence
that respondents committed the acts imputed against them. As such, there is no
more need to discuss whether the assailed statements are defamatory.1avvphi1

WHEREFORE, the petition is DENIED. The August 10, 2007 Decision of the
Court of Appeals in CA-G.R. CV No. 81657 reversing the October 29, 2003
Decision and February 2, 2004 Resolution of the Regional Trial Court of Quezon
City, Branch 89, finding petitioner entitled to damages, as well as the October
16, 2007 Resolution denying the motion for reconsideration, are AFFIRMED.

SO ORDERED.
G.R. No.179535 June 9, 2014 which caused his instantaneous death, to the damage and prejudice of the heirs
10
of said Alberto Berbon y Downie. CONTRARY TO LAW.
JOSE ESPINELI a.k.a. DANILO ESPINELI, Petitioner,
vs. Petitioner was arrested on July 1, 1997 and when arraigned on July 7, 1997 with
11
PEOPLE OF THE PIDLIPPINES, Respondent. the assistance of counsel, entered a plea of not guilty.

RESOLUTION The facts show that in the early evening of December 15, 1996, Alberto Berbon
y Downie (Alberto), a 49-year old Senior Desk Coordinator of the radio station
DEL CASTILLO, J.: DZMM, was shot in the head and different parts of the body in front of his house
in Imus, Cavite by unidentified malefactors who immediately fled the crime
scene on board a waiting car.
Jurisprudence teaches us that "for circumstantial evidence to be sufficient to
support a conviction, all circumstances must be consistent with each other,
consistent with the hypothesis that the accused is guilty, and at the same time Meanwhile, the group of Atty. Orly Dizon (Atty. Dizon) of the National Bureau of
1 Investigation (NBI) arrested and took into custody one Romeo Reyes (Reyes)
inconsistent with the hypothesis that he is innocent x x x." Thus, conviction
based on circumstantial evidence can be upheld provided that the for the crime of Illegal Possession of Deadly Weapon. Reyes confided to the
circumstances proven constitute an unbroken chain which leads to one fair and group of Atty. Dizon that he was willing to give vital information regarding the
reasonable conclusion that points to the accused, to the exclusion of all others, Berbon case. In due course, NBI Agent Dave Segunial(NBI Agent Segunial)
2 interviewed Reyes on February 10, 1997 and reduced his statement into writing
as the guilty person.
whereby Reyes claimed that on December 15, 1996, he saw petitioner and
3 Sotero Paredes (Paredes) board a red car while armed with a .45 caliber firearm
Assailed in the present Petition for Review on Certiorari is the July 6, 2007
4 and armalite, respectively; and that petitioner told Paredes that "ayaw ko nang
Decision of the Court of Appeals (CA) in CA-G.R. CR-H.C. No. 02252 which 12
5
modified the August 31, 1999 Decision of the Regional Trial Court (RTC) of abutin pa ng bukas yang si Berbon." Subsequently, Reyes posted bail and was
Imus, Cavite, Branch 90, by finding petitioner Jose Espineli a.k.a. Danilo released on February 14, 1997. Thenceforth, he jumped bail and was never
again heard of. NBI Agent Segunial testified on these facts during the trial.
"Danny" Espineli (petitioner) guilty of the crime of homicide instead of murder.

6 The victim’s widow, Sabina Berbon (Sabina) likewise testified. According to her,
Also questioned is the CA’s September 14, 2007 Resolution denying
petitioner’s Motion for Reconsideration.
7 sometime in the third week of February 1997 Reyes sought financial help so he
could transfer his family to the province and protect them from any untoward
consequence that may result from his giving information to the NBI regarding the
Factual Antecedents death of Sabina’s husband. Sabina gave him the total amount of ₱1,500.00 and
8
promised to help him in applying for the witness protection program. This was
On June 24, 1997, an Information charging petitioner with the crime of murder
9
affirmed on the witness stand by Sabina’s brother, Bartolome Pakingan. After
was filed before the RTC, the accusatory portion of which reads as follows: that, however, Reyes never came back.

That on or about the 15th day of December, 1996 in the Municipality of Imus,
Province of Cavite, Philippines, and within the jurisdiction of this Honorable
Court, the above-named accused, together with one (1) Sotero Paredes and
three (3) other unidentified persons, whose real names, identities and
whereabouts are still unknown, said Sotero Paredes having been earlier
charged with the same offense, and is now undergoing trial before Branch 90, of
the Regional Trial Court of Cavite, then armed with firearms, conspiring,
confederating and mutually helping one another, with intent to kill, with treachery
and evident premeditation and taking advantage of superior strength, did then
and there, willfully, unlawfully and feloniously, attack, assault and shoot one
Alberto Berbon y Downie with the use of said firearms, thereby inflicting upon
the latter multiple gunshot wounds on his head and different parts of his body
Another prosecution witness, Rodolfo Dayao (Rodolfo), testified that he sold his
red Ford Escort car to three persons who came to his residence in the afternoon
of September 1, 1996. He later identified the said car from the photographs
presented to him by the police officers.
Dr. Ludivino J. Lagat (Dr. Lagat), the NBI Medico-Legal Officer who conducted a
post-mortem examination on Alberto, declared in his Autopsy Report that the
victim suffered multiple gunshot wounds in the head and body. He also stated
that based on the size of the gunshot wounds or entrance, high-powered guns
were used in the killing.
Petitioner, on the other hand, did not adduce evidence for his defense. Instead,
13
he filed a Demurrer to Evidence without leave of court. As no action
whatsoever was taken thereon by the trial court, petitioner just moved that the
case be deemed submitted for decision.
Ruling of the Regional Trial Court
14
In its Decision dated August 31, 1999, the trial court adjudged petitioner guilty
of murder, thus:
WHEREFORE, premises considered, accused JOSE ESPINELI a.k.a. DANILO
"Danny" ESPINELI, is found guilty beyond reasonable doubt of committing the
crime of "Murder" as charged. He is, therefore, sentenced to suffer the penalty
of RECLUSION PERPETUA, and is likewise ordered to pay the heirs of Alberto
Berbon y Downie, the civil indemnity of ₱50,000.00, and actual and
compensatory damages in the total amount of ₱135,000.00 as funeral expenses
(Exhibit "H"), interment fee of ₱8,360.00 (Exhibit "C"), medical expenses in the
total amount of ₱1,519.45 (Exhibit[s] "D", "D-1" and "D-2") and for the contract
fees of Memorial Park Care the amount of ₱15,700.00 (Exhibit "E").
Furthermore, considering that he is a high risk prisoner, his transfer to the
National Penitentiary at Muntinlupa City, Metro Manila, is immediately ordered.
15
SO ORDERED.
Petitioner seasonably appealed his conviction before this Court. Pursuant,
16
however, to the Court’s pronouncement in People v. Mateo, the case was
ordered transferred to the CA for appropriate action and disposition through a
17
Resolution dated March 22, 2006.
Ruling of the Court of Appeals
18
In its Decision promulgated on July 6, 2007, the CA affirmed with modification
the findings of the trial court. It ratiocinated that since none of the prosecution
witnesses saw how the killing of the victim was perpetrated, the qualifying
circumstance of abuse of superior strength cannot be appreciated. Neither can
nighttime serve as an aggravating circumstance as the time of the commission
of the crime was not even alleged in the Information. In view thereof, the CA
found petitioner guilty only of homicide instead of murder. The decretal portion of
the appellate court’s Decision reads:
WHEREFORE, premises considered, the present appeal is hereby DISMISSED.
The appealed Decision dated August 31, 1999 of the Regional Trial Court of
Imus, Cavite, Branch 90 is hereby AFFIRMED with MODIFICATION in that
accused-appellant is hereby found GUILTY beyond reasonable doubt of the
crime of Homicide and is hereby sentenced to an indeterminate prison term of
ten (10) years of prision mayor, as minimum, to seventeen (17) years and four
(4) months of reclusion temporal, as maximum.
In all other respects, the said decision STANDS.
In the service of his sentence, accused-appellant shall be credited in full with the
period of his preventive imprisonment.
With costs against the accused-appellant.
19
SO ORDERED.
20
Dissatisfied, petitioner filed a Motion for Reconsideration which the CA denied
21
in its Resolution dated September 14, 2007.
Hence, this Petition.
Arguments of the Parties
Petitioner posits that the CA should not have affirmed the Decision of RTC as
the latter erred:
1. x x x [in admitting, considering and giving] probative value to Exhibit
"A", the "Sinumpaang Salaysay" of [Reyes] because [he] was not
presented in court to confirm, affirm and authenticate the contents of his
sworn statement. It resulted in the denial of petitioner’s constitutional
22
right to confront and cross-examine his accusers.
2. x x x [in convicting] the [petitioner] based on unproven, inadmissible
23
circumstantial evidence.
3. x x x in not acquitting the petitioner for failure of the prosecution to
24
prove [his guilt] beyond reasonable doubt x x x.
In sum, petitioner anchors his quest for the reversal of his conviction on the
25
alleged erroneous admission in evidence of the Sinumpaang Salaysay of
Reyes for being hearsay and inadmissible. He avers that the said sworn
statement should not have been given probative value because its contents
were neither confirmed nor authenticated by the affiant. Thus, all circumstances
emanating from or included in the sworn statement must be totally brushed
aside as lacking any evidentiary and probative value. Petitioner emphasizes that
as found by the courts below, there was no direct evidence linking him to the
crime; therefore, he wants this Court to review the sufficiency of the
circumstantial evidence upon which his conviction was based as he believes
that the same failed to establish his guilt beyond reasonable doubt.
For its part, the Office of the Solicitor General (OSG), representing respondent
People of the Philippines, concurs with the petitioner and recommends his
26
acquittal. It is also of the view that the prosecution failed to discharge its
burden of proving petitioner’s guilt beyond reasonable doubt.
The Court’s Ruling
The Petition is devoid of merit.
Truly, "direct evidence of the commission of a crime is not the only basis from
27
which a court may draw its finding of guilt." The rules of evidence allow a trial
court to rely on circumstantial evidence to support its conclusion of guilt.
Circumstantial evidence is that evidence "which indirectly proves a fact in issue
through an inference which the fact-finder draws from the evidence
28
established." Under Section 4, Rule 133 of the Rules of Court, circumstantial
evidence would be sufficient to convict the offender "if i)there is more than one
circumstance; ii) the facts from which the inference is derived are proven; and iii)
the combination of all circumstances is such as to produce a conviction beyond
29
reasonable doubt." All the circumstances must be consistent with one another,
consistent with the hypothesis that the accused is guilty and at the same time
inconsistent with the hypothesis that he is innocent. Thus, conviction based on
circumstantial evidence can be upheld provided that the circumstances proved
constitute an unbroken chain which leads to one fair and reasonable conclusion
30
that points to the accused, to the exclusion of all others as the guilty person.
In this case, the circumstances found by the CA as forming an unbroken chain
leading to one fair and reasonable conclusion that petitioner, to the exclusion of
all others, is the guilty person are the following:
1. In the morning of December 15,1996, petitioner was heard telling his
co-accused Sotero Paredes (Sotero) "ayaw ko nang abutin pa ng bukas
yang si Berbon" before boarding a red car. Sotero was holding an
armalite rifle while petitioner was armed with a .45 caliber pistol;
2. The said red car was identified or recognized by prosecution witness
Rodolfo to be the same car he had sold to Sotero for ₱10,000.00 in
September 1996;
3. The victim Alberto was fatally shot later in the day (December 15,
1996) by unidentified gunmen who thereafter immediately fled riding a
red car; and
4. Post-mortem examination of the victim’s body showed that he
sustained multiple gunshot wounds, the nature, severity and
characteristics of which indicate that they were inflicted using high-
31
powered guns, possibly anarmalite rifle and .22 caliber pistol.
The records reveal that there was no eyewitness to the actual killing of Alberto.
Thus the courts below were forced to render their verdict of conviction on
32
circumstantial evidence as sanctioned under Section 4, Rule 133 of the Rules
of Court. The central issue now confronting this Court is whether the prosecution
has amply proved by circumstantial evidence petitioner’s guilt beyond
reasonable doubt.
The circumstantial evidence relied upon by the Court of Appeals sufficiently
support petitioner’s conviction.
The Court has carefully scrutinized the evidence presented in this case in the
light of the standards discussed above and finds the foregoing circumstantial
evidence sufficient to support a judgment of conviction. Several reasons deserve
our acceptance of the circumstances upon which petitioner’s conviction was
based, to wit:
First, NBI Agent Segunial testified that he had investigated Reyes and reduced
the latter’s statement into writing declaring, among others, that in the morning of
December 15, 1996, he (Reyes) overheard petitioner telling Sotero "Ayaw ko
nang abutin pa ng bukas yang si Berbon" and saw them armed with .45 caliber
pistol and an armalite, respectively, before boarding a red car. The CA gave
weight to Reyes’ sworn statement in this wise:
The probative value of Romeo Reyes’s worn statement as to the words spoken
by appellant to his co-accused Sotero Paredes in the morning of December 15,
33
1996 cannot be disputed. x x x
Petitioner takes vigorous exception to the said findings, insisting that the said
sworn statement belongs to the category of hearsay evidence and therefore
inadmissible. He asserts that its contents were never confirmed or authenticated
by Reyes, thus, it lacks probative value.
The Court is unconvinced.
The hearsay evidence rule as provided under Section 36, Rule 130 of the Rules
of Court states:
Sec. 36. Testimony generally confined to personal knowledge; hearsay
excluded. – A witness can testify only to those facts which he knows of his
personal knowledge; that is, which are derived from his own perception, except
as otherwise provided in these rules.
Evidence is hearsay when its probative force depends in whole or in part on the
competency and credibility of some persons other than the witness by whom it is
sought to produce. However, while the testimony of a witness regarding a
statement made by another person given for the purpose of establishing the
truth of the fact asserted in the statement is clearly hearsay evidence, it is
otherwise if the purpose of placing the statement on the record is merely to
establish the fact that the statement, or the tenor of such statement, was made.
Regardless of the truth or falsity of a statement, when what is relevant is the fact
that such statement has been made, the hearsay rule does not apply and the
statement may be shown. As a matter of fact, evidence as to the making of the
statement is not secondary but primary, for the statement itself may constitute a
fact in issue or is circumstantially relevant as to the existence of such a
34 35
fact. This is known as the doctrine of independently relevant statements.
In the present case, the testimony of NBI Agent Segunial that while he was
investigating Reyes, the latter confided to him that he (Reyes) heard petitioner
telling Sotero "Ayaw ko nang abutin pa ng bukas yang si Berbon" and that he
saw the two (petitioner and Sotero) armed with a .45 caliber pistol and an
armalite, respectively, before boardinga red car, cannot be regarded as hearsay
evidence. This is considering that NBI Agent Segunial’s testimony was not
presented to prove the truth of such statement but only for the purpose of
establishing that on February 10, 1997, Reyes executed a sworn statement
containing such narration of facts. This is clear from the offer of the witness’ oral
36
testimony. Moreover, NBI Agent Segunial himself candidly admitted that he is
37
incompetent to testify on the truthfulness of Reyes’ statement. Verily then,
what the prosecution sought to be admitted was the fact that Reyes made such
narration of facts in his sworn statement and not necessarily to prove the truth
thereof. Thus, the testimony of NBI Agent Segunial is in the nature of an
independently relevant statement where what is relevant is the fact that Reyes
made such statement and the truth and falsity thereof is immaterial. In such a
case, the statement of the witness is admissible as evidence and the hearsay
38
rule does not apply. Moreover, the written statement of Reyes is a notarized
document having been duly subscribed and sworn to before Atty. Cesar A.
Bacani, a supervising agent of the NBI. As such, it may be presented in
evidence without further proof, the certificate of acknowledgment being a prima
facie evidence of the due execution of this instrument or document involved
pursuant to Section 30 of Rule 132 of the Rules of Court. As held in Gutierrez v.
39
Mendoza-Plaza, a notarized document enjoys a prima facie presumption of
authenticity and due execution which must be rebutted by clear and convincing
evidence. Here, no clear and convincing evidence was presented by petitioner
to overcome such presumption. Clearly, therefore, the CA did not err in its
appreciation of Reyes’ sworn statement as testified to by NBI Agent Segunial.
Second, the identification and recognition through photograph by Rodolfo of the
1971 Ford Escort red colored car as the same car he had sold to Sotero in
September 1996 clearly and convincingly prove that it was the very same red
car used in the killing of Alberto on December 15, 1996.
Third, Alberto was shot and killed on December 15, 1996 and the gunmen
immediately fled the scene riding a red car which was identified as the same car
previously sold by Rodolfo to Sotero.
Fourth, though the testimony of Dr. Lagat was limited to the post-mortem
examination of the cadaver of Alberto, his findings that the victim suffered
multiple gunshot wounds and that the same were caused by high-powered guns,
served as corroborative evidence and contributed in a significant way in
establishing the level of proof that the law requires in convicting petitioner.
Lastly, petitioner’s escape from detention on August 26, 1998 while the case
was pending can also be considered as another circumstance since it is a strong
indication of his guilt.
All told, this Court finds the concordant combination and cumulative effect of the
alleged established circumstances, which essentially were the same
circumstances found by the trial court and the appellate court, to have satisfied
the requirement of Section 4, Rule 133 of the Rules of Court. Indeed, the
incriminating circumstances, when taken together, constitute an unbroken chain
of events enough to arrive at the conclusion that petitioner was responsible for
the killing of the victim.
Besides, it is "[a]n established rule in appellate review x x x that the trial court’s
factual findings, including its assessment of the credibility of the witnesses and
the probative weight of their testimonies, as well as the conclusions drawn from
the factual findings, are accorded respect, if not conclusive effect. These factual
findings and conclusions assume greater weight if they are affirmed by the
40
CA," as in this case.
The Crime Committed and the Proper Penalty.
The Court agrees with the CA that petitioner is guilty only of the crime of
homicide in view of the prosecution’s failure to prove any of the alleged
attendant circumstances of abuse of superior strength and nighttime. As aptly
observed by the appellate court:
The circumstance of abuse of superior strength is present whenever there is
inequality of forces between the victim and the aggressor, assuming a situation
of superiority of strength notoriously advantageous for the aggressor, and the
latter takes advantage of it in the commission of the crime. However, as none of
the prosecution witnesses saw how the killing was perpetrated, abuse of
superior strength cannot be appreciated in this case. Neither can nighttime
serve as an aggravating circumstance, the time of the commission of the crime
41
was not even alleged in the Information. (Citations omitted)
The penalty prescribed by law for the crime of homicide is reclusion
42
temporal. In view of the absence of any mitigating or aggravating circumstance
and applying the Indeterminate Sentence Law, the maximum of the sentence
should be within the range of reclusion temporal in its medium term which has a
duration of fourteen (14) years, eight (8) months and one (1) day to seventeen
(17) years and four (4) months, while the minimum should be within the range of
prision mayor which has a duration of six (6) years and one (1) day to twelve
(12) years. Thus, the imposition by the CA of an indeterminate prison term of ten
(10) years of prision mayor, as minimum, to seventeen (17) years and four (4)
months of reclusion temporal, as maximum, is in order.

Petitioner’s Civil liability

While the CA correctly imposed the amount of ₱50,000.00 as civil indemnity, it

failed, however, to award moral damages. These awards are mandatory without
need of allegation and proof other than the death of the victim, owing to the fact
43
of the commission of murder or homicide. Thus, for moral damages, the award
of ₱50,000.00 to the heirs of the victim is only proper.

Anent the award of actual damages, this Court sees no reason to disturb the
amount awarded by the trial court as upheld by the CA since the itemized
medical and burial expenses were duly supported by receipts and other
documentary evidence.

The CA did not grant any award of damages for loss of earning capacity and
rightly so. Though Sabina testified as to the monthly salary of the deceased, the
same remains unsubstantiated. "Such indemnity cannot be awarded in the
absence of documentary evidence except where the victim was either self-
employed or a daily wage worker earning less than the minimum wage under
44
current labor laws.'' The exceptions find no application in this case.

In addition and in conformity with current policy, an interest at the legal rate of
6% per annum is imposed on all the monetary awards for damages from date of
finality of this judgment until fully paid.

WHEREFORE, in light of all the foregoing, the Petition is hereby DENIED. The
Decision dated July 6, 2007 and Resolution dated September 14, 2007 of the
Court of Appeals in CA-G.R. CR-H.C. No. 02252 are AFFIRMED with the
MODIFICATIONS that petitioner JOSE ESPINEL! a.k.a. DANILO "DANNY''
ESPINEL! is further ordered to pay the heirs of the victim ALBERTO BERBON y
DOWNIE PS0,000.00 as moral damages as well as interest on all the damages
assessed at the legal rate of 6% per annum from date of finality of this judgment
until fully paid.

SO ORDERED.
 G.R. No. 205412, September 09, 2015
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. ADRIAN GUTING Y
TOMAS, Accused-Appellant.
DECISION
LEONARDO-DE CASTRO, J.:
1
For Our consideration is an appeal from the Decision dated May 23, 2012 of
the Court of Appeals in CA-G.R. CR.-H.C. No. 04596, which affirmed the
2
Decision dated June 24, 2010 of the Regional Trial Court (RTC), Camiling,
Tarlac, Branch 68, in Criminal Case No. 06-93, finding accused-appellant Adrian
Guting y Tomas guilty of the crime of Parricide under Article 246 of the Revised
Penal Code.
3
In an Information dated August 1, 2006, docketed as Criminal Case No. 06-93,
accused-appellant was charged before the RTC with Parricide, allegedly
committed as follows:
That on or about 4:50 in the rainy afternoon of July 30, 2006 at Plaridel St.,
Poblacion B. Camiling, Tarlac, Philippines and within the jurisdiction of this
Honorable Court, the said accused, did then and there willfully, unlawfully and
feloniously, and with evident premeditation, that is, having conceived and
deliberated to kill his own father Jose Guting y Ibarra, 67 years old, married,
while inside their residential house, and armed with a bladed weapon, suddenly
and unexpectedly stabbed several times the victim, employing means, manner
and form in the execution thereof which tender directly and specially to insure its
commission without danger to the person of said accused, the result of which
attack was that said victim received multiple stab wounds on his body which
directly caused his instantaneous death.
When arraigned on September 19, 2006, accused-appellant pleaded not guilty
4 accused-appellant, their son. Flora only learned of the stabbing incident and
to the crime charged. Thereafter, pre-trial and trial on the merits ensued.
Below is a summary of the prosecution witnesses' testimonies.
Police Officer (PO1) Fidel Torre (Torre) testified that on the rainy afternoon of
July 30, 2005, at around 5:00 o'clock, he and PO1 Alexis Macusi (Macusi) were
standing in front of the Camiling Police Station when accused-appellant, all wet
from the rain and with a bladed weapon in his hand, suddenly approached them
and told them that he had stabbed his father. Hearing accused-appellant's
statement, PO1 Torre immediately got the bladed weapon from accused-
5 Lomibao also showed several pictures of Jose's body which were taken before
appellant and turned it over to PO1 Macusi for proper disposition.
PO1 Macusi corroborated PO1 Torre's testimony. PO1 Macusi narrated that
accused-appellant suddenly appeared before them at the Police Station, all wet
and holding a knife. Accused-appellant proclaimed that his father was already
dead. Unsuspecting, PO1 Macusi asked who killed accused-appellant's father.
Accused-appellant answered, "Sinaksak ko po yong tatay ko! Napatay ko na
po!" PO1 Torre then got the knife from accused-appellant and gave it to PO1
Macusi. PO1 Macusi placed the knife in the custodian cabinet in the Police
Station. Thereafter, PO1 Macusi, Senior Police Officer (SPO) 2 Eliseo
Hermosado (Hermosado), and SPO2 Noli Felipe (Felipe) went to the residence
of Jose Guting (Jose), accused-appellant's father, to verify the reported crime,
while other police officers informed Flora Guting (Flora), Jose's wife (also
accused-appellant's mother), who was still in the market with Emerlito Guting
(Emerlito), Jose and Flora's other son (accused-appellant's brother), who was
then driving a tricycle for hire. While waiting for Flora and Emerlito, PO1 Macusi,
SPO2 Hermosado, and SPO2 Felipe inquired from the neighbors if anybody had
witnessed the crime, but no one did. When Flora and Emerlito arrived, they
entered the house and saw Jose's lifeless body with blood still oozing from his
wounds. Immediately, Flora and Emerlito brought Jose to the hospital where he
was pronounced dead on arrival. Subsequently, Flora and Emerlito executed
their respective Sinumpaang Salaysay and filed a case for Parricide against
6
accused-appellant.
On cross-examination, PO1 Macusi divulged that when the knife was given to
him by PO1 Torre for safekeeping, he did not ask accused-appellant if it was the
knife he used to kill his father. Neither did accused-appellant mention to PO1
Macusi that it was the knife he used in stabbing Jose. All that accused-appellant
said was, "Sinaksak ko po yong tatay ko! Napatay ko na po!" PO1 Macusi also
admitted that he did not request for the examination of the knife because it was
clean; any trace or stain of blood on it would have been washed away by the
rains at that time. PO1 Macusi was further questioned as to why he did not put
into writing accused-appellant's admission that he killed his father, and PO1
Macusi explained that it escaped his mind as he was still new at the job then
7
and he was carried away by the fast flow of events.
Flora conceded that she was not present when Jose, her husband, was killed by
accused-appellant's surrender from the police officers of the Camiling Police
Station. Flora declared that she spent for the wake and burial of Jose and that
Jose, who was a tricycle driver, had been earning around P200.00 a day at the
8
time of his death.
Doctor Valentin Theodore Lomibao (Dr. Lomibao) conducted the autopsy of
Jose's body. Dr. Lomibao reported that Jose suffered around 39 stab wounds on
the head, neck, thorax, abdomen, and extremities. Jose's internal organs were
heavily damaged by the stab wounds, resulting in his instantaneous death. Dr.
9
he conducted the autopsy.
Accused-appellant opted not to present any evidence in his defense.
The RTC promulgated its Decision on June 24, 2010 finding accused-appellant
guilty of Parricide based on his verbal admission that he killed his father, Jose.
Even assuming that accused-appellant's admission was inadmissible in
evidence, the RTC adjudged that the prosecution was still able to establish
sufficient circumstantial evidence which, taken collectively, pointed to accused-
appellant as the perpetrator of the brutal killing of his father. The dispositive
portion of the RTC judgment reads:
WHEREFORE, accused Adrian Guting y Tomas is hereby found guilty beyond
reasonable doubt of the offense of Parricide punishable under Article 246 of the
Revised Penal Code, as amended and hereby sentences him to a penalty
of Reclusion Perpetua.
Accused is likewise ordered to pay the heirs of the victim the amount of
P50,000.00 as civil indemnity, another amount of P50,000.00 as moral
10
damages, and still another amount of P30,000.00 as temperate damages.
Accused-appellant appealed his conviction before the Court of Appeals,
docketed as CA-G.R. CR.-H.C. No. 04596. The appellate court promulgated its
Decision on May 23, 2012, decreeing thus:
WHEREFORE, the appeal is DENIED. The Decision of the Regional Trial Court
of Camiling, Tarlac, Branch 68 convicting herein accused-appellant Adrian
Guting y Tomas for the crime of Parricide under Article 246 of the Revised Penal
11
Code is AFFIRMED.
Hence, accused-appellant comes before us via the instant appeal with the same
assignment of errors he raised before the Court of Appeals, to wit:
I the rule begins to operate. (Citation omitted.)
THE TRIAL COURT GRAVELY ERRED IN CONVICTING THE ACCUSED-
APPELLANT ON THE BASIS OF HIS EXTRAJUDICIAL ADMISSION.
II
THE TRIAL COURT GRAVELY ERRED IN CONVICTING THE ACCUSED-
APPELLANT ON THE BASIS OF INSUFFICIENT CIRCUMSTANTIAL
EVIDENCE.
III
THE TRIAL COURT GRAVELY ERRED IN FINDING THE ACCUSED-
APPELLANT GUILTY BEYOND REASONABLE DOUBT OF THE CRIME
CHARGED DESPITE THE PROSECUTION'S FAILURE TO OVERTHROW THE
12
CONSTITUTIONAL PRESUMPTION OF INNOCENCE IN HIS FAVOR.
We find no merit in accused-appellant's appeal.
Accused-appellant argues that his oral confession to PO1 Torre and PO1
Macusi, without the assistance of counsel, is inadmissible in evidence for having
been made in blatant violation of his constitutional right under Article III, Section
12 of the 1987 Constitution.
Section 12, paragraphs 1 and 3, Article III (Bill of Rights) of the 1987
Constitution mandate that:
SEC. 12. (1) Any person under investigation for the commission of an offense
shall have the right to be informed of his right to remain silent and to have
competent and independent counsel preferably of his own choice. If the person
cannot afford the services of counsel, he must be provided with one. These
rights cannot be waived except in writing and in the presence of counsel.
xxxx
(3) Any confession or admission obtained in violation of this or Section 17 hereof
13
shall be inadmissible in evidence against him.
The "investigation" in Section 12, paragraph 1, Article III of the 1987 Constitution
pertains to "custodial investigation." Custodial investigation commences when a
person is taken into custody and is singled out as a suspect in the commission
of a crime under investigation and the police officers begin to ask questions on
14
the suspect's participation therein and which tend to elicit an admission. As we
15
expounded in People v. Marra :
Custodial investigation involves any questioning initiated by law enforcement
officers after a person has been taken into custody or otherwise deprived of his
freedom of action in any significant way. It is only after the investigation ceases
to be a general inquiry into an unsolved crime and begins to focus on a
particular suspect, the suspect is taken into custody, and the police carries out a
process of interrogations that lends itself to eliciting incriminating statements that
Applying the foregoing definitions, accused-appellant was not under custodial
investigation when he admitted, without assistance of counsel, to PO1 Torre and
PO1 Macusi that he stabbed his father to death. Accused-appellant's verbal
confession was so spontaneously and voluntarily given and was not elicited
through questioning by the police authorities. It may be true that PO1 Macusi
asked accused-appellant who killed his father, but PO1 Macusi only did so in
response to accused-appellant's initial declaration that his father was already
dead. At that point, PO1 Macusi still had no idea who actually committed the
crime and did not consider accused-appellant as the suspect in his father's
killing. Accused-appellant was also merely standing before PO1 Torre and PO1
Macusi in front of the Camiling Police Station and was not yet in police custody.
16
Accused-appellant cites in support of his argument People v. Cabintoy, where
we held that an uncounselled extrajudicial confession without a valid waiver of
the right to counsel - that is, in writing and in the presence of counsel - is
inadmissible in evidence. The situation of accused-appellants in Cabintoy is not
similar to that of accused-appellant herein. The accused-appellants in Cabintoy,
when they executed their extrajudicial confessions without assistance of
counsel, were already suspects under custodial investigation by the San Mateo
Police for robbery with homicide committed against a taxi driver. Accused-
appellant in the instant case, on his own volition, approached unsuspecting
police officers standing in front of the police station with a knife in his hand and
readily confessed to stabbing his father to death. Accused-appellant was
arrested and subjected to custodial investigation by the police officers
only after his confession.
Hence, herein accused-appellant's confession, even if done without the
assistance of a lawyer, is not in violation of his constitutional right under Section
12, paragraph 1, Article III of the 1987 Constitution. The present case is more
17
akin to People v. Andan wherein we allowed into evidence the uncounselled
confession of therein accused-appellant given under the following
circumstances:
Under these circumstances, it cannot be successfully claimed that appellant's
confession before the mayor is inadmissible. It is true that a municipal mayor
has "operational supervision and control" over the local police and may arguably
be- deemed a law enforcement officer for purposes of applying Section 12 (1)
and (3) of Article III of the Constitution. However, appellant's confession to the
mayor was not made in response to any interrogation by the latter. In fact, the
mayor did not question appellant at all. No police authority ordered appellant to
talk to the mayor. It was appellant himself who spontaneously, freely and
voluntarily sought the mayor for a private meeting. The mayor did not know that
appellant was going to confess his guilt to him. When appellant talked with the
mayor as a confidant and not as a law enforcement officer, his uncounselled
confession to him did not violate his constitutional rights. Thus, it has been held
that the constitutional procedures on custodial investigation do not apply to a
spontaneous statement, not elicited through questioning by the authorities, but
given in an ordinary manner whereby appellant orally admitted having
committed the crime. What the Constitution bars is the compulsory disclosure of
incriminating facts or confessions. The rights under Section 12 are guaranteed
to preclude the slightest use of coercion by the state as would lead the accused
to admit something false, not to prevent him from freely and voluntarily telling
the truth. Hence, we hold that appellant's confession to the mayor was correctly
admitted by the trial court.
Moreover, accused-appellant's verbal confession that he stabbed his father to
death made to PO1 Torre and PO1 Macusi, established through the testimonies
of said police officers, falls under Rule 130, Section 26 of the Rules of Court,
which provides that "[t]he act, declaration or omission of a party as to a relevant
fact may be given in evidence against him." This rule is based upon the notion
that no man would make any declaration against himself, unless it is
18
true. Accused-appellant's declaration is admissible for being part of the res
gestae. A declaration is deemed part of the res gestae and admissible in
evidence as an exception to the hearsay rule when these three requisites
concur: (1) the principal act, the res gestae, is a startling occurrence; (2) the
statements were made before the declarant had time to contrive or devise; and
(3) the statements concern the occurrence in question and its immediately
19
attending circumstances. All the requisites are present in this case. Accused-
appellant had just been through a startling and gruesome occurrence, that is, his
father's death. Accused-appellant made the confession to PO1 Torre and PO1
Macusi only a few minutes after and while he was still under the influence of
said startling occurrence, before he had the opportunity to concoct or contrive a
story. In fact, accused-appellant seemed to still be in shock when he walked to
the Police Station completely unmindful of the rain and the knife in his hand, and
headed directly to PO1 Torre and PO1 Macusi, who were standing in front of the
Police Station, to confess to stabbing his father to death. The police officers who
immediately went to the house of Jose, accused-appellant's father, found Jose's
lifeless body with blood still oozing from his stab wounds. As res gestae,
accused-appellant's spontaneous statement is admissible in evidence against
him.
Accused-appellant's confession was further corroborated by the circumstantial
evidence.
To justify a conviction upon circumstantial evidence, the combination of
circumstances must be such as to leave no reasonable doubt in the mind as to
20
the criminal liability of the accused. Rule 133, Section 4 of the Rules of Court
enumerates the conditions when circumstantial evidence is sufficient for
conviction, thus:
SEC. 4. Circumstantial Evidence, when sufficient. - Circumstantial evidence is
sufficient for conviction if:chanRoblesvirtualLawlibrary
(a) There is more than one circumstance;ChanRoblesVirtualawlibrary
(b) The facts from which the inferences are derived are proven; and
(c) The combination of all circumstances is such as to produce conviction
beyond reasonable doubt.
The RTC, affirmed by the Court of Appeals, found that the aforequoted
requisites have been satisfied in this case given the following circumstantial
evidence:
1. On or about 4:50 o'clock in the afternoon of July 30, 2006, the victim was
stabbed to death.
2. Thirty minutes later, [accused-appellant] personally went to Camiling Police
Station and surrendered himself and the bladed weapon he used in killing his
father to the police authorities of the said police station.
3. When his mother learned about the incident, [accused-appellant] did nothing
to appease his responding mother. "It has always been said that criminal case
are primarily about human nature." Here is a case of a son doing nothing to
explain the death of his father to his grieving mother. Such inaction is contrary to
human nature.
4. When he was detained after police investigation, [accused-appellant] did not
object to his continued detention.
These circumstances constitute an unbroken chain which leads to one fair and
reasonable conclusion that points to accused-appellant, to the exclusion of all
21
others, as the guilty person. The incriminating collage of facts against
accused-appellant was created by circumstantial evidence anchored on the
credible and unbiased testimony of the prosecution's witnesses. We will not
disturb but shall accord the highest respect to the findings of the RTC on the
issue of credibility of the witnesses and their testimonies, it having had the
opportunity to observe their deportment and manner of testifying during the
22
trial.
Article 246 of the Revised Penal Code defines Parricide as follows:
Art. 246. Parricide. - Any person who shall kill his father, mother, or child,
whether legitimate or illegitimate, or any of his ascendants, or descendants, or
his spouse, shall be guilty of parricide and shall be punished by the penalty
of reclusion perpetua to death.
Parricide is committed when: (1) a person is killed; (2) the deceased is killed by
the accused; and (3) the deceased is the father, mother, or child, whether
legitimate or illegitimate, or a legitimate other ascendant or other descendant, or
the legitimate spouse of the accused. The key element in Parricide - other than
23
the fact of killing - is the relationship of the offender to the victim. All the
elements are present in this case. Jose, the victim, was killed by accused-
appellant, his own son. Accused-appellant's birth certificate, which was
presented before the RTC, establishes that accused-appellant was the
legitimate son of Jose and Flora.
The crime of Parricide is punishable by the indivisible penalties of reclusion
perpetua to death. With one mitigating circumstance, namely, voluntary
surrender, and no aggravating circumstance, the imposition of the lesser penalty
of reclusion perpetua on accused-appellant was proper.
We modify though the monetary awards imposed by the RTC and affirmed by
the Court of Appeals. When death occurs due to a crime, the following damages
may be awarded: (1) civil indemnity ex delicto for the death of the victim; (2)
actual or compensatory damages; (3) moral damages; (4) exemplary damages;
24
and (5) temperate damages.
Prevailing jurisprudence pegs the amount of civil indemnity and moral damages
25
awarded to the heirs of the victim of Parricide at P75,000.00 each. The
temperate damages awarded by the RTC in the amount of P30,000.00 should
26
be decreased to P25,000.00 to also conform with the latest jurisprudence. It is
fitting to additionally award exemplary damages in the sum of P30,000.00
considering the presence of the qualifying circumstance of relationship.
Damages for the loss of earning capacity of Jose should be awarded as well
given the testimony of his wife, Flora, on this particular fact. We refer to our
27
pronouncements in People v. Verde that:
The heirs are also entitled to damages for the loss of earning capacity of the
deceased Francisco Gealon. The fact that the prosecution did not present
documentary evidence to support its claim for damages for loss of earning
capacity of the deceased does not preclude recovery of said damages. The
testimony of the victim's wife, Delia Gealon, as to the earning capacity of her
husband Francisco Gealon sufficiently establishes the basis for making such an
award. It was established that Francisco Gealon was 48 years old at the time of
his death in 1991. His average income was P200.00 a day. Hence, in
accordance with the American Expectancy Table of Mortality adopted in several
cases decided by this Court, the loss of his earning capacity is to be calculated
as follows:
To be able to claim damages for loss of earning capacity despite the non-
availability of documentary evidence, there must be oral testimony that: (a) the
victim was self-employed earning less than the minimum wage under current
labor laws and judicial notice was taken of the fact that in the victim's line of
work, no documentary evidence is available; or (b) the victim was employed as a
daily wage worker earning less than the minimum wage under current labor
28
laws.
In the case at bar, Jose was 67 years old at the time of his death and was
earning a daily wage of P200.00 as a tricycle driver, which was below the
P252.00 to P263.50 minimum wage rate for non-agriculture under Wage Order
No. 11 dated June 16, 2005 for Region III. We take judicial notice that there is
no documentary evidence available to establish the daily earning capacity of a
tricycle driver. We thus compute the award of damages for the loss of Jose's
earning capacity as follows:
Net
Gross
earning life less living expenses (50% of gross annual
= x annual -
capacity expectancy income)
income
(x)
x= 2(80-67) x [73,000.00-36,500.00]
3
= 8.67 x 36,500.00
= P316,455.00
Finally, in conformity with current policy, we impose interest on all monetary
awards for damages at the rate of six percent (6%) per annum from the date of
finality of this Decision until fully paid.
WHEREFORE, the Decision of the Court of Appeals in CA-G.R. CR.-H.C. No.
04596, finding accused-appellant, Adrian Guting y Tomas, GUILTY beyond
reasonable doubt of the crime of Parricide, is hereby AFFIRMED with
MODIFICATIONS. Accused-appellant is sentenced to suffer the penalty
of reclusion perpetua and to pay the heirs of the victim the amounts of
P75,000.00 as civil indemnity, P75,000.00 as moral damages, P25,000.00 as
temperate damages, P30,000.00 as exemplary damages, and P316,455.00 as
compensation for loss of earning capacity. All monetary awards for damages
shall be subject to interest of six percent (6%) per annum from date of finality of
this Decision until they are fully paid.
SO ORDERED.chanroblesvirtuallawlibrary
G.R. No. 181043 October 8, 2008
THE PEOPLE OF THE PHILIPPINES, appellee,
vs.
MILLANO MUIT, SERGIO PANCHO, JR., EDUARDO HERMANO ALIAS
"BOBBY REYES," ROLANDO DEQUILLO, ROMEO PANCHO, and JOSEPH
FERRAER, appellants.
DECISION
TINGA, J.:
Millano Muit y Munoz (Muit), Sergio Pancho y Cagumoc, Jr. (Pancho, Jr.),
Rolando Dequillo y Tampos (Dequillo), Romeo Pancho (Romeo), Eduardo
"Eddie" Hermano alias "Bobby Reyes" alias "Eddie Reyes" (Hermano), and
Joseph Ferraer (Ferraer) were charged with
1 2
kidnapping for ransom with homicide and carnapping in two separate
informations. Only Muit, Pancho Jr., Dequillo, Romeo, and Ferraer were
arrested and stood trial. However, Ferraer was discharged from the criminal
3
cases by the Regional Trial Court (RTC) and was utilized as a state witness. All
appellants pleaded not guilty during their arraignments.
The facts as culled from the records are as follows:
In the afternoon of 11 November 1997, Orestes Julaton, (Julaton), a relative of
Ferraer, arrived at the latter’s house in Kaylaway, Nasugbu, Batangas with
Sergio Pancho, Sr. (Pancho, Sr.), Pancho, Jr., Dequillo and four other men on
board a gray Mitsubishi car with plate number PSV-818. Julaton introduced
them to Ferraer and told the latter that Pancho, Sr. is also their relative. Pancho,
Sr. told Ferraer that they wanted to use his house as a safehouse for their
"visitor." Ferraer was hesitant at first as he thought it was risky for him and his
family. Hermano told Ferraer not to worry because they are not killers; their line
of work is kidnap for ransom. Ferraer was assured that the money they will get
would be shared equally among them. Ferraer and Pancho, Sr. would guard
their victim. Later, five other men came and they were introduced to Ferraer as
Muit, Morales, alias Tony, alias David and alias Puri. They had dinner and
chatted until midnight. That evening, Morales handed to Ferraer for safekeeping
a folded carton wrapped with masking tape contained in a big paper bag, and a
green backpack. Hermano told Ferraer that the package contained guns.
Ferraer brought the package inside his room; he inspected the contents before
placing them under the bed, and saw that the carton contained a shotgun and
the green backpack, an Ingram folding. Morales and Udon also showed him
4
their .45 caliber guns tucked at their waists.
At one o’clock in the afternoon of 24 November 1997, Ferraer saw Pancho, Jr.,
and Hermano with a companion, seated under the tree in front of his house.
Pancho, Jr. introduced their companion as Romeo. They informed Ferraer that
the following day, they would proceed with their plan. Romeo would be the
informant since he is an insider and a trusted general foreman of the victim. The
next day, at nine o’clock in the morning, Pancho, Sr. arrived at Ferraer’s house
alone and asked Ferraer if he was already informed of the plan. Ferraer replied
in the affirmative. Pancho, Sr. told him to wait for the group’s return. However,
the group returned without the intended victim because the latter did not show
5
up at the construction site. On 2 December 1997, the group received a call from
Romeo informing them that the victim was already at the construction site.
Hermano, Morales, Udon, Manuel, Bokbok, and Muit commuted to the
construction site at Barangay Darasa, Tanauan, Batangas. Pancho, Jr. was on
board the Mitsubishi car as back-up.
At around two o’clock in the afternoon of the same date, 2 December 1997,
Roger Seraspe (Seraspe), the personal driver of the victim, drove a
blue Pajero with plate number UDL-746 carrying Engr. Ruth Roldan and the
victim to visit the Flexopac project site at Barangay Darasa, Tanauan, Batangas.
At the site, Engr. Roldan and the victim alighted from the Pajero and, along with
Engr. Ed dela Cruz, toured the construction site. Seraspe talked with Armand
Chavez (Chavez), the warehouseman of ILO Construction, while waiting for his
6
boss.
After the site inspection, the three engineers walked towards the direction of
the Pajero. Seraspe was surprised to see that the three engineers who stood
together suddenly lay prostrate on the ground. Seraspe and Chavez saw an
unidentified man standing near the three engineers. Three more armed men
surrounded the Pajero. Two of them approached Seraspe and Chavez. One of
the armed men, Muit, poked a gun at Seraspe and ordered him and Chavez to
7
lay prostrate on the ground. The assailants dragged the victim towards
the Pajero. They forced the victim to order Seraspe to give them the keys to
the Pajero. When the victim was already on board the Pajero, Seraspe heard
8
one of them say, "Sarge, nandito na ang ating pakay."
They then started the Pajero and drove away, passing through the Pag-asa
Road gate. Two more persons who were waiting at the Pag-asa road boarded
9
the Pajero.
At 2:30 that same afternoon, Lipa City Deputy Chief of Police, Supt. Arcadio
Mission (Supt. Mission) received a radio message from the Tanauan Police
Station that a kidnapping was ongoing and the kidnappers on board
a Pajero with plate number UDL-746 were heading towards Lipa City. Supt.
Mission immediately ordered the police posted near the Lipa City bus stop to put
up a barricade. In the meantime, two teams were organized to intercept
10
the Pajero. They proceeded to the barricade.
Right after Supt. Mission and the teams arrived at the barricade, the Pajero was
spotted. When policemen flagged down the Pajero, the driver stopped the
vehicle. While two policemen approached the Pajero, the driver and front
passenger opened their car doors and started firing at the policemen. At this
point, all the policemen present at the scene fired back. The cross-fire lasted for
around four minutes. All the occupants of the Pajero, except the driver and the
front passenger who managed to escape, died. SPO1 Rolando Cariaga
apprehended one of the escapees who turned out to be Muit, the driver of
the Pajero, at Barangay San Carlos, Batangas, about 200 meters from the place
11
of the shootout.
On the other hand, after the assailants carried their plan into action, Pancho, Jr.
proceeded to their agreed meeting place but did not find Hermano’s group there.
Pancho, Jr. waited along the highway in front of the construction site. He thought
that he had been left behind when he did not see the group, so he left. When
Pancho, Jr. returned to Ferraer’s house, he told Ferraer what happened to their
operation. Worried that something bad might have happened to the group,
Pancho, Jr. went back and looked for the rest of his group. Pancho, Jr. came
back alone.
At around 5:30 in the morning of 3 December 1997, Ferraer saw Pancho, Sr.
and Pancho, Jr. watching the TV program "Alas Singko y Medya." He joined
them and saw on the news the Pajero riddled with bullets. Pancho, Sr. and
Pancho, Jr. left Ferraer’s house at around 9:00 in the morning and they also left
behind the Mitsubishi car they used. That night, Ferraer saw on the news
program TV Patrol a footage showing the cadavers of Udon, Morales, Manuel,
Bokbok and the victim, and the Pajero riddled with bullets. Ferraer also saw Muit
in handcuffs.
The prosecution presented Ignacio Ong, Sr., the father of the victim Engr.
Ignacio Ong, Jr.; Seraspe; Chavez; Dr. Anthony Llamas, the PNP Medico-Legal
Officer who conducted the autopsy; Supt. Mission, Ferraer, as the state witness;
12
and Atty. Narzal Mallare (Atty. Mallare), the lawyer who assisted appellants
Pancho, Jr. and Dequillo in executing their respective sworn statements as
witnesses. Their accounts were corroborated by the prosecution’s documentary
evidence such as the extra judicial confessions of Pancho, Jr. and Dequillo,
which were executed with the assistance of Atty. Mallare. Muit executed two
extra judicial confessions: the first statement was dated 4 December 1997, in
which he was assisted by Atty. Ernesto Vergara, and the second statement was
dated 7 December 1997 in which he was assisted by Atty. Solomon De Jesus
and witnessed by his uncle, Bonifacio Muit (Bonifacio), and his brother,
Dominador Muit (Dominador). On the other hand, the defense presented
appellants Dequillo, Pancho, Jr., and Muit.
Dequillo, for his part, claimed that for the period of November to December 1997
he was working as a mason at Villanueva Construction in BF Homes. His work
starts at 8:00 in the morning and ends at 5:00 in the afternoon. He stated that on
8 December 1997, he was arrested by the CIDG at his house in Purok Sto.
Domingo, Barangay Holy Spirit, Quezon City. At the CIDG Detention Center, he
was questioned about the guns used in the kidnapping of the victim. He was
allegedly tortured when he denied any knowledge about the kidnapping and was
forced to sign a statement without being allowed to read it. Atty. Mallare only
came in after he had already signed the statement. He denied any participation
13
in the crimes charged against him.
Pancho, Jr. claimed that he was arrested on 7 December 1997 in Calbayog,
Samar. He was first brought to the Calbayog City Police Station, and then
transferred to Camp Crame. He alleged that the police tortured him and forced
him to sign the written confession of his participation in the crimes. He denied
14
having participated in the commission of the offenses charged against him.
On the other hand, Muit claimed that on 2 December 1997 he was in Lipa City,
near the place of the shootout. He had just attended a gathering of the Rizalistas
and was waiting for his uncle Bonifacio when the police arrested him. He denied
having any knowledge of the crime. He denied knowing the people whose name
appeared in his two extra judicial confessions. He claimed that the names were
supplied by the police and that he was not assisted by counsel during the
15
custodial investigation.
16
In a decision dated 22 November 2002, the RTC, Branch 83 of Tanauan City,
17
Batangas found Muit, Pancho, Jr., Dequillo, and Romeo guilty. Only the cases
involving the charges of carnapping and kidnapping for ransom which resulted in
the death of the victim were automatically appealed to this Court.
The RTC held that mere denials and alibis of appellants cannot prevail over the
positive declarations of the prosecution’s witnesses. It found the prosecution’s
witnesses more credible than appellants, whose self-serving statements were
obviously intended to exculpate themselves from criminal liability. The RTC did
not give credence to the claims of appellants that their extra judicial confessions
were procured through torture as these were belied by the testimony of Atty.
Mallare and appellants’ medical certificates which were issued during their
incarceration and after the execution of their statements. And the RTC noted
that even without appellants’ extra judicial confessions, there was still sufficient
evidence on record to hold them guilty.
In a resolution dated 17 January 2006, the Court referred the case to the Court
of Appeals for intermediate review.
18
19
The Court of Appeals in a decision dated 31 August 2007 affirmed the decision
20
of the RTC. The appellate court held that the RTC was correct in convicting
appellants for kidnapping and carnapping. The prosecution was able to prove
through Ferraer that appellants conspired with one another in the planning and
execution of their plan to kidnap the victim. Moreover, appellants executed extra
judicial confessions, duly assisted by their counsels, detailing their participation
in the kidnapping. As for Muit, other than his extra judicial confession, he was
also positively identified during the kidnapping by eyewitnesses Seraspe and
Chavez. Appellants filed their notices of appeal with the Court of Appeals.
Before this Court, appellants opted not to file supplemental briefs, and instead
21
adopted the assignment of errors in their respective original briefs. Taken
together, appellants claim that: (i) the RTC erred in finding them guilty beyond
reasonable doubt of the charges against them; (ii) the RTC erred in its finding
that they acted in conspiracy in the commission of the crimes charged against
them; and (iii) the RTC erred in giving credence to the extra-judicial confessions
of Pancho, Jr. and Dequillo, and to the sworn statement and testimony of
22
Ferraer in convicting them.
The appeals are bereft of merit.
23
The elements of the crime of kidnapping and serious illegal detention are the
following: (a) the accused is a private individual; (b) the accused kidnaps or
detains another, or in any manner deprives the latter of his liberty; (c) the act of
detention or kidnapping is illegal; and (d) in the commission of the offense, any
of the four circumstances mentioned in Article 267 is present. The essence of
the crime of kidnapping is the actual deprivation of the victim’s liberty, coupled
24
with indubitable proof of intent of the accused to effect the same. The totality of
the prosecution’s evidence in this case established the commission of
kidnapping for ransom with homicide.
On the other hand, Republic Act No. 6539, or the Anti-Carnapping Act, as
amended, defines "carnapping" as the taking, with intent to gain, of a motor
vehicle belonging to another without the latter’s consent, or by means of
25
violence against or intimidation of persons, or by using force upon things. The
crime was committed in this case when the victim’s Pajero was forcibly taken
away from him contemporaneously with his kidnapping at the construction site.
The kidnapping for ransom with homicide and the carnapping were established
by the direct testimony of Ferraer, Seraspe and Chavez. Ferraer testified on how
the group approached and convinced him to let them use his house to keep the
victim they planned to kidnap. They planned the crime in Ferraer’s house and
waited for the call from Romeo to inform them when the victim would be at the
construction site. The group received a call from Romeo on 2 December 1997
informing them that the victim was already at the construction site, and so they
went there to carry out their plan. At the construction site, as testified to by
Seraspe and Chavez, Muit and the other members of the group pointed their
guns at the victim and his companion and ordered them to lie prostrate on the
ground. After getting the keys to the Pajero from Seraspe, they forced the victim
to board the vehicle with Muit driving it. They immediately reported the
kidnapping of the victim to the police and the kidnappers were intercepted by the
group led by Supt. Mission. Supt. Mission testified that the kidnappers refused to
surrender and engaged the police in a shoot out in which the victim was among
the casualties. Muit was one of the two persons who survived the shoot out, but
was apprehended by the police. Pancho, Jr. returned to the house of Ferraer
alone when the group did not arrive at their meeting place. Ferraer, Pancho, Jr.,
and Pancho, Sr. learned from the news that the group engaged the police in a
shoot out and most of them were killed, and that Muit was arrested by the police.
After investigation, the police were able to apprehend appellants Pancho, Jr.,
Romeo, and Dequillo who all took part in the botched criminal conspiracy to
kidnap the victim. During the investigation, Pancho, Jr., Dequillo, and Muit, with
the assistance of their counsels and family members, executed extra judical
confessions divulging their respective roles in the planning and execution of the
crimes.
Even though Pancho, Jr., Dequillo and Romeo did not participate in the actual
abduction of the victim, they should still be held liable, as the courts below did,
because of the existence of conspiracy. Conspiracy is a unity of purpose and
26
intention in the commission of a crime. Where conspiracy is established, the
precise modality or extent of participation of each individual conspirator
27
becomes secondary since the act of one is the act of all. The degree of actual
participation in the commission of the crime is immaterial.
The conspiracy to kidnap the victim was proven through circumstantial evidence.
The group thoroughly planned the kidnapping in Ferraer’s house and patiently
waited for the day when the victim would be at the construction site. Then on 2
December 1997, the group received a call from Romeo so they proceeded to the
construction site and carried out their plan.
All the appellants took active part in the criminal conspiracy and performed
different roles to consummate their common plan. The roles which Muit and his
other companions played in the actual abduction were described earlier. As for
Dequillo, he was the one who procured the guns used by the group. Pancho, Jr.
served as the driver of the back-up vehicle, and Romeo was the group’s
informant.
Section 4, Rule 133 of the Revised Rules of Evidence states that circumstantial
evidence is sufficient if: (a) there is more than one circumstance; (b) the facts
from which the inferences are derived are proven; and (c) the combination of all
the circumstances is such as to produce a conviction beyond reasonable doubt.
The extra judicial confessions of Pancho, Jr., Dequillo, and Muit strengthened
the case against them. There is nothing on record to support appellants’ claim
that they were coerced and tortured into executing their extra judicial
confessions. One of the indicia of voluntariness in the execution of appellants’
extra judicial statements is that each contains many details and facts which the
investigating officers could not have known and could not have supplied, without

the knowledge and information given by appellants. Moreover, the appellants
were assisted by their lawyers when they executed their statements. Atty.
Mallare testified that Pancho, Jr. and Dequillo executed their statements
voluntarily and affixed their signatures after he talked with them alone and
28
informed them of their constitutional rights. Muit, on the other hand, was
assisted by counsels in each instance when he executed his two extra judicial
confessions; his second statement was even witnessed by his uncle, Bonifacio,
and his brother, Dominador. Muit cannot just conveniently disclaim any
knowledge of the contents of his extra judicial confession. Nevertheless, in
Muit’s case, he was also positively identified by Seraspe and Chavez as the one
who pointed a gun at them during the kidnapping and ordered them to lay
29
prostrate on the ground.
Appellants’ claims of torture are not supported by medical certificates from the
30
physical examinations done on them. These claims of torture were mere
afterthoughts as they were raised for the first time during trial; appellants did not
even inform their family members who visited them while they were imprisoned
31
about the alleged tortures. Dequillo, for his part, also had the opportunity to
complain of the alleged torture done to him to the Department of Justice when
32
he was brought there. Claims of torture are easily concocted, and cannot be
given credence unless substantiated by competent and independent
33
corroborating evidence.
The extra judicial confessions of Pancho, Jr., Dequillo, and Muit also
strengthened the prosecution’s case against Romeo. The rule that an extra
judicial confession is evidence only against the person making it recognizes
various exceptions. One such exception is where several extra judicial
statements had been made by several persons charged with an offense and
there could have been no collusion with reference to said several confessions,
the fact that the statements are in all material respects identical is confirmatory
of the confession of the co-defendants and is admissible against other persons
implicated therein. They are also admissible as circumstantial evidence against
the person implicated therein to show the probability of the latter’s actual
participation in the commission of the crime and may likewise serve as
corroborative evidence if it is clear from other facts and circumstances that other
persons had participated in the perpetration of the crime charged and proved.
34
These are known as "interlocking confessions." Nonetheless, the RTC, in
convicting Romeo, relied not only on the aforesaid extra judicial statements but
also on Ferraer’s testimony that Romeo was introduced to him in his house as
the informant when they were planning the kidnapping.
As for the penalty, the RTC did not err in imposing the penalty of death since the
kidnapping was committed for the purpose of extorting ransom from the victim or
any other person. Neither actual demand for nor payment of ransom is
necessary for the consummation of the felony. It is sufficient that the deprivation
of liberty was for the purpose of extorting ransom even if none of the four
35
circumstances mentioned in Article 267 were present in its perpetration. The
death of the victim as a result of the kidnapping only serves as a generic
aggravating circumstance for the rule is that when more than one qualifying
circumstances are proven, the others must be considered as generic
36
aggravating circumstances.
The imposition of death penalty is also proper in the carnapping of the
victim’s Pajero because it was committed by a band, which serves as a generic
aggravating circumstance, without any mitigating
37
circumstance. There is band whenever more than three armed malefactors
38
shall have acted together in the commission of the offense. As planned, Muit
and three other armed men kidnapped the victim and drove away with the
latter’s Pajero while two more persons waiting near the Pag-asa road boarded
the Pajero.
However, pursuant to Republic Act No. 9346 which prohibits the imposition of
the death penalty, the penalties imposed are commuted to reclusion
perpetua with all its accessory penalties and without eligibility for parole under
39
Act No. 4103.
As to damages, the RTC erred in awarding compensation for loss of earning
capacity. Pursuant to jurisprudence, the Court precludes an award for loss of
earning capacity without adequate proof as it partakes of the nature of actual
40
damages. The bare testimony of the father of the deceased that, at the time of
his death, the victim was earning
41
₱5,000.00 per month as an engineer is not sufficient proof. But pursuant to the
42
Court’s ruling in People v. Abrazaldo wherein we deemed it proper to award
temperate damages in the amount of ₱25,000.00 in cases where evidence
confirms the heirs’ entitlement to actual damages but the amount of actual
damages cannot be determined because of the absence of supporting and duly
presented receipts, the Court awards ₱25,000.00 temperate damages to the
heirs of the victim in the present case.
43
The civil indemnity should be increased to ₱75,000.00. The award of civil
indemnity may be granted without any need of proof other than the death of the
44
victim. In line with jurisprudence, the moral damages should also be increased
45
to P 500,000.00.
Moreover, exemplary damages in the amount of ₱100,000.00 for the crime of
46
kidnapping for ransom with homicide and ₱25,000.00 for the crime of
carnapping should be awarded. The law allows exemplary damages in criminal
cases as part of the civil liability of the malefactors when the crime is attended
47
by one or more aggravating circumstances.
WHEREFORE, the Decision of the Court of Appeals in CA-G.R. CR-HC No.
02044 which commuted the death penalties imposed in Criminal Case Nos. P-
521 and P-607 to reclusion perpetua without eligibility for parole is AFFIRMED
with the MODIFICATIONS that the compensation for loss of earning capacity
be deleted while the civil indemnity be increased to ₱75,000.00 and the moral
damages to ₱500,000.00, and that appellants shall also pay the heirs of Ignacio
Earl Ong, Jr. temperate damages of ₱25,000.00 and exemplary damages of
₱100,000.00 for the crime of kidnapping for ransom with homicide and
₱25,000.00 for the crime of carnapping. Costs against appellants.

SO ORDERED.

July 20, 2016
G.R. No. 208527
PEOPLE OF THE PHILIPPINES, Plaintiff -Appellee,
vs
ARDO BACERO y CASABON, Accused-Appellant.
DECISION
PEREZ, J.:
1 men while they were having a small picnic at the Monteverde Royal Subdivision
Before this court is an appeal of the July 26, 2012 Decision of the Court of
Appeals (CA) in CA-G.R. CR.- H.C. No. 05040 affirming the January 11, 2011
2 forcibly grabbed Jun's cellphone after stabbing him on the face with a knife.
Decision of the Regional Trial Court (RTC) of Antipolo City, Branch 73 in Crim.
Case No. 03-25345, finding accused-appellant Ardo Bacero y Casabon
(accused-appellant) guilty beyond reasonable doubt of the special complex
crime of Robbery with Homicide as defined and penalized under Article 294,
paragraph (1)of the Revised Penal Code, as amended by Section 9 of Republic
Act No. 7659.
3
On March 27, 2003, an Information for the special complex crime of Robbery
with Homicide was filed against accused-appellant and several men whose true
identities were unknown at the time of filing, namely, Victor Bisaya, Rodel,
Rommel, John Doe and Peter Doe. The accusatory portion of the Information
reads:
th
"That on or about the 24 day of March, 2003, in the Municipality of Taytay,
Province of Rizal, Philippines, and within the jurisdiction of this Honorable Court,
the above named accused, in conspiracy with @Victor Bisaya, @Rodel,
@Rommel, @John Doe, @Peter Doe[,] whose true identities and whereabouts
are still unknown, with the use of deadly bladed weapons, with intent to gain and
by means or force, violence and intimidation, did then and th.ere willfully,
unlawfully and feloniously rob, take and divest one Virgilio San Juan[, Jr.] y
Molina @Jun of his Nokia 3310 cellphone valued at Php4,500.00 and one Juliet
Bunot y Dumdum of her Smart Buddy 3388 model cellphone valued at
[P]2,400.00 and cash money amounting to [P]70.00, to the damage and
prejudice of both offended parties in the total amount of Php6,970.00; that by
reason and on the occasion of the robbery, the above-named accused, with
intent to kill, and by means of the qualifying aggravating circumstances of
treachery, evident premeditation and superior strength, did, then and there
willfully, unlawfully and feloniously attack, assault and stab with said deadly
bladed weapons, said Virgilio San Juan[, Jr.] y Molina @Jun, hitting him on the
different parts of his body, thereby inflicting upon the victim mortal stabbed
wounds which directly caused his death.
4
CONTRARY TO LAW."
5
On arraignment, accused-appellant entered a plea of NOT GUILTY. Trial on the
merits ensued thereafter.
The Facts
6
The antecedent facts as culled from the Plaintiff-Appellee's Brief and the
records of the case are summarized as follows:
At around 4:45 o'clock in the afternoon of March 24, 2003, Juliet Dumdum-Bunot
and her boyfriend, Virgilio "Jun" San Juan[, Jr., y Molina] were attacked by six
in Taytay, Rizal. One of the men, later identified as the accused-appellant,
Juliet was unable to help Jun as her face was being shoved down towards her
thighs by one of accused-appellant's companions. Every time Juliet fought back,
the unidentified man punched her. Despite her struggle, Juliet could hear Jun
shouting "Huwag po, huwag po, Diyos ko po". Juliet was restrained by one of
the men; her face was covered with a towel and her hands were tied with
another towel. Fortunately, according to Juliet, the towel was loosely tied and
thin enough for her to see through it and identify the man who attacked her.
When Juliet freed herself from the loosely tied towels, she immediately looked
for Jun but he was nowhere to be found. She sought assistance from the·
Monteverde Royale Subdivision security guards. They roamed around the
subdivision and saw Jun's lifeless body in a grassy area.
At the police station later that day, Juliet Dumdum Bunot (Juliet) told Senior
Police Officer 1 Rogelio V. Marundan (SPOl Marundan), then Chief Investigator
of Taytay Police, that two of the assailants' faces were familiar to her but she
was uncertain of their identities. She also mentioned that the face of one of the
men who attacked Virgilio San Juan, Jr. y Molina (Jun) was familiar as she had
seen him in the neighborhood. She identified said assailant as having long hair.
Still distraught over the horrifying incident, Juliet was unable to remember the
faces of the other assailants. She was advised to calm down and to head home.
Two days after, Juliet informed Senior Police Officer 1 William S. Texon (SPOl
Texon) that she remembered one of the assailants. Juliet claimed that she was
familiar with accused-appellant's face because she used to see him three to four
times a week whenever he was plying his tricycle route outside her house.
7
According to the Pinagsamang Sinumpaang Salaysay executed by SPOl
Marundan, SPO1 Tecson and Police Officer 2 Manuelito Inosanto (PO2
Inosanto ), a team of investigating officers and several civilian agents was
formed for the purpose of conducting a follow-up investigation in the vicinity of
Javier Compound, San Francisco Village, Muzon, Taytay, Rizal. During the
conduct of the follow-up investigation, Juliet, accompanied by the investigating
officers, spotted accused-appellant standing in front of his house and identified
him as the long-haired assailant. The officers invited accused-appellant back to
the police station. A police line-up was conducted and accused-appellant was
positively identified by Juliet. Accused-appellant initially denied any involvement
in the incident but after thirty minutes, he admitted to the robbery and the
8
killing. He also gave the names and whereabouts of his companions, namely:
Victor Waray, a certain Rodel and Rommel, and another man who was an
acquaintance of Victor Waray.
9
On July 10, 2003, Juliet executed a supplemental affidavit for the purpose of
identifying the other five assailants. Juliet implicated Victor "Waray" Magcuro
(Victor), Rommel David (Rommel), Edwin Soberano y Dela Cruz (Edwin),
Nelson Ampatin (Nelson) and Rodel Zacarias (Rodel). According to Juliet, she
asked around for their respective names when she chanced upon the suspects
having a drink outside a compound. Accused Edwin is a tricycle driver who knew
Juliet since December 2002. On April 3, 2003, he was invited by the Taytay
police for questioning but was immediately released by midnight of the same
day. On October 23, 2003, he was arrested by virtue of a warrant. On January
11, 2011, the RTC eventually acquitted Edwin for lack of sufficient evidence to
10
warrant his conviction.
Accused-appellant proffers the defenses of alibi and denial. He posits that he
was just a victim of mistaken identity and at the time the incident supposedly
happened, he was in his house gathering wood. Moreover, accused-appellant
claims that on the day he was arrested, he was forced to admit the crime after
11
being tortured by the police. Divina Esguerra Chiong (Chiong), a witness for
12
the defense, executed an affidavit dated April 8, 2003 claiming that she
witnessed the incident from her sister's house, which was overlooking the scene
of the crime, and that she is positive that accused-appellant was not one of the
assailants.
The prosecution presented the testimony of Estella Arellano San Juan
13
(Estella), widow of the deceased, to prove that the deceased was gainfully
employed and to prove the damages and expenses incurred in relation to the
death of Jun.
Ruling of the Regional Trial Court
The RTC ruled that Juliet was able to positively identify accused-appellant as
one of the six persons who approached Jun and was in fact, the person who
used a knife in stabbing Jun in the face. The trial court gave weight to the fact
that Juliet was able to identify accused-appellant as one of the assailants as
early as the day after the incident. The trial court held that the same categorical
and straightforward identification cannot be said with respect to accused Edwin
who was not immediately identified by Juliet despite the fact that he was already
in police custody a little over a week after the incident. Edwin was only identified
by Juliet when she executed her supplemental affidavit roughly 3 months after
the incident. For the trial court, the fact that Edwin was arrested only on October
23, 2003 or 7 months after the incident makes his identification not quite similar
to Juliet's identification of Bacero. The dispositive portion of the decision reads:
WHEREFORE, premises considered, accused Arclo Bacero y Garingo is hereby
found GUILTY beyond reasonable [doubt] of the crime of Robbery with
Homicide and is sentenced to suffer the penalty of Reclusion Perpetua and is
ordered to pay the heirs of Virgilio San Juan[,Jr. y Molina] [P]l 72,000.00 in
actual damages, [P]200,000.00 in moral damages, [P] 100,000.00 in exemplary
damages with costs against suit.
Accused Edwin Soberano is ACQUITTED of the crime charged for lack of
sufficient evidence to warrant his conviction. He is therefore ordered released
from detention unless he is being detained for some other case or cause other
than the instant case.
The case against Nelson Ampatin, Victor Magcoro, Rommel David and Rodel
Zacarias is ordered archived and the corresponding warrant of arrest is hereby
issued against them for their immediate apprehension.
14
SO ORDERED.
Ruling of the Court of Appeals
Aggrieved by the RTC decision, accused-appellant elevated the case to the CA.
Accused-appellant questioned Juliet's credibility and contended that her
testimony anent the identity of the accused-appellant as one of the perpetrators
is highly doubtful for the reason that her statements were contradictory. Relying
15
on a previous case, the defense maintained that the fact that Juliet knew
accused-appellant before the crime but made no accusation against him when
questioned by the police is a danger signal indicating that identification may be
16
erroneous. The appellate court found no cogent reason to deviate from the
findings of the trial court. The CA gave deference to the trial court's appreciation
of the facts and credibility of witnesses. The dispositive portion of the decision
reads:
WHEREFORE, premises considered, the appeal is DENIED. The Decision
dated 11 January 2011 of the Regional Trial Court, Fourth Judicial Region,
Branch 73, Antipolo City in Crim. Case No. 03-25345 finding accused-appellant
Ardo Bacero y Casabon guilty beyond reasonable doubt of the crime of robbery
with homicide under Article 294 (1) of the Revised Penal Code, as amended,
and sentencing him to suffer the penalty of reclusion
perpetua is AFFIRMED with MODIFICATION in that accused-appellant, in
addition to the said penalty, is not eligible for parole and he is further ordered to
indemnify the heirs of the victim Virgilio San Juan, Jr. y Molina the following
amounts: (1) Php75,000.00 as civil indemnity; (2) Php75,000.00 as moral
damages; (3) Php30,000.00 as exemplary damages; (4) Php75,871.30 as actual
damages; (5)Php2,5 l 8,634.68 for loss of earning capacity; and (6) interest on
all damages awarded at the rate of 6% per annum from the finality of this
judgment until fully paid. Costs against accused-appellant.
17
SO ORDERED.
Accused-appellant filed a Motion for Reconsideration of the July 26, 2012
Decision of the appellate court. Finding that the grounds relied upon in the said
Motion were mere reiterations of the matters already considered passed upon,
the CA denied the Motion for Reconsideration for lack of merit in a Resolution
dated December 4, 2012. On December 26, 2012, accused-appellant appealed
the Decision of the CA dated July 26, 2012. Accused-appellant's Notice of
Appeal was given due course and the records were ordered elevated to this
18
Court for review.
19
In a Resolution dated October 9, 2013, this Court required the parties to
submit their respective supplemental briefs. Both the OSG and the accused-
appellant manifested that they are adopting all the arguments contained in their
20
respective briefs in lieu of filing supplemental briefs.
Our Ruling
This Court finds no reason to deviate from the findings and conclusions of the
courts below as the degree of proof required in criminal cases has been met in
the case at bar. We rule that accused-appellant's contentions of mistaken
identity, torture, and denial are bereft of merit.
Extra-judicial Confession
Accused-appellant claims that he was coerced into admitting the crime. We hold
that his allegation of being subjected to torture does not find support in the
evidence on record. There was no proof, such as a medical certificate, that
would show that accused-appellant suffered bodily harm while under the
custody of police officers. In previous cases, the Court has disregarded
allegations of torture when the accused did not file any complaint against his
21
alleged malefactors for maltreatment.
Notwithstanding the fact that torture was not sufficiently proven, the extra-judicial
confession made at the police station remains inadmissible in evidence. R.A.
No. 7438, the law defining the rights of persons under custodial investigation,
provides:
"Section 2. (d) - Any extrajudicial confession made by a person arrested,
detained or under custodial investigation shall be in writing and signed by such
person in the presence of his counsel or in the latter's absence, upon a valid
waiver, and in the presence of any of the parents, elder brothers and sisters, his
spouse, the municipal mayor, the municipal judge, district school superyisor, or
priest or minister of the gospel as chosen by him; otherwise, such extrajudicial
confession shall be inadmissible as evidence in any proceeding."
The admission made by accused-appellant was neither put into writing nor made
in the presence of persons mentioned in the law. Thus, there can be no
conclusion other than that the extra-judicial confession is inadmissible in
evidence. Nevertheless, the positive identification of accused-appellant as the
perpetrator of the crime warrants his conviction.
Positive Identification of Accused-appellant
The defense maintains that Juliet's testimony anent the identity of accused-
appellant as one of the perpetrators is highly doubtful. Accused-appellant harps
on the inconsistencies in Juliet's statements regarding the suspects' identities.
We cannot sustain such argument casting doubt on Juliet's positive
identification- of accused-appellant's participation in the commission of the
crime. Time and again, this Court has held that when the credibility of a witness
is in issue, the trial court's calibration of the testimonies of the witnesses and its
assessment of the probative weight thereof, are accorded high respect if not
conclusive effect, most especially when such findings are affirmed by the
22
appellate court. Unless there is a clear showing that the trial court and the
appellate court overlooked, misunderstood or misapplied some facts or
23
circumstances of weight and substance, this rule should not be disturbed.
Jurisprudence is replete with various ways of conducting out-of-court
24
identifications. It may be done thru show-ups, where the suspect alone is
brought face to face with the witness or thru mug shots, where only
photographs are shown to the witness. Identification can also be done thru line-
25
ups where a witness identifies the suspect from a group of persons. To
maintain the integrity of in-court identification during trial, courts have fashioned
out rules to assure its fairness and compliance with the requirements of
26
constitutional due process. In a long line of cases, the Court has reiterated
the totality of circumstances test adopted from American Jurisprudence and
27
set forth in People v. Teehankee, Jr., which has been the guide in resolving
the admissibility of out-of-court identification. Under the totality of circumstances
test, the following factors are considered: (1) the witness' opportunity to view the
criminal at the time of the crime; (2) the witness' degree of attention at that time;
(3) the accuracy of any prior description given by the witness; (4) the level of
ce1iainty demonstrated by the witness at the identification; (5) the length of time
between the crime and the identification; and (6) the suggestiveness of the
28
identification procedure.
Juliet identified accused-appellant out-of-court on two separate occasions, viz:
(1) when she saw accused-appellant in front of the latter's house after roaming
the vicinity and (2) at a police line-up conducted by SPO1 Tecson. We rule that
the out-of-court identifications made by Juliet satisfied the totality of
circumstances test. Juliet was at the scene of the crime when the incident
happened and she was able to see the faces of the assailants through the
loosely tied blindfold. Moreover, the most natural reaction of a witness to a crime
is "to strive to look at the appearance of the perpetrator and to observe the
29
manner in which the offense is perpetrated." Most often, the face and body
movements of the assailant create a lasting impression which cannot be easily
30
erased from their memory. We agree with the appellate court that
eyewitnesses can remember with a high degree of reliability the identity of
criminals at any given time precisely because of the unusual acts of violence
31
committed right before their eyes. Though this Court is aware that such
pronouncement should be applied with great caution, there is no compelling
circumstance in this case that would warrant its non-application.
Accused-appellant contends that Juliet's description of the appellant as a man
having long hair lacks the highest degree of certainty. We find this contention
unmeritorious. The lack of a detailed description of the assailants should not
lead to a conclusion that the identification was erroneous. Victims of violent
crimes have varying reactions to shocking events. Juliet cannot be expected to
immediately remember the detailed features of the assailants' faces as she was
still in a state of shock. Though she was unable to describe in detail the
appearances of the assailants, she was able to immediately identify Bacero
when she saw him two days after the incident. Nevertheless, assuming for the
sake of argument that Juliet's out-of-court identification was improper, it will
have no bearing on the conviction of accused-appellant. It has long been settled
that an out-of court identification does not necessarily foreclose the admissibility
of an independent in-court identification and that "even assuming that an out-of-
court identification was tainted with irregularity, the subsequent identification in
32
court cured any flaw that may have attended it." Furthermore, the records
show that there is no improper motive for Juliet to impute a serious crime to the
33
accused-appellant.
Unmeritorious Defense of Mistaken Identity
Accused-appellant posited the defense of mistaken identity which is essentially
in the nature of denial and alibi. It is established jurisprudence that denial cannot
prevail over the witnesses' positive identification of the accused-appellant; more
so where the defense did not present convincing evidence that it was physically
impossible for accused-appellant to have been present at the crime scene at the
34
time of the commission of the crime. We quote with approval the disquisition of
the appellate court, to wit:
The defenses of denial and alibi are the weakest of defenses in criminal cases
and the same are self-serving negative evidence. They cannot prevail over the
spontaneous, positive, and credible testimony of the prosecution witness who
pointed to and identified the accused-appellant as one of the malefactors.
Moreover, for the defense of alibi to prosper, the requirements of time and place
must be strictly met. It is not enough to prove that the accused was somewhere
else when the crime was committed, but he must also demonstrate by clear and
convincing evidence that it was physically impossible for him to have been at the
scene of the crime at the time the same was committed. Accused-appellant's
feeble. denial and alibi crumble in the face of Juliet's affirmative testimony.
In accused-appellant's attempt to support his mistaken identity claim, the
defense presented the testimony of Chiong, accused-appellant's long time
friend. The RTC and CA correctly did not give credence to the testimony of
Chiong. When a defense witness is a close friend, courts should view such
35
testimony with skepticism, more so when the same is uncorroborated, as in the
case at bar.
Robbery with Homicide
The trial and appellate courts committed no error in convicting the accused-
appellant of Robbery with Homicide.1âwphi1Section 9, Article 294, paragraph
(1) of the Revised Penal Code, as amended by R.A. No. 7659, reads:
" Art. 294 - Any person guilty of robbery with the use of violence against or
intimidation of any person shall suffer:
1. The penalty of reclusion perpetua to death, when by reason or on occasion of
the robbery, the crime of homicide shall have been committed, or when the
robbery shall have been accompanied by rape or intentional mutilation or
arson."
To warrant a conviction for Robbery with Homicide, the prosecution must prove
the confluence of the following elements: (l) the taking of personal property with
the use of violence or intimidation against a person; (2) the property taken thus
belongs to another; (3) the taking is characterized by intent to gain or animus
lucrandi; and (4) on occasion of the robbery or by reason thereof, the crime of
36
homicide, which is used in a generic sense, was committed. In proving
Robbery with Homicide, it is necessary that the robbery itself be established
37
conclusively as any other essential element of the crime. In the instant case,
the elaborate testimony of Juliet and her positive identification of accused-
appellant as one of the assailants support the charge of the component offense
38
of Robbery. In previous cases, We had occasion to explain that intent to rob is
an internal act but it may be inferred from proof of violent unlawful taking of
personal property and when the fact of asportation has been established beyond
reasonable doubt, conviction is justified even if the subject property is not
presented in court. "After all, the property stolen may have already been
39
abandoned, thrown away or destroyed by the robber."
As to the allegation of the presence of the aggravating circumstance of abuse of
superior strength, we quote the ruling of the CA with approval, to wit:

"The trial court correctly appreciated the aggravating circumstance of abuse of
superior strength. The aggravating circumstance of abuse of superior strength is
considered whenever there is notorious inequality of forces between the victim
and the aggressor that is plainly and obviously advantageous to the aggressor
and purposely selected or taken advantage of to facilitate the commission of the
crime. It is taken into account whenever the aggressor purposely used
excessive force that is out of proportion to the means of defense available to the
person attacked. The felonious acts of accused-appellant and the other
malefactors of robbing and killing the victim were clearly executed with abuse of
superior strength. Their combined force and physical strength overwhelmed the
victim and left him defenseless. Accused-appellant struck with his knife the
unarmed victim. The multiple stab wounds sustained by the victim indisputably
show that the group of accused-appellant took advantage of their superior
40
strength to perpetrate the crime."
41
In numerous cases, We held that when the killing is committed by reason of or
on the occasion of the robbery, the qualifying circumstances attendant to the
killing would be considered as generic aggravating circumstances. Thus, in the
case at bar, the circumstance of abuse of superior strength serves to aggravate
the crime.
Penalty and Damages
Persons found guilty of committing the special complex crime of Robbery with
42
Homicide are punishable with reclusion perpetua to death. Considering that
the generic aggravating circumstance of abuse of superior strength was alleged
in the information and proven during the trial, accused-appellant shall suffer the
penalty of death pursuant to Article 63 of the Revised Penal Code, as
43 44
amended. Nonetheless, in light of R.A. No. 9346, the penalty shall be
reduced from death to reclusion perpetua without eligibility for parole.
Applying the adjusted amounts for damages laid down in the recently decided
45
case of People v. Jugueta, We modify the damages awarded by the trial and
appellate courts. Accused-appellant shall be liable to the heirs of the deceased
for civil indemnity in the amount of P100,000.00, as the imposable penalty would
have been death, were it not for the enactment of R.A. No. 9346. Accused-
appellant shall also be liable for moral damages in the amount of Pl00,000.00
and exemplary damages in the amount of P100,000.00.
In awarding actual damages amounting to Pl72,000.00, the RTC erroneously
46
included amounts stated in handwritten lists of expenses, which were self-
47
serving. A receipt dated months after the death of the victim was also
erroneously included in the computation of actual damages awarded by the trial
court. Time and again, this Court has held that only expenses supported by
receipts and which appear to have been actually expended in connection with
48
the death of the victims may be allowed. Only substantiated expenses and
those which appear to have been genuinely incurred in connection with the
49
death, wake or burial of the victim will be recognized by the courts. This Court
has repeatedly held that self-serving statements of account are not sufficient
basis for an award of actual damages. To justify an award of actual damages, it
is necessary for the claimant to produce competent proof and the best evidence
obtainable. Verily, "a list of expenses cannot replace receipts when the latter
50
should have been issued as a matter of course in business transactions." The
CA, on the other hand, erroneously excluded in the computation for actual
51
damages the amount stated in an unofficial receipt issued by George & Elvie
Store. The said tape receipt issued by the store, though unofficial because of the
absence of a TIN number, contained material particulars such as the date of the
transaction, the place of transaction, the items purchased, and the cost of items
purchased. To the mind of this Court, the same constitutes competent proof.
The heirs of the victims, as claimants, should not be prejudiced by the store's
failure to issue official receipts.
All in all, an examination of the records reveals that the following competent
proofs of expenses incurred in connection with the death, wake and burial of the
victim were submitted:
Official Receipt dated March 30, 2003, issued by Kairiz Funeral P45,000.00
Service (Exhibit 1)
Official Receipt dated April 01, 2003, issued by Our Lady of Light P27,000.00
Parish (Exhibit J)
Official Receipt dated April 06, 2003, issued by Pilipinas Makro, P2,842.05
Inc. (Exhibit K)
Official Receipt dated April 9, 2003, issued by Ever Shoppers Inc. P21,029.25
52
Supermarket
53
Receipt dated March 28, 2003, issued by George & Elvie Store P89.00
TOTAL P75,
960.30
Based on the foregoing, accused-appellant shall be liable to the heirs of the
victim for the amount of P75,960.30 as actual damages.
Lastly, the heirs of the victim are likewise entitled to indemnity for loss of earning
54
capacity amounting to P2,5l9,405.86. Such indemnification partakes of the
nature of actual damages and thus, must be duly proven by competent
55
proof. Estella, wife of the victim, testified on the income of her husband and
presented documentary evidence to show that her husband was gainfully
56
employed at the time of his death. A Certification dated July 03, 2006 issued
by Mitsubishi Motors Philippines Corporation was presented to prove that the
victim was employed in the said company as a regular sealing man with a salary
 57
rate of P80.33/hour. Pursuant to jurisprudence, such certification shall be
considered as sufficient basis for a fair and reasonable computation of the
victim's loss of earning capacity. Loss of earning capacity is computed as
follows:

Net Earning Capacity= Life expectancy x [Gross Annual Income – Living

Expenses]

= [2/3 (80 - age at death)] x [GAI - 50% of GAI]

58 59
= [2/3 (80- 31 )] x [ Pl54, 233.60 -P77,116.80]

= [2/3 (49)] x P77,116.80

= 32.67xP77,116.80

= P2,519,405.86

WHEREFORE, the decision of the Court of Appeals in CA-GR. CR.-H.C. No.

05040 dated July 26, 2012 is hereby AFFIRMED WITH
MODIFICATION. Accused-appellant Ardo Bacero y Casabon is
found GUILTY beyond reasonable doubt of Robbery with Homicide and
sentenced to suffer the penalty of Reclusion Perpetua without eligibility for
parole and ordered to pay the heirs of Virgilio M. San Juan, Jr. the amounts of
Pl00,000.00 as civil indemnity, P100,000.00 as moral damages, Pl00,000.00 as
exemplary damages, P75,960.30 as actual damages, and P2,519,405.86 as
indemnity for loss of earning capacity. All monetary awards for damages shall
earn interest at the legal rate of 6% per annum from the date of finality of this
judgment until fully paid.

SO ORDERED.
G.R. No. 198022 April 7, 2014
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,
vs.
SONNY GATARIN y CABALLERO @ "JAY-R" and EDUARDO
QUISAYAS, Accused,
EDUARDO QUISAYAS, Accused-Appellant.
DECISION
PERALTA, J.:
1 On November 3, 2004, at 8 o’clock in the evening, Umali was riding a bicycle on
Assailed in this appeal is the Court of Appeals (CA) Decision dated February
23, 2011 in CA-G.R. CR H.C. No. 03593 affirming the Regional Trial Court
2 3
(RTC) Decision dated June 20, 2008 in Criminal Case No. 13838 convicting
appellant Eduardo Quisayas of Robbery with Homicide committed against the
victim Januario Castillo y Masangcay (Januario).
The facts of the case follow:
Appellant and accused Sonny Gatarin y Caballero were charged in an
4
Information with Robbery with Homicide committed as follows:
That on or about the 3rd day of November, 2004, at about 8:00 o’clock (sic) in
the evening, at Barangay Poblacion, Municipality of Mabini, Province of
Batangas, Philippines and within the jurisdiction of this Honorable Court, the
above-named accused, armed with a bladed weapon, conspiring and
confederating together, acting in common accord and mutually helping each
other, with intent to gain, without the knowledge and consent of the owner
thereof and with violence against or intimidation of person, did then and there
willfully, unlawfully and feloniously take, rob, and carry away cash money
amounting to Twenty Thousand Pesos (₱20,000.00), Philippine Currency,
belonging to Januario Castillo y Masangcay alias "Ka Maning," to the damage
and prejudice of the latter in the aforementioned amount and that on the
occasion and by reason of said robbery, the said accused with intent to kill and
taking advantage of their superior strength, did then and there willfully,
unlawfully and feloniously attack, assault and stab with the said weapon
Januario Castillo y Masangcay alias "Ka Maning," thereby inflicting upon the
latter the stab wounds to [the] anterior chest and right shoulder and right axilla,
which directly caused his death.
5 In his defense, appellant denied the accusation against him. He claimed that he
Contrary to law.
Appellant was arrested, while his co-accused remained at-large. When
arraigned, he pleaded "Not Guilty." Trial on the merits thereafter ensued.
The prosecution presented the testimonies of the following witnesses: (1) Maria
Castillo, the victim’s wife; (2) Howel Umali (Umali), who allegedly saw how the
accused mauled the victim; (3) SPO3 Gregorio G. Mendoza (SPO3 Mendoza) of
the Mabini Police Station, who saw the victim lying on the floor and the accused
running away from the crime scene, and testified on the dying declaration of
Januario; (4) Dr. Catalino Ike A. Rasa Jr. (Dr. Rasa), who attended to the victim
when he was brought to the hospital; and (5) PO1 Rogelio Dizon Coronel (PO1
Coronel), who saw the accused running fast near the crime scene and who,
likewise, testified on Januario’s ante mortem statement.
From the testimonies of the above-named witnesses, the prosecution
established the following facts:
his way home when he saw Januario being mauled by two persons opposite
Dom’s Studio in Poblacion, Mabini, Batangas. Upon seeing the incident, he
stayed in front of the church until such time that the accused ran away and were
chased by policemen who alighted from the police patrol vehicle.
6
On the same night, SPO3 Mendoza and PO1 Coronel were on board their patrol
vehicle performing their routine patrol duty when they met two men, later
identified as the accused, who were running at a fast speed. When asked why
they were running, the accused did not answer prompting the policemen to
chase them. The policemen, however, were unsuccessful in catching them and
when it became evident that they could no longer find them, they continued
patrolling the area. There they saw Januario lying on the street in front of Dom’s
studio. As he was severely injured, the policemen immediately boarded Januario
to the patrol vehicle and brought him to the Zigzag Hospital. While inside the
vehicle, SPO3 Mendoza asked Januario who hurt him. He answered that it was
"Jay-R and his uncle" who stabbed him. The uncle turned out to be the appellant
7
herein, while Jay-R is his co-accused who remains at-large.
At the Zigzag Hospital, Januario was attended to by Dr. Rasa who found him in
critical condition. Three fatal wounds caused by a bladed weapon were found in
8
Januario’s body which eventually caused his death.
Maria Castillo, for her part, testified on how she learned of what happened to her
husband, the victim herein, the amount allegedly stolen from her husband, as
well as on the expenses and loss incurred by reason of Januario’s death. She,
further, quantified the sorrow and anxiety the family suffered by reason of such
death.
9
is from the Province of Samar but has been residing in Cupang, Muntinlupa City
since 1987. He denied knowing, much more residing in, Mabini, Batangas, as he
only heard about the province from his employer who happens to be a resident
therein. He claimed that he did not know Januario and that he was, in fact,
working in Muntinlupa City on the date and time the crime was allegedly
10
committed.
The prosecution’s rebuttal witness Mr. Bienvenido Caponpon, however, belied
appellant’s claim and insisted that appellant was renting a house in Mabini,
11
Batangas and that he was seen there until the day the crime was committed.
On June 20, 2008, the RTC rendered a Decision against the appellant, the
dispositive portion of which reads:
WHEREFORE, the People having proven the guilt of accused Eduardo
Quisayas beyond reasonable doubt, he is hereby declared "GUILTY" of the
offense as charged. Accordingly, he is hereby sentenced to a prison term of
Reclusion Perpetua.
Further, he is hereby ordered to pay herein offended party of the following:
(a) civil indemnity in the amount of Php50,000.00
(b) actual damages in the amount of Php20,000.00, plus Php35,310.00
(funeral and hospital expenses), and
(c) moral damages in the amount of Php100,000.00
12
SO ORDERED.
The trial court gave credence to the testimony of Maria Castillo not only as to the
13
fact of taking money from Januario but also the amount taken. The fact of
death was, likewise, found by the court to have been adequately proven by the
14
testimony of Dr. Rasa. Though there was no evidence whether the unlawful
taking preceded the killing of Januario, the court held that there was direct and
15
intimate connection between the two acts.
As to the identity of the perpetrators, the court considered the victim’s response
to SPO3 Mendoza’s question as to who committed the crime against him as part
16
of the res gestae, which is an exception to the hearsay rule. As to appellant’s
defense of alibi, the court gave more weight to the prosecution’s rebuttal
17
evidence that indeed the former was an actual resident of Mabini, Batangas.
On appeal, the CA affirmed the RTC decision. Contrary, however, to the RTC’s
conclusion, the appellate court considered Januario’s statement to SPO3
Mendoza, that the accused were the ones who stabbed him and took his wallet,
18
not only as part of res gestae but also as a dying declaration.
Hence, the appeal before the Court.
We find appellant guilty beyond reasonable doubt not of robbery with homicide
but of murder.
The trial court’s factual findings, including its assessment of the credibility of the
witnesses, the probative weight of their testimonies, and the conclusions drawn
from the factual findings are accorded great respect and even conclusive effect.
We, nevertheless, fully scrutinize the records, since the penalty of reclusion
perpetua that the CA imposed on appellant demands no less than this kind of
19
careful and deliberate consideration.
To sustain a conviction for robbery with homicide, the prosecution must prove
the following elements: (1) the taking of personal property belonging to another;
(2) with intent to gain; (3) with the use of violence or intimidation against a
person; and (4) on the occasion or by reason of the robbery, the crime of
20
homicide, as used in the generic sense, was committed.
First, in order to sustain a conviction for the crime of robbery with homicide, it is
necessary that the robbery itself be proven as conclusively as any other
21
essential element of the crime. In order for the crime of robbery with homicide
to exist, it must be established that a robbery has actually taken place and that,
22
as a consequence or on the occasion of robbery, a homicide be committed.
For there to be robbery, there must be taking of personal property belonging to
another, with intent to gain, by means of violence against or intimidation of any
23
person or by using force upon on things. Both the RTC and the CA concluded
that robbery was committed based on the testimonies of Maria Castillo, SPO3
Mendoza, and PO1 Coronel. A closer look at the testimonies of these witnesses,
however, failed to convince us that indeed robbery took place.
Maria Castillo’s testimony was offered by the prosecution to prove that her
husband, the victim herein, was a victim of robbery with homicide and that he is
a businessman, and that she suffered damages by reason of such death. The
pertinent portion of her direct testimony is quoted below for a closer scrutiny:
ATTY. MASANGYA:
Q The victim in this case Januario Castillo, how are you related to him?
WITNESS:
A My husband, sir.
Q On November 3, 2004, do you remember of any unusual incident that has We submit.
occurred?
COURT:
A Yes, sir.
You ask her if she is aware who the perpetrators are.
Q And what is that event?
ATTY. MASANGYA:
A At around 8:30 o’clock in the evening of November 3, 2004 while I was at
home, policemen arrived and informed me that my husband was wounded, sir. Q Madam Witness, were you informed who are the perpetrators of the crime on
your husband?
Q Did these police officers inform you the location (sic) of where your husband
was located? WITNESS:

A According to the policemen, my husband was at Zigzag Hospital, sir.
Q Did you go to Zigzag Hospital, Madam Witness?
A Yes, sir.
Q What happened, Madam Witness, when you arrived at the hospital?
A Not yet, sir. It was not told to me by the policemen because the policemen
were in a hurry.
ATTY. MASANGYA:
Q After the policemen went to your house, was there [any] person who informed
you who were the perpetrators of the crime?

A I was informed by the nurse there that my husband was already dead. A Yes, sir. My niece.

ATTY. MASANGYA: Q And who is that niece of yours, Madam Witness?

Q Were you informed of the cause of the death of your husband? A Josephine Borbon, sir.

WITNESS: Q Did Miss Borbon tell you about the identity of the perpetrators of the crime,
Madam Witness?
A According to them my husband was wounded, many wounds and he was
robbed, sir. A Yes, sir.

Q Madam Witness, were you able to know who are the persons responsible for Q And who are the persons did Miss Borbon mention?
the death of your husband?
A My former helper Sonny Gatarin and his uncle Eduardo Quisayas, sir.
ATTY. EBORA:
Q You were told that your husband was robbed, how much was taken from your
We will object. That will be misleading. husband, Madam Witness?

COURT: A ₱20,000.00.

If she is aware. Q And can you tell, Madam Witness, why is your husband carrying that amount
of money at the time of his death?
ATTY. EBORA:
A Yes, sir. Q In a month or year?

WITNESS: A ₱40,000.00 a month, sir.

A Those were the earnings for that day for he delivered merchandise and Q How do you feel or confront the situation that your husband is already dead?
groceries, sir.
A We felt deep sorrow together with my three (3) children, sir. (Witness is crying)
ATTY. MASANGYA:
24
xxxx
Q Do you know, Madam Witness, if your husband is engaged in any business?
From the above testimony, it can be inferred that Maria Castillo obviously was
A Yes, sir. not at the scene of the crime on that fateful night as she was only informed that
the incident took place and that Januario was brought to the Zigzag Hospital. It,
Q And what is your proof in saying your husband is engaged in business? likewise, appears that she had no personal knowledge that Januario was
robbed. While she claimed that ₱20,000.00 was illegally taken from him, no
evidence was presented to show that Januario indeed had that amount at that
A Our business was we delivered bottled goods and groceries, sir.
time and that the same was in his possession. As Maria Castillo claimed that the
said amount was allegedly received from their clients in their grocery business,
Q The business wherein your husband is engaged has an existing license with said fact could have been proven by receipts or testimonies of said clients. The
the appropriate local government? prosecution’s failure to present such evidence creates doubt as to the existence
of the money.
A Yes, sir.
The trial and appellate courts likewise relied on the testimony of SPO3 Mendoza
Q If a copy will be shown to you, will you be able to identify the same? and PO1 Coronel on the statement of Januario after the commission of the
crime. While both policemen testified as to the dying declaration of Januario
A Yes, sir. pertaining to the cause and circumstances surrounding his death, only PO1
Coronel testified during his direct examination that when asked who stabbed
Q I am showing to you [a] certified copy of [the] Mayor’s permit previously him, Januario replied that it was "Jay-Ar and his uncle who stabbed him and
25
marked as Exhibit "H"? took his wallet." In response to the Presiding Judge’s clarificatory question,
however, PO1 Coronel admitted that when he asked Januario who stabbed him,
he replied that it was Jay-Ar and his uncle. After which, no further question was
A This is it, sir. 26
asked. On the other hand, nowhere in SPO3 Mendoza’s testimony did he talk
about the alleged taking of wallet. The pertinent portions of their testimonies
Q If you know, Madam Witness, how much is your husband earning in his sari- read:
sari or grocery business?
Direct Examination of PO1 Coronel:
WITNESS:
xxxx
A Yes, sir.
Q: What did you do next after boarding him inside your vehicle?
ATTY. MASANGYA:
A We brought him at the Zigzag Hospital and we asked him who stabbed him.
Q How much is he earning at the time?
Q What was his reply Mr. Witness?
A He earns ₱40,000.00.
A He told us that Jay-ar and his uncle stabbed him and took his wallet. A We lifted him and boarded him in our vehicle then we brought him to the
hospital.
27
xxxx
Q While you were travelling, were you able to talk to the victim Januario
PO1 Coronel’s Answers to the questions propounded by the Presiding Judge: Castillo?

THE COURT: A Yes, sir.

Alright, the Court will ask. Q What was your conversation all about?

Q When did you talk with the victim? A I asked Ka Maning Castillo as to who stabbed him and he answered Jay-R
and his uncle.
A When we were inside the patrol car, your Honor. 29
xxxx
Q What exactly did you ask from the victim?
It is, therefore, clear from the foregoing that the evidence presented to prove the
robbery aspect of the special complex crime of robbery with homicide, does not
A I asked him who stabbed him, your Honor.
show that robbery actually took place. The prosecution did not convincingly
establish the corpus delicti of the crime of robbery.
Q Did you tell the victim his condition?
Corpus delicti has been defined as the body or substance of the crime and, in its
A No, your Honor. primary sense, refers to the fact that a crime has actually been committed. As
applied to a particular offense, it means the actual commission by someone of
30
Q You just asked the victim who stabbed him? the particular crime charged. In this case, the element of taking, as well as the
existence of the money alleged to have been lost and stolen by appellant, was
31
A Yes, your Honor. not adequately established. We find no sufficient evidence to show either the
amount of money stolen, or if any amount was in fact stolen from Januario. Even
Q What was the answer of the victim? if we consider Januario’s dying declaration, the same pertains only to the
stabbing incident and not to the alleged robbery.
A That he was stabbed by Jay-ar and his uncle, your Honor.
Moreover, assuming that robbery was indeed committed, the prosecution must
establish with certitude that the killing was a mere incident to the robbery, the
Q And no other question did you ask him?
latter being the perpetrator’s main purpose and objective. It is not enough to
suppose that the purpose of the author of the homicide was to rob; a mere
A None, your Honor. 32
presumption of such fact is not sufficient. Stated in a different manner, a
conviction requires certitude that the robbery is the main purpose, and objective
28
xxxx of the malefactor and the killing is merely incidental to the robbery. The intent to
rob must precede the taking of human life but the killing may occur before,
33
Direct Testimony of SPO3 Mendoza: during or after the robbery. What is crucial for a conviction for the crime of
robbery with homicide is for the prosecution to firmly establish the offender’s
xxxx intent to take personal property before the killing, regardless of the time when
34
the homicide is actually carried out. In this case, there was no showing of the
appellant’s intention, determined by their acts prior to, contemporaneous with,
Q And when you saw Januario Castillo lying on the street, what did you do? 35
and subsequent to the commission of the crime, to commit robbery. No shred
of evidence is on record that could support the conclusion that appellant’s
primary motive was to rob Januario and that he was able to accomplish
 36
it. Mere speculation and probabilities cannot substitute for proof required in
37
establishing the guilt of an accused beyond reasonable doubt. Where the
evidence does not conclusively prove the robbery, the killing of Januario would
be classified either as a simple homicide or murder, depending upon the
absence or presence of any qualifying circumstance, and not the crime of
38
robbery with homicide. To establish the fact that appellant and his co-accused
killed the victim by stabbing him with a bladed weapon, the prosecution
presented Umali as an eyewitness to the mauling incident. It was this same
witness who identified the perpetrators. The trial and appellate courts also relied
on the statement of Januario as to the circumstances of his death, testified to by
PO1 Coronel and SPO3 Mendoza as dying declaration and as part of res
gestae.
A dying declaration, although generally inadmissible as evidence due to its
hearsay character, may nonetheless be admitted when the following requisites
concur, namely: (a) the declaration concerns the cause and the surrounding
circumstances of the declarant's death; (b) it is made when death appears to be
imminent and the declarant is under a consciousness of impending death; (c)
the declarant would have been competent to testify had he or she survived; and
(d) the dying declaration is offered in a case in which the subject of inquiry
39
involves the declarant's death.
In the case at bar, it appears that not all the requisites of a dying declaration are
present. From the records, no questions relative to the second requisite was
propounded to Januario. It does not appear that the declarant was under the
consciousness of his impending death when he made the statements. The rule
is that, in order to make a dying declaration admissible, a fixed belief in
inevitable and imminent death must be entered by the declarant. It is the belief
in impending death and not the rapid succession of death in point of fact that
renders a dying declaration admissible. The test is whether the declarant has
abandoned all hopes of survival and looked on death as certainly
40
impending. Thus, the utterances made by Januario could not be considered as
a dying declaration.
However, even if Januario’s utterances could not be appreciated as a dying
declaration, his statements may still be appreciated as part of the res gestae.
Res gestae refers to the circumstances, facts, and declarations that grow out of
the main fact and serve to illustrate its character and are so spontaneous and
contemporaneous with the main fact as to exclude the idea of deliberation and
fabrication. The test of admissibility of evidence as a part of the res gestae is,
therefore, whether the act, declaration, or exclamation, is so interwoven or
connected with the principal fact or event that it characterizes as to be regarded
as a part of the transaction itself, and also whether it clearly negates any
41
premeditation or purpose to manufacture testimony.
The requisites for admissibility of a declaration as part of the res gestae concur
herein. When Januario gave the identity of the assailants to SPO3 Mendoza, he
was referring to a startling occurrence which is the stabbing by appellant and his
co-accused. At that time, Januario and the witness were in the vehicle that
would bring him to the hospital, and thus, had no time to contrive his
identification of the assailant. His utterance about appellant and his co-accused
having stabbed him, in answer to the question of SPO3 Mendoza, was made in
spontaneity and only in reaction to the startling occurrence. Definitely, the
statement is relevant because it identified the accused as the authors of the
crime. Verily, the killing of Januario, perpetrated by appellant, is adequately
proven by the prosecution.
From the evidence presented, we find that as alleged in the information, abuse
of superior strength attended the commission of the crime, and thus, qualifies
the offense to murder. Abuse of superior strength is considered whenever there
is a notorious inequality of forces between the victim and the aggressor,
assessing a superiority of strength notoriously advantageous for the aggressor
42
which the latter selected or took advantage of in the commission of the crime.
It is clear from the records of the case that Januario was then fifty-four (54)
years old. Appellant, on the other hand, was then forty (40) years old. Appellant
committed the crime with his co-accused, his nephew. Clearly, assailants are
younger than the victim. These two accused were seen by Umali as the persons
who mauled Januario. Moreover, assailants were armed with a bladed weapon,
while Januario was unarmed. This same bladed weapon was used in repeatedly
stabbing Januario, who no longer showed any act of defense. Dr. Rasa, the
medical doctor who attended to Januario when he was brought to the hospital,
also testified as to the nature and extent of the injury sustained by Januario. He
clearly stated that Januario sustained three fatal injuries which caused his death.
The pertinent portion of Dr. Rasa’s testimony reads:
ATTY. MASANGYA:
Q How many injuries were sustained by the victim, Mr. Witness?
A Three.
Q In what parts of the body was the victim injured?
A The victim sustained three injuries: one on the left side of the parasternal
border the heart (sic) and it penetrated, and then the second one was on the
right side of the chest near the shoulder and the third one was under the armpit
also to the chest.
ATTY. MASANGYA:
Q Which of those injuries caused the death of the victim?
A All of them are fatal, because the one over the heart penetrated the heart and
the aorta. The one in the anterior chest near the right shoulder hit the blood
vessels of the armpit and the wound under the armpit apparently hit the lungs.
43
xxxx
This same physician issued the Medical Certificate explaining the location of the
stab wounds as well as the cause of death of Januario, to wit:
Location of Stab Wounds:
1. Stab wound penetrating 2nd inter-costal space left para-sternal
border, 6" deep penetrating the heart chambers and aorta
2. Stab wound over the right anterior deltoid muscle, penetrating
3" into the right axilla space; injuring the axilla blood vessels.
3. Stab wound over the right axilla, penetrating to the right chest cavity.
CAUSES OF DEATH
Immediate Cause: Hypovolemic Shock
Antecedent Cause: Multiple stab wounds to the anterior chest, right
axilla, and right axilla penetrating the chest cavity.
44
xxxx
From the testimony of the eyewitness and corroborated by the medical
certificate of Dr. Rasa, it can be inferred that indeed the qualifying circumstance
of abuse of superior strength attended the commission of the crime. To be sure,
with two assailants younger than the victim, armed with a bladed weapon and
inflicting multiple mortal wounds on the victim, there is definitely abuse of
superior strength deliberately taken advantage of by appellant and his co-
accused in order to consummate the offense.
Now on the penalty. Article 248 of the Revised Penal Code provides:
ART. 248. Murder. – Any person who, not falling within the provisions of article
246 shall kill another, shall be guilty of murder and shall be punished by
reclusion perpetua to death if committed with any of the following attendant
circumstances:
1. With treachery, taking advantage of superior strength, with the aid of armed
men, or employing means to weaken the defense or of means or persons to
insure or afford impunity.
45
xxxx
There being neither mitigating nor aggravating circumstances, appellant shall be
meted the penalty of reclusion perpetua.
Finally, the award of damages. In murder, the grant of civil indemnity which has
been fixed by jurisprudence at ₱50,000.00 requires no proof other than the fact
of death as a result of the crime and proof of the accused’s responsibility
therefor. Moral damages, on the other hand, which in this case is also
46
₱50,000.00 are awarded in view of the violent death of the victim. Moreover,
exemplary damages in the amount of ₱30,000.00 should likewise be given,
considering that the offense was attended by an aggravating circumstance
whether ordinary, or qualifying as in this case. As duly proven by Maria Castillo,
actual damages representing the hospital and funeral expenses, as evidenced
by receipts in the amount of ₱35,300.00, be awarded. Finally, in addition and in
conformity with current policy, we also impose on all the monetary awards for
damages an interest at the legal rate of six percent (6%) from date of finality of
47
this decision until full payment.
WHEREFORE, premises considered, we MODIFY the Court of Appeals
Decision dated February 23, 2011 in CA-G.R. CR H.C. No. 03593, affirming the
Regional Trial Court Decision dated June 20, 2008 in Criminal Case No. 13838,
convicting appellant Eduardo Quisayas of Robbery with Homicide. We find
appellant guilty beyond reasonable doubt of the crime of MURDER and is
sentenced to suffer the penalty of reclusion perpetua.
We, likewise, ORDER appellant TO PAY the heirs of the victim Januario Castillo
y Masangcay the following: (1) ₱35,300.00 actual damages; (2) ₱50,000.00 civil
indemnity; (3) ₱50,000.00 moral damages; (4) ₱30,000.00 exemplary damages;
plus (5) six percent (6%) interest on all damages awarded from the date of the
finality of this decision until full payment.
SO ORDERED.
G.R. No. 196735 May 5, 2014
PEOPLE OF THE PHILIPPINES, Plaintiff-appellee,
vs.
DANILO FELICIANO, JR., JULIUS VICTOR MEDALLA, CHRISTOPHER
SOLIVA, WARREN L. ZINGAPAN, and ROBERT MICHAEL BELTRAN
ALVIR, Accused-appellants.
DECISION
LEONEN, J.:
It is in the hallowed grounds of a university where students, faculty, and
research personnel should feel safest. After all, this is where ideas that could
probably solve the sordid realities in this world are peacefully nurtured and
debated. Universities produce hope. They incubate all our youthful dreams.
Yet, there are elements within this academic milieu that trade misplaced
concepts of perverse brotherhood for these hopes. Fraternity rumbles exist
because of past impunity. This has resulted in a senseless death whose justice
is now the subject matter of this case. It is rare that these cases are prosecuted.
It is even more extraordinary that there are credible witnesses who present
themselves courageously before an able and experienced trial court judge.
This culture of impunity must stop. There is no space in this society for
hooliganism disguised as fraternity rumbles. The perpetrators must stand and
suffer the legal consequences of their actions. They must do so for there is an
individual who now lies dead, robbed of his dreams and the dreams of his
family. Excruciating grief for them will never be enough.
It is undisputed that on December 8, 1994, at around 12:30 to 1:00 in the
afternoon, seven (7) members of the Sigma Rho fraternity were eating lunch at
the Beach House Canteen, near the Main Library of the University of the
Philippines, Diliman, when they were attacked by several masked men carrying
baseball bats and lead pipes. Some of them sustained injuries that required
hospitalization. One of them, Dennis Venturina, died from his injuries.
1
An information for murder, docketed as Criminal Case No. Q95-6113 3, was
filed against several members of the Scintilla Juris fraternity, namely, Danilo
Feliciano, Jr., Julius Victor L. Medalla, Warren L. Zingapan, Robert Michael
Beltran Alvir, Christopher L. Soliva, Reynaldo G. Ablanida, Carlo Jolette Fajardo,
George Morano, Raymund E. Narag, Gilbert Merle Magpantay, Benedict
Guerrero, and Rodolfo Penalosa, Jr. with the Regional Trial Court of Quezon
City, Branch 219. The information reads:
That on or about the 8th day of December 1994, in Quezon City, Philippines, the
above-named accused, wearing masks and/or other forms of disguise,
conspiring, confederating with other persons whose true names, identities and
whereabouts have not as yet been ascertained, and mutually helping one
another, with intent to kill, qualified with treachery, and with evident
premeditation, taking advantage of superior strength, armed with baseball bats,
lead pipes, and cutters, did then and there willfully, unlawfully and feloniously
attack, assault and employ personal violence upon the person of DENNIS F.
VENTURINA, by then and there hitting him on the head and clubbing him on
different parts of his body thereby inflicting upon him serious and mortal injuries
which were the direct and immediate cause of his death, to the damage and
prejudice of the heirs of said DENNIS F. VENTURINA. (Emphasis supplied)
Separate informations were also filed against them for the attempted murder of
2
Sigma Rho fraternity members Cesar Mangrobang, Jr., Cristobal Gaston,
3 4
Jr., and Leandro Lachica, and the frustrated murder of Sigma Rho fraternity
5 6
members Mervin Natalicio and Amel Fortes. Only 11 of the accused stood trial
since one of the accused, Benedict Guerrero, remained at large.
A trial on the merits ensued.
The facts, according to the prosecution, are as follows:
Leandro Lachica, Amel Fortes, Derinis Venturina, Mervin Natalicio, Cristobal
7
Gaston, Jr., Felix Tumaneng, and Cesar Magrobang, Jr. are all members of the
Sigma Rho Fraternity. On December 8, 1994, at around 12:30 to 1 :00 p.m.,
they were having lunch at Beach House Canteen, located at the back of the
Main Library of the University of the Philippines, Diliman, Quezon
8 9
City. Suddenly, Dennis Venturina shouted, "Brads, brods!"
According to Leandro Lachica, Grand Archon of Sigma Rho Fraternity, he
looked around when Venturina shouted, and he saw about ten (10) men
10
charging toward them. The men were armed with baseball bats and lead
11
pipes, and their heads were covered with either handkerchiefs or shirts. Within
a few seconds, five (5) of the men started attacking him, hitting him with their
12
lead pipes. During the attack, he recognized one of the attackers as Robert
13
Michael Beltran Alvir because his mask fell off.
Lachica tried to parry the blows of.his attackers, suffering scratches and
14
contusions.
15
He was, however, able to run to the nearby College of Education. Just before
reaching it, he looked back and saw Warren Zingapan and Julius Victor L.
16
Medalla holding lead pipes and standing where the commotion was. Both of
17
them did not have their masks on. He was familiar with Alvir, Zingapan, and
Medalla because he often saw them in the College of Social Sciences and
 18
Philosophy (CSSP) and Zingapan used to be his friend. The attack lasted
19
about thirty (30) to forty-five (45) seconds.
According to Mervin Natalicio, the Vice Grand Archon of Sigma Rho, he looked
20
to his left when Venturina shouted. He saw about fifteen (15) to twenty (20)
21
men, most of who were wearing masks, running toward them. He was
22
stunned, and he started running. He stumbled over the protruding roots of a
23
tree. He got up, but the attackers came after him and beat him up with lead
24
pipes and baseball bats until he fell down. While he was parrying the blows, he
recognized two (2) of the attackers as Warren Zingapan and Christopher L.
25
Soliva since they were not wearing any masks. After about thirty (30) seconds,
26
they stopped hitting him.
He was lying on his back and when he looked up, he saw another group of four
27
(4) to five (5) men coming toward him, led by Benedict Guerrero. This group
28
also beat him up. He did not move until another group of masked men beat
29
him up for about five (5) to eight (8) seconds.
30
When the attacks ceased, he was found lying on the ground. Several
bystanders brought him to the U.P. Infirmary where he stayed for more than a
31
week for the treatment of his wounds and fractures.
According to Cesar Mangrobang, Jr., member of Sigma Rho, he also looked
back when Venturina shouted and saw a group of men with baseball bats and
32
lead pipes. Some of them wore pieces of cloth around their heads. He ran
when they attacked, but two (2) men, whose faces were covered with pieces of
33
cloth, blocked his way and hit him with lead pipes. While running and parrying
the blows, he recognized them as Gilbert Merle Magpantay and Carlo Jolette
34
Fajardo because their masks fell off. He successfully evaded his attackers and
35
ran to the Main Library. He then decided that he needed to help his fraternity
36
brothers and turned back toward Beach House. There, he saw Venturina lying
37
on the ground. Danilo Feliciano, Jr. was beating Venturina up with a lead pipe
38
while Raymund E. Narag was aiming to hit Venturina. When they saw him,
39
they went toward his direction. They were about to hit him when somebody
40
shouted that policemen were coming. Feliciano and Narag then ran away.
Cesar Mangrobang, Jr. then saw Amel Fortes. Fortes accompanied him to his
41
car so they could bring Venturina to the U.P. Infirmary. When they brought the
car over, other people, presumably bystanders, were already loading Venturina
42
into another vehicle. They followed that vehicle to the U.P. Infirmary where
43 44
they saw Natalicio. He stayed at the infirmary until the following morning.
According to Cristobal Gaston, Jr., member of Sigma Rho, he immediately stood
45
up when he heard someone shout, "Brods!" He saw a group of men charging
46
toward them carrying lead pipes and baseball bats. Most of them had pieces of
47
cloth covering their faces. He was about to run when two (2) of the attackers
48
approached him. One struck him with a heavy pipe while the other stabbed
49
him with a bladed instrument. He was able to parry most of the blows from the
50
lead pipe, but he sustained stab wounds on the chest and on his left forearm.
51
He was able to run away. When he sensed that no one was chasing him, he
looked back to Beach House Canteen and saw Danilo Feliciano, Jr., Warren
52
Zingapan, and George Morano. He decided to go back to the canteen to help
53
his fraternity brothers. When he arrived, he did not see any of his fraternity
54
brothers but only saw the ones who attacked them. He ended up going to their
55
hang-out instead to meet with his other fraternity brothers. They then
proceeded to the College of Law where the rest of the fraternity was already
56
discussing the incident.
According to Amel Fortes, member of Sigma Rho, he also ran when he saw the
57
group of attackers coming toward them. When he looked back, he saw Danilo
58
Feliciano, Jr. hitting Venturina. He was also able to see Warren Zingapan and
59
George Morano at the scene.
Leandro Lachica, in the meantime, upon reaching the College of Education,
boarded a jeepney to the College of Law to wait for their other fraternity
60
brothers. One of his fraternity brothers, Peter Corvera, told him that he
received information that members of Scintilla Juris were seen in the west wing
61
of the Main Library and were regrouping in SM North. Lachica and his group
62
then set off for SM North to confront Scintilla Juris and identify their attackers.
When they arrived in SM North, pillboxes and stones were thrown at
63
them. Lachica saw Robert Michael Beltran Alvir and Warren Zingapan and a
64
certain Carlo Taparan. They had no choice but to get away from the mall and
proceed instead to U.P. where the Sigma Rho Fraternity members held a
65
meeting.
On the night of December 8, 1994, the officers of Sigma Rho advised the victims
66
to lodge their complaints with the National Bureau of Investigation. Their
counsel, Atty. Frank Chavez, told the U.P. Police that the victims would be
giving their statements before the National Bureau of Investigation, promising to
give the U.P. Police copies of their statements. In the meantime, Venturina was
transferred from the U.P. Infirmary to St. Luke's Hospital on December 8, 1994.
67
He died on December 10, 1994. On December 11, 1994, an autopsy was
68
conducted on the cadaver of Dennis Venturina. Dr. Rolando Victoria, a
medico-legal officer of the National Bureau of Investigation, found that Venturina
had "several contusions located at the back of the upper left arm and hematoma
69
on the back of both hands," "two (2) lacerated wounds at the back of the
70 71
head, generalized hematoma on the skull," "several fractures on the
72 73
head," and "inter-cranial hemorrhage." The injuries, according to Dr. Victoria,
74
could have been caused by a hard blunt object. Dr. Victoria concluded that
75
Venturina died of traumatic head injuries.

On December 12, 1994, Lachica, Natalicio, Mangrobang, Fortes, and Gaston
76
executed their respective affidavits before the National Bureau of Investigation
77
and underwent medico-legal examinations with their medicolegal officer, Dr.
Aurelio Villena. According to Dr. Villena, he found that Mervin Natalicio had
"lacerated wounds on the top of the head, above the left ear, and on the fingers;
78
contused abrasions on both knees; contusion on the left leg and thigh," all of
which could have been caused by any hard, blunt object. These injuries required
medical attendance for a period of ten (10) days to thirty (30) days from the date
79
of infliction.
Dr. Villena found on Amel Fortes "lacerated wounds on the head and on the
80
right leg which could have been caused by a blunt instrument." These injuries
required hospitalization for a period of ten (10) days to thirty (30) days from date
81
of infliction. He also found on Cesar Mangrobang, Jr. a "healed abrasion on
the left forearm which could possibly be caused by contact with [a] rough hard
82
surface and would require one (1) to nine (9) days of medical attention." He
found on Leandro Lachica "contusions on the mid auxiliary left side, left forearm
83
and lacerated wound on the infra scapular area, left side." On Christopher
Gaston, Jr. he found "lacerated wounds on the anterior chest, left side, left
forearm; swollen knuckles of both hands; contusions on the mid auxiliary left
84
side, left forearm and lacerated wound on the infra scapular area, left side."
On September 18, 1997, after the prosecution presented its evidence-in-chief,
the court granted the demurrer to evidence filed by Rodolfo Penalosa, Jr. on the
ground that he was not identified by the prosecution's witnesses and that he was
85
not mentioned in any of the documentary evidence of the prosecution.
Upon the presentation of their evidence, the defense introduced their own
statement of the facts, as follows:
86
According to Romeo Cabrera, a member of the U.P. Police, he was on foot
patrol with another member of the U.P. Police, Oscar Salvador, at the time of the
incident. They were near the College of Arts and Sciences (Palma Hall) when he
vaguely heard somebody shouting, "Rumble!" They went to the place where the
alleged rumble was happening and saw injured men being helped by
bystanders. They helped an injured person board the service vehicle of the
Beach House Canteen. They asked what his name was, and he replied that he
was Mervin Natalicio. When he asked Natalicio who hit him, the latter was not
able to reply but instead told him that his attackers were wearing masks. Oscar
87
Salvador corroborated his testimony.
88
Benjamin Lato, a utility worker of the Beach House Canteen, likewise testified
that the identities of the attackers were unrecognizable because of their masks.
He, however, admitted that he did not see the attack; he just saw a man
sprawled on the ground at the time of the incident.
89
Frisco Capilo, a utility worker of U.P. assigned to the Main Library, was buying
a cigarette at a vendor located nearby. From there, he allegedly saw the whole
incident. He testified that ten (10) men, wearing either masks of red and black
bonnets or with shirts covering their faces, came from a red car parked nearby.
He also saw three (3) men being hit with lead pipes by the masked men. Two (2)
of the men fell after being hit. One of the victims was lifting the other to help him,
but the attackers overtook him. Afterwards, the attackers ran away. He then saw
students helping those who were injured. He likewise helped in carrying one of
the injured victims, which he later found out to be Amel Fortes.
A U.P. student and member of the Sigma Alpha Nu Sorority, Eda
90
Panganiban, testified that she and her friends were in line to order lunch at the
Beach House Canteen when a commotion happened. She saw around fifteen
(15) to eighteen (18) masked men attack a group of Sigma Rhoans. She did not
see any mask fall off. Her sorority sister and another U.P. student, Luz
91
Perez, corroborated her story that the masked men were unrecognizable
because of their masks. Perez, however, admitted that a member of Scintilla
Juris approached her to make a statement.
92
Another sorority sister, Bathalani Tiamzon, testified on substantially the same
matters as Panganiban and Perez. She also stated that she saw a person lying
on the ground who was being beaten up by about three (3) to five (5) masked
men. She also stated that some of the men were wearing black masks while
some were wearing white t-shirts as masks. She did not see any mask fall off
the faces of the attackers.
93
According to Feliciana Feliciano, accused-appellant Danilo Feliciano, Jr.'s
motlier, her son was in Pampanga to visit his sick grandfather at the time of the
incident. She alleged that her son went to Pampanga before lunch that day and
visited the school where she teaches to get their house key from her.
94
According to Robert Michael Beltran Alvir, he had not been feeling well since
December 5, 1994. He said that he could not have possibly been in U.P. on
December 8, 1994 since he was absent even from work. He also testified that
he wore glasses and, thus, could not have possibly been the person identified
by Leandro Lachica. He also stated that he was not enrolled in U.P. at the time
since he was working to support himself.
95
According to Julius Victor Medalla, he and another classmate, Michael Vibas,
were working on a school project on December 8, 1994. He also claimed that he
could not have participated in the rumble as he had an injury affecting his
balance. The injury was caused by an incident in August 1994 when he was
struck in the head by an unknown assailant. His testimony was corroborated by
96
Jose Victor Santos who stated that after lunch that day, Medalla played darts
with him and, afterwards, they went to Jollibee.
 97
Christopher Soliva, on the other hand, testified that he was eating lunch with
his girlfriend and another friend in Jollibee, Philcoa, on December 8, 1994. They
went back to U.P. before 1:00 p.m. and went straight to their fraternity hang-out
where he was told that there had been a rumble at the Main Library. He also met
several Sigma Rhoans acting suspiciously as they passed by the hang-out.
They were also told by their head, Carlo Taparan, not to react to the Sigma
98
Rhoans and just go home. Anna Cabahug, his girlfriend, corroborated his
story.
99
Warren Zingapan also testified that he was not in U.P. at the time of the
incident. He claimed to have gone to SM North to buy a gift for a friend's
wedding but ran into a fraternity brother. He also alleged that some Sigma
Rhoans attacked them in SM North that day.
100
On February 28, 2002, the trial court rendered its decision with the finding that
Robert Michael Alvir, Danilo Feliciano, Jr., Christopher Soliva, Julius Victor
Medalla, and Warren Zingapan were guilty beyond reasonable doubt of murder
and attempted murder and were sentenced to, among other penalties, the
101
penalty of reclusion perpetua. The trial court, however, acquitted Reynaldo
Ablanida, Carlo Jolette Fajardo, Gilbert Magpantay, George Morano, and
102
Raymund Narag. The case against Benedict Guerrero was ordered archived
103
by the court until his apprehension. The trial court, m evaluating the
voluminous evidence at hand, concluded that:
After a judicious evaluation of the matter, the Court is of the considered view
that of the ten accused, some were sufficiently identified and some were not.
The Court believes that out of the amorphous images during the pandemonium,
the beleaguered victims were able to espy and identify some of the attackers
etching an indelible impression in their memory. In this regard, the prosecution
eyewitnesses were emphatic that they saw the attackers rush towards them
wielding deadly weapons like baseball bats, lead pipes, pieces of wood and
bladed ones, and pounce on their hapless victims, run after them, and being
present with one another at the scene of the crime during the assault. Although
each victim had a very strong motive to place his fraternity rivals permanently
behind bars, not one .of them testified against all of them. If the prosecution
eyewitnesses, who were all Sigma Rhoans, were simply bent on convicting
Scintilla Juris members for that matter, they could have easily tagged each and
every single accused as a participant in the atrocious and barbaric assault to
make sure that no one else would escape conviction. Instead, each eyewitness
named only one or two and some were candid enough to say that they did not
104
see who delivered the blows against them.
Because one of the penalties meted out was reclusion perpetua, the case was
brought to this court on automatic appeal. However, due to the amendment of
105 106
the Rules on Appeal, the case was remanded to the Court of Appeals. In
107
the Court of Appeals, the case had to be re-raffled several Times before it
was eventually assigned to Presiding Justice Andres B. Reyes, Jr. for the writing
of the decision.
On December 26, 2010, the Court of Appeals, in a Special First Division of Five,
108
affirmed the decision of the Regional Trial Court, with three (3) members
109 110
concurring an one (1) dissenting.
The decision of the Court of Appeals was then brought to this court for review.
The issue before this court is whether the prosecution was able to prove beyond
reasonable doubt that accused-appellants attacked private complainants and
caused the death of Dennis Venturina.
On the basis, however, of the arguments presented to this court by both parties,
the issue may be further refined, thus:
1. Whether accused-appellants' constitutional rights were violated when
the information against them contained the aggravating circumstance of
the use of masks despite the prosecution presenting witnesses to prove
that the masks fell off; and
2. Whether the Regional Trial Court and the Court of Appeals correctly
ruled, on the basis of the evidence, that accused-appellants were
sufficiently identified.
I
An information is sufficient
when the accused is fully
apprised of the charge against
him to enable him to prepare
his defense
It is the argument of appellants that the information filed against them violates
their constitutional right to be informed of the nature and cause of the accusation
against them. They argue that the prosecution should not have included the
phrase "wearing masks and/or other forms of disguise" in the information since
they were presenting testimonial evidence that not all the accused were wearing
masks or that their masks fell off.
It is enshrined in our Bill of Rights that "[n]o person shall be held to answer for a
111
criminal offense without due process of law." This includes the right of the
accused to be presumed innocent until proven guilty and "to be informed of the
nature and accusation against him."
112
Upon a finding of probable cause, an information is filed by the prosecutor
against the accused, in compliance with the due process of the law. Rule 110,
Section 1, paragraph 1 of the Rules of Criminal Procedure provides that:
A complaint or information is sufficient if it states the name of the accused; the
designation of the offense given by the statute; the acts or omissions
complained of as constituting the offense; the name of the offended pary; the
approximate date of the commission of the offense; and the place where the
offense was committed.
113
In People v. Wilson Lab-ea, this court has stated that:
The test of sufficiency of Information is whether it enables a person of common
understanding to know the charge against him, and the court to render judgment
properly. x x x The purpose is to allow the accused to fully prepare for his
114
defense, precluding surprises during the trial.
Contrary to the arguments of the appellants, the inclusion of the phrase "wearing
masks and/or other forms of disguise" in the information does not violate their
constitutional rights.
It should be remembered that every aggravating circumstance being alleged
must be stated in the information. Failure to state an aggravating circumstance,
115
even if duly proven at trial, will not be appreciated as such. It was, therefore,
incumbent on the prosecution to state the aggravating circumstance of "wearing
masks and/or other forms of disguise" in the information in order for all the
evidence, introduced to that effect, to be admissible by the trial court.
In criminal cases, disguise is an aggravating circumstance because, like
nighttime, it allows the accused to remain anonymous and unidentifiable as he
carries out his crimes.
The introduction of the prosecution of testimonial evidence that tends to prove
that the accused were masked but the masks fell off does not prevent them from
116
including disguise as an aggravating circumstance. What is important in
alleging disguise as an aggravating circumstance is that there was a
concealment of identity by the accused. The inclusion of disguise in the
information was, therefore, enough to sufficiently apprise the accused that in the
commission of the offense they were being charged with, they tried to conceal
their identity.
The introduction of evidence which shows that some of the accused were not
wearing masks is also not violative of their right to be informed of their offenses.
The information charges conspiracy among the accused. Conspiracy
117
presupposes that "the act of one is the act of all." This would mean all the
accused had been one in their plan to conceal their identity even if there was
evidence later on to prove that some of them might not have done so.
In any case, the accused were being charged with the crime of murder,
frustrated murder, and attempted murder. All that is needed for the information
to be sufficient is that the elements of the crime have been alleged and that
there are sufficient details as to the time, place, and persons involved in the
offense.
II
Findings of the trial court,
when affirmed by the
appellate court, are entitled
to great weight and credence
As a general rule, the findings of fact by the trial court, when affirmed by the
appellate court, are given great weight and credence on review. The rationale
118
for this was explained in People v. Daniel Quijada, as follows:
Settled is the rule that the factual findings of the trial court, especially on the
credibility of witnesses, are accorded great weight and respect. For, the trial
court has the advantage of observing the witnesses through the different
indicators of truthfulness or falsehood, such as the angry flush of an insisted
assertion or the sudden pallor of a discovered lie or the tremulous mutter of a
reluctant answer or the forthright tone of a ready reply;
or the furtive glance, the blush of conscious shame, the hesitation, the sincere or
the flippant or sneering tone, the heat, the calmness, the yawn, the sigh, the
candor or lack of it, the scant or full realization of the solemnity of an oath, the
119
carriage and mien.
There are, of course, recognized exceptions to this rule. In People v. Leticia
120
Labarias, this court stated that:
It is the policy of this Court to sustain the factual findings of the trial court on the
reasonable assumption that it is in a better position to assess the evidence
before it, particularly the testimonies of the witnesses, who reveal much of
themselves by their deportment on the stand. The exception that makes the rule
is where such findings arc clearly arbitrary or erroneous as when they are
tainted with bias or hostility or are so lacking in basis as to suggest that they
were reached without the careful study and perceptiveness that should
121
characterize a judicial decision. (Emphasis supplied)
In criminal cases, the exception gains even more importance since the
presumption is always in favor of innocence. It is only upon proof of guilt beyond
reasonable doubt that a conviction is sustained.
In this case, a total of eleven (11) witnesses for the prosecution and forty-two
(42) witnesses for the defense were put on the stand from 1995 to 2001. In an
eighty-three (83)-page decision, the trial court acquitted six (6) and convicted
five (5) of the accused. On the basis of these numbers alone, it cannot be said
that the trial court acted arbitrarily or that its decision was "so lacking in basis"
that it was arrived at without a judicious and exhaustive study of all the evidence
presented.
Inasmuch, however, as the trial court's findings hold great persuasive value,
there is also nothing that precludes this court from coming to its own conclusions
based on an independent review of the facts and the evidence on record.
The accused were sufficiently
identified by the witnesses for
the prosecution
The trial court, in weighing all the evidence on hand, found the testimonies of the
witnesses for the prosecution to be credible. In its decision, the trial court stated
that:
x x x. Although each victim had a very strong motive to place his fraternity rivals
permanently behind bars, not one testified against all of them. If the prosecution
eyewitnesses, who were all Sigma Rhoans, were simply bent on convicting
Scintilla Juris members for that matter, they could have easily tagged each and
every accused as a participant in the atrocious and barbaric assault to make
sure no one would escape conviction. Instead, each eyewitness named only one
or two and some were candid enough to say that they did not see who delivered
the blows against them.
Thus, the prosecution witnesses, Ernest Paulo Tan, Dennis Gaio and Darwin
Asuncion, testified to have seen it all but they could not, and did not, disclose
any name. Lachica, on the other hand, said that he did not have the opportunity
to see and identify the person who hit him in the back and inflicted a two-inch
cut. His forearm was also hit by a lead pipe but he did not see who did it.
Natalicio, one of the other three who were hospitalized, was severely beaten by
three waves of attackers totalling more than 15 but he could only name 3 of
them. He added, however, that he would be able to recognize those he saw if he
would see them again. Of them, Mangrobang pointed to at least 5 but he
stressed that he did not see Zingapan, Soliva, Guerrero, Del Rosario, Daraoay,
Denoista, and Penalosa during the onslaught. Gaston could have named any of
the accused as the one who repeatedly hit him with a heavy pipe and stabbed
him but he frankly said their faces were covered. Like Natalicio, Fortes was
repeatedly beaten by several groups but did not name any of the accused as
one of those who attacked him. The persons he identified were those leading
the pack with one of them as the assailant of Venturina, and the two others who
he saw standing while he was running away. He added that he saw some of the
122
accused during the attack but did not know then their names. (Emphasis
supplied)
We agree.
The trial court correctly held that "considering the swiftness of the
123
incident," there would be slight inconsistencies in their statements. In People
124
v. Adriano Cabrillas, it was previously observed that:
It is perfectly natural for different witnesses testifying on the occurrence of a
crime to give varying details as there may be some details which one witness
may notice while the other may not observe or remember. In fact, jurisprudence
even warns against a perfect dovetailing of narration by different witnesses as it
could mean that their testimonies were prefabricated and
125
rehearsed. (Emphasis supplied)
According to their testimonies, Lachica was able to identify Alvir, Zingapan, and
126
Medalla;
127
Natalicio was able to identify Medalla, Zingapan, and Soliva; and Fortes was
128
able to identify Feliciano, Medalla, and Zingapan. Their positive identification
was due to the fact that they either wore no masks or that their masks fell off.
It would be in line with human experience that a victim or an eyewitness of a
crime would endeavor to find ways to identify the assailant so that in the event
that he or she survives, the criminal could be apprehended. It has also been
previously held that:
It is the most natural reaction for victims of criminal violence to strive to see the
looks and faces of their assailants and observe the manner in which the crime
was committed. Most often the face of the assailant and body movements
thereof, creates a lasting impression which cannot be easily erased from their
129
memory.
In the commotion, it was more than likely that the masked assailants could have
lost their masks. It had been testified by the victims that some of the assailants
were wearing masks of either a piece of cloth or a handkerchief and that
130 131 132 133
Alvir, Zingapan, Soliva, and Feliciano had masks on at first but their
masks fell off and hung around their necks.
Equally telling was the testimony of defense witness Frisco Capilo during cross-
examination who observed that some of the attackers were wearing masks and
some were not, thus:
Q Mr. Capilo, do you know this Scintilla Juris Fraternity?
A No, sir.
Q During the incident of December 8, 1994, there were a lot of people eating in
the Beach House Canteen, and then running towards different directions, is it
not?
A Yes, sir.
Q And some people were wearing masks and some were not?
134
A Yes, sir.
While the attack was swift and sudden, the victims would have had the presence
of mind to take a look at their assailants if they were identifiable. Their positive
identification, in the absence of evidence to the contrary, must be upheld to be
credible.
It has been argued that the trial court did not give Mangrobang's testimony
credence while Gaston's testimony was found to be "hazy." This argument is
unmeritorious.
It should be noted that it was the trial court itself that stated that the acquittal of
the Scintilla Juris members identified by Mangrobang "should not be.
misinterpreted to mean that the tt:'.stimony of Mangrobang was an absolute
135
fabrication." The court went on to state that they "were exonerated merely
because they were accorded the benefit of the doubt as their identification by
Mangrobang, under tumultuous and chaotic circumstances were [sic] not
136
corroborated and their alibis, not refuted." There was, therefore, no basis to
say that Mangrobang was not credible; it was only that the evidence presented
was not strong enough to overcome the presumption of innocence.
137
Gaston's testimony, on the other hand, was considered "hazy" by the trial
court only with regard to his identification of Zingapan's companion. Gaston
testified that he saw Zingapan with Morano, with Zingapan moving and Morano
staying in place. Fortes, however, testified that both Zingapan and Morano were
running after him. Lachica also testified that it was Medalla, not Morano, who
was with Zingapan. Because of this confusion, the trial court found that there
was doubt as to who was really beside Zingapan. The uncertainty resulted into
an acquittal for Morano. Despite this, the court still did not" impute doubt in their
testimonies that Zingapan was present at the scene.
Be that as it may, the acquittals made by the trial court further prove that its
decision was brought about only upon a thorough examination of the evidence
presented: It accepted that there were inconsistencies in the testimonies of the
victims but that these were minor and did not affect their credibility. It ruled that
"[s]uch inconsistencies, and even probabilities, are not unusual 'for there is no
138
person with perfect faculties or senses."'
Evidence as part of the res
gestae may be admissible but
have little persuasive value in
this case
139
According to the testimony of U.P. Police Officer Salvador, when he arrived at
the scene, he interviewed the bystanders who all told him that they could not
recognize the attackers since they were all masked. This, it is argued, could be
evidence that could be given as part of the res gestae.
As a general rule, "[a] witness can testify only to the facts he knows of his
personal knowledge; that is, which are derived from his own perception, x x
140
x." All other kinds of testimony are hearsay and are inadmissible as evidence.
The Rules of Court, however, provide several exceptions to the general rule,
and one of which is when the evidence is part of res gestae, thus:
Section 42. Part of res gestae. - Statements made by a person while a starting
occurrence is taking place or immediately prior or subsequent thereto with
respect to the circumstances thereof, may be given in evidence as part of res
gestae. So, also, statements accompanying an equivocal act material to the
issue, and giving it a legal significance, may be received as part of the res
141
gestae.
142
In People v. Rodrigo Salafranca, this court has previously discussed the
admissibility of testimony taken as part of res gestae, stating that:
A declaration or an utterance is deemed as part of the res gestae and thus
admissible in evidence as an exception to the hearsay rule when the following
requisites concur, to wit: (a) the principal act, the res gestae, is a startling
occurrence; (b) the statements are made before the declarant had time to
contrive or devise; and (c) the statements must concern the occurrence in
question and its immediately attending circumstances.
xxxx
The term res gestae has been defined as "those circumstances which are the
undersigned incidents of a particular litigated act and which are admissible when
illustrative of such act." In a general way, res gestae refers to the circumstances,
facts, and declarations that grow out of the main fact and serve to illustrate its
character and are so spontaneous and contemporaneous with the main fact as
to exclude the idea of deliberation and fabrication. The rule on res gestae
encompasses the exclamations and statements made by either the participants,
victims, or spectators to a crime immediately before, during, or immediately after
the commission of the crime when the circumstances are such that the
statements were made as a spontaneous reaction or utterance inspired by the
excitement of the occasion and there was no opportunity for the declarant to
deliberate and to fabricate a false statement. The test of admissibility of
evidence as a part of the res gestae is, therefore, whether the act, declaration,
or exclamation is so intimately interwoven or connected with the principal fact or
event that it characterizes as to be regarded as a part of the transaction itself,
and also whether it clearly negatives any premeditation or purpose to
143
manufacture testimony.
There is no doubt that a sudden attack on a group peacefully eating lunch on a
school campus is a startling occurrence. Considering that the statements of the
bystanders were made immediately after the startling occurrence, they are, in
fact, admissible as evidence given in res gestae.
144
In People v. Albarido, however, this court has stated that "in accord to
ordinary human experience:"
x x x persons who witness an event perceive the same from their respective
points of reference. Therefore, almost always, they have different accounts of
how it happened. Certainly, we cannot expect the testimony of witnesses to a
crime to be consistent in all aspects because different persons have different
145
impressions and recollections of the same incident. x x x
(Emphasis supplied)
The statements made by the bystanders, although admissible, have little
persuasive value since the bystanders could have seen the events transpiring at
different vantage points and at different points in time. Even Frisco Capilo, one
of the bystanders at the time of the attack, testified that the attackers had their
masks on at first, but later on, some remained masked and some were
unmasked.
When the bystanders' testimonies are weighed against those of the victims who
witnessed the entirety of the incident from beginning to end at close range, the
former become merely corroborative of the fact that an attack occurred. Their
account of the incident, therefore, must be given considerably less weight than
that of the victims.
The belated identification by
the victims do not detract from
their positive identification of
the appellants
It is argued that the fact that the victims stayed silent about the incident to the
U.P. Police or the Quezon City Police but instead executed affidavits with the
National Bureau of Investigation four (4) days after the incident gives doubt as to
the credibility of their testimonies.
146
U.P. Police Officer Romeo Cabrera testified that on their way to the U.P.
Infirmary, he interviewed the victims who all told him they could not recognize
the attackers because they were all wearing masks. Meanwhile, Dr.
147
Mislang testified to the effect that when she asked Natalicio who attacked
them, Natalicio answered that he did not know because they were masked.
It must be remembered that the parties involved in this case belong to rival
fraternities. While this court does not condone their archaic and oftentimes
barbaric traditions, it is conceded that there are certain practices that are unique
to fraternal organizations.
It is quite possible that at this point in time, they knew the identities of their
attackers but chose not to disclose it without first conferring with their other
fraternity brothers. This probability is bolstered by the actions of Sigma Rho after
the incident, which showed that they confronted the members of Scintilla Juris in
SM North. Because of the tenuous relationship of rival fraternities, it would not
have been prudent for Sigma Rho to retaliate against the wrong fraternity.
Their act of not disclosing the correct information to the U.P. Police or to Dr.
Mislang does not make the police officer or the doctor's testimonies more
credible than that of the victims. It should not be forgotten that the victims
actually witnessed the entire incident, while Officer Salvador, Officer Cabrera,
and Dr. Mislang were merely relaying secondhand information.
The fact that they went to the National Bureau of Investigation four (4) days after
the incident also does not affect their credibility since most of them had been
hospitalized from their injuries and needed to recover first.
Since a fraternity moves as one unit, it would be understandable that they
decided to wait until all of them were well enough to go to the National Bureau of
Investigation headquarters in order to give their statements.
Seniority is also often the norm in fraternities. It was upon the advice of their
senior "brads" and their legal counsel that they executed their sworn statements
before the National Bureau of Investigation four (4) days after the incident.
The decision to report the incident to the National Bureau of Investigation
instead of to the U.P. Police was the call of their legal counsel who might have
deemed the National Bureau of Investigation more equipped to handle the
investigation. This does not, however, affect the credibility of the witnesses since
they were merely following the legal advice of their counsel.
Indeed, there is reason to believe that the National Bureau of Investigation is
better equipped than the U.P. Police to handle the investigation of the case. As
stated in the U.P. College of Economics website:
The UP Diliman Police (UPDP) is tasked with maintaining campus security.
Their station is located in front of the College of Architecture.
The primary missions of the UPDP are to maintain peace and order, secure and
protect lives and property, enforce basic laws, applicable Quezon City
Ordinances, and University Rules and Regulations including policies and
standards; and to perform such other functions relative to the general safety and
security of the students, employees, and residents in the U.P. Diliman Campus.
148
x x x. (Emphasis supplied)
It can be seen that the U.P. Police is employed by U.P. primarily for campus
security. They are by no means an actual police force that is equipped to handle
a full-blown murder investigation. Fraternity-related violence in U.P. has also
increasingly become more frequent, which might possibly have desensitized the
U.P. Police in such a way that would prevent their objectivity in the conduct of
their investigations. The victims' reliance on the National Bureau of
Investigation, therefore, is understandable.
III
Alibi cannot prevail over the
positive identification of the
victim
It is settled that the defense of alibi cannot prevail over the positive identification
149 150
of the victim. In People v. Benjamin Peteluna, this court stated that:
It is a time-honored principle that the positive identification of the appellant by a
witness destroys the defense of alibi and denial. Thus:
x x x. It is well-entrenched that alibi and denial are inherently weak and have
always been viewed with disfavor by the courts due to the facility with which they
can be concocted. They warrant the least credibility or none at all and cannot
prevail over the positive identification of the appellant by the prosecution
witnesses. For alibi to prosper, it is not enough to prove that appellant was
somewhere else when the crime was committed; he must also demonstrate that
it was physically impossible for him to have been at the scene of the crime at the
time of its commission. Unless substantiated by clear and convincing proof, such
defense is negative, self-serving, and undeserving of any weight in law. Denial,
like alibi, as an exonerating justification[,] is inherently weak and if
uncorroborated regresses to blatant impotence. Like alibi, it also constitutes self-
serving negative evidence which cannot be accorded greater evidentiary weight
151
than the declaration of credible witnesses who testify on affirmative matters.
In this case, the victims were able to positively identify their attackers while the
accused-appellants merely offered alibis and denials as their defense. The
credibility of the victims was upheld by both the trial court and the appellate
court while giving little credence to the accused-appellants' alibis. There is, thus,
no reason to disturb their findings.
Accused-appellants were
correctly charged with
murder, and there was
treachery in the commission
of the crime
According to the provisions of Article 248 of the Revised Penal Code, the
accused-appellants were correctly charged with murder. Article 248 states:
ART. 248. Murder.-Any person who, not falling within the provisions of Article
246, shall kill another, shall be guilty of murder and shall be punished by
reclusion perpetua, to death if committed with any of the following attendant
circumstances:
1. With treachery, taking advantage of superior strength, with the aid of armed
men, or employing means to weaken the defense, or of means or persons to
insure or afford impunity;
xxxx
It is undisputed that on December 8, 1994, a group of men armed with lead
pipes and baseball bats attacked Dennis Venturina and his companions, which
resulted in Venturina's death.
As correctly found by the trial court and the appellate court, the offense
committed against Dennis Venturina was committed by a group that took
advantage of its superior strength and with the aid of armed men. The appellate
court, however, incorrectly ruled out the presence of treachery in the
commission of the offense.
It has been stated previously by this court that:
[T]reachery is present when the offender commits any of the crimes against
persons, employing means, methods, or forms in the execution, which tend
directly and specially to insure its execution, without risk to the offender arising
152
from the defense which the offended party might make.
153
Similarly, in People v. Leozar Dela Cruz, this court stated that:
There is treachery when the offender commits any of the crimes against
persons, employing means, methods, or forms in the execution, which tend
directly and specially to insure its execution, without risk to the offender arising
from the defense which the offended party might make. The essence of
treachery is that the attack comes without a warning and in a swift, deliberate,
and unexpected manner, affording the hapless, unarmed, and unsuspecting
victim no chance to resist or escape. For treachery to be considered, two
elements must concur: (1) the employment of means of execution that gives the
persons attacked no opportunity to defend themselves or retaliate; and (2) the
154
means of execution were deliberately or consciously adopted. (Emphasis
supplied)
The appellate court, in affirming the conviction of the accused-appellants, ruled
that contrary to the findings of the trial court, there was no treachery involved. In
particular, they ruled that although the attack was sudden and unexpected, "[i]t
155
was done in broad daylight with a lot of people who could see them" and that
"there was a possibility for the victims to have fought back or that the people in
156
the canteen could have helped the victims."
This reasoning is clearly erroneous. The victims in this case were eating lunch
on campus. They were not at a place where they would be reasonably expected
to be on guard for any sudden attack by rival fraternity men.
The victims, who were unarmed, were also attacked with lead pipes and
baseball bats. The only way they could parry the blows was with their arms. In a
situation where they were unnamed and outnumbered, it would be impossible
for them to fight back against the attackers. The attack also happened in less
than a minute, which would preclude any possibility of the bystanders being able
to help them until after the incident.
The swiftness and the suddenness of the attack gave no opportunity for the
victims to retaliate or even to defend themselves. Treachery, therefore, was
present in this case.
The presence of conspiracy
makes all of the accused-
appellants liable for murder
and attempted murder
In the decision of the trial court, all of the accused-appellants were found guilty
of the murder of Dennis Venturina and the attempted murder of Mervin Natalicio,
Cesar Mangrobang, Jr. Leandro Lachica, Arnel Fortes, and Cristobal Gaston, Jr.
The appellate court, however, modified their liabilities and found that the
accused-appellants were guilty of attempted murder only against Natalicio and
Fortes, and not against Mangrobang, Lachica, and Gaston.
It is the appellate court's reasoning that because Lachica and Mangrobang
157
"were no longer chased by the attackers," it concluded that accused-
appellants "voluntary desisted from pursuing them and from inflicting harm to
them, which shows that they did not have the intent to do more than to make
158
them suffer pain by slightly injuring them." It also pointed out that the wound
159
inflicted on Gaston "was too shallow to have been done with an intent to kill."
Thus, it concluded that the accused-appellants would have been guilty only of
slight physical injuries.
This is erroneous.
It should be remembered that the trial court found that there was conspiracy
160
among the accused-appellants and the appellate court sustainedthis
161
finding.
Conspiracy, once proven, has the effect of attaching liability to all of the
accused, regardless of their degree of participation, thus: Once an express or
implied conspiracy is proved, all of the conspirators are liable as co-principals
regardless of the extent and character of their respective active participation in
the commission of the crime or crimes perpetrated in furtherance of the
conspiracy because in contemplation of law the act of one is the act of all. The
foregoing rule is anchored on the sound principle that "when two or more
persons unite to accomplish a criminal object, whether through the physical
volition of one, or all, proceeding severally or collectively, each individual whose
evil will actively contributes to the wrong-doing is in law responsible for the
whole, the same as though performed by himself alone." Although it is axiomatic
that no one is liable for acts other than his own, "when two or more persons
agree or conspire to commit a crime, each is responsible for all the acts of the
others, done in furtherance of the agreement or conspiracy." The imposition of
collective liability upon the conspirators is clearly explained in one case where
this Court held that
... it is impossible to graduate the separate liability of each (conspirator) without
taking into consideration the close and inseparable relation of each of them with
the criminal act, for the commission of which they all acted by common
agreement ... The crime must therefore in view of the solidarity of the act and
intent which existed between the ... accused, be regarded as the act of the band
or party created by them, and they are all equally responsible
Verily, the moment it is established that the malefactors conspired and
confederated in the commission of the felony proved, collective liability of the
accused conspirators attaches by reason of the conspiracy, and the court shall
not speculate nor even investigate as to the actual degree of participation of
162
each of the perpetrators present at the scene of the crime. x x x. (Emphasis
supplied)
The liabilities of the accused-appellants m this case arose from a single incident
wherein the accused-appellants were armed with baseball bats and lead pipes,
all in agreement to do the highest amount of damage possible to the victims.
Some were able to run away and take cover, but the others would fall prey at the
hands of their attackers. The intent to kill was already present at the moment of
attack and that intent was shared by all of the accused-appellants alike when the
presence of conspiracy was proven. It is, therefore, immaterial to distinguish
between the seriousness of the injuries suffered by the victims to determine the
respective liabilities of their attackers. What is relevant is only as to whether the
death occurs as a result of that intent to kill and whether there are qualifying,
aggravating or mitigating circumstances that can be appreciated.
"Giting at dangal" are words of the anthem of the University of the Philippines. It
colors the stories of many who choose to expend their energy in order that our
people will have better lives. Fraternity rumbles are an anathema, an immature
and useless expenditure of testosterone. It fosters a culture that retards
manhood. It is devoid of "giting at dangal."
This_ kind of shameful violence must stop.
WHEREFORE, the decision of the Court of Appeals in CA-G.R. CR N). 01158
dated November 26, 2010 is AFFIRMED insofar as the accused-appellants
Danilo Feliciano, Jr., Julius Victor Medalla, Christopher Soliva, Warren L.
Zingapan, and Robert Michael Beltran Alvir are found GUILTY beyond
reasonable doubt of Murder in. Criminal Case No. Q95-61133 with the
MODIFICATION that they be fouhd GUILTY beyond reasonable doubt of
Attempted Murder in Criminal Case Nos. Q95-61136, Q95-61135, Q95-61134,
Q95-61138, and Q95-61137.
SO ORDERED.

The appellate court, therefore, erred in finding the accused-appellants guilty only
of slight physical injuries. It would be illogical to presume that despite the
swiftness and suddenness of the attack, the attackers intended to kill only
Venturina, Natalicio, and Fortes, and only intended to injure Lachica,
Mangrobang, and Gaston. Since the intent to kill was evident from the moment
the accused-appellants took their first swing, all of them were liable for that
intent to kill.1âwphi1

For this reason, the accused-appellants should be liable for the murder of
Dennis Venturina and the attempted murder of Mervin Natalicio, Cesar
Mangrobang, Jr., Leandro Lachica, Arnel Fortes, and Cristobal Gaston, Jr.

A Final Note

It is not only the loss of one promising young life; rather, it is also the effect on
the five other lives whose once bright futures are now put in jeopardy because of
one senseless act of bravado. There is now more honor for them to accept their
responsibility and serve the consequences of their actions. There is, however,
nothing that they can do to bring back Dennis Venturina or fully compensate for
his senseless and painful loss.

This is not the first fraternity-related case to come to this court; neither will it be
the last. Perhaps this case and many cases like it can empower those who have
a better view of masculinity: one which valorizes courage, sacrifice and honor in
more life-saving pursuits.
G.R. No. 173476 February 22, 2012
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,
vs.
RODRIGO SALAFRANCA y BELLO, Accused-Appellant.
DECISION
BERSAMIN, J.:
An ante-mortem declaration of a victim of murder, homicide, or parricide that
meets the conditions of admissibility under the Rules of Court and pertinent
jurisprudence is admissible either as a dying declaration or as a part of the res
gestae, or both.
Rodrigo Salafranca y Bello was charged with and tried for murder for the fatal
stabbing of Johnny Bolanon, and was ultimately found guilty of the felony by the
Regional Trial Court, Branch 18, in Manila on September 23, 2004. On appeal,
his conviction was affirmed by the Court of Appeals (CA) through its decision
1
promulgated on November 24, 2005.
Salafranca has come to the Court on a final appeal, continuing to challenge the
credibility of the witnesses who had incriminated him.
The established facts show that past midnight on July 31, 1993 Bolanon was
stabbed near the Del Pan Sports Complex in Binondo, Manila; that after
stabbing Bolanon, his assailant ran away; that Bolanon was still able to walk to
the house of his uncle Rodolfo B. Estaño in order to seek help; that his uncle
rushed him to the Philippine General Hospital by taxicab; that on their way to the
hospital Bolanon told Estaño that it was Salafranca who had stabbed him; that
Bolanon eventually succumbed at the hospital at 2:30 am despite receiving
medical attention; and that the stabbing of Bolanon was personally witnessed by
Augusto Mendoza, then still a minor of 13 years, who was in the complex at the
2 Manila.
time.
As stated, Salafranca fled after stabbing Bolanon. He evaded arrest for a long
period, despite the warrant for his arrest being issued. He was finally arrested on
April 23, 2003, and detained at the Manila City Jail.
After trial, the RTC convicted Salafranca, stating:
The evidence is clear that it was Rodrigo Salafranca who delivered two (2)
stabbing blows to the victim while holding Johnny Bolanon with his left arm
encircled around Bolanon’s neck stabbing the latter with the use of his right
hand at the right sub costal area which caused Bolanon’s death. Not only
because it was testified to by Augusto Mendoza but corroborated by Rodolfo
Estaño, the victim’s uncle who brought Bolanon to the hospital and who relayed
to the court that when he aided Bolanon and even on their way to the hospital
while the latter was suffering from hard breathing, victim Bolanon was able to
3
say that it was Rodrigo Salafranca who stabbed him.
The RTC appreciated treachery based on the testimony of Prosecution witness
Mendoza on how Salafranca had effected his attack
against Bolanon, observing that by "encircling his (accused) left arm, while
behind the victim on the latter’s neck and stabbing the victim with the use of his
right hand," Salafranca did not give Bolanon "any opportunity to defend
4
himself." The RTC noted inconsistencies in Salafranca’s and his witness’
testimonies, as well as the fact that he had fled from his residence the day after
the incident and had stayed away in Bataan for eight years until his arrest. The
RTC opined that had he not been hiding, there would be no reason for him to
immediately leave his residence, especially because he was also working near
the area.
5
The RTC disposed thus:
With the above observations and findings, accused Rodrigo Salafranca is
hereby found guilty of the crime of Murder defined and punished under Article
248 as amended by Republic Act No. 7659 in relation to Article 63 of the
Revised Penal Code with the presence of the qualifying aggravating
circumstance of treachery (248 par. 1 as amended) without any mitigating nor
other aggravating circumstance attendant to its commission, Rodrigo Salafranca
is hereby sentenced to suffer the penalty of reclusion perpetua.
He shall be credited with the full extent of his preventive imprisonment under
Article 29 of the Revised Penal Code.
His body is hereby committed to the custody of the Director of the Bureau of
Correction, National Penitentiary, Muntinlupa City thru the City Jail Warden of
He is hereby ordered to indemnify the heirs of the victim the sum of ₱50,000.00
representing death indemnity.
There being no claim of other damages, no pronouncement is hereby made.
6
SO ORDERED.
7
On appeal, the CA affirmed the findings and conclusions of the RTC, citing the
8
dying declaration made to his uncle pointing to Salafranca as his assailant, and
9
Salafranca’s positive identification as the culprit by Mendoza. It stressed that
Salafranca’s denial and his alibi of being in his home during the incident did not
overcome the positive identification, especially as his unexplained flight after the
stabbing, leaving his home and employment, constituted a circumstance highly
10
indicative of his guilt.
Presently, Salafranca reiterates his defenses, and insists that the State did not
prove his guilt beyond reasonable doubt.
insure its execution, without risk to himself arising from the defense which the
offended party might make.
The Court further notes Estaño’s testimony on the utterance by Bolanon of
statements identifying Salafranca as his assailant right after the stabbing
incident. The testimony follows:

The appeal lacks merit. Q Can you tell what happened on the said date?

Discrediting Mendoza and Estaño as witnesses against Salafranca would be A My nephew arrived in our house with a stab wound on his left chest.
unwarranted. The RTC and the CA correctly concluded that Mendoza and
Estaño were credible and reliable. The determination of the competence and Q What time was that?
credibility of witnesses at trial rested primarily with the RTC as the trial court due
to its unique and unequalled position of observing their deportment during
A 12:50 a.m.
testimony, and of assessing their credibility and appreciating their truthfulness,
honesty and candor. Absent a substantial reason to justify the reversal of the
assessment made and conclusions reached by the RTC, the CA as the Q When you saw your nephew with a stab wound, what did he say?
11
reviewing court was bound by such assessment and conclusions, considering
that the CA as the appellate court could neither substitute its assessment nor A "Tito dalhin mo ako sa Hospital sinaksak ako."
draw different conclusions without a persuasive showing that the RTC
misappreciated the circumstances or omitted significant evidentiary matters that Q What did you do?
12
would alter the result. Salafranca did not persuasively show a misappreciation
or omission by the RTC. Hence, the Court, in this appeal, is in no position to A I immediately dressed up and brought him to PGH.
undo or to contradict the findings of the RTC and the CA, which were entitled to
13
great weight and respect.
Q On the way to the PGH what transpired?
Salafranca’s denial and alibi were worthless in the face of his positive
A While traveling toward PGH I asked my nephew who stabbed him?, and he
identification by Mendoza as the assailant of Bolanon. The lower courts properly
answered, Rod Salafranca.
accorded full faith to such incrimination by Mendoza considering that Salafranca
did not even project any ill motive that could have impelled Mendoza to testify
against him unless it was upon the truth.
14 Q Do you know this Rod Salafranca?

Based on Mendoza’s account, Salafranca had attacked Bolanon from behind A Yes, Sir.
and had "encircled his left arm over the neck (of Bolanon) and delivered the
stabbing blow using the right(hand) and coming from wnnt (sic) up right Q How long have you known him?
sideways and another one encircling the blow towards below the left
15
nipple." Relying on Mendoza’s recollection of how Salafranca had attacked A "Matagal na ho kasi mag-neighbor kami."
Bolanon, the RTC found treachery to be attendant in the killing. This finding the
CA concurred with. We join the CA’s concurrence because Mendoza’s Q If you see him inside the courtroom will you be able to identify him?
eyewitness account of the manner of attack remained uncontested by
Salafranca who merely insisted on his alibi. The method and means Salafranca
employed constituted a surprise deadly attack against Bolanon from behind and A Yes, Sir.
included an aggressive physical control of the latter’s movements that ensured
the success of the attack without any retaliation or defense on the part of Q Will you look around and point him to us?
16
Bolanon. According to the Revised Penal Code, treachery is present when the
offender commits any of the crimes against the person, employing means, A (Witness pointing to a man who answered by the name of Rod Salafranca.)
methods or forms in the execution thereof which tend directly and specially to
COURT
When he told you the name of his assailant what was his condition?
A He was suffering from hard breathing so I told him not to talk anymore
because he will just suffer more.
Q What happened when you told him that?
A He kept silent.
Q What time did you arrive at the PGH?
A I cannot remember the time because I was already confused at that time.
Q When you arrived at the PGH what happened?
A He was brought to Emergency Room.
Q When he was brought to the emergency room what happened?
17
A He was pronounced dead.
It appears from the foregoing testimony that Bolanon had gone to the residence
of Estaño, his uncle, to seek help right after being stabbed by Salafranca; that
Estaño had hurriedly dressed up to bring his nephew to the Philippine General
Hospital by taxicab; that on the way to the hospital, Estaño had asked Bolanon
who had stabbed him, and the latter had told Estaño that his assailant had been
Salafranca; that at the time of the utterance Bolanon had seemed to be having a
hard time breathing, causing Estaño to advise him not to talk anymore; and that
about ten minutes after his admission at the emergency ward of the hospital,
Bolanon had expired and had been pronounced dead. Such circumstances
qualified the utterance of Bolanon as both a dying declaration and as part of the
res gestae, considering that the Court has recognized that the statement of the
victim an hour before his death and right after the hacking incident bore all the
earmarks either of a dying declaration or part of the res gestae either of which
18
was an exception to the hearsay rule.
A dying declaration, although generally inadmissible as evidence due to its
hearsay character, may nonetheless be admitted when the following requisites
concur, namely: (a) that the declaration must concern the cause and
surrounding circumstances of the declarant’s death; (b) that at the time the
declaration is made, the declarant is under a consciousness of an impending
death; (c) that the declarant is competent as a witness; and (d) that the
declaration is offered in a criminal case for homicide, murder, or parricide, in
19
which the declarant is a victim.
All the requisites were met herein. Bolanon communicated his ante-mortem
statement to Estaño, identifying Salafranca as the person who had stabbed him.
At the time of his statement, Bolanon was conscious of his impending death,
having sustained a stab wound in the chest and, according to Estaño, was then
experiencing great difficulty in breathing. Bolanon succumbed in the hospital
emergency room a few minutes from admission, which occurred under three
hours after the stabbing. There is ample authority for the view that the
declarant’s belief in the imminence of his death can be shown by the declarant’s
own statements or from circumstantial evidence, such as the nature of his
wounds, statements made in his presence, or by the opinion of his
20
physician. Bolanon would have been competent to testify on the subject of the
declaration had he survived. Lastly, the dying declaration was offered in this
criminal prosecution for murder in which Bolanon was the victim.
A declaration or an utterance is deemed as part of the res gestae and thus
admissible in evidence as an exception to the hearsay rule when the following
requisites concur, to wit: (a) the principal act, the res gestae, is a startling
occurrence; (b) the statements are made before the declarant had time to
contrive or devise; and (c) the statements must concern the occurrence in
21
question and its immediately attending circumstances.
The requisites for admissibility of a declaration as part of the res gestae concur
herein. Surely, when he gave the identity of the assailant to Estaño, Bolanon
was referring to a startling occurrence, i.e., his stabbing by Salafranca. Bolanon
was then on board the taxicab that would bring him to the hospital, and thus had
no time to contrive his identification of Salafranca as the assailant. His utterance
about Salafranca having stabbed him was made in spontaneity and only in
reaction to the startling occurrence. The statement was relevant because it
identified Salafranca as the perpetrator.
The term res gestae has been defined as "those circumstances which are the
undesigned incidents of a particular litigated act and which are admissible when
22
illustrative of such act." In a general way, res gestae refers to the
circumstances, facts, and declarations that grow out of the main fact and serve
to illustrate its character and are so spontaneous and contemporaneous with the
23
main fact as to exclude the idea of deliberation and fabrication. The rule
on res gestae encompasses the exclamations and statements made by either
the participants, victims, or spectators to a crime immediately before, during, or
immediately after the commission of the crime when the circumstances are such
that the statements were made as a spontaneous reaction or utterance inspired
by the excitement of the occasion and there was no opportunity for the declarant
24
to deliberate and to fabricate a false statement. The test of admissibility of
evidence as a part of the res gestae is, therefore, whether the act, declaration,
or exclamation is so intimately interwoven or connected with the principal fact or
event that it characterizes as to be regarded as a part of the transaction itself,
and also whether it clearly negatives any premeditation or purpose to
25
manufacture testimony.
We modify the limiting of civil damages by the CA and the RTC to only the death
indemnity of ₱50,000.00. We declare that the surviving heirs of Bolanon were
entitled by law to more than such indemnity, because the damages to be
awarded when death occurs due to a crime may include: (a) civil indemnity ex
delicto for the death of the victim (which was granted herein); (b) actual or
compensatory damages; (c) moral damages; (d) exemplary damages; and (e)
26
temperate damages.
We hold that the CA and the RTC should have further granted moral damages
27
which were different from the death indemnity. The death indemnity
compensated the loss of life due to crime, but appropriate and reasonable moral
damages would justly assuage the mental anguish and emotional sufferings of
28
the surviving family of the victim. Although mental anguish and emotional
sufferings of the surviving heirs were not quantifiable with mathematical
precision, the Court must nonetheless strive to set an amount that would restore
the heirs of Bolanon to their moral status quo ante. Given the circumstances, the
amount of ₱50,000.00 is reasonable as moral damages, which, pursuant to
29
prevailing jurisprudence, we are bound to award despite the absence of any
allegation and proof of the heirs’ mental anguish and emotional suffering. The
rationale for doing so rested on human nature and experience having shown
that:
xxx a violent death invariably and necessarily brings about emotional pain and
anguish on the part of the victim’s family.1âwphi1 It is inherently human to suffer
sorrow, torment, pain and anger when a loved one becomes the victim of a
violent or brutal killing. Such violent death or brutal killing not only steals from
the family of the deceased his precious life, deprives them forever of his love,
affection and support, but often leaves them with the gnawing feeling that an
30
injustice has been done to them.
The CA and the RTC committed another omission consisting in their non-
recognition of the right of the heirs of Bolanon to temperate damages. It is
already settled that when actual damages for burial and related expenses are
not substantiated by receipts, temperate damages of at least ₱25,000.00 are
warranted, for it would certainly be unfair to the surviving heirs of the victim to
31
deny them compensation by way of actual damages.
Moreover, the Civil Code provides that exemplary damages may be imposed in
criminal cases as part of the civil liability "when the crime was committed with
32
one or more aggravating circumstances." The Civil Code permits such
damages to be awarded "by way of example or correction for the public good, in
addition to the moral, temperate, liquidated or compensatory
33
damages." Conformably with such legal provisions, the CA and the RTC
should have recognized the entitlement of the heirs of the victim to exemplary
damages because of the attendance of treachery. It was of no moment that
treachery was an attendant circumstance in murder, and, as such, inseparable
34
and absorbed in murder. The Court explained so in People v. Catubig:
The term "aggravating circumstances" used by the Civil Code, the law not
having specified otherwise, is to be understood in its broad or generic sense.
The commission of an offense has a two-pronged effect, one on the public as it
breaches the social order and the other upon the private victim as it causes
personal sufferings, each of which is addressed by, respectively, the prescription
of heavier punishment for the accused and by an award of additional damages
to the victim. The increase of the penalty or a shift to a graver felony
underscores the exacerbation of the offense by the attendance of aggravating
circumstances, whether ordinary or qualifying, in its commission. Unlike the
criminal liability which is basically a State concern, the award of damages,
however, is likewise, if not primarily, intended for the offended party who suffers
thereby. It would make little sense for an award of exemplary damages to be
due the private offended party when the aggravating circumstance is ordinary
but to be withheld when it is qualifying. Withal, the ordinary or qualifying nature
of an aggravating circumstance is a distinction that should only be of
consequence to the criminal, rather than to the civil, liability of the offender. In
fine, relative to the civil aspect of the case, an aggravating circumstance,
whether ordinary or qualifying, should entitle the offended party to an award of
exemplary damages within the unbridled meaning of Article 2230 of the Civil
Code.
For the purpose of fixing the exemplary damages, the sum of ₱30,000.00 is
35
deemed reasonable and proper, because we think that a lesser amount could
not result in genuine exemplarity.
WHEREFORE, the Court AFFIRMS the decision of the Court of Appeals
promulgated on November 24, 2005, but MODIFIES the awards of civil
damages by adding to the amount of ₱50,000.00 awarded as death indemnity
the amounts of ₱50,000.00 as moral damages; ₱25,000.00 as temperate
damages; and ₱30,000.00 as exemplary damages, all of which awards shall
bear interest of 6% per annum from the finality of this decision.
The accused shall further pay the costs of suit.
SO ORDERED.
G.R. No. 161434 March 3, 2004
MARIA JEANETTE C. TECSON and FELIX B. DESIDERIO, JR., petitioners,
vs.
The COMMISSION ON ELECTIONS, RONALD ALLAN KELLY POE (a.k.a.
FERNANDO POE, JR.) and VICTORINO X. FORNIER, respondents.
x-----------------------------x
G.R. No. 161634 March 3, 2004
ZOILO ANTONIO VELEZ, petitioner,
vs.
RONALD ALLAN KELLEY POE, a.k.a. FERNANDO POE, JR., respondent.
x-----------------------------x
G. R. No. 161824 March 3, 2004
VICTORINO X. FORNIER, petitioner,
vs.
HON. COMMISSION ON ELECTIONS and RONALD ALLAN KELLEY POE,
ALSO KNOWN AS FERNANDO POE JR., respondents.
DECISION
VITUG, J.:
Citizenship is a treasured right conferred on those whom the state
believes are deserving of the privilege. It is a "precious heritage, as well as
1 executed in Spanish by Paulita Poe y Gomez attesting to her having filed a case
an inestimable acquisition," that cannot be taken lightly by anyone -
either by those who enjoy it or by those who dispute it.
Before the Court are three consolidated cases, all of which raise a single
question of profound importance to the nation. The issue of citizenship is
brought up to challenge the qualifications of a presidential candidate to hold the
highest office of the land. Our people are waiting for the judgment of the Court
with bated breath. Is Fernando Poe, Jr., the hero of silver screen, and now one
of the main contenders for the presidency, a natural-born Filipino or is he not?
The moment of introspection takes us face to face with Spanish and American
colonial roots and reminds us of the rich heritage of civil law and common law
traditions, the fusion resulting in a hybrid of laws and jurisprudence that could be
no less than distinctly Filipino.
Antecedent Case Settings
On 31 December 2003, respondent Ronald Allan Kelly Poe, also known as
Fernando Poe, Jr. (hereinafter "FPJ"), filed his certificate of candidacy for the
position of President of the Republic of the Philippines under the Koalisyon ng
Nagkakaisang Pilipino (KNP) Party, in the forthcoming national elections. In his
certificate of candidacy, FPJ, representing himself to be a natural-born citizen of
the Philippines, stated his name to be "Fernando Jr.," or "Ronald Allan" Poe, his
date of birth to be 20 August 1939 and his place of birth to be Manila.
Victorino X. Fornier, petitioner in G.R. No. 161824, entitled "Victorino X. Fornier,
Petitioner, versus Hon. Commission on Elections and Ronald Allan Kelley Poe,
also known as Fernando Poe, Jr., Respondents," initiated, on 09 January 2004,
a petition docketed SPA No. 04-003 before the Commission on Elections
("COMELEC") to disqualify FPJ and to deny due course or to cancel his
certificate of candidacy upon the thesis that FPJ made a material
misrepresentation in his certificate of candidacy by claiming to be a natural-born
Filipino citizen when in truth, according to Fornier, his parents were foreigners;
his mother, Bessie Kelley Poe, was an American, and his father, Allan Poe, was
a Spanish national, being the son of Lorenzo Pou, a Spanish subject. Granting,
petitioner asseverated, that Allan F. Poe was a Filipino citizen, he could not
have transmitted his Filipino citizenship to FPJ, the latter being an illegitimate
child of an alien mother. Petitioner based the allegation of the illegitimate birth of
respondent on two assertions - first, Allan F. Poe contracted a prior marriage to
a certain Paulita Gomez before his marriage to Bessie Kelley and, second, even
if no such prior marriage had existed, Allan F. Poe, married Bessie Kelly only a
year after the birth of respondent.
In the hearing before the Third Division of the COMELEC on 19 January 2004,
petitioner, in support of his claim, presented several documentary exhibits - 1) a
copy of the certificate of birth of FPJ, 2) a certified photocopy of an affidavit
for bigamy and concubinage against the father of respondent, Allan F. Poe, after
discovering his bigamous relationship with Bessie Kelley, 3) an English
translation of the affidavit aforesaid, 4) a certified photocopy of the certificate of
birth of Allan F. Poe, 5) a certification issued by the Director of the Records
Management and Archives Office, attesting to the fact that there was no record
in the National Archives that a Lorenzo Poe or Lorenzo Pou resided or entered
the Philippines before 1907, and 6) a certification from the Officer-In-Charge of
the Archives Division of the National Archives to the effect that no available
information could be found in the files of the National Archives regarding the
birth of Allan F. Poe.
On his part, respondent, presented twenty-two documentary pieces of evidence,
the more significant ones being - a) a certification issued by Estrella M. Domingo
of the Archives Division of the National Archives that there appeared to be no
available information regarding the birth of Allan F. Poe in the registry of births
for San Carlos, Pangasinan, b) a certification issued by the Officer-In-Charge of
the Archives Division of the National Archives that no available information
about the marriage of Allan F. Poe and Paulita Gomez could be found, c) a
certificate of birth of Ronald Allan Poe, d) Original Certificate of Title No. P-2247
of the Registry of Deeds for the Province of Pangasinan, in the name of Lorenzo
Pou, e) copies of Tax Declaration No. 20844, No. 20643, No. 23477 and No.
23478 in the name of Lorenzo Pou, f) a copy of the certificate of death of
Lorenzo Pou, g) a copy of the purported marriage contract between Fernando
Pou and Bessie Kelley, and h) a certification issued by the City Civil Registrar of
San Carlos City, Pangasinan, stating that the records of birth in the said office
during the period of from 1900 until May 1946 were totally destroyed during
World War II.
On 23 January 2004, the COMELEC dismissed SPA No. 04-003 for lack of
merit. Three days later, or on 26 January 2004, Fornier filed his motion for
reconsideration. The motion was denied on 06 February 2004 by the COMELEC
en banc. On 10 February 2004, petitioner assailed the decision of the
COMELEC before this Court conformably with Rule 64, in relation to Rule 65, of
the Revised Rules of Civil Procedure. The petition, docketed G. R. No. 161824,
likewise prayed for a temporary restraining order, a writ of preliminary injunction
or any other resolution that would stay the finality and/or execution of the
COMELEC resolutions.
The other petitions, later consolidated with G. R. No. 161824, would include G.
R. No. 161434, entitled "Maria Jeanette C. Tecson, and Felix B. Desiderio, Jr.,
vs. The Commission on Elections, Ronald Allan Kelley Poe (a.k.a. ‘Fernando
Poe, Jr.’), and Victorino X. Fornier," and the other, docketed G. R. No. 161634,
entitled "Zoilo Antonio G. Velez, vs. Ronald Allan Kelley Poe, a.k.a. Fernando
Poe, Jr.," both challenging the jurisdiction of the COMELEC and asserting that,
under Article VII, Section 4, paragraph 7, of the 1987 Constitution, only the
Supreme Court had original and exclusive jurisdiction to resolve the basic issue
on the case.
Jurisdiction of the Court
In G. R. No. 161824
In seeking the disqualification of the candidacy of FPJ and to have the
COMELEC deny due course to or cancel FPJ’s certificate of candidacy for
alleged misrepresentation of a material fact (i.e., that FPJ was a natural-born
citizen) before the COMELEC, petitioner Fornier invoked Section 78 of the
Omnibus Election Code –
"Section 78. Petition to deny due course to or cancel a certificate of
candidacy. --- A verified petition seeking to deny due course or to cancel
a certificate of candidacy may be filed by any person exclusively on the
ground that any material representation contained therein as required
under Section 74 hereof is false" –
in consonance with the general powers of COMELEC expressed in Section 52
of the Omnibus Election Code -
"Section 52. Powers and functions of the Commission on Elections. In
addition to the powers and functions conferred upon it by the
Constitution, the Commission shall have exclusive charge of the
enforcement and administration of all laws relative to the conduct of
elections for the purpose of ensuring free, orderly and honest elections"
-
and in relation to Article 69 of the Omnibus Election Code which would
authorize "any interested party" to file a verified petition to deny or
cancel the certificate of candidacy of any nuisance candidate.
Decisions of the COMELEC on disqualification cases may be reviewed by the
2 3
Supreme Court per Rule 64 in an action for certiorari under Rule 65 of the
Revised Rules of Civil Procedure. Section 7, Article IX, of the 1987 Constitution
also reads –
"Each Commission shall decide by a majority vote of all its Members
any case or matter brought before it within sixty days from the date of its
submission for decision or resolution. A case or matter is deemed
submitted for decision or resolution upon the filing of the last pleading,
brief, or memorandum, required by the rules of the Commission or by
the Commission itself. Unless otherwise provided by this Constitution or
by law, any decision, order, or ruling of each Commission may be
brought to the Supreme Court on certiorari by the aggrieved party within
thirty days from receipt of a copy thereof."
Additionally, Section 1, Article VIII, of the same Constitution provides that judicial
power is vested in one Supreme Court and in such lower courts as may be
established by law which power "includes the duty of the courts of justice to
settle actual controversies involving rights which are legally demandable and
enforceable, and to determine whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government."
It is sufficiently clear that the petition brought up in G. R. No. 161824 was aptly
elevated to, and could well be taken cognizance of by, this Court. A contrary
view could be a gross denial to our people of their fundamental right to be fully
informed, and to make a proper choice, on who could or should be elected to
occupy the highest government post in the land.
In G. R. No. 161434 and G. R. No. 161634
Petitioners Tecson, et al., in G. R. No. 161434, and Velez, in G. R. No. 161634,
invoke the provisions of Article VII, Section 4, paragraph 7, of the 1987
Constitution in assailing the jurisdiction of the COMELEC when it took
cognizance of SPA No. 04-003 and in urging the Supreme Court to instead take
on the petitions they directly instituted before it. The Constitutional provision
cited reads:
"The Supreme Court, sitting en banc, shall be the sole judge of all
contests relating to the election, returns, and qualifications of the
President or Vice-President, and may promulgate its rules for the
purpose."
The provision is an innovation of the 1987 Constitution. The omission in the
1935 and the 1973 Constitution to designate any tribunal to be the sole judge of
presidential and vice-presidential contests, has constrained this Court to
4 received either the second or third highest number of votes could file an election
declare, in Lopez vs. Roxas, as "not (being) justiciable" controversies or
disputes involving contests on the elections, returns and qualifications of the
President or Vice-President. The constitutional lapse prompted Congress, on 21
June 1957, to enact Republic Act No. 1793, "An Act Constituting an
Independent Presidential Electoral Tribunal to Try, Hear and Decide Protests
Contesting the Election of the President-Elect and the Vice-President-Elect of
the Philippines and Providing for the Manner of Hearing the Same." Republic
Act 1793 designated the Chief Justice and the Associate Justices of the
Supreme Court to be the members of the tribunal. Although the subsequent
adoption of the parliamentary form of government under the 1973 Constitution
might have implicitly affected Republic Act No. 1793, the statutory set-up,
nonetheless, would now be deemed revived under the present Section 4,
paragraph 7, of the 1987 Constitution.
Ordinary usage would characterize a "contest" in reference to a post-election
scenario. Election contests consist of either an election protest or a quo
warranto which, although two distinct remedies, would have one objective in
view, i.e., to dislodge the winning candidate from office. A perusal of the
phraseology in Rule 12, Rule 13, and Rule 14 of the "Rules of the Presidential
Electoral Tribunal," promulgated by the Supreme Court en banc on 18 April
1992, would support this premise -
"Rule 12. Jurisdiction. - The Tribunal shall be the sole judge of all
contests relating to the election, returns, and qualifications of the
President or Vice-President of the Philippines.
"Rule 13. How Initiated. - An election contest is initiated by the filing of
an election protest or a petition for quo warranto against the President
or Vice-President. An election protest shall not include a petition for quo
warranto. A petition for quo warranto shall not include an election
protest.
"Rule 14. Election Protest. - Only the registered candidate for President
or for Vice-President of the Philippines who received the second or third
highest number of votes may contest the election of the President or the
Vice-President, as the case may be, by filing a verified petition with the
Clerk of the Presidential Electoral Tribunal within thirty (30) days after
the proclamation of the winner."
The rules categorically speak of the jurisdiction of the tribunal over contests
relating to the election, returns and qualifications of the "President" or "Vice-
President", of the Philippines, and not of "candidates" for President or Vice-
President. A quo warranto proceeding is generally defined as being an action
against a person who usurps, intrudes into, or unlawfully holds or exercises a
5
public office. In such context, the election contest can only contemplate a post-
election scenario. In Rule 14, only a registered candidate who would have
protest. This rule again presupposes a post-election scenario.
It is fair to conclude that the jurisdiction of the Supreme Court, defined by
Section 4, paragraph 7, of the 1987 Constitution, would not include cases
directly brought before it, questioning the qualifications of a candidate for the
presidency or vice-presidency before the elections are held.
Accordingly, G. R. No. 161434, entitled "Maria Jeanette C. Tecson, et al., vs.
Commission on Elections et al.," and G. R. No. 161634, entitled "Zoilo Antonio
Velez vs. Ronald Allan Kelley Poe a.k.a. Fernando Poe, Jr." would have to be
dismissed for want of jurisdiction.
The Citizenship Issue
Now, to the basic issue; it should be helpful to first give a brief historical
background on the concept of citizenship.
Perhaps, the earliest understanding of citizenship was that given by Aristotle,
who, sometime in 384 to 322 B.C., described the "citizen" to refer to a man who
6
shared in the administration of justice and in the holding of an office. Aristotle
saw its significance if only to determine the constituency of the "State," which he
described as being composed of such persons who would be adequate in
7
number to achieve a self-sufficient existence. The concept grew to include one
who would both govern and be governed, for which qualifications like autonomy,
judgment and loyalty could be expected. Citizenship was seen to deal with rights
and entitlements, on the one hand, and with concomitant obligations, on the
8
other. In its ideal setting, a citizen was active in public life and fundamentally
willing to submit his private interests to the general interest of society.
The concept of citizenship had undergone changes over the centuries. In the "(c) Foreigners who have obtained naturalization papers,
18th century, the concept was limited, by and large, to civil citizenship, which
established the rights necessary for individual freedom, such as rights to "(d) Those who, without such papers, may have become domiciled
9 20
property, personal liberty and justice. Its meaning expanded during the 19th inhabitants of any town of the Monarchy."
century to include political citizenship, which encompassed the right to
10
participate in the exercise of political power. The 20th century saw the next
The year 1898 was another turning point in Philippine history. Already in the
stage of the development of social citizenship, which laid emphasis on the right
11 state of decline as a superpower, Spain was forced to so cede her sole colony in
of the citizen to economic well-being and social security. The idea of the East to an upcoming world power, the United States. An accepted principle
citizenship has gained expression in the modern welfare state as it so developed of international law dictated that a change in sovereignty, while resulting in an
in Western Europe. An ongoing and final stage of development, in keeping with
abrogation of all political laws then in force, would have no effect on civil laws,
the rapidly shrinking global village, might well be the internationalization of
12 which would remain virtually intact.
citizenship.
The Treaty of Paris was entered into on 10 December 1898 between Spain and
The Local Setting - from Spanish Times to the Present 21
the United States. Under Article IX of the treaty, the civil rights and political
status of the native inhabitants of the territories ceded to the United States
There was no such term as "Philippine citizens" during the Spanish regime but would be determined by its Congress -
13
"subjects of Spain" or "Spanish subjects." In church records, the natives were
called 'indios', denoting a low regard for the inhabitants of the archipelago. "Spanish subjects, natives of the Peninsula, residing in the territory over
Spanish laws on citizenship became highly codified during the 19th century but
which Spain by the present treaty relinquishes or cedes her sovereignty
their sheer number made it difficult to point to one comprehensive law. Not all of
may remain in such territory or may remove therefrom, retaining in
these citizenship laws of Spain however, were made to apply to the Philippine
14 either event all their rights of property, including the right to sell or
Islands except for those explicitly extended by Royal Decrees.
dispose of such property or of its proceeds; and they shall also have the
right to carry on their industry, commerce, and professions, being
Spanish laws on citizenship were traced back to the Novisima Recopilacion, subject in respect thereof to such laws as are applicable to foreigners. In
promulgated in Spain on 16 July 1805 but as to whether the law was extended case they remain in the territory they may preserve their allegiance to
to the Philippines remained to be the subject of differing views among the Crown of Spain by making, before a court of record, within a year
15
experts; however, three royal decrees were undisputably made applicable to from the date of the exchange of ratifications of this treaty, a declaration
16
Spaniards in the Philippines - the Order de la Regencia of 14 August 1841, the of their decision to preserve such allegiance; in default of which
Royal Decree of 23 August 1868 specifically defining the political status of declaration they shall be held to have renounced it and to have adopted
17
children born in the Philippine Islands, and finally, the Ley Extranjera de the nationality of the territory in which they reside.
Ultramar of 04 July 1870, which was expressly made applicable to the
18
Philippines by the Royal Decree of 13 July 1870.
Thus –

The Spanish Constitution of 1876 was never extended to the Philippine Islands
because of the express mandate of its Article 89, according to which the
provisions of the Ultramar among which this country was included, would be
19
governed by special laws.
It was only the Civil Code of Spain, made effective in this jurisdiction on 18
December 1889, which came out with the first categorical enumeration of who
were Spanish citizens. -
"(a) Persons born in Spanish territory,
"The civil rights and political status of the native inhabitants of the
territories hereby ceded to the United States shall be determined by the
22
Congress."
Upon the ratification of the treaty, and pending legislation by the United States
Congress on the subject, the native inhabitants of the Philippines ceased to be
Spanish subjects. Although they did not become American citizens, they,
however, also ceased to be "aliens" under American laws and were thus issued
passports describing them to be citizens of the Philippines entitled to the
protection of the United States.

"(b) Children of a Spanish father or mother, even if they were born The term "citizens of the Philippine Islands" appeared for the first time in the
outside of Spain, Philippine Bill of 1902, also commonly referred to as the Philippine Organic Act
of 1902, the first comprehensive legislation of the Congress of the United States
on the Philippines -
".... that all inhabitants of the Philippine Islands continuing to reside
therein, who were Spanish subjects on the 11th day of April, 1891, and
then resided in said Islands, and their children born subsequent thereto,
shall be deemed and held to be citizens of the Philippine Islands and as
such entitled to the protection of the United States, except such as shall
have elected to preserve their allegiance to the Crown of Spain in
accordance with the provisions of the treaty of peace between the
United States and Spain, signed at Paris, December tenth eighteen
23
hundred and ninety eight."
Under the organic act, a "citizen of the Philippines" was one who was an
th
inhabitant of the Philippines, and a Spanish subject on the 11 day of April
1899. The term "inhabitant" was taken to include 1) a native-born inhabitant, 2)
an inhabitant who was a native of Peninsular Spain, and 3) an inhabitant who
24
obtained Spanish papers on or before 11 April 1899.
Controversy arose on to the status of children born in the Philippines from 11
April 1899 to 01 July 1902, during which period no citizenship law was extant in
the Philippines. Weight was given to the view, articulated in jurisprudential
writing at the time, that the common law principle of jus soli, otherwise also
known as the principle of territoriality, operative in the United States and
England, governed those born in the Philippine Archipelago within that
25
period. More about this later.
In 23 March 1912, the Congress of the United States made the following
amendment to the Philippine Bill of 1902 -
"Provided, That the Philippine Legislature is hereby authorized to
provide by law for the acquisition of Philippine citizenship by those
natives of the Philippine Islands who do not come within the foregoing
provisions, the natives of other insular possession of the United States,
and such other persons residing in the Philippine Islands who would
become citizens of the United States, under the laws of the United
26
States, if residing therein."
With the adoption of the Philippine Bill of 1902, the concept of "Philippine
citizens" had for the first time crystallized. The word "Filipino" was used by
William H. Taft, the first Civil Governor General in the Philippines when he
initially made mention of it in his slogan, "The Philippines for the Filipinos." In
1916, the Philippine Autonomy Act, also known as the Jones Law restated
virtually the provisions of the Philippine Bill of 1902, as so amended by the Act
of Congress in 1912 -
"That all inhabitants of the Philippine Islands who were Spanish subjects
on the eleventh day of April, eighteen hundred and ninety-nine, and then
resided in said Islands, and their children born subsequently thereto,
shall be deemed and held to be citizens of the Philippine Islands, except
such as shall have elected to preserve their allegiance to the Crown of
Spain in accordance with the provisions of the treaty of peace between
the United States and Spain, signed at Paris December tenth, eighteen
hundred and ninety-eight and except such others as have since become
citizens of some other country; Provided, That the Philippine
Legislature, herein provided for, is hereby authorized to provide for the
acquisition of Philippine citizenship by those natives of the Philippine
Islands who do not come within the foregoing provisions, the natives of
the insular possessions of the United States, and such other persons
residing in the Philippine Islands who are citizens of the United States,
or who could become citizens of the United States under the laws of the
United States, if residing therein."
Under the Jones Law, a native-born inhabitant of the Philippines was deemed to
be a citizen of the Philippines as of 11 April 1899 if he was 1) a subject of Spain
on 11 April 1899, 2) residing in the Philippines on said date, and, 3) since that
date, not a citizen of some other country.
While there was, at one brief time, divergent views on whether or not jus soli
was a mode of acquiring citizenship, the 1935 Constitution brought to an end to
any such link with common law, by adopting, once and for all, jus sanguinis or
blood relationship as being the basis of Filipino citizenship -
"Section 1, Article III, 1935 Constitution. The following are citizens of the
Philippines -
"(1) Those who are citizens of the Philippine Islands at the time of the
adoption of this Constitution
"(2) Those born in the Philippines Islands of foreign parents who, before
the adoption of this Constitution, had been elected to public office in the
Philippine Islands.
"(3) Those whose fathers are citizens of the Philippines.
"(4) Those whose mothers are citizens of the Philippines and upon
reaching the age of majority, elect Philippine citizenship.
"(5) Those who are naturalized in accordance with law."
Subsection (4), Article III, of the 1935 Constitution, taken together with existing
civil law provisions at the time, which provided that women would automatically
lose their Filipino citizenship and acquire that of their foreign husbands, resulted
in discriminatory situations that effectively incapacitated the women from
transmitting their Filipino citizenship to their legitimate children and required
illegitimate children of Filipino mothers to still elect Filipino citizenship upon
reaching the age of majority. Seeking to correct this anomaly, as well as fully
cognizant of the newly found status of Filipino women as equals to men, the
framers of the 1973 Constitution crafted the provisions of the new Constitution
on citizenship to reflect such concerns -
"Section 1, Article III, 1973 Constitution - The following are citizens of
the Philippines:
"(1) Those who are citizens of the Philippines at the time of the adoption
of this Constitution.
"(2) Those whose fathers or mothers are citizens of the Philippines.
"(3) Those who elect Philippine citizenship pursuant to the provisions of
the Constitution of nineteen hundred and thirty-five.
"(4) Those who are naturalized in accordance with law."
For good measure, Section 2 of the same article also further provided that –
"A female citizen of the Philippines who marries an alien retains her
Philippine citizenship, unless by her act or omission she is deemed,
under the law to have renounced her citizenship."
The 1987 Constitution generally adopted the provisions of the 1973 Constitution,
except for subsection (3) thereof that aimed to correct the irregular situation
generated by the questionable proviso in the 1935 Constitution.
Section I, Article IV, 1987 Constitution now provides:
"The following are citizens of the Philippines:
"(1) Those who are citizens of the Philippines at the time of the
adoption of this Constitution.
"(2) Those whose fathers or mothers are citizens of the
Philippines.
"(3) Those born before January 17, 1973 of Filipino mothers,
who elect Philippine citizenship upon reaching the age of
majority; and
"(4) Those who are naturalized in accordance with law."
The Case Of FPJ
Section 2, Article VII, of the 1987 Constitution expresses:
"No person may be elected President unless he is a natural-born citizen
of the Philippines, a registered voter, able to read and write, at least
forty years of age on the day of the election, and a resident of the
Philippines for at least ten years immediately preceding such election."
The term "natural-born citizens," is defined to include "those who are citizens of
the Philippines from birth without having to perform any act to acquire or perfect
27
their Philippine citizenship."
The date, month and year of birth of FPJ appeared to be 20 August 1939 during
the regime of the 1935 Constitution. Through its history, four modes of acquiring
28
citizenship - naturalization, jus soli, res judicata and jus sanguinis – had been
in vogue. Only two, i.e., jus soli and jus sanguinis, could qualify a person to
being a "natural-born" citizen of the Philippines. Jus soli, per Roa vs. Collector of
29
Customs (1912), did not last long. With the adoption of the 1935 Constitution
30
and the reversal of Roa in Tan Chong vs. Secretary of Labor (1947), jus
sanguinis or blood relationship would now become the primary basis of
citizenship by birth.
Documentary evidence adduced by petitioner would tend to indicate that the
earliest established direct ascendant of FPJ was his paternal grandfather
Lorenzo Pou, married to Marta Reyes, the father of Allan F. Poe. While the
record of birth of Lorenzo Pou had not been presented in evidence, his death
certificate, however, identified him to be a Filipino, a resident of San Carlos,
Pangasinan, and 84 years old at the time of his death on 11 September 1954.
The certificate of birth of the father of FPJ, Allan F. Poe, showed that he was
born on 17 May 1915 to an Español father, Lorenzo Pou, and a mestiza Español
mother, Marta Reyes. Introduced by petitioner was an "uncertified" copy of a
supposed certificate of the alleged marriage of Allan F. Poe and Paulita Gomez
on 05 July 1936. The marriage certificate of Allan F. Poe and Bessie Kelley
reflected the date of their marriage to be on 16 September 1940. In the same
certificate, Allan F. Poe was stated to be twenty-five years old, unmarried, and a
Filipino citizen, and Bessie Kelley to be twenty-two years old, unmarried, and an
American citizen. The birth certificate of FPJ, would disclose that he was born
on 20 August 1939 to Allan F. Poe, a Filipino, twenty-four years old, married to
Bessie Kelly, an American citizen, twenty-one years old and married.
Considering the reservations made by the parties on the veracity of some of the
entries on the birth certificate of respondent and the marriage certificate of his
parents, the only conclusions that could be drawn with some degree of certainty
from the documents would be that -
1. The parents of FPJ were Allan F. Poe and Bessie Kelley;
2. FPJ was born to them on 20 August 1939;
3. Allan F. Poe and Bessie Kelley were married to each other on 16
September, 1940;
4. The father of Allan F. Poe was Lorenzo Poe; and
5. At the time of his death on 11 September 1954, Lorenzo Poe was 84
years old.
Would the above facts be sufficient or insufficient to establish the fact that FPJ is
a natural-born Filipino citizen? The marriage certificate of Allan F. Poe and
Bessie Kelley, the birth certificate of FPJ, and the death certificate of Lorenzo
Pou are documents of public record in the custody of a public officer. The
documents have been submitted in evidence by both contending parties during
the proceedings before the COMELEC.
The birth certificate of FPJ was marked Exhibit "A" for petitioner and Exhibit "3"
for respondent. The marriage certificate of Allan F. Poe to Bessie Kelley was
submitted as Exhibit "21" for respondent. The death certificate of Lorenzo Pou
was submitted by respondent as his Exhibit "5." While the last two documents
were submitted in evidence for respondent, the admissibility thereof, particularly
in reference to the facts which they purported to show, i.e., the marriage
certificate in relation to the date of marriage of Allan F. Poe to Bessie Kelley and
the death certificate relative to the death of Lorenzo Pou on 11 September 1954
in San Carlos, Pangasinan, were all admitted by petitioner, who had utilized
those material statements in his argument. All three documents were certified
true copies of the originals.
Section 3, Rule 130, Rules of Court states that -
"Original document must be produced; exceptions. - When the subject
of inquiry is the contents of a document, no evidence shall be
admissible other than the original document itself, except in the
following cases:
"x x x xxx xxx
"(d) When the original is a public record in the custody of a public office
or is recorded in a public office."
Being public documents, the death certificate of Lorenzo Pou, the marriage
certificate of Allan F. Poe and Bessie Kelly, and the birth certificate of FPJ,
constitute prima facie proof of their contents. Section 44, Rule 130, of the Rules
of Court provides:
"Entries in official records. Entries in official records made in the
performance of his duty by a public officer of the Philippines, or by a
person in the performance of a duty specially enjoined by law, are prima
facie evidence of the facts therein stated."
The trustworthiness of public documents and the value given to the entries
made therein could be grounded on 1) the sense of official duty in the
preparation of the statement made, 2) the penalty which is usually affixed to a
breach of that duty, 3) the routine and disinterested origin of most such
statements, and 4) the publicity of record which makes more likely the prior
31
exposure of such errors as might have occurred.
The death certificate of Lorenzo Pou would indicate that he died on 11
September 1954, at the age of 84 years, in San Carlos, Pangasinan. It could
thus be assumed that Lorenzo Pou was born sometime in the year 1870 when
the Philippines was still a colony of Spain. Petitioner would argue that Lorenzo
Pou was not in the Philippines during the crucial period of from 1898 to 1902
considering that there was no existing record about such fact in the Records
Management and Archives Office. Petitioner, however, likewise failed to show
that Lorenzo Pou was at any other place during the same period. In his death
certificate, the residence of Lorenzo Pou was stated to be San Carlos,
Pangasinan. In the absence of any evidence to the contrary, it should be sound
to conclude, or at least to presume, that the place of residence of a person at
the time of his death was also his residence before death. It would be extremely
doubtful if the Records Management and Archives Office would have had
complete records of all residents of the Philippines from 1898 to 1902.
Proof of Paternity and Filiation
Under Civil Law.
Petitioner submits, in any case, that in establishing filiation (relationship or civil
status of the child to the father [or mother]) or paternity (relationship or civil
status of the father to the child) of an illegitimate child, FPJ evidently being an
illegitimate son according to petitioner, the mandatory rules under civil law must
be used.
Under the Civil Code of Spain, which was in force in the Philippines from 08
December 1889 up until the day prior to 30 August 1950 when the Civil Code of
the Philippines took effect, acknowledgment was required to establish filiation or
paternity. Acknowledgment was either judicial (compulsory) or voluntary. Judicial
or compulsory acknowledgment was possible only if done during the lifetime of
the putative parent; voluntary acknowledgment could only be had in a record of
32
birth, a will, or a public document. Complementary to the new code was Act
No. 3753 or the Civil Registry Law expressing in Section 5 thereof, that -
"In case of an illegitimate child, the birth certificate shall be signed and
sworn to jointly by the parents of the infant or only by the mother if the
father refuses. In the latter case, it shall not be permissible to state or
reveal in the document the name of the father who refuses to
acknowledge the child, or to give therein any information by which such
father could be identified."
In order that the birth certificate could then be utilized to prove voluntary
acknowledgment of filiation or paternity, the certificate was required to be signed
or sworn to by the father. The failure of such requirement rendered the same
33
useless as being an authoritative document of recognition. In Mendoza vs.
34
Mella, the Court ruled -
"Since Rodolfo was born in 1935, after the registry law was enacted, the
question here really is whether or not his birth certificate (Exhibit 1),
which is merely a certified copy of the registry record, may be relied
upon as sufficient proof of his having been voluntarily recognized. No
such reliance, in our judgment, may be placed upon it. While it contains
the names of both parents, there is no showing that they signed the
original, let alone swore to its contents as required in Section 5 of Act
No. 3753. For all that might have happened, it was not even they or
either of them who furnished the data to be entered in the civil register.
Petitioners say that in any event the birth certificate is in the nature of a
public document wherein voluntary recognition of a natural child may
also be made, according to the same Article 131. True enough, but in
such a case, there must be a clear statement in the document that the
parent recognizes the child as his or her own."
In the birth certificate of respondent FPJ, presented by both parties, nowhere in
the document was the signature of Allan F. Poe found. There being no will
apparently executed, or at least shown to have been executed, by decedent
Allan F. Poe, the only other proof of voluntary recognition remained to be "some
35
other public document." In Pareja vs. Pareja, this Court defined what could
constitute such a document as proof of voluntary acknowledgment:
"Under the Spanish Civil Code there are two classes of public
documents, those executed by private individuals which must be
authenticated by notaries, and those issued by competent public
officials by reason of their office. The public document pointed out in
Article 131 as one of the means by which recognition may be made
belongs to the first class."
Let us leave it at that for the moment.
The 1950 Civil Code categorized the acknowledgment or recognition of
illegitimate children into voluntary, legal or compulsory. Voluntary recognition
was required to be expressedly made in a record of birth, a will, a statement
before a court of record or in any authentic writing. Legal acknowledgment took
place in favor of full blood brothers and sisters of an illegitimate child who was
recognized or judicially declared as natural. Compulsory acknowledgment could
be demanded generally in cases when the child had in his favor any evidence to
prove filiation. Unlike an action to claim legitimacy which would last during the
lifetime of the child, and might pass exceptionally to the heirs of the child, an
action to claim acknowledgment, however, could only be brought during the
lifetime of the presumed parent.
Amicus Curiae Ruben F. Balane defined, during the oral argument, "authentic
writing," so as to be an authentic writing for purposes of voluntary recognition,
simply as being a genuine or indubitable writing of the father. The term would
include a public instrument (one duly acknowledged before a notary public or
other competent official) or a private writing admitted by the father to be his.
The Family Code has further liberalized the rules; Article 172, Article 173, and
Article 175 provide:
"Art. 172. The filiation of legitimate children is established by any of the
following:
"(1) The record of birth appearing in the civil register or a final judgment;
or
"(2) An admission of legitimate filiation in a public document or a private
handwritten instrument and signed by the parent concerned.
"In the absence of the foregoing evidence, the legitimate filiation shall
be proved by:
"(1) The open and continuous possession of the status of a legitimate
child; or
"(2) Any other means allowed by the Rules of Court and special laws.
"Art. 173. The action to claim legitimacy may be brought by the child
during his or her lifetime and shall be transmitted to the heirs should the
child die during minority or in a state of insanity. In these cases, the
heirs shall have a period of five years within which to institute the action.

"The action already commenced by the child shall survive
notwithstanding the death of either or both of the parties.
"x x x xxx x x x.
"Art. 175. Illegitimate children may establish their illegitimate filiation in
the same way and on the same, evidence as legitimate children.
"The action must be brought within the same period specified in Article
173, except when the action is based on the second paragraph of Article
172, in which case the action may be brought during the lifetime of the
alleged parent."
The provisions of the Family Code are retroactively applied; Article 256 of the
code reads:
"Art. 256. This Code shall have retroactive effect insofar as it does not
prejudice or impair vested or acquired rights in accordance with the Civil
Code or other laws."
36
Thus, in Vda. de Sy-Quia vs. Court of Appeals, the Court has ruled:
"We hold that whether Jose was a voluntarily recognized natural child
should be decided under Article 278 of the Civil Code of the Philippines.
Article 2260 of that Code provides that 'the voluntary recognition of a
natural child shall take place according to this Code, even if the child
was born before the effectivity of this body of laws' or before August 30,
1950. Hence, Article 278 may be given retroactive effect."
It should be apparent that the growing trend to liberalize the acknowledgment or
recognition of illegitimate children is an attempt to break away from the
traditional idea of keeping well apart legitimate and non-legitimate relationships
within the family in favor of the greater interest and welfare of the child. The
provisions are intended to merely govern the private and personal affairs of the
family. There is little, if any, to indicate that the legitimate or illegitimate civil
status of the individual would also affect his political rights or, in general, his
relationship to the State. While, indeed, provisions on "citizenship" could be
found in the Civil Code, such provisions must be taken in the context of private
relations, the domain of civil law; particularly -
"Civil Law is that branch of law which has for its double purpose the
organization of the family and the regulation of property. It has thus
[been] defined as the mass of precepts which determine and regulate
the relations of assistance, authority and obedience among members of
a family, and those which exist among members of a society for the
37
protection of private interests."
38
In Yañez de Barnuevo vs. Fuster, the Court has held:
"In accordance with Article 9 of the Civil Code of Spain, x x x the laws
relating to family rights and duties, or to the status, condition and legal
capacity of persons, govern Spaniards although they reside in a foreign
country; that, in consequence, 'all questions of a civil nature, such as
those dealing with the validity or nullity of the matrimonial bond, the
domicile of the husband and wife, their support, as between them, the
separation of their properties, the rules governing property, marital
authority, division of conjugal property, the classification of their
property, legal causes for divorce, the extent of the latter, the authority
to decree it, and, in general, the civil effects of marriage and divorce
upon the persons and properties of the spouses, are questions that are
governed exclusively by the national law of the husband and wife."
The relevance of "citizenship" or "nationality" to Civil Law is best exemplified in
Article 15 of the Civil Code, stating that -
"Laws relating to family rights and duties, or to the status, condition and
legal capacity of persons are binding upon citizens of the Philippines,
even though living abroad" -
that explains the need to incorporate in the code a reiteration of the
Constitutional provisions on citizenship. Similarly, citizenship is significant in civil
39
relationships found in different parts of the Civil Code, such as on successional
40
rights and family relations. In adoption, for instance, an adopted child would be
considered the child of his adoptive parents and accorded the same rights as
their legitimate child but such legal fiction extended only to define his rights
41
under civil law and not his political status.
Civil law provisions point to an obvious bias against illegitimacy. This
discriminatory attitude may be traced to the Spanish family and property laws,
which, while defining proprietary and successional rights of members of the
family, provided distinctions in the rights of legitimate and illegitimate children. In
the monarchial set-up of old Spain, the distribution and inheritance of titles and
wealth were strictly according to bloodlines and the concern to keep these
bloodlines uncontaminated by foreign blood was paramount.
These distinctions between legitimacy and illegitimacy were codified in the
Spanish Civil Code, and the invidious discrimination survived when the Spanish
Civil Code became the primary source of our own Civil Code. Such distinction,
however, remains and should remain only in the sphere of civil law and not
unduly impede or impinge on the domain of political law.
The proof of filiation or paternity for purposes of determining his citizenship
status should thus be deemed independent from and not inextricably tied up with
that prescribed for civil law purposes. The Civil Code or Family Code provisions
on proof of filiation or paternity, although good law, do not have preclusive
effects on matters alien to personal and family relations. The ordinary rules on
evidence could well and should govern. For instance, the matter about pedigree
is not necessarily precluded from being applicable by the Civil Code or Family
Code provisions.
Section 39, Rule 130, of the Rules of Court provides -
"Act or Declaration about pedigree. The act or declaration of a person
deceased, or unable to testify, in respect to the pedigree of another
person related to him by birth or marriage, may be received in evidence
where it occurred before the controversy, and the relationship between
the two persons is shown by evidence other than such act or
declaration. The word `pedigree’ includes relationship, family genealogy,
birth, marriage, death, the dates when and the places where these facts
occurred, and the names of the relatives. It embraces also facts of
family history intimately connected with pedigree."
For the above rule to apply, it would be necessary that (a) the declarant is
already dead or unable to testify, (b) the pedigree of a person must be at issue,
(c) the declarant must be a relative of the person whose pedigree is in question,
(d) declaration must be made before the controversy has occurred, and (e) the
relationship between the declarant and the person whose pedigree is in question
must be shown by evidence other than such act or declaration.
Thus, the duly notarized declaration made by Ruby Kelley Mangahas, sister of
Bessie Kelley Poe submitted as Exhibit 20 before the COMELEC, might be
accepted to prove the acts of Allan F. Poe, recognizing his own paternal
relationship with FPJ, i.e, living together with Bessie Kelley and his children
(including respondent FPJ) in one house, and as one family -
"I, Ruby Kelley Mangahas, of legal age and sound mind, presently
residing in Stockton, California, U.S.A., after being sworn in accordance
with law do hereby declare that:
"1. I am the sister of the late Bessie Kelley Poe.
"2. Bessie Kelley Poe was the wife of Fernando Poe, Sr.
"3. Fernando and Bessie Poe had a son by the name of Ronald Allan
Poe, more popularly known in the Philippines as `Fernando Poe, Jr.,’ or
`FPJ’.
"4. Ronald Allan Poe `FPJ’ was born on August 20, 1939 at St. Luke's
Hospital, Magdalena Street, Manila.
"x x x xxx xxx
"7. Fernando Poe Sr., and my sister Bessie, met and became engaged
while they were students at the University of the Philippines in 1936. I
was also introduced to Fernando Poe, Sr., by my sister that same year.
"8. Fernando Poe, Sr., and my sister Bessie had their first child in 1938.
"9. Fernando Poe, Sr., my sister Bessie and their first three children,
Elizabeth, Ronald, Allan and Fernando II, and myself lived together with
our mother at our family's house on Dakota St. (now Jorge Bocobo St.),
Malate until the liberation of Manila in 1945, except for some months
between 1943-1944.
"10. Fernando Poe, Sr., and my sister, Bessie, were blessed with four
(4) more children after Ronald Allan Poe.
"x x x xxx xxx
"18. I am executing this Declaration to attest to the fact that my nephew,
Ronald Allan Poe is a natural born Filipino, and that he is the legitimate
child of Fernando Poe, Sr.
"Done in City of Stockton, California, U.S.A., this 12th day of January
2004.
Ruby Kelley Mangahas Declarant DNA Testing
In case proof of filiation or paternity would be unlikely to satisfactorily establish
or would be difficult to obtain, DNA testing, which examines genetic codes
obtained from body cells of the illegitimate child and any physical residue of the
long dead parent could be resorted to. A positive match would clear up filiation
42
or paternity. In Tijing vs. Court of Appeals, this Court has acknowledged the
strong weight of DNA testing -
"Parentage will still be resolved using conventional methods unless we adopt
the modern and scientific ways available. Fortunately, we have now the facility
and expertise in using DNA test for identification and parentage testing. The
University of the Philippines Natural Science Research Institute (UP-NSRI) DNA
Analysis Laboratory has now the capability to conduct DNA typing using short
tandem repeat (STR) analysis. The analysis is based on the fact that the DNA of
a child/person has two (2) copies, one copy from the mother and the other from
the father. The DNA from the mother, the alleged father and the child are
analyzed to establish parentage. Of course, being a novel scientific technique,
the use of DNA test as evidence is still open to challenge. Eventually, as the
appropriate case comes, courts should not hesitate to rule on the admissibility of
DNA evidence. For it was said, that courts should apply the results of science
when competently obtained in aid of situations presented, since to reject said
result is to deny progress."
Petitioner’s Argument For Jurisprudential Conclusiveness
Petitioner would have it that even if Allan F. Poe were a Filipino citizen, he could
not have transmitted his citizenship to respondent FPJ, the latter being an
illegitimate child. According to petitioner, prior to his marriage to Bessie Kelley,
Allan F. Poe, on July 5, 1936, contracted marriage with a certain Paulita Gomez,
making his subsequent marriage to Bessie Kelley bigamous and respondent
FPJ an illegitimate child. The veracity of the supposed certificate of marriage
between Allan F. Poe and Paulita Gomez could be most doubtful at best. But the
documentary evidence introduced by no less than respondent himself,
consisting of a birth certificate of respondent and a marriage certificate of his
parents showed that FPJ was born on 20 August 1939 to a Filipino father and an
American mother who were married to each other a year later, or on 16
September 1940. Birth to unmarried parents would make FPJ an illegitimate
child. Petitioner contended that as an illegitimate child, FPJ so followed the
citizenship of his mother, Bessie Kelley, an American citizen, basing his stand
43
on the ruling of this Court in Morano vs. Vivo, citing Chiongbian vs. de
44 45
Leo and Serra vs. Republic.
On the above score, the disquisition made by amicus curiae Joaquin G. Bernas,
SJ, is most convincing; he states -
"We must analyze these cases and ask what the lis mota was in each of
them. If the pronouncement of the Court on jus sanguinis was on the lis
mota, the pronouncement would be a decision constituting doctrine
under the rule of stare decisis. But if the pronouncement was irrelevant
to the lis mota, the pronouncement would not be a decision but a mere
obiter dictum which did not establish doctrine. I therefore invite the Court
to look closely into these cases.
"First, Morano vs. Vivo. The case was not about an illegitimate child of a
Filipino father. It was about a stepson of a Filipino, a stepson who was
the child of a Chinese mother and a Chinese father. The issue was
whether the stepson followed the naturalization of the stepfather.
Nothing about jus sanguinis there. The stepson did not have the blood
of the naturalized stepfather.
"Second, Chiongbian vs. de Leon. This case was not about the
illegitimate son of a Filipino father. It was about a legitimate son of a
father who had become Filipino by election to public office before the
1935 Constitution pursuant to Article IV, Section 1(2) of the 1935
Constitution. No one was illegitimate here.
"Third, Serra vs. Republic. The case was not about the illegitimate son
of a Filipino father. Serra was an illegitimate child of a Chinese father
and a Filipino mother. The issue was whether one who was already a
Filipino because of his mother who still needed to be naturalized. There
is nothing there about invidious jus sanguinis.
46
"Finally, Paa vs. Chan. This is a more complicated case. The case
was about the citizenship of Quintin Chan who was the son of Leoncio
Chan. Quintin Chan claimed that his father, Leoncio, was the illegitimate
son of a Chinese father and a Filipino mother. Quintin therefore argued
that he got his citizenship from Leoncio, his father. But the Supreme
Court said that there was no valid proof that Leoncio was in fact the son
of a Filipina mother. The Court therefore concluded that Leoncio was
not Filipino. If Leoncio was not Filipino, neither was his son Quintin.
Quintin therefore was not only not a natural-born Filipino but was not
even a Filipino.
"The Court should have stopped there. But instead it followed with an
obiter dictum. The Court said obiter that even if Leoncio, Quintin's
father, were Filipino, Quintin would not be Filipino because Quintin was
illegitimate. This statement about Quintin, based on a contrary to fact
assumption, was absolutely unnecessary for the case. x x x It was obiter
dictum, pure and simple, simply repeating the obiter dictum in Morano
vs. Vivo.
"x x x xxx xxx
"Aside from the fact that such a pronouncement would have no textual
foundation in the Constitution, it would also violate the equal protection
clause of the Constitution not once but twice. First, it would make an
illegitimate distinction between a legitimate child and an illegitimate
child, and second, it would make an illegitimate distinction between the
illegitimate child of a Filipino father and the illegitimate child of a Filipino
mother.
"The doctrine on constitutionally allowable distinctions was established
47
long ago by People vs. Cayat. I would grant that the distinction
between legitimate children and illegitimate children rests on real
differences. x x x But real differences alone do not justify invidious
distinction. Real differences may justify distinction for one purpose but
not for another purpose.
"x x x What is the relevance of legitimacy or illegitimacy to elective
public service? What possible state interest can there be for
disqualifying an illegitimate child from becoming a public officer. It was
not the fault of the child that his parents had illicit liaison. Why deprive
 the child of the fullness of political rights for no fault of his own? To
disqualify an illegitimate child from holding an important public office is
to punish him for the indiscretion of his parents. There is neither justice
nor rationality in that. And if there is neither justice nor rationality in the
distinction, then the distinction transgresses the equal protection clause
and must be reprobated."
The other amici curiae, Mr. Justice Vicente Mendoza (a former member of this
Court), Professor Ruben Balane and Dean Martin Magallona, at bottom, have
expressed similar views. The thesis of petitioner, unfortunately hinging solely on
pure obiter dicta, should indeed fail.
Where jurisprudence regarded an illegitimate child as taking after the citizenship
of its mother, it did so for the benefit the child. It was to ensure a Filipino
nationality for the illegitimate child of an alien father in line with the assumption
that the mother had custody, would exercise parental authority and had the duty
to support her illegitimate child. It was to help the child, not to prejudice or
discriminate against him.
The fact of the matter – perhaps the most significant consideration – is that the
1935 Constitution, the fundamental law prevailing on the day, month and year of
birth of respondent FPJ, can never be more explicit than it is. Providing neither
conditions nor distinctions, the Constitution states that among the citizens of the
Philippines are "those whose fathers are citizens of the Philippines." There
utterly is no cogent justification to prescribe conditions or distinctions where
there clearly are none provided.
In Sum –
(1) The Court, in the exercise of its power of judicial review, possesses
jurisdiction over the petition in G. R. No. 161824, filed under Rule 64, in
relation to Rule 65, of the Revised Rules of Civil Procedure. G.R. No.
161824 assails the resolution of the COMELEC for alleged grave abuse
of discretion in dismissing, for lack of merit, the petition in SPA No. 04-
003 which has prayed for the disqualification of respondent FPJ from
th
running for the position of President in the 10 May 2004 national
elections on the contention that FPJ has committed material
representation in his certificate of candidacy by representing himself to
be a natural-born citizen of the Philippines.
(2) The Court must dismiss, for lack of jurisdiction and prematurity, the
petitions in G. R. No. 161434 and No. 161634 both having been directly
elevated to this Court in the latter’s capacity as the only tribunal to
resolve a presidential and vice-presidential election contest under the
Constitution. Evidently, the primary jurisdiction of the Court can directly
be invoked only after, not before, the elections are held.
(3) In ascertaining, in G.R. No. 161824, whether grave abuse of
discretion has been committed by the COMELEC, it is necessary to take
on the matter of whether or not respondent FPJ is a natural-born citizen,
which, in turn, depended on whether or not the father of respondent,
Allan F. Poe, would have himself been a Filipino citizen and, in the
affirmative, whether or not the alleged illegitimacy of respondent
prevents him from taking after the Filipino citizenship of his putative
father. Any conclusion on the Filipino citizenship of Lorenzo Pou could
only be drawn from the presumption that having died in 1954 at 84
years old, Lorenzo would have been born sometime in the year 1870,
when the Philippines was under Spanish rule, and that San Carlos,
Pangasinan, his place of residence upon his death in 1954, in the
absence of any other evidence, could have well been his place of
residence before death, such that Lorenzo Pou would have benefited
from the "en masse Filipinization" that the Philippine Bill had effected in
1902. That citizenship (of Lorenzo Pou), if acquired, would thereby
extend to his son, Allan F. Poe, father of respondent FPJ. The 1935
Constitution, during which regime respondent FPJ has seen first light,
confers citizenship to all persons whose fathers are Filipino citizens
regardless of whether such children are legitimate or illegitimate.
(4) But while the totality of the evidence may not establish conclusively
that respondent FPJ is a natural-born citizen of the Philippines, the
evidence on hand still would preponderate in his favor enough to hold
that he cannot be held guilty of having made a material
misrepresentation in his certificate of candidacy in violation of Section
78, in relation to Section 74, of the Omnibus Election Code. Petitioner
has utterly failed to substantiate his case before the Court,
notwithstanding the ample opportunity given to the parties to present
their position and evidence, and to prove whether or not there has been
material misrepresentation, which, as so ruled in Romualdez-Marcos vs.
48
COMELEC, must not only be material, but also deliberate and willful.
WHEREFORE, the Court RESOLVES to DISMISS –
1. G. R. No. 161434, entitled "Maria Jeanette C. Tecson and Felix B.
Desiderio, Jr., Petitioners, versus Commission on Elections, Ronald
Allan Kelley Poe (a.k.a. "Fernando Poe, Jr.,) and Victorino X. Fornier,
Respondents," and G. R. No. 161634, entitled "Zoilo Antonio Velez,
Petitioner, versus Ronald Allan Kelley Poe, a.k.a. Fernando Poe, Jr.,
Respondent," for want of jurisdiction.
2. G. R. No. 161824, entitled "Victorino X. Fornier, Petitioner, versus
Hon. Commission on Elections and Ronald Allan Kelley Poe, also
known as Fernando Poe, Jr.," for failure to show grave abuse of
discretion on the part of respondent Commission on Elections in
dismissing the petition in SPA No. 04-003.
No Costs.
SO ORDERED.
Davide, Jr., C.J., see separate opinion, concurring.
Puno, J., on leave but was allowed to vote; see separate opinion.
Panganiban, J., on official leave; allowed to vote but did not send his vote on the
matter.
Quisumbing, J., joins the dissent of Justices Tinga and Morales; case should
have been remanded.
Ynares-Santiago, J., concurs and also with J. Puno’s separate opinion.
Sandoval-Gutierrez, J., concurs, please see separate opinion.
Carpio, J., see dissenting opinion.
Austria-Martinez, J., concurs, please see separate opinion.
Corona, J., joins the dissenting opinion of Justice Morales.
Carpio-Morales, J., see dissenting opinion.
Callejo, Sr., J., please see concurring opinion.
Azcuna, J., concurs in a separate opinion.
Tinga, J., dissents per separate opinion.
SEPARATE OPINION
DAVIDE, JR. C.J.:
The procedural and factual antecedents of these consolidated cases are as
follows:
On 9 January 2004, petitioner Victorino X. Fornier filed with public respondent
Commission on Elections (COMELEC) a petition to disqualify private respondent
Fernando Poe, Jr. (FPJ) and to deny due course to or cancel his certificate of
candidacy for the position of President in the forthcoming 10 May 2004
presidential elections. As a ground therefore, he averred that FPJ committed
falsity in a material representation in his certificate of candidacy in declaring that
he is a natural-born Filipino citizen when in truth and in fact he is not, since he is
the illegitimate son of Bessie Kelley, an American citizen, and Allan Poe, a
Spanish national. The case was docketed as COMELEC Case SPA No. 04-003
and assigned to the COMELEC’s First Division.
At the hearing before the First Division of the COMELEC, petitioner Fornier
offered FPJ’s record of birth to prove that FPJ was born on 20 August 1939 to
Bessie Kelley, an American citizen, and Allan Poe, who was then married to
Paulita Gomez. Upon the other hand, FPJ tried to establish that his father was a
Filipino citizen whose parents, although Spanish nationals, were Filipino
citizens. He adduced in evidence a copy of the marriage contract of Allan Poe
and Bessie Kelley, showing that they were married on 16 September 1940 in
Manila.
In its Resolution of 23 January 2004, the First Division of the COMELEC
dismissed COMELEC Case SPA No. 04-003 for lack of merit. It declared that
COMELEC’s jurisdiction is limited to all matters relating to election, returns and
qualifications of all elective regional, provincial and city officials, but not those of
national officials like the President. It has, however, jurisdiction to pass upon the
issue of citizenship of national officials under Section 78 of the Omnibus Election
Code on petitions to deny due course or cancel certificates of candidacy on the
ground that any material representation contained therein is false. It found that
the evidence adduced by petitioner Fornier is not substantial, and that FPJ did
not commit any falsehood in material representation when he stated in his
certificate of candidacy that he is a natural-born Filipino citizen.
His motion for reconsideration filed before the COMELEC en banc having been
denied, petitioner Fornier filed a petition with this Court, which was docketed as
G.R. No. 161824.
Meanwhile, petitioners Maria Jeanette C. Tecson and Felix B. Desiderio, Jr.
came to this Court via a special civil action for certiorari under Rule 65 of the
Rules of Court, docketed as G.R. No. 161434, to challenge the jurisdiction of the
COMELEC over the issue of the citizenship of FPJ. They assert that only this
Court has jurisdiction over the issue in light of the last paragraph of Section 4 of
Article VII of the Constitution, which provides:
The Supreme Court, sitting en banc, shall be the sole judge of all contests
relating to the election returns, and qualifications of the President or Vice-
President, and may promulgate its rules for the purpose.
On 29 January 2004 petitioner Velez filed a similar petition, which was docketed
as G.R. No. 161634.
The core issues in these consolidated cases, as defined by the Court during the
oral argument, are as follows:
(1) Whether the COMELEC has jurisdiction over petitions to deny due
course to or cancel certificates of candidacy of Presidential candidates;
(2) Whether the Supreme Court has jurisdiction over the petitions of (a)
Tecson, et al., (b) Velez, and (c) Fornier; and
(3) Whether respondent FPJ is a Filipino citizen, and if so, whether he is
a natural-born Filipino citizen.
These consolidated petitions must be dismissed.
Both the petitions of Tecson and Velez invoke the jurisdiction of this Court as
provided for in the last paragraph of Section 4 of Article VII of the Constitution,
and raise the issue of the ineligibility of a candidate for President on the ground
that he is not a natural-born citizen of the Philippines. The actions contemplated
in the said provision of the Constitution are post-election remedies, namely,
regular election contests and quo warranto. The petitioner should have, instead,
resorted to pre-election remedies, such as those prescribed in Section 68
(Disqualifications), in relation to Section 72; Section 69 (Nuisance candidates);
and Section 78 (Petition to deny course to or cancel a certificate of candidacy),
in relation to Section 74, of the Omnibus Election Code, which are implemented
in Rules 23, 24 and 25 of the COMELEC Rules of Procedure. These pre-
election remedies or actions do not, however, fall within the original jurisdiction
of this Court.
Under the Omnibus Election Code and the COMELEC Rules of Procedure, the
COMELEC has the original jurisdiction to determine in an appropriate
proceeding whether a candidate for an elective office is eligible for the office for
which he filed his certificate of candidacy or is disqualified to be a candidate or
to continue such candidacy because of any of the recognized grounds for
disqualification. Its jurisdiction over COMELEC SPA No. 04-003 is, therefore,
beyond question.
Upon the other hand, this Court has jurisdiction over Fornier’s petition (G.R. No.
161824) under Section 7 of Article IX-A of the Constitution, which provides:
Section 7. Each Commission shall decide by a majority vote of all its Members
any case or matter brought before it within sixty days from the date of its
submission for decision or resolution. A case or matter is deemed submitted for
decision or resolution upon the filing of the last pleading, brief, or memorandum
required by the rules of the Commission or by the Commission itself. Unless
otherwise provided by this Constitution or by law, any decision, order, or ruling
of each Commission may be brought to the Supreme Court on certiorari by the
aggrieved party within thirty days from receipt of a copy thereof.
This Court can also take cognizance of the issue of whether the COMELEC
committed grave abuse of discretion amounting to lack or excess of jurisdiction
in issuing the challenged resolution in COMELEC SPA No. 04-003 by virtue of
Section 1 of Article VIII of the Constitution, which reads as follows:
Section 1. The judicial power shall be vested in one Supreme Court and in such
lower courts as may be established by law.
Judicial power includes the duty of the courts of justice to settle actual
controversies involving rights which are legally demandable and enforceable,
and to determine whether or not there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of nay branch or
instrumentality of the Government.
On the issue of whether private respondent FPJ is a natural-born Filipino citizen,
the following facts have been established by a weighty preponderance of
evidence either in the pleadings and the documents attached thereto or from the
admissions of the parties, through their counsels, during the oral arguments:
1. FPJ was born on 20 August 1939 in Manila, Philippines.
2. FPJ was born to Allan Poe and Bessie Kelley.
3. Bessie Kelley and Allan Poe were married on 16 September 1940.
4. Allan Poe was a Filipino because his father, Lorenzo Poe, albeit a
Spanish subject, was not shown to have declared his allegiance to
Spain by virtue of the Treaty of Paris and the Philippine Bill of 1902.
From the foregoing it is clear that respondent FPJ was born before the marriage
of his parents. Thus, pursuant to the Civil Code then in force, he could either be
(a) a natural child if both his parents had no legal impediments to marry each
other; or (b) an illegitimate child if, indeed, Allan Poe was married to another
woman who was still alive at the time FPJ was born.
Petitioner Fornier never alleged that Allan Poe was not the father of FPJ. By
revolving his case around the illegitimacy of FPJ, Fornier effectively conceded
paternity or filiation as a non-issue. For purposes of the citizenship of an
illegitimate child whose father is a Filipino and whose mother is an alien, proof of
paternity or filiation is enough for the child to follow the citizenship of his putative
father, as advanced by Fr. Joaquin Bernas, one of the amici curiae. Since
paternity or filiation is in fact admitted by petitioner Fornier, the COMELEC
committed no grave abuse of discretion in holding that FPJ is a Filipino citizen,
pursuant to paragraph 3 of Section 1 of Article IV of the 1935 Constitution, which
reads:
Section 1. The following are citizens of the Philippines:
…
(3) Those whose fathers are citizens of the Philippines.
I agree with the amici curiae that this provision makes no distinction between
legitimate and illegitimate children of Filipino fathers. It is enough that filiation is
established or that the child is acknowledged or recognized by the father.
DISSENTING OPINION
CARPIO, J.:
I dissent from the majority opinion.
The Antecedent Proceedings
Petitioner Fornier filed before the Commission on Elections ("Comelec") a
"Petition for Disqualification of Presidential Candidate Ronald Allan Kelley Poe
a.k.a. Fernando Poe, Jr." on the ground that Fernando Poe, Jr. ("FPJ") is not a
natural-born Philippine citizen. The Comelec First Division dismissed the
petition, ruling that petitioner failed to present substantial evidence that FPJ
committed "any material misrepresentation when he stated in his Certificate of
Candidacy that he is a natural-born citizen." On motion for reconsideration, the
Comelec En Banc affirmed the ruling of the First Division. Petitioner Fornier now
assails the Comelec En Banc resolution under Rule 64 in relation to Rule 65 of
the Rules of Court.
The Undisputed Facts
The undisputed facts are based on two documents and the admission of FPJ.
The first document is the Birth Certificate of FPJ, showing he was born on 20
August 1939. The Birth Certificate is an evidence of FPJ.[1] The second
document is the Marriage Certificate of Allan F. Poe and Bessie Kelley, showing
that their marriage took place on 16 September 1940. The Marriage Certificate
is also an evidence of FPJ.[2] Moreover, FPJ admits that his mother Bessie
Kelley was an American citizen.[3]
Based on these two documents and admission, the undisputed facts are: (1)
FPJ was born out of wedlock and therefore illegitimate,[4] and (2) the mother of
FPJ was an American citizen.
The Issues
The issues raised in Fornier’s petition are:
(a) Whether the Court has jurisdiction over the petition to disqualify FPJ
as a candidate for President on the ground that FPJ is not a natural-
born Philippine citizen;
(b) Whether FPJ is a natural-born citizen of the Philippines.
Jurisdiction
The Comelec has jurisdiction to determine initially the qualifications of all
candidates. Under Section 2(1), Article IX-C of the Constitution, the Comelec
has the power and function to "[E]nforce and administer all laws and regulations
relative to the conduct of an election." The initial determination of who are
qualified to file certificates of candidacies with the Comelec clearly falls within
this all-encompassing constitutional mandate of the Comelec. The conduct of an
election necessarily includes the initial determination of who are qualified under
existing laws to run for public office in an election. Otherwise, the Comelec’s
certified list of candidates will be cluttered with unqualified candidates making
the conduct of elections unmanageable. For this reason, the Comelec weeds out
every presidential election dozens of candidates for president who are deemed
nuisance candidates by the Comelec.[5]
Section 2(3), Article IX-C of the Constitution also empowers the Comelec to
"[D]ecide, except those involving the right to vote, all questions affecting
elections x x x." The power to decide "all questions affecting elections"
necessarily includes the power to decide whether a candidate possesses the
qualifications required by law for election to public office. This broad
constitutional power and function vested in the Comelec is designed precisely to
avoid any situation where a dispute affecting elections is left without any legal
remedy. If one who is obviously not a natural-born Philippine citizen, like Arnold
Schwarzenneger, runs for President, the Comelec is certainly not powerless to
cancel the certificate of candidacy of such candidate. There is no need to wait
until after the elections before such candidate may be disqualified.
Under Rule 25 on "Disqualification of Candidates" of the Comelec Rules of
Procedure, a voter may question before the Comelec the qualifications of any
candidate for public office. Thus, Rule 25 provides:
Section 1. Grounds for Disqualification. — Any candidate who does not possess
all the qualifications of a candidate as provided for by the Constitution or by
existing law or who commits any act declared by law to be grounds for
disqualification may be disqualified from continuing as a candidate.
Section 2. Who May File Petition for Disqualification. — Any citizen of voting
age, or duly registered political party, organization or coalition of political parties
may file with the Law Department of the Commission a petition to disqualify a
candidate on grounds provided by law. (Emphasis supplied)
The Comelec adopted its Rules of Procedure pursuant to its constitutional power
to promulgate its own rules of procedure[6] to expedite the disposition of cases
or controversies falling within its jurisdiction.
The Comelec has ruled upon the qualifications of candidates, even if the
Constitution provides that some other body shall be the "sole judge" of the
qualifications of the holders of the public offices involved. The Court has upheld
the jurisdiction of Comelec to issue such rulings,[7] even when the issue is the
citizenship of a candidate.[8] Thus, the Comelec has jurisdiction to determine
initially if FPJ meets the citizenship qualification to run for President.
However, the Comelec En Banc, in its scanty resolution, failed to state the
factual bases of its ruling. The Comelec En Banc also failed to rule conclusively
on the issue presented – whether FPJ is a natural-born Philippine citizen. The
Comelec En Banc affirmed the First Division ruling that "[W]e feel we are not at
liberty to finally declare whether or not the respondent is a natural-born citizen."
In short, the Comelec En Banc allowed a candidate for President to run in the
coming elections without being convinced that the candidate is a natural-born
Philippine citizen. Clearly, the Comelec En Banc acted with grave abuse of
discretion. Under Section 1, Article VIII, as well as Section 5, Article VIII, of the
Constitution, the Court has jurisdiction to hear and decide the issue in a petition
for certiorari under Rule 64 in relation to Rule 65.
To hold that the Court acquires jurisdiction to determine the qualification of a
candidate for President only after the elections would lead to an absurd
situation. The Court would have to wait for an alien to be elected on election day
before he could be disqualified to run for President. If the case is not decided
immediately after the election, an alien who wins the election may even assume
office as President before he is finally disqualified. Certainly, this is not what the
Constitution says when it provides that "[N]o person may be elected President
unless he is a natural-born citizen of the Philippines."[9] The clear and specific
language of the Constitution prohibits the election of one who is not a natural-
born citizen. Thus, the issue of whether a candidate for President is a natural-
born Philippine citizen must be decided before the election.
Governing Laws
Since FPJ was born on 20 August 1939, his citizenship at the time of his birth
depends on the Constitution and statutes in force at the time of his birth.[10]
FPJ’s citizenship at the time of his birth in 1939, applying the laws in force in
1939, determines whether he is a natural-born Philippine citizen.
Natural-born Philippine citizens are "those who are citizens of the Philippines
from birth without having to perform any act to acquire or perfect their Philippine
citizenship."[11] If a person has to perform an act, such as proving in an
administrative or judicial proceeding, that an event subsequent to his birth
transpired thus entitling him to Philippine citizenship, such person is not a
natural born citizen.[12]
The 1935 Constitution and the Spanish Civil Code, the laws in force in 1939, are
the governing laws that determine whether a person born in 1939 is a Philippine
citizen at the time of his birth in 1939. Any subsequent legislation cannot change
the citizenship at birth of a person born in 1939 because such legislation would
violate the constitutional definition of a natural-born citizen as one who is a
Philippine citizen from birth. In short, one who is not a Philippine citizen at birth
in 1939 cannot be declared by subsequent legislation a natural-born citizen.
General Principles
A legitimate child of a Filipino father follows the citizenship of the father. A child
born within wedlock is presumed to be the son of the father[13] and thus carries
the blood of the father. Under the doctrine of jus sanguinis, as provided for in
Section 1(3), Article III of the 1935 Constitution, a legitimate child, by the fact of
legitimacy, automatically follows the citizenship of the Filipino father.
An illegitimate child, however, enjoys no presumption at birth of blood relation to
any father unless the father acknowledges the child at birth.[14] The law has
always required that "in all cases of illegitimate children, their filiation must be
duly proved."[15] The only legally known parent of an illegitimate child, by the
fact of illegitimacy, is the mother of the child who conclusively carries the blood
of the mother. Thus, unless the father acknowledges the illegitimate child at
birth, the illegitimate child can only acquire the citizenship of the only legally
known parent - the mother.
However, if the Filipino father is legally known because the filiation (blood
relation of illegitimate child to the father) of the child to the Filipino father is
established in accordance with law, the child follows the citizenship of the
Filipino father. This gives effect, without discrimination between legitimate and
illegitimate children, to the provision of the 1935 Constitution that "[T]hose
whose fathers are citizens of the Philippines"[16] are Philippine citizens.
Nature of Citizenship
If the Filipino father acknowledges the illegitimate child at birth, the child is a
natural-born Philippine citizen because no other act after his birth is required to
acquire or perfect his Philippine citizenship. The child possesses all the
qualifications to be a Philippine citizen at birth.
If the Filipino father acknowledges the child after birth, the child is a Philippine
citizen as of the time of the acknowledgment. In this case, the child does not
possess all the qualifications to be a Philippine citizen at birth because an act -
the acknowledgement of the Filipino father - is required for the child to acquire or
perfect his Philippine citizenship. Statutory provisions on retroactivity of
acknowledgment cannot be given effect because they would be contrary to the
constitutional definition of natural- born citizens as those who are Philippine
citizens at birth without having to perform any act to acquire or perfect their
Philippine citizenship.
If the illegitimacy of a child is established, there is no presumption that the child
has the blood of any man who is supposed to be the father. There is only a
conclusive presumption that the child has the blood of the mother. If an
illegitimate child claims to have the blood of a man who is supposed to be the
child’s father, such blood relation must be established in accordance with proof
of filiation as required by law.
Where the illegitimate child of an alien mother claims to follow the citizenship of
the putative father, the burden is on the illegitimate child to establish a blood
relation to the putative Filipino father since there is no presumption that an
illegitimate child has the blood of the putative father. Even if the putative father
admits paternity after the birth of the illegitimate child, there must be an
administrative or judicial approval that such blood relation exists upon proof of
paternity as required by law.
Citizenship, being a matter of public and State interest, cannot be conferred on
an illegitimate child of an alien mother on the mere say so of the putative Filipino
father. The State has a right to examine the veracity of the claim of paternity.
Otherwise, the grant of Philippine citizenship to an illegitimate child of an alien
mother is left to the sole discretion of the putative Filipino father. For example, a
Philippine citizen of Chinese descent can simply claim that he has several
illegitimate children in China. The State cannot be required to grant Philippine
passports to these supposed illegitimate children born in China of Chinese
mothers just because the putative Filipino father acknowledges paternity of
these illegitimate children. There must be either an administrative or judicial
determination that the claim of the putative Filipino father is true.
The case of the illegitimate Vietnamese children, born in Vietnam of Vietnamese
mothers and allegedly of Filipino fathers, is illustrative. These children grew up
in Vietnam, many of them studying there until high school. These children grew
up knowing they were Vietnamese citizens. In 1975, a Philippine Navy vessel
brought them, together with their Vietnamese mothers, to the Philippines as
Saigon fell to the communists. The mothers of these children became stateless
when the Republic of (South) Vietnam ceased to exist in 1975. The Department
of Justice rendered Opinion No. 49 dated 3 May 1995 that being children of
Filipino fathers, these Vietnamese children, even if illegitimate, are Philippine
citizens under Section 1(3), Article IV of the 1935 Constitution and Section 1(2),
Article III of the 1973 Constitution. This Opinion is cited by FPJ as basis for his
claim of being a natural-born Philippine citizen.[17] However, this Opinion
categorically stated that before the illegitimate Vietnamese children may be
considered Filipino citizens "it is necessary in every case referred to that such
paternity be established by sufficient and convincing documentary
evidence."[18]
In short, the illegitimate child must prove to the proper administrative or judicial
authority the paternity of the alleged Filipino father by "sufficient and convincing
documentary evidence." Clearly, an administrative or judicial act is necessary to
confer on the illegitimate Vietnamese children Philippine citizenship. The mere
claim of the illegitimate child of filiation to a Filipino father, or the mere
acknowledgment of the alleged Filipino father, does not automatically confer
Philippine citizenship on the child. The State must be convinced of the veracity
of such claim and approve the same. Since the illegitimate Vietnamese children
need to perform an act to acquire or perfect Philippine citizenship, they are not
natural-born Philippine citizens. They become Philippine citizens only from the
moment the proper administrative or judicial authority approve and recognize
their filiation to their alleged Filipino fathers.
The rationale behind requiring that only natural-born citizens may hold certain
high public offices[19] is to insure that the holders of these high public offices
grew up knowing they were at birth citizens of the Philippines. In their formative
years they knew they owed from birth their allegiance to the Philippines. In case
any other country claims their allegiance, they would be faithful and loyal to the
Philippines of which they were citizens from birth. This is particularly true to the
President who is the commander-in-chief of the armed forces.[20] The President
of the Philippines must owe, from birth, allegiance to the Philippines and must
have grown up knowing that he was a citizen of the Philippines at birth. The
constitutional definition of a natural-born Philippine citizen would lose its
meaning and efficacy if one who was at birth recognized by law as an alien were
declared forty years later[21] a natural-born Philippine citizen just because his
alleged Filipino father subsequently admitted his paternity.
Proof of Filiation
Article 131[22] of the Spanish Civil Code, the law in force in 1939, recognized
only the following as proof of filiation of a natural child:
a. acknowledgment in a record of birth;
b. acknowledgment in a will;
c. acknowledgment in some other public document.
To establish his Philippine citizenship at birth, FPJ must present either an
acknowledgement in a record of birth, or an acknowledgment in some other
public document executed at the time of his birth. An acknowledgment executed
after birth does not make one a citizen at birth but a citizen from the time of such
acknowledgment since the acknowledgment is an act done after birth to acquire
or perfect Philippine citizenship.
After the birth of one who is not a natural-born Philippine citizen, a subsequent
legislation liberalizing proof of filiation cannot apply to such person to make him
a natural-born citizen. A natural-born Philippine citizen is expressly defined in
the Constitution as one who is a citizen at birth. If a person is not a citizen at
birth, no subsequent legislation can retroactively declare him a citizen at birth
since it would violate the constitutional definition of a natural-born citizen.
Burden of Proof
Any person who claims to be a citizen of the Philippines has the burden of
proving his Philippine citizenship. Any person who claims to be qualified to run
for President because he is, among others, a natural-born Philippine citizen, has
the burden of proving he is a natural-born citizen. Any doubt whether or not he is
natural-born citizen is resolved against him. The constitutional requirement of a
natural-born citizen, being an express qualification for election as President,
must be complied with strictly as defined in the Constitution. As the Court ruled
in Paa v. Chan: [23]
It is incumbent upon a person who claims Philippine citizenship to prove to the
satisfaction of the Court that he is really a Filipino. No presumption can be
indulged in favor of the claimant of Philippine citizenship, and any doubt
regarding citizenship must be resolved in favor of the State.
Since the undisputed facts show that FPJ is an illegitimate child, having been
born out of wedlock, the burden is on FPJ to prove his blood relation to his
alleged Filipino father. An illegitimate child enjoys no presumption of blood
relation to any father. Such blood relationship must be established in the
appropriate proceedings in accordance with law.
Private party litigants cannot stipulate on the Philippine citizenship of a person
because citizenship is not a private right or property, but a matter of public and
State interest. Even if petitioner Fornier admits that FPJ, although illegitimate, is
the son of Allan F. Poe, such admission cannot bind the State for the purpose of
conferring on FPJ the status of a natural-born Philippine citizen or even of a
naturalized citizen. Certainly, the Court will not recognize a person as a natural-
born Philippine citizen just because the private party litigants have admitted or
stipulated on such a status. In the present case, the Solicitor General, as
representative of the Government, is strongly disputing the status of FPJ as a
natural-born Philippine citizen.
Legitimation
Under Article 123[24] of the Spanish Civil Code, legitimation took effect as of the
date of marriage. There was no retroactivity of the effects of legitimation on the
rights of the legitimated child. Thus, a legitimated child acquired the rights of a
legitimate child only as of the date of marriage of the natural parents. Allan F.
Poe and Bessie Kelley were married on 16 September 1940 while FPJ was born
more than one year earlier on 20 August 1939. Assuming that Allan F. Poe was
FPJ’s natural father, the effects of legitimation did not retroact to the birth of FPJ
on 20 August 1939.
Besides, legitimation vests only civil, not political rights, to the legitimated child.
As the Court held in Ching Leng:[25]
The framers of the Civil Code had no intention whatsoever to regulate therein
political questions. Hence, apart from reproducing the provisions of the
Constitution on citizenship, the Code contains no precept thereon except that
which refers all matters of "naturalization", as well as those related to the "loss
and reacquisition of citizenship" to "special laws." Consistently with this policy,
our Civil Code does not include therein any rule analogous to Articles 18 to 28 of
the Civil Code of Spain, regulating citizenship. (Underscoring in the original)
Clearly, even assuming that the marriage of Allan F. Poe and Bessie Kelley
legitimated FPJ, such legitimation did not vest retroactively any civil or political
rights to FPJ.
Treaty of Paris of 1898 and Philippine Bill of 1902
FPJ admits that his grandfather, Lorenzo Pou, was a Spanish citizen who came
to the Philippines from Spain.[26] To benefit from the mass naturalization under
the Treaty of Paris of 1898 and the Philippine Bill of 1902, FPJ must prove that
Lorenzo Pou was an inhabitant and resident of the Philippines on 11 April 1899.
Once it is established that Lorenzo Pou was an inhabitant and resident of the
Philippines on 11 April 1899, then he is presumed to have acquired Philippine
citizenship under the Treaty of Paris of 1898 and the Philippine Bill of 1902.[27]
Being an inhabitant and resident of the Philippines on 11 April 1899 is the
determinative fact to fall under the coverage of the Treaty of Paris of 1898 and
the Philippine Bill of 1902.[28]
There is, however, no evidence on record that Lorenzo Pou was a Philippine
inhabitant and resident on 11 April 1899. The date of arrival of Lorenzo Pou in
the Philippines is not known. If he arrived in the Philippines after 11 April 1899,
then he could not benefit from the mass naturalization under the Treaty of Paris
of 1898 and the Philippine Bill of 1902. There is also no evidence that Lorenzo
Pou was naturalized as a Philippine citizen after 11 April 1899. Thus, there can
be no presumption that Lorenzo Pou was a Philippine citizen.
There is also no evidence on record that Allan F. Poe, the son of Lorenzo Pou
and the alleged father of FPJ, was naturalized as a Philippine citizen. Thus,
based on the evidence adduced there is no legal basis for claiming that Allan F.
Poe is a Philippine citizen. Nevertheless, there is no need to delve further into
this issue since the Court can decide this case without determining the
citizenship of Lorenzo Pou and Allan F. Poe. Whether or not Lorenzo Pou and
Allan F. Poe were Philippine citizens is not material in resolving whether FPJ is
a natural-born Philippine citizen.
Convention on the Rights of the Child
The Philippines signed the Convention on the Rights of the Child on 26 January
1990 and ratified the same on 21 August 1990. The Convention defines a child
to mean "every human being below the age of eighteen years unless, under the
law applicable to the child, majority is attained earlier." Obviously, FPJ cannot
invoke the Convention since he is not a child as defined in the Convention, and
he was born half a century before the Convention came into existence. FPJ’s
citizenship at birth in 1939 could not in any way be affected by the Convention
which entered into force only on 2 September 1990.
The Convention has the status of a municipal law[29] and its ratification by the
Philippines could not have amended the express requirement in the Constitution
that only natural-born citizens of Philippines are qualified to be President. While
the Constitution apparently favors natural-born citizens over those who are not,
that is the explicit requirement of the Constitution which neither the Executive
Department nor the Legislature, in ratifying a treaty, could amend. In short, the
Convention cannot amend the definition in the Constitution that natural-born
citizens are "those who are citizens of the Philippines from birth without having
to perform any act to acquire or perfect their Philippine citizenship."
In any event, the Convention guarantees a child "the right to acquire a
nationality,"[30] and requires States Parties to "ensure the implementation" of
this right, "in particular where the child would otherwise be stateless."[31] Thus,
as far as nationality or citizenship is concerned, the Convention guarantees the
right of the child to acquire a nationality so that he may not be stateless. The
Convention does not guarantee a child a citizenship at birth, but merely "the
right to acquire a nationality" in accordance with municipal law. When FPJ was
born in 1939, he was apparently under United States law an American citizen at
birth.[32] After his birth FPJ also had the right to acquire Philippine citizenship by
proving his filiation to his alleged Filipino father in accordance with Philippine
law. At no point in time was FPJ in danger of being stateless. Clearly, FPJ
cannot invoke the Convention to claim he is a natural-born Philippine citizen.
The Doctrine in Ching Leng v. Galang
The prevailing doctrine today is that an illegitimate child of a Filipino father and
an alien mother follows the citizenship of the alien mother as the only legally
known parent. The illegitimate child, even if acknowledged and legally adopted
by the Filipino father, cannot acquire the citizenship of the father. The Court
made this definitive doctrinal ruling in Ching Leng v. Galang,[33] which involved
the illegitimate minor children of a naturalized Filipino of Chinese descent with a
Chinese woman, Sy An. The illegitimate children were later on jointly adopted by
the naturalized Filipino and his legal wife, So Buan Ty.
The facts in Ching Leng as quoted by the Court from the trial court’s decision
are as follows:
After the petitioner Ching Leng Alias Ching Ban Lee obtained judgment in this
Court dated May 2, 1950 granting his petition for naturalization, he together with
his wife So Buan Ty filed another petition also in this Court in Special Proc. No.
1216 for the adoption of Ching Tiong Seng, Ching Liong Ding, Victoria Ching
Liong Yam, Sydney Ching and Ching Tiong An, all minors and admittedly the
illegitimate children of petitioner Ching Leng with one Sy An, a Chinese citizen.
Finding the petition for adoption proper, this Court granted the same in a
decision dated September 12, 1950, declaring the said minors free from all legal
obligations of obedience and maintenance with respect to their mother Sy An
and to all legal intents and purposes the children of the adopter Ching Leng alias
Ching Ban Lee and So Buan Ty with all the legal rights and obligations provided
by law.
On September 29, 1955, Ching Leng took his oath of allegiance and became
therefore a full pledge (sic) Filipino citizen. Believing now that his adopted
illegitimate children became Filipino citizens by virtue of his naturalization,
petitioner Ching Leng addressed a communication to the respondent
Commissioner of Immigration requesting that the alien certificate of registration
of the said minors be cancelled. (Bold underscoring supplied)
In Ching Leng, the Court made a definitive ruling on the meaning of "minor child
or children" in Section 15 of the Naturalization Law,[34] as well as the meaning
of children "whose parents are citizens of the Philippines" under the
Constitution. The Court categorically ruled that these children refer to legitimate
children only, and not to illegitimate children. Thus, the Court held:
It is claimed that the phrases "minor children" and "minor child", used in these
provisions, include adopted children. The argument is predicated upon the
theory that an adopted child is, for all intents and purposes, a legitimate child.
Whenever, the word "children" or "child" is used in statutes, it is generally
understood, however, to refer to legitimate children, unless the context of the
law and its spirit indicate clearly the contrary. Thus, for instance, when the
Constitution provides that "those whose parents are citizens of the Philippines,
"and "those whose mothers are citizens of the Philippines," who shall elect
Philippine citizenship "upon reaching the age of majority", are citizens of the
Philippines (Article IV, Section 1, subdivisions 3 and 4), our fundamental law
clearly refers to legitimate children (Chiong Bian vs. De Leon, 46 Off. Gaz.,
3652-3654; Serra v. Republic, L-4223, May 12, 1952).
Similarly, the children alluded to in said section 15 are those begotten in lawful
wedlock, when the adopter, at least is the father. In fact, illegitimate children are
under the parental authority of the mother and follow her nationality, not that of
the illegitimate father (U.S. vs. Ong Tianse, 29 Phil. 332, 335-336; Santos Co vs.
Gov’t of the Philippines, 52 Phil. 543, 544; Serra v. Republic, supra; Gallofin v.
Ordoñez, 70 Phil. 287; Quimsuan vs. Republic, L-4693, Feb. 16, 1953).
Although, adoption gives "to the adopted person the same rights and duties as if
he were a legitimate child of the adopter", pursuant to said Article 341 of our
Civil Code, we have already seen that the rights therein alluded to are merely a natural-born Philippine citizen since an act is required after birth to acquire or
those enumerated in Article 264, and do not include the acquisition of the perfect his Philippine citizenship.
nationality of the adopter.
Conclusion
Moreover, as used in said section 15 of the Naturalization Law, the term
"children" could not possibly refer to those whose relation to the naturalized In conclusion, private respondent Fernando Poe, Jr. is not a natural-born
person is one created by legal fiction, as, for instance, by adoption, for, Philippine citizen since there is no showing that his alleged Filipino father Allan
otherwise, the place and time of birth of the child would be immaterial. The fact F. Poe acknowledged him at birth. The Constitution defines a natural-born
that the adopted persons involved in the case at bar are illegitimate children of citizen as a Philippine citizen "from birth without having to perform any act to
appellant Ching Leng does not affect substantially the legal situation before us, acquire or perfect" his Philippine citizenship. Private respondent Fernando Poe,
for, by legal fiction, they are now being sought to be given the status of Jr. does not meet this citizenship qualification.
legitimate children of said appellant, despite the circumstance that the Civil
Code of the Philippine does not permit their legitimation. (Bold underscoring Therefore, I vote to grant the petition of Victorino X. Fornier. However, I vote to
supplied)
dismiss the petitions of Maria Jeanette C. Tecson, Felix B. Desiderio, Jr. and
Zoilo Antonio Velez on the ground that their direct petitions invoking the
Ching Leng, penned by Justice Roberto Concepcion in October 1958, was a jurisdiction of the Court under Section 4, paragraph 7, Article VII of the
unanimous decision of the Court En Banc. Subsequent Court decisions, Constitution are premature, there being no election contest in this case.
including Paa v. Chan[35] and Morano et al. v. Vivo,[36] have cited the doctrine
laid down in Ching Leng that the provision in the 1935 Constitution stating
"those whose fathers are citizens of the Philippines" refers only to legitimate
children. When the 1973 and 1987 Constitutions were drafted, the framers did
not attempt to change the intent of this provision, even as they were presumably
aware of the Ching Leng doctrine.

Nevertheless, I believe that it is now time to abandon the Ching Leng doctrine.
The inexorable direction of the law, both international and domestic in the last
100 years, is to eliminate all forms of discrimination between legitimate and
illegitimate children. Where the Constitution does not distinguish between
legitimate and illegitimate children, we should not also distinguish, especially
when private rights are not involved as in questions of citizenship. Abandoning
the Ching Leng doctrine upholds the equal protection clause of the Constitution.
Abandoning the Ching Leng doctrine is also in compliance with our treaty
obligation under the Covenant on the Rights of Children mandating States
Parties to eliminate all forms of discrimination based on the status of children,
save of course those distinctions prescribed in the Constitution itself like the
reservation of certain high public offices to natural-born citizens.

Abandoning the Ching Leng doctrine does not mean, however, that an
illegitimate child of a Filipino father and an alien mother automatically becomes
a Philippine citizen at birth. We have repeatedly ruled that an illegitimate child
does not enjoy any presumption of blood relation to the alleged father until
filiation or blood relation is proved as provided by law.[37] Article 887 of the Civil
Code expressly provides that "[I]n all cases of illegitimate children, their filiation
must be duly proved." The illegitimate child becomes a Philippine citizen only
from the time he establishes his blood relation to the Filipino father. If the blood
relation is established after the birth of the illegitimate child, then the child is not
G.R. No. 202692 November 12, 2014
EDMUND SYDECO y SIONZON, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.
DECISION
VELASCO, JR., J.:
Assailed and sought to be set aside in this petition for review under Rule 45 are
1 2
the December 28, 2011 Decision and July 18, 2012 Resolution of the Court of
Appeals (CA) in CA-G.R. CR No. 33567. The assailed issuances affirmed the
3 8
decision of the Regional Trial Court (RTC) of Manila, Branch 12, in Criminal
Case Nos. 09-270107-08 which, in turn, affirmed that of the Metropolitan Trial
Court (MeTC) in Manila adjudging petitioner Edmund Sydeco (Sydeco) guilty of
4
drunk driving and resisting arrest.
The factual backdrop:
On July 20, 2006, separate Informations, one for Violation of Section 56(f) of
5
Republic Act No. (RA) 4136 and another, for Violation of Article 151 of the
6
Revised Penal Code (RPC) were filed against petitioner Sydeco with the MeTC
in Manila and eventually raffled to Branch 14 of that court. The accusatory
portions of the interrelated informations, docketed as Crim. Case No. 052527-
CN for the first offense and Crim. Case No. 052528-CN for the second,
respectively read:
1. Crim. Case No. 052527-CN
That on or about June 11, 2006, in the City of Manila, Philippines, the said
accused, being then the driver and owner of a car, did then and there willfully
and unlawfully, drive, manage and operate the same along Roxas Blvd. cor.
Quirino Avenue, Malate, in said city, while under the influence of liquor, in
violation of Section 56(f) of Republic Act 4136.
Contrary to law.
2. Crim. Case No. 052528-CN
That on or about June 11, 2006, in the City of Manila, Philippines, the said
accused, did then and there willfully and unlawfully resist and disobey P/INSP
Manuel Aguilar, SPO2 Virgilio Paulino, SPO4 Efren Bodino and PO3 Benedict
Cruz III, bonafide member of the Philippine National Police, Malate Police
Station-9, duly qualified and appointed, and while in the actual performance of
their official duties as such police officers, by then and there resisting, shoving
and pushing, the hands of said officers while the latter was placing him under
arrest for violation of Article 151 of the Revised Penal Code.
Contrary to law.
By Order of September 19, 2006, the MeTC classified the cases as falling
under, thus to be governed by, the Rule on Summary Procedure.
When arraigned, petitioner, as accused, pleaded "Not Guilty" to both charges.
During the trial of the two consolidated cases, the prosecution presented in
7
evidence the oral testimonies of SPO4 Efren Bodino (Bodino), PO2 Emanuelle
9
Parungao and Ms. Laura Delos Santos, plus the documents each identified
while in the witness box, among which was Exh. "A", with sub-markings, the
10
Joint Affidavit of Arrest executed by SPO2 Bodino and two other police officers.
The defense’s witnesses, on the other hand, consisted of Sydeco himself, his
wife, Mildred, and Joenilo Pano.
The prosecution’s version of the incident, as summarized in and/or as may be
deduced from, the CA decision now on appeal is as follows:
On or about June 11, 2006, P/Insp. Manuel Aguilar (Aguilar), SPO4 Bodino,
PO3 Benedict Cruz III and another officer were manning a checkpoint
established along Roxas Boulevard corner Quirino Ave., Malate, Manila when,
from about twenty (20) meters away, they spotted a swerving red Ford Ranger
pick up with plate number XAE-988. Petitioner was behind the wheel. The team
members, all inuniform, flagged the vehicle down and asked the petitioner to
alightfrom the vehicle so he could take a rest at the police station situated
11
nearby,before he resumes driving. Petitioner, who the policemen claimed was
smelling of liquor, denied being drunk and insisted he could manage to drive.
Then in a raised voice, petitioner started talking rudely to the policemen and in
fact yelled at P/Insp. Aguilar blurting: "P…g ina mo, bakit mo ako hinuhuli."
Atthat remark, P/Insp. Aguilar, who earlier pointed out to petitioner that his team
had seen him swerving and driving under the influence of liquor, proceeded to
arrestpetitioner who put up resistance. Despite petitioner’s efforts to parry the
hold on him, the police eventually succeeded in subduing him who was then
brought to the Ospital ng Maynila where he was examined and found to be
positive of alcoholic breath per the Medical Certificate issuedby that hospital,
marked as Exh. "F". Petitioner was then turned over to the Malate Police Station
12
for disposition. Petitioner, on the other hand, claimed tobe a victim in the
incident in question, adding in this regard that he has in fact filed criminal
charges for physical injuries, robbery and arbitrary detention against P/Insp.
13 14
Aguilar et al. In his Counter-Affidavit and his Complaint-Affidavit appended
thereto, petitioner averred that, in the early morning of June 12, 2006, he
together with Joenilo Pano and Josie Villanueva, cook and waitress,
respectively, in his restaurant located along Macapagal Ave., Pasay City, were
on the way home from on board his pick-up when signaled to stop by police
officers at the area immediately referred to above. Their flashlights trained on
the inside of the vehicle and its occupants, the policemen then asked the
petitioner to open the vehicle’s door and alight for a body and vehicle search, a
directive he refused to heed owing to a previous extortion experience. Instead,
he opened the vehicle window, uttering, "plain view lang boss, plain view lang."
Obviously irked by this remark, one of the policemen, P/Insp. Aguilar, as it
turnedout, then told the petitioner that he was drunk, pointing to three cases of
empty beer bottles in the trunk of the vehicle. Petitioner’s explanation about
being sober and that the empty bottles adverted to came from his restaurant
was ignored as P/Insp. Aguilar suddenly boxed him (petitioner) on the mouth
and poked a gun at his head, at the same time blurting, "P…g ina mo gusto mo
tapusin na kita dito marami ka pang sinasabi." The officers then pulled the
petitioner out of the driver’s seat and pushed him into the police mobile car,
whereupon he, petitioner, asked his companions to call up his wife. The
policemen then brought petitioner to the Ospital ng Maynila where they
succeeded in securing a medical certificate under the signature of one Dr.
Harvey Balucating depicting petitioner as positive of alcoholic breath, although
he refused to be examined and no alcohol breath examination was conducted.
He was thereafter detained from 3:00 a.m.of June 12, 2006 and released in the
afternoon of June 13, 2006. Before his release, however, he was allowed to
undergo actual medical examination where the resulting medical certificate
indicated that he has sustained physical injuries but negative for alcohol breath.
Ten days later, petitioner filed his Complaint-Affidavit against Dr. Balucating,
P/Insp. Aguilar and the other police officers.
Petitioner also stated in his counter-affidavit that, under Sec. 29 of R.A. 4136, or
the Land Transportation and Traffic Code, the procedure for dealing with a traffic
violation is not to place the erring driver under arrest, but to confiscate his
driver’s license.
On June 26, 2009, the MeTC rendered judgment finding petitioner guilty as
charged, disposing as follows:
WHEREFORE, premises considered, the prosecution having established the
guilt of the accused beyond reasonable doubt, his conviction of the offenses
charges is hereby pronounced. Accordingly, he is sentenced to:
1. Pay a fine of two hundred fifty pesos (₱250.00) for Criminal Case No.
052527-CN; and
2. Suffer imprisonment of straight penalty of three (3) months and pay a
fine of two hundred fifty pesos (₱250.00) for Criminal Case No. 052528-
CN.
For lack of basis, no civil liability is adjudged.
The Branch Clerk of Court is directed to certify to the Land Transportation Office
15
the result of this case, stating further the data required under Section 58 of
Republic Act 4136.
Therefrom, petitioner appealed to the RTC on the main submissions that the
MeTC erred in: 1) according credit to the medical certificate issued by Dr.
Balucating, although the records custodian of Ospital ng Maynila was presented
to testify thereon instead of the issuing physician, and 2) upholding the veracity
of the joint affidavit of arrest of P/INSP Manuel Aguilar, SPO4 Efren Bodino, and
PO3 Benedict Cruz III, considering that only SPO4 Bodino appeared in court to
testify.
16
By Decision dated February 22, 2010, the RTC affirmed the conviction of the
petitioner, addressing the first issue thus raised in the appeal in the following
wise: Dr. Balucating’s failure to testify relative to petitioner’s alcoholic breath, as
indicatedin the medical certificate, is not fatal as such testimony would only
serve to corroborate the testimony on the matter of SPO4 Bodino, noting
17
thatunder the Rules of Court, observations of the police officers regarding the
petitioner’s behavior would suffice to support the conclusion of the latter’s
18
drunken state on the day he was apprehended.
Apropos the second issue, the RTC pointed out that the prosecution has the
discretion as to how many witnesses it needs to present before the trial court,
the positive testimony of a single credible witness as to the guilt of the accused
being reasonable enough to warrant a conviction. The RTC cited established
19
jurisprudence enunciating the rule that preponderance is not necessarily with
the greatest number as "[W]itnesses are to be weighed, not numbered."
Following the denial by the RTC of his motion for reconsideration, petitioner
went to the CA on a petition for review, the recourse docketed as CA-G.R. CR
No. 33567. By a Decision dated December 28, 2011, as would be reiterated in a
Resolution of July 18, 2012, the appellatecourt affirmed that of the RTC, thus:
WHEREFORE, the petition is DENIED. The assailed Decision dated February
22, 2010 of the RTC, Manila, Branch 12, is AFFIRMED.
SO ORDERED.
Hence, this petition on the following stated issues:
I. The CA erred in upholding the presumption of regularity in the
performance of duties by the police officers; and
II. The CA erred in giving weight to the Medical Certificate issued by Dr.
Harvey Balucating, in the absence of his testimony before the Court.
The petition is meritorious.
Prefatory, the rule according great weight, even finality at times, to the trial
court’s findings of fact does hold sway when, as here, it appears in the record
that facts and circumstancesof weight and substance have been overlooked,
20
misapprehended or misapplied in a case under appeal. Corollary, it is basic
that an appeal in criminal prosecutions throws the whole case wide open for
21
review, inclusive of the matter of credibility and appreciation of evidence. `
Peace officers and traffic enforcers,like other public officials and employees are
bound to discharge their duties with prudence, caution and attention, which
22
careful men usually exercise in the management of their own affairs.
In the case at bar, the men manning the checkpoint in the subject area and
during the period material appearednot to have performed their duties as
required by law, or at least fell short of the norm expected of peace officers.
They spotted the petitioner’s purported swerving vehicle. They then signaled him
to stop which he obeyed. But they did not demand the presentation of the
driver’s license orissue any ticket or similar citation paper for traffic violation as
required under the particular premises by Sec. 29 of RA 4136, which specifically
provides:
SECTION 29. Confiscation of Driver’s License. – Law enforcement and peace
officers of other agencies duly deputized by the Director shall, in apprehending a
driver for any violation of this Act or any regulations issued pursuant thereto, or
of local traffic rules and regulations x x x confiscate the license ofthe driver
concerned and issue a receipt prescribed and issuedby the Bureau therefor
which shall authorize the driver to operate a motor vehicle for a period not
exceeding seventy-two hours from the time and date of issue of said receipt.
The period so fixed in the receipt shall not be extended, and shall become
invalid thereafter.x x x (Emphasis added.) Instead of requiring the vehicle’s
occupants to answer one or two routinary questions out of respectto what the
23
Court has, in Abenes v. Court of Appeals, adverted to as the motorists’ right of
"free passage without [intrusive] interruption," P/Insp. Aguilar, et al. engaged
petitioner in what appears to be an unnecessary conversation and when
utterances were made doubtless not to their liking, they ordered the latter to step
out of the vehicle, concluding after seeing three (3) empty cases of beer at the
trunk of the vehicle that petitioner was driving under the influence of alcohol.
Then petitioner went on with his "plain view search" line. The remark apparently
pissed the police officers off no end as one of them immediately lashed at
petitioner and his companions as "mga lasing" (drunk) and to get out of the
vehicle, an incongruous response to an otherwise reasonable plea. Defense
witness, Joenilo Pano, graphically described this particular event in his
sinumpaang salaysay, as follows:
x x x matapos kami huminto ay naglapitan sa amin ang mga pulis, nag flash light
sa loob ng sasakyan at sa aming mga mukha.
x x x isang pulis ang nag-utos sa aminna kami ay magsi-baba at buksan ang
pintuan ng nasabing sasakyan.
x x x dahil doon sinabi ni Kuya sa mga pulis, na hindi pwede iyon at pinigilan
niya ako at ang aking kasama kong waitress na bumaba.
x x x iginiit ni Kuya sa mga pulisang salitang "PLAIN VIEW LANG BOSS, PLAIN
VIEW LANG" pero iyon ayhindi nila pinansin. Sa halip as isang pulis ang
nagsabi na "MGA LASING KAYO HETO MAY CASE PA KAYO NG BEER".
x x x habang nagpapaliwanag si Kuya, isang pulis ang biglang kumuha ng susi
ng sasakyan habang ang isang pulis ang biglang sumuntok sa bibig ni Kuya,
nagbunot ng baril at tinutukan sa ulo si Kuya.
x x x dahil doon ay nagmakaawa ako na wag barilin si Kuya subalit ako rin ay
tinutukan ng baril. x x x na matapos suntukin si Kuya aypinagtulungan siya ng
mga pulis na ilabas sa sasakyan at nang mailabas siyaay pinagtulakan siya ng
mga pulis sa gilid ng kalsada habang hawak ang kanilang baril.
24
Pano’s above account ironicallyfinds in a way collaboration from the arresting
officers themselves who admitted that they originally had no intention to search
the vehicle in question nor subject its occupants to a body search. The officers
wrote in their aforementioned joint affidavit:
xxxx
That we arrested the suspect, Edmund Sydeco y Siozon x x x for violation of RA
4136 (Driving under the influence of liquor), and violation of Article 151 of the
RPC (Resisting Arrest) x x x committed on or about 3:30A.M., June 11, 2006
along x x x Malate, Manila. x x x He began to raise his voice and converse with
us rudely without considering that we are in uniform, on duty and performing our
job. P/INSP Manuel Aguilar pointed out that we saw him swerving and driving
under the influence of liquor that was why we are inviting him to our police
station in which our intention was to make him rest for a moment before he
continue to drive. x x x (Emphasis added.)
In fine, at the time of his apprehension, or when he was signaled to stop, to be
precise, petitioner has not committed any crime or suspected of having
committed one. "Swerving," as ordinarily understood,refers to a movement
wherein a vehicle shifts from a lane to another or to turn aside from a direct
25
course of action or movement. The act may become punishable when there is
a sign indicating that swerving is prohibited or where swerving partakes the
nature ofreckless driving, a concept defined under RA 4136, as:
SECTION 48. Reckless Driving. – Noperson shall operate a motor vehicle on
any highway recklessly or without reasonable caution considering the width,
traffic, grades, crossing, curvatures, visibility and other conditions of the highway
and the conditions of the atmosphere and weather, or so as to endanger the
property or the safetyor rights of any person or so as to cause excessive or
unreasonable damage to the highway.
Swerving is not necessarily indicative of imprudent behavior let alone
constitutive of reckless driving. To constitute the offense of reckless driving, the
act must be something more than a mere negligence in the operation of a motor
vehicle, and a willful and wantondisregard of the consequences is
26
required. Nothing in the records indicate that the area was a "no swerving or
overtaking zone." Moreover, the swerving incident, if this be the case, occurred
at around 3:00 a.m. when the streets are usually clear of moving vehicles and
human traffic, and the danger to life, limb and property to third persons is
minimal. When the police officers stopped the petitioner’s car, they did not issue
any ticket for swerving as required under Section 29 of RA 4136. Instead, they
inspected the vehicle, ordered the petitioner and his companions to step down of
their pick up and concluded that the petitioner was then drunk mainly because of
the cases of beer found at the trunk of the vehicle. On re-direct examination,
SPO4 Bodino testified:
Q: On that particular date, time and place … what exactly prompted you to
arrest the accused (sic) the charged in for Viol. of Section 56(f) of R.A. 4136?
A: Noong mag check-up kami, naamoynamin na amoy alak siya at yung
sasakyan ay hindi maganda ang takbo.
Q: Now you stated in your affidavit of arrest Mr. Witness that you spotted the
vehicle of the accused swerving, is that correct?
A: Yes, sir.
Q. Is that also the reason why you apprehended him?
A: Yes, sir.
Q: And what happened after Mr. Witness, when you approached the vehicle of
the accused?
A: The accused was in a loud voice. He was asking, "Bakit daw siya
pinahihinto?"
xxxx
Q: How do you describe the resistance Mr. Witness?
A: He refused to ride with usgoing to the hospital, Your Honor.
27
xxxx
Going over the records, it is fairly clear that what triggered the confrontational
stand-off between the police team, on one hand, and petitioner on the other,
was the latter’s refusal to get off of the vehicle for a body and vehicle search
juxtaposed by his insistence on a plain view search only. Petitioner’s twin
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gestures cannot plausibly be considered as resisting a lawful order. He may
have sounded boorish or spoken crudely at that time, but none of this would
make him a criminal. It remains to stress that the petitioner has not, when
flagged down, committed a crime or performed an overt act warranting a
reasonable inference of criminal activity. He did not try to avoid the road block
established. He came to a full stop when so required to stop. The two key
elements of resistance and serious disobedience punished under Art. 151 of the
RPC are: (1) That a person in authority or his agent is engaged in the
performance of official duty or gives a lawful order to the offender; and (2) That
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the offender resists or seriously disobeys such person or his agent.
There can be no quibble that P/Insp. Aguilar and his apprehending team are
persons in authority or agents of a person in authority manning a legal
checkpoint. But surely petitioner’s act of exercising one’s right against
30
unreasonable searches to be conducted in the middle of the night cannot, in
context, be equated to disobedience let alone resisting a lawful order in
contemplation of Art. 151 of the RPC. As has often been said, albeit expressed
differently and under dissimilar circumstances, the vitality of democracy lies not
in the rights it guarantees, but in the courage of the people to assert and use
31
them whenever they are ignored or worse infringed. Moreover, there is, to
stress, nothing in RA 4136 that authorized the checkpoint-manning policemen to
order petitioner and his companions to get out of the vehicle for a vehicle and
body search. And it bears to emphasize that there was no reasonable suspicion
of the occurrence of a crime that would allow what jurisprudence refers to as a
"stop and frisk" action. As SPO4 Bodino no less testified, the only reason why
they asked petitioner to get out of the vehicle was not because he has
committed a crime, but because of their intention toinvite him to Station 9 so he
could rest before he resumes driving. But instead of a tactful invitation, the
apprehending officers, in an act indicative of overstepping of their duties,
dragged the petitioner out of the vehicle and, in the process of subduing him,
pointed a gun and punched him on the face. None of the police officers, to note,
categorically denied the petitioner’s allegation aboutbeing physically hurt before
being brought to the Ospital ng Maynila to be tested for intoxication. What the
policemen claimed was that it took the three (3) of them to subdue the fifty-five
year old petitioner. Both actions were done in excess of their authority granted
under RA 4136. They relied on the medical certificate issued by Dr. Balucating
attesting that petitioner showed no physical injuries. The medical certificate was
in fact challenged not only because the petitioner insisted at every turn that he
was not examined, but also because Dr. Balucating failed to testify as to its
content. Ms. Delos Santos, the medical record custodian ofthe Ospital ng
Maynila, testified, but only to attest that the hospital has a record of the
certificate. The trial court, in its decision, merely stated:
At the outset, the records of the case show that the same were not testified upon
by the doctor who issued it.1âwphi1Instead, the Records Custodian of the
Ospital ng Maynila was presented by the Prosecution to testify on the said
documents.
However, although the doctor who examined the accused was unable to testify
to affirm the contents of the Medical Certificate he issued (re: that he was found
to have an alcoholic breath), this court finds that the observation of herein
private complainants as to the accused’s behavior and condition after the
incident was sufficient.
Under Section 50 of Rule 130 of the Revised Rules of evidence:
The opinion of a witness for which proper basis is given, may be received in
evidence regarding x x x x
The witness may also testify on his impressions of the emotion, behavior,
condition or appearance of a person Under Section 15 of the Revised Rules on
Summary Procedure, "at the trial, the affidavits submitted by the parties shall
32
constitute the direct testimonies of the witnesses who executed the same."
In sum, the MeTC, as echoed by RTC and CA later, did not rely on the medical
certificate Dr. Balucating issued on June 12, 2006 as to petitioner’s intoxicated
state, as the former was not able to testify as to its contents, but on the
testimony of SPO4Bodino, on the assumption that he and his fellow police
officers were acting in the regular performance of their duties. It cannot be
emphasized enough that smelling of liquor/alcohol and be under the influence of
liquor are differing concepts. Corollarily, it is difficult to determine with legally
acceptable certainty whether a person is drunk in contemplation of Sec. 56(f) of
RA 4136 penalizing the act of driving under the influence of alcohol. The legal
situation has of course changed with the approval in May 2013 of the Anti-Drunk
and Drugged Driving Act of 2013 (RA 10586) which also penalizes driving under
33
the influence of alcohol (DUIA), a term defined under its Sec. 3(e) as the "act
of operating a motor vehicle while the driver’s blood alcohol concentration level
has, after being subjected to a breath analyzer test reached the level of
intoxication as established jointly by the [DOH], the NAPOLCOM] and the
[DOTC]. And under Sec. 3(g) of the IRR of RA 10586, a driver of a private motor
vehicle with gross vehicle weight not exceeding 4,500 kilograms who has BAC
[blood alcohol concentration] of 0.05% or higher shall be conclusive proof that
said driver isdriving under the influence of alcohol. Viewed from the prism of RA
10586, petitioner cannot plausibly be convicted of driving under the influence of
alcohol for this obvious reason: he had not been tested beyond reasonable
doubt, let alone conclusively, for reaching during the period material the
threshold level of intoxication set under the law for DUIA, i.e., a BAC of 0.05% or
34
over. Under Art. 22 of the RPC, penal laws shall be given retroactive insofar
asthey are favorable to the accused. Section 19 of RA 10586 expressly modified
Sec. 56(f) of RA 4136. Verily, even by force of Art. 22 ofthe RPC in relation to
Sec. 3(e) of RA 10586 alone, petitioner could very well be acquitted for the
charge of driving under the influence of alcohol, even if the supposed inculpatory
act occurred in 2006.
Parenthetically, the Office of the City Prosecutor of Manila, per its
35
Resolution of November 21, 2006 found, on the strength of another physical
examination from the same Ospital ng Maynila conducted by Dr. Devega on the
petitioner on the same day,June 12, but later hour, probable cause for slight
physical injuries against P/Insp. Aguilar et al. That finding to be sure tends to
indicate that the police indeed man handled the petitioner and belied, or at least
cancelled out, the purported Dr. Balucating’s finding as to petitioner’s true state.
The Court must underscore at this juncture that the petitioner, after the
unfortunate incident, lost no time incommencing the appropriate criminal
charges against the police officers and Dr. Balucating, whomhe accused of
issuing Exh. "F" even without examining him. The element of immediacy in the
filing lends credence to petitioner’s profession of innocence, particularly of the
charge of disobeying lawful order or resisting arrest. Certainly not to be
overlooked is the fact that petitioner,in so filing his complaint, could not have
possibly been inspired by improper motive, the police officers being complete
strangers to him and vice versa. Withal, unless he had a legitimate grievance, it
is difficult to accept the notion that petitioner would expose himself to harm’s
way by filing a harassment criminal suit against policemen.
36
Conviction must come only after it survives the test of reason. It is thus
required that every circumstance favoring one’s innocence be duly taken into
37
account. Given the deviation of the police officers from the standard and usual
procedure in dealing with traffic violation by perceived drivers under the
influence of alcoholand executing an arrest, the blind reliance and simplistic
invocation by the trial court and the CA on the presumption of regularity in the
conduct of police duty is clearly misplaced. As stressed in People v.
38
Ambrosio, the presumption of regularity is merely just that, a presumption
disputable by contrary proof and which when challenged by the evidence cannot
be regarded as binding truth. And to be sure, this presumption alone cannot
preponderate over the presumption of innocence that prevails if not overcome
by proof that obliterates all doubts as to the offender’s culpability. In the present
case, the absence of conclusive proof being under the influence of liquor while
driving coupled with the forceful manner the police yanked petitioner out of his
vehicle argues against or at least cast doubt on the finding of guilt for drunken
driving and resisting arrest.
In case of doubt as to the moral certainty of culpability, the balance tips in favor
of innocence or at least infavor of the milderform of criminal liability. This is as it
should be. For, it is basic, almost elementary, that the burden of proving the
guiltof an accused lies on the prosecution which must rely on the strength of its
evidence and noton the weakness of the defense.

WHEREFORE, in light of all the foregoing, the appealed Decision and

Resolution of the Court of Appeals in CA-G.R. CR No. 33567 are hereby
REVERSED and SET ASI:OE. Petitioner is hereby acquitted of the crimes
charged in Criminal Case No. 052527-CN and Criminal Case No. 052528-CN.

No pronouncement as to costs.