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G.R. No. 124110. April 20, 2001.

UNITED AIRLINES, INC., petitioner, vs. COURT OF APPEALS, ANICETO


FONTANILLA, in his personal capacity and in behalf of his minor son
MYCHAL ANDREW FONTANILLA, respondents.
Civil Procedure; Evidence; The general rule in civil cases is that the party having the
burden of proof of an essential fact must produce a preponderance of evidence thereon;
Although plaintiffs evidence is stronger than that presented by the defendant a judgment
cannot be entered in favor of the former if his evidence is not sufficient to sustain his cause of
action.—It must be remembered that the general rule in civil cases is that the party having
the burden of proof of an essential fact must produce a preponderance of evidence thereon.
Although the evidence adduced by the plaintiff is stronger than that presented by the
defendant, a judgment cannot be entered in favor of the former, if his evidence is not sufficient
to sustain his cause of action. The plaintiff must rely on the strength of his own evidence and
not upon the weakness of the defendant’s.
Same; Same; Appeals; Appellate courts should not, unless for strong and cogent reasons,
reverse the findings of facts of trial courts.—Time and again, the Court has pronounced that
appellate courts should not, unless for strong and cogent reasons, reverse the findings of facts
of trial courts. This is so because trial judges are in a better position to examine real evidence
and at a vantage point to observe the actuation and the demeanor of the witnesses. While not
the sole indicator of the credibility of a witness, it is of such weight that it has been said to
be the touchstone of credibility.
Civil Law; Private International Law; Doctrine of lex loci contractus; According to the
doctrine, as a general rule, the law of the place where a contract is made or entered into governs
with respect to its nature and validity, obligation and interpretation.—In the case of Zalamea
vs. Court of Appeals, this Court applied the doctrine of lex loci contractus. According to the
doctrine, as a general rule, the law of the place where a contract is made or entered into
governs with respect to its nature and validity, obligation and interpretation. This has been
said to be the rule even though the place where the contract was made is different from the
place where it is to be performed, and particularly so, if the place of the making and the place
of performance are the same. Hence, the court should apply the law
______________

* FIRST DIVISION.

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100 SUPREME COURT REPORTS ANNOTATED


United Airlines, Inc. vs. Court of Appeals
of the place where the airline ticket was issued, when the passengers are residents and
nationals of the forum and the ticket is issued in such State by the defendant airline.
Same; Damages; For the plaintiff to be entitled to an award of moral damages arising
from a breach of contract of carriage, the carrier must have acted with fraud or bad faith.—
As to the award of moral and exemplary damages, we find error in the award of such by the
Court of Appeals. For the plaintiff to be entitled to an award of moral damages arising from
a breach of contract of carriage, the carrier must have acted with fraud or bad faith.

PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.


Quisumbing, Torres & Evangelista for petitioner.
Yulo, Aliling & Associates for private respondent.

KAPUNAN, J.:

On March 1, 1989, private respondent Aniceto Fontanilla purchased from petitioner


United Airlines, through the Philippine Travel Bureau in Manila, three (3) “Visit the
U.S.A.” tickets for himself, his wife and his minor son Mychal for the following routes:

1. (a)San Francisco to Washington (15 April 1989);


2. (b)Washington to Chicago (25 April 1989);
3. (c)Chicago to Los Angeles (29 April 1989);
4. (d)Los Angeles to San Francisco (01 May 1989 for petitioner’s wife and 05 May
1989 for petitioner and his son). 1

All flights had been confirmed previously by United Airlines. 2

The Fontanillas proceeded to the United States as planned, where they used the
first coupon from San Francisco to Washington. On April 24, 1989, Aniceto Fontanilla
bought two (2) addi-
_____________

1 Records, p. 35.
2 Ibid.

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VOL. 357, APRIL 20, 2001 101
United Airlines, Inc. vs. Court of Appeals
tional coupons each for himself, his wife and his son from petitioner at its office in
Washington Dulles Airport. After paying the penalty for rewriting their tickets, the
Fontanillas were issued tickets with corresponding boarding passes with the words
“CHECK-IN REQUIRED,” for United Airlines Flight No. 1108, set to leave from Los
Angeles to San Francisco at 10:30 a.m. on May 5, 1989. 3

The cause of the non-boarding of the Fontanillas on United Airlines Flight No.
1108 makes up the bone of contention of this controversy.
Private respondents’ version is as follows:
Aniceto Fontanilla and his son Mychal claim that on May 5, 1989, upon their
arrival at the Los Angeles Airport for their flight, they proceeded to United Airlines
counter where they were attended by an employee wearing a nameplate bearing the
name “LINDA.” Linda examined their tickets, punched something into her computer
and then told them that boarding would be in fifteen minutes. 4

When the flight was called, the Fontanillas proceeded to the plane. To their
surprise, the stewardess at the gate did not allow them to board the plane, as they
had no assigned seat numbers. They were then directed to go back to the “check-in”
counter where Linda subsequently informed them that the flight had been over-
booked and asked them to wait. 5
The Fontanillas tried to explain to Linda the special circumstances of their visit.
However, Linda told them in arrogant manner, “So what, I cannot do anything about
it.”
6

Subsequently, three other passengers with Caucasian features were graciously


allowed to board, after the Fontanillas were told that the flight had been overbooked. 7

_______________

3 Id.
4 Records, pp. 35-36.
5 Id., at 36.

6 Ibid.

7 Id.

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102 SUPREME COURT REPORTS ANNOTATED
United Airlines, Inc. vs. Court of Appeals
The plane then took off with the Fontanillas’ baggage in tow, leaving them behind. 8

The Fontanillas then complained to Linda, who in turn gave them an ugly stare
and rudely uttered, “It’s not my fault. It’s the fault of the company. Just sit down and
wait.” When Mr. Fontanilla reminded Linda of the inconvenience being caused to
9

them, she bluntly retorted, “Who do you think you are? You lousy Flips are good for
nothing beggars. You always ask for American aid.” After which she remarked “Don’t
worry about your baggage. Anyway there is nothing in there. What are you doing here
anyway? I will report you to immigration. You Filipinos should go home,” Such rude
10

statements were made in front of other people in the airport causing the Fontanillas
to suffer shame, humiliation and embarrassment. The chastening situation even
caused the younger Fontanilla to break into tears. 11

After some time, Linda, without any explanation, offered the Fontanillas $50.00
each. She simply said “Take it or leave it.” This, the Fontanillas declined.
12

The Fontanillas then proceeded to the United Airlines customer service counter to
plead their case. The male employee at the counter reacted by shouting that he was
ready for it and left without saying anything. 13

The Fontanillas were not booked on the next flight, which departed for San
Francisco at 11:00 a.m. It was only at 12:00 noon that they were able to leave Los
Angeles on United Airlines Flight No. 803.
Petitioner United Airlines has a different version of what occurred at the Los
Angeles Airport on May 5, 1989.
According to United Airlines, the Fontanillas did not initially go to the check-in
counter to get their seat assignments for UA Flight
________________

8 Id.
9 Id.
10 Records, p. 37.

11 Ibid.

12 Id.

13 Id., at 39.

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VOL. 357, APRIL 20, 2001 103
United Airlines, Inc. vs. Court of Appeals
1108. They instead proceeded to join the queue boarding the aircraft without first
securing their seat assignments as required in their ticket and boarding passes.
Having no seat assignments, the stewardess at the door of the plane instructed them
to go to the check-in counter. When the Fontanillas proceeded to the check-in counter,
Linda Allen, the United Airlines Customer Representative at the counter informed
them that the flight was overbooked. She booked them on the next available flight
and offered them denied boarding compensation. Allen vehemently denies uttering
the derogatory and racist words attributed to her by the Fontanillas. 14

The incident prompted the Fontanillas to file Civil Case No. 89-4268 for damages
before the Regional Trial Court of Makati. After trial on the merits, the trial court
rendered a decision, the dispositive portion of which reads as follows:
WHEREFORE, judgment is rendered dismissing the complaint. The counterclaim is likewise
dismissed as it appears that plaintiffs were not actuated by legal malice when they filed the
instant complaint. 15

On appeal, the Court of Appeals ruled in favor of the Fontanillas. The appellate court
found that there was an admission on the part of United Airlines that the Fontanillas
did in fact observe the check-in requirement. It ruled further that even assuming
there was a failure to observe the check-in requirement. United Airlines failed to
comply with the procedure laid down in cases where a passenger is denied boarding.
The appellate court likewise gave credence to the claim of Aniceto Fontanilla that the
employees of United Airlines were discourteous and arbitrary and, worse,
discriminatory. In light of such treatment, the Fontanillas were entitled to moral
damages. The dispositive portion of the decision of the respondent Court of Appeals
dated 29 September 1995, states as follows:
WHEREFORE, in view of the foregoing, judgment appealed herefrom is hereby REVERSED
and SET ASIDE, and a new judgment is entered ordering defendant-appellee to pay plaintiff-
appellant the following:
______________

14 Id., at 119-204.
15 CA Decision, Rollo, pp. 7-25.

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104 SUPREME COURT REPORTS ANNOTATED
United Airlines, Inc. vs. Court of Appeals

1. a)P200,000.00 as moral damages;


2. b)P200,000.00 as exemplary damages;
3. c)P50,000.00 as attorney’s fees.

No pronouncement as to costs.
SO ORDERED. 16
Petitioner United Airlines now comes to this Court raising the following assignment
of errors:
I

RESPONDENT COURT OF APPEALS GRAVELY ERRED IN RULING THAT THE TRIAL


COURT WAS WRONG IN FAILING TO CONSIDER THE ALLEGED ADMISSION THAT
PRIVATE RESPONDENT OBSERVED THE CHECK-IN REQUIREMENT.

II

RESPONDENT COURT OF APPEALS GRAVELY ERRED IN RULING THAT PRIVATE


RESPONDENTS FAILURE TO CHECK-IN WILL NOT DEFEAT HIS CLAIMS BECAUSE
THE DENIED BOARDING RULES WERE NOT COMPLIED WITH.

III

RESPONDENT COURT OF APPEALS GRAVELY ERRED IN RULING THAT PRIVATE


RESPONDENT IS ENTITLED TO MORAL DAMAGES OF P200,000.

IV

RESPONDENT COURT OF APPEALS GRAVELY ERRED IN RULING THAT PRIVATE


RESPONDENT IS ENTITLED TO EXEMPLARY DAMAGES OF P200,000.

RESPONDENT COURT OF APPEALS GRAVELY ERRED IN RULING THAT PRIVATE


RESPONDENT IS ENTITLED TO ATTORNEY’S FEES OF P50,000. 17

On the first issue raised by the petitioner, the respondent Court of Appeals ruled that
when Rule 9, Section 1 of the Rules of Court, 18

_______________

16 Rollo, p. 25.
17 Id., at 37.
18 Section 1. Allegations not specifically denied deemed admitted.—Material Averment in the complaint,

other than those as to the amount of

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VOL. 357, APRIL 20, 2001 105
United Airlines, Inc. vs. Court of Appeals
there was an implied admission in petitioner’s answer in the allegations in the
complaint that private respondent and his son observed the “check-in requirement at
the Los Angeles Airport.” Thus:
A perusal of the above pleadings filed before the trial court disclosed that there exists a
blatant admission on the part of the defendant-appellee that the plaintiffs-appellants indeed
observed the “check-in” requirement at the Los Angeles Airport on May 5, 1989. In view of
defendant-appellee’s admission of plaintiffs-appellants’ material averment in the complaint,
We find no reason why the trial court should rule against such admission. 19
We disagree with the above conclusion reached by respondent Court of Appeals.
Paragraph 7 of private respondents’ complaint states:
7. On May 5, 1989 at 9:45 a.m., plaintiff and his son checked in at defendant’s
designated counter at the airport in Los Angeles for their scheduled flight to San
Francisco on defendant’s Flight No. 1108. 20

Responding to the above allegations, petitioner averred in paragraph 4 of its


answer, thus:
4. Admits the allegation set forth in paragraph 7 of the complaint except to deny
that plaintiff and his son checked in at 9:45 a.m., for lack of knowledge or information
at this point in time as to the truth thereof. 21

The rule authorizing an answer that the defendant has no knowledge or


information sufficient to form a belief as to the truth of an averment and giving such
answer the effect of a denial, does not apply where the fact as to which want of
knowledge is asserted is so plainly and necessarily within the defendant’s knowledge
that
_____________

damage, shall be deemed admitted when not specifically admitted when not specifically denied.
Allegations of usury are deemed not denied specifically when not denied specifically under oath.
19 Rollo, p. 75.

20 CA Rollo, p. 2.

21 Id., at 14.

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106 SUPREME COURT REPORTS ANNOTATED
United Airlines, Inc. vs. Court of Appeals
his averment of ignorance must be palpably untrue. Whether or not private
22

respondents checked in at petitioner’s designated counter at the airport at 9:45 a.m.


on May 5, 1989 must necessarily be within petitioner’s knowledge.
While there was no specific denial as to the fact” of compliance with the “check-in”
requirement by private respondents, petitioner presented evidence to support its
contention that there indeed was no compliance.
Private respondents then are said to have waived the rule on admission. It not
only presented evidence to support its contention that there was compliance with the
check-in requirement, it even allowed petitioner to present rebuttal evidence. In the
case of Yu Chuck vs. “Kong Li Po,” we ruled that:
The object of the rule is to relieve a party of the trouble and expense in proving in the first
instance an alleged fact, the existence or nonexistence of which is necessarily within the
knowledge of the adverse party, and of the necessity (to his opponent’s case) of establishing
which such adverse party is notified by his opponent’s pleadings.
The plaintiff may, of course, waive the rule and that is what must be considered to have
done (sic) by introducing evidence as to the execution of the document and failing to object to
the defendant’s evidence in refutation; all this evidence is now competent and the case must
be decided thereupon. 23
The determination of the other issues raised is dependent on whether or not there
was a breach of contract in bad faith on the part of the petitioner in not allowing the
Fontanillas to board United Airlines Flight 1108.
It must be remembered that the general rule in civil cases is that the party having
the burden of proof of an essential fact must produce a preponderance of evidence
thereon. Although the evi-
24

______________

22 Warner Barnes and Co. Ltd. vs. Reyes, 103 Phil. 662 (1958); PNB vs. Utility Assurance and Surety Co.,

Inc., 177 SCRA 210 (1989).


23 46 Phil. 604, 613.

24 Ricardo J. Francisco, THE REVISED RULES OF COURT IN THE PHILIPPINES, EVIDENCE,

Volume VII, Par II, 1997, citing I Moore on Facts 54.

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VOL. 357, APRIL 20, 2001 107
United Airlines, Inc. vs. Court of Appeals
dence adduced by the plaintiff is stronger than that presented by the defendant, a
judgment cannot be entered in favor of the former, if his evidence is not sufficient to
sustain his cause of action. The plaintiff must rely on the strength of his own evidence
and not upon the weakness of the defendant’s. Proceeding from this, and considering
25

the contradictory findings of facts by the Regional Trial Court and the Court of
Appeals, the question before this Court is whether or not private respondents were
able to prove with adequate evidence his allegations of breach of contract in bad faith.
We rule in the negative.
Time and again, the Court has pronounced that appellate courts should not, unless
for strong and cogent reasons, reverse the findings of facts of trial courts. This is so
because trial judges are in a better position to examine real evidence and at a vantage
point to observe the actuation and the demeanor of the witnesses. While not the sole
26

indicator of the credibility of a witness, it is of such weight that it has been said to be
the touchstone of credibility. 27

Aniceto Fontanilla’s assertion that upon arrival at the airport at 9:45 a.m., he
immediately proceeded to the check-in counter, and that Linda Allen punched in
something into the computer is specious and not supported by the evidence on record.
In support of their allegations, private respondents submitted a copy of the boarding
pass. Explicitly printed on the boarding pass are the words “Check-In
Required.” Curiously, the said pass did not indicate any seat number. If indeed the
Fontanillas checked in at the designated time as they claimed, why then were they
not assigned seat numbers? Absent any showing that Linda was so, motivated, we do
not buy into private respondents’ claim that Linda intentionally deceived him, and
made him the laughing stock among the passengers. Hence, as correctly observed by
28

the trial court:


____________

25 Nolan vs. Jalandoni, 23 Phil. 292.


26 Matuguina Integrated Wood Products, Inc. vs. CA, 263 SCRA 490 (1996) citing Bael vs. IAC, 169 SCRA
617 (1989).
27 Connor vs. Connor, 77 A. 2d 697.
28 Records, p. 39.

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108 SUPREME COURT REPORTS ANNOTATED
United Airlines, Inc. vs. Court of Appeals
Plaintiffs fail to realize that their failure to check in, as expressly required in their boarding
passes, is the very reason why they were not given their respective seat numbers, which
resulted in their being denied boarding. 29

Neither do we agree with the conclusion reached by the appellate court that private
respondents’ failure to comply with the check-in requirement will not defeat his claim
as the denied boarding rules were not complied with. Notably, the appellate court
relied on the Code of Federal Regulation Part on Oversales, which states:
250.6 Exceptions to eligibility for denied boarding compensation.
A passenger denied board involuntarily from an oversold flight shall not be eligible for
denied board compensation if:
(a) The passenger does not comply with the carrier’s contract of carriage or tariff
provisions regarding ticketing, reconfirmation, check-in, and acceptability for
transformation.

The appellate court, however, erred in applying the laws of the United States as, in
the case at bar, Philippine law is the applicable law. Although, the contract of carriage
was to be performed in the United States, the tickets were purchased through
petitioner’s agent in Manila. It is true that the tickets were “rewritten” in
Washington, D.C. However, such fact did not change the nature of the original
contract of carriage entered into by the parties in Manila.
In the case of Zalamea vs. Court of Appeals, this Court applied the doctrine of lex
30

loci contractus. According to the doctrine, as a general rule, the law of the place where
a contract is made or entered into governs with respect to its nature and validity,
obligation and interpretation. This has been said to be the rule even though the place
where the contract was made is different from the place where it is to be performed,
and particularly so, if the place of the making and the place of performance are the
same. Hence, the court should apply the law of the place where the airline ticket was
___________

29 CA Rollo, p. 40.
30 228 SCRA 23 (1993).

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VOL. 357, APRIL 20, 2001 109
United Airlines, Inc. vs. Court of Appeals
issued, when the passengers are residents and nationals of the forum and the ticket
is issued in such State by the defendant airline.
The law of the forum on the subject matter is Economic Regulations No. 7 as
amended by Boarding Priority and Denied Boarding Compensation of the Civil
Aeronautics Board, which provides that the check-in requirement be complied with
before a passenger may claim against a carrier for being denied boarding:
SEC. 5. Amount of Denied Boarding Compensation.—Subject to the exceptions provided
hereinafter under Section 6, carriers shall pay to passengers holding confirmed reserved
space and who have presented themselves at the proper place and time and fully complied
with the carrier’s check-in and reconfirmation procedures and who are acceptable for carriage
under the Carrier’s tariffs but who have been denied boarding for lack of space, a
compensation at the rate of: x x

Private respondents’ narration that they were subjected to harsh and derogatory
remarks seems incredulous. However, this Court will not attempt to surmise what
really happened. Suffice to say, private respondent was not able to prove his cause of
action, for as the trial court correctly observed:
x x x plaintiffs claim to have been discriminated against and insulted in the presence of
several people. Unfortunately, plaintiffs limited their evidence to the testimony [of] Aniceto
Fontanilla, without any corroboration by the people who saw or heard the discriminatory
remarks and insults; while such limited testimony could possibly be true, it does not enable
the Court to reach the conclusion that plaintiffs have, by a preponderance of evidence, proven
that they are entitled to P1,650,000.00 damages from defendant. 31

As to the award of moral and exemplary damages, we find error in the award of such
by the Court of Appeals. For the plaintiff to be entitled to an award of moral damages
arising from a breach of contract of carriage, the carrier must have acted with fraud
or bad faith. The appellate court predicated its award on our pronounce-
______________

31 CA Rollo, p. 41.

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United Airlines, Inc. vs. Court of Appeals
ment in the case of Zalamea vs. Court of Appeals, supra, where we stated:
Existing jurisprudence explicitly states that overbooking amounts to bad faith, entitling
passengers concerned to an award of moral damages. In Alitalia Airways v. Court of
Appeals, where passengers with confirmed booking were refused carriage on the last minute,
this Court held that when an airline issues a ticket to a passenger confirmed on a particular
flight, on a certain date, a contract of carriage arises, and the passenger has every right to
expect that he would fly on that flight and on that date. If he does not, then the carrier opens
itself to a suit for breach of contract of carriage. Where an airline had deliberately
overbooked, it took the risk of having to deprive some passengers of their seats in case all of
them would show up for check in. For the indignity and inconvenience of being refused a
confirmed seat on the last minute, said passenger is entitled to moral damages. (Emphasis
supplied.)

However, the Court’s ruling in said case should be read in consonance with existing
laws, particularly, Economic Regulations No. 7, as amended, of the Civil Aeronautics
Board:
Sec. 3. Scope.—This regulation shall apply to every Philippine and foreign air carrier with
respect to its operation of flights or portions of flights originating from or terminating at, or
serving a point within the territory of the Republic of the Philippines insofar as it denies
boarding to a passenger on a flight, or portion of a flight inside or outside the Philippines, for
which he holds confirmed reserved space. Furthermore, this Regulation is designed to cover
only honest mistakes on the part of the carriers and excludes deliberate and willful acts of
non-accommodation. Provided, however, that overbooking not exceeding 10% of the seating
capacity of the aircraft shall not be considered as a deliberate and willful act of non-
accommodation.

What this Court considers as bad faith is the willful and deliberate overbooking on
the part of the airline carrier. The above-mentioned law clearly states that when the
overbooking does not exceed ten percent (10%), it is not considered as deliberate and
therefore does not amount to bad faith. While there may have been overbooking in
this case, private respondents were not able to prove that the overbooking on United
Airlines Flight 1108 exceeded ten percent.
111
VOL. 357, APRIL 20, 2001 111
United Airlines, Inc. vs. Court of Appeals
As earlier stated, the Court is of the opinion that the private respondents were not
able to prove that they were subjected to coarse and harsh treatment by the ground
crew of United Airlines. Neither were they able to show that there was bad faith on
part of the carrier airline. Hence, the award of moral and exemplary damages by the
Court of Appeals is improper. Corollarily, the award of attorney’s fees is, likewise,
denied for lack of any legal and factual basis.
WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals in
CA-G.R. CV No. 37044 is hereby REVERSED and SET ASIDE. The decision of the
Regional Trial Court of Makati City in Civil Case No. 89-4268 dated April 8, 1991 is
hereby REINSTATED.
SO ORDERED.
Davide, Jr. (C.J., Chairman), Puno, Pardo and Ynares-Santiago, JJ., concur.
Petition granted, judgment reversed and set aside. That of the trial court reinstated.
Note.—In civil cases, the party having the burden of proof must establish his
cause by a preponderance of evidence. (Ceremonia vs. Court of Appeals, 314 SCRA
731 [1999]

——o0o——

G.R. No. 152154. July 15, 2003. *

REPUBLIC OF THE PHILIPPINES, petitioner, vs. HONORABLE


SANDIGANBAYAN (SPECIAL FIRST DIVISION), FERDINAND E. MARCOS
(REPRESENTED BY HIS ESTATE/HEIRS: IMELDA R. MARCOS, MARIA
IMELDA [IMEE] MARCOS-MANOTOC, FERDINAND R. MARCOS, JR. AND
IRENE MARCOS-ARANETA) AND IMELDA ROMUALDEZ MARCOS,
respondents.
Actions; Pleadings and Practice; Appeals; Certiorari; Normally, decisions of the
Sandiganbayan are brought before the Supreme Court under Rule 45, not Rule 65, but where
the case is undeniably ingrained with immense public interest, public policy and deep
historical repercussions, certiorari is allowed notwithstanding the existence and availability
of the remedy of appeal.—At the outset, we would like to stress that, we are treating this case
as an exception to the general rule governing petitions for certiorari. Normally, decisions of
the Sandiganbayan are brought before this Court under Rule 45, not Rule 65. But where the
case is undeniably ingrained with immense public interest, public policy and deep historical
repercussions, certiorari is allowed notwithstanding the existence and availability of the
remedy of appeal.
Same; Same; Same; Same; Public Officers; Ill-Gotten Wealth; In all the alleged ill-gotten
wealth cases filed by the PCGG, the Supreme Court has seen fit to set aside technicalities and
formalities that merely serve to delay or impede judicious resolution.—In all the alleged ill-
gotten wealth

_______________

*EN BANC.
191
VOL. 406, JULY 15, 2003 191
Republic vs. Sandiganbayan
cases filed by the PCGG, this Court has seen fit to set aside technicalities and formalities
that merely serve to delay or impede judicious resolution. This Court prefers to have such
cases resolved on the merits at the Sandiganbayan. But substantial justice to the Filipino
people and to all parties concerned, not mere legalisms or perfection of form, should now be
relentlessly and firmly pursued. Almost two decades have passed since the government
initiated its search for and reversion of such ill-gotten wealth. The definitive resolution of
such cases on the merits is thus long overdue. If there is proof of illegal acquisition,
accumulation, misappropriation, fraud or illicit conduct, let it be brought out now. Let the
ownership of these funds and other assets be finally determined and resolved with dispatch,
free from all the delaying technicalities and annoying procedural sidetracks.
Same; Same; Summary Judgment; Words and Phrases; Summary judgment has been
described as a judgment which a court may render before trial but after both parties have
pleaded.—We hold that respondent Marcoses failed to raise any genuine issue of fact in their
pleadings. Thus, on motion of petitioner Republic, summary judgment should take place as a
matter of right. In the early case of Auman vs. Estenzo, summary judgment was described as
a judgment which a court may render before trial but after both parties have pleaded. It is
ordered by the court upon application by one party, supported by affidavits, depositions or
other documents, with notice upon the adverse party who may in turn file an opposition
supported also by affidavits, depositions or other documents. This is after the court
summarily hears both parties with their respective proofs and finds that there is no genuine
issue between them. Summary judgment is sanctioned in this jurisdiction by Section 1, Rule
35 of the 1997 Rules of Civil Procedure: SECTION 1. Summary judgment for claimant.—A
party seeking to recover upon a claim, counterclaim, or cross-claim or to obtain a declaratory
relief may, at any time, after the pleading in answer thereto has been served, move with
supporting affidavits, depositions or admissions for a summary judgment in his favor upon
all or any part thereof. Summary judgment is proper when there is clearly no genuine issue
as to any material fact in the action. The theory of summary judgment is that, although an
answer may on its face appear to tender issues requiring trial, if it is demonstrated by
affidavits, depositions or admissions that those issues are not genuine but sham or fictitious,
the Court is justified in dispensing with the trial and rendering summary judgment for
petitioner Republic.
Same; Same; Same; Same; A genuine issue is an issue of fact which calls for the
presentation of evidence as distinguished from an issue which is fictitious and contrived, set
up in bad faith or patently lacking in substance so as not to constitute a genuine issue for
trial—respondents’ defenses of “lack of knowledge for lack of privity” or “(inability to) recall
be-
192
192 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan
cause it happened a long time ago” or, on the part of Mrs. Marcos, that the “funds were
lawfully acquired” are fully insufficient to tender genuine issues.—Upon careful perusal of the
foregoing, the Court finds that respondent Mrs. Marcos and the Marcos children indubitably
failed to ten-der genuine issues in their answer to the petition for forfeiture. A genuine issue
is an issue of fact which calls for the presentation of evidence as distinguished from an issue
which is fictitious and contrived, set up in bad faith or patently lacking in substance so as
not to constitute a genuine issue for trial. Respondents’ defenses of “lack of knowledge for
lack of privity” or “(inability to) recall because it happened a long time ago” or, on the part of
Mrs. Marcos, that “the funds were lawfully acquired” are fully insufficient to tender genuine
issues. Respondent Marcoses’ defenses were a sham and evidently calibrated to compound
and confuse the issues.
Same; Same; Same; Specific Denials; The purpose of requiring respondents to make a
specific denial is to make them disclose facts which will disprove the allegations of petitioner
at the trial, together with the matters they rely upon in support of such denial.—The purpose
of requiring respondents to make a specific denial is to make them disclose facts which will
disprove the allegations of petitioner at the trial, together with the matters they rely upon in
support of such denial. Our jurisdiction adheres to this rule to avoid and prevent unnecessary
expenses and waste of time by compelling both parties to lay their cards on the table, thus
reducing the controversy to its true terms. As explained in Alonso vs. Villamor, A litigation
is not a game of technicalities in which one, more deeply schooled and skilled in the subtle
art of movement and position, entraps and destroys the other. It is rather a contest in which
each contending party fully and fairly lays before the court the facts in issue and then,
brushing aside as wholly trivial and indecisive all imperfections of form and technicalities of
procedure, asks that justice be done upon the merits. Lawsuits, unlike duels, are not to be
won by a rapier’s thrust.
Same; Same; Same; Same; Ill-Gotten Wealth; Forfeiture Proceedings; General, self-
serving claim of ignorance of the facts alleged in a petition for forfeiture is insufficient to raise
an issue.—Respondents’ denials in their answer at the Sandiganbayan were based on their
alleged lack of knowledge or information sufficient to form a belief as to the truth of the
allegations of the petition. It is true that one of the modes of specific denial under the rules
is a denial through a statement that the defendant is without knowledge or information
sufficient to form a belief as to the truth of the material averment in the complaint. The
question, however, is whether the kind of denial in respondents’ answer qualifies as the
specific denied called for by the rules. We do not think so. In Morales vs. Court of Appeals,
this Court ruled that if an allegation directly and specifically charges a party with having
done, performed or committed a particular act which the latter did not in fact do, perform or
commit, a categorical and
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express denial must be made. Here, despite the serious and specific allegations against
them, the Marcoses responded by simply saying that they had no knowledge or information
sufficient to form a belief as to the truth of such allegations. Such a general, self-serving claim
of ignorance of the facts alleged in the petition for forfeiture was insufficient to raise an issue.
Respondent Marcoses should have positively stated how it was that they were supposedly
ignorant of the facts alleged.
Same; Same; Same; Same; Negative Pregnant; Words and Phrases; A negative pregnant
is a denial pregnant with the admission of the substantial facts in the pleading responded to
which are not squarely denied, in effect an admission of the averments it was directed at; A
negative pregnant is a form of negative expression which carries with it an affirmation or at
least an implication of some kind favorable to the adverse party.—Evidently, this particular
denial had the earmark of what is called in the law on pleadings as a negative pregnant, that
is, a denial pregnant with the admission of the substantial facts in the pleading responded to
which are not squarely denied. It was in effect an admission of the averments it was directed
at. Stated otherwise, a negative pregnant is a form of negative expression which carries with
it an affirmation or at least an implication of some kind favorable to the adverse party. It is
a denial pregnant with an admission of the substantial facts alleged in the pleading. Where
a fact is alleged with qualifying or modifying language and the words of the allegation as so
qualified or modified are literally denied, it has been held that the qualifying circumstances
alone are denied while the fact itself is admitted.
Same; Same; Same; Same; Same; When matters regarding which respondents claim to
have no knowledge or information sufficient to form a belief are plainly and necessarily within
their knowledge, their alleged ignorance or lack of information will not be considered a specific
denial—a profession of ignorance about a fact which is patently and necessarily within the
pleader’s knowledge or means of knowing is as ineffective as no denial at all; The form of
denial based on ignorance or lack of information must be availed of with sincerity and in good
faith, and certainly not for the purpose of confusing the adverse party as to what allegations
of the petition are really being challenged, nor should it be made for the purpose of delay.—
When matters regarding which respondents claim to have no knowledge or information
sufficient to form a belief are plainly and necessarily within their knowledge, their alleged
ignorance or lack of information will not be considered a specific denial. An unexplained
denial of information within the control of the pleader, or is readily accessible to him, is
evasive and is insufficient to constitute an effective denial. The form of denial adopted by
respondents must be availed of with sincerity and in good faith, and certainly not for the
purpose of confusing the adverse party as to what allegations of the petition are really being
chal-
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lenged; nor should it be made for the purpose of delay.In the instant case, the Marcoses
did not only present unsubstantiated assertions but in truth attempted to mislead and
deceive this Court by presenting an obviously contrived defense. Simply put, a profession of
ignorance about a fact which is patently and necessarily within the pleader’s knowledge or
means of knowing is as ineffective as no denial at all. Respondents’ ineffective denial thus
failed to properly tender an issue and the averments contained in the petition for forfeiture
were deemed judicially admitted by them.
Same; Same; Same; Pre-Trial Briefs; It is unquestionably within the court’s power to
require the parties to submit their pre-trial briefs and to state the number of witnesses intended
to be called to the stand, and a brief summary of the evidence each of them is expected to give
as well as to disclose the number of documents to be submitted with a description of the nature
of each.—It is unquestionably within the court’s power to require the parties to submit their
pre-trial briefs and to state the number of witnesses intended to be called to the stand, and
a brief summary of the evidence each of them is expected to give as well as to disclose the
number of documents to be submitted with a description of the nature of each. The tenor and
character of the testimony of the witnesses and of the documents to be deduced at the trial
thus made known, in addition to the particular issues of fact and law, it becomes apparent if
genuine issues are being put forward necessitating the holding of a trial. Likewise, the parties
are obliged not only to make a formal identification and specification of the issues and their
proofs, and to put these matters in writing and submit them to the court within the specified
period for the prompt disposition of the action.
Same; Same; Same; The absence of opposing affidavits, depositions and admissions to
contradict the sworn declarations in a motion for summary judgment only demonstrates that
the averments to such opposition are not genuine and therefore unworthy of belief.—The
opposition filed by Mrs. Marcos to the motion for summary judgment dated March 21, 2000
of petitioner Republic was merely adopted by the Marcos children as their own opposition to
the said motion. However, it was again not accompanied by affidavits, depositions or
admissions as required by Section 3, Rule 35 of the 1997 Rules on Civil Procedure: x x x The
adverse party may serve opposing affidavits, depositions, or admissions at least three (3) days
before hearing. After hearing, the judgment sought shall be rendered forthwith if the
pleadings, supporting affidavits, depositions, and admissions on file, show that, except as to
the amount of damages, there is no genuine issue as to any material fact and that the moving
party is entitled to a judgment as a matter of law. The absence of opposing affidavits,
depositions and admissions to contradict the sworn declarations in the Republic’s motion only
demonstrated that the averments of such opposition were not genuine and therefore
unworthy of belief.
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Same; Same; Same; Mere denials, if unaccompanied by any fact which will be admissible
in evidence at a hearing, are not sufficient to raise genuine issues of fact and will not defeat a
motion for summary judgment.—In sum, mere denials, if unaccompanied by any fact which
will be admissible in evidence at a hearing, are not sufficient to raise genuine issues of fact
and will not defeat a motion for summary judgment. A summary judgment is one granted
upon motion of a party for an expeditious settlement of the case, it appearing from the
pleadings, depositions, admissions and affidavits that there are no important questions or
issues of fact posed and, therefore, the movant is entitled to a judgment as a matter of law.
A motion for summary judgment is premised on the assumption that the issues presented
need not be tried either because these are patently devoid of substance or that there is no
genuine issue as to any pertinent fact. It is a method sanctioned by the Rules of Court for the
prompt disposition of a civil action where there exists no serious controversy. Summary
judgment is a procedural device for the prompt disposition of actions in which the pleadings
raise only a legal issue, not a genuine issue as to any material fact. The theory of summary
judgment is that, although an answer may on its face appear to tender issues requiring trial,
if it is established by affidavits, depositions or admissions that those issues are not genuine
but fictitious, the Court is justified in dispensing with the trial and rendering summary
judgment for petitioner.
Same; Same; Same; Dilatory Tactics; Time and again, the Supreme Court has
encountered cases like this which are either only half-heartedly defended or, if the semblance
of a defense is interposed at all, it is only to delay disposition and gain time.—Time and again,
this Court has encountered cases like this which are either only half-heartedly defended or,
if the semblance of a defense is interposed at all, it is only to delay disposition and gain time.
It is certainly not in the interest of justice to allow respondent Marcoses to avail of the
appellate remedies accorded by the Rules of Court to litigants in good faith, to the prejudice
of the Republic and ultimately of the Filipino people. From the beginning, a candid
demonstration of respondents’ good faith should have been made to the court below. Without
the deceptive reasoning and argumentation, this protracted litigation could have ended a
long time ago.
Same; Same; Same; Same; Since 1991, when the petition for forfeiture was first filed, up
to the present, all respondents have offered are foxy responses like “lack of sufficient knowledge
or lack of privity” or “they cannot recall because it happened a long time ago” or, as to Mrs.
Marcos, “the funds were lawfully acquired.—Since 1991, when the petition for forfeiture was
first filed, up to the present, all respondents have offered are foxy responses like “lack of
sufficient knowledge or lack of privity” or “they cannot recall because it happened a long time
ago” or, as to Mrs. Marcos, “the funds were lawfully acquired.” But, whenever it suits them,
they also
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claim ownership of 90% of the funds and allege that only 10% belongs to the Marcos
estate. It has been an incredible charade from beginning to end.
Same; Same; Same; No fixed reglementary period is provided by the Rules for moving for
summary judgment; Since no local jurisprudence or authoritative work has touched upon the
issue as to when to file a motion for summary judgment, an examination of foreign laws and
jurisprudence, particularly those of the United States where many of our laws and rules were
copied, is in order.—Under the rule, the plaintiff can move for summary judgment “at any
time after the pleading in answer thereto (i.e., in answer to the claim, counterclaim or cross-
claim) has been served.” No fixed reglementary period is provided by the Rules. How else
does one construe the phrase “any time after the answer has been served?” This issue is
actually one of first impression. No local jurisprudence or authoritative work has touched
upon this matter. This being so, an examination of foreign laws and jurisprudence,
particularly those of the United States where many of our laws and rules were copied, is in
order.
Same; Same; Same; Words and Phrases; Agreeing to proceed to trial during the pre-trial
conference, does not amount to a waiver of the right to summary judgment; The phrase
“anytime after the pleading in answer thereto has been served” in Section 1, Rule 35 of the
Rules of Civil Procedure means “at any stage of the litigation.”—In the case at bar, petitioner
moved for summary judgment after pre-trial and before its scheduled date for presentation
of evidence. Respondent Marcoses argue that, by agreeing to proceed to trial during the pre-
trial conference, petitioner “waived” its right to summary judgment. This argument must fail
in the light of the New York Supreme Court ruling which we apply by analogy to this case.
InEcker, the defendant opposed the motion for summary judgment on a ground similar to
that raised by the Marcoses, that is, “that plaintiff had waived her right to summary
judgment” by her act of proceeding to trial. If, as correctly ruled by the New York court,
plaintiff was allowed to move for summary judgment even after trial and submission of the
case for resolution, more so should we permit it in the present case where petitioner moved
for summary judgment before trial. Therefore, the phrase “anytime after the pleading in
answer thereto has been served” in Section 1, Rule 35 of our Rules of Civil Procedure means
“at any stage of the litigation.” Whenever it becomes evident at any stage of the litigation
that no triable issue exists, or that the defenses raised by the defendant(s) are sham or
frivolous, plaintiff may move for summary judgment. A contrary interpretation would go
against the very objective of the Rule on Summary Judgment which is to “weed out sham
claims or defenses thereby avoiding the expense and loss of time involved in a trial.”
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Republic vs. Sandiganbayan
Same; Same; Same; Dilatory Tactics; In cases with political undertones like the one at
bar, adverse parties will often do almost anything to delay the proceedings in the hope that a
future administration sympathetic to them might be able to influence the outcome of the case
in their favor.— In cases with political undertones like the one at bar, adverse parties will
often do almost anything to delay the proceedings in the hope that a future administration
sympathetic to them might be able to influence the outcome of the case in their favor. This is
rank injustice we cannot tolerate.
Same; Same; Same; The fact that the Republic agreed to proceed to trial did not in any
way prevent it from moving for summary judgment, as indeed no genuine issue of fact was
ever validly raised by respondent Marcoses.—The law looks with disfavor on long, protracted
and expensive litigation and encourages the speedy and prompt disposition of cases. That is
why the law and the rules provide for a number of devices to ensure the speedy disposition
of cases. Summary judgment is one of them. Faithful therefore to the spirit of the law on
summary judgment which seeks to avoid unnecessary expense and loss of time in a trial, we
hereby rule that petitioner Republic could validly move for summary judgment any time after
the respondents’ answer was filed or, for that matter, at any subsequent stage of the
litigation. The fact that petitioner agreed to proceed to trial did not in any way prevent it
from moving for summary judgment, as indeed no genuine issue of fact was ever validly
raised by respondent Marcoses.
Same; Same; Same; Laches; Estoppel; Words and Phrases; Estoppel by laches is the
failure or neglect for an unreasonable or unexplained length of time to do that which, by
exercising due diligence, could or should have been done earlier, warranting a presumption
that the person has abandoned his right or declained to assert it.—Respondents further allege
that the motion for summary judgment was based on respondents’ answer and other
documents that had long been in the records of the case. Thus, by the time the motion was
filed on March 10, 2000, estoppel by laches had already set in against petitioner. We disagree.
Estoppel by laches is the failure or neglect for an unreasonable or unexplained length of time
to do that which, by exercising due diligence, could or should have been done earlier,
warranting a presumption that the person has abandoned his right or declined to assert it.
In effect, therefore, the principle of laches is one of estoppel because “it prevents people who
have slept on their lights from prejudicing the rights of third parties who have placed reliance
on the inaction of the original parties and their successors-in-interest.”
Same; Same; Same; Same; Same; The doctrine of estoppel or laches does not apply when
the government sues as a sovereign or asserts governmental rights.—But even assuming for
the sake of argument that laches had already set in, the doctrine of estoppel or laches does
not apply when
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the government sues as a sovereign or asserts governmental rights. Nor can estoppel
validate an act that contravenes law or public policy.
Same; Same; Same; Same; It must be emphasized that laches is not a mere question of
time but is principally a question of the inequity or unfairness of permitting a right or claim
to be enforced or asserted.—As a final point, it must be emphasized that laches is not a mere
question of time but is principally a question of the inequity or unfairness of permitting a
right or claim to be enforced or asserted. Equity demands that petitioner Republic should not
be barred from pursuing the people’s case against the Marcoses.
Same; Public Officers; Ill-Gotten Wealth; Forfeiture Proceedings; Presumptions; The law
raises the prima facie presumption that a property is unlawfully acquired, hence subject to
forfeiture, if its amount or value is manifestly disproportionate to the official salary and other
lawful income of the public officer who owns it.—The law raises the prima facie presumption
that a property is unlawfully acquired, hence subject to forfeiture, if its amount or value is
manifestly disproportionate to the official salary and other lawful income of the public officer
who owns it. Hence, Sections 2 and 6 of RA 1379 provide: x x x x x x Section 2. Filing of
petition.—Whenever any public officer or employee has acquired during his incumbency an
amount or property which is manifestly out of proportion to his salary as such public officer
or employee and to his other lawful income and the income from legitimately acquired
property, said property shall be presumed prima facie to have been unlawfully acquired. x x
x x x x Sec. 6. Judgment—If the respondent is unable to show to the satisfaction of the court
that he has lawfully acquired the property in question, then the court shall declare such
property in question, forfeited in favor of the State, and by virtue of such judgment the
property aforesaid shall become the property of the State. Provided, That no judgment shall
be rendered within six months before any general election or within three months before any
special election. The Court may, in addition, refer this case to the corresponding Executive
Department for administrative or criminal action, or both.
Same; Same; Same; Same; Requisites for Forfeiture or Seizure of the Swiss Deposits.—
From the above-quoted provisions of the law, the following facts must be established in order
that forfeiture or seizure of the Swiss deposits may be effected: (1) ownership by the public
officer of money or property acquired during his incumbency, whether it be in his name or
otherwise, and (2) the extent to which the amount of that money or property exceeds, i.e., is
grossly disproportionate to, the legitimate income of the public officer.
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Republic vs. Sandiganbayan
Same; Same; Same; Same; Admissions; Pleadings and Practice; Judicial admission
may be made (a) in the pleadings filed by the parties, (b) in the course of the trial either by
verbal or written manifestations or stipulations, or (c) in other stages of judicial proceedings,
as in the pre-trial of the case.—Prescinding from the aforesaid admissions, Section 4, Rule
129 of the Rules of Court provides that: Section 4. Judicial admissions—An admission, verbal
or written, made by a party in the course of the proceedings in the same case does not require
proof. The admission may be contradicted only by showing that it was made through palpable
mistake or that no such admission was made. It is settled that judicial admissions may be
made: (a) in the pleadings filed by the parties; (b) in the course of the trial either by verbal
or written manifestations or stipulations; or (c) in other stages of judicial proceedings, as in
the pre-trial of the case. Thus, facts pleaded in the petition and answer, as in the case at bar,
are deemed admissions of petitioner and respondents, respectively, who are not permitted to
contradict them or subsequently take a position contrary to or inconsistent with such
admissions.
Same; Same; Same; Same; Same; Same; It is not for the Republic to establish the
Marcoses’ other lawful income or income from legitimately acquired property for the
presumption that the property sought to be for-feited is unlawfully acquired to apply because,
as between the Republic and the Marcoses, the latter are in a better position to know if there
are such other sources of lawful income.—Respondents argue that petitioner was not able to
establish a prima facie case for the forfeiture of the Swiss funds since it failed to prove the
essential elements under Section 3, paragraphs (c), (d) and (e) of RA 1379. As the Act is a
penal statute, its provisions are mandatory and should thus be construed strictly against the
petitioner and liberally in favor of respondent Marcoses. We hold that it was not for petitioner
to establish the Marcoses’ other lawful income or income from legitimately acquired property
for the presumption to apply because, as between petitioner and respondents, the latter were
in a better position to know if there were such other sources of lawful income. And if indeed
there was such other lawful income, respondents should have specifically stated the same in
their answer. Insofar as petitioner Republic was concerned, it was enough to specify the
known lawful income of respondents.
Same; Same; Same; Same; Same; Statement of Assets and Liabilities (SAL); The failure
of the Marcos couple to file their SAL was in itself a violation of law and to allow them to
successfully assail the Republic for not presenting their SAL would reward them for their
violation of the law.—Section 9 of the PCGG Rules and Regulations provides that, in
determining prima facie evidence of ill-gotten wealth, the value of the accumulated assets,
properties and other material possessions of those covered by Executive Order Nos. 1 and 2
must be put of proportion to the known lawful income of such persons. The respondent
Marcos couple did
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Republic vs. Sandiganbayan
not file any Statement of Assets and Liabilities (SAL) from which their net worth could
be determined. Their failure to file their SAL was in itself a violation of law and to allow them
to successfully assail the Republic for not presenting their SAL would reward them for their
violation of the law.
Same; Same; Same; Same; Same; Compromise Agreements; Respondents’ willingness to
agree to an amicable settlement with the Republic only affirmed their ownership of the Swiss
deposits for the simple reason that no person would acquiesce to any concession over such huge
dollar deposits if he did not in fact own them.—The stipulations set forth in the General and
Supplemental Agreements undeniably indicated the manifest intent of respondents to enter
into a compromise with petitioner. Corollarily, respondents’ willingness to agree to an
amicable settlement with the Republic only affirmed their ownership of the Swiss deposits
for the simple reason that no person would acquiesce to any concession over such huge dollar
deposits if he did not in fact own them.
Same; Same; Same; Same; Same; Same; The reasons relied upon by the Court in
declaring the nullity of the agreements entered into by the Marcoses with the Republic never
in the least bit even touched on the veracity and truthfulness of the Marcoses’ admission with
respect to their ownership of the Swiss funds.—Respondents make much capital of the
pronouncement by this Court that the General and Supplemental Agreements were null and
void. They insist that nothing in those agreements could thus be admitted in evidence against
them because they stood on the same ground as an accepted offer which, under Section 27,
Rule 130 of the 1997 Rules of Civil Procedure, provides that “in civil cases, an offer of
compromise is not an admission of any liability and is not admissible in evidence against the
offeror.” We find no merit in this contention. The declaration of nullity of said agreements
was premised on the following constitutional and statutory infirmities: (1) the grant of
criminal immunity to the Marcos heirs was against the law; (2) the PCGG’s commitment to
exempt from all forms of taxes the properties to be retained by the Marcos heirs was against
the Constitution; and (3) the government’s undertaking to cause the dismissal of all cases
filed against the Marcoses pending before the Sandiganbayan and other courts encroached
on the powers of the judiciary. The reasons relied upon by the Court never in the least bit even
touched on the veracity and truthfulness of respondents’ admission with respect to their
ownership of the Swiss funds. Besides, having made certain admissions in those agreements,
respondents cannot now deny that they voluntarily admitted owning the subject Swiss funds,
notwithstanding the fact that the agreements themselves were later declared null and void.
Same; Same; Same; Same; Same; A written statement is nonetheless competent as an
admission even if it is contained in a document which is not itself effective for the purpose for
which it is made, either by reason of
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Republic vs. Sandiganbayan
illegality, or incompetency of a party thereto, or by reason of not being signed, executed or
delivered.—A written statement is nonetheless competent as an admission even if it is
contained in a document which is not itself effective for the purpose for which it is made,
either by reason of illegality, or incompetency of a party thereto, or by reason of not being
signed, executed or delivered. Accordingly, contracts have been held as competent evidence
of admissions, although they may be unenforceable.
Same; Same; Same; Same; Same; Admissions of a party in his testimony are receivable
against him.—Ferdinand Jr.’s pronouncements, taken in context and in their entirety, were
a confirmation of respondents’ recognition of their ownership of the Swiss bank deposits.
Admissions of a party in his testimony are receivable against him. If a party, as a witness,
deliberately concedes a fact, such concession has the force of a judicial admission. It is
apparent from Ferdinand Jr.’s testimony that the Marcos family agreed to negotiate with the
Philippine government in the hope of finally putting an end to the problems besetting the
Marcos family regarding the Swiss accounts. This was doubtlessly an acknowledgment of
ownership on their part. The rule is that the testimony on the witness stand partakes of the
nature of a formal judicial admission when a party testifies clearly and unequivocally to a
fact which is peculiarly within his own knowledge.
Same; Same; Same; Same; Same; The failure of Imelda Marcos to specifically deny the
existence, much less the genuineness and due execution, of the instruments bearing her
signature, was tantamount to a judicial admission of the genuineness and due execution of
said instruments.— Respondents’ ownership of the Swiss bank accounts as borne out by Mrs.
Marcos’ manifestation is as bright as sunlight. And her claim that she is merely a beneficiary
of the Swiss deposits is belied by her own signatures on the appended copies of the documents
substantiating her ownership of the funds in the name of the foundations. As already
mentioned, she failed to specifically deny under oath the authenticity of such documents,
especially those involving “William Saunders” and “Jane Ryan” which actually referred to
Ferdinand Marcos and Imelda Marcos, respectively. That failure of Imelda Marcos to
specifically deny the existence, much less the genuineness and due execution, of the
instruments bearing her signature, was tantamount to a judicial admission of the
genuineness and due execution of said instruments, in accordance with Section 8, Rule 8 of
the 1997 Rules of Civil Procedure.
Same; Same; Same; Same; Same; Owing to the far-reaching historical and political
implications of this case, the Court considered and examined, individually and totally, the
evidence of the parties, even if it might have bordered on factual adjudication which, by
authority of the rules and jurisprudence, is not usually done by the Supreme Court.—All told,
the foregoing disquisition negates the claim of respondents that “petitioner
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Republic vs. Sandiganbayan
failed to prove that they acquired or own the Swiss funds” and that “it was only by
arbitrarily isolating and taking certain statements made by private respondents out of
context that petitioner was able to treat these as judicial admissions.” The Court is fully
aware of the relevance, materiality and implications of every pleading and document
submitted in this case. This Court carefully scrutinized the proofs presented by the parties.
We analyzed, assessed and weighed them to ascertain if each piece of evidence rightfully
qualified as an admission. Owing to the far-reaching historical and political implications of
this case, we considered and examined, individually and totally, the evidence of the parties,
even if it might have bordered on factual adjudication which, by authority of the rules and
jurisprudence, is not usually done by this Court. There is no doubt in our mind that
respondent Marcoses admitted ownership of the Swiss bank deposits.
Same; Same; Same; Same; Same; An admission made in the pleadings cannot be
controverted by the party making such admission and becomes conclusive on him, and that
all proofs submitted by him contrary thereto or inconsistent therewith should be ignored,
whether an objection is interposed by the adverse party or not.—We have always adhered to
the familiar doctrine that an admission made in the pleadings cannot be controverted by the
party making such admission and becomes conclusive on him, and that all proofs submitted
by him contrary thereto or inconsistent therewith should “be ignored, whether an objection
is interposed by the adverse party or not. This doctrine is embodied in Section 4, Rule 129 of
the Rules of Court: SEC. 4. Judicial admissions.—An admission, verbal or written, made by
a party in the course of the proceedings in the same case, does not require proof. The
admission may be contradicted only by showing that it was made through palpable mistake
or that no such admission was made. In the absence of a compelling reason to the contrary,
respondents’ judicial admission of ownership of the Swiss deposits is definitely binding on
them.
Same; Same; Same; Same; Same; The declarations of a person are admissible against a
party whenever a “privity of estate” exists between the declarant and the party, the term
“privity of estate” generally denoting a succession in rights.—The declarations of a person are
admissible against a party whenever a “privity of estate” exists between the declarant and
the party, the term “privity of estate” generally denoting a succession in rights. Consequently,
an admission of one in privity with a party to the record is competent. Without doubt, privity
exists among the respondents in this case. And where several co-parties to the record are
jointly interested in the subject matter of the controversy, the admission of one is competent
against all.
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Republic vs. Sandiganbayan
Same; Same; Same; Same; Presumptions; Elements of the Prima Facie Presumption
Under §2 of RA 1379.—Section 2 of RA 1379 explicitly states that “whenever any public officer
or employee has acquired during his incumbency an amount of property which is manifestly
out of proportion to his salary as such public officer or employee and to his other lawful
income and the income from legitimately acquired property, said property shall be
presumed prima facie to have been unlawfully acquired. x x x” The elements which must
concur for this prima facie presumption to apply are: (1) the offender is a public officer or
employee; (2) he must have acquired a considerable amount of money or property during his
incumbency; and (3) said amount is manifestly out of proportion to his salary as such public
officer or employee and to his other lawful income and the income from legitimately acquired
property.
Same; Same; Same; Same; Same; A presumption is prima facie proof of the fact
presumed and, unless the fact thus prima facie established by legal presumption is disproved,
it must stand as proved.—The burden of proof was on the respondents to dispute this
presumption and show by clear and convincing evidence that the Swiss deposits were lawfully
acquired and that they had other legitimate sources of income. A presumption is prima
facie proof of the fact presumed and, unless the fact thus prima facie established by legal
presumption is disproved, it must stand as proved.
Same; Parties; Indispensable Parties; Failure to join an indispensable party does not
divest the court of jurisdiction since the rule regarding indispensable parties is founded on
equitable considerations and is not jurisdictional—the court is not divested of its power to
render a decision even in the absence of indispensable parties, though such judgment is not
binding on the non-joined party.—The Court finds that petitioner Republic did not err in not
impleading the foreign foundations. Section 7, Rule 3 of the 1997 Rules of Civil Procedure,
taken from Rule 19b of the American Federal Rules of Civil Procedure, provides for the
compulsory joinder of indispensable parties. Generally, an indispensable party must be
impleaded for the complete determination of the suit. However, failure to join an
indispensable party does not divest the court of jurisdiction since the rule regarding
indispensable parties is founded on equitable considerations and is not jurisdictional. Thus,
the court is not divested of its power to render a decision even in the absence of indispensable
parties, though such judgment is not binding on the non-joined party.
Same; Same; Same; Essential Tests of an Indispensable Party; Words and
Phrases; “Indispensable Party,” Defined.—An indispensable party has been defined as one:
[who] must have a direct interest in the litigation; and if this interest is such that it cannot
be separated from that of the parties to the suit, if the court cannot render justice between
the parties in
204
204 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan
his absence, if the decree will have an injurious effect upon his interest, or if the final
determination of the controversy in his absence will be inconsistent with equity and good
conscience. There are two essential tests of an indispensable party: (1) can relief be afforded
the plaintiff without the presence of the other party? and (2) can the case be decided on its
merits without prejudicing the rights of the other party? There is, however, no fixed formula
for determining who is an indispensable party; this can only be determined in the context
and by the facts of the particular suit or litigation.
Same; Same; Same; Admissions; The admission by respondent Imelda Marcos that she
was the sole beneficiary of 90% of the subject matter in controversy with the remaining 10%
belonging to the estate of Ferdinand Marcos only confirmed what was already generally
known—that the foreign foundations were established precisely to hide the money stolen by
the Marcos spouses from the Republic, negating whatever illusion there was, if any, that the
foreign foundations owned even a nominal part of the assets in question.—In the present case,
there was an admission by respondent Imelda Marcos in her May 26, 1998 Manifestation
before the Sandiganbayan that she was the sole beneficiary of 90% of the subject matter in
controversy with the remaining 10% belonging to the estate of Ferdinand Marcos. Viewed
against this admission, the foreign foundations were not indispensable parties. Their non-
participation in the proceedings did not prevent the court from deciding the case on its merits
and according full relief to petitioner Republic. The judgment ordering the return of the $356
million was neither inimical to the foundations’ interests nor inconsistent with equity and
good conscience. The admission of respondent Imelda Marcos only confirmed what was
already generally known: that the foundations were established precisely to hide the money
stolen by the Marcos spouses from petitioner Republic. It negated whatever illusion there
was, if any, that the foreign foundations owned even a nominal part of the assets in question.
Same; Same; Same; Same; Inasmuch as the ownership of the foreign foundations in the
assets was repudiated by Imelda Marcos, they could no longer be considered as indispensable
parties and their participation in the proceedings became unnecessary.—The rulings of the
Swiss court that the foundations, as formal owners, must be given an opportunity to
participate in the proceedings hinged on the assumption that they owned a nominal share of
the assets. But this was already refuted by no less than Mrs. Marcos herself. Thus, she cannot
now argue that the ruling of the Sandiganbayan violated the conditions set by the Swiss
court. The directive given by the Swiss court for the foundations to participate in the
proceedings was for the purpose of protecting whatever nominal interest they might have
had in the assets as formal owners. But inasmuch as their ownership was subsequently
repudiated by Imelda Marcos, they could no
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VOL. 406, JULY 15, 2003 205
Republic vs. Sandiganbayan
longer be considered as indispensable parties and their participation in the proceedings
became unnecessary.
Same; Same; Same; Impleading the firms which are the res of the action is
unnecessary.—InRepublic vs. Sandiganbayan, this Court ruled that impleading the firms
which are the resof the action was unnecessary: “And as to corporations organized with ill-
gotten wealth, but are not themselves guilty of misappropriation, fraud or other illicit
conduct—in other words, the companies themselves are not the object or thing involved in
the action, the res thereof—there is no need to implead them either. Indeed, their impleading
is not proper on the strength alone of their having been formed with ill-gotten funds, absent
any other particular wrongdoing on their part . . . Such showing of having been formed with,
or having received ill-gotten funds, however strong or convincing, does not, without more,
warrant identifying the corporations in question with the person who formed or made use of
them to give the color or appearance of lawful, innocent acquisition to illegally amassed
wealth—at the least, not so as place on the Government the onus of impleading the former
with the latter in actions to recover such wealth. Distinguished in terms of juridical
personality and legal culpability from their erring members or stockholders, said
corporations are not themselves guilty of the sins of the latter, of the embezzlement,
asportation, etc., that gave rise to the Government’s cause of action for recovery; their
creation or organization was merely the result of their members’ (or stockholders’)
manipulations and maneuvers to conceal the illegal origins of the assets or monies invested
therein. In this light, they are simply the resin the actions for the recovery of illegally
acquired wealth, and there is, in principle, no cause of action against them and no ground to
implead them as defendants in said actions.” Just like the corporations in the aforementioned
case, the foreign foundations here were set up to conceal the illegally acquired funds of the
Marcos spouses. Thus, they were simply the res in the action for recovery of ill-gotten wealth
and did not have to be impleaded for lack of cause of action or ground to implead them.
Same; Same; Same; Even if the foreign foundations were indispensable parties, the
failure of the Republic to implead them is a curable error.— Assuming arguendo, however,
that the foundations were indispensable parties, the failure of petitioner to implead them
was a curable error, as held in the previously cited case of Republic vs. Sandiganbayan: “Even
in those cases where it might reasonably be argued that the failure of the Government to
implead the sequestered corporations as defendants is indeed a procedural aberration, as
where said firms were allegedly used, and actively cooperated with the defendants, as
instruments or conduits for conversion of public funds and property or illicit or fraudulent
obtention of favored government contracts, etc., slight reflection would nevertheless lead to
the conclusion that the defect is not fatal, but one correcti-
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206 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan
ble under applicable adjective rules—e.g., Section 10, Rule 5 of the Rules of Court
[specifying the remedy of amendment during trial to authorize or to conform to the evidence];
Section 1, Rule 20 [governing amendments before trial], in relation to the rule respecting
omission of so-called necessary or indispensable parties, set out in Section 11, Rule 3 of the
Rules of Court. It is relevant in this context to advert to the old familiar doctrines that the
omission to implead such parties “is a mere technical defect which can be cured at any stage
of the proceedings even after judgment”; and that, particularly in the case of indispensable
parties, since their presence and participation is essential to the very life of the action, for
without them no judgment may be rendered, amendments of the complaint in order to
implead them should be freely allowed, even on appeal, in fact even after rendition of
judgment by this Court, where it appears that the complaint otherwise indicates their
identity and character as such indispensable parties.”
Same; Same; Same; The better view is that non-joinder of indispensable parties is not a
ground to dismiss the suit or annul the judgment.— Although there are decided cases wherein
the non-joinder of indispensable parties in fact led to the dismissal of the suit or the
annulment of judgment, such cases do not jibe with the matter at hand. The better view is
that non-joinder is not a ground to dismiss the suit or annul the judgment. The rule on joinder
of indispensable parties is founded on equity. And the spirit of the law is reflected in Section
11, Rule 31 of the 1997 Rules of Civil Procedure. It prohibits the dismissal of a suit on the
ground of non-joinder or misjoinder of parties and allows the amendment of the complaint at
any stage of the proceedings, through motion or on order of the court on its own initiative.
Same; Same; Same; The court has jurisdiction to render judgment which, even in the
absence of indispensable parties, is binding on all the parties before it though not on the absent
party.—Jurisprudence on the Federal Rules of Procedure, from which our Section 7, Rule 31
on indispensable parties was copied, allows the joinder of indispensable parties even after
judgment has been entered if such is needed to afford the moving party full relief. Mere delay
in filing the joinder motion does not necessarily result in the waiver of the right as long as
the delay is excusable. Thus, respondent Mrs. Marcos cannot correctly argue that the
judgment rendered by the Sandiganbayan was void due to the non-joinder of the foreign
foundations. The court had jurisdiction to render judgment which, even in the absence of
indispensable parties, was binding on all the parties before it though not on the absent party.
If she really felt that she could not be granted full relief due to the absence of the foreign
foundations, she should have moved for their inclusion, which was allowable at any stage of
the proceedings. She never did. Instead she assailed the judgment rendered.
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VOL. 406, JULY 15, 2003 207
Republic vs. Sandiganbayan
Ill-Gotten Wealth; Forfeiture Proceedings; The Swiss deposits should be considered ill-
gotten wealth and forfeited in favor of the State.—In the face of undeniable circumstances and
the avalanche of documentary evidence against them, respondent Marcoses failed to justify
the lawful nature of their acquisition of the said assets. Hence, the Swiss deposits should be
considered ill-gotten wealth and forfeited in favor of the State in accordance with Section 6
of RA 1379: SEC. 6. Judgment.—If the respondent is unable to show to the satisfaction of the
court that he has lawfully acquired the property in question, then the court shall declare such
property forfeited in favor of the State, and by virtue of such judgment the property aforesaid
shall become property of the State x x x.
Judgments; Documentary Evidence; Foreign Judgments; The presentation of the
authenticated translations of the original copies of the Swiss decision is not de rigueur for the
Sandiganbayan to make findings of fact and reach its conclusions—the Sandiganbayan’s
decision is not dependent on the determination of the Swiss courts, and neither is the Supreme
Court’s.—While we are in reality perplexed by such an incomprehensible change of heart,
there might nevertheless not be any real need to belabor the issue. The presentation of the
authenticated translations of the original copies of the Swiss decision was not de rigueur for
the public respondent to make findings of fact and reach its conclusions. In short, the
Sandiganbayan’s decision was not dependent on the determination of the Swiss courts. For
that matter, neither is this Court’s. The release of the Swiss funds held in escrow in the PNB
is dependent solely on the decision of this jurisdiction that said funds belong to the petitioner
Republic. What is important is our own assessment of the sufficiency of the evidence to rule
in favor of either petitioner Republic or respondent Marcoses. In this instance, despite the
absence of the authenticated translations of the Swiss decisions, the evidence on hand tilts
convincingly in favor of petitioner Republic.

SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.

The facts are stated in the opinion of the Court.


The Solicitor General for petitioner.
Baldomero S.P. Gatbonton, Jr. and Michelle Lazaro for F.R. Marcos, Jr.
Ponce Enrile, Reyes & Manalastas for Imelda R. Marcos.
Robert A.C. Sison for Imee R. Marcos-Manotoc.
Sales, De Leon, Tecson and Desiderio for Ferdinand R. Marcos, Jr. and Imelda
(Imee) Marcos-Manotoc.
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208 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan

CORONA,J.:
This is a petition for certiorari under Rule 65 of the Rules of Court seeking to (1) set
aside the Resolution dated January 31, 2002 issued by the Special First Division of
the Sandiganbayan in Civil Case No. 0141 entitled Republic of the Philippines vs.
Ferdinand E. Marcos, et al., and (2) reinstate its earlier decision dated September 19,
2000 which forfeited in favor of petitioner Republic of the Philippines (Republic) the
amount held in escrow in the Philippine National Bank (PNB) in the aggregate
amount of US$658,175,373.60 as of January 31, 2002.
BACKGROUND OF THE CASE
On December 17, 1991, petitioner Republic, through the Presidential Commission on
Good Government (PCGG), represented by the Office of the Solicitor General (OSG),
filed a petition for forfeiture before the Sandiganbayan, docketed as Civil Case No.
0141 entitled Republic of the Philippines vs. Ferdinand E. Marcos, represented by his
Estate/Heirs and Imelda R. Marcos, pursuant to RA 1379 in relation to Executive
1

Order Nos. 1, 2, 14 and 14-A.


2 3 4 5

_______________

1 An Act Declaring Forfeiture In Favor of the State Any Property To Have Been Unlawfully Acquired By

Any Public Officer or Employee and Providing For the Procedure Therefor.
2 E.O. No. 1—promulgated on February 28, 1986, only two (2) days after the Marcoses fled the country,

creating the PCGG which was primarily tasked to assist the President in the recovery of vast government
resources allegedly amassed by former President Marcos, his immediate family, relatives, and close
associates, both here and abroad.
3 E.O. No. 2—issued twelve (12) days later, warning all persons and entities who had knowledge of

possession of ill-gotten assets and properties under pain of penalties prescribed by law, prohibiting them
from concealing, transferring or dissipating them or from otherwise frustrating or obstructing the recovery
efforts of the government.
4 E.O. No. 14—Series of 1986, as amended by E.O. No. 14-A.

5 Also series of 1986, vested Sandiganbayan the exclusive and original jurisdiction over cases, whether

civil or criminal, to be filed by the PCGG with the assistance of the Office of the Solicitor General. The law
also declared that the civil actions for the recovery of unlawfully acquired property under Republic Act No.
1379 or for restitution, reparation of damages, or indemnification for consequential and other damages or
any other civil action under the Civil Code or other existing laws filed with the
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VOL. 406, JULY 15, 2003 209
Republic vs. Sandiganbayan
In said case, petitioner sought the declaration of the aggregate amount of US$356
million (now estimated to be more than US$658 million inclusive of interest)
deposited in escrow in the PNB, as illgotten wealth. The funds were previously held
by the following five account groups, using various foreign foundations in certain
Swiss banks:

1. (1)Azio-Verso-Vibur Foundation accounts;


2. (2)Xandy-Wintrop: Charis-Scolari-Valamo-Spinus-Avertina-Foundation accounts;
3. (3)Trinidad-Rayby-Palmy Foundation accounts;
4. (4)Rosalys-Aguamina Foundation accounts and
5. (5)Maler Foundation accounts.
In addition, the petition sought the forfeiture of US$25 million and US$5 million in
treasury notes which exceeded the Marcos couple’s salaries, other lawful income as
well as income from legitimately acquired property. The treasury notes are frozen at
the Central Bank of the Philippines, now Bangko Sentral ng Pilipinas, by virtue of
the freeze order issued by the PCGG.
On October 18, 1993, respondents Imelda R. Marcos, Maria Imelda M. Manotoc,
Irene M. Araneta and Ferdinand R. Marcos, Jr. filed their answer.
Before the case was set for pre-trial, a General Agreement and the Supplemental
Agreements dated December 28, 1993 were executed by the Marcos children and
6

then PCGG Chairman Magtanggol Gunigundo for a global settlement of the assets of
the Marcos family. Subsequently, respondent Marcos children filed a motion dated
December 7, 1995 for the approval of said agreements and for the enforcement
thereof.
The General Agreement/Supplemental Agreements sought to identify, collate,
cause the inventory of and distribute all assets presumed to be owned by the Marcos
family under the conditions contained therein. The aforementioned General
Agreement speci-

_______________

Sandiganbayan against Ferdinand Marcos, et al., may proceed independently of any criminal
proceedings and may be proved by preponderance of evidence.
6 Declared null and void by this Court on December 9, 1998 in the case of Francisco I. Chavez vs. PCGG

and Magtanggol Gunigundo,” docketed as G.R. No. 130716.


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210 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan
fied in one of its premises or “whereas clauses” the fact that petitioner “obtained a
judgment from the Swiss Federal Tribunal on December 21, 1990, that the Three
Hundred Fifty-six Million U.S. dollars (US$356 million) belongs in principle to the
Republic of the Philippines provided certain conditionalities are met x x x.” The said
decision of the Swiss Federal Supreme Court affirmed the decision of Zurich District
Attorney Peter Consandey, granting petitioner’s request for legal
assistance. Consandey declared the various deposits in the name of the enumerated
7

foundations to be of illegal provenance and ordered that they be frozen to await the
final verdict in favor of the parties entitled to restitution.
Hearings were conducted by the Sandiganbayan on the motion to approve the
General/Supplemental Agreements. Respondent Ferdinand, Jr. was presented as
witness for the purpose of establishing the partial implementation of said
agreements.
On October 18, 1996, petitioner filed a motion for summary judgment and/or
judgment on the pleadings. Respondent Mrs. Marcos filed her opposition thereto
which was later adopted by respondents Mrs. Manotoc, Mrs. Araneta and Ferdinand,
Jr.
In its resolution dated November 20, 1997,the Sandiganbayan denied petitioner’s
motion for summary judgment and/or judgment on the pleadings on the ground that
the motion to approve the compromise agreement “(took) precedence over the motion
for summary judgment.”
Respondent Mrs. Marcos filed a manifestation on May 26, 1998 claiming she was
not a party to the motion for approval of the Compromise Agreement and that she
owned 90% of the funds with the remaining 10% belonging to the Marcos estate.

_______________

7 In April 1986, pursuant to E.O. No. 2, the Republic of the Philippines through the PCGG filed a request
for mutual assistance with the Swiss Federal Police Department, under the procedures of the International
Mutual Assistance in Criminal Proceedings (IMAC) to freeze the bank deposits of the Marcoses located in
Switzerland.
IMAC is a domestic statute of Switzerland which generally affords relief to the kind of request from
foreign governments or entities as authorized under E.O. No. 2.
The various Swiss local authorities concerned granted the request of petitioner Republic, and ordered
the Swiss deposits to be “blocked” until the competent Philippine court could decide on the matter.
211
VOL. 406, JULY 15, 2003 211
Republic vs. Sandiganbayan
Meanwhile, on August 10, 1995, petitioner filed with the District Attorney in Zurich,
Switzerland, an additional request for the immediate transfer of the deposits to an
escrow account in the PNB. The request was granted. On appeal by the Marcoses, the
Swiss Federal Supreme Court, in a decision dated December 10, 1997, upheld the
ruling of the District Attorney of Zurich granting the request for the transfer of the
funds. In 1998, the funds were remitted to the Philippines in escrow. Subsequently,
respondent Marcos children moved that the funds be placed in custodia legis because
the deposit in escrow in the PNB was allegedly in danger of dissipation by petitioner.
The Sandiganbayan, in its resolution dated September 8, 1998, granted the motion.
After the pre-trial and the issuance of the pre-trial order and supplemental pre-
trial order dated October 28, 1999 and January 21, 2000, respectively, the case was
set for trial. After several resettings, petitioner, on March 10, 2000, filed another
motion for summary judgment “pertaining to the forfeiture of the US$356 million,
based on the following grounds:

THE ESSENTIAL FACTS WHICH WARRANT THE FORFEITURE OF THE FUNDS


SUBJECT OF THE PETITION UNDER R.A. NO. 1379 ARE ADMITTED BY
RESPONDENTS IN THEIR PLEADINGS AND OTHER SUBMISSIONS MADE IN THE
COURSE OF THE PROCEEDING.

II

RESPONDENTS’ ADMISSION MADE DURING THE PRE-TRIAL THAT THEY DO NOT


HAVE ANY INTEREST OR OWNERSHIP OVER THE FUNDS SUBJECT OF THE ACTION
FOR FORFEITURE TENDERS NO GENUINE ISSUE OR CONTROVERSY AS TO ANY
MATERIAL FACT IN THE PRESENT ACTION, THUS WARRANTING THE RENDITION
OF SUMMARY JUDGMENT. 8
Petitioner contended that, after the pre-trial conference, certain facts were
established, warranting a summary judgment on the funds sought to be forfeited.
Respondent Mrs. Marcos filed her opposition to the petitioner’s motion for
summary judgment, which opposition was later adopted

_______________

8Volume III, Rollo, p. 2195.


212
212 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan
by her co-respondents Mrs. Manotoc, Mrs. Araneta and Ferdinand, Jr.
On March 24, 2000, a hearing on the motion for summary judgment was
conducted.
In a decision dated September 19, 2000, the Sandiganbayan granted petitioner’s
9

motion for summary judgment:

CONCLUSION

There is no issue of fact which calls for the presentation of evidence.


The Motion for Summary Judgment is hereby granted.
The Swiss, deposits which were transmitted to and now held in escrow at the” PNB are
deemed unlawfully acquired as ill-gotten wealth.

DISPOSITION

“WHEREFORE, judgment is hereby rendered in favor of the Republic of the Philippines


and against the respondents, declaring the Swiss deposits which were transferred to and now
deposited in escrow at the Philippine National Bank in the total aggregate value equivalent
to US$627,608,544.95 as of August 31, 2000 together with the increments thereof forfeited
in favor of the State.” 10

Respondent Mrs. Marcos filed a motion for reconsideration dated September 26, 2000.
Likewise, Mrs. Manotoc and Ferdinand, Jr. filed their own motion for reconsideration
dated October 5, 2000. Mrs. Araneta filed a manifestation dated October 4, 2000
adopting the motion for reconsideration of Mrs. Marcos, Mrs. Manotoc and
Ferdinand, Jr.
Subsequently, petitioner filed its opposition thereto.
In a resolution dated January 31, 2002, the Sandiganbayan reversed its
11

September 19, 2000 decision, thus denying petitioner’s motion for summary
judgment:

_______________

9 Penned by Justice Catalino R. Castañeda, Jr. and concurred in by Presiding Justice Francis E.

Garchitorena and Associate Justice Gregory S. Ong.


10 Volume III, Rollo, p. 2218.

11 Penned by Presiding Justice Francis E. Garchitorena with the separate concurring opinions of

Associate Justice Nicodemo T. Ferrer and Associate Justice Gregory S. Ong. Associate Justices Catalino R.
213
VOL. 406, JULY 15, 2003 213
Republic vs. Sandiganbayan

CONCLUSION

“In sum, the evidence offered for summary judgment of the case did not prove that the money
in the Swiss Banks belonged to the Marcos spouses because no legal proof exists in the record
as to the ownership by the Marcoses of the funds in escrow from the Swiss Banks.
The basis for the forfeiture in favor of the government cannot be deemed to have been
established and our judgment thereon, perforce, must also have been without basis.
WHEREFORE, the decision of this Court dated September 19, 2000 is reconsidered and
set aside, and this case is now being set for further proceedings.” 12

Hence, the instant petition. In filing the same, petitioner argues that the
Sandiganbayan, in reversing its September 19, 2000 decision, committed grave abuse
of discretion amounting to lack or excess of jurisdiction considering that—

PETITIONER WAS ABLE TO PROVE ITS CASE IN ACCORDANCE WITH THE


REQUISITES OF SECTIONS 2 AND 3 OF R.A. NO. 1379:

1. A.PRIVATE RESPONDENTS CATEGORICALLY ADMITTED NOT ONLY THE


PERSONAL CIRCUMSTANCES OF FERDINAND E. MARCOS AND IMELDA R.
MARCOS AS PUBLIC OFFICIALS BUT ALSO THE EXTENT OF THEIR
SALARIES AS SUCH PUBLIC OFFICIALS, WHO UNDER THE CONSTITUTION,
WERE PROHIBITED FROM ENGAGING IN THE MANAGEMENT OF
FOUNDATIONS.
2. B.PRIVATE RESPONDENTS ALSO ADMITTED THE EXISTENCE OF THE SWISS
DEPOSITS AND THEIR OWNERSHIP THEREOF:

1. 1.ADMISSIONS IN PRIVATE RESPONDENTS ANSWER;


2. 2.ADMISSION IN THE GENERAL/SUPPLEMENTAL AGREEMENTS THEY
SIGNED AND SOUGHT TO IMPLEMENT;
3. 3.ADMISSION IN A MANIFESTATION OF PRIVATE RESPONDENT IMELDA R.
MARCOS AND IN THE MOTION TO PLACE THE RES IN CUSTODIA
LEGIS; AND

_______________

Castañeda, Jr. and Francisco H. Villaruz, Jr. both wrote their respective dissenting opinions.
12 Volume I, Rollo, pp. 145-146.

214
214 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan

1. 4.ADMISSION IN THE UNDERTAKING TO PAY THE HUMAN RIGHTS VICTIMS.


1. C.PETITIONER HAS PROVED THE EXTENT OF THE LEGITIMATE INCOME OF
FERDINAND E. MARCOS AND IMELDA R. MARCOS AS PUBLIC OFFICIALS.
2. D.PETITIONER HAS ESTABLISHED A PRIMA FACIE PRESUMPTION OF
UNLAWFULLY ACQUIRED WEALTH.

II

SUMMARY JUDGMENT IS PROPER SINCE PRIVATE RESPONDENTS HAVE NOT


RAISED ANY GENUINE ISSUE OF FACT CONSIDERING THAT:

1. A.PRIVATE RESPONDENTS’ DEFENSE THAT SWISS DEPOSITS WERE


LAWFULLY ACQUIRED DOES NOT ONLY FAIL TO TENDER AN ISSUE BUT IS
CLEARLY A SHAM; AND
2. B.IN SUBSEQUENTLY DISCLAIMING OWNERSHIP OF THE SWISS DEPOSITS,
PRIVATE RESPONDENTS ABANDONED THEIR SHAM DEFENSE OF
LEGITIMATE ACQUISITION, AND THIS FURTHER JUSTIFIED THE
RENDITION OF A SUMMARY JUDGMENT.

III

THE FOREIGN FOUNDATIONS NEED NOT BE IMPLEADED.

IV

THE HONORABLE PRESIDING JUSTICE COMMITTED GRAVE ABUSE OF


DISCRETION IN REVERSING HIMSELF ON THE GROUND THAT ORIGINAL COPIES
OF THE AUTHENTICATED SWISS DECISIONS AND THEIR “AUTHENTICATED
TRANSLATIONS” HAVE NOT BEEN SUBMITTED TO THE COURT, WHEN EARLIER
THE SANDIGANBAYAN HAS QUOTED EXTENSIVELY A PORTION OF THE
TRANSLATION OF ONE OF THESE SWISS DECISIONS IN HIS “PONENCIA” DATED
JULY 29, 1999 WHEN IT DENIED THE MOTION TO RELEASE ONE HUNDRED FIFTY
MILLION US DOLLARS ($150,000,000.00) TO THE HUMAN RIGHTS VICTIMS.

PRIVATE RESPONDENTS ARE DEEMED TO HAVE WAIVED THEIR OBJECTION TO


THE AUTHENTICITY OF THE SWISS FEDERAL SUPREME COURT DECISIONS. 13

_______________

Volume I, Rollo, pp. 60-62.


13

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VOL. 406, JULY 15, 2003 215
Republic vs. Sandiganbayan
Petitioner, in the main, asserts that nowhere inthe respondents’ motions for
reconsideration and supplemental motion for reconsideration were the authenticity,
accuracy and admissibility of the Swiss decisions ever challenged. Otherwise stated,
it was incorrect for the Sandiganbayan to use the issue of lack of authenticated
translations of the decisions of the Swiss Federal Supreme Court as the basis for
reversing itself because respondents themselves never raised this issue in their
motions for reconsideration and supplemental motion for reconsideration.
Furthermore, this particular issue relating to the translation of the Swiss court
decisions could not be resurrected anymore because said decisions had been
previously utilized by the Sandiganbayan itself in resolving a “decisive issue” before
it.
Petitioner faults the Sandiganbayan for questioning the nonproduction of the
authenticated translations of the Swiss Federal Supreme Court decisions as this was
a marginal and technical matter that did not diminish by any measure the
conclusiveness and strength of what had been proven and admitted before the
Sandiganbayan, that is, that the funds deposited by the Marcoses constituted ill-
gotten wealth and thus belonged to the Filipino people.
In compliance with the order of this Court, Mrs. Marcos filed her comment to the
petition on May 22, 2002. After several motions for extension which were all granted,
the comment of Mrs. Manotoc and Ferdinand, Jr. and the separate comment of Mrs.
Araneta were filed on May 27, 2002.
Mrs. Marcos asserts that the petition should be denied on the following grounds:

A.

PETITIONER HAS A PLAIN, SPEEDY, AND ADEQUATE REMEDY AT THE


SANDIGANBAYAN.

B.

THE SANDIGANBAYAN DID NOT ABUSE ITS DISCRETION IN SETTING THE CASE
FOR FURTHER PROCEEDINGS. 14

_______________

Volume IV, Rollo, p. 2605.


14

216
216 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan
Mrs. Marcos contends that petitioner has a plain, speedy and adequate remedy in the
ordinary course of law in view of the resolution of the Sandiganbayan dated January
31, 2000 directing petitioner to submit the authenticated translations of the Swiss
decisions. Instead of availing of said remedy, petitioner now elevates the matter to
this Court. According to Mrs. Marcos, a petition for certiorari which does not comply
with the requirements of the rules may be dismissed. Since petitioner has a plain,
speedy and adequate remedy, that is, to proceed to trial and submit authenticated
translations of the Swiss decisions, its petition before this Court must be dismissed.
Corollarily, the Sandiganbayan’s ruling to set the case for further proceedings cannot
and should not be considered a capricious and whimsical exercise of judgment.
Likewise, Mrs. Manotoc and Ferdinand, Jr., in their comment, prayed for the
dismissal of the petition on the grounds that:
(A)

BY THE TIME PETITIONER FILED ITS MOTION FOR SUMMARY JUDGMENT ON 10


MARCH 2000, IT WAS ALREADY BARRED FROM DOING SO.

1. (1)The Motion for Summary Judgment was based on private respondents’ Answer and
other documents that had long been in the records of the case. Thus, by the time the
Motion was filed on 10 March 2000, estoppel by laches had already set in against
petitioner.
2. (2)By its positive acts and express admissions prior to filing the Motion for Summary
Judgment on 10 March 1990, petitioner had legally bound itself to go to trial on the
basis of existing issues. Thus, it clearly waived whatever right it had to move for
summary judgment.

(B)

EVEN ASSUMING THAT PETITIONER WAS NOT LEGALLY BARRED FROM FILING
THE MOTION FOR SUMMARY JUDGMENT, THE SANDIGANBAYAN IS CORRECT IN
RULING THAT PETITIONER HAS NOT YET ESTABLISHED A PRIMA FACIE CASE FOR
THE FORFEITURE OF THE SWISS FUNDS.

1. (1)Republic Act No. 1379, the applicable law, is a penal statute. As such, its provisions,
particularly the essential elements stated in section 3 thereof, are mandatory in
nature. Those should be strictly construed against petitioner and liberally in favor of
private respondents.
2. (2)Petitioner has failed to establish the third and fourth essential elements in Section
3 of R.A. 1379 with respect to the identification, own-

217
VOL. 406, JULY 15, 2003 217
Republic vs. Sandiganbayan
ership, and approximate amount of the property which the Marcos couple allegedly
“acquired during their incumbency”.

1. (a)Petitioner has failed to prove that the Marcos couple “acquired” or own the Swiss
funds.
2. (b)Even assuming, for the sake of argument, that the fact of acquisition has been
proven, petitioner has categorically admitted that it has no evidence showing how
much of the Swiss funds was acquired “during the incumbency” of the Marcos couple
from 31 December 1965 to 25 February 1986.

1. (3)In contravention of the essential element stated in Section 3 (e) of R.A. 1379,
petitioner has failed to establish the other proper earnings and income from
legitimately acquired property of the Marcos couple over and above their government
salaries.
2. (4)Since petitioner failed to prove the three essential elements provided in paragraphs
(c) (d) and (e) of Section 3, R.A. 1379, the inescapable conclusion is that the prima
15 16 17
facie presumption of unlawful acquisition of the Swiss funds has not yet attached.
There can, therefore, be no premature forfeiture of the funds.

(C)

IT WAS ONLY BY ARBITRARILY ISOLATING AND THEN TAKING CERTAIN


STATEMENTS MADE BY PRIVATE RESPONDENTS OUT OF CONTEXT THAT
PETITIONER WAS ABLE TO TREAT THESE AS “JUDICIAL ADMISSIONS”
SUFFICIENT TO ESTABLISH A PRIMA FACIE AND THEREAFTER A CONCLUSIVE
CASE TO JUSTIFY THE FORFEITURE OF THE SWISS FUNDS.

1. (1)Under Section 27, Rule 130 of the Rules of Court, the General and Supplemental
Agreements, as well as the other written and testimonial statements submitted in
relation thereto, are expressly barred from being admissible in evidence against
private respondents.

_______________

15 Sec. 3—the petition shall contain the following information


xxx
(c) The approximate amount of property he has acquired during his incumbency in his past and present offices and
employments.
16(d) A description of said property, or such thereof as has been identified by the Solicitor General.
17(e) The total amount of his government salary and other proper earnings and incomes from legitimately
acquired property x x x.
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218 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan

1. (2)Had petitioner bothered to weigh the alleged admissions together with the other
statements on record, there would be a demonstrable showing that no such “judicial
admissions” were made by private respondents.

(D)

SINCE PETITIONER HAS NOT (YET) PROVEN ALL THE ESSENTIAL ELEMENTS
TO ESTABLISH A PRIMA FACIE CASE FOR FORFEITURE, AND PRIVATE
RESPONDENTS HAVE NOT MADE ANY JUDICIAL ADMISSION THAT WOULD HAVE
FREED IT FROM ITS BURDEN OF PROOF, THE SANDIGANBAYAN DID NOT COMMIT
GRAVE ABUSE OF DISCRETION IN DENYING THE MOTION FOR SUMMARY
JUDGMENT. CERTIORARI, THEREFORE, DOES NOT LIE, ESPECIALLY AS THIS
COURT IS NOT A TRIER OF FACTS. 18

For her part, Mrs. Araneta, in her comment to the petition, claims that obviously
petitioner is unable to comply with a very plain requirement of respondent
Sandiganbayan. The instant petition is allegedly an attempt to elevate to this Court
matters, issues and incidents which should be properly threshed out at the
Sandiganbayan. To respondent Mrs. Araneta, all other matters, save that pertaining
to the authentication of the translated Swiss Court decisions, are irrelevant and
impertinent as far as this Court is concerned. Respondent Mrs. Araneta manifests
that she is as eager as respondent Sandiganbayan or any interested person to have
the Swiss Court decisions officially translated in our known language. She says the
authenticated official English version of the Swiss Court decisions should be
presented. This should stop all speculations on what indeed is contained therein.
Thus, respondent Mrs. Araneta prays that the petition be denied for lack of merit and
for raising matters which, in elaborated fashion, are impertinent and improper before
this Court.
PROPRIETY OF PETITIONER’S
ACTION FOR CERTIORARI
But before this Court discusses the more relevant issues, the question regarding the
propriety of petitioner Republic’s action for certiorari under Rule 65 of the 1997
19

Rules of Civil Procedure

_______________

Volume IV, Rollo, pp. 2651-2654.


18

Same as Section 1, Rule 65 of the old Rules of Court.


19

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VOL. 406, JULY 15, 2003 219
Republic vs. Sandiganbayan
assailing the Sandiganbayan Resolution dated January 21, 2002 should be threshed
out.
At the outset, we would like to stress that, we are treating this case as an exception
to the general rule governing petitions for certiorari. Normally, decisions of the
Sandiganbayan are brought before this Court under Rule 45, not Rule 65. But where 20

the case is undeniably ingrained with immense public interest, public policy and deep
historical repercussions, certiorari is allowed notwithstanding the existence and
availability of the remedy of appeal. 21

One of the foremost concerns of the Aquino Government in February 1986 was the
recovery of the unexplained or ill-gotten wealth reputedly amassed by former
President and Mrs. Ferdinand E. Marcos, their relatives, friends and business
associates. Thus, the very first Executive Order (EO) issued by then President
Corazon Aquino upon her assumption to office after the ouster of the Marcoses was
EO No. 1, issued on February 28, 1986. It created the Presidential Commission on
Good Government (PCGG) and charged it with the task of assisting the President in
the “recovery of all ill-gotten wealth accumulated by former President Ferdinand E.
Marcos, his immediate family, relatives, subordinates and close associates, whether
located in the Philippines or abroad, including the takeover or sequestration of all
business enterprises and entities owned or controlled by them during his
administration, directly or through nominees, by taking undue advantage of their
public office and/or using their powers, authority, influence, connections or
relationship.” The urgency of this undertaking was tersely described by this Court
in Republic vs. Lobregat: 22

surely x x x an enterprise “of great pith and moment”; it was attended by “great expectations”;
it was initiated not only out of considerations of simple justice but also out of sheer
necessity—the national coffers were empty, or nearly so.
In all the alleged ill-gotten wealth cases filed by the PCGG, this Court has seen fit to
set aside technicalities and formalities that merely serve to delay or impede judicious
resolution. This Court prefers to have such cases resolved on the merits at the
Sandigan-

_______________

20 Filoteo, Jr. vs. Sandiganbavan, 263 SCRA 222 [1996]).


21 Central Bank vs. Cloribel, 44 SCRA 307, 314 [1972].
22 240 SCRA 376 [1995].

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220 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan
bayan. But substantial justice to the Filipino people and to all parties concerned, not
mere legalisms or perfection of form, should now be relentlessly and firmly pursued.
Almost two decades have passed since the government initiated its search for and
reversion of such ill-gotten wealth. The definitive resolution of such cases on the
merits is thus long overdue. If there is proof of illegal acquisition, accumulation,
misappropriation, fraud or illicit conduct, let it be brought out now. Let the ownership
of these funds and other assets be finally determined and resolved with dispatch, free
from all the delaying technicalities and annoying procedural side-tracks. 23

We thus take cognizance of this case and settle with finality all the issues therein.
ISSUES BEFORE THIS COURT
The crucial issues which this Court must resolve are: (1) whether or not respondents
raised any genuine issue of fact which would either justify or negate summary
judgment; and (2) whether or not petitioner Republic was able to prove its case for
forfeiture in accordance with Sections 2 and 3 of RA 1379.
(1) The Propriety of Summary Judgment
We hold that respondent Marcoses failed to raise any genuine issue of fact in their
pleadings. Thus, on motion of petitioner Republic, summary judgment should take
place as a matter of right.
In the early case of Auman vs. Estenzo, summary judgment was described as a
24

judgment which a court may render before trial but after both parties have pleaded.
It is ordered by the court upon application by one party, supported by affidavits,
depositions or other documents, with notice upon the adverse party who may in turn
file an opposition supported also by affidavits, depositions or other documents. This
is after the court summarily hears both parties with their respective proofs and finds
that there is no genuine issue between them. Summary judgment is sanctioned in
this jurisdiction by Section 1, Rule 35 of the 1997 Rules of Civil Procedure:

_______________

Republic vs. Sandiganhayan, 269 SCRA 316 [1997]).


23

69 SCRA 524 [1976].


24

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Republic vs. Sandiganbayan
SECTION 1. Summary judgment for claimant.—A party seeking to recover upon a claim,
counterclaim, or cross-claim or to obtain a declaratory relief may, at any time, after the
pleading in answer thereto has been served, move with supporting affidavits, depositions or
admissions for a summary judgment in his favor upon all or any part thereof. 25

Summary judgment is proper when there is clearly no genuine issue as to any


material fact in the action. The theory of summary judgment is that, although an
26

answer may on its face appear to tender issues requiring trial, if it is demonstrated
by affidavits, depositions or admissions that those issues are not genuine but sham
or fictitious, the Court is justified in dispensing with the trial and rendering summary
judgment for petitioner Republic.
The Solicitor General made a very thorough presentation of its case for forfeiture:
xxx
4. Respondent Ferdinand E. Marcos (now deceased and represented by his Estate/Heirs)
was a public officer for several decades continuously and without interruption as
Congressman, Senator, Senate President and President of the Republic of the Philippines
from December 31, 1965 up to his ouster by direct action of the people of EDSA on February
22-25, 1986.
5. Respondent Imelda Romualdez Marcos (Imelda, for short) the former First Lady who
ruled with FM during the 14-year martial law regime, occupied the position of Minister of
Human Settlements from June 1976 up to the peaceful revolution in February 22-25, 1986.
She likewise served once as a member of the Interim Batasang Pambansa during the early
years of martial law from 1978 to 1984 and as Metro Manila Governor in concurrent capacity
as Minister of Human Settlements, x x x
xxx xxx xxx
11. At the outset, however, it must be pointed out that based on the Official Report of the
Minister of Budget, the total salaries of former President Marcos as President from 1966 to
1976 was P60,000 a year and from 1977 to 1985, P100,000 a year; while that of the former
First Lady, Imelda R. Marcos, as Minister of Human Settlements from June 1976 to February
22-25, 1986 was P75,000 a year x x x.

_______________

Substantially the same as Section 1, Rule 34 of the old Rules of Court.


25

Agcanas vs. Nagum, L-20707, 143 Phil 177; 32 SCRA 298 [1970].
26

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222 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan

ANALYSIS OF RESPONDENTS
LEGITIMATE INCOME

xxx

1. 12.Based on available documents, the ITRs of the Marcoses for the years 1965-1975
were filed under Tax Identification No. 1365-055-1. For the years 1976 until 1984,
the returns were filed under Tax Identification No. M 6221-J 1117-A-9.
2. 13.The data contained in the ITRs and Balance Sheet filed by the “Marcoses are
summarized and attached to the reports in the following schedules:
Schedule A:
Schedule of Income (Annex “T” hereof);
Schedule B:
Schedule of Income Tax Paid (Annex “T-1” hereof);
Schedule C:
Schedule of Net Disposable Income (Annex “T-2” hereof);
Schedule D:
Schedule of Networth Analysis (Annex “T-3” hereof).

1. 14.As summarized in Schedule A (Annex “T” hereof), the Marcoses


reported P16,408,442.00 or US$2,414,484.91 in total income over a period of 20 years
from 1965 to 1984. The sources of income are as follows:

Official Salaries P2,627,581.00 16.01%


Legal Practice 11,109,836.00 67.71%
Farm Income 149,700.00 .91%
Others 2,521,325.00 15.37%
Total P16,408,442.00 100.00%

1. 15.FM’s official salary pertains to his compensation as Senate President in 1965 in


the amount of P15,935.00 and P1,420,000,00 as President of the Philippines during
the period 1966 until 1984. On the other hand, Imelda reported salaries and
allowances only for the years 1979 to 1984 in the amount of P1,191,646.00, The
records indicate that the reported income came from her salary from the Ministry of
Human Settlements and allowances from Food Terminal, Inc., National Home
Mortgage Finance Corporation, National Food Authority Council, Light Rail Transit
Authority and Home Development Mutual Fund.
2. 16.Of the P11,109,836.00 in reported income from legal practice, the amount of
P10,649,836.00 or 96% represents “receivables from prior years” during the period
1967 up to 1984.

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Republic vs. Sandiganbayan

1. 17.In the guise of reporting income using the cash method under Section 38 of the
National Internal Revenue Code, FM made it appear that he had an extremely
profitable legal practice before he became a President (FM being barred by law from
practicing his law profession during his entire presidency) and that, incredibly, he
was still receiving payments almost 20 years after. The only problem is that in his
Balance Sheet attached to his 1965 ITR immediately preceeding his ascendancy to
the presidency he did not show any Receivables from client at all, much less the
P10.65-M that he decided to later recognize as income. There are no documents
showing any withholding tax certificates. Likewise, there is nothing on record that
will show any known Marcos client as he has no known law office. As previously
stated, his networth was a mere P120,000.00 in December, 1965. The joint income
tax returns of FM and Imelda cannot, therefore, conceal the skeletons of their
kleptocracy.
2. 18.FM reported a total of P2,521,325.00 as Other Income for the years 1972 up to 1976
which he referred to in his return as “Miscellaneous Items” and “Various
Corporations.” There is no indication of any payor of the dividends or earnings.
3. 19.Spouses Ferdinand and Imelda did not declare any income from any deposits and
placements which are subject to a 5% withholding tax. The Bureau of Internal
Revenue attested that after a diligent search of pertinent records on file with the
Records Division, they did not find any records involving the tax transactions of
spouses Ferdinand and Imelda in Revenue Region No. 1, Baguio City, Revenue
Region No.4A, Manila, Revenue Region No. 4B1, Quezon City and Revenue No. 8,
Tacloban, Leyte. Likewise, the Office of the Revenue Collector of Batac. Further, BIR
attested that no records were found on any filing of capital gains tax return involving
spouses FM and Imelda covering the years 1960 to 1965.
4. 20.In Schedule B, the taxable reported income over the twenty-year period was
P14,463,595.00 which represents 88% of the gross income. The Marcoses paid income
taxes totaling P8,233,296.00 or US$1,220,667.59. The business expenses in the
amount of P861,748.00 represent expenses incurred for subscription, postage,
stationeries and contributions while the other deductions in the amount of
P567,097.00 represents interest charges, medicare fees, taxes and licenses. The total
deductions in the amount of P1,994,845.00 represents 12% of the total gross income.
5. 21.In Schedule C, the net cumulative disposable income amounts to P6,756,301.00 or
US$980,709.77. This is the amount that represents that portion of the Marcoses
income that is free for consumption, savings and investments. The amount is arrived
at by adding back to the net income after tax the personal and additional exemptions
for the years 1965-1984, as well as the tax-exempt salary of the President for the
years 1966 until 1972.

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224 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan

1. 22.Finally, the networth analysis in Schedule D, represents the total accumulated


networth of spouses, Ferdinand and Imelda. Respondent’s Balance Sheet attached
to their 1965 ITR, covering the year immediately preceding their ascendancy to the
presidency, indicates an ending net-worth of P120,000.00 which FM declared as
Library and Miscellaneous assets. In computing for the networth, the income
approach was utilized. Under this approach, the beginning capital is increased or
decreased, as the case may be, depending upon the income earned or loss incurred.
Computations establish the total networth of spouses Ferdinand and Imelda, for the
years 1965 until 1984 in the total amount of US$957,487.75, assuming the income
from legal practice is real and valid x x x.

G. THE SECRET MARCOS DEPOSITS


IN SWISS BANKS

1. 23.The following presentation very clearly and overwhelmingly show in detail how
both respondents clandestinely stashed away the country’s wealth to Switzerland
and hid the same under layers upon layers of foundations and other corporate
entities to prevent its detection. Through their dummies/nominees, fronts or agents
who formed those foundations or corporate entities, they opened and maintained
numerous bank accounts. But due to the difficulty if not the impossibility of detecting
and documenting all those secret accounts as well as the enormity of the deposits
therein hidden, the following presentation is confined to five identified accounts
groups, with balances amounting to about $356-M with a reservation for the filing of
a supplemental or separate forfeiture complaint should the need arise.

H. THE AZIO-VERSO-VIBUR
FOUNDATION ACCOUNTS

1. 24.On June 11, 1971, Ferdinand Marcos issued a written order to Dr. Theo Bertheau,
legal counsel of Schweizeresche Kreditanstalt or SKA, also known as Swiss Credit
Bank, for him to establish the AZIO Foundation. On the same date, Marcos executed
a power of attorney in favor of Roberto S. Benedicto empowering him to transact
business in behalf of the said foundation. Pursuant to the said Marcos mandate,
AZIO Foundation was formed on June 21, 1971 in Vaduz. Walter Fessler and Ernst
Scheller, also of SKA Legal Service, and Dr. Helmuth Merling from Schaan were
designated as members of the Board of Trustees of the said foundation. Ferdinand
Marcos was named first beneficiary and the Marcos Foundation, Inc. was
second beneficiary. On November 12, 1971, FM again issued another written order
naming Austrahil PTY Ltd. In Sydney, Australia, as

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Republic vs. Sandiganbayan

1. the foundation’s first and sole beneficiary. This was recorded on December 14, 1971.
2. 25.In an undated instrument, Marcos changed the first and sole beneficiary to
CHARIS FOUNDATION. This change was recorded on December 4, 1972.
3. 26.On August 29, 1978, the AZIO FOUNDATION was renamed to VERSO
FOUNDATION. The Board of Trustees remained the same. On March 11, 1981,
Marcos issued a written directive to liquidate VERSO FOUNDATION and to
transfer all its assets to account of FIDES TRUST COMPANY at Bank Hofman in
Zurich under the account “Reference OSER.” The Board of Trustees decided to
dissolve the foundation on June 25, 1981.
4. 27.In an apparent maneuver to bury further the secret deposits beneath the thick
layers of corporate entities, FM effected the establishment of VIBUR FOUNDATION
on May 13, 1981 in Vaduz. Atty. Ivo Beck and Limag Management, a wholly-owned
subsidiary of Fides Trust, were designated as members of the Board of Trustees. The
account was officially opened with SKA on September 10, 1981. The beneficial owner
was not made known to the bank since Fides Trust Company acted as fiduciary.
However, comparison of the listing of the securities in the safe deposit register of the
VERSO FOUNDATION as of February 27, 1981 with that of VIBUR FOUNDATION
as of December 31, 1981 readily reveals that exactly the same securities were listed.
5. 28.Under the foregoing circumstances, it is certain that the VIBUR FOUNDATION is
the beneficial successor of VERSO FOUNDATION.
6. 29.On March 18, 1986, the Marcos-designated Board of Trustees decided to liquidate
VIBUR FOUNDATION. A notice of such liquidation was sent to the Office of the
Public Register on March 21, 1986. However, the bank accounts and respective
balances of the said VIBUR FOUNDATION remained with SKA. Apparently, the
liquidation was an attempt by the Marcoses to transfer the foundation’s funds to
another account or bank but this was prevented by the timely freeze order issued by
the Swiss authorities. One of the latest documents obtained by the PCGG from the
Swiss authorities is a declaration signed by Dr. Ivo Beck (the trustee) stating that the
beneficial owner of VIBUR FOUNDATION is Ferdinand E. Marcos. Another
document signed by G. Raber of SKA shows that VIBUR FOUNDATION is owned
by the “Marcos Familie”.
7. 30.As of December 31, 1989, the balance of the bank accounts of VIBUR
FOUNDATION with SKA, Zurich, under the General Account No. 469857 totaled
$3,597,544.00.

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226 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan

I. XANDY-WINTROP: CHARIS-SCOLARI-
VALAMO-SPINUS-AVERTINA
FOUNDATION ACCOUNTS

1. 31.This is the most intricate and complicated account group. As the Flow Chart hereof
shows, two (2) groups under the foundation organized by Marcos dummies/nominees
for FM’s benefit, eventually joined together and became one (1) account group under
the AVERTINA FOUNDATION for the benefit of both FM and Imelda. This is the
biggest group from where the $50-M investment fund of the Marcoses was drawn
when they bought the Central Bank’s dollar-denominated treasury notes with high-
yielding interests.
2. 32.On March 20, 1968, after his second year in the presidency, Marcos opened bank
accounts with SKA using an alias or pseudonym WILLIAM SAUNDERS, apparently
to hide his true identity. The next day, March 21, 1968, his First Lady, Mrs. Imelda
Marcos also opened her own bank accounts with the same bank using an American-
sounding alias, JANE RYAN. Found among the voluminous documents in
Malacañang shortly after they fled to Hawaii in haste that fateful night of February
25, 1986, were accomplished forms for “Declaration/Specimen Signatures” submitted
by the Marcos couple. Under the caption “signature(s)” Ferdinand and Imelda signed
their real names as well as their respective aliases underneath. These accounts were
actively operated and maintained by the Marcoses for about two (2) years until their
closure sometime in February, 1970 and the balances transferred to XANDY
FOUNDATION.
3. 33.The XANDY FOUNDATION was established on March 3, 1970 in Vaduz, C.W.
Fessler, C. Souviron and E. Scheller were named as members of the Board of
Trustees.
4. 34.FM and Imelda issued the written mandate to establish the foundation to Markus
Geel of SKA on March 3, 1970. In the handwritten Regulations signed by the Marcos
couple as well as in the type-written Regulations signed by Markus Geel both dated
February 13, 1970, the Marcos spouses were named the first beneficiaries, the
surviving spouse as the second beneficiary and the Marcos children—Imee,
Ferdinand, Jr. (Bongbong) and Irene—as equal third beneficiaries.
5. 35.The XANDY FOUNDATION was renamed WINTROP FOUNDATION on August
29, 1978. The Board of Trustees remained the same at the outset. However, on March
27, 1980, Souviron was replaced by Dr. Peter Ritter. On March 10, 1981, Ferdinand
and Imelda Marcos issued a written order to the Board of Wintrop to liquidate the
foundation and transfer all its assets to Bank Hofmann in Zurich in favor of FIDES
TRUST COMPANY. Later, WINTROP FOUNDATION was dissolved.
6. 36.The AVERTINA FOUNDATION was established on May 13, 1981 in Vaduz with
Atty. Ivo Beck and Limag Management, a wholly-

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Republic vs. Sandiganbayan

1. owned subsidiary of FIDES TRUST CO., as members of the Board of Trustees. Two
(2) account categories, namely: CAR and NES, were opened on September 10, 1981.
The beneficial owner of AVERTINA was not made known to the bank since the
FIDES TRUST CO. acted as fiduciary. However, the securities listed in the safe
deposit register of WINTROP FOUNDATION Category R as of December 31, 1980
were the same as those listed in the register of AVERTINA FOUNDATION Category
CAR as of December 31, 1981. Likewise, the securities listed in the safe deposit
register of WINTROP FOUNDATION Category S as of December 31, 1980 were the
same as those listed in the register of Avertina Category NES as of December 31,
1981. Under the circumstances, it is certain that the beneficial successor of
WINTROP FOUNDATION is AVERTINA FOUNDATION. The balance of Category
CAR as of December 31, 1989 amounted to US$231,366,894.00 while that of Category
NES as of 12-31-83 was US$8,647,190.00. Latest documents received from Swiss
authorities included a declaration signed by IVO Beck stating that the beneficial
owners of AVERTINA FOUNDATION are FM and Imelda. Another document signed
by G. Raber of SKA indicates that Avertina Foundation is owned by the “Marcos
Families.”
2. 37.The other groups of foundations that eventually joined AVERTINA were also
established by FM through his dummies, which started with the CHARIS
FOUNDATION.
3. 38.The CHARIS FOUNDATION was established in VADUZ on December 27, 1971.
Walter Fessler and Ernst Scheller of SKA and Dr. Peter Ritter were named as
directors. Dr. Theo Bertheau, SKA legal counsel, acted as founding director in behalf
of FM by virtue of the mandate and agreement dated November 12, 1971. FM himself
was named the first beneficiary and Xandy Foundation as second beneficiary in
accordance with the handwritten instructions of FM on November 12, 1971 and the
Regulations. FM gave a power of attorney to Roberto S. Benedicto on February 15,
1972 to act in his behalf with regard to Charis Foundation.
4. 39.On December 13, 1974, Charis Foundation was renamed Scolari Foundation but
the directors remained the same. On March 11, 1981 FM ordered in writing that the
Valamo Foundation be liquidated and all its assets be transferred to Bank Hofmann,
AG in favor of Fides Trust Company under the account “Reference OMAL.” The
Board of Directors decided on the immediate dissolution of Valamo Foundation on
June 25, 1981.
5. 40.The SPINUS FOUNDATION was established on May 13, 1981 in Vaduz with Atty.
Ivo Beck and Limag Management, a wholly-owned subsidiary of Fides Trust Co., as
members of the Foundation’s Board of Directors. The account was officially opened
with SKA on September 10, 1981. The beneficial owner of the foundation was not
made known to the bank since Fides Trust Co. acted as fiduciary. However, the list
of securi-

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228 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan

1. ties in the safe deposit register of Valamo Foundation as of December 31, 1980 are
practically the same with those listed in the safe deposit register of Spinus
Foundation as of December 31, 1981. Under the circumstances, it is certain that the
Spinus Foundation is the beneficial successor of the Valamo Foundation.
2. 41.On September 6, 1982, there was a written instruction from Spinus Foundation to
SKA to close its Swiss Franc account and transfer the balance to Avertina
Foundation. In July/August, 1982, several transfers from the foundation’s German
marks and US dollar accounts were made to Avertina Category CAR totaling DM
29.5-M and $58-M, respectively. Moreover, a comparison of the list of securities of
the Spinus Foundation as of February 3, 1982 with the safe deposit slips of the
Avertina Foundation Category CAR as of August 19, 1982 shows that all the
securities of Spinus were transferred to Avertina.

J. TRINIDAD-RAYBY-PALMY
FOUNDATION ACCOUNTS

1. 42.The Trinidad Foundation was organized on August 26, 1970 in Vaduz with C.W.
Fessler and E. Scheller of SKA and Dr. Otto Tondury as the foundation’s directors.
Imelda issued a written mandate to establish the foundation to Markus Geel on
August 26, 1970. The regulations as well as the agreement, both dated August 28,
1970 were likewise signed by Imelda. Imelda was named the first beneficiary and
her children Imelda (Imee), Ferdinand, Jr. (Bongbong) and, Irene were named as
equal second beneficiaries.
2. 43.Rayby Foundation was established on June 22, 1973 in Vaduz with Fessler,
Scheller and Ritter as members of the board of directors. Imelda issued a written
mandate to Dr. Theo Bertheau to establish the foundation with a note that the
foundation’s capitalization as well as the cost of establishing it be debited against
the account of Trinidad Foundation. Imelda was named the first and only beneficiary
of Rayby foundation. According to written information from SKA dated November
28, 1988, Imelda apparently had the intention in 1973 to transfer part of the assets
of Trinidad Foundation to another foundation, thus the establishment of Rayby
Foundation. However, transfer of assets never took place. On March 10, 1981, Imelda
issued a written order to transfer all the assets of Rayby Foundation to Trinidad
Foundation and to subsequently liquidate Rayby. On the same date, she issued a
written order to the board of Trinidad to dissolve the foundation and transfer all its
assets to Bank Hofmann in favor of Fides Trust Co. Under the account “Reference
Dido,” Rayby was dissolved on April 6, 1981 and Trinidad was liquidated on August
3, 1981.
3. 44.The PALMY FOUNDATION was established on May 13, 1981 in Vaduz with Dr.
Ivo Beck and Limag Management, a wholly-owned subsidiary of Fides Trust Co, as
members of the Foundation’s Board of

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Republic vs. Sandiganbayan

1. Directors. The account was officially opened with the SKA on September 10, 1981.
The beneficial owner was not made known to the bank since Fides Trust Co. acted
as fiduciary. However, when one compares the listing of securities in the safe deposit
register of Trinidad Foundation as of December 31, 1980 with that of the Palmy
Foundation as of December 31, 1980, one can clearly see that practically the same
securities were listed. Under the circumstances, it is certain that the Palmy
Foundation is the beneficial successor of the Trinidad Foundation.
2. 45.As of December 31, 1989, the ending balance of the bank accounts of Palmy
Foundation under General Account No. 391528 is $17,214,432.00.
3. 46.Latest documents received from Swiss Authorities included a declaration signed
by Dr. Ivo Beck stating that the beneficial owner of Palmy Foundation is Imelda.
Another document signed by Raber shows that the said Palmy Foundation is owned
by “Marcos Familie.”

K. ROSALYS-AGUAMINA
FOUNDATION ACCOUNTS

1. 47.Rosalys Foundation was established in 1971 with FM as the beneficiary. Its


Articles of Incorporation was executed on September 24, 1971 and its By-Laws on
October 3, 1971. This foundation maintained several accounts with Swiss Bank
Corporation (SBC) under the general account 51960 where most of the bribe monies
from Japanese suppliers were hidden.
2. 48.On December 19, 1985, Rosalys Foundation was liquidated and all its assets were
transferred to Aguamina Corporation’s (Panama) Account No. 53300 with SBC. The
ownership by Aguamina Corporation of Account No. 53300 is evidenced by an
opening account documents from the bank. J. Christinaz and R.L. Rossier, First Vice-
President and Senior Vice President, respectively, of SBC, Geneva issued a
declaration dated September 3, 1991 stating that the by-laws dated October 3, 1971
governing Rosalys Foundation was the same by-law applied to Aguamina
Corporation Account No. 53300. They further confirmed that no change of beneficial
owner was involved while transferring the assets of Rosalys to Aguamina. Hence,
FM remains the beneficiary of Aguamina Corporation Account No. 53300.

As of August 30, 1991, the ending balance of Account No. 53300 amounted to
$80,566,483.00.

L. MALER FOUNDATION ACCOUNTS


1. 49.Maler was first created as an establishment. A statement of its rules and
regulations was found among Malacañang documents. It stated, among others, that
50% of the Company’s assets will be for sole and full

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230 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan

1. right disposal of FM and Imelda during their lifetime, which the remaining 50% will
be divided in equal parts among their children. Another Malacañang document dated
October 19, 1968 and signed by Ferdinand and Imelda pertains to the appointment
of Dr. Andre Barbey and Jean Louis Sunier as attorneys of the company and as
administrator and manager of all assets held by the company. The Marcos couple,
also mentioned in the said document that they bought the Maler Establishment from
SBC, Geneva. On the same date, FM and Imelda issued a letter addressed to Maler
Establishment, stating that all instructions to be transmitted with regard to Maler
will be signed with the word “JOHN LEWIS.” This word will have the same value as
the couple’s own personal signature. The letter was signed by FM and Imelda in their
signatures and as John Lewis.
2. 50.Maler Establishment opened and maintained bank accounts with SBC, Geneva.
The opening bank documents were signed by Dr. Barbey and Mr. Sunnier as
authorized signatories.
3. 51.On November 17, 1981, it became necessary to transform Maler Establishment into
a foundation. Likewise, the attorneys were changed to Michael Amaudruz, et al.
However, administration of the assets was left to SBC. The articles of incorporation
of Maler Foundation registered on November 17, 1981 appear to be the same articles
applied to Maler Establishment. On February 28, 1984, Maler Foundation cancelled
the power of attorney for the management of its assets in favor of SBC and
transferred such power to Sustrust Investment Co., S.A.
4. 52.As of June 6, 1991, the ending balance of Maler Foundation’s Account Nos. 254,508
BT and 98,929 NY amount SF 9,083,567 and SG 16,195,258, respectively, for a total
of SF 25,278,825.00. GM only until December 31, 1980. This account was opened by
Maler when it was still an establishment which was subsequently transformed into
a foundation.
5. 53.All the five (5) group accounts in the over-all flow chart have a total balance of
about Three Hundred Fifty Six Million Dollars ($356,000,000.00) as shown by Annex
“R-5” hereto attached as integral part hereof.
x x x x x x. 27

Respondents Imelda R. Marcos, Maria Imelda M. Manotoc, Irene M. Araneta


and Ferdinand Marcos, Jr., in their answer, stated the following:
xxx xxx xxx
4. Respondents ADMIT paragraphs 3 and 4 of the Petition.

_______________

Rollo, Vol. I, pp. 22-37.


27

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VOL. 406, JULY 15, 2003 231
Republic vs. Sandiganbayan

1. 5.Respondents specifically deny paragraph 5 of the Petition in so far as it states that


summons and other court processes may be served on Respondent Imelda R. Marcos
at the stated address the truth of the matter being that Respondent Imelda R.
Marcos may be served with summons and other processes at No. 10-B Bel Air
Condominium 5022 P. Burgos Street, Makati, Metro Manila, and ADMIT the rest.
xxx xxx xxx

1. 10.Respondents ADMIT paragraph 11 of the Petition.


2. 11.Respondents specifically DENY paragraph 12 of the Petition for lack of knowledge
sufficient to form a belief as to the truth of the allegation since Respondents were
not privy to the transactions and that they cannot remember exactly the truth as to
the matters alleged.
3. 12.Respondents specifically DENY paragraph 13 of the Petition for lack of knowledge
or information sufficient to form a belief as to the truth of the allegation since
Respondents cannot remember with exactitude the contents of the alleged ITRs and
Balance Sheet.
4. 13.Respondents specifically DENY paragraph 14 of the Petition for lack of knowledge
or information sufficient to form a belief as to the truth of the allegation since
Respondents cannot remember with exactitude the contents of the alleged ITRs.
5. 14.Respondents specifically, DENY paragraph 15 of the Petition for lack of knowledge
or information sufficient to form a belief as to the truth of the allegation since
Respondents cannot remember with exactitude the contents of the alleged ITRs.
6. 15.Respondents specifically DENY paragraph 16 of the Petition for lack of knowledge
or information sufficient to form a belief as to the truth of the allegation since
Respondents cannot remember with exactitude the contents of the alleged ITRs.
7. 16.Respondents specifically DENY paragraph 17 of the Petition insofar as it attributes
willful duplicity on the part of the late President Marcos, for being false, the same
being pure conclusions based on pure assumption and not allegations of fact; and
specifically DENY the rest for lack of knowledge or information sufficient to form a
belief as to the truth of the allegation since Respondents cannot remember with
exactitude the contents of the alleged ITRs or the attachments thereto.
8. 17.Respondents specifically DENY paragraph 18 of the Petition for lack of knowledge
or information sufficient to form a belief as to the truth of the allegation since
Respondents cannot remember with exactitude the contents of the alleged ITRs.
9. 18.Respondents specifically DENY paragraph 19 of the Petition for lack of knowledge
or information sufficient to form a belief as to the truth of the allegation since
Respondents cannot remember with exactitude the

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232 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan

1. contents of the alleged ITRs and that they are not privy to the activities of the BIR.
2. 19.Respondents specifically DENY paragraph 20 of the Petition for lack of knowledge
or information sufficient to form a belief as to the truth of the allegation since
Respondents cannot remember with exactitude the contents of the alleged ITRs.
3. 20.Respondents specifically DENY paragraph 21 of the Petition for lack of knowledge
or information sufficient to form a belief as to the truth of the allegation since
Respondents cannot remember with exactitude the contents of the alleged ITRs.
4. 21.Respondents specifically DENY paragraph 22 of the Petition for lack of knowledge
or information sufficient to form a belief as to the truth of the allegation since
Respondents cannot remember with exactitude the contents of the alleged ITRs.
5. 22.Respondents specifically DENY paragraph 23 insofar as it alleges that
Respondents clandestinely stashed the country’s wealth in Switzerland and hid the
same under layers and layers of foundation and corporate entities for being false, the
truth being that Respondents aforesaid properties were lawfully acquired.
6. 23.Respondents specifically, DENY paragraphs 24, 25, 26, 27, 28, 29 and 30 of the
Petition for lack of knowledge or information sufficient to form a belief as to the truth
of the allegation since Respondents were not privy to the transactions regarding the
alleged Azio-Verso-Vibur Foundation accounts, except that as to Respondent Imelda
R. Marcos she specifically remembers that the funds involved were lawfully acquired.
7. 24.Respondents specifically DENY paragraphs 31, 32, 33, 34, 35, 36, 37, 38, 39, 40,
and 41 of the Petition for lack of knowledge or information sufficient to form a belief
as to the truth of the allegations since Respondents are not privy to the transactions
and as to such transaction they were privy to they cannot remember with exactitude
the same having occurred a long time ago, except that as to Respondent Imelda R.
Marcos she specifically remembers that the funds involved were lawfully acquired.
8. 25.Respondents specifically DENY paragraphs 42, 43, 44, 45, and 46, of the Petition
for lack of knowledge or information sufficient to form a belief as to the truth of the
allegations since Respondents were not privy to the transactions and as to such
transaction they were privy to they cannot remember with exactitude the same
having occurred a long time ago, except that as to Respondent Imelda R. Marcos she
specifically remembers that the funds involved were lawfully acquired.
9. 26.Respondents specifically DENY paragraphs 49, 50, 51 and 52, of the Petition for
lack of knowledge or information sufficient to form a belief as to the truth of the
allegations since Respondents were not privy to the transactions and as to such
transaction they were privy to they cannot

233
VOL. 406, JULY 15, 2003 233
Republic vs. Sandiganbayan

1. remember with exactitude the same having occurred a long time ago, except that as
to Respondent Imelda R. Marcos she specifically remembers that the funds involved
were lawfully acquired.

Upon careful perusal of the foregoing, the Court finds that respondent Mrs. Marcos
and the Marcos children indubitably failed to tender genuine issues in their answer
to the petition for forfeiture. A genuine issue is an issue of fact which calls for the
presentation of evidence as distinguished from an issue which is fictitious and
contrived, set up in bad faith or patently lacking in substance so as not to constitute
a genuine issue for trial. Respondents’ defenses of “lack of knowledge for lack of
privity” or “(inability to) recall because it happened a long time ago” or, on the part of
Mrs. Marcos, that “the funds were lawfully acquired” are fully insufficient to tender
genuine issues. Respondent Marcoses’ defenses were a sham and evidently calibrated
to compound and confuse the issues.
The following pleadings filed by respondent Marcoses are replete with indications
of a spurious defense:

1. (a)Respondents’ Answer dated October 18, 1993;


2. (b)Pre-trial Brief dated October 4, 1999 of Mrs. Marcos, Supplemental Pre-trial Brief
dated October 19, 1999 of Ferdinand, Jr. and Mrs. Imee Marcos-Manotoc adopting
the pre-trial brief of Mrs. Marcos, and Manifestation dated October 19, 1999 of Irene
Marcos-Araneta adopting the pre-trial briefs of her co-respondents;
3. (c)Opposition to Motion for Summary Judgment dated March 21, 2000, filed by Mrs.
Marcos which the other respondents (Marcos children) adopted;
4. (d)Demurrer to Evidence dated May 2, 2000 filed by Mrs. Marcos and adopted by the
Marcos children;
5. (e)Motion for Reconsideration dated September 26, 2000 filed by Mrs. Marcos; Motion
for Reconsideration dated October 5, 2000 jointly filed by Mrs. Manotoc and
Ferdinand, Jr., and Supplemental Motion for Reconsideration dated October 9, 2000
likewise jointly filed by Mrs. Manotoc and Ferdinand, Jr.;
6. (f)Memorandum dated December 12, 2000 of Mrs. Marcos and Memorandum dated
December 17, 2000 of the Marcos children;

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234 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan

1. (g)Manifestation dated May 26, 1998; and


2. (h)General/Supplemental Agreement dated December 23, 1993.

An examination of the foregoing pleadings is in order.


RESPONDENTS’ ANSWER DATED OCTOBER 18, 1993.
In their answer, respondents failed to specifically deny each and every allegation
contained in the petition for forfeiture in the manner required by the rules. All they
gave were stock answers like “they have no sufficient knowledge” or “they could not
recall because it happened a long time ago,” and, as to Mrs. Marcos, “the funds were
lawfully acquired,” without stating the basis of such assertions.

Section 10, Rule 8 of the 1997 Rules of Civil Procedure, provides:

A defendant must specify each material allegation of fact the truth of which he does not admit
and, whenever practicable, shall set forth the substance of the matters upon which he relies
to support his denial. Where a defendant desires to deny only a part of an averment, he shall
specify so much of it as is true and material and shall deny the remainder. Where a defendant
is without knowledge or information sufficient to form a belief as to the truth of a material
averment made in the complaint, he shall so state, and this shall have the effect of a denial. 28
The purpose of requiring respondents to make a specific denial is to make them
disclose facts which will disprove the allegations of petitioner at the trial, together
with the matters they rely upon in support of such denial. Our jurisdiction adheres
to this rule to avoid and prevent unnecessary expenses and waste of time by
compelling both parties to lay their cards on the table, thus reducing the controversy
to its true terms. As explained in Alonso vs. Villamor, 29

A litigation is not a game of technicalities in which one, more deeply schooled and skilled in
the subtle art of movement and position, entraps and destroys the other. It is rather a contest
in which each contending party fully and fairly lays before the court the facts in issue and
then,

_______________

28 Substantially the same as Section 10, Rule 8 of the old Rules of Court.
29 16 Phil. 315, 321-322 [1910].
235
VOL. 406, JULY 15, 2003 235
Republic vs. Sandiganbayan
brushing aside as wholly trivial and indecisive all imperfections of form and technicalities of
procedure, asks that justice be done upon the merits. Lawsuits, unlike duels, are not to be
won by a rapier’s thrust.
On the part of Mrs. Marcos, she claimed that the funds were lawfully acquired.
However, she failed to particularly state the ultimate facts surrounding the lawful
manner or mode of acquisition of the subject funds. Simply put, she merely stated in
her answer with the other respondents that the funds were “lawfully acquired”
without detailing how exactly these funds were supposedly acquired legally by them.
Even in this case before us, her assertion that the funds were lawfully acquired
remains bare and unaccompanied by any factual support which can prove, by the
presentation of evidence at a hearing, that indeed the funds were acquired
legitimately by the Marcos family.
Respondents’ denials in their answer at the Sandiganbayan were based on their
alleged lack of knowledge or information sufficient to form a belief as to the truth of
the allegations of the petition.
It is true that one of the modes of specific denial under the rules is a denial through
a statement that the defendant is without knowledge or information sufficient to form
a belief as to the truth of the material averment in the complaint. The question,
however, is whether the kind of denial in respondents’ answer qualifies as the specific
denial called for by the rules. We do not think so. In Morales vs. Court of
Appeals, this Court ruled that if an allegation directly and specifically charges a
30

party with having done, performed or committed a particular act which the latter did
not in fact do, perform or commit, a categorical and express denial must be made.
Here, despite the serious and specific allegations against them, the Marcoses
responded by simply saying that they had no knowledge or information sufficient to
form a belief as to the truth of such allegations. Such a general, self-serving claim of
ignorance of the facts alleged in the petition for forfeiture was insufficient to raise an
issue. Respondent Marcoses should have positively stated how it was that they were
supposedly ignorant of the facts alleged. 31

_______________

197 SCRA 391 [1991]


30

Philippine Advertising vs. Revilla, 52 SCRA 246 [1973].


31

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236 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan
To elucidate, the allegation of petitioner Republic in paragraph 23 of the petition for
forfeiture stated:
23. The following presentation very clearly and overwhelmingly show in detail how both
respondents clandestinely stashed away the country’s wealth to Switzerland and hid the
same under layers upon layers of foundations and other corporate entities to prevent its
detection. Through their dummies/nominees, fronts or agents who formed those foundations
or corporate entities, they opened and maintained numerous bank accounts. But due to the
difficulty if not the impossibility of detecting and documenting all those secret accounts as
well as the enormity of the deposits therein hidden, the following presentation is confined to
five identified accounts groups, with balances amounting to about $356-M with a reservation
for the filing of a supplemental or separate forfeiture complaint should the need arise. 32

Respondents’ lame denial of the aforesaid allegation was:


22. Respondents specifically DENY paragraph 23 insofar as it alleges that Respondents
clandestinely stashed the country’s wealth in Switzerland and hid the same under layers and
layers of foundations and corporate entities for being false, the truth being that Respondents’
aforesaid properties were lawfully acquired. 33

Evidently, this particular denial had the earmark of what is called in the law on
pleadings as a negative pregnant, that is, a denial pregnant with the admission of the
substantial facts in the pleading responded to which are not squarely denied. It was
in effect an admission of the averments it was directed at. Stated otherwise, a
34

negative pregnant is a form of negative expression which carries with it an


affirmation or at least an implication of some kind favorable to the adverse party. It
is a denial pregnant with an admission of the substantial facts alleged in the
pleading. Where a fact is alleged with qualifying or modifying language and the words
of the allegation as so qualified or modified are literally denied, it has been held that
the qualifying circumstances alone are denied while the fact itself is admitted. 35

_______________

32 Petition, Annex “C”, Volume I, Rollo, p. 236.


33 Answer, Annex “D”, Volume II, Rollo, p. 1064.
34 61A Am. Jur., pp. 172-173.

35 Blume vs. MacGregor, 148 P. 2d. 656 [see p. 428, Moran, Comments on the Rules of Court, 1995 ed.].

237
VOL. 406, JULY 15, 2003 237
Republic vs. Sandiganbayan
In the instant case, the material allegations in paragraph 23 of the said petition were
not specifically denied by respondents in paragraph 22 of their answer. The denial
contained in paragraph 22 of the answer was focused on the averment in paragraph
23 of the petition for forfeiture that “Respondents clandestinely stashed the country’s
wealth in Switzerland and hid the same under layers and layers of foundations and
corporate entities.” Paragraph 22 of the respondents’ answer was thus a denial
pregnant with admissions of the following substantial facts:

1. (1)that the Swiss bank deposits existed and


2. (2)that the estimated sum thereof was US$356.million as of December, 1990.

Therefore, the allegations in the petition for forfeiture on the existence of the Swiss
bank deposits in the sum of about US$356 million, not having been specifically denied
by respondents in their answer, were deemed admitted by them pursuant to Section
11, Rule 8 of the 1997 Revised Rules on Civil Procedure:
Material averment in the complaint, x x x shall be deemed admitted when not specifically
denied. x x x. 36

By the same token, the following unsupported denials of respondents in their answer
were pregnant with admissions of the substantial facts alleged in the Republic’s
petition for forfeiture:

1. 23.Respondents specifically DENY paragraphs 24, 25, 26, 27, 28, 29 and 30 of the
Petition for lack of knowledge or information sufficient to form a belief as to the truth
of the allegation since respondents were not privy to the transactions regarding the
alleged Azio-Verso-Vibur Foundation accounts, except that, as to respondent Imelda
R. Marcos, she specifically remembers that the funds involved were lawfully
acquired.
2. 24.Respondents specifically DENY paragraphs 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41
of the Petition for lack of knowledge or information sufficient to form a belief as to
the truth of the allegations since respondents were not privy to the transactions and
as to such transactions they were privy to, they cannot remember with exactitude
the same having occurred a long time ago, except as to respondent Imelda R. Marcos,
she specifically remembers that the funds involved were lawfully acquired.

_______________

Substantially the same as Section 1, Rule 9 of the old Rules of Court.


36

238
238 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan

1. 25.Respondents specifically DENY paragraphs 42, 43, 45, and 46 of the petition for
lack of knowledge or information sufficient to from a belief as to the truth of the
allegations since respondents were not privy to the transactions and as to such
transaction they were privy to, they cannot remember with exactitude, the same
having occurred a long time ago, except that as to respondent Imelda R. Marcos, she
specifically remembers that the funds involved were lawfully acquired.
2. 26.Respondents specifically DENY paragraphs 49, 50, 51 and 52 of the petition for
lack of knowledge and information sufficient to form a belief as to the truth of the
allegations since respondents were not privy to the transactions and as to such
transaction they were privy to they cannot remember with exactitude the same
having occurred a long time ago, except that as to respondent Imelda R. Marcos, she
specifically remembers that the funds involved were lawfully acquired.

The matters referred to in paragraphs 23 to 26 of the respondents’ answer pertained


to the creation of five groups of accounts as well as their respective ending balances
and attached documents alleged in paragraphs 24 to 52 of the Republic’s petition for
forfeiture. Respondent Imelda R. Marcos never specifically denied the existence of the
Swiss funds. Her claim that “the funds involved were lawfully acquired” was an
acknowledgment on her part of the existence of said deposits. This only reinforced
her earlier admission of the allegation in paragraph 23 of the petition for forfeiture
regarding the existence of the US$356 million Swiss bank deposits.
The allegations in paragraphs 47 and 48 of the petition for forfeiture referring to
37 38

the creation and amount of the deposits of the Rosalys-Aguamina Foundation as well
as the averment in paragraph 52-a of the said petition with respect to the sum of the
39

Swiss bank deposits estimated to be US$356 million were again not specifically
denied by respondents in their answer. The respondents did not at all respond to the
issues raised in these paragraphs and the existence, nature and amount of the Swiss
funds were therefore deemed admitted by them. As held in Galofa vs. Nee

_______________

37 Supra.
38 Supra.
39 “All the five (5) group accounts in the over-all flow chart have a total balance of about Three Hundred

Fifty Six Million Dollars ($356,000,000,00) as shown by Annex ‘R-5’ hereto attached as integral part hereof.”
239
VOL. 406, JULY 15, 2003 239
Republic vs. Sandiganbayan
Bon Sing, if a defendant’s denial is a negative pregnant, it is equivalent to an
40

admission.
Moreover, respondents’ denial of the allegations in the petition for forfeiture “for
lack of knowledge or information sufficient to form a belief as to the truth of the
allegations since respondents were not privy to the transactions” was just a pretense.
Mrs. Marcos’ privity to the transactions was in fact evident from her signatures on
some of the vital documents attached to the petition for forfeiture which Mrs. Marcos
41

failed to specifically deny as required by the rules. 42

It is worthy to note that the pertinent documents attached to the petition for
forfeiture were even signed personally by respondent Mrs. Marcos and her late
husband, Ferdinand E. Marcos, indicating that said documents were within their
knowledge. As correctly pointed out by Sandiganbayan Justice Francisco Villaruz, Jr.
in his dissenting opinion:

_______________

40 22 SCRA 48 [1968].
41 XANDY-WINTROP-AVERTINA FOUNDATION: (a) Contract for opening of deposit dated March 21,
1968; (b) Handwritten instruction; (c) Letter dated March 3, 1970; (d) Handwritten regulation of Xandy
dated February 13, 1970; (e) Letter of instruction dated March 10, 1981; (f) Letter of Instructions dated
March 10, 1991.
TRINIDAD-RAYBY-PALMY FOUNDATION: (a) Management agreement dated August 28, 1990; (b)
Letter of instruction dated August 26, 1970 to Markers Geel of Furich; (c) Approval of Statutes and By-laws
of Trinidad Foundation dated August 26, 1990; (d) Regulations of the Trinidad Foundation dated August
28, 1970; (e) Regulations of the Trinidad Foundation prepared by Markers Geel dated August 28, 1970; (f)
Letter of Instructions to the Board of Rayby Foundation dated March 10, 1981; (g) Letter of Instructions to
the Board of Trinidad Foundation dated March 10, 1981.
MALER ESTABLISHMENT FOUNDATION: (a) Rules and Regulations of Maler dated October 15,
1968; (b) Letter of Authorization dated October 19, 1968 to Barbey d Suncir; (c) Letter of Instruction to
Muler to Swiss Bank dated October 19, 1968.
42 “Where an action or defense is founded upon a written instrument, copied in or attached to the

corresponding pleading x x x, 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 x x x.”
240
240 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan
The pattern of: 1) creating foundations, 2) use of pseudonyms and dummies, 3) approving
regulations of the Foundations for the distribution of capital and income of the Foundations
to the First and Second beneficiary (who are no other than FM and his family), 4) opening of
bank accounts for the Foundations, 5) changing the names of the Foundations, 6) transferring
funds and assets of the Foundations to other Foundations or Fides Trust, 7) liquidation of
the Foundations as substantiated by the Annexes “U” to “U-168”, Petition [for forfeiture]
strongly indicate that FM and/or Imelda were the real owners of the assets deposited in the
Swiss banks, using the Foundations as dummies. 43

How could respondents therefore claim lack of sufficient knowledge or information


regarding the existence of the Swiss bank deposits and the creation of five groups of
accounts when Mrs. Marcos and her late husband personally masterminded and
participated in the formation and control of said foundations? This is a fact
respondent Marcoses were never able to explain.
Not only that. Respondents’ answer also technically admitted the genuineness and
due execution of the Income Tax Returns (ITRs) and the balance sheets of the late
Ferdinand E. Marcos and Imelda R. Marcos attached to the petition for forfeiture, as
well as the veracity of the contents thereof.
The answer again premised its denials of said ITRs and balance sheets on the
ground of lack of knowledge or information sufficient to form a belief as to the truth
of the contents thereof. Petitioner correctly points out that respondents’ denial was
not really grounded on lack of knowledge or information sufficient to form a belief but
was based on lack of recollection. By reviewing their own records, respondent
Marcoses could have easily determined the genuineness and due execution of the
ITRs and the balance sheets. They also had the means and opportunity of verifying
the same from the records of the BIR and the Office of the President. They did not.
When matters regarding which respondents claim to have no knowledge or
information sufficient to form a belief are plainly and necessarily within their
knowledge, their alleged ignorance or lack of information will not be considered a
specific denial. An unexplained denial of information within the control of the
44

pleader, or is

_______________

Annex “A-F”, Volume I, Rollo, pp. 193-194.


43

Ice Plant Equipment vs. Martocello, D.C.P., 1941, 43 F. Supp. 281.


44

241
VOL. 406, JULY 15, 2003 241
Republic vs. Sandiganbayan
readily accessible to him, is evasive and is insufficient to constitute an effective
denial. 45

The form of denial adopted by respondents must be availed of with sincerity and
in good faith, and certainly not for the purpose of confusing the adverse party as to
what allegations of the petition are really being challenged; nor should it be made for
the purpose of delay. In the instant case, the Marcoses did not only present
46

unsubstantiated assertions but in truth attempted to mislead and deceive this Court
by presenting an obviously contrived defense.
Simply put, a profession of ignorance about a fact which is patently and necessarily
within the pleader’s knowledge or means of knowing is as ineffective as no denial at
all. Respondents’ ineffective denial thus failed to properly tender an issue and the
47

averments contained in the petition for forfeiture were deemed judicially admitted by
them.
As held in J.P. Juan &Sons, Inc. vs. Lianga Industries, Inc.:
Its “specific denial” of the material allegation of the petition without setting forth the
substance of the matters relied upon to support its general denial, when such matters were
plainly within its knowledge and it could not logically pretend ignorance as to the same,
therefore, failed to properly tender on issue. 48

Thus, the general denial of the Marcos children of the allegations in the petition for
forfeiture “for lack of knowledge or information sufficient to form a belief as to the
truth of the allegations since they were not privy to the transactions” cannot
rightfully be accepted as a defense because they are the legal heirs and succes-sors-
in-interest of Ferdinand E. Marcos and are therefore bound by the acts of their
father vis-a-vis the Swiss funds.

PRE-TRIAL BRIEF DATED OCTOBER 18, 1993

The pre-trial brief of Mrs. Marcos was adopted by the three Marcos children. In said
brief, Mrs. Marcos stressed that the funds

_______________

45 Phil. Advertising Counselors, Inc. vs. Revilla, L-31869, Aug. 8, 1973.


46 Warner Barnes & Co., Ltd. vs. Reyes, et al., 55 O.G. 3109-3111.
47 Philippine Bank of Communications vs. Court of Appeals, 195 SCRA 567 [1991].

48 28 SCRA 807, 812 [1969].

242
242 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan
involved were lawfully acquired. But, as in their answer, they failed to state and
substantiate how these funds were acquired lawfully. They failed to present and
attach even a single document that would show and prove the truth of their
allegations. Section 6, Rule 18 of the 1997 Rules of Civil Procedure provides:
The parties shall file with the court and serve on the adverse party, x x x their respective pre-
trial briefs which shall contain, among others:
xxx
(d)the documents or exhibits to be presented, stating the purpose thereof;
xxx
(f) the number and names of the witnesses, and the substance of their respective
testimonies. 49

It is unquestionably within the court’s power to require the parties to submit their
pre-trial briefs and to state the number of witnesses intended to be called to the stand,
and a brief summary of the evidence each of them is expected to give as well as to
disclose the number of documents to be submitted with a description of the nature of
each. The tenor and character of the testimony of the witnesses and of the documents
to be deduced at the trial thus made known, in addition to the particular issues of
fact and law, it becomes apparent if genuine issues are being put forward
necessitating the holding of a trial. Likewise, the parties are obliged not only to make
a formal identification and specification of the issues and their proofs, and to put
these matters in writing and submit them to the court within the specified period for
the prompt disposition of the action. 50

The pre-trial brief of Mrs. Marcos, as subsequently adopted by respondent Marcos


children, merely stated:

_______________

49 Rule 20 of the old Rules of Court was amended but the change(s) had no adverse effects on the rights

of private respondents.
50 Development Bank of the Phils. vs. Court of Appeals, G.R. No. L-49410, 169 SCRA 409 [1989].

243
VOL. 406, JULY 15, 2003 243
Republic vs. Sandiganbayan
xxx

WITNESSES

4.1 Respondent Imelda will present herself as a witness and reserves the right to present
additional witnesses as may be necessary in the course of the trial.
xxx

DOCUMENTARY EVIDENCE

5.1 Respondent Imelda reserves the right to present and introduce in evidence documents
as may be necessary in the course of the trial.
Mrs. Marcos did not enumerate and describe the documents constituting her
evidence. Neither the names of witnesses nor the nature of their testimony was
stated. What alone appeared certain was the testimony of Mrs. Marcos only who in
fact had previously claimed ignorance and lack of knowledge. And even then, the
substance of her testimony, as required by the rules, was not made known, either.
Such cunning tactics of respondents are totally unacceptable to this Court. We hold
that, since no genuine issue was raised, the case became ripe for summary judgment.
OPPOSITION TO MOTION FOR SUMMARY JUDGMENT DATED MARCH 21,
2000
The opposition filed by Mrs. Marcos to the motion for summary judgment dated
March 21, 2000 of petitioner Republic was merely adopted by the Marcos children as
their own opposition to the said motion. However, it was again not accompanied by
affidavits, depositions or admissions as required by Section 3, Rule 35 of the 1997
Rules on Civil Procedure:
x x x The adverse party may serve opposing affidavits, depositions, or admissions at least
three (3) days before hearing. After hearing, the judgment sought shall be rendered forthwith
if the pleadings, supporting affidavits, depositions, and admissions on file, show that, except
as to the amount of damages, there is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of law. 51

_______________

Substantially the same as Section 3, Rule 34 of the old Rules of Court.


51

244
244 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan
The absence of opposing affidavits, depositions and admissions to contradict the
sworn declarations in the Republic’s motion only demonstrated that the averments of
such opposition were not genuineand therefore unworthy of belief.
DEMURRER TO EVIDENCE DATED MAY 2, 2000; MOTIONS FOR 52

RECONSIDERATION; AND MEMORANDA OF MRS. MARCOS AND THE


53

MARCOS CHILDREN 54

All these pleadings again contained no allegations of facts showing their lawful
acquisition of the funds. Once more, respondents merely made general denials
without alleging facts which would have been admissible in evidence at the hearing,
thereby failing to raise genuine issues of fact.
Mrs. Marcos insists in her memorandum dated October 21, 2002 that, during the
pre-trial, her counsel stated that his client was just a beneficiary of the funds,
contrary to petitioner Republic’s allegation that Mrs. Marcos disclaimed ownership
of or interest in the funds.
This is yet another indication that respondents presented a fictitious defense
because, during the pre-trial, Mrs. Marcos and the Marcos children deniedownership
of or interest in the Swiss funds:
PJ Garchitorena:
Make of record that as far as Imelda Marcos is concerned
through the statement of Atty. Armando M. Marcelo that
the US$360 million more orless subject matter of the
instant laws uit as allegedly obtained from the various
Swiss Foundations do not belong to the estate of Marcos
or to Imelda Marcos herself. That’s your statement of
facts?
Atty. MARCELO:
Yes, Your Honor.
_______________

52 Adopted by the Marcos children.


53 Dated September 26, 2000 as filed by Mrs. Marcos; dated October 5, 2000 as jointly filed by Mrs.
Manotoc and Ferdinand, Jr.; supplemental motion for reconsideration dated October 9, 2000 jointly filed by
Mrs. Manotoc and Ferdinand, Jr.
54 Dated December 12, 2000 and December 17, 2000 as filed by the Marcos children.

245
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JULY 15,
2003
Republic vs. Sandiganbayan
PJ Garchitorena:
That’s it. Okay. Counsel for Manotoc and
Manotoc, Jr. What is your point here? Does the
estate of Marcos own anything of the $360
million subject of this case.
Atty. TECSON:
We joined the Manifestation of Counsel.
PJ Garchitorena:
You do not own anything?
Atty. TECSON:
Yes, Your Honor.
PJ Garchitorena:
Counsel for Irene Araneta?
Atty. SISON:
I join the position taken by my other compañeros
here, Your Honor.
xxx
Atty. SISON:
Irene Araneta as heir do (sic) not own any of the
amount, Your Honor. 55

We are convinced that the strategy of respondent Marcoses was to confuse petitioner
Republic as to what facts they would prove or what issues they intended to pose for
the court’s resolution. There is no doubt in our mind that they were leading petitioner
Republic, and now this Court, to perplexity, if not trying to drag this forfeiture case
to eternity.
MANIFESTATION DATED MAY 26, 1998 FILED BY MRS. MARCOS;
GENERAL/SUPPLEMENTAL COMPROMISE AGREEMENT DATED DECEMBER
28, 1993
These pleadings of respondent Marcoses presented nothing but feigned defenses. In
their earlier pleadings, respondents alleged either that they had no knowledge of the
existence of the Swiss deposits or that they could no longer remember anything as it
happened a long time ago. As to Mrs. Marcos, she remembered that it was lawfully
acquired.
In her Manifestation dated May 26, 1998, Mrs. Marcos stated that:

_______________

TSN, pp. 47-48, October 28, 1999.


55

246
246 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan
COMES NOW undersigned counsel for respondent Imelda R. Marcos, and before this
Honorable Court, most respectfully manifests:
That respondent Imelda R. Marcos owns 90% of the subject matter of the above-entitled
case, being the sole beneficiary of the dollar deposits in the name of the various foundations
alleged in the case;
That in fact only 10% of the subject matter in the above-entitled case belongs to the estate
of the late President Ferdinand E. Marcos.
In the Compromise/Supplemental Agreements, respondent Marcoses sought to
implement the agreed distribution of the Marcos assets, including the Swiss
deposits. This was, to us, an unequivocal admission of ownership by the Marcoses of
the said deposits.
But, as already pointed out, during the pre-trial conference, respondent Marcoses
denied knowledge as well as ownership of the Swiss funds.
Anyway we look at it, respondent Marcoses have put forth no real defense. The
“facts” pleaded by respondents, while ostensibly raising important questions or issues
of fact, in reality comprised mere verbiage that was evidently wanting in substance
and constituted no genuine issues for trial.
We therefore rule that, under the circumstances, summary judgment is proper.
In fact, it is the law itself which determines when summary judgment is called for.
Under the rules, summary judgment is appropriate when there are no genuine issues
of fact requiring the presentation of evidence in a full-blown trial. Even if on their
face the pleadings appear to raise issue, if the affidavits, depositions and admissions
show that such issues are not genuine, then summary judgment as prescribed by the
rules must ensue as a matter of law. 56

In sum, mere denials, if unaccompanied by any fact which will be admissible in


evidence at a hearing, are not sufficient to raise genuine issues of fact and will not
defeat a motion for summary judgment. A summary judgment is one granted upon
57

motion of a party for an expeditious settlement of the case, it appearing from the
pleadings, depositions, admissions and affidavits that there are
_______________

56Evadel Realty and Development Corp. vs. Spouses Antera and Virgilio Soriano, April 20, 2001, 357
SCRA 395.
57 Plantadosi vs. Loew’s, Inc., 7 Fed. Rules Service, 786, June 2, 1943.

247
VOL. 406, JULY 15, 2003 247
Republic vs. Sandiganbayan
no important questions or issues of fact posed and, therefore, the movant is entitled
to a judgment as a matter of law. A motion for summary judgment is premised on the
assumption that the issues presented need not be tried either because these are
patently devoid of substance or that there is no genuine issue as to any pertinent fact.
It is a method sanctioned by the Rules of Court for the prompt disposition of a civil
action where there exists no serious controversy. Summary judgment is a procedural
58

device for the prompt disposition of actions in which the pleadings raise only a legal
issue, not a genuine issue as to any material fact. The theory of summary judgment
is that, although an answer may on its face appear to tender issues requiring trial, if
it is established by affidavits, depositions or admissions that those issues are not
genuine but fictitious, the Court is justified in dispensing with the trial and rendering
summary judgment for petitioner. 59

In the various annexes to the petition for forfeiture, petitioner Republic attached
sworn statements of witnesses who had personal knowledge of the Marcoses’
participation in the illegal acquisition of funds deposited in the Swiss accounts under
the names of five groups or foundations. These sworn statements substantiated the
ill-gotten nature of the Swiss bank deposits. In their answer and other subsequent
pleadings, however, the Marcoses merely made general denials of the allegations
against them without stating facts admissible in evidence at the hearing, thereby
failing to raise any genuine issues of fact.
Under these circumstances, a trial would have served no purpose at all and would
have been totally unnecessary, thus justifying a summary judgment on the petition
for forfeiture. There were no opposing affidavits to contradict the sworn declarations
of the witnesses of petitioner Republic, leading to the inescapable conclusion that the
matters raised in the Marcoses’ answer were false.
Time and again, this Court has encountered cases like this which are either only
half-heartedly defended or, if the semblance of a defense is interposed at all, it is only
to delay disposition and gain time. It is certainly not in the interest of justice to allow
respondent Marcoses to avail of the appellate remedies accorded by

_______________

Rabaca vs. Velez, 341 SCRA 543 [2000].


58

Carcon Development Corp. vs. Court of Appeals, 180 SCRA 348 [1989].
59

248
248 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan
the Rules of Court to litigants in good faith, to the prejudice of the Republic and
ultimately of the Filipino people. From the beginning, a candid demonstration of
respondents’ good faith should have been made to the court below. Without the
deceptive reasoning and argumentation, this protracted litigation could have ended
a long time ago.
Since 1991, when the petition for forfeiture was first filed, up to the present, all
respondents have offered are foxy responses like “lack of sufficient knowledge or lack
of privity” or “they cannot recall because it happened a long time ago” or, as to Mrs.
Marcos, “the funds were lawfully acquired.” But, whenever it suits them, they also
claim ownership of 90% of the funds and allege that only 10% belongs to the Marcos
estate. It has been an incredible charade from beginning to end.
In the hope of convincing this Court to rule otherwise, respondents Maria Imelda
Marcos-Manotoc and Ferdinand R. Marcos Jr. contend that “by its positive acts and
express admissions prior to filing the motion for summary judgment on March 10,
2000, petitioner Republic had bound itself to go to trial on the basis of existing issues.
Thus, it had legally waived whatever right it had to move for summary judgment.” 60

We do not think so. The alleged positive acts and express admissions of the
petitioner did not preclude it from filing a motion for summary judgment.
Rule 35 of the 1997 Rules of Civil Procedure provides:

Rule 35
Summary Judgment

Section 1. Summary judgment for claimant.—A party seeking to recover upon a claim,
counterclaim, or cross-claim or to obtain a declaratory relief may, at any time after the
pleading in answer thereto has been served, move with supporting affidavits, depositions or
admissions for a summary judgment in his favor upon all or any part thereof.
Section 2. Summary judgment for defending party.—A party against whom a claim,
counterclaim, or cross-claim is asserted or a declaratory relief is sought may, at any
time, move with supporting affida-

_______________

60 Rollo, pp. 2659-70.


249
VOL. 406, JULY 15, 2003 249
Republic vs. Sandiganbayan
vits, depositions or admissions for a summary judgment in his favor as to all or any part
thereof. (Emphasis ours) 61

Under the rule, the plaintiff can move for summary judgment “at any time after the
pleading in answer thereto (i.e., in answer to the claim, counterclaim or cross-claim)
has been served.” No fixed reglementary period is provided by the Rules. How else
does one construe the phrase “any time after the answer has been served?”
This issue is actually one of first impression. No local jurisprudence or
authoritative work has touched upon this matter. This being so, an examination of
foreign laws and jurisprudence, particularly those of the United States where many
of our laws and rules were copied, is in order.
Rule 56 of the Federal Rules of Civil Procedure provides that a party seeking to
recover upon a claim, counterclaim or cross-claim may move for summary judgment
at any time after the expiration of 20-days from the commencement of the action or
after service of a motion for summary judgment by the adverse party, and that a party
against whom a claim, counterclaim or cross-claim is asserted may move for summary
judgment at any time.
However, some rules, particularly Rule 113 of the Rules of Civil Practice of New
York, specifically provide that a motion for summary judgment may not be made until
issues have been joined, that is, only after an answer has been served. Under said 62

rule, after issues have been joined, the motion for summary judgment

_______________

61 Substantially the same as Sections 1 and 2, Rule 34 of the old Rules of Court.
62 Rule 113. Summary Judgment.—When an answer is served in an action to recover a debt or a
liquidated demand arising,
1. on a contract, express or implied, sealed or not scaled; or
2. on a judgment for a stated sum; the answer may be struck out and judgment entered thereon on
motion, and the affidavit of the plaintiff or of any other person having knowledge of the facts, verifying the
cause of action and stating the amount claimed, and his belief that there is no defense to the action; unless
the defendant by affidavit or other proof, shall show such facts as may be deemed, by the judge hearing the
motion, sufficient to entitle him to defend. (emphasis ours)
250
250 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan
may be made at any stage of the litigation. No fixed prescriptive period is provided.
63

Like Rule 113 of the Rules of Civil Practice of New York, our rules also provide
that a motion for summary judgment may not be made until issues have been joined,
meaning, the plaintiff has to wait for the answer before he can move for summary
judgment. And like the New York rules, ours do not provide for a fixed reglementary
64

period within which to move for summary judgment.


This being so, the New York Supreme Court’s interpretation of Rule 113 of the
Rules of Civil Practice can be applied by analogy to the interpretation of Section 1,
Rule 35, of our 1997 Rules of Civil Procedure.
Under the New York rule, after the issues have been joined, the motion for
summary judgment may be made at any stage of the litigation. And what exactly does
the phrase “at any stage of the litigation” mean? In Ecker vs. Muzysh, the New York 65

Supreme Court ruled:

“PER CURIAM.

Plaintiff introduced her evidence and the defendants rested on the case made by the plaintiff.
The case was submitted. Owing to the serious illness of the trial justice, a decision was not
rendered within sixty days after the final adjournment of the term at which the case was
tried. With the approval of the trial justice, the plaintiff moved for a new trial under Section
442 of the Civil Practice Act. The plaintiff also moved for summary judgment under Rule 113
of the Rules of Civil Practice. The motion was opposed mainly on the ground that, by
proceeding to trial, the plaintiff had waived her right to summary judgment and that the
answer and the opposing affidavits raised triable issues. The amount due and unpaid under
the contract is not in dispute. The Special Term granted both motions and the defendants
have appealed.
The Special Term properly held that the answer and the opposing affidavits raised no
triable issue. Rule 113 of the Rules of Civil Practice and the Civil Practice Act prescribe no
limitation as to the time when a motion for summary judgment must be made. The object of
Rule 113 is to empower the court to summarily determine whether or not a bona fide issue
exists

_______________

63 73 Am Jur 2d 733, §12; C.J.S. 412, §224.


64 Moran, COMMENTS ON THE RULES OF COURT, Vol. II, (1996), pp. 183-184.
65 19 NYS2d 250 (1940).

251
VOL. 406, JULY 15, 2003 251
Republic vs. Sandiganbayan
between the parties, and there is no limitation on the power of the court to make such a
determination at any stage of the litigation.” (emphasis ours)
On the basis of the aforequoted disquisition, “any stage of the litigation” means that
“even if the plaintiff has proceeded to trial, this does not preclude him from thereafter
moving for summary judgment.” 66

In the case at bar, petitioner moved for summary judgment after pre-trial and
before its scheduled date for presentation of evidence. Respondent Marcoses argue
that, by agreeing to proceed to trial during the pre-trial conference, petitioner
“waived” its right to summary judgment.
This argument must fail in the light of the New York Supreme Court ruling which
we apply by analogy to this case. In Ecker, the defendant opposed the motion for
67

summary judgment on a ground similar to that raised by the Marcoses, that is, “that
plaintiff had waived her right to summary judgment” by her act of proceeding to trial.
If, as correctly ruled by the New York court, plaintiff was allowed to move for
summary judgment even after trial and submission of the case for resolution, more
so should we permit it in the present case where petitioner moved for summary
judgment before trial.
Therefore, the phrase “anytime after the pleading in answer thereto has been
served” in Section 1, Rule 35 of our Rules of Civil Procedure means “at any stage of
the litigation.” Whenever it becomes evident at any stage of the litigation that no
triable issue exists, or that the defenses raised by the defendant(s) are sham or
frivolous, plaintiff may move for summary judgment. A contrary interpretation would
go against the very objective of the Rule on Summary Judgment which is to “weed
out sham claims or defenses thereby avoiding the expense and loss of time involved
in a trial.”68

In cases with political undertones like the one at bar, adverse parties will often do
almost anything to delay the proceedings in the hope that a future administration
sympathetic to them might
_______________
66 Am Jur 2d 733, §12; 49 C.J.S. 412, § 224.
67 Supra.
68 Gregorio Estrada vs. Hon. Francisco Consolacion, 71 SCRA 523 [1976].

252
252 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan
be able to influence the outcome of the case in their favor. This is rank injustice we
cannot tolerate.
The law looks with disfavor on long, protracted and expensive litigation and
encourages the speedy and prompt disposition of cases. That is why the law and the
rules provide for a number of devices to ensure the speedy disposition of cases.
Summary judgment is one of them.
Faithful therefore to the spirit of the law on summary judgment which seeks to
avoid unnecessary expense and loss of time in a trial, we hereby rule that petitioner
Republic could validly move for summary judgment any time after the respondents’
answer was filed or, for that matter, at any subsequent stage of the litigation. The
fact that petitioner agreed to proceed to trial did not in any way prevent it from
moving for summary judgment, as indeed no genuine issue of fact was ever validly
raised by respondent Marcoses.
This interpretation conforms with the guiding principle enshrined in Section 6,
Rule 1 of the 1997 Rules of Civil Procedure that the “[r]ules should be liberally
construed in order to promote their objective of securing a just, speedy and
inexpensive disposition of every action and proceeding.” 69

Respondents further allege that the motion for summary judgment was based on
respondents’ answer and other documents that had long been in the records of the
case. Thus, by the time the motion was filed on March 10, 2000, estoppel by laches
had already set in against petitioner.
We disagree. Estoppel by laches is the failure or neglect for an unreasonable or
unexplained length of time to do that which, by exercising due diligence, could or
should have been done earlier, warranting a presumption that the person has
abandoned his right or declined to assert it. In effect, therefore, the principle of
70

laches is one of estoppel because “it prevents people who have slept on their lights
from prejudicing the rights of third parties who have placed reliance on the inaction
of the original parties and their successors-in-interest.” 71

_______________

69 Substantially the same as Section 2, Rule 1 of the old Rules of Court.


70 Madeja vs. Patcho, 123 SCRA 540 [1983].
71 Mejia de Lucas vs. Gamponia, 100 Phil. 277 [1956].

253
VOL. 406, JULY 15, 2003 253
Republic vs. Sandiganbayan
A careful examination of the records, however, reveals that petitioner was in fact
never remiss in pursuing its case against respondent Marcoses through every remedy
available to it, including the motion for summary judgment.
Petitioner Republic initially filed its motion for summary judgment on October 18,
1996. The motion was denied because of the pending compromise agreement between
the Marcoses and petitioner. But during the pre-trial conference, the Marcoses denied
ownership of the Swiss funds, prompting petitioner to file another motion for
summary judgment now under consideration by this Court. It was the subsequent
events that transpired after the answer was filed, therefore, which prevented
petitioner from filing the questioned motion. It was definitely not because of neglect
or inaction that petitioner filed the (second) motion for summary judgment years after
respondents’ answer to the petition for forfeiture.
In invoking the doctrine of estoppel by laches, respondents must show not only
unjustified inaction but also that some unfair injury to them might result unless the
action is barred. 72

This, respondents failed to bear out. In fact, during the pre-trial conference, the
Marcoses disclaimed ownership of the Swiss deposits. Not being the owners, as they
claimed, respondents did not have any vested right or interest which could be
adversely affected by petitioner’s alleged inaction.
But even assuming for the sake of argument that laches had already set in, the
doctrine of estoppel or laches does not apply when the government sues as a sovereign
or asserts governmental rights. Nor can estoppel validate an act that contravenes
73

law or public policy. 74

As a final point, it must be emphasized that laches is not a mere question of time
but is principally a question of the inequity or unfairness of permitting a right or
claim to be enforced or as-

_______________

72 Diaz vs. Gorricho, 103 Phil. 261 [1958].


73 Collado vs. Court of Appeals, G.R. No. 107764, October 4, 2002, 390 SCRA 343; Section 15, Article XI
of the 1987 Constitution.
74 Go Tian An vs. Republic of the Philippines, 124 Phil. 472; 17 SCRA 1053 [1966].

254
254 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan
serted. Equity demands that petitioner Republic should not be barred from pursuing
75

the people’s case against the Marcoses.


(2) The Propriety of Forfeiture
The matter of summary judgment having been thus settled, the issue of whether or
not petitioner Republic was able to prove its case for forfeiture in accordance with the
requisites of Sections 2 and 3 of RA 1379 now takes center stage.
The law raises the prima facie presumption that a property is unlawfully acquired,
hence subject to forfeiture, if its amount or value is manifestly disproportionate to
the official salary and other lawful income of the public officer who owns it. Hence,
Sections 2 and 6 of RA 1379 provide:
76

xxx xxx
Section 2. Filing of petition.—Whenever any public officer or employee has acquired
during his incumbency an amount or property which is manifestly out of proportion to his
salary as such public officer or employee and to his other lawful income and the income from
legitimately acquired property, said property shall be presumed prima facie to have been
unlawfully acquired.
xxx xxx
Sec. 6. Judgment.—If the respondent is unable to show to the satisfaction of the court that
he has lawfully acquired the property in question, then the court shall declare such property
in question, forfeited in favor of the State, and by virtue of such judgment the property
aforesaid shall become the property of the State. Provided, That no judgment shall be
rendered within six months before any general election or within three months before any
special election. The Court may, in addition, refer this case to the corresponding Executive
Department for administrative or criminal action, or both.
From the above-quoted provisions of the law, the following facts must be established
in order that forfeiture or seizure of the Swiss deposits may be effected:

_______________

75Tijam vs. Sibonghanoy, 23 SCRA 29 [1968).


76“An Act Declaring Forfeiture in Favor of the State any Property Found to Have Been Unlawfully
Acquired by Any Public Officer or Employee and Providing for the Proceedings Therefor,” approved on June
18, 1955.
255
VOL. 406, JULY 15, 2003 255
Republic vs. Sandiganbayan

1. (1)ownership by the public officer of money or property acquired during his


incumbency, whether it be in his name or otherwise, and
2. (2)the extent to which the amount of that money or property exceeds, i.e., is grossly
disproportionate to, the legitimate income of the public officer.

That spouses Ferdinand and Imelda Marcos were public officials during the time
material to the instant case was never in dispute. Paragraph 4 of respondent
Marcoses’ answer categorically admitted the allegations in paragraph 4 of the
petition for forfeiture as to the personal circumstances of Ferdinand E. Marcos as a
public official who served without interruption as Congressman, Senator, Senate
President and President of the Republic of the Philippines from December 1, 1965 to
February 25, 1986. Likewise, respondents admitted in their answer the contents of
77

paragraph 5 of the petition as to the personal circumstances of Imelda R. Marcos who


once served as a member of the Interim Batasang Pambansa from 1978 to 1984 and
as Metro Manila Governor, concurrently Minister of Human Settlements, from June
1976 to February 1986. 78

Respondent Mrs. Marcos also admitted in paragraph 10 of her answer the


allegations of paragraph 11 of the petition for forfeiture which referred to the
accumulated salaries of respondents Ferdinand E. Marcos and Imelda R.
Marcos. The combined accumulated salaries of the Marcos couple were reflected in
79

the Certification dated May 27, 1986 issued by then Minister of Budget and
Management Alberto Romulo. The Certification showed that, from 1966 to 1985,
80
Ferdinand E. Marcos and Imelda R. Marcos had accumulated salaries in the amount
of P1,570,000 and P718,750, respectively, or a total of P2,288,750:
FERDINAND E. MARCOS, AS PRESIDENT
1966-1976 at P60,000/year P660,000
1977-1984 at P100,000/year 800,000
1985 at P110,000/year 110,000
P1,570,00
_______________

77 Petition, Annex “D”, Volume II, p. 1081.


78 Ibid.
79 Id.,p. 1062.

80 Exhibit “S.”

256
256 SUPREME COURT REPORTS
ANNOTATED
Republic vs. Sandiganbayan
IMELDA R. MARCOS, AS MINISTER
June 1976-1985 at P718,000
P75,000/year
In addition to their accumulated salaries from 1966 to 1985 are the Marcos couple’s
combined salaries from January to February 1986 in the amount of P30,833.33.
Hence, their total accumulated salaries amounted to P2,319,583.33. Converted to
U.S. dollars on the basis of the corresponding peso-dollar exchange rates prevailing
during the applicable period when said salaries were received, the total amount had
an equivalent value of $304,372.43.
The dollar equivalent was arrived at by using the official annual rates of exchange
of the Philippine peso and the US dollar from 1965 to 1985 as well as the official
monthly rates of exchange in January and February 1986 issued by the Center for
Statistical Information of the Bangko Sentral ng Pilipinas.
Prescinding from the aforesaid admissions, Section 4, Rule 129 of the Rules of
Court provides that:
Section 4. Judicial admissions.—An admission, verbal or written, made by a party in the
course of the proceedings in the same case does not require proof. The admission may be
contradicted only by showing that it was made through palpable mistake or that no such
admission was made. 81

It is settled that judicial admissions may be made: (a) in the pleadings filed by the
parties; (b) in the course of the trial either by verbal or written manifestations or
stipulations; or (c) in other stages of judicial proceedings, as in the pre-trial of the
case. Thus, facts pleaded in the petition and answer, as in the case at bar, are
82

deemed admissions of petitioner and respondents, respectively, who are not


permitted to contradict them or subsequently take a position contrary to or
inconsistent with such admissions. 83

The sum of $304,372.43 should be held as the only known lawful income of
respondent’s since they did not file any Statement of Assets and Liabilities (SAL), as
required by law, from which their net worth could be determined. Besides, under the
1935 Constitu-

_______________

81 Substantially the same as Section 2, Rule 129 of the old Rules of Court.
82 Regalado, Remedial Law Compendium, Vol. II, 1997 ed., p. 650.
83 Moran, Comments on the Rules of Court, Volume V, 1980 ed., p. 64.

257
VOL. 406, JULY 15, 2003 257
Republic vs. Sandiganbayan
tion, Ferdinand E. Marcos as President could not receive “any other emolument from
the Government or any of its subdivisions and instrumentalities.” Likewise, under84

the 1973 Constitution, Ferdinand E. Marcos as President could “not receive during
his tenure any other emolument from the Government or any other source.” In fact, 85

his management of businesses, like the administration of foundations to accumulate


funds, was expressly prohibited under the 1973 Constitution:
Article VII, Sec. 4(2)—The President and the Vice-President shall not, during their tenure,
hold any other office except when otherwise provided in this Constitution, nor may they
practice any profession, participate directly or indirectly in the management of any business,
or be financially interested directly or indirectly in any contract with, or in any franchise or
special privilege granted by the Government or any other subdivision, agency, or
instrumentality thereof, including any government owned or controlled corporation.
Article VII, Sec. 11—No Member of the National Assembly shall appear as counsel before
any court inferior to a court with appellate jurisdiction, x x x. Neither shall he, directly or
indirectly, be interested financially in any contract with, or in any franchise or special
privilege granted by the Government, or any subdivision, agency, or instrumentality thereof
including any government owned or controlled corporation during his term of office. He shall
not intervene in any matter before any office of the government for his pecuniary benefit.
Article IX, Sec. 7—The Prime Minister and Members of the Cabinet shall be subject to the
provision of Section 11, Article VIII hereof and may not appear as counsel before any court
or administrative body, or manage any business, or practice any profession, and shall also be
subject to such other disqualification as may be provided by law.
Their only known lawful income of $304,372.43 can therefore legally and fairly serve
as basis for determining the existence of a prima facie case of forfeiture of the Swiss
funds.
Respondents argue that petitioner was not able to establish a prima facie case for
the forfeiture of the Swiss funds since it failed to prove the essential elements under
Section 3, paragraphs (c), (d) and (e) of RA 1379. As the Act is a penal statute, its
provisions are

_______________

Section 9, Article VII.


84

Section 4(1), Article VII.


85

258
258 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan
mandatory and should thus be construed strictly against the petitioner and liberally
in favor of respondent Marcoses.
We hold that it was not for petitioner to establish the Marcoses’ other lawful
income or income from legitimately acquired property for the presumption to apply
because, as between petitioner and respondents, the latter were in a better position
to know if there were such other sources of lawful income. And if indeed there was
such other lawful income, respondents should have specifically stated the same in
their answer. Insofar as petitioner Republic was concerned, it was enough to specify
the known lawful income of respondents.
Section 9 of the PCGG Rules and Regulations provides that, in determining prima
facie evidence of ill-gotten wealth, the value of the accumulated assets, properties and
other material possessions of those covered by Executive Order Nos. 1 and 2 must be
put of proportion to the known lawful income of such persons. The respondent Marcos
couple did not file any Statement of Assets and Liabilities (SAL) from which their net
worth could be determined. Their failure to file their SAL was in itself a violation of
law and to allow them to successfully assail the Republic for not presenting their SAL
would reward them for their violation of the law.
Further, contrary to the claim of respondents, the admissions made by them in
their various pleadings and documents were valid. It is of record that respondents
judicially admitted that the money deposited with the Swiss banks belonged to them.
We agree with petitioner that respondent Marcoses made judicial admissions of
their ownership of the subject Swiss bank deposits in their answer, the
General/Supplemental Agreements, Mrs. Marcos’ Manifestation and Constancia
dated May 5, 1999, and the Undertaking dated February 10, 1999. We take note of
the fact that the Associate Justices of the Sandiganbayan were unanimous in holding
that respondents had made judicial admissions of their ownership of the Swiss funds.
In their answer, aside from admitting the existence of the subject funds,
respondents likewise admitted ownership thereof. Paragraph 22 of respondents’
answer stated:
22. Respondents specifically DENY PARAGRAPH 23 insofar as it alleges that respondents
clandestinely stashed the country’s wealth in Switzerland and hid the same under layers and
layers of foundations and
259
VOL. 406, JULY 15, 2003 259
Republic vs. Sandiganbayan
corporate entities for being false, the truth being that respondents’ aforesaid properties were
lawfully acquired. (emphasis supplied)
By qualifying their acquisition of the Swiss bank deposits as lawful, respondents
unwittingly admitted their ownership thereof.
Respondent Mrs. Marcos also admitted ownership of the Swiss bank deposits by
failing to deny under oath the genuineness and due execution of certain actionable
documents bearing her signature attached to the petition. As discussed earlier,
Section 11, Rule 8 of the 1997 Rules of Civil Procedure provides that material
86

averments in the complaint shall be deemed admitted when not specifically denied.
The General and Supplemental Agreements executed by petitioner and
87 88

respondents on December 28, 1993 further bolstered the claim of petitioner Republic
that its case for forfeiture was proven in accordance with the requisites of Sections 2
and 3 of RA 1379. The whereas clause in the General Agreement declared that:
WHEREAS, the FIRST PARTY has obtained a judgment from the Swiss Federal Tribunal on
December 21, 1990, that the $356 million belongs in principle to the Republic of the
Philippines provided certain conditionalities are met, but even after 7 years, the FIRST
PARTY has not been able to procure a final judgment of conviction against the PRIVATE
PARTY.
While the Supplemental Agreement warranted, inter alia, that:
In consideration of the foregoing, the parties hereby agree that the PRIVATE PARTY shall
be entitled to the equivalent of 25% of the amount that may be eventually withdrawn from
said $356 million Swiss deposits.
The stipulations set forth in the General and Supplemental Agreements undeniably
indicated the manifest intent of respondents to enter into a compromise with
petitioner. Corollarily, respondents’ willingness to agree to an amicable settlement
with the Republic only affirmed their ownership of the Swiss deposits for the simple
reason that no person would acquiesce to any concession over such huge dollar
deposits if he did not in fact own them.

_______________

86 Substantially the same as Section 1, Rule 9 of the old Rules of Court.


87 Annex “F-1”, Volume II, Rollo, pp. 1095-1098.
88 Annex “F-2”, Volume II, Rollo, pp. 1099-1100.

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260 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan
Respondents make much capital of the pronouncement by this Court that the General
and Supplemental Agreements were null and void. They insist that nothing in those
89

agreements could thus be admitted in evidence against them because they stood on
the same ground as an accepted offer which, under Section 27, Rule 130 of the 1997
90

Rules of Civil Procedure, provides that “in civil cases, an offer of compromise is not
an admission of any liability and is not admissible in evidence against the offeror.”
We find no merit in this contention. The declaration of nullity of said agreements
was premised on the following constitutional and statutory infirmities: (1) the grant
of criminal immunity to the Marcos heirs was against the law; (2) the PCGG’s
commitment to exempt from all forms of taxes the properties to be retained by the
Marcos heirs was against the Constitution; and (3) the government’s undertaking to
cause the dismissal of all cases filed against the Marcoses pending before the
Sandiganbayan and other courts encroached on the powers of the judiciary. The
reasons relied upon by the Court never in the least bit even touched on the veracity and
truthfulness of respondents’ admission with respect to their ownership of the Swiss
funds. Besides, having made certain admissions in those agreements, respondents
cannot now deny that they voluntarily admitted owning the subject Swiss funds,
notwithstanding the fact that the agreements themselves were later declared null
and void.
The following observation of Sandiganbayan Justice Catalino Castañeda, Jr. in the
decision dated September 19, 2000 could not have been better said:
x x x The declaration of nullity of the two agreements rendered the same without legal effects
but it did not detract from the admissions of the respondents contained therein. Otherwise
stated, the admissions made in said agreements, as quoted above, remain binding on the
respondents. 91

A written statement is nonetheless competent as an admission even if it is contained


in a document which is not itself effective for

_______________

89 Chavez vs. Presidential Commission on Good Government, 299 SCRA 744, [1998].
90 Substantially the same as Section 24, Rule 130 of the old Rules of Court.
91 Annex “HH”, Volume III, Rollo, p. 2205.

261
VOL. 406, JULY 15, 2003 261
Republic vs. Sandiganbayan
the purpose for which it is made, either by reason of illegality, or incompetency of a
party thereto, or by reason of not being signed, executed or delivered. Accordingly,
contracts have been held as competent evidence of admissions, although they may be
unen-forceable. 92

The testimony of respondent Ferdinand Marcos, Jr. during the hearing on the
motion for the approval of the Compromise Agreement on April 29, 1998 also lent
credence to the allegations of petitioner Republic that respondents admitted
ownership of the Swiss bank accounts. We quote the salient portions of Ferdinand
Jr.’s formal declarations in open court:
ATTY. FERNANDO:
Mr. Marcos, did you ever have any meetings with PCGG
Chairman Magtanggol C. Gunigundo?
F. MARCOS, JR.:
Yes. I have had very many meetings in fact with
Chairman.
ATTY. FERNANDO:
Would you recall when the first meeting occurred?
PJ GARCHITORENA:
In connection with what?
ATTY. FERNANDO:
In connection with the ongoing talks to compromise the
various cases initiated by PCGG against your family?
F. MARCOS, JR.:
The nature of our meetings was solely concerned with
negotiations towards achieving some kind of agreement
between the Philippine government and the Marcos
family. The discussions that led up to the compromise
agreement were initiated by our then counsel Atty.
Simeon Mesina x x x.93
x x x xx x x x x
ATTY. FERNANDO:
What was your reaction when Atty. Mesina informed you
of this possibility?
F. MARCOS, JR.:
My reaction to all of these approaches is that I am always
open, we are always open, we are very much always in
search of resolution to the problem of the family and any
approach
_______________

31A C.J.S., Par. 284, p. 721.


92

Annex “I”, Volume II, Rollo, pp. 1177-1178.


93

262
262 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan
that has been made us, we have entertained. And so my
reaction was the same as what I have always ... why not?
Maybe this is the one that will finally put an end to this
problem. 94

xxx xxx xxx


ATTY. FERNANDO:
Basically, what were the true amounts of the assets in the
bank?
PJ GARCHITORENA:
So, we are talking about liquid assets here? Just Cash?
F. MARCOS, JR.:
Well, basically, any assets. Anything that was under the
Marcos name in any of the banks in Switzerland which
may necessarily be not cash. 95

xxx xxx xxx


PJ GARCHITORENA:
x x x What did you do in other words, after being
apprised of this contract in connection herewith?
F. MARCOS, JR.:
I assumed that we are beginning to implement the
agreement because this was forwarded through the
Philippine government lawyers through our lawyers and
then, subsequently, to me. I was a little surprised because
we hadn’t really discussed the details of the transfer of
the funds, what the bank accounts, what the mechanism
would be. But nevertheless, I was happy to see that as far
as the PCGG is concerned, that the agreement was
perfected and that we were beginning to implement it and
that was a source of satisfaction to me because I thought
that finally it will be the end.96

Ferdinand Jr.’s pronouncements, taken in context and in their entirety, were a


confirmation of respondents’ recognition of their ownership of the Swiss bank
deposits. Admissions of a party in his testimony are receivable against him. If a party,
as a witness, deliberately concedes a fact, such concession has the force of a judicial
admission. It is apparent from Ferdinand Jr.’s testimony that the Marcos family
97

agreed to negotiate with the Philippine government in the hope of finally putting an
end to the problems beset-

_______________

94Ibid, p. 1181.
95Ibid, p. 1188.
96Ibid, p. 1201.

97 29A Am. Jur., Par. 770, p. 137.

263
VOL. 406, JULY 15, 2003 263
Republic vs. Sandiganbayan
ting the Marcos family regarding the Swiss accounts. This was doubtlessly an
acknowledgment of ownership on their part. The rule is that the testimony on the
witness stand partakes of the nature of a formal judicial admission when a party
testifies clearly and unequivocally to a fact which is peculiarly within his own
knowledge. 98

In her Manifestation dated May 26, 1998, respondent Imelda Marcos furthermore
99

revealed the following:


That respondent Imelda R. Marcos owns 90% of the subject matter of the above-entitled case,
being the sole beneficiary of the dollar deposits in the name of the various foundations alleged
in the case;
That in fact only 10% of the subject matter in the above-entitled case belongs to the estate
of the late President Ferdinand E. Marcos;
xxx xxx xxx
Respondents’ ownership of the Swiss bank accounts as borne out by Mrs. Marcos’
manifestation is as bright as sunlight. And her claim that she is merely a beneficiary
of the Swiss deposits is belied by her own signatures on the appended copies of the
documents substantiating her ownership of the funds in the name of the foundations.
As already mentioned, she failed to specifically deny under oath the authenticity of
such documents, especially those involving “William Saunders” and “Jane Ryan”
which actually referred to Ferdinand Marcos and Imelda Marcos, respectively. That
failure of Imelda Marcos to specifically deny the existence, much less the genuineness
and due execution, of the instruments bearing her signature, was tantamount to a
judicial admission of the genuineness and due execution of said instruments, in
accordance with Section 8, Rule 8 of the 1997 Rules of Civil Procedure.
100

Likewise, in her Constancia dated May 6,1999, Imelda Marcos prayed for the
101

approval of the Compromise Agreement and the subsequent release and transfer of
the $150 million to the rightful owner. She further made the following
manifestations:

_______________

98 31A C.J.S., Par. 311, p. 795.


99 Annex “M”, Volume II, Rollo, pp. 1260-1261.
100 Substantially the same as Section 8, Rule 8 of the old Rules of Court.

101 Annex “S”, Volume II, Rollo, pp. 1506-1507.

264
264 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan
xxx xxx xxx
2. The Republic’s cause of action over the full amount is its forfeiture in favor of the
government if found to be ill-gotten. On the other hand, the Marcoses defend that it is a
legitimate asset. Therefore, both parties have an inchoate right of ownership over the account.
If it turns out that the account is of lawful origin, the Republic may yield to the Marcoses.
Conversely, the Marcoses must yield to the Republic. (italics supplied)
xxx xxx xxx
3. Consistent with the foregoing, and the Marcoses having committed themselves to
helping the less fortunate, in the interest of peace, reconciliation and unity, defendant
MADAM IMELDA ROMUALDEZ MARCOS, in firm abidance thereby, hereby affirms her
agreement with the Republic for the release and transfer of the US Dollar 150 million for
proper disposition, without prejudice to the final outcome of the litigation respecting the
ownership of the remainder.
Again, the above statements were indicative of Imelda’s admission of the Marcoses’
ownership of the Swiss deposits as in fact “the Marcoses defend that it (Swiss
deposits) is a legitimate (Marcos) asset.”
On the other hand, respondents Maria Imelda Marcos-Manotoc, Ferdinand
Marcos, Jr. and Maria Irene Marcos-Araneta filed a motion on May 4, 1998 asking 102

the Sandiganbayan to place the res (Swiss deposits) in custodia legis:


7. Indeed, the prevailing situation is fraught with danger! Unless the aforesaid Swiss deposits
are placed in custodia legis or within the Court’s protective mantle, its dissipation or
misappropriation by the petitioner looms as a distinct possibility.
Such display of deep, personal interest can only come from someone who believes that
he has a marked and intimate right over the considerable dollar deposits. Truly, by
filing said motion, the Marcos children revealed their ownership of the said deposits.
Lastly, the Undertaking entered into by the PCGG, the PNB and the Marcos
103

foundations on February 10, 1999, confirmed the Marcoses’ ownership of the Swiss
bank deposits. The subject Undertaking brought to light their readiness to pay the
human rights victims out of the funds held in escrow in the PNB. It stated:
_______________
Annex “L”, Volume II, Rollo, p. 1256.
102

Annex “P-1”, Volume II, Rollo, p. 1289.


103

265
VOL. 406, JULY 15, 2003 265
Republic vs. Sandiganbayan
WHEREAS, the Republic of the Philippines sympathizes with the plight of the human rights
victims-plaintiffs in the aforementioned litigation through the Second Party, desires to assist
in the satisfaction of the judgment awards of said human rights victims-plaintiffs, by
releasing, assigning and or waiving US$150 million of the funds held in escrow under the
Escrow Agreements dated August 14, 1995, although the Republic is not obligated to do so
under final judgments of the Swiss courts dated December 10 and 19, 1997, and January 8,
1998;
WHEREAS, the Third Party is likewise willing to release, assign and/or waive all its rights
and interests over said US$150 million to the aforementioned human rights victims-
plaintiffs.
All told, the foregoing disquisition negates the claim of respondents that “petitioner
failed to prove that they acquired or own the Swiss funds” and that “it was only by
arbitrarily isolating and taking certain statements made by private respondents out
of context that petitioner was able to treat these as judicial admissions.” The Court
is fully aware of the relevance, materiality and implications of every pleading and
document submitted in this case. This Court carefully scrutinized the proofs
presented by the parties. We analyzed, assessed and weighed them to ascertain if
each piece of evidence rightfully qualified as an admission. Owing to the far-reaching
historical and political implications of this case, we considered and examined,
individually and totally, the evidence of the parties, even if it might have bordered on
factual adjudication which, by authority of the rules and jurisprudence, is not usually
done by this Court. There is no doubt in our mind that respondent Marcoses admitted
ownership of the Swiss bank deposits.
We have always adhered to the familiar doctrine that an admission made in the
pleadings cannot be controverted by the party making such admission and becomes
conclusive on him, and that all proofs submitted by him contrary thereto or
inconsistent therewith should “be ignored, whether an objection is interposed by the
adverse party or not. This doctrine is embodied in Section 4, Rule 129 of the Rules
104

of Court:
SEC. 4. Judicial admissions.—An admission, verbal or written, made by a party in the course
of the proceedings in the same case, does not require proof. The admission may be
contradicted only by showing that it

_______________

104 Santiago vs. De los Santos, 61 SCRA 146 [1974].


266
266 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan
was made through palpable mistake or that no such admission was made. 105

In the absence of a compelling reason to the contrary, respondents’ judicial admission


of ownership of the Swiss deposits is definitely binding on them.
The individual and separate admissions of each respondent bind all of them
pursuant to Sections 29 and 31, Rule 130 of the Rules of Court:
SEC. 29. Admission by co-partner or agent.—The act or declaration of a partner or agent of
the party within the scope of his authority and during the existence of the partnership or
agency, may be given in evidence against such party after the partnership or agency is shown
by evidence other than such act or declaration. The same rule applies to the act ordeclaration
of a joint owner, joint debtor, or other person jointly interested with the party. 106

SEC. 31. Admission by privies.—Where one derives title to property from another, the act,
declaration, or omission of the latter, while holding the title, in relation to the property, is
evidence against the former. 107

The declarations of a person are admissible against a party whenever a “privity of


estate” exists between the declarant and the party, the term “privity of estate”
generally denoting a succession in rights. Consequently, an admission of one in
108

privity with a party to the record is competent. Without doubt, privity exists among
109

the respondents in this case. And where several co-parties to the record are jointly
interested in the subject matter of the controversy, the admission of one is competent
against all. 110

_______________

105 Substantially the same as Section 2, Rule 129 of the old Rules of Court.
106 Substantially the same as Section 26, Rule 130 of the old Rules of Court.
107 Substantially the same as Section 28, Rule 130 of the old Rules of Court.

108 Am Jur 2d Par. 824, p. 211.

109 31A C.J.S., Par. 322, p. 817.

110Ibid, p.814.

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VOL. 406, JULY 15, 2003 267
Republic vs. Sandiganbayan
Respondents insist that the Sandiganbayan is correct in ruling that petitioner
Republic has failed to establish a prima facie case for the forfeiture of the Swiss
deposits.
We disagree. The sudden turn-around of the Sandiganbayan was really strange,
to say the least, as its findings and conclusions were not borne out by the voluminous
records of this case.
Section 2 of RA 1379 explicitly states that “whenever any public officer or employee
has acquired during his incumbency an amount of property which is manifestly out
of proportion to his salary as such public officer or employee and to his other lawful
income and the income from legitimately acquired property, said property shall be
presumed prima facie to have been unlawfully acquired. x x x”
The elements which must concur for this prima facie presumption to apply are:

1. (1)the offender is a public officer or employee;


2. (2)he must have acquired a considerable amount of money or property during his
incumbency; and
3. (3)said amount is manifestly out of proportion to his salary as such public officer or
employee and to his other lawful income and the income from legitimately acquired
property.

It is undisputed that spouses Ferdinand and Imelda Marcos were former public
officers. Hence, the first element is clearly extant.
The second element deals with the amount of money or property acquired by the
public officer during his incumbency. The Marcos couple indubitably acquired and
owned properties during their term of office. In fact, the five groups of Swiss accounts
were admittedly owned by them. There is proof of the existence and ownership of
these assets and properties and it suffices to comply with the second element.
The third requirement is met if it can be shown that such assets, money or property
is manifestly out of proportion to the public officer’s salary and his other lawful
income. It is the proof of this third element that is crucial in determining whether
a prima facie presumption has been established in this case.
268
268 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan
Petitioner Republic presented not only a schedule indicating the lawful income of the
Marcos spouses during their incumbency but also evidence that they had huge
deposits beyond such lawful income in Swiss banks under the names of five different
foundations. We believe petitioner was able to establish the prima facie presumption
that the assets and properties acquired by the Marcoses were manifestly and patently
disproportionate to their aggregate salaries as public officials. Otherwise stated,
petitioner presented enough evidence to convince us that the Marcoses had dollar
deposits amounting to US $356 million representing the balance of the Swiss
accounts of the five foundations, an amount way, way beyond their aggregate
legitimate income of only US$304,372.43 during their incumbency as government
officials.
Considering, therefore, that the total amount of the Swiss deposits was
considerably out of proportion to the known lawful income of the Marcoses, the
presumption that said dollar deposits were unlawfully acquired was duly established.
It was sufficient for the petition for forfeiture to state the approximate amount of
money and property acquired by the respondents, and their total government
salaries. Section 9 of the PCGG Rules and Regulations states:
Prima Facie Evidence.—Any accumulation of assets, properties, and other material
possessions of those persons covered by Executive Orders No. 1 and No. 2, whose value is out
of proportion to their known lawful income is prima facie deemed ill-gotten wealth.
Indeed, the burden of proof was on the respondents to dispute this presumption and
show by clear and convincing evidence that the Swiss deposits were lawfully acquired
and that they had other legitimate sources of income. A presumption is prima
facie proof of the fact presumed and, unless the fact thus prima facie established by
legal presumption is disproved, it must stand as proved. 111

Respondent Mrs. Marcos argues that the foreign foundations should have been
impleaded as they were indispensable parties without whom no complete
determination of the issues could be made. She asserts that the failure of petitioner
Republic to implead the foundations rendered the judgment void as the joinder of
indis-

_______________

Miriam Defensor Santiago, Rules of Court Annotated, 1999 ed., p. 857.


111

269
VOL. 406, JULY 15, 2003 269
Republic vs. Sandiganbayan
pensable parties was a sine qua non exercise of judicial power. Furthermore, the non-
inclusion of the foreign foundations violated the conditions prescribed by the Swiss
government regarding the deposit of the funds in escrow, deprived them of their day
in court and denied them their rights under the Swiss constitution and international
law. 112

The Court finds that petitioner Republic did not err in not impleading the foreign
foundations. Section 7, Rule 3 of the 1997 Rules of Civil Procedure, taken from Rule 113

19b of the American Federal Rules of Civil Procedure, provides for the compulsory
joinder of indispensable parties. Generally, an indispensable party must be
impleaded for the complete determination of the suit. However, failure to join an
indispensable party does not divest the court of jurisdiction since the rule regarding
indispensable parties is founded on equitable considerations and is not jurisdictional.
Thus, the court is not divested of its power to render a decision even in the absence
of indispensable parties, though such judgment is not binding on the non-joined
party. 114

An indispensable party has been defined as one:


115

[who] must have a direct interest in the litigation; and if this interest is such that it cannot
be separated from that of the parties to the suit, if the court cannot render justice between
the parties in his absence, if the decree will have an injurious effect upon his interest, or if
the final determination of the controversy in his absence will be inconsistent with equity and
good conscience.
There are two essential tests of an indispensable party: (1) can relief be afforded the
plaintiff without the presence of the other party? and (2) can the case be decided on
its merits without prejudicing the rights of the other party? There is, however, no
116

fixed formula for determining who is an indispensable party; this can

_______________

112 Rollo, pp. 2255-2265.


113 Sec. 7. Compulsory joinder of indispensable parties.—Parties in interest without whom no final
determination can be had of an action shall be joined either as plaintiffs or defendants, The same as Section
7, Rule 3 of the old Rules of Court.
114 59 AM. JUR. 2D PARTIES §97 (2000).

115Supranote 3 § 13 (2000).

116 Supra note 3 citing Picket vs. Paine, 230 Ga 786, 199 SE2d 223.

270
270 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan
only be determined in the context and by the facts of the particular suit or litigation.
In the present case, there was an admission by respondent Imelda Marcos in her
May 26, 1998 Manifestation before the Sandiganbayan that she was the sole
beneficiary of 90% of the subject matter in controversy with the remaining 10%
belonging to the estate of Ferdinand Marcos. Viewed against this admission, the
117

foreign foundations were not indispensable parties. Their non-participation in the


proceedings did not prevent the court from deciding the case on its merits and
according full relief to petitioner Republic. The judgment ordering the return of the
$356 million was neither inimical to the foundations’ interests nor inconsistent with
equity and good conscience. The admission of respondent Imelda Marcos only
confirmed what was already generally known: that the foundations were established
precisely to hide the money stolen by the Marcos spouses from petitioner Republic. It
negated whatever illusion there was, if any, that the foreign foundations owned even
a nominal part of the assets in question.
The rulings of the Swiss court that the foundations, as formal owners, must be
given an opportunity to participate in the proceedings hinged on the assumption that
they owned a nominal share of the assets. But this was already refuted by no less
118

than

_______________

117 Rollo, p. 1260. Manifestation:


“Comes now undersigned counsel for the respondent Imelda R. Marcos, and before this Honorable Court, most
respectfully manifests:

1. I.That respondent Imelda R. Marcos owns 90% of the subject-matter of the above-entitled case, being the sole
beneficiary of the dollar deposits in the name of the various Foundations alleged in the case;
2. II.That in fact only 10% of the subject-matter in the above-entitled case belongs to the Estate of the late
President Ferdinand E. Marcos;”

118 Rollo, p. 2464, quoted from the December 18, 2000 memorandum of respondent Mrs. Marcos:
“On the other hand, the opponent to the appeal, formally the owner of the assets to be seized and restituted, has not
been involved in the collecting procedure pending in the Philippines. Even though such opponent is nothing but a legal
construction to hide the true ownership to the assets of the Marcos family, they nevertheless are
271
VOL. 406, JULY 15, 2003 271
Republic vs. Sandiganbayan
Mrs. Marcos herself. Thus, she cannot now argue that the ruling of the
Sandiganbayan violated the conditions set by the Swiss court. The directive given by
the Swiss court for the foundations to participate in the proceedings was for the
purpose of protecting whatever nominal interest they might have had in the assets
as formal owners. But inasmuch as their ownership was subsequently repudiated by
Imelda Marcos, they could no longer be considered as indispensable parties and their
participation in the proceedings became unnecessary.
InRepublic vs. Sandiganbayan, this Court ruled that impleading the firms which
119

are the resof the action was unnecessary:


“And as to corporations organized with ill-gotten wealth, but are not themselves guilty of
misappropriation, fraud or other illicit conduct—in other words, the companies themselves
are not the object or thing involved in the action, the res thereof—there is no need to implead
them either. Indeed, their impleading is not proper on the strength alone of their having been
formed with ill-gotten funds, absent any other particular wrongdoing on their part . . .
Such showing of having been formed with, or having received ill-gotten funds, however
strong or convincing, does not, without more, warrant identifying the corporations in question
with the person who formed or made use of them to give the color or appearance of lawful,
innocent acquisition to illegally amassed wealth—at the least, not so as place on the
Government the onus of impleading the former with the latter in actions to recover such
wealth. Distinguished in terms of juridical personality and legal culpability from their erring
members or stockholders, said corporations are not themselves guilty of the sins of the latter,
of the embezzlement, asportation, etc., that gave rise to the Government’s cause of action for
recovery; their creation or organization was merely the result of their members’ (or
stockholders’) manipulations and maneuvers to conceal the illegal origins of the assets or
monies invested therein. In this light, they are simply the resin the actions for the recovery
of illegally acquired wealth, and there is, in principle, no cause of action against them and no
ground to implead them as defendants in said actions.”

_______________

entitled to a hearing as far as the proceedings are concerned with accounts which are nominally theirs. The guarantees
of the Republic of the Philippines therefore must include the process rights not only of the defendants but also of the
formal owners of the assets to be delivered.”
240 SCRA 376, 469 [1995].
119

272
272 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan
Just like the corporations in the aforementioned case, the foreign foundations here
were set up to conceal the illegally acquired funds of the Marcos spouses. Thus, they
were simply the res in the action for recovery of ill-gotten wealth and did not have to
be impleaded for lack of cause of action or ground to implead them.
Assuming arguendo, however, that the foundations were indispensable parties,
the failure of petitioner to implead them was a curable error, as held in the previously
cited case of Republic vs. Sandiganbayan: 120

“Even in those cases where it might reasonably be argued that the failure of the Government
to implead the sequestered corporations as defendants is indeed a procedural abberation, as
where said firms were allegedly used, and actively cooperated with the defendants, as
instruments or conduits for conversion of public funds and property or illicit or fraudulent
obtention of favored government contracts, etc., slight reflection would nevertheless lead to
the conclusion that the defect is not fatal, but one correctible under applicable adjective
rules—e.g., Section 10, Rule 5 of the Rules of Court [specifying the remedy of amendment
during trial to authorize or to conform to the evidence]; Section 1, Rule 20 [governing
amendments before trial], in relation to the rule respecting omission of so-called necessary
or indispensable parties, set out in Section 11, Rule 3 of the Rules of Court. It is relevant in
this context to advert to the old familiar doctrines that the omission to implead such parties
“is a mere technical defect which can be cured at any stage of the proceedings even after
judgment”; and that, particularly in the case of indispensable parties, since their presence
and participation is essential to the very life of the action, for without them no judgment may
be rendered, amendments of the complaint in order to implead them should be freely allowed,
even on appeal, in fact even after rendition of judgment by this Court, where it appears that
the complaint otherwise indicates their identity and character as such indispensable
parties.” 121

Although there are decided cases wherein the non-joinder of indispensable parties in
fact led to the dismissal of the suit or the annulment of judgment, such cases do not
jibe with the matter at hand. The better view is that non-joinder is not a ground to
dismiss the suit or annul the judgment. The rule on joinder of indispensable parties
is founded on equity. And the spirit of the law is re-

_______________

Supra.
120

Id.,at pp. 470-471.


121

273
VOL. 406, JULY 15, 2003 273
Republic vs. Sandiganbayan
flected in Section 11, Rule 31 of the 1997 Rules of Civil Procedure. It prohibits the
122

dismissal of a suit on the ground of non-joinder or misjoinder of parties and allows


the amendment of the complaint at any stage of the proceedings, through motion or
on order of the court on its own initiative. 123

Likewise, jurisprudence on the Federal Rules of Procedure, from which our Section
7, Rule 31 on indispensable parties was copied, allows the joinder of indispensable
124

parties even after judgment has been entered if such is needed to afford the moving
party full relief. Mere delay in filing the joinder motion does not necessarily result
125

in the waiver of the right as long as the delay is excusable. Thus, respondent Mrs.
126

Marcos cannot correctly argue that the judgment rendered by the Sandiganbayan
was void due to the non-joinder of the foreign foundations. The court had jurisdiction
to render judgment which, even in the absence of indispensable parties, was binding
on all the parties before it though not on the absent party. If she really felt that she
127

could not be granted full relief due to the absence of the foreign foundations, she
should have moved for their inclusion, which was allowable at any stage of the
proceedings. She never did. Instead she assailed the judgment rendered.
In the face of undeniable circumstances and the avalanche of documentary
evidence against them, respondent Marcoses failed to justify the lawful nature of
their acquisition of the said assets.

_______________

122 Substantially the same as Section 11, Rule 3 of the old Rules of Court.
123 Sec. 11. Misjoinder and non-joinder of parties.—Neither misjoinder nor non-joinder of parties is
ground for the dismissal of an action. Parties may be dropped or added by order of the court on motion of
any party or on its own initiative at any stage of the action and on such terms as are just. Any claim against
a misjoined party may be severed and proceeded with separately.
124 Same as Section 7, Rule 3 of the old Rules of Court.

125 Supra note 3 § 265 (2000).

126 Id.citing Gentry vs. Smith (CA5 Fla) 487 F2d 571, 18 FR Serv 2d 221, later app (CAS Fla) 538 F2d

1090, on reh (CA5 Fla) 544 F2d 900, holding that a failure to request the joinder of a defendant was excused
where the moving party’s former counsel, who had resisted the joinder, abruptly withdrew his appearance
and substitute counsel moved promptly to join the corporation.
127 Supra note 3.
274
274 SUPREME COURT REPORTS ANNOTATED
Republic vs. Sandiganbayan
Hence, the Swiss deposits should be considered ill-gotten wealth and forfeited in favor
of the State in accordance with Section 6 of RA 1379:
SEC. 6. Judgment.—If the respondent is unable to show to the satisfaction of the court that
he has lawfully acquired the property in question, then the court shall declare such property
forfeited in favor of the State, and by virtue of such judgment the property aforesaid shall
become property of the State x x x.
THE FAILURE TO PRESENT AUTHENTICATED
TRANSLATIONS OF THE SWISS DECISIONS
Finally, petitioner Republic contends that the Honorable Sandi-ganbayan Presiding
Justice Francis Garchitorena committed grave abuse of discretion in reversing
himself on the ground that the original copies of the authenticated Swiss decisions
and their authenticated translations were not submitted to the court a quo. Earlier
PJ Garchitorena had quoted extensively from the unofficial translation of one of these
Swiss decisions in his ponencia dated July 29, 1999 when he denied the motion to
release US$150 Million to the human rights victims.
While we are in reality perplexed by such an incomprehensible change of heart,
there might nevertheless not be any real need to belabor the issue. The presentation
of the authenticated translations of the original copies of the Swiss decision was
not de rigueur for the public respondent to make findings of fact and reach its
conclusions. In short, the Sandiganbayan’s decision was not dependent on the
determination of the Swiss courts. For that matter, neither is this Court’s.
The release of the Swiss funds held in escrow in the PNB is dependent solely on
the decision of this jurisdiction that said funds belong to the petitioner Republic.
What is important is our own assessment of the sufficiency of the evidence to rule in
favor of either petitioner Republic or respondent Marcoses. In this instance, despite
the absence of the authenticated translations of the Swiss decisions, the evidence on
hand tilts convincingly in favor of petitioner Republic.
WHEREFORE, the petition is hereby GRANTED. The assailed Resolution of the
Sandiganbayan dated January 31, 2002 is SET ASIDE. The Swiss deposits which
were transferred to and are now
275
VOL. 406, JULY 15, 2003 275
Republic vs. Sandiganbayan
deposited in escrow at the Philippine National Bank in the estimated aggregate
amount of US$658,175,373.60 as of January 31, 2002, plus interest, are hereby
forfeited in favor of petitioner Republic of the Philippines.
SO ORDERED.
Davide, Jr. (C.J.), Bellosillo, Panganiban, Ynares-Santiago, Austria-
Martinez, Carpio-Morales, Callejo, Sr., Azcuna and Tinga, JJ.,concur.
Puno and Vitug, JJ., In the result.
Quisumbing and Sandoval-Gutierrez, JJ., On official leave.
Carpio, J., No part. While Presidential Legal Counsel, I acted as chair of a
committee that oversaw the transfer of these funds to the Philippines.
Petition granted.
Notes.—The PCGG is the agency empowered to bring proceedings for forfeiture of
property allegedly acquired unlawfully before February 25, 1986, while the power to
investigate cases of ill-gotten or unexplained wealth acquired after that date is vested
in the Ombudsman. (Republic vs. Sandiganbayan, 237 SCRA 242 [1994])
The power of the PCGG to investigate and prosecute offenses committed in the
acquisition of ill-gotten wealth does not extend to other acts or omissions not
involving “ill-gotten wealth” penalized by the Anti-Graft and Corrupt Practices Act.
(Romualdez vs. Sandiganbayan, 244 SCRA 152 [1995])

——o0o——

No. L-35113. March 25, 1975. *

EUGENIO CUARESMA, petitioner, vs. MARCELO DAQUIS, PHHC, CESAR


NAVARRO, NICANOR GUEVARRA, Sheriff of Quezon City or his Deputy
and JUDGE PACIFICO P. DE CASTRO, respondents. ATTORN EY
MACARIO O. DIRECTO, respondent.
Legal ethics; Attorneys; An attorney should be careful in the preparation of his pleadings
so that the least doubt as to his intellectual honesty cannot be entertained.—The above
explanation lends itself to the suspicion that it was a mere afterthought. It could very well
be that after his attention was called to the misstatements in his petition, he decided on such
a version as a way out. That is more than a bare possibility . There is the assumption though
of good faith. That is in his favor. Moreover, judging from the awkwardly -worded petition
and even his compliance quite indicative of either carelessness or lack of proficiency in the
handling of the English language, it is not unreasonable to assume that his deficiency in the
mode of expression contributed to the inaccuracy of his statements. While a mere disclaimer
of intent certainly cannot exculpate him, still, in the spirit of charity and forbearance, a
penalty of reprimand would suffice. At least, it would serve to impress on r espondent that in
the future he should be more careful in the preparation of his pleadings so that the least
doubt as to his intellectual honesty cannot be entertained. Every member of the bar should
realize that candor in the dealings with this Court is of the very essence of honorable
membership in the profession.

ORIGINAL PETITION in the Supreme Court. Certiorari.

The facts are stated in the resolution of the Court.


RESOLUTION

_______________

*SECOND DIVISION.
258
258 SUPREME COURT REPORTS ANNOTATED
Cuaresma vs. Daquis
FERNANDO, J.:

The predicament in which resp ondent Macario O. Directo, a me mber of the


Philippine bar, now finds himself is one of his own making. In a petition for certiorari
filed with this Court on behalf of one Eugenio Cuaresma, he included the following
categorical allegations: “4. Th at your petitioner has no knowledge of the existence of
said case (Civil Case No. 12176, CFI of Rizal, Quezon City Branch) aforecited between
the respondents Marcelo Daquis, PHHC, and Cesar Navarro, and wherein the
respondent Judge, [gave] due course to the comp laint, and the subject matter in
litigation; 5. That on May 26, 1972, the respondent Judge issued an order of
demolition, ordering the respondent Sh eriff of Quezon City or his deputy to demo lish
the house of your petitioner etc., and on th e same day of May 26, 1972, the Sheriff of
Quezon City through his deputy [gave] three (3) days to your petitioner to re move
his house or face (demolition, * * *; 6. * * * 7. That your petitioner was not givefi a
day in court to present his side of the case, in violation of law, and of the dictum of
due process of the constitution, * * *.” Thereafter, after receipt of the comments of
1

respondents, it turned out, as set forth in a resolution of this Court of August 4, 1972,
“that petitioner was fully aware of the existence of said civil case because on
December 14, 1971 Atty. Macario Directo, as counsel of petitioner, addressed to
respondent Marcelo Daquis a letter which ind icates that both counsel and petitioner
were aware of the existence of the case. It also appears that, before respondents
Marcelo Daquis and Cesar Navarro filed a motion for a writ of Possession in Civil
Case No. Q-12176, petitioner Eugenio Cu aresma, along with th e other occupants of
the lot in question, was given thirty (30) days notice to vacate the premises, which
period was even extended for another thirty (30) days, but that, despite that notice,
petitioner Eugenio Cuaresma refused to vacate the lot invo lved in the case. It further
appears that on May 3, 1972, Atty. Macario Directo, as counsel for petitioner, filed a
motion for intervention in the aforementioned Civil Case No. Q-12176; and on May
13, 1972, same counsel filed a motion to quash or recall the writ of execution, and an
opposition to the issuance of a writ of demolition. On May 22, 1972, respondent Judge
Pacifico

______________

1Petition, pars. 4-7.


259
VOL. 63, MARCH 25, 1975 259
Cuaresma vs. Daquis
de Castro issued an order denying the motion to intervene as well as the motion to
quash or recall the writ of execution.” It was then set forth in such resolution th at
2

there was no truth to the allegation that on May 27, 1972 , the date of th e filing of
the petition for certiorari in the present case, petitioner had no knowledge of the
existence of Civil Case No. 12176.
Respondent Macario O. Directo was then given ten days to show cause why no
disciplinary action should be taken against him for deliberately making false
allegations in such petition. Thereafter, on August 16, 1972, came a pleading which
he entitled Compliance. Th is is his explanation: “What yo ur petitioner honestly
meant when he alleged th at he [has] no knowledge of the existence of said Civil Case
No. 12176, CFI of Rizal, Quezon City Branch, was from the time the plaintiff Marcelo
Daquis instituted th e said case in June 1968 up to and after the ti me the Court
issued the decision in the year 1970. The plaintiff Marcelo Daquis entered into a
conditional contract of sale of the lot invo lved in said Civil Case No. 12176 with the
PHHC. There were four (4) purchasers, the plaintiff, two others, and your petitioner.
Because of the requirement of the PHHC that only one of th em should enter info the
contract, Marcelo Daquis was chosen by the others to enter into the same. Since this
was a sale on installment basis, by agreement of all the purchasers, duly
acknowledged by the PHHC, the monthly dues of the petitioner and the two others,
were remitted to Marcelo Daquis, who in turn remits the same to the PHHC. In June
1968 plaintiff Marcelo Daquis instituted Civil Case No. 12176 in the CFI of Quezon
City. From June 1968 up to the time and after the decision was issued by the court,
plaintiff Marcelo Daquis never info rmed your petitioner of the said case.” He 3

reiterated in a later paragraph that all he wanted to convey was that his knowledge
of the aforesaid civil case came only after the decision was issued. He closed his
Compliance with the plea that if there were any mistake committed, “it had been an
honest one, and would say in all sincerity that there was no deliberate atte mpt and
intent on his part of misleading this Honorab le Court, honestly and totally unaware
of any false allegation in th e petition.” 4

_______________

2 Resolution of this Court dated August 4, 1972


3 Compliance, 1-2.
4 Ibid, 2.

260
260 SUPREME COURT REPORTS ANNOTATED
Cuaresma vs. Daquis
The above explanation lends itself to the suspicion that it was a mere afterthought.
It could very well be that after his attention was called to th e misstate ments in his
petition, he decided on such a version as away out. That is more than a bare possibilit
y. There is th e assu mption though of good faith. That is in his favor. Moreover, ju
dging from the awkwardly-worded petition and even his comp liance quite indicative
of either carelessness or lack of proficiency in the handling of the English language,
it is not unreasonable to assume that his deficiency in the mode of expression
contributed to the inaccuracy of his state ments. W h ile a mere disclaimer of intent
certainly cannot exculpate him, st ill, in the spirit of charity and forbearance, a
penalty of reprimand would suffice. At least, it would serve to impress on respondent
that in the future he should be much more careful in the preparation of his pleadings
so that the least doubt as to his intellectual honesty cannot be entertained. Every me
mber of the bar should realize that candor in the dealing s with the Court is of the
very essence of honorable me mbership in the profession.
WHEREFORE, Attorney Macario O. Directo is reprimanded. Let a copy of this
resolution be spread on his record.
Barredo, Antonio, Fernandez and Aquino, JJ., concur.
Respondent attorney reprimanded.
Notes.—A counsel de parte is bound to communicate with his client such an
importan t ma tter as the withdrawal of appeal with all the adverse consequences it
entails and the equally significant decision allegedly reached by the family of his
client that instead of not pursu in g th e appeal, the brief for a co-accused would be
adopted to set forth his defense. (People vs. Tigulo, 45 SCRA 1).
The act co mmitted by an attorney, namely, that of notarizing a will the
acknowledgme nt clau se whereof recites that the testator exhibited his residence
certificate, when in truth he did not, considered in the light of the facts that
respondent acted in good faith and readily admitted the truth, does not call for the
penalty of suspension or disbarment. In the premises, an admonition will be
sufficient, if only to remind respondent and other notaries public of the delicate
nature of their sworn duties.
In disbarment proceedings, based upon the conduct of the
261
VOL. 63, MARCH 25, 1975 261
Nonan vs. Plan
respondent as a notary public in taking the acknowledgment of an impostor as vendor
on a deed of sale of real estate, which made him guilty of bein g a party to forgery or
at least serious misconduct as a notary, it was considered in Cailing vs.
Espinosa, Adm. Case No. 28, May 30, 1958, sufficient to merely admonish the
respondent to be more careful in the future in view of th e circumstan ces that he
charged no fee, acted in good faith, no damage resulted, and he was actually the
victim of imposition by the person who filed the complaint against him.
In Sevilla vs. Zoleta, Adm. Case No. 31, March 28, 1955, although the respond ent
attorney knew, at the time he notarized a deed of sale to property containing a state
ment that the property was free and clear of all encumbrances, that there was a
mortgage against the property, it was held that his conduct in letting the false state
ments stand merited no more than an admonition in the light of his explanation that
he had been advised by the mortg agee th at she was willing to let the mortgagor sell
the property free and clear of the mortgage because she needed the money.

——o0o——

G.R. No. 142316. November 22, 2001. *

FRANCISCO A.G. DE LIANO, ALBERTO O. VILLA-ABRILLE, JR., and SAN


MIGUEL CORPORATION, petitioners, vs. HON. COURT OF APPEALS and
BENJAMIN A. TANGO, respondents.
Appeals; The premise that underlies all appeals is that they are merely rights which arise
from statute—therefore, they must be exercised in the manner prescribed by law.—The premise
that underlies all appeals is that they are merely rights which arise from statute; therefore,
they must be exercised in the manner prescribed by law. It is to this end that rules governing
pleadings and practice before appellate courts were imposed. These rules were designed to
assist the appellate court in the accomplishment of its tasks, and overall, to enhance the
orderly administration of justice.

_______________

*SECOND DIVISION.
350
350 SUPREME COURT REPORTS ANNOTATED
De Liano vs. Court of Appeals
Same; Pleadings and Practice; Briefs; Words and Phrases; “Brief,” Defined; The brief
should be so prepared as to minimize the labor of the court in the examination of the record
upon which the appeal is heard and determined.—x x x [L]et it be recalled that the word
“brief” is derived from the Latin brevis, and the French briefe, and literally means a short or
condensed statement. The purpose of the brief, as all law students and lawyers know, is to
present to the court in concise form the points and questions in controversy, and by fair
argument on the facts and law of the case to assist the court in arriving at a just and proper
conclusion. The brief should be so prepared as to minimize the labor of the court in the
examination of the record upon which the appeal is heard and determined. [italics supplied]
Same; Same; Same; Same; Subject Index; The index is intended to facilitate the review of
appeals by providing ready reference, functioning much like a table of contents—the subject
index makes readily available at one’s fingertips the subject of the contents of the brief so that
the need to thumb through the brief page after page to locate a party’s arguments, or a
particular citation, or whatever else needs to be found and considered, is obviated.—The first
requirement of an appellant’s brief is a subject index. The index is intended to facilitate the
review of appeals by providing ready reference, functioning much like a table of contents.
Unlike in other jurisdictions, there is no limit on the length of appeal briefs or appeal
memoranda filed before appellate courts. The danger of this is the very real possibility that
the reviewing tribunal will be swamped with voluminous documents. This occurs even though
the rules consistently urge the parties to be “brief” or “concise” in the drafting of pleadings,
briefs, and other papers to be filed in court. The subject index makes readily available at
one’s fingertips the subject of the contents of the brief so that the need to thumb through the
brief page after page to locate a party’s arguments, or a particular citation, or whatever else
needs to be found and considered, is obviated.
Same; Same; Same; Same; Assignment of Errors; An assignment of errors in appellate
procedure is an enumeration by appellant or plaintiff in error of the errors alleged to have
been committed by the court below in the trial of the case upon which he seeks to obtain a
reversal of the judgment or decree—it is in the nature of a pleading, and performs in the
appellate court the same office as a declaration or complaint in a court of original
jurisdiction.—An assignment of errors follows the subject index. It is defined in this wise: An
assignment of errors in appellate procedure is an enumeration by appellant or plaintiff in
error of the errors alleged to have
351
VOL. 370, NOVEMBER 22, 2001 351
De Liano vs. Court of Appeals
been committed by the court below in the trial of the case upon which he seeks to obtain
a reversal of the judgment or decree; it is in the nature of a pleading, and performs in the
appellate court the same office as a declaration or complaint in a court of original jurisdiction.
Such an assignment is appellant’s complaint, or pleading, in the appellate court, and takes
the place of a declaration or bill; an appeal without an assignment of errors would be similar
to a suit without a complaint, bill, or declaration. The assignment is appellant’s declaration
or complaint against the trial judge, charging harmful error, and proof vel non of assignment
is within the record on appeal. xxx xxx xxx The object of such pleadings is to point out the
specific errors claimed to have been committed by the court below, in order to enable the
reviewing court and the opposing party to see on what points appellant or plaintiff in error
intends to ask a reversal of the judgment or decree, and to limit discussion to those points.
The office of an assignment of errors is not to point out legal contentions, but only to inform
the appellate court that appellant assigns as erroneous certain named rulings; the function
of the assignment is to group and bring forward such of the exceptions previously noted in
the case on appeal as appellant desires to preserve and present to the appellant.
Same; Same; Same; Same; Statement of the Case; A statement of the case gives the
appellate tribunal an overview of the judicial antecedents of the case, providing material
information regarding the nature of the controversy, the proceedings before the trial court, the
orders and rulings elevated on appeal, and the judgment itself.—The rules then require that
an appellant’s brief must contain both a “statement of the case” and a “statement of facts.” A
statement of the case gives the appellate tribunal an overview of the judicial antecedents of
the case, providing material information regarding the nature of the controversy, the
proceedings before the trial court, the orders and rulings elevated on appeal, and the
judgment itself. These data enable the appellate court to have a better grasp of the matter
entrusted to it for its appraisal.
Same; Same; Same; Same; Statement of Facts; The statement of facts comprises the very
heart of the appellant’s brief—the facts constitute the backbone of a legal argument,
determinative of the law and jurisprudence applicable to the case, and consequently, will
govern the appropriate relief.—In turn, the statement of facts comprises the very heart of the
appellant’s brief. The facts constitute the backbone of a legal argument; they are
determinative of the law and jurisprudence applicable to the case, and consequently, will
govern the appropriate relief. Appellants should remember that the Court of Appeals is
empowered to review both questions
352
352 SUPREME COURT REPORTS ANNOTATED
De Liano vs. Court of Appeals
of law and of facts. Otherwise, where only a pure question of law is involved, appeal
would pertain to this Court. An appellant, therefore, should take care to state the facts
accurately though it is permissible to present them in a manner favorable to one party. The
brief must state the facts admitted by the parties, as well as the facts in controversy. To
laymen, the distinction may appear insubstantial, but the difference is clear to the
practitioner and the student of law. Facts which are admitted require no further proof,
whereas facts in dispute must be backed by evidence. Relative thereto, the rule specifically
requires that one’s statement of facts should be supported by page references to the record.
Indeed, disobedience therewith has been punished by dismissal of the appeal. Page references
to the record are not an empty requirement. If a statement of fact is unaccompanied by a
page reference to the record, it may be presumed to be without support in the record and may
be stricken or disregarded altogether.
Same; Same; Same; Same; Statement of the Issues; The statement of issues is not to be
confused with the assignment of errors—they are not one and the same; The statement of issues
puts forth the questions of fact or law to be resolved by the appellate court; “Questions of Fact”
and “Questions of Law,” Distinguished.—When the appellant has given an account of the case
and of the facts, he is required to state the issues to be considered by the appellate court. The
statement of issues is not to be confused with the assignment of errors: they are not one and
the same, for otherwise, the rules would not require a separate statement for each. The
statement of issues puts forth the questions of fact or law to be resolved by the appellate
court. What constitutes a question of fact or one of law should be clear by now: At this point,
the distinction between a question of fact and a question of law must be clear. As
distinguished from a question of law which exists “when the doubt or difference arises as to
what the law is on certain state of facts”—“there is a question of fact when the doubt or
difference arises as to the truth or the falsehood of alleged facts”; or when the “query
necessarily invites calibration of the whole evidence considering mainly the credibility of
witnesses, existence and relevancy of specific surrounding circumstances, their relation to
each other and to the whole and the probabilities of the situation.”
Same; Same; Same; Same; Arguments; An appellant’s arguments go hand in hand with
his assignment of errors, for the former provide the justification supporting his contentions,
and in so doing resolves the issues. It will not do to impute error on the part of the trial court
without substantiation.—Thereafter, the appellant is required to present his arguments on
353
VOL. 370, NOVEMBER 22, 2001 353
De Liano vs. Court of Appeals
each assigned error. An appellant’s arguments go hand in hand with his assignment of
errors, for the former provide the justification supporting his contentions, and in so doing
resolves the issues. It will not do to impute error on the part of the trial court without
substantiation. The mere elevation on appeal of a judgment does not create a presumption
that it was rendered in error. The appellant has to show that he is entitled to the reversal of
the judgment appealed, and he cannot do this unless he provides satisfactory reasons for
doing so. It is therefore essential that x x x [A]s far as possible, the errors and reasons
assigned should be supported by a citation of authorities. The failure to do so has been said
to be inexcusable; and, although a point made in the brief is before the court even though no
authorities are cited and may be considered and will be where a proposition of well
established law is stated, the court is not required to search out authorities, but may presume
that counsel has found no case after diligent search or that the point has been waived or
abandoned, and need not consider the unsupported errors assigned, and ordinarily will not
give consideration to such errors and reasons unless it is apparent without further research
that the assignments of errors presented are well taken.
Same; Same; Same; Procedural Rules; When the error relates to something so elementary
as to be inexcusable, the Court’s discretion becomes nothing more than exercise in
frustration.—Some may argue that adherence to these formal requirements serves but a
meaningless purpose, that these may be ignored with little risk in the smug certainty that
liberality in the application of procedural rules can always be relied upon to remedy the
infirmities. This misses the point. We are not martinets; in appropriate instances, we are
prepared to listen to reason, and to give relief as the circumstances may warrant. However,
when the error relates to something so elementary as to be inexcusable, our discretion
becomes nothing more than an exercise in frustration. It comes as an unpleasant shock to us
that the contents of an appellant’s brief should still be raised as an issue now. There is
nothing arcane or novel about the provisions of Section 13, Rule 44. The rule governing the
contents of appellants’ briefs has existed since the old Rules of Court, which took effect
on July 1, 1940, as well as the Revised Rules of Court, which took effect on January 1,
1964, until they were superseded by the present 1997 Rules of Civil Procedure. The
provisions were substantially preserved, with few revisions.
Same; Same; Same; Same; A half-hearted attempt at submitting a supposedly amended
brief only serves to harden the Court’s resolve to demand a strict observance of the rules.—An
additional circumstance impels us to deny the reinstatement of petitioner’s appeal. We
observed that
354
354 SUPREME COURT REPORTS ANNOTATED
De Liano vs. Court of Appeals
petitioner submitted an “Amended Appellant’s Brief” to cure the infirmities of the one
first filed on its behalf by its lawyer. All things being equal, we would have been inclined to
grant the petition until we realized that the attempt at compliance was, at most, only a
cosmetic procedure. On closer scrutiny, the amended brief was as defective as the first. Where
the first brief lacked an assignment of errors but included a statement of issues, the amended
brief suffered a complete reversal: it had an assignment of errors but no statement of issues.
The “statement of facts” lacked page references to the record, a deficiency symptomatic of the
first. Authorities were cited in an improper manner, that is, the exact page of the report
where the citation was lifted went unspecified. The amended brief did not even follow the
prescribed order: the assignment of errors came after the statement of the case and the
statement of facts. No one could be expected to ignore such glaring errors, as in the case at
bar. The half-hearted attempt at submitting a supposedly amended brief only serves to
harden our resolve to demand a strict observance of the rules.
Same; Same; Same; Same; The Court reminds members of the bar that their first duty is
to comply with the rules, not to seek exceptions.—We remind members of the bar that their
first duty is to comply with the rules, not to seek exceptions. As was expressed more recently
in Del Rosario v. Court of Appeals, which was rightfully quoted by the appellate court, we
ruled that: Petitioner’s plea for liberality in applying these rules in preparing Appellants’
Brief does not deserve any sympathy. Long ingrained in our jurisprudence is the rule that
the right to appeal is a statutory right and a party who seeks to avail of the right must
faithfully comply with the rules. In People v. Marong, we held that deviations from the rules
cannot be tolerated. The rationale for this strict attitude is not difficult to appreciate. These
rules are designed to facilitate the orderly disposition of appealed cases. In an age where
courts are bedeviled by clogged dockets, these rules need to be followed by appellants with
greater fidelity. Their observance cannot be left to the whims and caprices of appellants. In
the case at bar, counsel for petitioners had all the opportunity to comply with the above rules.
He remained obstinate in his non-observance even when he sought reconsideration of the
ruling of the respondent court dismissing his clients’ appeal. Such obstinacy is incongruous
with his late plea for liberality in construing the rules on appeal. [italics supplied]
Same; Same; Same; Two Modes of Appeal from Decisions of the Regional Trial Courts to
the Court of Appeals.—The Rules of Court prescribe two (2) modes of appeal from decisions
of the Regional Trial Courts to the Court of Appeals. When the trial court decides a case in
the exercise of its
355
VOL. 370, NOVEMBER 22, 2001 355
De Liano vs. Court of Appeals
original jurisdiction, the mode of review is by an ordinary appeal in accordance with
Section 2(a) of Rule 41. In contrast, where the assailed decision was rendered by the trial
court in the exercise of its appellate jurisdiction, the mode of appeal is via a petition for review
pursuant to Rule 42. We are more concerned here about the first mode since the case at bar
involves a decision rendered by the Regional Trial Court exercising its original jurisdiction.
Same; Same; Same; Categories and Treatment of Cases Elevated to the Court of Appeals;
Ordinary appealed civil cases undergo two (2) stages: completion of the records, and study and
report.—Cases elevated to the Court of Appeals are treated differently depending upon their
classification into one of three (3) categories: appealed civil cases, appealed criminal cases,
and special cases. Be it noted that all cases are under the supervision and control of the
members of the Court of Appeals in all stages, from the time of filing until the remand of the
cases to the courts or agencies of origin. Ordinary appealed civil cases undergo two (2) stages.
The first stage consists of completion of the records. The second stage is for study and report,
which follows when an appealed case is deemed submitted for decision.
Same; Same; Same; A preliminary raffle is held at which time an appealed case is
assigned to a Justice for completion, and after completion, when the case is deemed ripe for
judgment, a second raffle is conducted to determine the Justice to whom the case will be
assigned for study and report.—At each stage, a separate raffle is held. Thus, a preliminary
raffle is held at which time an appealed case is assigned to a Justice for completion. After
completion, when the case is deemed ripe for judgment, a second raffle is conducted to
determine the Justice to whom the case will be assigned for study and report. Each stage is
distinct; it may happen that the Justice to whom the case was initially raffled for completion
may not be the same Justice who will write the decision thereon.
Same; Same; Same; The Justice in-charge of completion exceeds his province should he
examine the merits of the case since his function is to oversee completion only.—The aforesaid
distinction has a bearing on the case at bar. It becomes apparent that the merits of the appeal
can only be looked into during the second stage. The Justice in-charge of completion exceeds
his province should he examine the merits of the case since his function is to oversee
completion only. The prerogative of determining the merits of an appeal pertains properly to
the Justice to whom the case is raffled for study and report. The case at bar did not reach the
second stage; it was dismissed during completion stage pursuant to Section 1(f) of
356
356 SUPREME COURT REPORTS ANNOTATED
De Liano vs. Court of Appeals
Rule 50. Consequently, petitioner’s contention that the appellate court should have
considered the substance of the appeal prior to dismissing it due to technicalities does not
gain our favor.
Same; Attorneys; Corporation Law; Generally, the negligence of counsel binds his client;
A corporation is an artificial being whose juridical personality is only a fiction created by
law—it can only exercise its powers and transact its business through the instrumentalities of
its board of directors, and through its officers and agents, when authorized by resolution or
its by-laws.—Generally, the negligence of counsel binds his client. Actually, Atty. Afable is
also an employee of petitioner San Miguel Corporation. Yet even this detail will not operate
in petitioner’s favor. A corporation, it should be recalled, is an artificial being whose juridical
personality is only a fiction created by law. It can only exercise its powers and transact its
business through the instrumentalities of its board of directors, and through its officers and
agents, when authorized by resolution or its bylaws. x x x Moreover, “x x x a corporate officer
or agent may represent and bind the corporation in transactions with third persons to the
extent that authority to do so has been conferred upon him, and this includes powers which
have been intentionally conferred, and also such powers as, in the usual course of the
particular business, are incidental to, or may be implied from, the powers intentionally
conferred, powers added by custom and usage, as usually pertaining to the particular officer
or agent, and such apparent powers as the corporation has caused persons dealing with the
officer or agent to believe that it has conferred.

PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.


De Lima-Bohol & Meñez Law Offices for petitioners.
Leovillo C. Agustin Law Offices for respondent.

DE LEON, JR., J.:

Before us is a petition for review on certiorari praying for the reversal of the
Resolution dated June 4, 1999 issued by the former
1

_______________

Penned by Associate Justice Ramon A. Barcelona, and concurred in by Associate Justices Demetrio G.
1

Demetria and Mariano M. Umali, Fourteenth Division. Rollo, pp. 45-48.


357
VOL. 370, NOVEMBER 22, 2001 357
De Liano vs. Court of Appeals
Fourteenth Division of the Court of Appeals in CA-G.R. CV No. 60460, which
dismissed the appeal of herein petitioners on procedural grounds as well as its
Resolution of February 23, 2000 which denied their motion for reconsideration.
The relevant facts are:
On March 30, 1998, the Regional Trial Court of Quezon City, Branch 227 issued a
Decision in Civil Case No. Q-95-24332, the dispositive portion of which is hereunder
2 3

quoted:
WHEREFORE, premises considered, defendant San Miguel Corporation is hereby ordered

1. 1.To release to the plaintiff the owner’s duplicate copy of

TCT No. 299551 in the same [sic] of Benjamin A. Tango;

2. 2.To release to plaintiff the originals of the REM contracts dated December 4, 1990
and February 17, 1992 and to cause the cancellation of the annotation of the same
on plaintiffs [sic] TCT No. 299551;
3. 3.To pay the plaintiff the following sums:

1. 3.1.P100,000.00 as and by way of moral damages;


2. 3.2.P50,000.00 as and by way of attorney’s fees;
3. 3.3.costs of suit.

SO ORDERED.
In brief, the case involved the cancellation of two (2) real estate mortgages in favor of
petitioner San Miguel Corporation (SMC) executed by private respondent Benjamin
A. Tango over his house and lot in Quezon City. The mortgages were third party or
accommodation mortgages on behalf of the spouses Bernardino and Carmelita Ibarra
who were dealers of SMC products in Aparri, Cagayan. Other defendants in the case
were Francisco A.G. De Liano

_______________

2Annex “Q” of the Petition, Rollo, pp. 97-101.


3Entitled “Benjamin A. Tango v. San Miguel Corporation, Francisco A.G. De Liano, Alberto O. Villa-
Abrille, Jr., and Spouses Carmelita Ibarra and Bernardino Ibarra.”
358
358 SUPREME COURT REPORTS ANNOTATED
De Liano vs. Court of Appeals
and Alberto O. Villa-Abrille, Jr., who are senior executives of petitioner SMC.
SMC, De Liano and Abrille appealed the aforesaid decision to the Court of Appeals.
In due time, their counsel, Atty. Edgar B. Afable, filed an Appellants’ Brief which 4

failed to comply with Section 13, Rule 44 of the Rules of Court. The appellee (herein
private respondent) was quick to notice these deficiencies, and accordingly filed a
“Motion to Dismiss Appeal” dated March 8, 1999. Required to comment, the
5 6

appellants averred that their brief had substantially complied with the contents as
set forth in the rules. They proffered the excuse that the omissions were only the
result of oversight or inadvertence and as such could be considered “harmless” errors.
They prayed for liberality in the application of technical rules, adding that they have
a meritorious defense.
On June 4, 1999, the appellate court issued the first assailed resolution dismissing 7

the appeal. The Court of Appeals held, as follows:


xxx xxx xxx
As pointed out by plaintiff-appellee, the Brief does not contain a Subject Index nor a Table
of Cases and Authorities, with page references. Moreover, the Statement of the Case,
Statement of Facts, and Arguments in the Brief has no page reference to the record. These
procedural lapses justify the dismissal of the appeal, pursuant to Section 1 (f), Rule 50 of the
1997 Rules of Civil Procedure, as amended, which reads:
“SECTION 1. Grounds for dismissal of appeal.—An appeal may be dismissed by the Court of Appeals,
on its own motion, or on that of the appellee, on the following grounds:
xxx xxx xxx
(f) Absence of specific assignment of errors in the appellant’s brief, or of page references to the
record as required in section 13, paragraphs (a), (c), (d) and (f) of Rule 44;”
xxx xxx xxx

_______________

4 Annex “R” of the Petition, Rollo, pp. 107-121.


5 Annex “S” of the Petition, Rollo, pp. 122-125.
6 Annex “T” of the Petition, Rollo, pp. 126-128.

7 Annex “A” of the Petition, Rollo, pp. 45-48.

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VOL. 370, NOVEMBER 22, 2001 359
De Liano vs. Court of Appeals
Finally, defendants-appellants, despite having been notified of such defects, still failed to
amend their Brief to conform to the Rules, and instead, argues that these are mere “harmless
errors.” In the case of Del Rosario v. Court of Appeals, G.R. No. 113890, February 22,
1996, 241 SCRA 553 [1996], the Supreme Court, in sustaining the dismissal of the
petitioner’s appeal for non-compliance with the rule on the contents of the Appellant’s Brief,
ruled that:
“Long ingrained in our jurisprudence is the rule that the right to appeal is a statutory right and a
party who seeks to avail of the right must faithfully comply with the rules. x x x These rules are
designed to facilitate the orderly disposition of appealed cases. In an age where courts are bedeviled
by clogged dockets, these rules need to be followed by appellants with greater fidelity. Their observance
cannot be left to the whims and caprices of appellants. x x x”
Having ruled as such, the Court need not resolve plaintiff-appellee’s contention that the
issues raised in the appeal are mere questions of law.
The appellants (herein petitioners) sought to have the foregoing resolution
reconsidered. Simultaneously, through the same counsel, they filed a “Motion to
Admit Amended Defendants-Appellants’ Brief.” The appellate court denied the
8

consolidated motions in its Resolution of February 23, 2000.


9

From the denial of their motion for reconsideration, only petitioner SMC
interposed the instant petition. As grounds for allowance, petitioner contends that:
10

THE COURT OF APPEALS ERRED IN DISMISSING SMC’s APPEAL ON THE BASIS OF


PURE TECHNICALITIES AND EVEN AFTER SMC HAS CORRECTED THE TECHNICAL
DEFECT OF ITS APPEAL.

_______________

8 Annexes “U” and “V” of the Petition, Rollo, pp. 129-133 and 134-153, respectively.
9 Annex “B” of the Petition, Rollo, p. 50.
10 We note with interest that petitioner has entrusted the instant appeal to external counsel.

360
360 SUPREME COURT REPORTS ANNOTATED
De Liano vs. Court of Appeals

THE COURT OF APPEALS ERRED IN DISMISSING SMC’s APPEAL WITHOUT


CONSIDERING ITS MERITS.

1. 1.There are valid grounds to reverse the RTC’s award of damages in favor of Tango.
The award of damages has no basis in fact or in law.
2. 2.The appeal involves a question of substance which should have been resolved by the
Court of Appeals, to wit: whether a third party mortgagor can unilaterally withdraw
the mortgage without the consent of the debtor and creditor.

The petition has no merit.


The premise that underlies all appeals is that they are merely rights which arise
from statute; therefore, they must be exercised in the manner prescribed by law. It is
to this end that rules governing pleadings and practice before appellate courts were
imposed. These rules were designed to assist the appellate court in the
accomplishment of its tasks, and overall, to enhance the orderly administration of
justice.
In his definition of a brief, Justice Malcolm explained thus:
x x x [L]et it be recalled that the word “brief” is derived from the Latin brevis, and the
French briefe, and literally means a short or condensed statement. The purpose of the brief,
as all law students and lawyers know, is to present to the court in concise form the points
and questions in controversy, and by fair argument on the facts and law of the case to assist
the court in arriving at a just and proper conclusion. The brief should be so prepared as to
minimize the labor of the court in the examination of the record upon which the appeal is
heard and determined. [italics supplied]
11

Relative thereto, Section 13, Rule 44 of the Revised Rules of Court governs the format
to be followed by the appellant in drafting his brief, as follows:

_______________

Estiva v. Cavil, 59 Phil. 67, 68-69 (1933).


11

361
VOL. 370, NOVEMBER 22, 2001 361
De Liano vs. Court of Appeals
Contents of appellant’s brief.—The appellant’s brief shall contain, in the order herein
indicated, the following:

1. (a)A subject index of the matter in the brief with a digest of the arguments and page
references, and a table of cases alphabetically arranged, textbooks and statutes cited
with references to the pages where they are cited;
2. (b)An assignment of errors intended to be urged, which errors shall be separately,
distinctly and concisely stated without repetition and numbered consecutively;
3. (c)Under the heading “Statement of the Case,” a clear and concise statement of the
nature of the action, a summary of the proceedings, the appealed rulings and orders
of the court, the nature of the judgment and any other matters necessary to an
understanding of the nature of the controversy, with page references to the record;
4. (d)Under the heading “Statement of Facts,” a clear and concise statement in a
narrative form of the facts admitted by both parties and of those in controversy,
together with the substance of the proof relating thereto in sufficient detail to make
it clearly intelligible, with page references to the record;
5. (e)A clear and concise statement of the issues of fact or law to be submitted to the
court for its judgment;
6. (f)Under the heading “Argument,” the appellant’s arguments on each assignment of
error with page references to the record. The authorities relied upon shall be cited
by the page of the report at which the case begins and the page of the report on which
the citation is found;
7. (g)Under the heading “Relief,” a specification of the order or judgment which the
appellant seeks; and
8. (h)In cases not brought up by record on appeal, the appellant’s brief shall contain, as
an appendix, a copy of the judgment or final order appealed from.
This particular rule was instituted with reason, and most certainly, it was not
intended to become “a custom more honored in the breach than in the observance.” It
has its logic, which is to present to the appellate court in the most helpful light, the
factual and legal antecedents of a case on appeal.
The first requirement of an appellant’s brief is a subject index. The index is
intended to facilitate the review of appeals by provid-
362
362 SUPREME COURT REPORTS ANNOTATED
De Liano vs. Court of Appeals
ing ready reference, functioning much like a table of contents. Unlike in other
jurisdictions, there is no limit on the length of appeal briefs or appeal memoranda
filed before appellate courts. The danger of this is the very real possibility that the
reviewing tribunal will be swamped with voluminous documents. This occurs even
though the rules consistently urge the parties to be “brief” or “concise” in the drafting
of pleadings, briefs, and other papers to be filed in court. The subject index makes
readily available at one’s fingertips the subject of the contents of the brief so that the
need to thumb through the brief page after page to locate a party’s arguments, or a
particular citation, or whatever else needs to be found and considered, is obviated.
An assignment of errors follows the subject index. It is defined in this wise:
An assignment of errors in appellate procedure is an enumeration by appellant or plaintiff in
error of the errors alleged to have been committed by the court below in the trial of the case
upon which he seeks to obtain a reversal of the judgment or decree; it is in the nature of a
pleading, and performs in the appellate court the same office as a declaration or complaint
in a court of original jurisdiction. Such an assignment is appellant’s complaint, or pleading,
in the appellate court, and takes the place of a declaration or bill; an appeal without an
assignment of errors would be similar to a suit without a complaint, bill, or declaration. The
assignment is appellant’s declaration or complaint against the trial judge, charging harmful
error, and proof vel non of assignment is within the record on appeal.
xxx xxx xxx
The object of such pleadings is to point out the specific errors claimed to have been
committed by the court below, in order to enable the reviewing court and the opposing party
to see on what points appellant or plaintiff in error intends to ask a reversal of the judgment
or decree, and to limit discussion to those points. The office of an assignment of errors is not
to point out legal contentions, but only to inform the appellate court that appellant assigns
as erroneous certain named rulings; the function of the assignment is to group and bring
forward such of the exceptions previously noted in the case on appeal as appellant desires to
preserve and present to the appellant. 12

_______________

5 C.J.S. Appeal and Error § 1217.


12

363
VOL. 370, NOVEMBER 22, 2001 363
De Liano vs. Court of Appeals
It has been held that a general assignment of errors is unacceptable under the rules.
Thus, a statement of the following tenor: that “the Court of First Instance of this City
incurred error in rendering the judgment appealed from, for it is contrary to law and
the weight of the evidence,” was deemed insufficient. The appellant has to specify in
13

what aspect of the law or the facts that the trial court erred. The conclusion, therefore,
is that the appellant must carefully formulate his assignment of errors. Its
importance cannot be underestimated, as Section 8, Rule 51 of the Rules of Court will
attest:
Questions that may be decided.—No error which does not affect the jurisdiction over the
subject matter or the validity of the judgment appealed from or the proceedings therein will
be considered unless stated in the assignment of errors, or closely related to or dependent on
an assigned error and properly argued in the brief, save as the court may pass upon plain
errors and clerical errors.
The rules then require that an appellant’s brief must contain both a “statement of the
case” and a “statement of facts.” A statement of the case gives the appellate tribunal
an overview of the judicial antecedents of the case, providing material information
regarding the nature of the controversy, the proceedings before the trial court, the
orders and rulings elevated on appeal, and the judgment itself. These data enable the
appellate court to have a better grasp of the matter entrusted to it for its appraisal.
In turn, the statement of facts comprises the very heart of the appellant’s brief.
The facts constitute the backbone of a legal argument; they are determinative of the
law and jurisprudence applicable to the case, and consequently, will govern the
appropriate relief. Appellants should remember that the Court of Appeals is
empowered to review both questions of law and of facts. Otherwise, where only a pure
question of law is involved, appeal would pertain to this Court. An appellant,
therefore, should take care to state the facts accurately though it is permissible to
present them in a manner favorable to one party. The brief must state the facts
admitted

_______________

Santiago v. Felix, 94 Phil. 378, 384 (1913).


13

364
364 SUPREME COURT REPORTS ANNOTATED
De Liano vs. Court of Appeals
by the parties, as well as the facts in controversy. To laymen, the distinction may
appear insubstantial, but the difference is clear to the practitioner and the student of
law. Facts which are admitted require no further proof, whereas facts in dispute must
be backed by evidence. Relative thereto, the rule specifically requires that one’s
statement of facts should be supported by page references to the record. Indeed,
disobedience therewith has been punished by dismissal of the appeal. Page 14

references to the record are not an empty requirement. If a statement of fact is


unaccompanied by a page reference to the record, it may be presumed to be without
support in the record and may be stricken or disregarded altogether. 15

When the appellant has given an account of the case and of the facts, he is required
to state the issues to be considered by the appellate court. The statement of issues is
not to be confused with the assignment of errors: they are not one and the same, for
otherwise, the rules would not require a separate statement for each. The statement
of issues puts forth the questions of fact or law to be resolved by the appellate court.
What constitutes a question of fact or one of law should be clear by now:
At this point, the distinction between a question of fact and a question of law must be clear.
As distinguished from a question of law which exists “when the doubt or difference arises as
to what the law is on certain state of facts”—“there is a question of fact when the doubt or
difference arises as to the truth or the falsehood of alleged facts;” or when the “query
necessarily invites calibration of the whole evidence considering mainly the credibility of
witnesses, existence and relevancy of specific surrounding circumstances, their relation to
each other and to the whole and the probabilities of the situation.” 16

_______________

14 Eg., Heirs of Palomique v. Court of Appeals, 134 SCRA 331, 334 (1985) and Genobiagon v. Court of

Appeals, 76 SCRA 37, 39 (1977). Also, in People v. Marong (119 SCRA 430, 436 [1982]), we disapproved of
the Solicitor General’s failure to cite page references to the record in support of its statement of facts.
15 5 Am Jur 2d, Appellate Review § 546.

16 Bernardo v. Court of Appeals, 216 SCRA 224, 232 (1992).

365
VOL. 370, NOVEMBER 22, 2001 365
De Liano vs. Court of Appeals
Thereafter, the appellant is required to present his arguments on each assigned error.
An appellant’s arguments go hand in hand with his assignment of errors, for the
former provide the justification supporting his contentions, and in so doing resolves
the issues. It will not do to impute error on the part of the trial court without
substantiation. The mere elevation on appeal of a judgment does not create a
presumption that it was rendered in error. The appellant has to show that he is
entitled to the reversal of the judgment appealed, and he cannot do this unless he
provides satisfactory reasons for doing so. It is therefore essential that
x x x [A]s far as possible, the errors and reasons assigned should be supported by a citation
of authorities. The failure to do so has been said to be inexcusable; and, although a point
made in the brief is before the court even though no authorities are cited and may be
considered and will be where a proposition of well established law is stated, the court is not
required to search out authorities, but may presume that counsel has found no case after
diligent search or that the point has been waived or abandoned, and need not consider the
unsupported errors assigned, and ordinarily will not give consideration to such errors and
reasons unless it is apparent without further research that the assignments of errors
presented are well taken. 17

In this regard, the rules require that authorities should be cited by the page of the
report at which the case begins, as well as the page of the report where the citation is
found. This rule is imposed for the convenience of the appellate court, for obvious
reasons: since authorities relied upon by the parties are checked for accuracy and
aptness, they are located more easily as the appellate court is not bound to peruse
volume upon volume, and page after page, of reports.
Lastly, the appellant is required to state, under the appropriate heading, the
reliefs prayed for. In so doing, the appellate court is left in no doubt as to the result
desired by the appellant, and act as the circumstances may warrant.
Some may argue that adherence to these formal requirements serves but a
meaningless purpose, that these may be ignored with

_______________

5 C.J.S. Appeal and Error § 1325.


17

366
366 SUPREME COURT REPORTS ANNOTATED
De Liano vs. Court of Appeals
little risk in the smug certainty that liberality in the application of procedural rules
can always be relied upon to remedy the infirmities. This misses the point. We are
not martinets; in appropriate instances, we are prepared to listen to reason, and to
give relief as the circumstances may warrant. However, when the error relates to
something so elementary as to be inexcusable, our discretion becomes nothing more
than an exercise in frustration. It comes as an unpleasant shock to us that the
contents of an appellant’s brief should still be raised as an issue now. There is nothing
arcane or novel about the provisions of Section 13, Rule 44. The rule governing the
contents of appellants’ briefs has existed since the old Rules of Court, which took 18

effect on July 1, 1940, as well as the

_______________

18 Section 17, Rule 48 of which states:


Contents of appellant’s brief.—The appellant’s brief shall contain in the order herein indicated the following:

1. (a)A subject index of the matter in the brief with page references and a table of cases alphabetically arranged,
textbooks, and statutes cited with references to the pages where they are cited, if the brief contains twenty or
more pages;
2. (b)An assignment of errors intended to be urged. Such errors shall be separately, distinctly, and concisely stated
without repetition, and shall be numbered consecutively;
3. (c)Under the heading “Statement of Facts,” a clear and concise statement in brief narrative form of the facts of
the case, including the nature of the action, the character of the pleading and proceedings, the substance of
the proof in sufficient detail to make it clearly intelligible, the rulings and orders of the court, the nature of
the judgment, and any other matters necessary to an understanding of the nature of the controversy on
appeal, with page references to the record;
4. (d)Under the heading “Argument,” the appellant’s arguments on each assignment of error with page references
to the record. The authorities relied upon shall be cited by the page of the report at which the case begins and
the page of the report on which the citation is found;
5. (e)Under the heading “Relief,” a specification of the order or judgment which the appellant seeks;

367
VOL. 370, NOVEMBER 22, 2001 367
De Liano vs. Court of Appeals
Revised Rules of Court, which took effect on January 1, 1964, until they were
19

superseded by the present 1997 Rules of Civil Pro-

_______________

1. (f)In cases not brought up by record on appeal, the appellant’s brief shall contain as an appendix a
copy of the judgment or order appealed from.
19 Section 16, Rule 46 thereof provides:
Contents of appellant’s brief.—The appellant’s brief shall contain in the order herein indicated the following:

1. (a)A subject index of the matter in the brief with a digest of the argument and page references and a table of
cases alphabetically arranged, textbooks and statutes cited with reference to the pages where they are cited;
2. (b)An assignment of errors intended to be urged. Such errors shall be separately, distinctly and concisely stated
without repetition, and shall be numbered consecutively;
3. (c)Under the heading “Statement of the Case,” a clear and concise statement of the nature of the action, a
summary of the proceedings, the appealed rulings and orders of the court, the nature of the judgment and
any other matters necessary to an understanding of the nature of the controversy, with page references to the
record;
4. (d)Under the heading “Statement of Facts,” a clear and concise statement in a narrative form of the facts
admitted by both parties and of those in controversy, together with the substance of the proof relating thereto
in sufficient detail to make it clearly intelligible, with page references to the record;
5. (e)A clear and concise statement of the issues of fact or law to be submitted to the court for its judgment;
6. (f)Under the heading “Argument,” the appellant’s arguments on each assignment of error with page references
to the record. The authorities relied upon shall be cited by the page of the report at which the case begins and
the page of the report on which the citation is found;
7. (g)Under the heading “Relief,” a specification of the order or judgment which the appellant seeks;
8. (h)In cases not brought up by record on appeal, the appellant’s brief shall contain, as an appendix, a copy of the
judgment or order appealed from.

368
368 SUPREME COURT REPORTS ANNOTATED
De Liano vs. Court of Appeals
cedure. The provisions were substantially preserved, with few revisions.
An additional circumstance impels us to deny the reinstatement of petitioner’s
appeal. We observed that petitioner submitted an “Amended Appellant’s Brief” to
cure the infirmities of the one first filed on its behalf by its lawyer. All things being
equal, we would have been inclined to grant the petition until we realized that the
attempt at compliance was, at most, only a cosmetic procedure. On closer scrutiny, the
amended brief was as defective as the first. Where the first brief lacked an
assignment of errors but included a statement of issues, the amended brief suffered
a complete reversal: it had an assignment of errors but no statement of issues. The
“statement of facts” lacked page references to the record, a deficiency symptomatic of
the first. Authorities were cited in an improper manner, that is, the exact page of the
report where the citation was lifted went unspecified. The amended brief did not 20

even follow the prescribed order: the assignment of errors came after the statement
of the case and the statement of facts. No one could be expected to ignore such glaring
errors, as in the case at bar. The half-hearted attempt at submitting a supposedly
amended brief only serves to harden our resolve to demand a strict observance of the
rules.
We remind members of the bar that their first duty is to comply with the rules, not
to seek exceptions. As was expressed more recently in Del Rosario v. Court of
Appeals, which was rightfully quoted by the appellate court, we ruled that:
21

Petitioner’s plea for liberality in applying these rules in preparing Appellants’ Brief does not
deserve any sympathy. Long ingrained in our jurisprudence is the rule that the right to
appeal is a statutory right and a party who seeks to avail of the right must faithfully comply
with the rules. In People v. Marong, we held that deviations from the rules cannot be
tolerated. The rationale for this strict attitude is not difficult to appreciate. These rules are
designed to facilitate the orderly disposition of appealed
_______________

20 As added aggravation, two cases (Filoil Marketing Corporation v. Intermediate Appellate Court and Ilocos

Norte Electric Company v. Court of Appeals) were mis-cited; see Rollo, p. 136.
21 241 SCRA 553, 557 (1995).

369
VOL. 370, NOVEMBER 22, 2001 369
De Liano vs. Court of Appeals
cases. In an age where courts are bedeviled by clogged dockets, these rules need to be followed
by appellants with greater fidelity. Their observance cannot be left to the whims and caprices
of appellants. In the case at bar, counsel for petitioners had all the opportunity to comply with
the above rules. He remained obstinate in his non-observance even when he sought
reconsideration of the ruling of the respondent court dismissing his clients’ appeal. Such
obstinacy is incongruous with his late plea for liberality in construing the rules on
appeal. [italics supplied]
Anent the second issue, it may prove useful to elucidate on the processing of appeals
in the Court of Appeals. In so doing, it will help to explain why the former Fourteenth
Division of the appellate court could not look into the merits of the appeal, as
petitioner corporation is urging us to do now.
The Rules of Court prescribe two (2) modes of appeal from decisions of the Regional
Trial Courts to the Court of Appeals. When the trial court decides a case in the
exercise of its original jurisdiction, the mode of review is by an ordinary appeal in
accordance with Section 2(a) of Rule 41. In contrast, where the assailed decision was
22

rendered by the trial court in the exercise of its appellate jurisdiction, the mode of
appeal is via a petition for review pursuant to Rule 42. We are more concerned here
23

about the first mode

_______________

22 Section 2 (a) states:


(a) Ordinary appeal.—The appeal to the Court of Appeals in cases decided by the Regional Trial Court in the exercise of
its original jurisdiction shall be taken by filing a notice of appeal with the court which rendered the judgment or final
order appealed from and serving a copy thereof upon the adverse party. No record on appeal shall be required except in
special proceedings and other cases of multiple or separate appeals where the law or these Rules so require. In such
cases, the record on appeal shall be filed and served in like manner.
23 Section 1 thereof provides:
How appeal taken; time for filing.—A party desiring to appeal from a decision of the Regional Trial Court rendered in
the exercise of its appellate jurisdiction may file a verified petition for review with the Court of Appeals, paying at the
same time to the clerk of said court the corresponding docket and other lawful fees, depositing the amount of P500.00
for costs, and furnishing the Regional Trial
370
370 SUPREME COURT REPORTS ANNOTATED
De Liano vs. Court of Appeals
since the case at bar involves a decision rendered by the Regional Trial Court
exercising its original jurisdiction.
Cases elevated to the Court of Appeals are treated differently depending upon
their classification into one of three (3) categories: appealed civil cases, appealed
criminal cases, and special cases. Be it noted that all cases are under the supervision
24

and control of the members of the Court of Appeals in all stages, from the time of
filing until the remand of the cases to the courts or agencies of origin. Ordinary 25
appealed civil cases undergo two (2) stages. The first stage consists of completion of
the records. The second stage is for study and report, which follows when an appealed
case is deemed submitted for decision, thus:
When case deemed submitted for judgment.—A case shall be deemed submitted for judgment:

1. A.In ordinary appeals.—

1. 1)Where no hearing on the merits of the main case is held, upon the filing of the last
pleading, brief, or memorandum required

_______________

Court and the adverse party with a copy of the petition. The petition shall be filed and served within fifteen (15) days
from notice of the decision sought to be reviewed or of the denial of petitioner’s motion for new trial or reconsideration
filed in due time after judgment. Upon proper motion and the payment of the full amount of the docket and other lawful
fees and the deposit for costs before the expiration of the reglementary period, the Court of Appeals may grant an
additional period of fifteen (15) days only within which to file the petition for review. No further extension shall be
granted except for the most compelling reason and in no case to exceed fifteen (15) days.
24 Cases which are considered special include petitions for annulment of judgments of regional trial

courts; petitions for certiorari, mandamus, prohibition, quo warranto, and habeas corpus; petitions for
review of decisions from administrative or quasi-judicial tribunals and from regional trial courts in the
exercise of their appellate jurisdiction; appeals in agrarian cases; and appeals in special civil actions
originating from regional trial courts.
25 Section 1, Rule 3, Revised Internal Rules of the Court of Appeals [hereafter, “RIRCA”].

371
VOL. 370, NOVEMBER 22, 2001 371
De Liano vs. Court of Appeals

1. by the Rules or by the court itself, or the expiration of the period for its filing;
2. 2)Where such a hearing is held, upon its termination or upon the filing of the last
pleading or memorandum as may be required or permitted to be filed by the court,
or the expiration of the period for its filing. 26

3. x x x x x x x x x

At each stage, a separate raffle is held. Thus, a preliminary raffle is held at which
time an appealed case is assigned to a Justice for completion. After completion, when
the case is deemed ripe for judgment, a second raffle is conducted to determine the
Justice to whom the case will be assigned for study and report. Each stage is distinct; 27

it may happen that the Justice to whom the case was initially raffled for completion
may not be the same Justice who will write the decision thereon.
The aforesaid distinction has a bearing on the case at bar. It becomes apparent
that the merits of the appeal can only be looked into during the second stage. The
Justice in-charge of completion exceeds his province should he examine the merits of
the case since his function is to oversee completion only. The prerogative of
determining the merits of an appeal pertains properly to the Justice to whom the case
is raffled for study and report. The case at bar did not reach the second stage; it was
dismissed during completion stage pursuant to Section 1(f) of Rule 50. Consequently,
petitioner’s contention that the appellate court should have considered the substance
of the appeal prior to dismissing it due to technicalities does not gain our favor.
Generally, the negligence of counsel binds his client. Actually, Atty. Afable is also
an employee of petitioner San Miguel Corporation. Yet even this detail will not
28

operate in petitioner’s favor. A

_______________

26 Section 1, Rule 51, Rules of Court.


27 Per section 6, Rule 3 of the RIRCA, the first raffle is open to the public while the second raffle is strictly
confidential.
28 A manifestation filed by SAN MIGUEL states, in the secretary’s certificate attached thereto (Rollo, pp.

169-172), that Atty. Afable is authorized to represent, prosecute and defend petitioner in any action
372
372 SUPREME COURT REPORTS ANNOTATED
De Liano vs. Court of Appeals
corporation, it should be recalled, is an artificial being whose juridical personality is
only a fiction created by law. It can only exercise its powers and transact its business
through the instrumentalities of its board of directors, and through its officers and
agents, when authorized by resolution or its by-laws.
x x x Moreover, “x x x a corporate officer or agent may represent and bind the corporation in
transactions with third persons to the extent that authority to do so has been conferred upon
him, and this includes powers which have been intentionally conferred, and also such powers
as, in the usual course of the particular business, are incidental to, or may be implied from,
the powers intentionally conferred, powers added by custom and usage, as usually pertaining
to the particular officer or agent, and such apparent powers as the corporation has caused
persons dealing with the officer or agent to believe that it has conferred. 29

That Atty. Afable was clothed with sufficient authority to bind petitioner SMC is
undisputable. Petitioner SMC’s board resolution of May 5, 1999 attests to that.
Coupled with the provision of law that a lawyer has authority to bind his client in
taking appeals and in all matters of ordinary judicial procedure, a fortiori then, 30

petitioner SMC must be held bound by the actuations of its counsel of record, Atty.
Afable.
WHEREFORE, the instant petition is hereby DENIED for lack of merit, with cost
against petitioner San Miguel Corporation.
SO ORDERED.
Bellosillo (Chairman), Mendoza, Quisumbing and Buena, JJ., concur.
Petition denied.

_______________

G.R. No. 138884. June 6, 2002. *

RODOLFO DE LEON, petitioner, vs. COURT OF APPEALS and SPOUSES


ESTELITA and AVELINO BATUNGBACAL, respondents.
Actions; Judgments; Appeals; A several judgment is proper only when the liability of each
party is clearly separable and distinct from that of his co-parties, such that the claims against
each of them could have been the subject of separate suits, and judgment for or against one of
them will not necessarily affect the other—where a common cause of action exists against the
defendants, as in actions against solidary debtors, a several judgment is not proper.—A
several judgment is proper only when the liability of each party is clearly separable and
distinct from that of his co-parties, such that the claims against each of them could have been
the subject of separate suits, and judgment for or against one of them will not necessarily
affect the other. Where a common cause of action exists against the defendants, as in actions
against solidary debtors, a several judgment is not proper. In this case, private respondents
are sued together under a common cause of action and are sought to be held liable as solidary
debtors for a loan contracted by Estelita. This is the clear import of the allegation in the
complaint that the proceeds of the loan benefited the conjugal partnership.
Same; Same; Same; Between two judgments rendered by a trial court, there could only be
one judgment that finally disposes of the case on the merits, and it is receipt of notice of said
final judgment that marks the point when the reglementary period is to begin running.—
Between the two judgments rendered by the trial court, there could only be one judgment

_______________

*SECOND DIVISION.
217
VOL. 383, JUNE 6, 2002 217
De Leon vs. Court of Appeals
that finally disposes of the case on the merits. Receipt of notice of this final judgment
marks the point when the reglementary period is to begin running. In this case, that
judgment is the decision rendered by the trial court on June 2, 1997 and it is only from the
date of notice of this decision that the reglementary period began to run. The partial
judgment dated May 14, 1996 was rendered only with respect to one issue in the case and is
not the final and appealable order or judgment that finally disposes of the case on the merits.
It must, therefore, only be appealed together with the decision dated June 2, 1997.
Same; Same; Words and Phrases; Final and Interlocutory Orders; A final order is that
which gives an end to the litigation, and when the order or judgment does not dispose of the
case completely but leaves something to be done upon the merits, it is merely interlocutory.—
A final order is that which gives an end to the litigation. When the order or judgment does
not dispose of the case completely but leaves something to be done upon the merits, it is
merely interlocutory. Quite obviously, the partial judgment ordering Estelita to pay
petitioner is an interlocutory order because it leaves other things for the trial court to do and
does not decide with finality the rights and obligations of the parties. Specifically, at the time
the partial judgment was rendered, there remained other issues including whether the
husband Avelino had any liability under Article 121 of the Family Code. However, as the
partial judgment disposed of one of the issues involved in the case, it is to be taken in
conjunction with the decision dated June 2, 1997. Together, these two issuances form one
integrated decision.
Same; Same; Attorneys; Pleadings and Practice; When a party is represented by counsel
of record, service of orders and notices must be made upon said attorney and notice to the
client and to any other lawyer, not the counsel of record, is not notice in law.—The question
now is when the period to appeal should actually commence, from June 6, 1997, as petitioner
contends; or from June 10, 1997, as private respondent Estelita Batungbacal claims? We hold
that the period began to run on June 6, 1997 when counsel for private respondents received
a copy of the decision dated June 2, 1997. When a party is represented by counsel of record,
service of orders and notices must be made upon said attorney and notice to the client and to
any other lawyer, not the counsel of record, is not notice in law. The exception to this rule is
when service upon the party himself has been ordered by the court. In this case, it does not
appear that there was any substitution of counsel or that service upon private respondent
Estelita Batungbacal had been specifically ordered by the trial court; hence, the counsel of
record for the private respondents is presumed to be
218
218 SUPREME COURT REPORTS ANNOTATED
De Leon vs. Court of Appeals
their counsel on appeal and the only one authorized to receive court processes. Notice of
the judgment upon such counsel, therefore, was notice to the clients for all legal intents and
purposes.
Same; Same; Parties; Where the spouses have been jointly sued under a common cause of
action, an appeal made by the husband inures to the benefit of the wife.—Private respondents’
appeal had been taken within the reglementary period since Avelino Batungbacal had filed
a notice of appeal on June 19, 1997 or 13 days from their counsel’s receipt of the decision on
June 6, 1997. Respondent spouses having been jointly sued under a common cause of action,
an appeal made by the husband inures to the benefit of the wife. The notice of appeal filed by
Estelita was a superfluity, the appeal having been perfected earlier by her husband.
Same; Same; The grounds for dismissal of an appeal under Section 1 of Rule 50 of the
Rules of Court are discretionary upon the Court of Appeals.—Worth stressing, the grounds
for dismissal of an appeal under Section 1 of Rule 50 of the Rules of Court are discretionary
upon the Court of Appeals. This can be seen from the very wording of the Rules which uses
the word ‘may’ instead of ‘shall.’ This Court has held in Philippine National Bank vs.
Philippine Milling Co., Inc. that Rule 50, Section 1 which provides specific grounds for
dismissal of appeal manifestly “confers a power and does not impose a duty.” “What is more,
it is directory, not mandatory.” With the exception of Sec. 1(b), the grounds for the dismissal
of an appeal are directory and not mandatory, and it is not the ministerial duty of the court
to dismiss the appeal. The discretion, however, must be a sound one to be exercised in
accordance with the tenets of justice and fair play having in mind the circumstances
obtaining in each case.
Same; Same; Pleadings and Practice; Appeal Briefs; Where the citations found in the
appellants’ brief could sufficiently enable the appellate court to locate expeditiously the
portions of the record referred to, there is substantial compliance with the requirements of
Section 13(c) and (d), Rule 46 of the Rules of Court; For the same reason, the Court also holds
that the Court of Appeals did not err when it did not dismiss the appeal based on the allegation
that appellants’ brief failed to comply with the internal rules of said court.—The Court of
Appeals rightly exercised its discretion when, in denying petitioner’s motion to dismiss, it
ruled that the citations contained in the appellants’ brief were in substantial compliance with
the rules. Where the citations found in the appellants’ brief could sufficiently enable the
appellate court to locate expeditiously the portions of the record referred to, there is
substantial compliance with the requirements of Section 13(c) and (d), Rule 46 of the Rules
of Court. Such determination was
219
VOL. 383, JUNE 6, 2002 219
De Leon vs. Court of Appeals
properly within the appellate court’s discretion. Nothing in the records indicate that it
was exercised capriciously, whimsically, or with a view of permitting injury upon a party
litigant. For the same reasons, we hold that the respondent Court of Appeals also did not err
when it did not dismiss the appeal based on the allegation that appellants’ brief failed to
comply with the internal rules of said court.
Same; Same; Same; It is error for the Court of Appeals to require the appellee to file an
appellee’s brief in response to an amended appellants’ brief that had been filed without the
proper motion for leave to do so and corresponding order from the respondent court.—The
Court of Appeals erred in requiring petitioner to file the appellee’s brief in response to the
amended appellants’ brief. Note that the amended brief was filed without the proper motion
for leave to do so and corresponding order from the respondent court. Even more significant,
it was filed beyond the extensions of time granted to appellants. The discretion in accepting
late briefs conferred upon respondent court which this Court applied in the cases of Maqui
vs. CA and Vda. de Haberer vs. CA, finds no application under the present circumstances
because, unlike in these two cases, here no valid reason was advanced for the late filing of
the amended brief. While the amended brief might contain no substantial and prejudicial
changes, it was error for the respondent court to accept the amended brief as filed and then
require petitioner to file appellee’s brief because admittedly the amended brief was filed
beyond August 31, 1998, the last period of extension granted to private respondents.
Same; Same; Same; The proper remedy in case of denial of the motion to dismiss is to file
the appellee’s brief and proceed with the appeal.—On the second issue, we hold that the Court
of Appeals did not commit grave abuse of discretion in considering the appeal submitted for
decision. The proper remedy in case of denial of the motion to dismiss is to file the appellee’s
brief and proceed with the appeal. Instead, petitioner opted to file a motion for
reconsideration which, unfortunately, was pro forma. All the grounds raised therein have
been discussed in the first resolution of the respondent Court of Appeals. There is no new
ground raised that might warrant reversal of the resolution. A cursory perusal of the motion
would readily show that it was a near verbatim repetition of the grounds stated in the motion
to dismiss; hence, the filing of the motion for reconsideration did not suspend the period for
filing the appellee’s brief. Petitioner was therefore properly deemed to have waived his right
to file appellee’s brief.
220
220 SUPREME COURT REPORTS ANNOTATED
De Leon vs. Court of Appeals

SPECIAL CIVIL ACTION in the Supreme Court. Certiorari and Prohibition.

The facts are stated in the opinion of the Court.


Gil Venerando R. Racho for petitioners.
De Castro & Cagampang Law Offices for private respondents.

QUISUMBING, J.:

Before us is a special civil action for certiorari and prohibition under Rule 65 of the
Rules of Court. It seeks to annul and set aside the resolution dated January 13, 1999
1

of the Court of Appeals, in CA-G.R. CV No. 57989, denying petitioner’s motion (a) to
dismiss the appeals of private respondents, and (b) to suspend the period to file
appellee’s brief. Also assailed is the CA resolution dated April 19, 1999, denying
2

petitioner’s motion for reconsideration.


The antecedent facts are as follows:
On March 11, 1996, petitioner Rodolfo de Leon filed with the Regional Trial Court
of Bataan, Branch 3, a complaint for a sum of money plus damages, with a prayer for
3
preliminary attachment, against herein private respondents Avelino and Estelita
Batungbacal. The complaint averred that private respondent Estelita Batungbacal
executed a promissory note in favor of herein petitioner for her P500,000 loan with
4

stipulated interest at 5 percent monthly. The loan and interest remained unpaid
allegedly because the check issued by Estelita was dishonored. Private respondents
filed an answer with counterclaim. Estelita admitted the loan obligation, but Avelino
denied liability on the ground that his wife was not the designated administrator and
therefore had no authority to bind the conjugal partnership. Avelino further averred
that his wife contracted the debt without his knowledge and consent.

_______________

1 CA Rollo, pp. 116-117.


2 Id., at 135-136.
3 Rollo, pp. 31-38.

4 Id., at 39.

221
VOL. 383, JUNE 6, 2002 221
De Leon vs. Court of Appeals
Based on Estelita’s admission, petitioner filed a motion for partial judgment against
Estelita, which the trial court granted in an order dated May 14, 1996:
5

“WHEREFORE, the Motion for Partial Judgment on the Pleadings is hereby granted in
accordance with Sec. 4 of Rule 36, Rules of Court. As prayed for, judgment is hereby rendered
against Estelita Q. Batungbacal, ordering her to pay plaintiff Rodolfo de Leon the principal
amount of the loan obligation of P500,000.00 plus the stipulated interest which has accrued
thereon at 5% per month since May 1995 until now, plus interest at the legal rate on said
accrued interest from date of judicial demand until the obligation is fully paid.
SO ORDERED.”
Counsel for private respondent spouses received a copy of the partial judgment on
May 21, 1996, but no appeal was taken therefrom. Thus, petitioner filed a motion for
execution of said judgment on June 6, 1996. Counsel for private respondents was
furnished a copy of the motion on the same date. As private respondents interposed
no objection, a writ of execution was correspondingly issued. The sheriff then
proceeded to execute the writ and partially satisfied the judgment award against the
paraphernal property of Estelita and the conjugal properties of the private
respondents with due notice to the latter and their counsel. Again, private
respondents interposed no objection.
Pre-trial was held and trial proceeded on two main issues: (1) whether the loan
was secured with the knowledge and consent of the husband and whether the same
redounded to the benefit of the conjugal partnership; and (2) whether the capital of
the husband would be liable if the conjugal assets or the paraphernal property of the
wife were insufficient to satisfy the loan obligation. On June 2, 1997, the trial court
rendered judgment ordering private respondent Avelino Batungbacal to pay the
6

amount of the loan plus interest and other amounts in accordance with Article 121 of
the Family Code.
_______________
5Id., at 48-49.
6Id., at 54-64.
222
222 SUPREME COURT REPORTS ANNOTATED
De Leon vs. Court of Appeals
Counsel for private respondent spouses received a copy of the decision on June 6,
1997. Avelino through counsel, filed a notice of appeal on June 19, 1997. In a notice
7

of appearance dated June 25, 1997 bearing the conformity solely of Estelita, a new
8

counsel appeared in collaboration with the counsel of record for the private
respondents. On the same date, Estelita through said new counsel, served a notice
that she is appealing both decisions promulgated on May 14, 1996, and June 2, 1997,
to the Court of Appeals. However, the trial court, in an order dated July 7, 1997
9

denied the notice of appeal filed by Estelita on the ground that said notice was filed
10

beyond the reglementary period to appeal.


Private respondents’ appeal was docketed with the respondent Court of Appeals
as CA-G.R. CV No. 57989. Petitioner then filed with the Court of Appeals a Motion to
Dismiss the Appeal with Motion to Suspend period to file Appellee’s Brief on October
11

21, 1998. Petitioner based his motion to dismiss on the following grounds: (1) that the
statement of the case as well as the statement of the facts in the appellants’ brief do
not have page references to the record, and that the authorities relied upon in the
arguments are not cited by the page of the report at which the case begins and the
page of the report on which the citation is found; (2) that no copy of the appealed
decision of the lower court was attached to the appellants’ brief, in violation of the
Internal Rules of the Court of Appeals; (3) that private respondents furnished only
one copy of the appellants’ brief to the petitioner, also in violation of the Rules of
Court; (4) that the decision promulgated against Estelita on May 14, 1996 is no longer
appealable; and (5) that the notice of appeal filed on June 25, 1996 by Estelita
concerning the decision of the trial court against Avelino was filed beyond the
reglementary period to appeal. The motion also prayed that the period for filing
12

_______________

7 Id., at 65.
8 Id., at 66.
9 Id., at 68.

10 Id., at 67.

11 Supra, note 1 at 57-63.

12 Id., at 57-59, 62.

223
VOL. 383, JUNE 6, 2002 223
De Leon vs. Court of Appeals
the appellee’s brief be suspended in view of the pendency of the motion to dismiss. 13

Private respondents, in their opposition, insisted that the statements of the case
14

as well as the statement of facts in their brief contained page references to the record,
and that Estelita had seasonably filed her appeal. Private respondent spouses also
stated that they had filed an Amended Appellants’ Brief on November 27, 1998 and
15
that two copies thereof had been served on petitioner together with copies of the trial
court’s decisions.
On January 13, 1999, the Court of Appeals issued the assailed resolution denying 16

petitioner’s motion to dismiss and virtually admitting the Amended Appellants’ Brief
as follows:
As submitted by appellants, they adopted pertinent portions of the appealed Decision in the
Statement of the Case, indicated specific pages in the appealed decision where the quoted
portions are found. In the bottom of page 2 of the brief, is the quoted portions of the decision,
referring to pages 1 and 2 thereof. On page 3 of the brief is the dispositive portion, taken on
page 11 of the decision. The rest of the narration in the Statement of the Case are the specific
dates of the pleadings, orders, and portions of the decision citing the page references where
they are found.
Two (2) copies of the Amended Brief were served upon appellee with the appealed Decision
attached as Annex “A”, and “B”.
Appellant Estellita Batungbacal explained that her appeal was filed on time. She
cited Guevarra, et al. vs. Court of Appeals, et al., L-49017 and 49024, that a partial judgment
may be appealed only together with the judgment in the main case. She personally received
a copy of the main Decision, dated June 2, 1997 on June 10, 1997, and filed her notice of
appeal dated June 25, 1995 (sic) sent by registered mail on even date, per Registry Receipt
No. 2618, attached as Annex “C” hereof, thereby showing that the notice of appeal was filed
within 15 days from receipt of the Decision appealed from. At any rate, the merit of appellee’s
contention that appellant Estellita Batungbacal can no longer appeal from the decision may
be resolved after the case is considered ready for study and report.

_______________

13 Id., at 63.
14 Id., at 92-93.
15 Id., at 81-91.

16 Id., at 116-117.

224
224 SUPREME COURT REPORTS ANNOTATED
De Leon vs. Court of Appeals
WHEREFORE, the motion to dismiss is hereby DENIED, and appellee is required to file his
appellee’s brief within forty-five (45) days from receipt hereof.
SO ORDERED.
On January 22, 1999, petitioner filed a Motion for Reconsideration of the aforesaid
17

resolution but said motion was denied by the Court of Appeals in a resolution dated 18

April 19, 1999, the pertinent portion of which reads as follows:


The resolution promulgated on January 13, 1999 required appellee to file his appellee’s brief
within forty-five (45) days from receipt of that resolution, or up to March 4, 1999. Up to this
date no appellee’s brief has been submitted.
WHEREFORE, the appeal by appellants is deemed submitted for decision without the
benefit of appellee’s brief, and the records of this case is hereby transmitted to the Raffle
Committee, for re-raffle, for study and report.
SO ORDERED.
Hence, this Petition for Certiorari and Prohibition wherein petitioner contends that
19

respondent Court of Appeals acted:


1. (1)WITHOUT JURISDICTION IN ENTERTAINING THE APPEAL OF PRIVATE
RESPONDENT ESTELITA BATUNGBACAL;
2. (2)WITH GRAVE ABUSE OF DISCRETION AND IN DISREGARD OF THE
EXPRESS MANDATORY REQUIREMENTS OF THE RULES AS WELL AS
AGAINST SETTLED JURISPRUDENCE WHEN IT DENIED THE PETITIONER’S
MOTION TO DISMISS THE APPEAL OF THE PRIVATE RESPONDENT
SPOUSES;
3. (3)WITH GRAVE ABUSE OF DISCRETION AND IN GRAVE VIOLATION OF DUE
PROCESS OF LAW IN ADMITTING THE AMENDED APPELLANT’S BRIEF
FILED BY PRIVATE RESPONDENTS AND IN REQUIRING THE PETITIONER
AS APPELLEE TO FILE HIS APPELLEE’S BRIEF;

_______________

17 Id., at 121-125.
18 Id. at 135-136.
19 Supra, note 3 at 3-28.

225
VOL. 383, JUNE 6, 2002 225
De Leon vs. Court of Appeals

1. (4)WITHOUT DUE PROCESS OF LAW WHEN IT RESOLVED TO HAVE THE


APPEAL OF THE APPELLANT PRIVATE RESPONDENTS DEEMED
SUBMITTED FOR DECISION WITHOUT BENEFIT OF APPELLEE’S BRIEF. . . . 20

Simply put, the following are the issues presented before this Court for resolution: (1)
whether or not the appellate court erred in taking cognizance of the appeal; and (2)
whether or not the appellate court erred or committed grave abuse of discretion when
it considered the appeal as submitted for decision without petitioner’s brief.
On the first issue, petitioner contends that the decisions of the trial court in Civil
Case No. 6480 promulgated on May 14, 1996 and June 2, 1997 had become final and
executory as to private respondent Estelita Batungbacal. This is because Estelita
never appealed the partial judgment promulgated on May 14, 1996. In fact, there has
been a partial execution of said judgment with notice to and without objection from
private respondent spouses. As regards the decision dated June 2, 1997, petitioner
contends that the same had become final for failure to file the notice of appeal within
15 days, counted from the time counsel of record for private respondent spouses
received a copy on June 6, 1997 and not from the time Estelita received a copy on
June 10, 1997. Petitioner points to Section 2 of Rule 13 of the Rules of Court and
argues that since the trial court never ordered that service of the judgment be made
upon Estelita, she was not entitled to service of the judgment. The fact that she
received a copy of the judgment separately from her counsel cannot prejudice the legal
consequences arising out of prior receipt of copy of the decision by her counsel. It was
thus clear error for the Court of Appeals to accept Estelita’s argument that the
reglementary period commenced not from receipt of a copy of the decision by counsel
of record but from the time she received a copy of the decision. The appeal having
been filed out of time, the Court of Appeals did not have jurisdiction to entertain the
appeal of Estelita.

_______________

Id., at 5.
20

226
226 SUPREME COURT REPORTS ANNOTATED
De Leon vs. Court of Appeals
Petitioner also assails the appellants’ brief for certain formal defects. As pointed out
in his motion to dismiss filed before the public respondent, there are no page
references to the record in the statements of the case and of the facts in the appellants’
brief submitted by private respondents. Petitioner asserts that while there are many
pleadings and orders mentioned in said statements, only the decision dated June 2,
1997 is cited, and the citation is limited only to the particular page or pages in said
decision where the citation or quotation is taken, without any reference to the pages
in the record where the decision can be found. Neither is there reference to the pages
in the record where the particular cited or quoted portions of the decision can be
found.
Petitioner likewise alleges that the authorities relied upon in the appellants’ brief
of private respondents are also not cited by the page on which the citation is found,
as required in Sec. 13 (f) of Rule 44 of the Rules of Court. Page references to the record
are also required in Section 13, paragraphs (c), (d) and (f) of Rule 44 and absence
thereof is a ground for dismissal of the appeal, pursuant to Sec. 1(f) of Rule 50 of the
Rules of Court. Petitioner also harps on the failure of private respondents to furnish
petitioner with two copies of the original appellants’ brief, to submit proof of service
of two copies of the brief on the appellee, and to furnish the petitioner with two copies
of the amended appellants’ brief as required by the Rules of Court. Additionally,
petitioner asserts that the failure of private respondents to append copies of the
appealed decisions to their appellants’ brief constitutes a violation of the Internal
Rules of the Court of Appeals and is likewise a ground for dismissal under Section 1
of Rule 50 of the Rules of Court.
Lastly, petitioner contends that the virtual admission into the record by the
respondent court of the amended appellants’ brief of the private respondents under
the resolution dated January 13, 1999 and its corresponding action to require the
petitioner to respond thereto, constitute grave abuse of discretion and blatant
disregard of due process of law because the amended brief was filed without leave of
court.
Private respondents, for their part, argue that the resolutions being assailed by
petitioner are interlocutory in character because the Court of Appeals still has to
decide the appeal on the merits;
227
VOL. 383, JUNE 6, 2002 227
De Leon vs. Court of Appeals
hence, certiorari does not lie in his favor. Private respondents allege that petitioner
has another adequate and speedy remedy, i.e., to file his brief raising all issues before
the Court of Appeals. Once the appeal is resolved on the merits, all proper issues may
be elevated to the Supreme Court. An order denying a motion to dismiss being merely
interlocutory, it cannot be the basis of a petition for certiorari. The proper remedy is
to appeal in due course after the case is decided on the merits.
We find the petition devoid of merit.
On the first issue, we find that the Court of Appeals did not act without jurisdiction
in entertaining the appeal filed by private respondent Estelita Batungbacal. Contrary
to petitioner’s apparent position, the judgments rendered by the trial court in this
case are not several judgments under the Rules of Court so that there would be
multiple periods of finality.
A several judgment is proper only when the liability of each party is clearly
separable and distinct from that of his co-parties, such that the claims against each
of them could have been the subject of separate suits, and judgment for or against
one of them will not necessarily affect the other. Where a common cause of action
21

exists against the defendants, as in actions against solidary debtors, a several


judgment is not proper. In this case, private respondents are sued together under a
common cause of action and are sought to be held liable as solidary debtors for a loan
contracted by Estelita. This is the clear import of the allegation in the complaint that
the proceeds of the loan benefited the conjugal partnership.
Thus, between the two judgments rendered by the trial court, there could only be
one judgment that finally disposes of the case on the merits. Receipt of notice of this
final judgment marks the point when the reglementary period is to begin running. In
this case, that judgment is the decision rendered by the trial court on June 2, 1997
22

and it is only from the date of notice of this decision that the reglementary period
began to run. The partial judgment dated May 14, 1996 was rendered only with
respect to one issue in

_______________

F. Regalado, REMEDIAL LAW COMPENDIUM 375 (6th ed. 1997).


21

Supra, note 6.
22

228
228 SUPREME COURT REPORTS ANNOTATED
De Leon vs. Court of Appeals
the case and is not the final and appealable order or judgment that finally disposes
of the case on the merits. It must, therefore, only be appealed together with the
23

decision dated June 2, 1997.


A final order is that which gives an end to the litigation. When the order or
24

judgment does not dispose of the case completely but leaves something to be done
upon the merits, it is merely interlocutory. Quite obviously, the partial judgment
25

ordering Estelita to pay petitioner is an interlocutory order because it leaves other


things for the trial court to do and does not decide with finality the rights and
obligations of the parties. Specifically, at the time the partial judgment was rendered,
there remained other issues including whether the husband Avelino had any liability
under Article 121 of the Family Code. However, as the partial judgment disposed of
one of the issues involved in the case, it is to be taken in conjunction with the decision
dated June 2, 1997. Together, these two issuances form one integrated decision.
The question now is when the period to appeal should actually commence, from
June 6, 1997, as petitioner contends; or from June 10, 1997, as private respondent
Estelita Batungbacal claims? We hold that the period began to run on June 6, 1997
when counsel for private respondents received a copy of the decision dated June 2,
1997. When a party is represented by counsel of record, service of orders and notices
must be made upon said attorney and notice to the client and to any other lawyer,
not the counsel of record, is not notice in law. The exception to this rule is when
26

service upon the party himself has been ordered by the court. In this case, it does not
27

appear that there was any substitution of counsel or that service upon private
respondent Estelita Batungbacal had been spe-

_______________

23 See Section 1, Rule 41 of the Rules of Court.


24 Investments, Inc. vs. CA, G.R. No. L-60036, 147 SCRA 334, 340 (1987), citing PLDT Employees’ Union
vs. PLDT Co. Free Tel. Workers’ Union, G.R. No. L-8138, 97 Phil. 424, 426 (1955).
25 PLDT Employees’ Union vs. PLDT Co. Free Tel. Workers’ Union, id. at 426-427.

26 Bernardo vs. CA (Special Sixth Division), G.R. No. 106153, 275 SCRA 413, 423-424 (1997),
citing Chainani vs. Tancinco, G.R. No. L-4782, 90 Phil. 862, 864 (1952).
27 Rule 13, Section 2 of the 1997 Rules of Civil Procedure.

229
VOL. 383, JUNE 6, 2002 229
De Leon vs. Court of Appeals
cifically ordered by the trial court; hence, the counsel of record for the private
respondents is presumed to be their counsel on appeal and the only one authorized to
receive court processes. Notice of the judgment upon such counsel, therefore, was
notice to the clients for all legal intents and purposes.
Private respondents’ appeal had been taken within the reglementary period since
Avelino Batungbacal had filed a notice of appeal on June 19, 1997 or 13 days from
their counsel’s receipt of the decision on June 6, 1997. Respondent spouses having
been jointly sued under a common cause of action, an appeal made by the husband
inures to the benefit of the wife. The notice of appeal filed by Estelita was a
superfluity, the appeal having been perfected earlier by her husband.
We come now to petitioner’s contention that the appellants’ brief suffers from fatal
defects.
Worth stressing, the grounds for dismissal of an appeal under Section 1 of Rule
50 of the Rules of Court are discretionary upon
28

_______________

28 RULE 50—DISMISSAL OF APPEAL.


Section 1. Grounds for dismissal of appeal.—An appeal may be dismissed by the Court of Appeals, on its own motion or
on that of the appellee, on the following grounds:
1. (a)Failure of the record on appeal to show on its face that the appeal was taken within the period fixed by these
Rules;
2. (b)Failure to file the notice of appeal or the record on appeal within the period prescribed by these Rules;
3. (c)Failure of the appellant to pay the docket and other lawful fees as provided in section 5 of Rule 40 and section
4 of Rule 41;
4. (d)Unauthorized alterations, omissions or additions in the approved record on appeal as provided in section 4
of Rule 44;
5. (e)Failure of the appellant to serve and file the required number of copies of his brief or memorandum within
the time provided by these Rules;
6. (f)Absence of specific assignment of errors in the appellant’s brief, or of page references to the record as required
in section 13, paragraphs (a), (c), (d) and (f) of Rule 44;
7. (g)Failure of the appellant to take the necessary steps for the correction or completion of the record within the
time limited by the court in its order;

230
230 SUPREME COURT REPORTS ANNOTATED
De Leon vs. Court of Appeals
the Court of Appeals. This can be seen from the very wording of the Rules which uses
the word ‘may’ instead of ‘shall.’ This Court has held in Philippine National Bank vs.
Philippine Milling Co., Inc. that Rule 50, Section 1 which provides specific grounds
29

for dismissal of appeal manifestly “confers a power and does not impose a duty.”
“What is more, it is directory, not mandatory.” With the exception of Sec. 1(b), the
30

grounds for the dismissal of an appeal are directory and not mandatory, and it is not
the ministerial duty of the court to dismiss the appeal. The discretion, however, must
31

be a sound one to be exercised in accordance with the tenets of justice and fair play
having in mind the circumstances obtaining in each case. 32

The Court of Appeals rightly exercised its discretion when, in denying petitioner’s
motion to dismiss, it ruled that the citations contained in the appellants’ brief were
in substantial compliance with the rules. Where the citations found in the appellants’
brief could sufficiently enable the appellate court to locate expeditiously the portions
of the record referred to, there is substantial compliance with the requirements of
Section 13(c) and (d), Rule 46 of the Rules of Court. Such determination was properly
within the appellate court’s discretion. Nothing in the records indicate that it was
exercised capriciously, whimsically, or with a view of permitting injury upon a party
litigant. For the same reasons, we hold that the respondent Court of Appeals also did
not err when it did not dismiss the appeal based on the allegation that appellants’
brief failed to comply with the internal rules of said court.

_______________

1. (h)Failure of the appellant to appear at the preliminary conference under Rule 48 or to comply with orders,
circulars, or directives of the court without justifiable cause; and
2. (i)The fact that the order or judgment appealed from is not appealable. (1a).

29 G.R. No. L-27005, 26 SCRA 712, 715 (1969).


30 Ibid.
31 See Maqui vs. Court of Appeals, G.R. No. L-41609, 69 SCRA 368, 374 (1976).

32 Vda. de Haberer vs. CA, G.R. Nos. L-42699 to L-42709, 104 SCRA 534, 544 (1981).

231
VOL. 383, JUNE 6, 2002 231
De Leon vs. Court of Appeals
However, the Court of Appeals erred in requiring petitioner to file the appellee’s brief
in response to the amended appellants’ brief. Note that the amended brief was filed
without the proper motion for leave to do so and corresponding order from the
respondent court. Even more significant, it was filed beyond the extensions of time
granted to appellants. The discretion in accepting late briefs conferred upon
respondent court which this Court applied in the cases of Maqui vs. CA and Vda. de
33

Haberer vs. CA, finds no application under the present circumstances because,
34

unlike in these two cases, here no valid reason was advanced for the late filing of the
amended brief. While the amended brief might contain no substantial and
35

prejudicial changes, it was error for the respondent court to accept the amended brief
as filed and then require petitioner to file appellee’s brief because admittedly the
amended brief was filed beyond August 31, 1998, the last period of extension granted
to private respondents.
On the second issue, we hold that the Court of Appeals did not commit grave abuse
of discretion in considering the appeal submitted for decision. The proper remedy in
case of denial of the motion to dismiss is to file the appellee’s brief and proceed with
the appeal. Instead, petitioner opted to file a motion for reconsideration which,
unfortunately, was pro forma. All the grounds raised therein have been discussed in
the first resolution of the respondent Court of Appeals. There is no new ground raised
that might warrant reversal of the resolution. A cursory perusal of the motion would
readily show that it was a near verbatim repetition of the grounds stated in the
motion to dismiss; hence, the filing of the motion for reconsideration did not suspend
the period for filing the appellee’s brief. Petitioner was therefore properly deemed to
have waived his right to file appellee’s brief.
WHEREFORE, the petition is DENIED. The resolutions dated January 13, 1999
and April 19, 1999 of the Court of Appeals in CA-G.R. CV No. 57989 are AFFIRMED,
and the Court of Appeals is

_______________

33 Supra, note 31.


34 Supra, note 32.
35 Supra, note 1 at 81-91.

232
232 SUPREME COURT REPORTS ANNOTATED
Alvarico vs. Sola
ordered to proceed with the appeal and decide the case with dispatch. No
pronouncement as to costs.
SO ORDERED.
Bellosillo (Actg. C.J., Chairman), Mendoza, De Leon, Jr. and Corona,
JJ., concur.
Petition denied, resolutions affirmed.
Notes.—“Final,” in the phrase “judgments or final orders” found in Section 49 of
Rule 39, has two accepted interpretations—in the first sense, it is an order that one
can no longer appeal because the period to do so has expired, or because the order has
been affirmed by the highest possible tribunal involved, while in the second sense, it
connotes that it is an order that leaves nothing else to be done, as distinguished from
one that is interlocutory. (Macahilig vs. Heirs of Grace M. Magalit, 344 SCRA
838 [2000])
Interlocutory orders are not appealable as these are merely incidental to judicial
proceedings. In these cases, the court issuing such orders retains control over the
same and may thus modify, rescind, or revoke the same on sufficient grounds at any
time before final judgment. (Testate Estate of Maria Manuel Vda. de Biascan vs.
Rosalina C. Biascan, 347 SCRA 621 [2000])

——o0o——

G.R. No. 165793. October 27, 2006. *

ALFONSO T. YUCHENGCO, petitioner, vs. COURT OF APPEALS, THE


MANILA CHRONICLE PUBLISHING CORPORATION, RAUL VALINO,
NEAL CRUZ, ERNESTO TOLENTINO, NOEL CABRERA, THELMA SAN
JUAN, GERRY ZARAGOZA, DONNA GATDULA, RODNEY P. DIOLA and
ROBERT COYIUTO, JR., respondents.
Appeals; Appellant’s Briefs; Pleadings and Practice; Failure to serve the required number
of copies of appellant’s brief does not automatically result in the dismissal of the appeal.—
Section 7 of Rule 44 requires the appellants to serve two copies of the appellants’ brief to the
appellee. However, the failure to serve the required number of copies does not automatically
result in the dismissal of the appeal. The Court of Appeals has the discretion whether to
dismiss or not to dismiss the appeal. Thus, we held in Philippine National Bank v. Philippine
Milling Co., Inc., 26 SCRA 712 (1969), that: [P]ursuant to Section 1 of Rule 50 of the Rules of
Court, “an appeal may be dismissed by the Court of Appeals, on its own motion or on that of
the appellee” upon the ground, among others, of “failure of the appellant . . . to serve and file
the required number of copies of his brief,” within the reglementary period. Manifestly, this
provision confers a power and does not impose a duty. What is more, it is directory,
not mandatory.
Same; Same; Same; The appellant’s brief should contain a clear statement of the case and
facts with page references to the record, and the absence of page references is a ground for
dismissal of the appeal though the same is not mandatory but directory on the part of the
Court of Appeals.—Section 13 (c) & (d) requires that the appellants’ brief should contain a
clear statement of the case and facts with page references to the record. The absence of page
reference is a ground for dismissal of the appeal, however, the same is not mandatory but
directory on the part of the Court of Appeals. Thus, we held in De Leon v. Court of Appeals,
383 SCRA 216 (2002), that: The Court of Appeals rightly exercised its discretion
when, in denying petitioner’s motion to dismiss, it ruled that the citations
contained in the appellants’ brief were in substantial compliance with the
rules. Where the citations found in the appellants’ brief could sufficiently enable the
appellate court to locate expeditiously the portions of the record referred to, there is
substantial compliance with the requirements of Section 13 (c) and (d), Rule

_______________

*FIRST DIVISION.
717
VOL. 505, OCTOBER 27, 2006 717
Yuchengco vs. Court of Appeals
46 of the Rules of Court. Such determination was properly within the appellate
court’s discretion. Nothing in the records indicate that it was exercised capriciously,
whimsically, or with a view of permitting injury upon a party litigant. For the same reasons,
we hold that the respondent Court of Appeals also did not err when it did not dismiss the
appeal based on the allegation that appellants’ brief failed to comply with the internal rules
of said court. (Emphasis supplied) In the instant case, the Appellants’ Brief contained a
statement of facts with references to Exhibits and TSNs and attachments. The Appellants’
Brief may not have referred to the exact pages of the records, however, the same is not fatal
to their cause since the references they made enabled the appellate court to expeditiously
locate the portions of the record referred to. Consequently, respondents substantially
complied with the requirements of Section 13 (c) and (d) of Rule 44.
Certiorari; Words and Phrases; Grave abuse of discretion is defined as such capricious
and whimsical exercise of judgment as is equivalent to lack of jurisdiction.—Grave abuse of
discretion is defined as such capricious and whimsical exercise of judgment as is equivalent
to lack of jurisdiction. The abuse of discretion must be grave as where the power is exercised
in an arbitrary or despotic manner by reason of passion or personal hostility and must be so
patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform
the duty enjoined by or to act at all in contemplation of law. The Court of Appeals did not
gravely abuse its discretion when it denied petitioner’s motion to dismiss.
Actions; Procedural Rules and Technicalities; The Rules of Court was conceived and
promulgated to set forth guidelines in the dispensation of justice, but not to bind and chain
the hand that dispenses it, for otherwise, courts will be mere slaves to or robots of technical
rules, shorn of judicial discretion; Liberal construction of the rules and the pleadings is the
controlling principle to effect substantial justice.—The Rules of Court was conceived and
promulgated to set forth guidelines in the dispensation of justice, but not to bind and chain
the hand that dispenses it, for otherwise, courts will be mere slaves to or robots of technical
rules, shorn of judicial discretion. That is precisely why courts, in rendering justice, have
always been, as they in fact ought to be, conscientiously guided by the norm that on the
balance, technicalities take a backseat to substantive rights, and not the other way around.
Circumspect leniency will give the appellant “the fullest opportunity to establish the merits
of his complaint rather than to lose life, liberty, honor or property on technicalities.” The
rules of procedure should be viewed as mere tools designed to aid the courts in the speedy,
just and inexpensive determination of
718
718 SUPREME COURT REPORTS ANNOTATED
Yuchengco vs. Court of Appeals
the cases before them. Liberal construction of the rules and the pleadings is the
controlling principle to effect substantial justice.
PETITION for review on certiorari of the resolutions of the Court of Appeals.
The facts are stated in the opinion of the Court.
Belo, Gozon, Elma, Parel, Asuncion & Lucila for petitioner.
Jesus I. Santos Law Offices for respondents Neal H. Cruz and Ernesto
Tolentino.
Ethelwoldo E. Fernandez for respondents The Manila Chronicle Publishing
Corporation, Raul Valino, Robert O. Coyiuto, Jr., Noel Cabrera, Gerry Zaragoza,
Donna Gatdula, Rodney Diola and Thelma San Juan.

YNARES-SANTIAGO, J.:

This Petition for Certiorari assails the July 27, 2004 and October 25,
1 2

2004 Resolutions of the Court of Appeals in CA-G.R. CV No. 76995 denying


3

petitioner’s motion to dismiss and motion for reconsideration.


In his complaint filed before the Regional Trial Court of Makati City, Branch 136,
docketed as Civil Case No. 94-1114, petitioner Alfonso T. Yuchengco alleged that in
the last quarter of 1994, respondents published in the Manila Chronicle a series of
defamatory articles against him, to wit: (1) that he was a “Marcos crony” or a “Marcos-
Romualdez crony,” which term according to him is commonly understood to describe
an individual who received special and undeserving favors from former President
Ferdinand E. Marcos and/or his brother-in-law Benjamin “Kokoy” Romualdez,
thereby allowing him to engage in illegal and dishonorable business activities; (2)
that he

_______________

1 Rollo, pp. 6-22.


2 Id., at p. 24; penned by Associate Justice Noel G. Tijam, with Associate Justices Jose L. Sabio, Jr. and
Danilo B. Pine, concurring.
3 Id., at p. 26; penned by Associate Justice Noel G. Tijam, with Associate Justices Jose L. Sabio, Jr. and

Eubulo G. Verzola, concurring.


719
VOL. 505, OCTOBER 27, 2006 719
Yuchengco vs. Court of Appeals
engaged in unsound and immoral business practices by taking control of Oriental
Petroleum Mineral Corporation in order to divert its resources to rescue the debt-
ridden Benguet Corporation; (3) that he was an unfair and uncaring employer; (4)
that he induced Rizal Commercial Banking Corporation to violate the provisions of
the General Banking Act on DOSRI loans; (5) that he induced others to disobey the
lawful orders of the Securities and Exchange Commission; and (6) that he was a
“corporate raider,” or one who seeks to profit for something he did not work for. 4

On November 8, 2002, the trial court rendered a Decision, the dispositive portion
5

of which provides:
“WHEREFORE, in view of the foregoing, judgment is hereby rendered as follows:
1. On the First Cause of Action, ordering defendants Chronicle Publishing, Neil H. Cruz,
Ernesto Tolentino, Noel Cabrera, Thelma San Juan, Gerry Zaragoza, Donna Gatdula, Raul
Valino and Rodney Diola to pay plaintiff Yuchengco, jointly and severally:

1. a.the amount of Ten Million Pesos (P10,000,000.00) as moral damages; and


2. b.the amount of Ten Million Pesos (P10,000,000.00) as exemplary damages.
2. On the Second Cause of Action, ordering defendants Robert Coyiuto, Jr. and Chronicle
Publishing to pay plaintiff Yuchengco, jointly and severally:

1. a.the amount of Fifty Million Pesos (P50,000,000.00) as moral damages; and


2. b.the amount of Thirty Million Pesos (P30,000,000.00) as exemplary damages.

3. On the Third Cause of Action, ordering all defendants to pay plaintiff Yuchengco, jointly
and severally, the amount of One Million Pesos (P1,000,000.00) as attorney’s fees and legal
costs.
SO ORDERED.” 6

_______________

4 Id., at pp. 27-28.


5 Id., at pp. 27-47. Penned by Judge Rebecca R. Mariano.
6 Id., at p. 47.

720
720 SUPREME COURT REPORTS ANNOTATED
Yuchengco vs. Court of Appeals
After the trial court promulgated its decision, respondents appealed the same to the
Court of Appeals where it was docketed as CA-G.R. CV No. 76995. Thereafter, the
Court of Appeals in a notice dated October 3, 2003 required respondents to file their
appellant’s brief.
Respondents Cruz and Tolentino filed their appellants’ brief on February 4, 2004
while respondents The Manila Chronicle Publishing Corporation, Noel Cabrera,
Thelma San Juan, Gerry Zaragosa, Donna Gatdula, Rodney Viola, Raul Valino, and
Robert Coyiuto filed their appellants’ brief on March 3, 2004.
Thereafter, petitioner filed a Motion to Dismiss alleging that the appellants’ briefs
submitted by respondents were not in the prescribed size and did not have page
references.
The Court of Appeals denied the motion to dismiss holding that although
procedural rules are required to be followed as a general rule, they may be relaxed to
relieve a litigant of an injustice not commensurate with the degree of his
noncompliance with the procedure required. Petitioner’s Motion for Reconsideration
was denied.
Hence, this petition on the sole issue of whether or not the Court of Appeals
committed grave abuse of discretion amounting to lack or excess of jurisdiction in not
ordering the dismissal of private respondents’ appeal.
Petitioner alleges that respondents’ appellants’ briefs were not in the prescribed
size and did not have page references as required by Section 13 (c) and (d) of Rule 44
of the Rules of Court which is a ground to dismiss the appeal under Section 1 (f) of
Rule 50. Likewise, petitioner avers that he was not served two copies of respondents
Coyiuto, et al.’s brief as required by Section 7 of Rule 44 which constitutes another
ground to dismiss the appeal under Section 1 (e) of Rule 50.
Respondents aver that the Court of Appeals may have committed errors of
procedures but it does not constitute grave abuse of discretion. Petitioner’s claim that
the appellants’ briefs did not contain a “citation of authorities” is misleading because
they cited authorities and made references to specific pages in the TSNs. They argue
that if the appellants’ briefs suffered from any infirmity, the same is inconsequential
and would not justify the dismissal of their appeal, more
721
VOL. 505, OCTOBER 27, 2006 721
Yuchengco vs. Court of Appeals
so considering that the primordial issue at hand is whether or not giving due course
to the appeal would serve substantial justice.
The petition lacks merit.
Indeed, Section 7 of Rule 44 requires the appellants to serve two copies of the
appellants’ brief to the appellee. However, the failure to serve the required number
of copies does not automatically result in the dismissal of the appeal. The Court of
Appeals has the discretion whether to dismiss or not to dismiss the appeal. Thus, we
held in Philippine National Bank v. Philippine Milling Co., Inc. that: 7

“[P]ursuant to Section 1 of Rule 50 of the Rules of Court, “an appeal may be dismissed by the
Court of Appeals, on its own motion or on that of the appellee” upon the ground, among
others, of “failure of the appellant . . . to serve and file the required number of copies of his
brief,” within the reglementary period. Manifestly, this provision confers a power and
does not impose a duty. What is more, it is directory, not mandatory.
Contrary to petitioners’ assertion that, on November 22, 1966, “it became its (Court of
Appeals’) ministerial duty to dismiss the appeal and remand the case for execution to the
Court of origin,” the Court of Appeals had, under said provision of the Rules of
Court, discretion to dismiss or not to dismiss respondents’ appeal. Although said
discretion must be a sound one, to be exercised in accordance with the tenets of justice and
fair play, having in mind the circumstances obtaining in each case, the presumption is that
it has been so exercised. It was incumbent upon herein petitioners, as actors in the case at
bar, to offset this presumption. Yet, the record before us does not satisfactorily show
that the Court of Appeals has abused its discretion much less gravely. Petitioners’
assertion of abuse of discretion is predicated solely upon the alleged “ministerial” duty of said
Court to dismiss the appeal therein, which is devoid of legal foundation. It is inconsistent
with our views in Viuda de Ordoveza v. Raymundo and Alquiza v. Alquiza.” (Emphasis
supplied)
Likewise, Section 13 (c) & (d) requires that the appellants’ brief should contain a clear
statement of the case and facts with page references to the record. The absence of
page reference is a ground for dismissal of the appeal, however, the same is not
mandatory but

_______________

7136 Phil. 212, 215; 26 SCRA 712, 715-716 (1969).


722
722 SUPREME COURT REPORTS ANNOTATED
Yuchengco vs. Court of Appeals
directory on the part of the Court of Appeals. Thus, we held in De Leon v. Court of
Appeals that:
8
“The Court of Appeals rightly exercised its discretion when, in denying petitioner’s
motion to dismiss, it ruled that the citations contained in the appellants’ brief were
in substantial compliance with the rules. Where the citations found in the appellants’
brief could sufficiently enable the appellate court to locate expeditiously the portions of the
record referred to, there is substantial compliance with the requirements of Section 13 (c)
and (d), Rule 46 of the Rules of Court. Such determination was properly within the
appellate court’s discretion. Nothing in the records indicate that it was exercised
capriciously, whimsically, or with a view of permitting injury upon a party litigant. For the
same reasons, we hold that the respondent Court of Appeals also did not err when it did not
dismiss the appeal based on the allegation that appellants’ brief failed to comply with the
internal rules of said court.” (Emphasis supplied)
In the instant case, the Appellants’ Brief contained a statement of facts with
references to Exhibits and TSNs and attachments. The Appellants’ Brief may not
have referred to the exact pages of the records, however, the same is not fatal to their
cause since the references they made enabled the appellate court to expeditiously
locate the portions of the record referred to. Consequently, respondents substantially
complied with the requirements of Section 13 (c) and (d) of Rule 44.
Grave abuse of discretion is defined as such capricious and whimsical exercise of
judgment as is equivalent to lack of jurisdiction. The abuse of discretion must be
grave as where the power is exercised in an arbitrary or despotic manner by reason
of passion or personal hostility and must be so patent and gross as to amount to an
evasion of positive duty or to a virtual refusal to perform the duty enjoined by or to
act at all in contemplation of law. The Court of Appeals did not gravely abuse its
9

discretion when it denied petitioner’s motion to dismiss.

_______________

8432 Phil. 775, 790; 383 SCRA 216, 230 (2002).


9Hegerty v. Court of Appeals, G.R. No. 154920, August 15, 2003, 409 SCRA 285, 289, citing D.M.
Consunji, Inc. v. Esguerra, 328 Phil. 1168, 1181; 260 SCRA 74 (1996).
723
VOL. 505, OCTOBER 27, 2006 723
Yuchengco vs. Court of Appeals
Moreover, the Rules of Court was conceived and promulgated to set forth guidelines
in the dispensation of justice, but not to bind and chain the hand that dispenses it,
for otherwise, courts will be mere slaves to or robots of technical rules, shorn of
judicial discretion. That is precisely why courts, in rendering justice, have always
been, as they in fact ought to be, conscientiously guided by the norm that on the
balance, technicalities take a backseat to substantive rights, and not the other way
around. Circumspect leniency will give the appellant “the fullest opportunity to
10

establish the merits of his complaint rather than to lose life, liberty, honor or property
on technicalities.” 11

The rules of procedure should be viewed as mere tools designed to aid the courts
in the speedy, just and inexpensive determination of the cases before them. Liberal
construction of the rules and the pleadings is the controlling principle to effect
substantial justice. 12
WHEREFORE, in light of the foregoing, the petition is DISMISSED. The
Resolutions dated July 27, 2004 and October 25, 2004 of the Court of Appeals in CA-
G.R. CV No. 76995 denying petitioner’s motion to dismiss and motion for
reconsideration, are AFFIRMED.
SO ORDERED.
Panganiban (C.J., Chairperson), Austria-Martinez, Callejo, Sr. and Chico-
Nazario, JJ., concur.
Petition dismissed, resolutions affirmed.
Note.—An exception to the rule that the failure to file the appellant’s brief on time
may cause the dismissal of the appeal is when the appellant is represented by a
counsel de oficio. (Foralan vs. Court of Appeals, 241 SCRA 176 [1995])

——o0o——

_______________

G.R. No. 165622. October 17, 2008.*


MERCURY DRUG CORPORATION and AURMELA GANZON,
petitioners, vs. RAUL DE LEON, respondent.
Procedural Rules and Technicalities; Appeals; This Court stressed that the grounds for
dismissal of an appeal under Section 1 of Rule 50 are discretionary upon the appellate court.—
In several cases, this Court stressed that the grounds for dismissal of an appeal under Section
1 of Rule 50 are discretionary upon the appellate court. The very wording of the rule uses the
word “may” instead of “shall.” This indicates that it is only directory and not mandatory.
Sound discretion must be exercised in consonance with the tenets of justice and fair play,
keeping in mind the circumstances obtaining in each case.
Same; Same; This Court has held that the failure to properly cite reference to the original
records is not a fatal procedural lapse.—The absence of page reference to the record is a
ground for dismissal. It is a requirement intended to ultimately aid the appellate court in
arriving at a just and proper conclusion of the case. However, as earlier discussed, such
dismissal is not mandatory, but discretionary on the part of the appellate court. This Court
has held that the failure to properly cite reference to the original records is not a fatal
procedural lapse. When citations found in the appellant’s brief enable the court to
expeditiously locate the portions of the record referred to, there is substantial compliance with
the requirements of Section 13(c), (d), and (f) of Rule 44. In De Leon v. CA, 376 SCRA 531
(2002), this Court ruled that the citations contained in the appellant’s brief sufficiently
enabled the appellate court to expeditiously locate the portions of the record referred to. They
were in substantial compliance with the rules.
Same; Rules of procedure are intended to promote, not to defeat, substantial justice.—
Rules of procedure are intended to promote, not to defeat, substantial justice. They should
not be applied in a very rigid and technical sense. For reasons of justice and equity, this Court
has allowed exceptions to the stringent rules governing appeals. It has, in the past, refused
to sacrifice justice for technicality.
Pharmacists; Druggists must exercise the highest practicable degree of prudence and
vigilance, and the most exact and reliable safeguards
_______________
* THIRD DIVISION.

433

VOL. 569, OCTOBER 17, 2008 433


Mercury Drug Corporation vs. De Leon
consistent with the reasonable conduct of the business, so that human life may not
constantly be exposed to the danger flowing from the substitution of deadly poisons for
harmless medicines.—Mercury Drug and Ganzon can not exculpate themselves from any
liability. As active players in the field of dispensing medicines to the public, the highest
degree of care and diligence is expected of them. Likewise, numerous decisions, both here and
abroad, have laid salutary rules for the protection of human life and human health. In the
United States case of Tombari v. Conners, 85 Conn. 231 (1912), it was ruled that the
profession of pharmacy demands care and skill, and druggists must exercise care of a
specially high degree, the highest degree of care known to practical men. In other words,
druggists must exercise the highest practicable degree of prudence and vigilance, and the
most exact and reliable safeguards consistent with the reasonable conduct of the business, so
that human life may not constantly be exposed to the danger flowing from the substitution
of deadly poisons for harmless medicines.
Same; One holding himself out as competent to handle drugs, having rightful access to
them, and relied upon by those dealing with him to exercise that high degree of caution and
care called for by the peculiarly dangerous nature of the business, cannot be heard to say that
his mistake by which he furnishes a customer the most deadly of drugs for those comparatively
harmless, is not in itself gross negligence.—Smith’s Admrx v. Middelton, 56 LRA 484 (1902),
teaches Us that one holding himself out as competent to handle drugs, having rightful access
to them, and relied upon by those dealing with him to exercise that high degree of caution
and care called for by the peculiarly dangerous nature of the business, cannot be heard to say
that his mistake by which he furnishes a customer the most deadly of drugs for those
comparatively harmless, is not in itself gross negligence. In our own jurisdiction, United
States v. Pineda, 37 Phil. 456 (1918), and Mercury Drug Corporation v. Baking, 523 SCRA
184 (2007) are illustrative. In Pineda, the potassium chlorate demanded by complainant had
been intended for his race horses. When complainant mixed with water what he thought and
believed was potassium chlorate, but which turned out to be the potently deadly barium
chlorate, his race horses died of poisoning only a few hours after. The wisdom of such a
decision is unquestionable. If the victims had been human beings instead of horses, the
damage and loss would have been irreparable.
Same; This Court once more reiterated that the profession of pharmacy demands great
care and skill.—This Court once more reiterated that the profession of pharmacy demands
great care and skill. It reminded434

434 SUPREME COURT REPORTS ANNOTATED


Mercury Drug Corporation vs. De Leon
druggists to exercise the highest degree of care known to practical men. In cases where
an injury is caused by the negligence of an employee, there instantly arises a presumption of
law that there has been negligence on the part of the employer, either in the selection or
supervision of one’s employees. This presumption may be rebutted by a clear showing that the
employer has exercised the care and diligence of a good father of the family. Mercury Drug
failed to overcome such presumption.
Same; This Court has ruled that in the purchase and sale of drugs, the buyer and seller
do not stand at arms length.—As a buyer, De Leon relied on the expertise and experience of
Mercury Drug and its employees in dispensing to him the right medicine. This Court has
ruled that in the purchase and sale of drugs, the buyer and seller do not stand at arms length.
There exists an imperative duty on the seller or the druggist to take precaution to prevent
death or injury to any person who relies on one’s absolute honesty and peculiar learning. The
Court emphasized: x x x The nature of drugs is such that examination would not avail the
purchaser anything. It would be idle mockery for the customer to make an examination of a
compound of which he can know nothing. Consequently, it must be that the druggist warrants
that he will deliver the drug called for.
Damages; The award of damages must be commensurate to the loss or injury suffered.—
Moral damages are not intended to impose a penalty to the wrongdoer or to enrich the
claimant at the expense of defendant. There is no hard and fast rule in determining what
would be a fair and reasonable amount of moral damages since each case must be governed
by its peculiar circumstances. However, the award of damages must be commensurate to the
loss or injury suffered.

PETITION for review on certiorari of the resolutions of the Court of Appeals.


The facts are stated in the opinion of the Court.
Edsel R. Manuel for petitioner Aurmela Ganzon.
Joy Ann Marie G. Nolasco for petitioner Mercury Drug Corp.
Emerito P. Dela Cueva for private respondent.
435
VOL. 569, OCTOBER 17, 2008 435
Mercury Drug Corporation vs. De Leon
REYES, R.T., J.:
IN REALITY, for the druggist, mistake is negligence and care is no defense.1 Sa
isang parmasyutika, ang pagkakamali ay kapabayaan at ang pagkalinga
ay hindi angkop na dipensa.
This is a petition for review on certiorari2 of two Resolutions3 of the Court of
Appeals (CA). The first Resolution granted respondent’s motion to dismiss while the
second denied petitioner’s motion for reconsideration.

The Facts

Respondent Raul T. De Leon was the presiding judge of Branch 258, Regional Trial
Court (RTC) in Parañaque.4 On October 17, 1999, he noticed that his left eye was
reddish. He also had difficulty reading.5 On the same evening, he met a friend for
dinner at the Foohyui Restaurant. The same friend happened to be a doctor, Dr.
Charles Milla, and had just arrived from abroad.6
Aside from exchanging pleasantries, De Leon consulted Dr. Milla about his
irritated left eye.7 The latter prescribed the drugs “Cortisporin Opthalmic” and
“Ceftin” to relieve his eye problems.8 Before heading to work the following morning,
De Leon went to the Betterliving, Parañaque, branch of Mercury Drug Store
Corporation to buy the prescribed medicines.9 He showed his prescription to
petitioner Aurmela Ganzon, a pharmacist assistant.10 Subse-
_______________

1 United States v. Pineda, 37 Phil. 456, 465 (1918).


2 Treated here as petition for certiorari.
3 Rollo, pp. 128-130 & 141-143. Dated July 8, 2004 and October 4, 2004, respectively. Penned by
Associate Justice Jose L. Sabio, Jr., with Associate Justices Mariano C. Del Castillo and Noel S. Tijam,
concurring.
4 Id., at p. 31.
5 Id.
6 Id.
7 Id.
8 Id.
9 Id.
10 Id.

436
436 SUPREME COURT REPORTS ANNOTATED
Mercury Drug Corporation vs. De Leon
quently, he paid for and took the medicine handed over by Ganzon.11
At his chambers, De Leon requested his sheriff to assist him in using the eye
drops.12 As instructed, the sheriff applied 2-3 drops on respondent’s left eye.13 Instead
of relieving his irritation, respondent felt searing pain.14 He immediately rinsed the
affected eye with water, but the pain did not subside.15 Only then did he discover that
he was given the wrong medicine, “Cortisporin Otic Solution.”16
De Leon returned to the same Mercury Drug branch, with his left eye still red and
teary.17 When he confronted Ganzon why he was given ear drops, instead of the
prescribed eye drops,18 she did not apologize and instead brazenly replied that she
was unable to fully read the prescription.19 In fact, it was her supervisor who
apologized and informed De Leon that they do not have stock of the needed
Cortisporin Opthalmic.20
De Leon wrote Mercury Drug, through its president, Ms. Vivian K. Askuna, about the
day’s incident.21 It did not merit any response.22 Instead, two sales persons went to his
office and informed him that their supervisor was busy with other matters. 23 Having
been denied his simple desire for a written apology and explana-
_______________

11 Id.
12 Id., at p. 32.
13 Id.
14 Id.
15 Id.
16 Id.
17 Id.
18 Id.
19 Id.
20 Id.
21 Id.
22 Id.
23 Id.

437
VOL. 569, OCTOBER 17, 2008 437
Mercury Drug Corporation vs. De Leon
tion,24 De Leon filed a complaint for damages against Mercury Drug.25
Mercury Drug denied that it was negligent and therefore liable for damages. 26 It
pointed out that the proximate cause of De Leon’s unfortunate experience was his
own negligence.27 He should have first read and checked to see if he had the right eye
solution before he used any on his eye.28 He could have also requested his sheriff to do
the same before the latter applied the medicine on such a delicate part of his body.29
Also, Mercury Drug explained that there is no available medicine known as
“Cortisporin Opthalmic” in the Philippine market.30 Furthermore, what was written
on the piece of paper De Leon presented to Ganzon was “Cortisporin
Solution.”31 Accordingly, she gave him the only available “Cortisporin Solution” in the
market.
Moreover, even the piece of paper De Leon presented upon buying the medicine
can not be considered as proper prescription.32 It lacked the required information
concerning the attending doctor’s name and license number.33 According to Ganzon,
she entertained De Leon’s purchase request only because he was a regular customer
of their branch.34

RTC Disposition

On April 30, 2003, the RTC rendered judgment in favor of respondent, the
dispositive portion of which reads:
_______________

24 Id.
25 Id., at p. 31.
26 Id., at p. 32.
27 Id.
28 Id.
29 Id.
30 Id., at pp. 32-33.
31 Id., at p. 32.
32 Id.
33 Id.
34 Id.

438
438 SUPREME COURT REPORTS ANNOTATED
Mercury Drug Corporation vs. De Leon
“WHEREFORE, the court finds for the plaintiff.
For pecuniary loss suffered, Mercury Drug Store is to pay ONE HUNDRED FIFTY-
THREE PESOS AND TWENTY-FIVE CENTAVOS (Php 153.25), the value of the medicine.
As moral damages defendants is (sic) ordered to pay ONE HUNDRED THOUSAND
PESOS (Php 100,000.00).
To serve as a warning to those in the field of dispensing medicinal drugs discretion of the
highest degree is expected of them, Mercury Drug Store and defendant Aurmila (sic) Ganzon
are ordered to pay plaintiff the amount of THREE HUNDRED THOUSAND PESOS (Php
300,000.00) as exemplary damages.
Due to defendants callous reaction to the mistake done by their employee which forced
plaintiff to litigate, Defendant (sic) Mercury Drug Store is to pay plaintiff attorney’s fees of
P50,000.00 plus litigation expenses.
SO ORDERED.”35

In ruling in favor of De Leon, the RTC ratiocinated:


“The proximate cause of the ill fate of plaintiff was defendant Aurmila (sic) Ganzon’s
negligent exercise of said discretion. She gave a prescription drug to a customer who did not
have the proper form of prescription, she did not take a good look at said prescription, she
merely presumed plaintiff was looking for Cortisporin Otic Solution because it was the only
one available in the market and she further presumed that by merely putting the drug by
the counter wherein plaintiff looked at it, paid and took the drug without any objection meant
he understood what he was buying.”36

The RTC ruled that although De Leon may have been negligent by failing to read
the medicine’s label or to instruct his sheriff to do so, Mercury Drug was first to be
negligent.37 Ganzon dispensed a drug without the requisite prescription.38 Moreover,
she did so
_______________

35 Id., at pp. 35-36.


36 Id., at p. 34.
37 Id.
38 Id.

439
VOL. 569, OCTOBER 17, 2008 439
Mercury Drug Corporation vs. De Leon
without fully reading what medicine was exactly being bought. 39 In fact, she
presumed that since what was available was the drug Cortisporin Otic Solution, it
was what De Leon was attempting to buy.40 Said the court:
“When the injury is caused by the negligence of a servant or employee, there instantly
arises a presumption of law that there was negligence on the part of the employer or employer
either in the selection of the servant or employee, or in the supervision over him after the
selection or both.
xxxx
The theory bases the responsibility of the master ultimately on his own negligence and
not on that of his servant.”41

Dissatisfied with the RTC ruling, Mercury Drug and Ganzon elevated the matter
to the CA. Accordingly, they filed their respective briefs. Raising technical grounds,
De Leon moved for the appeal’s dismissal.

CA Disposition

On July 4, 2008, the CA issued a resolution which granted De Leon’s motion and
dismissed the appeal. Said the appellate court:
“As pointed out by the plaintiff-appellee, the Statement of Facts, Statement of the Case,
Assignment of Errors/issues, Arguments/Discussions in the Brief make no references to the
pages of the records. We find this procedural lapse justify the dismissal of the appeal,
pursuant to Section 1(f), Rule 50 of the 1997 Rules of Civil Procedure x x x.42
xxxx
“The premise that underlies all appeals is that they are merely rights which arise
form a statute; therefore, they must be exercised in the manner prescribed by law. It is
to this end that rules governing pleadings and practice before the appellate court were
imposed.
_______________

39 Id.
40 Id.
41 Id.
42 Id., at p. 44.

440

440 SUPREME COURT REPORTS ANNOTATED


Mercury Drug Corporation vs. De Leon
These rules were designed to assist the appellate court in the accomplishment of its
tasks, and overall, to enhance the orderly administration of justice.”
xxxx
x x x If the statement of fact is unaccompanied by a page reference to the record, it may
be stricken or disregarded all together.”43

On October 5, 2004, the CA denied Mercury Drug’s and Ganzon’s joint motion for
reconsideration. Although mindful that litigation is not a game of technicalities,44 the
CA found no persuasive reasons to relax procedural rules in favor of Mercury Drug
and Ganzon.45 The CA opined:
“In the case under consideration, We find no faithful compliance on the part of the movants
that will call for the liberal application of the Rules. Section 1(f) of Rule 50 of the 1997 Rules
of Civil Procedure explicitly provides that an appeal may be dismissed by the Court of
Appeals, on its own motion or on that of the appellee, for want of page references to the
records as required in Section 13 of Rule 44 of the same rules.”46

Issues

Petitioner has resorted to the present recourse and assigns to the CA the following
errors:
I
THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING PETITIONER’S
APPEAL BASED ON THE CASES OF DE LIANA VS. CA (370 SCRA 349) AND HEIRS OF
PALOMINIQUE VS. CA (134 SCRA 331).
II
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION IN DISMISSING PETITIONER’S APPEAL
_______________

43 Id.
44 Id., at p. 142.
45 Id.
46 Id., at pp. 142-143.

441

VOL. 569, OCTOBER 17, 2008 441


Mercury Drug Corporation vs. De Leon
despite substantial compliance with section 1(f), rule 60 and section 13, rule 44 of the rules of
court.
III
THE HONORABLE COURT OF APPEALS ERRED WHEN IT FAVORED MERE
TECHNICALITY OVER SUBSTANTIAL JUSTICE WHICH WILL CERTAINLY CAUSE
GRAVE INJUSTICE AND GREAT PREJUDICE TO PETITIONER CONSIDERING THAT
THE ASSAILED DECISION ON APPEAL IS CLUSTERED WITH ERRORS AND IN
CONTRAST WITH THE DECISIONS OF THIS HONORABLE SUPREME
COURT.47 (Italics supplied)

Our Ruling

The appeal succeeds in part.


Dismissal of an appeal under Rule 50 is discretionary.
In several cases,48 this Court stressed that the grounds for dismissal of an appeal
under Section 1 of Rule 5049 are discretionary
_______________

47 Id., at pp. 16-17.


48 Yuchengco v. Court of Appeals, G.R. No. 165793, October 27, 2006, 505 SCRA 716; De Leon v. Court
of Appeals, 432 Phil. 775; 376 SCRA 531 (2002); Philippine National Bank v. Philippine Milling Co., Inc.,
136 Phil. 212; 26 SCRA 712 (1969).
49 Rule 50, Sec. 1 provides:
Sec. 1. Grounds for dismissal of appeal.—An appeal may be dismissed by the Court of Appeals,
on its own motion or on that of the appellee, on the following grounds:
(a) Failure of the record on appeal to show on its face that the appeal was taken within the
period fixed by these Rules;
(b) Failure to file the notice of appeal or the record on appeal within the period prescribed by
these Rules;
(c) Failure of the appellant to pay the docket and other lawful fees as provided in Section 5 of
Rule 40 and Section 4 of Rule 41;
(d) Unauthorized alterations, omissions or additions in the approved record on appeal as
provided in Section 4 of Rule 44;
(e) Failure of the appellant to serve and file the required number of copies of his brief or
memorandum within the time provided by these Rules;

442
442 SUPREME COURT REPORTS ANNOTATED
Mercury Drug Corporation vs. De Leon
upon the appellate court. The very wording of the rule uses the word “may” instead
of “shall.” This indicates that it is only directory and not mandatory. 50 Sound
discretion must be exercised in consonance with the tenets of justice and fair play,
keeping in mind the circumstances obtaining in each case.51
The importance of an appellant’s brief cannot be gainsaid. Its purpose is two-fold:
(1) to present to the court in coherent and concise form the point and questions in
controversy; and (2) to assist the court in arriving at a just and proper conclusion.52 It
is considered a vehicle of counsel to convey to the court the essential facts of a client’s
case, a statement of the questions of law involved, the law to be applied, and the
application one desires of it by the court.53
The absence of page reference to the record is a ground for dismissal. It is a
requirement intended to ultimately aid the appellate court in arriving at a just and
proper conclusion of the case.54 How-
_______________

(f) Absence of specific assignment of errors in the appellant’s brief, or of page references to the
record as required in Section 13, paragraphs (a), (c), (d) and (f) of Rule 44;
(g) Failure of the appellant to take the necessary steps for the correction or completion of the
record within the time limited by the court in its order;
(h) Failure of the appellant to appear at the preliminary conference under Rule 48 or to comply
with orders, circulars, or directives of the court without justifiable cause; and
(i) The fact that the order or judgment appealed from is not appealable.
50 Philippine National Bank v. Philippine Milling Co., Inc., supra note 48, at p. 215.
51 Maqui v. Court of Appeals, G.R. No. L-41609, February 24, 1976, 69 SCRA 368.
52 Philippine Coconut Authority v. Corona International, Inc., G.R. No. 139910, September 29, 2000,
341 SCRA 519.
53 Casilan v. Chavez, G.R. No. L-17334, February 28, 1962, 4 SCRA 599.
54 Id.

443
VOL. 569, OCTOBER 17, 2008 443
Mercury Drug Corporation vs. De Leon
ever, as earlier discussed, such dismissal is not mandatory, but discretionary on the
part of the appellate court.
This Court has held that the failure to properly cite reference to the
original records is not a fatal procedural lapse.55 When citations found in the
appellant’s brief enable the court to expeditiously locate the portions of the
record referred to, there is substantial compliance with the requirements
of Section 13(c), (d), and (f) of Rule 44.56
In De Leon v. CA,57 this Court ruled that the citations contained in the appellant’s
brief sufficiently enabled the appellate court to expeditiously locate the portions of
the record referred to. They were in substantial compliance with the rules. The Court
said:
“Nothing in the records indicate that it was exercised capriciously, whimsically, or with a
view of permitting injury upon a party litigant. For the same reasons, we hold that the
respondent Court of Appeals did not err when it did not dismiss the appeal based on the
allegation that appellant’s brief failed to comply with the internal rules of said court.”58

Similar to the instant case, the appellant’s brief in Yuchengco v. Court of


Appeals59 contained references to Exhibits and Transcript of Stenographic Notes and
attachments. These were found to have substantially complied with the requirements
of Section 13(c) and (d) of Rule 44.
“x x x The Appellant’s brief may not have referred to the exact pages of the records,
however, the same is not fatal to their cause since the references they made enabled the
appellate court to expeditiously locate the portions referred to. x x x”60
_______________

55 Yuchengco v. Court of Appeals, supra note 48; People v. Dela Concha, G.R. No. 140205, September 3,
2002, 388 SCRA 280; De Leon v. Court of Appeals, supra note 48.
56 Id.
57 De Leon v. Court of Appeals, supra note 48, at p. 790.
58 Id.
59 Yuchengco v. Court of Appeals, supra note 48.
60 Id., at p. 722.

444
444 SUPREME COURT REPORTS ANNOTATED
Mercury Drug Corporation vs. De Leon
It is true that in De Liano v. Court of Appeals,61 this Court held that a statement
of facts unaccompanied by a page reference to the record may be presumed to be
without support in the record and may be stricken or disregarded altogether.
However, the instant case is not on all fours with De Liano.
In De Liano, the appellant’s brief lacked a Subject Index and a Table of Cases and
Authorities.62 Moreover, the Statement of the Case, Statements of Facts, and
Statements of Arguments had no page references to the record.63 When notified of
such defects, defendants-appellants failed to amend their brief to conform to the
rules.64 Instead, they continued to argue that their errors were harmless.65 All these
omissions and non-compliance justified the dismissal of the appeal by the CA.66
In the case under review, although there were no page references to the records,
Mercury Drug and Ganzon referred to the exhibits, TSN, and attachments of the case.
Despite its deficiencies, the brief is sufficient in form and substance as to apprise the
appellate court of the essential facts, nature of the case, the issues raised, and the
laws necessary for the disposition of the same.
Reliance on Heirs of Palomique v. Court of Appeals67 is likewise misplaced. In Heirs
of Palomique, the appellant’s brief did not at all contain a separate statement of
facts.68 This critical omission, together with the failure to make page references to the
record to support the factual allegations, justified the dismissal of the appeal.69
Rules of procedure are intended to promote, not to defeat, substantial justice. They
should not be applied in a very rigid and
_______________

61 G.R. No. 142316, November 22, 2001, 370 SCRA 349.


62 De Liano v. Court of Appeals, id., at p. 358.
63 Id.
64 Id., at p. 359.
65 Id.
66 Id.
67 G.R. Nos. L-39288-89, January 31, 1985, 134 SCRA 331.
68 Heirs of Palomique v. Court of Appeals, id., at p. 333.
69 Id., at p. 334.
445
VOL. 569, OCTOBER 17, 2008 445
Mercury Drug Corporation vs. De Leon
technical sense.70 For reasons of justice and equity, this Court has allowed exceptions
to the stringent rules governing appeals.71 It has, in the past, refused to sacrifice
justice for technicality.72
However, brushing aside technicalities, petitioners are still liable.
Mercury Drug and Ganzon failed to exercise the highest degree of diligence
expected of them.
Denying that they were negligent, Mercury Drug and Ganzon pointed out that De
Leon’s own negligence was the proximate cause of his injury. They argued that any
injury would have been averted had De Leon exercised due diligence before applying
the medicine on his eye. Had he cautiously read the medicine bottle label, he would
have known that he had the wrong medicine.
Mercury Drug and Ganzon can not exculpate themselves from any liability. As
active players in the field of dispensing medicines to the public, the highest degree of
care and diligence is expected of them.73 Likewise, numerous decisions, both here and
abroad, have laid salutary rules for the protection of human life and human
health.74 In the United States case of Tombari v. Conners,75 it was
_______________

70 Buenaflor v. Court of Appeals, G.R. No. 142021, November 29, 2000, 346 SCRA 563.
71 Siguenza v. Court of Appeals, G.R. No. L-44050, July 16, 1985, 137 SCRA 570.
72 Gerales v. Court of Appeals, G.R. No. 85909, February 9, 1993, 218 SCRA 638; Teodoro v. Carague,
G.R. No. 96004, February 21, 1992, 206 SCRA 429; Cabutin v. Amacio, G.R. No. 55228, February 28, 1989,
170 SCRA 750; American Express International, Inc. v. Intermediate Appellate Court, G.R. No. L-70766,
November 9, 1988, 167 SCRA 209; Fonseca v. Court of Appeals, G.R. No. L-36035, August 30, 1988, 165
SCRA 40; Calasiao Farmers Cooperative Marketing Association, Inc. v. Court of Appeals, G.R. No. L-50633,
August 17, 1981, 106 SCRA 630; A-One Feeds, Inc. v. Court of Appeals, G.R. No. L-35560, October 30, 1980,
100 SCRA 590; Gregorio v. Court of Appeals, G.R. No. L-43511, July 28, 1976, 72 SCRA 120; Alonso v.
Villamor, 16 Phil. 315 (1910).
73 Mercury Drug Corporation v. Baking, G.R. No. 156037, May 25, 2007, 523 SCRA 184; U.S. v. Pineda,
supra note 1, at p. 462.
74 People v. Castillo, C.A. No. 227, February 1, 1946.
75 85 Conn. 231 (1912).

446
446 SUPREME COURT REPORTS ANNOTATED
Mercury Drug Corporation vs. De Leon
ruled that the profession of pharmacy demands care and skill, and druggists must
exercise care of a specially high degree, the highest degree of care known to practical
men. In other words, druggists must exercise the highest practicable degree of
prudence and vigilance, and the most exact and reliable safeguards consistent with
the reasonable conduct of the business, so that human life may not constantly be
exposed to the danger flowing from the substitution of deadly poisons for harmless
medicines.76
In Fleet v. Hollenkemp,77 the US Supreme Court ruled that a druggist that sells to
a purchaser or sends to a patient one drug for another or even one innocent drug,
calculated to produce a certain effect, in place of another sent for and designed to
produce a different effect, cannot escape responsibility, upon the alleged pretext that
it was an accidental or innocent mistake. His mistake, under the most favorable
aspect for himself, is negligence. And such mistake cannot be countenanced or
tolerated, as it is a mistake of the gravest kind and of the most disastrous effect.78
Smith’s Admrx v. Middelton79 teaches Us that one holding himself out as
competent to handle drugs, having rightful access to them, and relied upon by those
dealing with him to exercise that high degree of caution and care called for by the
peculiarly dangerous nature of the business, cannot be heard to say that his mistake
by which he furnishes a customer the most deadly of drugs for those comparatively
harmless, is not in itself gross negligence.80
In our own jurisdiction, United States v. Pineda81 and Mercury Drug Corporation
v. Baking are illustrative.82 In Pineda, the potassium chlorate demanded by
complainant had been intended for his race horses. When complainant mixed with
water what he thought and believed was potassium chlorate, but which turned out to
be
_______________

76 Tombari v. Conners, id.


77 56 Am. Dec. 563 (1852).
78 Fleet v. Hollenkemp, id.
79 56 L.R.A. 484 (1902).
80 Smith’s Adm’x. v. Middleton, id.
81 Supra note 1.
82 Supra note 73.

447
VOL. 569, OCTOBER 17, 2008 447
Mercury Drug Corporation vs. De Leon
the potently deadly barium chlorate, his race horses died of poisoning only a few hours
after.
The wisdom of such a decision is unquestionable. If the victims had been human
beings instead of horses, the damage and loss would have been irreparable.83
In the more recent Mercury Drug, involving no less than the same petitioner
corporation, Sebastian Baking went to the Alabang branch of Mercury Drug 84 and
presented his prescription for Diamicron, which the pharmacist misread as
Dormicum.85 Baking was given a potent sleeping tablet, instead of medicines to
stabilize his blood sugar.86 On the third day of taking the wrong medicine, Baking
figured in a vehicular accident.87 He fell asleep while driving.88
This Court held that the proximate cause of the accident was the gross negligence
of the pharmacist who gave the wrong medicine to Baking. The Court said:
“x x x Considering that a fatal mistake could be a matter of life and death for a buying
patient, the said employee should have been very cautious in dispensing medicines. She
should have verified whether the medicine she gave respondent was indeed the one
prescribed by his physician. The care required must be commensurate with the danger
involved, and the skill employed must correspond with the superior knowledge of the
business which the law demands.”89
This Court once more reiterated that the profession of pharmacy demands great
care and skill. It reminded druggists to exercise the highest degree of care known to
practical men.
_______________

83 People v. Castillo, supra note 74.


84 Mercury Drug Corporation v. Baking, supra note 73, at pp. 186-187.
85 Id., at p. 187.
86 Id.
87 Id.
88 Id.
89 Id., at p. 189.

448
448 SUPREME COURT REPORTS ANNOTATED
Mercury Drug Corporation vs. De Leon
In cases where an injury is caused by the negligence of an employee,
there instantly arises a presumption of law that there has been negligence
on the part of the employer, either in the selection or supervision of one’s
employees. This presumption may be rebutted by a clear showing that the
employer has exercised the care and diligence of a good father of the
family.90 Mercury Drug failed to overcome such presumption.91
_______________

90 Civil Code, Art. 2180 provides:


Art. 2180. The obligation imposed by Article 2176 is demandable not only for one’s own acts or
omissions, but also for those of persons for whom one is responsible.
The father and, in case of his death or incapacity, the mother, are responsible for the damages
caused by the minor children who live in their company.
Guardians are liable for damages caused by the minors or incapacitated persons who are under
their authority and live in their company.
The owners and managers of an establishment or enterprise are likewise responsible for damages
caused by their employees in the service of the branches in which the latter are employed or on the
occasion of their functions.
Employers shall be liable for the damages caused by their employees and household helpers
acting within the scope of their assigned tasks, even though the former are not engaged in any
business or industry.
The State is responsible in like manner when it acts through a special agent; but not when the
damage has been caused by the official to whom the task done properly pertains, in which case what
is provided in Article 2176 shall be applicable.
Lastly, teachers or heads of establishments of arts and trades shall be liable for damages caused
by their pupils and students or apprentices, so long as they remain in their custody.
The responsibility treated of in this article shall cease when the persons herein mentioned prove
that they observed all the diligence of a good father of a family to prevent damage.
91 Mercury Drug Corporation v. Baking, supra note 73, at pp. 190-191.

449
VOL. 569, OCTOBER 17, 2008 449
Mercury Drug Corporation vs. De Leon
Petitioners Mercury Drug and Ganzon have similarly failed to live up to high
standard of diligence expected of them as pharmacy professionals. They were grossly
negligent in dispensing ear drops instead of the prescribed eye drops to De Leon.
Worse, they have once again attempted to shift the blame to their victim by
underscoring his own failure to read the label.
As a buyer, De Leon relied on the expertise and experience of Mercury Drug and
its employees in dispensing to him the right medicine.92 This Court has ruled that in
the purchase and sale of drugs, the buyer and seller do not stand at arms
length.93 There exists an imperative duty on the seller or the druggist to take
precaution to prevent death or injury to any person who relies on one’s absolute
honesty and peculiar learning.94 The Court emphasized:
“x x x The nature of drugs is such that examination would not avail the purchaser
anything. It would be idle mockery for the customer to make an examination of a compound
of which he can know nothing. Consequently, it must be that the druggist warrants that he
will deliver the drug called for.”95

Mercury Drug and Ganzon’s defense that the latter gave the only available
Cortisporin solution in the market deserves scant consideration. Ganzon could have
easily verified whether the medicine she gave De Leon was, indeed, the prescribed
one or, at the very least, consulted her supervisor. Absent the required certainty in
the dispensation of the medicine, she could have refused De Leon’s purchase of the
drug.
The award of damages is proper and shall only be reduced considering
the peculiar facts of the case. Moral damages include physical suffering, mental
anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral
shock, social humiliation, and similar injury. Though incapable of pecuni-
_______________

92 Hooks SuperX v. McLaughlin, (ind) 642 NE 2d 514 (1994).


93 United States v. Pineda, supra note 1, at p. 464.
94 Id.
95 Id.

450
450 SUPREME COURT REPORTS ANNOTATED
Mercury Drug Corporation vs. De Leon
ary computation, moral damages may be recovered if they are the proximate result
of defendant’s wrongful act or omission.96
Moral damages are not intended to impose a penalty to the wrongdoer or to enrich
the claimant at the expense of defendant.97 There is no hard and fast rule in
determining what would be a fair and reasonable amount of moral damages since
each case must be governed by its peculiar circumstances.98 However, the award of
damages must be commensurate to the loss or injury suffered.99
Taking into consideration the attending facts of the case under review, We find the
amount awarded by the trial court to be excessive. Following the precedent case
of Mercury Drug, We reduce the amount from P100,000.00 to P50,000.00 only.100 In
addition, We also deem it necessary to reduce the award of exemplary damages from
the exorbitant amount of P300,000.00 to P25,000.00 only.
This Court explained the propriety of awarding exemplary damages in the
earlier Mercury Drug case:
“x x x Article 2229 allows the grant of exemplary damages by way of example or correction
for the public good. As mentioned earlier, the drugstore business is affected by public interest.
Petitioner should have exerted utmost diligence in the selection and supervision of its
employees. On the
_______________

96 Civil Code, Art. 2217 provides:


Art. 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though
incapable of pecuniary computation, moral damages may be recorded if they are the proximate result of
the defendant’s wrongful act for omission.
97 Kierulf v. Court of Appeals, G.R. No. 99301, March 13, 1997, 269 SCRA 433; Lamis v. Ong, G.R. No. 148923,
August 11, 2005, 466 SCRA 510.
98 Mercury Drug Corporation v. Baking, supra note 73, at p. 191.
99 Lamis v. Ong, supra; Samson, Jr. v. Bank of the Philippine Islands, G.R. No. 150487, July 10, 2003, 405
SCRA 607; Filinvest Credit Corporation v. Intermediate Appellate Court, G.R. No. L-65935, September 30, 1988,
166 SCRA 155.
100 Mercury Drug Corporation v. Baking, supra note 73, at p. 192.

451

VOL. 569, OCTOBER 17, 2008 451


Mercury Drug Corporation vs. De Leon
part of the employee concerned, she should have been extremely cautious in dispensing
pharmaceutical products. Due to the sensitive nature of its business, petitioner must at
all times maintain a high level of meticulousness. Therefore, an award of exemplary damages
in the amount of P25,000.00 is in order.”101 (Emphasis supplied)

It is generally recognized that the drugstore business is imbued with public


interest. This can not be more real for Mercury Drug, the country’s biggest drugstore
chain. This Court can not tolerate any form of negligence which can jeopardize the
health and safety of its loyal patrons. Moreover, this Court will not countenance the
cavalier manner it treated De Leon. Not only does a pharmacy owe a customer the
duty of reasonable care, but it is also duty-bound to accord one with respect.
WHEREFORE, the petition is PARTIALLY GRANTED. The Decisions of the CA
and the RTC in Parañaque City are AFFIRMED WITH MODIFICATION, in that the
award of moral and exemplary damages is reduced to P50,000.00 and P25,000.00,
respectively.
SO ORDERED.
Ynares-Santiago (Chairperson), Austria-Martinez, Chico-Nazario and Nachura,
JJ., concur.
Petition partly granted, judgments affirmed with modification.
Note.—The Court has often stressed that rules of procedure are merely tools
designed to facilitate the attainment of justice. They were conceived and promulgated
to effectively aid the court in the dispensation of justice. (Redeña vs. Court of Appeals,
514 SCRA 389 [2007])
——o0o——
_______________
101 Id.

G.R. No. 172299. April 22, 2008.*


ALFREDO TAGLE, petitioner, vs. EQUITABLE PCI BANK (Formerly
Philippine Commercial International Bank) and the HONORABLE
HERMINIA V. PASAMBA, Acting Presiding Judge, Regional Trial Court-
Branch 82, City of Malolos, Bulacan, respondents.
Certiorari; Requisites; The principal office of a special civil action for certiorari is only to
keep the inferior court within the parameters of its jurisdiction or to prevent it from committing
such a grave abuse of discretion amounting to lack or excess of jurisdiction.—A special civil
action for Certiorari, or simply a Petition for Certiorari, under Rule 65 of the Revised Rules
of Court is intended for the correction of errors of jurisdiction only or grave abuse of discretion
amounting to lack or excess of jurisdiction. Its principal office is only to keep the inferior
court within the parameters of its jurisdiction or to prevent it from committing such a grave
abuse of discretion amounting to lack or excess of jurisdiction. A writ of certiorari may be
issued only for the correction of errors of jurisdiction or grave abuse of discretion amounting
to lack or excess of jurisdiction. Such cannot be used for any other purpose, as its function is
limited to keeping the inferior court within the bounds of its jurisdiction. For a petition
for certiorari to prosper, the essential requisites that have to concur are: (1) the writ is
directed against a tribunal, a board or any officer exercising judicial or quasi-judicial
functions; (2) such tribunal, board or officer has acted without or in excess of jurisdiction, or
with grave abuse of discretion amounting to lack or excess of jurisdiction; and (3) there is no
appeal or any plain, speedy and adequate remedy in the ordinary course of law.
Same; Words and Phrases; “Without Jurisdiction,” “Excess of Jurisdiction,” “Grave Abuse
of Discretion,” Explained.—The phrase “without jurisdiction” means that the court acted with
absolute lack of authority or want of legal power, right or authority to hear and determine a
cause or causes, considered either in general or with reference to a particular matter. It
means lack of power to exercise authority. “Excess of jurisdiction” occurs when the court
transcends

_______________

* THIRD DIVISION.
425
VOL. 552, APRIL 22, 2008 425
Tagle vs. Equitable PCI Bank
its power or acts without any statutory authority; or results when an act, though within
the general power of a tribunal, board or officer (to do) is not authorized, and invalid with
respect to the particular proceeding, because the conditions which alone authorize the
exercise of the general power in respect of it are wanting. While that of “grave abuse of
discretion” implies such capricious and whimsical exercise of judgment as to be equivalent to
lack or excess of jurisdiction; simply put, power is exercised in an arbitrary or despotic
manner by reason of passion, prejudice, or personal hostility; and such exercise is so patent
or so gross as to amount to an evasion of a positive duty or to a virtual refusal either to
perform the duty enjoined or to act at all in contemplation of law.
Same; Appeals; Decisions (judgments), final orders or resolutions of the Court of Appeals
in any case, i.e., regardless of the nature of the action or proceedings involved, may be appealed
to this Court by filing a petition for review, which would be but a continuation of the appellate
process over the original case.—From the words of Rule 45, it is crystal that decisions
(judgments), final orders or resolutions of the Court of Appeals in any case, i.e., regardless of
the nature of the action or proceedings involved, may be appealed to this Court by filing a
petition for review, which would be but a continuation of the appellate process over the
original case. In the case at bar, the assailed Resolutions of the Court of Appeals dismissing
petitioner Alfredo’s petition in CA-G.R. SP No. 90461 were final orders. They were not
interlocutory because the proceedings were terminated; and left nothing more to be done by
the appellate court. There were no remaining issues to be resolved in CA-G.R. SP No. 90461.
Consequently, the proper remedy available to petitioner Alfredo then was to file before this
Court a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court of the
assailed Resolutions of the Court of Appeals, and not a special civil action for certiorari.
Same; Same; Basic is the rule that a writ of certiorari will not issue where the remedy of
appeal is available to an aggrieved party; A remedy is considered “plain, speedy and adequate”
if it will promptly relieve the petitioner from the injurious effects of the judgment and the acts
of the lower court or agency.—It is fairly obvious that the third requisite for a petition
for certiorari is wanting, that is, there must be no appeal or any plain, speedy, and adequate
remedy in the ordinary course of law. The availability to petitioner Alfredo of the426
426 SUPREME COURT REPORTS ANNOTATED
Tagle vs. Equitable PCI Bank
remedy of a petition for review on certiorari from the assailed Resolutions of the Court
of Appeals effectively barred his right to resort to a petition for certiorari. Basic is the rule
that a writ of certiorari will not issue where the remedy of appeal is available to an aggrieved
party. A remedy is considered “plain, speedy and adequate” if it will promptly relieve the
petitioner from the injurious effects of the judgment and the acts of the lower court or agency.
In this case, appeal was not only available but also a speedy and adequate remedy. Moreover,
petitioner Alfredo failed to show circumstances that would justify a deviation from the
general rule as to make available to him a petition for certiorari in lieu of making an appeal.
Same; Same; “Petition for Review” and “Petition for Certiorari,” Compared.—To be sure,
once again, we take this opportunity to distinguish between a Petition for Review
on Certiorari (an appeal by certiorari) and a Petition for Certiorari (a special civil action/an
original action for Certiorari), under Rules 45 and 65, respectively, of the Revised Rules of
Court. Madrigal Transport Inc. v. Lapanday Holdings Corporation, 436 SCRA 123 (2004),
summarizes the distinctions between these two remedies, to wit: As to the Purpose.
Certiorari is a remedy designed for the correction of errors of jurisdiction, not errors of
judgment. In Pure Foods Corporation v. NLRC, 283 SCRA 133 (1997), we explained the
simple reason for the rule in this light: ‘When a court exercises its jurisdiction, an error
committed while so engaged does not deprive it of the jurisdiction being exercised when the
error is committed. If it did, every error committed by a court would deprive it of its
jurisdiction and every erroneous judgment would be a void judgment. This cannot be allowed.
The administration of justice would not survive such a rule. Consequently, an error of
judgment that the court may commit in the exercise of its jurisdiction is not correct[a]ble
through the original civil action of certiorari.’ The supervisory jurisdiction of a court over the
issuance of a writ of certiorari cannot be exercised for the purpose of reviewing the intrinsic
correctness of a judgment of the lower court—on the basis either of the law or the facts of the
case, or of the wisdom or legal soundness of the decision. Even if the findings of the court are
incorrect, as long as it has jurisdiction over the case, such correction is normally beyond the
province of certiorari. Where the error is not one of jurisdiction, but of an error of law or fact—
a mistake of judgment—appeal is the remedy. As to the Manner of Filing. Over an appeal,
the CA exercises its appellate jurisdiction and power of427
VOL. 552, APRIL 22, 2008 427
Tagle vs. Equitable PCI Bank
review. Over a certiorari, the higher court uses its original jurisdiction in accordance
with its power of control and supervision over the proceedings of lower courts. An appeal is
thus a continuation of the original suit, while a petition for certiorari is an original and
independent action that was not part of the trial that had resulted in the rendition of the
judgment or order complained of. The parties to an appeal are the original parties to the
action. In contrast, the parties to a petition for certiorari are the aggrieved party (who thereby
becomes the petitioner) against the lower court or quasi-judicial agency, and the prevailing
parties (the public and the private respondents, respectively). As to the Subject Matter. Only
judgments or final orders and those that the Rules of Court so declared are appealable. Since
the issue is jurisdiction, an original action for certiorari may be directed against an
interlocutory order of the lower court prior to an appeal from the judgment; or where there
is no appeal or any plain, speedy or adequate remedy. As to the Period of Filing. Ordinary
appeals should be filed within fifteen days from the notice of judgment or final order appealed
from. Where a record on appeal is required, the appellant must file a notice of appeal and a
record on appeal within thirty days from the said notice of judgment or final order. A petition
for review should be filed and served within fifteen days from the notice of denial of the
decision, or of the petitioner’s timely filed motion for new trial or motion for reconsideration.
In an appeal by certiorari, the petition should be filed also within fifteen days from the notice
of judgment or final order, or of the denial of the petitioner’s motion for new trial or motion
for reconsideration. On the other hand, a petition for certiorari should be filed not later than
sixty days from the notice of judgment, order, or resolution. If a motion for new trial or motion
for reconsideration was timely filed, the period shall be counted from the denial of the
motion. As to the Need for a Motion for Reconsideration. A motion for reconsideration is
generally required prior to the filing of a petition for certiorari, in order to afford the tribunal
an opportunity to correct the alleged errors. Note also that this motion is a plain and adequate
remedy expressly available under the law. Such motion is not required before appealing a
judgment or final order.
Same; Same; Procedural Rules and Technicalities; The relaxation of procedural rules
may be allowed only when there are exceptional circumstances to justify the same.—The
relaxation of procedural rules may be allowed only when there are exceptional circum-428
428 SUPREME COURT REPORTS ANNOTATED
Tagle vs. Equitable PCI Bank
stances to justify the same. Try as we might, however, we fail to find the existence of
such exceptional circumstances in this case, and neither did petitioner Alfredo endeavour to
prove the existence of any. In fact, there is total lack of effort on petitioner Alfredo’s part to
at least explain his inability to comply with the clear requisites of the Revised Rules of Court.
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.
The facts are stated in the opinion of the Court.
Leopoldo C. Sta. Maria for petitioner.
Sumalpong, Matibag, Magturo, Banzon, Buenaventura & Yusi for respondent
Bank.
CHICO-NAZARIO, J.:
This Petition for Certiorari under Rule 65 of the Revised Rules of Court filed by
petitioner Alfredo Tagle (petitioner Alfredo) stemmed from the following Resolutions
promulgated by the Court of Appeals: (1) the 6 September 2005 Resolution1 dismissing
the Petition for Certiorari filed by petitioner Alfredo, docketed as CA-G.R. SP No.
90461, assailing the 4 April 2005 Order of the Regional Trial Court (RTC), Branch
82, City of Malolos, Bulacan, in LRC Case No. P-71-20042; (2) the 16 February 2006
Resolu-

_______________

1 Penned by Associate Justice Edgardo P. Cruz with Associate Justices Romeo A. Brawner and Jose C.
Mendoza, concurring; Rollo, p. 17.
2 “In Re: Ex parte Petition for the Issuance of a Writ of Possession on the Property Located at BaliuAg,
Bulacan Embraced in Transfer Certificate of Title No. T-143715 of the Registry of Deeds for the Province of
Bulacan: EQUITABLE PCI BANK (formerly Philippine Commercial International Bank), Petitioner.” Id.,
at pp. 11-12.
3 Annex “C” of the Petition; id., at p. 16.
429
VOL. 552, APRIL 22, 2008 429
Tagle vs. Equitable PCI Bank
tion3 denying petitioner Alfredo’s Motion for Reconsideration; and (3) the 11 April
2006 Resolution4 denying petitioner Alfredo’s Second Motion for Reconsideration.5
Petitioner Alfredo urges this Court to set aside, on the ground of grave abuse of
discretion amounting to lack or excess of jurisdiction, the 4 April 2005 Order6 of the
RTC in LRC Case No. P-71-2004, which denied petitioner Alfredo’s Motion to Stop
Writ of Possession. He prays that this Court certify “for review with prayer for
preliminary injunction to stop the writ of possession [of] the property located at
Concepcion Subdivision, Baliuag, Bulacan and embraced in Transfer Certificate of
Title No. T-143715 of the Registry of Deeds for the Province of Bulacan [subject
property] and after due hearing, let judgment be rendered annulling or modifying the
proceedings of the Honorable Regional Trial Court Branch 82, [City of Malolos,
Bulacan,] and the Court of Appeals as the law requires with costs.”7
According to petitioner Alfredo, the subject property is registered in his name and
was constituted as a Family Home in accordance with the provisions of the Family
Code. He and his wife Arsenia Bautista Tagle (Arsenia) never mortgaged the subject
property to respondent Equitable PCI Bank (respondent E-PCI) whether before or
after the subject property was constituted as their Family Home. It was Josefino
Tagle (Josefino), who was not the owner of the subject property, who mortgaged the
same with respondent E-PCI. Josefino was religiously paying the installments on his
mortgage obligation and had paid more than half thereof. Josefino, however, passed
away. Petitioner Alfredo was then forced to assume Josefino’s outstanding mortgage
obliga-

_______________

4 Annex “B” of the Petition; id., at p. 14.


5 A Motion for Reconsideration of the 16 February 2006 Resolution which denied the Motion for
Reconsideration of the 6 September 2005 Resolution.
6 Annex “A” of the Petition; Rollo, pp. 11-12.
7 Id., at p. 9.
430
430 SUPREME COURT REPORTS ANNOTATED
Tagle vs. Equitable PCI Bank
tion. Even as petitioner Alfredo was already paying Josefino’s mortgage obligation in
installments, respondent E-PCI still foreclosed the mortgage on the subject property.8
On the other hand, respondent E-PCI recounts that the subject property was
formerly registered in the name of petitioner Alfredo. It was mortgaged, pursuant to
a Special Power of Attorney executed by petitioner Alfredo, to secure the obligation
of the spouses Josefino and Emma Tagle with respondent E-PCI. Respondent E-PCI
foreclosed the mortgage on the subject property upon default in payment by spouses
Josefino and Emma, and upon the expiration of the period of redemption, caused the
consolidation and transfer of the title to the subject property in its name.
Consequently, respondent E-PCI filed with the RTC a Petition for Issuance of Writ of
Possession of the subject property, which was docketed as LRC Case No. P-71-2004.
Petitioner Alfredo, however, filed a Motion to Stop Writ of Possession on the ground
that the subject property is a Family Home which is exempt from execution, forced
sale or attachment.9
On 4 April 2005, the RTC issued the assailed Order denying petitioner Alfredo’s
Motion, the dispositive part of which reads:
“WHEREFORE, premises considered, the Motion to Stop Writ of Possession is hereby
DENIED.”
In denying the motion, the RTC held that:
“In the case at bar, the mortgage transaction happened on May 9, 1997 (Exhibit “D”), after
the effectivity of the Family Code.
With Article 155 in application, it is crystal clear that this instant case does not fall under
the exemptions from execution provided in the Family Code, as the case stemmed from the
mortgage transaction entered into between the [herein respondent E-PCI] and [herein
petitioner Alfredo and his spouse Arsenia] dating back in (sic) 1997. This fact will militate
against the so-called exemption by

_______________

8 Id., at pp. 66-67.


9 Id., at pp. 73-74.
431
VOL. 552, APRIL 22, 2008 431
Tagle vs. Equitable PCI Bank
sheer force of exclusion embodied in said article. Hence, the law’s protective mantle cannot
be availed of by [petitioner Tagle and his spouse Arsenia].”10
Petitioner Alfredo and his spouse Arsenia filed with the RTC a Motion for
Reconsideration of its foregoing order. However, it was likewise denied by the RTC
in another Order11 dated 21 June 2005.
Thereafter, petitioner Alfredo12 elevated the case to the Court of Appeals on a
Petition for Certiorari [and Prohibition] under Rule 65 of the Revised Rules of Court,
docketed as CA-G.R. SP No. 90461, assailing and seeking the nullification and the
setting aside of the denial of his Motion to Stop Writ of Possession.
In a Resolution dated 6 September 2005, the appellate court resolved to dismiss
the petition, stating thus:
“The instant petition is not accompanied by (i) the order denying petitioner’s motion to
exempt from foreclosure of mortgage; and (ii) a relevant and pertinent document, i.e., motion
to exempt from foreclosure of mortgage (Sec. 1, Rule 65, in relation to Sec. 3, Rule 46, 1997
Rules of Civil Procedure).
WHEREFORE, the petition is DISMISSED outright.”13
In due time, petitioner Alfredo moved for the reconsideration of the afore-
quoted Resolution.
On 16 February 2006, the Court of Appeals promulgated a Resolution denying
petitioner Alfredo’s motion for reconsideration, decreeing that:
“Petitioner [Alfredo] seeks reconsideration of Our resolution dated September 6, 2005
dismissing the petition for not being ac-

_______________

10 Id., at pp. 11-12.


11 Records, pp. 104-05.
12 When the case was elevated to the Court of Appeals, the petitioner in the case was solely Alfredo Tagle.
13 Rollo, p. 17.
432
432 SUPREME COURT REPORTS ANNOTATED
Tagle vs. Equitable PCI Bank
companied by the order dated April 4, 2005 (denying his motion to exempt from foreclosure
mortgage) and motion to exempt from foreclosure of mortgage. Instead of the aforesaid order
and motion, however, petitioner submitted certified true copies of the order dated June 21,
2005 (which was already attached to the petition) and motion to stop writ of possession.
WHEREFORE, for lack of merit, the motion for reconsideration is DENIED.”14
Undaunted still, petitioner Alfredo once more filed a Motion for Reconsideration of
the appellate court’s 16 February 2006 Resolution.
On 11 April 2006, the Court of Appeals promulgated the last of its Resolutions,
denying, as expected, petitioner Alfredo’s Second Motion for Reconsideration, stated
in full below:
“For consideration is petitioner’s [Alfredo’s] motion for reconsideration of Our February
16, 2006 resolution denying its (sic) motion for reconsideration of Our resolution dated
September 6, 2005 dismissing the petition.
Appellant has not cured the formal defects of the petition noted in Our resolution dated
September 6, 2005. And, more importantly, a second motion for reconsideration of a final
order is not allowed (Sec. 5, Rule 37, 1997 Rules of Civil Procedure; Obando vs. Court of
Appeals, 366 SCRA 673).
WHEREFORE, the subject motion for reconsideration is DENIED.”15
Hence, this Petition for Certiorari with Prohibition filed under Rule 65 of the
Revised Rules of Court.
Petitioner Alfredo filed the instant petition designating it in both the caption and
the body as one for “certiorari” under Rule 65 of the Revised Rules of Court. He
anchors the present petition on the sole issue of “whether or not the subject prop-
_______________

14 Id., at p. 14.
15 Id., at p. 16.
433
VOL. 552, APRIL 22, 2008 433
Tagle vs. Equitable PCI Bank
erty subject of the mortgage being a family home is exempt from foreclosure of
mortgage.”16 He argues:
“That from the records of the mortgage, the same was not constituted before or after the
constitution of the family home by the petitioner and as such the Honorable Court of Appeals
has acted without or in excess of its or his jurisdiction or with grave abuse of discretion in
the proceedings complained of.”17
He thus prays for this Court to issue a preliminary injunction to stop the
implementation of the writ of possession of the subject property, and after due
hearing, render a judgment annulling or modifying the proceedings before the RTC
and the Court of Appeals, with costs.18
On the other hand, respondent E-PCI counters that the petition at bar must be
dismissed on the following grounds:
First, petitioner Alfredo’s “Petition for Certiorari” with this Court failed to comply
with the technical requirements of the Rules of Court19 for petitions for certiorari in
that (a) the present petition was filed out of time considering that the 60-day period
within which to file the same was reckoned from receipt of the 11 April 2006
Resolution denying petitioner Alfredo’s second Motion for Reconsideration, instead of
the 16 February 2006 Resolution denying his first Motion for Reconsideration;20 (b)
petitioner Alfredo did not allege in the present petition that the Court of Appeals
“acted without or in excess of its or his jurisdiction or with grave abuse of discretion
amounting to lack or excess of jurisdiction”21 when it dismissed his petition in CA-
G.R. SP No. 90461 for failure to attach thereto certified true copies of the 4 April 2005
RTC Order denying his Motion to Stop Writ of Possession, as well

_______________

16 Id., at p. 67.
17 Id., at p. 8.
18 Id., at p. 9.
19 Id., at p. 78.
20 Id., at p. 37.
21 Id.
434
434 SUPREME COURT REPORTS ANNOTATED
Tagle vs. Equitable PCI Bank
as the very motion subject of the assailed order; (c) the present petition lacks the
proper verification and is considered an unsigned pleading which produces no effect
whatsoever;22 and (d) the present petition requested for the issuance of an injunction
without stating the grounds therefor.23
Second, petitioner Alfredo’s second Motion for Reconsideration filed with the Court
of Appeals is prohibited by law,24 as a second motion for reconsideration of a judgment
or final resolution is clearly disallowed by Sec. 2, Rule 52 of the Rules of Court, as
amended.
And third, granting arguendo that the petition at bar was properly filed by
petitioner Alfredo with this Court, the Court of Appeals did not err in dismissing the
Petition for Certiorari in CA-G.R. SP No. 90461 for failure of petitioner Alfredo to
submit the required documents.25
Respondent E-PCI then concludes that “the present Petition for Certiorari was
filed not to question the jurisdiction of the Court of Appeals but as a vain hope of
appealing the Order dated April 4, 2005 issued by the Regional Trial Court x x x.”26
In reply to the foregoing counter-arguments, petitioner Alfredo contends:
“1. That Rule 52 Sec. 2 of the 1997 Rules of Procedure is not applicable to the present
case because what is applicable is a Second Motion for Reconsideration in the Supreme Court;
2. That the 60 day period within which petitioner [Alfredo] may file subject Petition for
Certiorari has been reckoned from April 11, 2006 denying the petitioner’s [Alfredo’s] Second
Motion for Reconsideration and the Rules of Court does not distinguished (sic) whether the
denial is first or second;

_______________

22 Id., at p. 80.
23 Id., at p. 81.
24 Id., at p. 76.
25 Id., at p. 82.
26 Id., at pp. 3-4; id., at pp. 38-39.
435
VOL. 552, APRIL 22, 2008 435
Tagle vs. Equitable PCI Bank
xxxx
4. That the issue of whether or not the mortgage was executed before or after the
constitution of the Family Home is a necessary question in a Petition for Certiorari under
Rule 65; and
5. That the verification based on personal knowledge is proper because the Rules of
Court did not distinguish whether the facts is based on personal knowledge or an (sic)
authentic records”;27
For its substantive as well as procedural infirmities, the instant petition must be
dismissed.
Given the above-stated arguments raised by both parties, the threshold question
that must be initially resolved is whether or not the present Petition
for Certiorari filed under Rule 65 of the Revised Rules of Court is the proper remedy
for petitioner Alfredo to avail of in seeking the reversal of the three Resolutions of the
Court of Appeals dated 6 September 2005, 16 February 2006 and 11 April 2006.
A petition for certiorari is governed by Rule 65 of the Revised Rules of Court, which
reads:
“Section 1. Petition for certiorari.—When any tribunal, board or officer exercising
judicial or quasi-judicial functions has acted without or in excess of [its or his] jurisdiction,
or with grave abuse of discretion amounting to lack or excess of its or his jurisdiction, and
there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law,
a person aggrieved thereby may file a verified petition in the proper court, alleging the facts
with certainty and praying that judgment be rendered annulling or modifying the
proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and
justice may require.
The petition shall be accompanied by a certified true copy of the judgment, order or
resolution subject thereof, copies of all pleadings and documents relevant and pertinent
thereto, and a sworn certification of non-forum shopping as provided in the third paragraph
of Section 3, Rule 46.”

_______________

27 Id., at pp. 61-62.


436
436 SUPREME COURT REPORTS ANNOTATED
Tagle vs. Equitable PCI Bank
A special civil action for Certiorari, or simply a Petition for Certiorari, under Rule
65 of the Revised Rules of Court is intended for the correction of errors of jurisdiction
only or grave abuse of discretion amounting to lack or excess of jurisdiction. Its
principal office is only to keep the inferior court within the parameters of its
jurisdiction or to prevent it from committing such a grave abuse of discretion
amounting to lack or excess of jurisdiction.28
A writ of certiorari may be issued only for the correction of errors of jurisdiction or
grave abuse of discretion amounting to lack or excess of jurisdiction. Such cannot be
used for any other purpose, as its function is limited to keeping the inferior court
within the bounds of its jurisdiction.29
For a petition for certiorari to prosper, the essential requisites that have to concur
are: (1) the writ is directed against a tribunal, a board or any officer exercising judicial
or quasi-judicial functions; (2) such tribunal, board or officer has acted without or in
excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of
jurisdiction; and (3) there is no appeal or any plain, speedy and adequate remedy in
the ordinary course of law.30

_______________

28 People v. Court of Appeals, 468 Phil. 1, 10; 423 SCRA 605, 612 (2004).
29 Land Bank of the Philippines v. Court of Appeals, 456 Phil. 755, 784; 409 SCRA 455, 479-480
(2003); Rivera v. Hon. Espiritu, 425 Phil. 169, 179-180; 374 SCRA 351, 360 (2002); Barangay Blue Ridge “A”
of Quezon City v. Court of Appeals, 377 Phil. 49, 53; 319 SCRA 48, 51 (1999); Silverio v. Court of Appeals,
G.R. No. L-39861, 17 March 1986, 141 SCRA 527, 539.
30 Land Bank of the Philippines v. Court of Appeals, id., at pp. 784-785; p. 480; Sanchez v. Court of
Appeals, 345 Phil. 155, 179; 279 SCRA 647, 671-672 (1997).
437
VOL. 552, APRIL 22, 2008 437
Tagle vs. Equitable PCI Bank
The phrase “without jurisdiction” means that the court acted with absolute lack of
authority31 or want of legal power, right or authority to hear and determine a cause
or causes, considered either in general or with reference to a particular matter. It
means lack of power to exercise authority.32 “Excess of jurisdiction” occurs when the
court transcends its power or acts without any statutory authority;33 or results when
an act, though within the general power of a tribunal, board or officer (to do) is not
authorized, and invalid with respect to the particular proceeding, because the
conditions which alone authorize the exercise of the general power in respect of it are
wanting.34 While that of “grave abuse of discretion” implies such capricious and
whimsical exercise of judgment as to be equivalent to lack or excess of jurisdiction;
simply put, power is exercised in an arbitrary or despotic manner by reason of
passion, prejudice, or personal hostility; and such exercise is so patent or so gross as
to amount to an evasion of a positive duty or to a virtual refusal either to perform the
duty enjoined or to act at all in contemplation of law.35
In the present case, there is no question that the 6 September 2005 Resolution of
the Court of Appeals dismissing petitioner Alfredo’s petition in CA-G.R. SP No. 90461
is already a disposition on the merits. Therefore, said Resolution, as well as
the Resolutions dated 16 February 2006 and 11 April 2006 denying reconsideration
thereof, issued by the Court of Ap-

_______________

31 Alafriz v. Nable, 72 Phil. 278, 280 (1941). See also Land Bank of the Philippines v. Court of
Appeals, supra note 27 at p. 785; p. 480.
32 Land Bank of the Philippines v. Court of Appeals, supra note 29 at p. 785; p. 480.
33 Id.
34 Id.
35 Cuison v. Court of Appeals, 351 Phil. 1089, 1102; 289 SCRA 159, 177 (1998); Lalican v. Hon. Vergara,
342 Phil. 485, 495; 276 SCRA 518, 528 (1997); Pure Foods Corp. v. National Labor Relations Commission,
G.R. No. 78591, 21 March 1989, 171 SCRA 415, 426; Palma v. Q & S Inc., 123 Phil. 958, 960; 17 SCRA 97,
100 (1966).
438
438 SUPREME COURT REPORTS ANNOTATED
Tagle vs. Equitable PCI Bank
peals, are in the nature of a final disposition of CA-G.R. SP No. 90461 by the appellate
court, and which, under Rule 45 of the Revised Rules of Court, are appealable to this
Court via a Petition for Review on Certiorari, viz.:
“SECTION 1. Filing of petition with Supreme Court.—A party desiring to appeal
by certiorari from a judgment or final order or resolution of the Court of Appeals, the
Sandiganbayan, the Regional Trial Court or other courts whenever authorized by law, may
file with the Supreme Court a verified petition for review on certiorari. The petition shall
raise only questions of law which must be distinctly set forth.” (Emphasis supplied.)
From the words of Rule 45, it is crystal that decisions (judgments), final orders or
resolutions of the Court of Appeals in any case, i.e., regardless of the nature of the
action or proceedings involved, may be appealed to this Court by filing a petition for
review, which would be but a continuation of the appellate process over the original
case.36
In the case at bar, the assailed Resolutions of the Court of Appeals dismissing
petitioner Alfredo’s petition in CA-G.R. SP No. 90461 were final orders.37 They were
not interlocutory because the proceedings were terminated; and left nothing more to
be done by the appellate court. There were no remaining issues to be resolved in CA-
G.R. SP No. 90461. Consequently, the proper remedy available to petitioner Alfredo
then was to file before this Court a Petition for Review on Certiorari under Rule 45 of
the Revised Rules of Court of the assailed Resolutions of the Court of Appeals, and
not a special civil action for certiorari.

_______________

36 Heirs of Marcelino Pagobo v. Court of Appeals, G.R. No. 121687, 16 October 1997, 280 SCRA 870,
883.
37 Heirs of Placido Miranda v. Court of Appeals, 325 Phil. 674, 685; 255 SCRA 368, 376 (1996); Marahay
v. Melicor, G.R. No. 44980, 6 February 1990, 181 SCRA 811, 814; Santos v. Pecson, 79 Phil. 261, 263 (1947).
439
VOL. 552, APRIL 22, 2008 439
Tagle vs. Equitable PCI Bank
From the foregoing discussion, it is fairly obvious that the third requisite for a
petition for certiorari is wanting, that is, there must be no appeal or any plain,
speedy, and adequate remedy in the ordinary course of law. The availability to
petitioner Alfredo of the remedy of a petition for review on certiorari from the
assailed Resolutions of the Court of Appeals effectively barred his right to resort to a
petition for certiorari.
Basic is the rule that a writ of certiorari will not issue where the remedy of appeal
is available to an aggrieved party. A remedy is considered “plain, speedy and
adequate” if it will promptly relieve the petitioner from the injurious effects of the
judgment and the acts of the lower court or agency.38 In this case, appeal was not only
available but also a speedy and adequate remedy.39 Moreover, petitioner Alfredo
failed to show circumstances that would justify a deviation from the general rule as
to make available to him a petition for certiorari in lieu of making an appeal.
Petitioner Alfredo failed to show any valid reason why the issue raised in his
petition for certiorari could not have been raised on ordinary appeal by certiorari. He
simply argued that the appellate court gravely abuse its discretion which amounted
to lack or excess of jurisdiction in dismissing his petition in CA-G.R. SP No. 90461
and not finding that the subject property covered by the Writ of Possession was a
Family Home, hence, exempt from execution or forced sale. He did not give a single
explanation as to why the errors committed by the Court of Appeals cannot possibly
be cured by ordinary appeal under Rule 45 of the Revised Rules of Court.
The remedies of appeal in the ordinary course of law and that of certiorari under
Rule 65 of the Revised Rules of Court

_______________

38 Chua v. Santos, G.R. No. 132467, 18 October 2004, 440 SCRA 365, 374.
39 National Irrigation Administration v. Court of Appeals, G.R. No. 129169, 17 November 1999, 318
SCRA 255, 265.
440
440 SUPREME COURT REPORTS ANNOTATED
Tagle vs. Equitable PCI Bank
are mutually exclusive and not alternative or cumulative.40 Time and again this Court
has reminded members of the bench and bar that the special civil action
of Certiorari cannot be used as a substitute for a lost appeal41 where the latter remedy
is available; especially if such loss or lapse was occasioned by one’s own negligence or
error in the choice of remedies.42
To be sure, once again, we take this opportunity to distinguish between a Petition
for Review on Certiorari (an appeal by certiorari) and a Petition for Certiorari (a
special civil action/an original action for Certiorari), under Rules 45 and 65,
respectively, of the Revised Rules of Court. Madrigal Transport Inc. v. Lapanday
Holdings Corporation,43 summarizes the distinctions between these two remedies, to
wit:
“As to the Purpose. Certiorari is a remedy designed for the correction of errors of
jurisdiction, not errors of judgment. In Pure Foods Corporation v. NLRC, we explained the
simple reason for the rule in this light:
‘When a court exercises its jurisdiction, an error committed while so engaged does
not deprive it of the jurisdiction being exercised when the error is committed. If it did,
every error committed by a court would deprive it of its jurisdiction and every erroneous
judgment would be a void judgment. This cannot be allowed. The administration of
justice would not survive such a rule. Consequently, an error of judgment that the court
may commit in the exercise of its jurisdiction is not correct[a]ble through the original
civil action of certiorari.’
The supervisory jurisdiction of a court over the issuance of a writ of certiorari cannot be
exercised for the purpose of reviewing the

_______________

40 Cathay Pacific Steel Corp. v. Court of Appeals, G.R. No. 164561, 30 August 2006, 500 SCRA 226, 236.
41 Land Bank of the Philippines v. Continental Watchman Agency Incorporated, 465 Phil. 607, 615; 420 SCRA
624, 630 (2004).
42 Land Bank of the Philippines v. Court of Appeals, supra note 29 at p. 785; pp. 480-481.
43 G.R. No. 156067, 11 August 2004, 436 SCRA 123, 134-136.
441
VOL. 552, APRIL 22, 2008 441
Tagle vs. Equitable PCI Bank
intrinsic correctness of a judgment of the lower court—on the basis either of the law or the
facts of the case, or of the wisdom or legal soundness of the decision. Even if the findings of
the court are incorrect, as long as it has jurisdiction over the case, such correction is normally
beyond the province of certiorari. Where the error is not one of jurisdiction, but of an error of
law or fact—a mistake of judgment—appeal is the remedy.
As to the Manner of Filing. Over an appeal, the CA exercises its appellate jurisdiction
and power of review. Over a certiorari, the higher court uses its original jurisdiction in
accordance with its power of control and supervision over the proceedings of lower courts. An
appeal is thus a continuation of the original suit, while a petition for certiorari is an original
and independent action that was not part of the trial that had resulted in the rendition of the
judgment or order complained of. The parties to an appeal are the original parties to the
action. In contrast, the parties to a petition for certiorari are the aggrieved party (who thereby
becomes the petitioner) against the lower court or quasi-judicial agency, and the prevailing
parties (the public and the private respondents, respectively).
As to the Subject Matter. Only judgments or final orders and those that the Rules of
Court so declared are appealable. Since the issue is jurisdiction, an original action for
certiorari may be directed against an interlocutory order of the lower court prior to an appeal
from the judgment; or where there is no appeal or any plain, speedy or adequate remedy.
As to the Period of Filing. Ordinary appeals should be filed within fifteen days from the
notice of judgment or final order appealed from. Where a record on appeal is required, the
appellant must file a notice of appeal and a record on appeal within thirty days from the said
notice of judgment or final order. A petition for review should be filed and served within
fifteen days from the notice of denial of the decision, or of the petitioner’s timely filed motion
for new trial or motion for reconsideration. In an appeal by certiorari, the petition should be
filed also within fifteen days from the notice of judgment or final order, or of the denial of the
petitioner’s motion for new trial or motion for reconsideration.
On the other hand, a petition for certiorari should be filed not later than sixty days from the
notice of judgment, order, or resolution. If a motion for new trial or motion for reconsideration
was442
442 SUPREME COURT REPORTS ANNOTATED
Tagle vs. Equitable PCI Bank
timely filed, the period shall be counted from the denial of the motion.
As to the Need for a Motion for Reconsideration. A motion for reconsideration is
generally required prior to the filing of a petition for certiorari, in order to afford the tribunal
an opportunity to correct the alleged errors. Note also that this motion is a plain and adequate
remedy expressly available under the law. Such motion is not required before appealing a
judgment or final order.”
Evidently, therefore, petitioner Alfredo erred in filing a Petition
for Certiorari instead of an ordinary appeal by certiorari, already a sufficient
justification for dismissing the instant petition. But even if his present petition is
given due course, we still find it bereft of merit.
When the Court of Appeals resolved to dismiss the petition in CA-G.R. SP No.
90461, it did so on the ground that petitioner Alfredo failed to attach certified true
copies of the following: (1) the 4 April 2005 Order of the RTC in LRC Case No. P-71-
2004 denying petitioner Alfredo’s Motion to Stop Writ of Possession; and (2) petitioner
Alfredo’s Motion to Stop Writ of Possession submitted to the RTC. Suitably, therefore,
the proper issue which petitioner Alfredo should raise before this Court in his instant
Petition for Certiorari should be whether or not the Court of Appeals gravely abused
its discretion in dismissing his petition in CA-G.R. SP No. 90461 for failure to attach
thereto the pertinent documents.
In dismissing the petition in CA-G.R. SP No. 90461, the appellate court relied on
Sec. 1, Rule 65, in relation to Sec. 3, Rule 46, of the Revised Rules of Court. Sec. 1 of
Rule 6544 reads:
“SECTION 1. Petition for certiorari.—When any tribunal, board or officer exercising
judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or
with grave abuse of discretion amounting to lack or excess of [its or his] jurisdic-

_______________

44 Entitled “CERTIORARI, PROHIBITION AND MANDAMUS.”


443
VOL. 552, APRIL 22, 2008 443
Tagle vs. Equitable PCI Bank
tion, and there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course
of law, a person aggrieved thereby may file a verified petition in the proper court, alleging
the facts with certainty and praying that judgment be rendered annulling or modifying the
proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and
justice may require.
The petition shall be accompanied by a certified true copy of the judgment, order or
resolution subject thereof, copies of all pleadings and documents relevant and pertinent
thereto, and a sworn certification of non-forum shopping as provided in the third paragraph
of Section 3, Rule 46. (Emphasis supplied.)
And Sec. 3 of Rule 4645 provides:
SEC. 3. Contents and filing of petition; effect of non-compliance with requirements.—The
petition shall contain the full names and actual addresses of all the petitioners and
respondents, a concise statement of the matters involved, the factual background of the case,
and the grounds relied upon for the relief prayed for.
In actions filed under Rule 65, the petition shall further indicate the material dates
showing when notice of the judgment or final order or resolution subject thereof was received,
when a motion for new trial or reconsideration, if any, was filed and when notice of the denial
thereof was received.
It shall be filed in seven (7) clearly legible copies together with proof of service thereof on
the respondent with the original copy intended for the court indicated as such by the
petitioner and shall be accompanied by a clearly legible duplicate original or certified true
copy of the judgment, order, resolution, or ruling subject thereof, such material portions of the
record as are referred to therein, and other documents relevant or pertinent thereto. The
certification shall be accomplished by the proper clerk of court or by his duly-authorized
representative, or by the proper officer of the court, tribunal, agency or office involved or by
his duly authorized representative. The other requisite number of copies of the petition shall
be accompanied by clearly legible plain copies of all documents attached to the original.
xxxx

_______________

45 Entitled “ORIGINAL CASES.”


444
444 SUPREME COURT REPORTS ANNOTATED
Tagle vs. Equitable PCI Bank
The failure of the petitioner to comply with any of the foregoing requirements shall be
sufficient ground for the dismissal of the petition.” (Emphasis supplied.)
The afore-quoted provisions are plain and unmistakable. Failure to comply with
the requirement that the petition be accompanied by a duplicate original or certified
true copy of the judgment, order, resolution or ruling being challenged is sufficient
ground for the dismissal of said petition. Consequently, it cannot be said that the
Court of Appeals acted with grave abuse of discretion amounting to lack or excess of
jurisdiction in dismissing the petition in CA-G.R. SP No. 90461 for non-compliance
with Sec. 1, Rule 65, in relation to Sec. 3, Rule 46, of the Revised Rules of Court.
It is true that in accordance with the liberal spirit pervading the Rules of Court
and in the interest of substantial justice,46 this Court has, before,47 treated a petition
for certiorari as a petition for review on certiorari, particularly (1) if the petition
for certiorari was filed within the reglementary period within which to file a petition
for review on certiorari;48 (2) when errors of judgment are averred;49 and (3) when
there is sufficient reason to justify the relaxation of the rules.50

_______________

46 Oaminal v. Sps. Castillo, 459 Phil. 542, 556; 413 SCRA 189, 200 (2003).
47 Id.
48 Republic v. Court of Appeals, 379 Phil. 92, 98; 322 SCRA 81, 87 (2000); Eternal Gardens Memorial
Park Corp. v. Court of Appeals, 347 Phil. 232, 256; 282 SCRA 553, 572 (1997).
49 Delsan Transport Lines, Inc. v. Court of Appeals, 335 Phil. 1066, 1075; 268 SCRA 597 (1997).
50 Banco Filipino Savings and Mortgage Bank v. Court of Appeals, 389 Phil. 644; 334 SCRA 305
(2000); Bank of America, NT & SA v. Gerochi, Jr., G.R. No. 73210, 10 February 1994, 230 SCRA 9, 15
citing Alto Sales Corp. v. Intermediate Appellate Court, 274 Phil. 914; 197 SCRA 618 (1991); Filcon
Manufacturing Corp. v. National Labor Relations Commission, G.R. No. 78576, 31 July 1991, 199 SCRA
814; Kabushi Kaisha Isetan v. Intermediate Appellate Court, G.R. No. 75420, 15 November 1991, 203 SCRA
583.
445
VOL. 552, APRIL 22, 2008 445
Tagle vs. Equitable PCI Bank
But these exceptions are not applicable to the present factual milieu.
Pursuant to Sec. 2, Rule 45 of the Revised Rules of Court:
“SEC. 2. Time for filing; extension.—The petition shall be filed within fifteen (15) days
from notice of the judgment or final order or resolution appealed from, or of the denial of the
petitioner’s motion for new trial or reconsideration filed in due time after notice of the
judgment. x x x.”
In the case at bar, the Court of Appeals dismissed the petition of petitioner Alfredo
in CA-G.R. SP No. 90461 by virtue of a Resolution dated 6 September 2005. Petitioner
Alfredo’s Motion for Reconsideration of the dismissal of his petition was denied by the
appellate court in its Resolution dated 16 February 2006. Petitioner Alfredo thus had
15 days from receipt of the 16 February 2006 Resolution of the Court of Appeals
within which to file a petition for review. The reckoning date from which the 15-day
period to appeal shall be computed is the date of receipt by petitioner Alfredo of the 16
February 2006 Resolution of the Court of Appeals, and not of its 11 April 2006
Resolution denying petitioner Alfredo’s second motion for reconsideration, since the
second paragraph of Sec. 5, Rule 37 of the Revised Rules of Court is explicit that a
second motion for reconsideration shall not be allowed. And since a second motion for
reconsideration is not allowed, then unavoidably, its filing did not toll the running of
the period to file an appeal by certiorari. Petitioner Alfredo made a critical mistake
in waiting for the Court of Appeals to resolve his second motion for reconsideration
before pursuing an appeal.
Another elementary rule of procedure is that perfection of an appeal within the
reglementary period is not only mandatory but also jurisdictional. For this reason,
petitioner Alfredo’s failure to file this petition within 15 days from receipt of the 16
February 2006 Resolution of the Court of Appeals denying his first Motion for
Reconsideration, rendered the446
446 SUPREME COURT REPORTS ANNOTATED
Tagle vs. Equitable PCI Bank
same final and executory, and deprived us of jurisdiction to entertain an appeal
thereof.
The relaxation of procedural rules may be allowed only when there are exceptional
circumstances to justify the same. Try as we might, however, we fail to find the
existence of such exceptional circumstances in this case, and neither did petitioner
Alfredo endeavour to prove the existence of any. In fact, there is total lack of effort on
petitioner Alfredo’s part to at least explain his inability to comply with the clear
requisites of the Revised Rules of Court.
Worth noting is the observation of respondent E-PCI that, essentially, petitioner
Alfredo is using the present Petition for Certiorari, to seek the reversal and setting
aside of the 4 April 2005 Order of the RTC, and not to assail the three Resolutions of
the Court of Appeals. This he cannot validly do for it is an apparent disregard of the
proper exercise of jurisdiction by the appellate court. We cannot overlook the ruling
of the Court of Appeals and proceed right away to a review of the RTC order, absent
any error of judgment or jurisdiction committed by the former.
All told, a perusal of the challenged Resolutions of the Court of Appeals fail to
illustrate any reversible error, much less, a showing of any iota of grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of the appellate
court, to warrant the exercise by this Court of its discretionary appellate jurisdiction
in the case at bar. Considering the allegations, issues and arguments adduced and
our disquisition above, without need of further delving deeper into the facts and
issues raised by petitioner Alfredo in this Petition for Certiorari with prayer for
preliminary injunction, we hereby dismiss the instant petition for being the wrong
remedy under the Revised Rules of Court, as well as his failure to sufficiently show
that the challenged Resolutions of the Court of Appeals were rendered in grave abuse
of discretion amounting to lack or excess of jurisdiction.447
VOL. 552, APRIL 22, 2008 447
Tagle vs. Equitable PCI Bank
WHEREFORE, premises considered, the instant Petition for Certiorari is
DISMISSED for lack of merit. The three Resolutions of the Court of Appeals dated 6
September 2005, 16 February 2006 and 11 April 2006, respectively, in CA-G.R. SP
No. 90461, are hereby AFFIRMED in toto. With costs against petitioner Alfredo
Tagle.
SO ORDERED.
Ynares-Santiago (Chairperson), Austria-Martinez, Nachura and Reyes,
JJ., concur.
Petition dismissed, resolutions affirmed in toto.
Notes.—In appeals under Rule 45 and in original civil actions for certiorari under
Rule 65 in relation to Rules 46 and 56, what is required to be certified is the copy of
the questioned judgment, final order or resolution. (OSM Shipping Philippines, Inc.
vs. National Labor Relations Commission, 398 SCRA 606 [2003])
The jurisdiction of the Supreme Court in a petition for review on certiorari under
Rule 45 of the 1997 Rules of Civil Procedure, as amended, is limited to reviewing only
errors of law, not of fact, unless the factual findings being assailed are not supported
by evidence on record or the impugned judgment is based on a misapprehension of
facts. (Manila Bankers Life Insurance Corporation vs. Ng Kok Wei, 418 SCRA 454
[2003])
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