Anda di halaman 1dari 89

Page 1 of 89

G.R. No. 178317, September 23, 2015

permanently attached to the building; of which the total amount is the one
reflected above;
ChanRoblesVirtualawlibrary

SPOUSES RICARDO AND ELENA C. GOLEZ, Petitioners, v. MELITON


NEMEO,1 Respondent.
DECISION

That, the term of this contract shall be for FOUR (4) Years only, however, if the
amount of (P143,823.00) shall not be folly paid within the period, the parties
hereby reserves the right to extend this contract, until such time that the
above[-]mentioned amount shall have been fully paid;
ChanRoblesVirtualawlibrary

VILLARAMA, JR., J.:


This is a petition for review on certiorari under Rule 45 of the 1997 Rules of
Civil Procedure, as amended, assailing the January 20, 2006 Decision2 and
April 18, 2007 Resolution3 of the Court of Appeals (CA) in CA-G.R. CV No.
60638. The appellate court affirmed with modification the March 16, 1998
Decision4 of the Regional Trial Court (RTC) of Molave, Zamboanga del Sur,
Branch 23, ordering petitioners Spouses Ricardo and Elena C. Golez to pay
respondent Meliton Nemeo the contract amount in their lease agreement of
P143,823.00 with 12% interest per annum plus damages.
The antecedents of the case follow:

chanRoble svirtualLawlibrary

Respondent is the registered owner of a commercial lot located in Molave,


Zamboanga del Sur known as Lot No. 7728 and covered by Original Certificate
of Title No. 0-2,2335 of the Registry of Deeds of Zamboanga del Sur.
On May 31, 1989, respondent entered into a Lease Contract 6 over a portion of
Lot No. 7728 with petitioners as "lessees." The pertinent portion of the contract
is quoted verbatim hereunder:
cralawla wlibrary

That, the Party of the First Part/Lessor hereby leased a portion of that
Commercial Lot with an area of 12 meters by 7 meters to the Party of the
Second Part;
ChanRoblesVirtualawlibrary

That, the Party of the Second Part shall construct a Commercial Building
thereon amounting to ONE HUNDRED FORTY THREE THOUSAND EIGHT
HUNDRED TWENTY THREE (P143,823.00) PESOS;
ChanRoblesVirtualawlibrary

That, the Party of the Second Part shall pay a monthly rental of the space
occupied by the building in the amount of TWO THOUSAND (P2,000) PESOS, of
which amount, the Party of the First Part shall not collect, instead, said amount
shall be used/paid to the herein Lessee as payment of the cost of building built
on the aforesaid lot;
ChanRoblesVirtualawlibrary

That, the total amount payable by the herein Lessor to the Lessee includes the
following: a. Building permit fees; b. Cost of building; c. 21 pcs. tables; d. 23
pcs. chairs; e. 5 pcs[.] benches; f. 1 unit cabinet; g. 3 window trapal; h. 1 unit
deepwell handpump with accessories; j. lighting facilities; and all things

That, as soon as the above amount shall be fully paid, the building shall be
deemed owned by the herein Party of the First Part; however, the Party of the
Second Part is hereby obligated to cause the repair of the building before it
shall be turned over to the Party of the First Part;
ChanRoblesVirtualawlibrary

That, this contract shall take effect on June 1, 1989, whereby payment of the
rental shall take effect on the said date[.]
chanrobleslaw

On May 23, 1992, the building subject of the lease contract was burned down.
Because of the destruction of the building, respondent, on May 29, 1992, sent
a letter7 to petitioners demanding the accumulated rentals for the leased
property from March 17, 1989 to June 17, 1992 totaling P78,000.00. As the
demand was left unheeded, respondent filed a complaint 8 for collection of
rentals plus damages before the Molave RTC.
Respondent alleged that Ricardo is the proximate cause of the fire that razed
the building to the ground. He also claimed that without his knowledge,
petitioners insured the building with two insurance companies for face values of
more than its cost. He further alleged that Ricardo was charged with arson
before the Municipal Trial Court (MTC) of Molave in relation to the burning of
the subject building. He prayed that petitioners be ordered to pay him
P96,000.00 representing the unpaid rentals from March 17, 1989 until the
expiration of the lease and P100,000.00 representing damages for violating the
lease contract. Respondent also sought the issuance of a writ of attachment in
his favor.
Petitioners, for their part, admitted the execution of the contract of lease but
dispute their liability to pay respondent rentals. They contended that under the
contract of lease, the rental payment is amortized over the cost of the subject
building, thus, respondent had already become its co-owner who must suffer
the loss of his property. They also denied liability for the burning of the building
contending that it has been destroyed by a fortuitous event. They admitted
though that they insured the building beyond their insurable interest over it. By
way of counterclaim, they alleged that they extended various cash loans to
respondent in the total amount of P11,000.00 starting April 1989 with an
agreed monthly interest of 5%. Because respondent failed to pay the loan,
they claimed that the total demandable amount from him is already
P39,104.00 as of the filing of their Answer. Petitioners are also demanding

Page 2 of 89
P1,000,000.00 in damages from respondent for publicly imputing to them the
burning of the subject building.
On July 9, 1992, Molave MTC Judge Diosdado C. Arriesgado, the investigating
judge on the criminal complaint for arson filed by respondent against Ricardo,
issued an Order9 finding probable cause to indict the latter for arson. The
findings of the investigating judge were approved by Zamboanga del Sur
Provincial Prosecutor Elpidio A. Nacua on September 4, 1992. 10 However, upon
motion for reconsideration filed by Ricardo, the criminal case for arson was
dismissed in a Resolution11 dated November 3, 1992 issued by Prosecutor
Nacua. This prompted respondent to file a motion for reconsideration of the
resolution issued by the Provincial Prosecutor.
In the meantime, the RTC issued a Pre-trial Order dated November 18, 1992,
which stated, among others, the following issues the parties agreed to litigate
on:
12

cralawla wlibrary

ATTY.
ACAIN
COURT

xxxx
ATTY.
ACAIN
COURT

Issues submitted by [respondent]:


1.

Whether or not under the contract of lease entered into by


[petitioners] and [respondent], [petitioners are] liable for back rentals
to [respondent];

ATTY.
ACAIN

ChanRoblesVirtualawlibrary

2.

Whether or not [petitioners have] any responsibility to the burning of


the house which is the subject matter of the lease contract.

Issues submitted by [petitioners]:


1.

Whether or not [respondent] has unpaid loan in favor of [petitioners]


in the amount of P39,000.00;
ChanRoblesVirtualawlibrary

2.

Whether or not [petitioners have] the right to claim moral damages for
the alleged character assassination made by the [respondent] against
[petitioners] for having burned the house built on the leased
premises.13 (Emphasis supplied)

COURT
ATTY.
ACAIN

chanrobleslaw

During trial, respondent testified on the contract he executed in favor of


petitioners; the subject building built thereon by the latter to be delivered at
the end of the term of the contract; the burning of the subject building; and
that after the building was burned, he demanded payment of rentals from
petitioners but said demand remained unheeded. When respondent was about
to present evidence to supposedly prove that Ricardo was the author of the fire
that gutted down the subject building, the trial court prohibited him and his
counsel on the ground that the alleged arson is not the basis of his complaint.
The pertinent portion of respondent's testimony is quoted hereunder:
cralawla wlibrary

chanrobleslaw

Q Do you know if the Office of the Chief of


: Police lile[d] a case of Arson against
defendant Ricardo Golez?
: If your theory is that the defendant is
responsible for the burning of the
building[,] why is this collection of rental
not damages?
: Our theory, Your Honor, is that recollect
(sic) the rental and that there is a breach
of contract.
: Then this evidence of the responsibility of
the burning is not relevant to this case.
: We submit, Your Honor, but we contend
that the defendant is still violating the
contract by burning the subject matter of
the contract. Because the contract says
that upon the expiration[,] this building
will go to the lessor. There are two causes
of action here, Your Honor, which is
payment of rental and damages, Your
Honor.
: But the claim for damages is based on the
non[-] performance of the contract not on
the criminal act of Arson.
: Yes, Your Honor, but I would like to make
it of record, Your Honor, that he still ha[s]
a pending case of Arson against the
defendants, Your Honor, and it is in that
case that we are claiming damages for
the building that [was] destroyed, Your
Honor, We are claiming damages as far as
this building is concerned, Your Honor.

Respondent also testified on the damages he was claiming in the amount of

Page 3 of 89
P100,000.00 for petitioners' failure to comply with the agreement "that after
four (4) years the building will be delivered to [him]." "

COURT

When it was petitioners' turn to present their evidence, the trial court likewise
prohibited them from proving that Ricardo was not responsible for the burning
of the subject building. The relevant portion of Ricardo's testimony reads:
cralawla wlibrary

ATTY. R.
ALOOT

ATTY. A.
ACAIN
ATTY. R.
ALOOT
ATTY. A.
ACAIN
COURT

ATTY. R.
ALOOT
ATTY. A.
ACAIN
ATTY. R.
ALOOT

Q Now I am confronting you with a certain


: receipt from the [F]aith Hospital which is
dated May 23, 1992, will you please
examine this document which is merely a
xerox copy and tell the court what is this
having a relation to stay in your house?
(sic)
: We beg[,] Your Honor[,] incompetent, the
witness Your Honor (sic).........
: Because at the time Your Honor there was
I think an incident which cause for the
attention of the witness to the fact that
he should stay in the house. (sic)
: Already answered[,] Your Honor.
: What has this to do with the cause of
action[?] [T]he cause of action is
collection of the rental. It is admitted
facts that there was a rented premises
(sic) no payment was made and the
house that was supposed to be made as
payment of the rental got burned.
: Your Honor[,] please[.] [T]here was a
claimed (sic) that the defendant[,]
Ricardo Golez[,] was responsible [for] the
fire on May 23, 1992.
: He [denied] that already.
: Yes[,] that is denied but....

ATTY. R.
ALOOT
COURT

chanrobleslaw

: That [has] nothing to do with the cause of


action[.] [T]he cause of action is not the
burning of the house[.] [T]he cause of
action is collection of the rental. Now, if
the parties was (sic) to establish that the
defendant is responsible for damages for
the burning of the house[,] you can file
another case.
: If the plaintiff agrees[,] Your Honor[,]
that there is no claim for the burning of
the house...
: The complaint will bear that out[.]
[T]here is no claim[.] You point to any
claim of the alleged burning of the house,
the court did not notice anything.16

Ricardo also testified on his counterclaim referring to an indebtedness of


respondent amounting to P11,000.00 as evidenced by a promissory note dated
January 1, 1990 signed by the latter. According to him, the loan remained
unpaid and ballooned to P368,362.50 as of December 1995 because of the 5%
monthly interest.17 Petitioners likewise presented two handwritten letters of
respondent, one dated May 8, 199118 and another dated January 12, 1992,19 to
supposedly prove that said loan remains outstanding.
On rebuttal, respondent took again the witness stand to refute petitioners'
allegation that his debt was still unpaid. He presented the supposed original of
the January 1, 1990 promissory note that was in his possession since July 26,
1990, the date when he claimed to have paid his debt. He also testified that he
wrote the May 8, 1991 and January 12, 1992 letters to demand from
petitioners the previous promissory notes which were consolidated in the
January 1, 1990 promissory note.20
While the trial was ongoing, the Department of Justice (DOJ) through
Undersecretary Ramon S. Esguerra, denied the motion for reconsideration filed
by respondent on February 10, 1994 and upheld the dismissal of the criminal
complaint for arson against Ricardo.21
In a Decision dated March 16, 1998, the trial court ruled in favor of
respondent. The fallo reads:
cralawlawlibrary

WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against


the defendants

Page 4 of 89
1. Ordering the defendants jointly and severally to pay the plaintiff the contract
amount of P143,823.00, to bear interest at 12% a year from the filing of this
action up to the time the same is fully paid.
2. Ordering the defendants jointly and severally to pay the plaintiff the
following sums:
chanRoblesvirtualLa wlibrary

a) Moral damages in the sum of P150,000.00;

ChanRoblesVirtualawlibrary

b) Temperate or compensatory damage in the sum of P100,000.00;


c) Exemplary damage in the sum [of] P50,000.00;
d) Litigation expenses in the sum of P15,000.00;
e) Attorney's fees in the sum of P25,000.00;

since the promissory note is in the possession of respondent, the debtor, it can
be presumed that it has already been paid. It also found no evidence that
respondent consented to the raising of the interest rate from 3% to 5% which
was handwritten on the note by Ricardo.
The trial court likewise found that petitioners have acted in wanton, fraudulent,
malicious, felonious, oppressive and malevolent manner in the performance of
their contractual obligations towards respondent justifying the award of
damages.

ChanRoblesVirtualawlibrary

ChanRoblesVirtualawlibrary

Aggrieved, petitioners appealed the trial court's decision to the CA raising the
following arguments:
cralawlawlibrary

ChanRoblesVirtualawlibrary

ChanRoblesVirtualawlibrary

3. Ordering the issuance of a writ of attachment against the properties of the


defendants to secure the payment of the above judgment amounts.

THE LOWER COURT ERRED IN FINDING THAT DEFENDANTS-APPELLANTS ARE


LIABLE WHEN THE TERMS OF THE CONTRACT THAT THE PARTIES ENTERED
INTO CLEARLY SHOW OTHERWISE.
II

4. Ordering the defendants to pay triple of the cost of this action.


5. Ordering the dismissal of all counterclaims of defendants against the
plaintiff.

THIS CASE BEING PRIMARILY FOR COLLECTION AND PAYMENT OF RENTALS,


THE LOWER COURT ERRED IN FINDING DEFENDANTS-APPELLANTS LIABLE
FOR THE BURNING OF THE BUILDING IN QUESTION.

SO ORDERED.22

III

chanrobleslaw

The trial court ruled that respondent did not become the co-owner of the
subject building before it was burned down. It held that ownership will only
pertain to him as soon as the amount agreed upon under the contract shall
have been fully paid. It further held that under the law, it would still be
necessary for petitioners to deliver the building to respondent in order that
acquisition of the real right of ownership can take place. It noted that not only
was the amount agreed upon under the contract not yet fully paid, there was
no delivery of the building at all to respondent. It ruled that the building was
still wholly owned by petitioners at the time the same was gutted by fire and
thus, they should be the only ones to suffer the loss.
The trial court likewise noted that petitioners have never paid respondent rent
for the leased premises. Since they can no longer deliver the building which the
contract obliged them to deliver, the trial court ruled that they are legally
obliged to pay the rentals for their use and enjoyment of the leased premises
to prevent unjust enrichment on the part of petitioners.
The trial court likewise found that Ricardo is indeed the author of the burning.
It took into consideration the insurance proceeds petitioners would get from
the burning of the building in question.
With regard to the respondent's debt to petitioners, the trial court ruled that

THE LOWER COURT ERRED IN ISSUING THE QUESTIONED WRIT OF


ATTACHMENT WITHOUT COMPLYING WITH THE PROCEDURAL AS WELL AS
SUBSTANTIVE REQUIREMENTS THEREFOR.
IV
THE LOWER COURT ERRED IN DENYING HEREIN DEFENDANTS-APPELLANTS'
COUNTERCLAIM.
V
THE LOWER COURT ERRED IN AWARDING EXCESSIVE DAMAGES IN FAVOR OF
PLAINTIFF-APPELLEE.23
chanrobleslaw

The CA, in the assailed decision, set aside the writ of attachment and notices of
garnishment issued in favor of respondent. It, however, affirmed the decision
of the trial court in all other respects. It held that the ownership of the subject
building still pertains to petitioners and therefore, they must solely bear the
loss. The CA also ruled that the fact that the building was destroyed before it
was delivered to respondent does not free petitioners from paying back rentals.
It held that petitioners cannot use respondent's land and deprive him of rents

Page 5 of 89
due him, otherwise, it would be a case of unjust enrichment at the expense of
respondent.
The CA likewise agreed with the trial court's finding that petitioner Ricardo is
liable for the burning of the building. It took note of respondent's testimony
that he saw Ricardo entering the subject building an hour and a half before the
fire; Ricardo's alleged indifference regarding the fire; the investigating judge's
finding of probable cause to indict Ricardo for arson; and the fact that the
latter insured the subject building for more than its actual value. The appellate
court also upheld the award of damages upon this finding of liability on the part
of Ricardo.
The appellate court also upheld the trial court's dismissal of petitioners'
counterclaim on the ground that the possession of respondent of the
promissory note evidencing his debt is prima facie evidence of payment. It
ruled that the letters presented by Ricardo did not suffice to overturn said
presumption as they do not conclusively show that the obligation of respondent
remains outstanding.
Hence this petition anchored on the following grounds:
I.

cralawlawlibrary

THE HONORABLE COURT OF APPEALS AND THE TRIAL COURT


GROSSLY VIOLATED PETITIONERS' RIGHT TO DUE PROCESS OF LAW
WHEN THE CASE WAS DECIDED ON THE BASIS OF ISSUES AND
EVIDENCE EXPRESSLY EXCLUDED BY THE COURT DURING TRIAL
PROPER.

II.

THE HONORABLE COURT OF APPEALS AND THE TRIAL COURT FAILED


TO APPLY ART. 1262 OF THE CIVIL CODE WHEN THE SAME IS CLEARLY
AND SQUARELY APPLICABLE IN THE INSTANT CASE.

III.

THE HONORABLE COURT OF APPEALS AND THE TRIAL COURT FAILED


TO CONSIDER THE FACT THAT THERE ARE NO LEGAL AND FACTUAL
BASES FOR THE GRANT OF DAMAGES IN FAVOR OF RESPONDENT IN
THAT HE HAS NOT PRESENTED A SINGLE PROOF OR EVIDENCE AND
THE LOWER COURTS HAVE NOT CITED ANY LAW REMOTELY SERVING
AS JURAL FOUNDATION FOR THE UNWARRANTED AWARD OF
DAMAGES.

IV.

THE HONORABLE COURT OF APPEALS AND THE TRIAL COURT ERRED


IN FAILING TO GRANT PETITIONERS' COUNTERCLAIM AND IN FAILING
TO CONSIDER A GLARING EVIDENCE OF ADMISSION OF
INDEBTEDNESS BY RESPONDENT CONSISTING OF TWO
HANDWRITTEN LETTERS WRITTEN IN RESPONDENT'S OWN LANGUAGE
ADMITTING LOAN OBLIGATION WITH PETITIONERS. INSTEAD, THE
TRIAL AND APPELLATE COURTS RELIED ON MERE DISPUTABLE
PRESUMPTION OF LAW WHICH DOES NOT EVEN FIND APPLICATION IN
THE CASE, ALL OF WHICH COMBINED TO RESULT IN A LOPSIDED

DECISION WARRANTING REVERSAL BY THE HONORABLE SUPREME


COURT.24
chanrobleslaw

Petitioners argue that the trial court itself made it clear to all concerned that
the suit is not based on any alleged arson. They contend that despite said
declaration by the trial court, the latter heavily relied on the result of the
preliminary investigation finding petitioner Ricardo chargeable for arson when
the same preliminary investigation was reversed with finality by the DOJ.
They also fault the trial court for its heavy reliance on the presumption of arson
found in Section 625of Presidential Decree No. 1613, Amending the Law on
Arson, contending that it is not applicable to the case at bar since first, the
issue of arson has been excluded and second, there was no admission of overinsurance on their part.
Petitioners also felt that they were intentionally misled because they were
made to believe that the issue of arson will not be taken up and yet the trial
court made a finding that petitioner Ricardo had a hand in the burning of the
subject building. Petitioners contend that the transcript of stenographic notes
will reveal that they were stopped by the trial court from presenting evidence
to disprove that there was arson.
Petitioners likewise asseverate that they are not liable to pay back rentals
insisting the applicability of Article 126226 to the case at bar. They contend that
the "rentals" are supposed to be "refund" to petitioners for the cost of the
subject building and thus, no "rental" is due. Petitioners also submit that based
on the contract, they had an obligation to deliver a determinate thing, i.e., the
subject building, but applying Article 1262, the total loss thereof extinguished
their obligation. They likewise point out that there was no stipulation in the
contract making them liable even for fortuitous events or that the nature of the
obligation requires the assumption of risk.
Petitioners further contend that there were no legal nor factual bases for the
grant of damages in favor of respondent. They argue that respondent
immediately took possession of the lot after the fire so at most, the trial court
should have awarded back rentals from 1989 to 1992. They contend that there
was no basis to award the sum of P143,823.00 as it was not a loan or
forbearance for the use of money. They further submit that there was no
explanation on the award of moral and temperate damages.
Petitioners also argue that the presumption in Section 3(h) of Rule 131 of the
Rules of Court is not applicable to the instant case. They cite the letters sent by
respondent to them allegedly acknowledging the obligation and offering
payment. They contend that if the debt has already been paid as ruled by the
trial and appellate courts, why would respondent still offer payment in said
letters.
Thus, the main issues for this Court's resolution are: (1) Are petitioners liable

Page 6 of 89
to pay respondent for back rentals?; (2) Are petitioners liable for damages;
and (3) Are petitioners entitled to their counterclaim?
The petition is partly granted.
This Court finds no reason to depart from the ruling of the courts a quo that
petitioners should pay respondent for back rentals. There is no dispute that the
contract entered into by the parties is one of lease. True, it had some
modifications such that instead of paying the rent in the form of money,
petitioners will withhold such payment and will apply the accumulated rent to
the cost of the building they built on the leased property. Thereafter, at the end
of the lease period or until such time the cost of the building has been fully
covered by the rent accumulated, petitioners, as lessees will transfer the
ownership of said building to respondent.
Unfortunately, the subject building was gutted down by fire. However, the
destruction of the building should not in any way be made a basis to exempt
petitioners from paying rent for the period they made use of the leased
property. Otherwise, this will be a clear case of unjust enrichment. As held
in P. C. Javier & Sons, Inc. v. Court of Appeals:27
cralawlawlibrary

x x x The fundamental doctrine of unjust enrichment is the transfer of value


without just cause or consideration. The elements of this doctrine are:
enrichment on the part of the defendant; impoverishment on the part of the
plaintiff; and lack of cause. The; main objective is to prevent one to enrich
himself at the expense of another. It is commonly accepted that this doctrine
simply means that a person shall not be allowed to profit or enrich himself
inequitably at another's expense.
chanrobleslaw

In the instant case, there is no dispute that petitioners used the property for
several years for their own benefit having operated a restaurant thereon.
Therefore, it would be the height of of injustice to deprive respondent of
compensation due him on the use of his property by petitioners. The fact that
the parties agreed to a different mode of payment - in this case, a building does not in any way exempt petitioners from paying compensation due to
respondent for the use of the latter's property because the building was
destroyed.
While we sustain the award of back rentals in favor of respondent, we do not
agree with the amount imposed by the courts a quo. Petitioners should only be
liable for rent during the period within which they were in possession of the
leased property, Respondent himself testified that petitioner Ricardo stayed in
the building on the leased premises just before it was burned down. 28 There
was no evidence submitted to prove that petitioners were in possession of the
leased property after the fire. Therefore, petitioners should be made to pay
rent until that time only. To order petitioners to pay for back rentals equivalent
to the cost of the building is in the same way, unjust enrichment this time on
the part of respondent considering that the rent due for the period petitioners
occupied the leased premises is way below the cost of the building.

This Court further finds the awards for moral, "temperate/compensatory" and
exemplary damages lacking in factual and legal bases. As correctly argued by
petitioners, these damages were not pleaded in respondent's complaint nor
proven during trial. A perusal of the complaint, as amended, reveals that
respondent was praying for "P100,000.00 as damages for the violation." 29 He
did not specifically pray that it was for moral, temperate or exemplary
damages. It is well-settled that in order that moral damages may be awarded,
there must be pleading and proof of moral suffering, mental anguish, fright and
the like.30 And even if the moral damages were specifically pleaded in his
complaint, nothing on the records would show that respondent testified on said
damages.
Even the trial court's finding that petitioner Ricardo was the author of the fire
will not make respondent entitled to moral damages and exemplary damages.
As correctly pointed out by petitioners, both parties were prevented from
presenting evidence to prove or disprove that there was arson. Thus, there
cannot be a finding on petitioners' liability of willful injury as basis of moral
damages as provided in Article 222031 and exemplary damages as provided in
Article 223232 of the Civil Code. It is also worthy to note that the criminal
complaint for arson filed against petitioner Ricardo was dismissed with finality
by the DOJ thus precluding any criminal liability on his part regarding the
burning of the subject building. There was no evidence presented by
respondent that the dismissal of the criminal complaint was reversed.
As to the award of litigation expenses, we find the same to be justified. As
provided under Article 2208 of the Civil Code, they may be recovered when the
defendant's act or omission has compelled the plaintiff to litigate with third
persons or to incur expenses to protect his interest. However, we find no basis
for a separate award of attorney's fees since they were not prayed for in both
the original and amended complaints.33
As to the order of the courts a quo for petitioners to pay triple of the cost of
the action, this Court also finds the same without basis. Nowhere in the
decision can its factual or legal justification be found.
This Court likewise affirms the dismissal of petitioners' counterclaims. As
correctly ruled by the trial and appellate courts, the possession of respondent
of the promissory note evidencing his debt to petitioners is prima
facie evidence of the payment of the same as provided in Section 3(h) of Rule
131 of the Rules of Court which reads:
cralawla wlibrary

SEC. 3. Disputable presumptions. - The following presumptions are satisfactory


if uncontradicted, but may be contradicted and overcome by other
evidence:
chanRoble svirtualLawlibrary

xxxx
(h) That an obligation delivered up to the debtor has been paid;

ChanRoblesVirtualawlibrary

Page 7 of 89
xxxx
chanrobleslaw

Unfortunately for petitioners, the evidence they presented failed to contradict


the above presumption as they did not conclusively show that respondent's
obligation to them remains outstanding. The two letters written by respondent
to petitioner Ricardo which were relied on by petitioners to refute the
presumption are quoted hereunder verbatim:

Compadre, how's the receipts which show an obligation of P11,000.00 to you?


If you find them, please bring them to the house because these receipts
appear having already lapsed, nonetheless, if they cannot be located, that's not
hard between us.
I shall be waiting.
Your brother in Christ,

cralawla wlibrary

(SGD.) COMPADRE MELING NEMEO35

[First Letter dated May 8, 1991:]

chanrobleslaw

Dear Compadre,
Please return to me now the three (3) receipts or promissory notes with the
total amount of P10,900.00 because we have already consolidated my
indebtedness to you by making it to P11,000.00. You were even the one that
personally made/drafted the consolidated amount which I signed and you
made me pay interest as appearing in the consolidated receipt that you made
on January 1, 1990.
Up to now that you still have in your possession the three (3) receipts or
promissory notes which were consolidated into one and you only made
[promises] to return, although you furnished me xerox copies from those
originals.
It is painful on my part by not returning those originals and I now entertained
suspicion that you have ill design against me but please Compadre do not do it
to me because I am poor as compared to you.
You know there's God that is looking on to all of us.

To the Court's mind, the letters of respondent were written to demand the
surrender of the three previous promissory notes he executed before they were
consolidated into one promissory note with the amount of P11,000.00. Thus,
they cannot prove that respondent acknowledges that his obligation remains
outstanding. This being the case, the presumption still stands.
WHEREFORE, the petition is PARTLY GRANTED. The January 20, 2006
Decision of the Court of Appeals in CA-G.R. CV No. 60638 is AFFIRMED with
MODIFICATIONS. As modified, petitioners Spouses Ricardo and Elena C.
Golez are ORDERED to pay respondent Meliton Nemeo:
chanRoblesvirtualLa wlibrary

1) Back rentals with a monthly rate of P2,000.00 for the period commencing
June 1, 1989 to May 23, 1992 and shall earn a corresponding interest of six
percent (6%) per annum, to be computed from May 29, 1992 until full
satisfaction;
ChanRoblesVirtualawlibrary

2) Litigation expenses amounting to P15,000.00. All other awards


are DELETED.
No pronouncement as to costs.

Your brother in Christ,


(SGD.) MELING D. NEMEO, SR.34

SO ORDERED.

chanroblesvirtuallawlibrary

Velasco, Jr., (Chairperson), Peralta, Perez,* and Jardeleza, JJ., concur.

[Second letter dated January 12, 1992:]


Dear Compadre,
How are you together with the members of your family? It's already a long
time that we have not met each other. Accordingly, you must have been
occupied by your Pawnshop business at Molave and at Ipil.
How's your plan to run for Vice Mayor? You seemed to be silent. Please let me
know whether or not you will proceed because I might be committed for
another whom we do not know its background or ability to perform the duties
of the office.

17. PARLOL EVIDENCE; PRESUMPTION


G.R. No. 197728, September 16, 2015
SPOUSES ARMANDO AND LORNA
TRINIDAD, Petitioners, v. DONA* MARIE GLENN IMSON, Respondent.
DECISION

Page 8 of 89
PERALTA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the
Rules of Court seeking the reversal and setting aside of the Decision 1 and
Resolution of the Court of Appeals (CA), dated December 22, 2010 and June
23, 2011,2 respectively, in CA-G.R. SP No. 110357. The assailed CA Decision
reversed and set aside the Decision3 dated June 19, 2009 of the Regional Trial
Court (RTC) of Pasig City, Branch 155, while the questioned CA Resolution
denied petitioners' Motion for Reconsideration.
The factual and procedural antecedents of the case are as follows:

aside from paying the purchase price, respondent also paid the real property
taxes due on the condominium unit as well as the association dues, water bills,
common area real estate tax, building insurance and other charges billed by
the developer; having full trust in Armando, coupled with her hectic schedule,
respondent did not bother to transfer ownership of the subject unit in her
name; since April 2002 up to the time of filing her Answer, respondent has
been in open and public possession of the subject property; in 2007, while
respondent was out of the country, Armando, without respondent's knowledge,
annotated his claim on the condominium certificate of title; he also executed a
Deed of Absolute Sale in his favor on July 13, 2007; as a result, respondent
was surprised to receive a copy of petitioners' demand letter and complaint.

chanRoble svirtualLawlibrary

On August 17, 2007, herein petitioners filed with the Metropolitan Trial Court
(MeTC) of Pasig City a Complaint4 for ejectment against herein respondent. In
their Position Paper,5 petitioners alleged that: they are the owners of a
condominium unit, denominated as Unit 2203, which is located at AIC Gold
Tower, Emerald Avenue, Ortigas Center, Pasig City; they purchased the
condominum unit from three (3) Indian nationals who originally contracted to
buy the said property from the developer, AIC Realty Corporation (AIC), but
had not fully paid for it yet; petitioners' purchase was evidenced by a Deed of
Assignment and Transfer of Rights6 dated June 13, 2002 and, later on, a Deed
of Absolute Sale7dated July 13, 2007 in the name of petitioner Armando; at the
time of petitioners' purchase of the subject condominium unit, the same was
being leased by respondent from the original owners; the period of lease was
from April 1, 2002 to March 1, 2003; petitioners respected the contract of
lease between respondent and the original owners; however, since June 2002
up to the time of the filing of the complaint for ejectment, respondent neither
remitted nor consigned the monthly rentals due to petitioners for her continued
use of the condominium unit; the rental arrears amounted to a total of
P2,130,000.00; petitioners sent a letter of demand to respondent requiring
that she, together with any and all persons using the said unit with her
approval, vacate the premises and pay her arrears; respondent ignored
petitioners' demand letter; petitioners tried to settle the case amicably but no
agreement was reached.
In her Answer with Compulsory Counterclaims,8 respondent countered that:
she, indeed, entered into a contract of lease with the original owners of the
disputed condominium unit which was to commence on April 1, 2002 and
would end on March 1, 2003; sometime in June 2002, she decided to purchase
the unit; however, since she was then undergoing proceedings to annul her
previous marriage and thinking that her purchase of the subject property
would disrupt the property arrangements already agreed upon, she thought it
best not to have the condominium unit registered yet in her name; instead,
she requested Armando Trinidad, who was her confidante, to purchase the unit
and register it under his name with the understanding that the said property
would actually be owned by respondent; Armando agreed without objection,
which led to the execution of the Deed of Assignment and Transfer of Rights in
his name; payments for the purchase price were made by respondent through
cash and checks paid to the original owners who acknowledged said payments;

On August 8, 2008, the MeTC of Pasig City, Branch 70, rendered its
Decision9 dismissing petitioners' complaint and ordering them to pay
respondent the amount of P250,000.00 as attorney's fees and cost of suit.
The MeTC found that respondent is the true owner of the subject property and
that the true intention of the parties is for Armando to hold the condominium
unit in behalf of respondent until the property could be placed in the latter's
name.
Petitioners filed an appeal with the RTC of Pasig City.
On June 19, 2009, the RTC of Pasig City, Branch 155, rendered its Decision
which reversed the MeTC Decision. The dispositive portion of the RTC judgment
reads, thus:
WHEREFORE, premises considered, the Decision dated August 8, 2008
rendered by the Metropolitan Trial Court, Branch 70, Pasig City is hereby
ordered REVERSED and SET ASIDE and a new one ENTERED ordering the
defendant-appellee [herein respondent] and all persons claiming rights under
her to vacate Unit 2203, AIC Gold Tower, Emerald Avenue, Ortigas Center,
Pasig City and to pay rental arrearages from July 13, 2007, at the rate of
P30,000.00 per month, until such arrearages shall have been fully paid and the
premises vacated and possession thereof restored to plaintiffs-appellants.
SO ORDERED.10
The RTC held that, by preponderance of evidence, the question of ownership is
resolved in favor of petitioners. The RTC held that the subject Deed of
Assignment and Transfer of Rights and the Deed of Absolute Sale in the name
of Armando is superior to the evidence presented by respondent, which merely
consisted of bills of payments of association dues, utility bills, real estate tax
on the common areas and building insurance.
Aggrieved by the RTC Decision, respondent filed a petition for review with the
CA.
On December 22, 2010, the CA promulgated its assailed Decision setting aside

Page 9 of 89
the RTC judgment and ordering petitioners to return possession of the subject
condominium unit to respondent.

(a) When the findings are grounded entirely on speculation, surmises, or


conjectures;

The CA ratiocinated that, based on the evidence adduced by the parties,


respondent's claim of ownership deserves more credence. The CA ruled that
records of payment of the purchase price of the subject property, through
respondent's personal checks, acknowledgment of these payments by the
former owners by way of receipt and affidavit, and respondent's exercise of
acts of ownership prove that she is the owner of the disputed condominium
unit and, thus, is entitled to the possession thereof.

(b) When the inference made is manifestly mistaken, absurd, or impossible;

Petitioners filed a Motion for Reconsideration,11 but the CA denied it in its


Resolution dated June 23, 2011.

(f) When in making its findings the CA went beyond the issues of the case, or
its findings are contrary to the admissions of both the appellant and the
appellee;

ChanRoblesVirtualawlibrary

(c) When there is grave abuse of discretion;

ChanRoblesVirtualawlibrary

ChanRoblesVirtualawlibrary

(d) When the judgment is based on a misapprehension of facts;


(e) When the findings of facts are conflicting;

ChanRoblesVirtualawlibrary

ChanRoblesVirtualawlibrary

ChanRoblesVirtualawlibrary

Hence, the instant petition for review on certiorari, raising the following issues,
to wit:
Do the pieces of evidence shown by the Respondent suffice to provisionally
declare her as owner of the subject condomunium unit?12

(g) When the CA's findings are contrary to those of the trial court;

ChanRoblesVirtualawlibrary

(h) When the findings are conclusions without citation of specific evidence on
which they are based;
ChanRoblesVirtualawlibrary

Does the evidence of the Respondent suffice to make an impression that it was
the Respondent who paid the consideration for the Deed of Assignment and
Transfer of Rights?13

(i) When the facts set forth in the petition as well as in the petitioners main
and reply briefs are not disputed by the respondent;
ChanRoblesVirtualawlibrary

[Was there] an implied trust?14


The petition should be denied.

(j) When the findings of fact are premised on the supposed absence of
evidence and contradicted by the evidence on record; and

At the outset, the Court notes that both parties anchor their right to possess
the disputed property on their supposed ownership of the same. Thus, the
courts are left with no recourse but to resolve the issue of ownership for the
sole purpose of determining as to who between the parties is entitled to
possess the subject condominium unit. However, as held by the CA, where the
issue of ownership is inseparably linked to that of possession, adjudication of
the ownership issue is not final and binding, but only for the purpose of
resolving the issue of possession.15 The adjudication of the issue of ownership
is only provisional, and not a bar to an action between the same parties
involving title to the property.16

(k) When the CA manifestly overlooked certain relevant facts not disputed by
the parties, which, if properly considered, would justify a different conclusion. 18
In the present case, the findings of fact of the MeTC and the CA are in conflict
with those of the RTC. It thus behooves this Court to look into the factual
findings of the lower courts to determine the nature of respondent's possession
of the disputed property.

The resolution of the issue of ownership, however, would entail going into
factual matters. Settled is the rule that questions of fact are not reviewable in
petitions for review on certiorari under Rule 45 of the Rules of Court.17 Section
1 of Rule 45 states that petitions for review on certiorari shall raise only
questions of law which must be distinctly set forth. Doubtless, in the instant
case, the issue of whether respondent possesses the subject property as
owner, or whether she occupies the same as a lessee, is a question of fact.
Thus, as a rule, it is not reviewable.
Nonetheless, the Court has, at times, allowed exceptions from the
abovementioned restriction. Among the recognized exceptions are the
following:

After a careful review of the records at hand, the Court finds that the petition
must fail as it finds no error in the findings of fact and conclusions of law of the
CA and the MeTC that respondent is, indeed, entitled to the possession of the
subject property.
As earlier stated, petitioners relied heavily on the Deed of Assignment and
Transfer of Rights as well as the Deed of Absolute Sale, which were executed in
Armando's favor, to prove their ownership of the subject property. Having been
notarized, they contend that these documents outweigh all the pieces of
evidence presented by respondent.
The Court is not persuaded.
It is true that the subject Deed of Assignment and Transfer of Rights and Deed
of Absolute Sale are notarized. It is well settled that a document acknowledged
before a notary public is a public document that enjoys the presumption of

Page 10 of 89
regularity.19 It is a prima facie evidence of the truth of the facts stated therein
and a conclusive presumption of its existence and due execution. 20However, the
CA correctly held that the existence and due execution of these documents are
not in issue. Moreover, the presumption of truth of the facts stated in notarized
documents is merely prima facie, which means that this presumption can be
overcome by clear and convincing evidence.21 Hence, the truth of the facts
stated in the disputed Deed of Assignment and Transfer of Rights as well as the
Deed of Absolute Sale may be rebutted by evidence.
In the present case, what is being asserted by respondent is that the above
documents do not embody the true intent and agreement of the parties. To this
end, respondent submitted sufficient proof to refute the contents of the
aforementioned documents and to establish the real intent of the parties, to
wit: (1) nine [9] checks drawn from the personal account of respondent,
variously dated from October 11, 2002 to June 11, 2003, each of which
amounts to P416,666.67 and paid to the order of Amarnath Hinduja; 22 (2)
Acknowledgment Receipt recognizing the various payments made by
respondent to the former owners of the subject property; 23(3) Real Property
Tax Receipts evidencing respondent's payment of the real estate taxes due on
the property;24 (4) Certification issued by AIC Golden Tower Condominium
acknowledging respondent's regular payment of association dues, water bills,
common area real estate tax, building insurance and other charges billed by
AIC;25 (5) Affidavit executed by the former owners acknowledging the
supposed agreement of the parties that the condominium unit shall be
purchased in the name of Armando with the understanding that he will hold it
in behalf of respondent until the same could be placed in her name. 26

the disputed premises and pay rentals. Moreover, as the MeTC has noted, it
was only in 2007 that Armando annotated his claim on the condominium
certificate of title, executed the subject Deed of Absolute Sale and requested
certification of his ownership from the developer.
Petitioners argue that under the Parole Evidence Rule, when the terms of an
agreement have been reduced to writing, it is considered as containing all the
terms agreed upon and there can be, as between the parties, no evidence of
such terms other than the contents of the written agreement. 28Based on this
rule, petitioners contend that since the former owners, as well as respondent,
are all parties to the Deed of Assignment and Transfer of Rights, they are
bound by the said Deed and they cannot allege terms which are not found
within the said agreement.
The Court is not convinced.
The fact that the Deed of Assignment and Transfer of Rights was put in writing
and notarized does not accord it the quality of incontrovertibility otherwise
provided by the Parole Evidence Rule.29 The rule on parole evidence is not, as it
were, ironclad. Thus, the second paragraph of Section 9, Rule 130 of the Rules
of Court provides the exceptions, to wit:
Section 9. Evidence of written agreements. - x x x
However, a party may present evidence to modify, explain or add to the terms
of written agreement if he puts in issue in his pleading:
(a) An intrinsic ambiguity, mistake or imperfection in the written
agreement;
ChanRoblesVirtualawlibrary

The MeTC and the CA were one in holding that the foregoing pieces of evidence
submitted by respondent, coupled with the surrounding circumstances in this
case, are sufficient to overcome the prima facie presumption of the truth of the
facts stated in the questioned Deed of Assignment and Transfer of Rights and
Deed of Absolute Sale. The Court agrees.
Indeed, petitioners failed to offer any credible explanation why payments of the
purchase price were made by respondent by using her personal checks if she is
not, in fact, the buyer of the property. Neither was there any justification why
respondent paid the real property taxes due on the property, as well as the
utility bills, association dues, common area real estate tax and building
insurance. More importantly, petitioners also fell short in advancing a plausible
refutation why the former owners would execute an affidavit indicating therein
that the agreement among the parties is that the subject property shall be
purchased in the name of Armando with the understanding between the latter
and respondent that Armando would hold the property in respondent's behalf
until it will be placed in her name, thus exposing themselves to possible
perjury charges, if such agreement is not really true.
In addition, if petitioners are the real owners of the subject condominium unit,
why did they wait until February 19, 2007,27 or almost four (4) years after the
supposed expiration of respondent's lease contract, to demand that she vacate

(b) The failure of the written agreement to express the true intent and
agreement of the parties thereto;
(c) The validity of the written agreement; or
(d) The existence of other terms agreed to by the parties or their successors in
interest after the execution of the written agreement.
The term "agreement" includes wills.30
As observed by the CA, respondent squarely put in issue in her Answer 31 that
the Deed of Assignment and Transfer of Rights did not express the true intent
of the parties. Hence, the exception applies.
The Court is neither convinced by petitioners' argument that when ley bought
the subject property from its former owners, they stepped into the shoes of the
latter who were the lessors of respondent and that, as lessee, respondent is
barred from contesting the title of her lessor or her lessor's sjuccessor-ininterest, who are herein petitioners.
Article 1436 of the Civil Code provides that "[a] lessee or bailee is estopped
from asserting title to the thing leased or received, as against the lpssor or

Page 11 of 89
bailor." In addition, the conclusive presumption found in Section 2(b), Rule 131
of the Rules of Court known as estoppel against tenants provides as follows:
Sec. 2. Conclusive presumptions. The following are instances of conclusive
presumptions:
xxxx
(b) The tenant is not permitted to deny the title of his landlord at the time of
the commencement of the relation of landlord and tenant between them.
It is clear from the above-quoted provision that what a tenant is stopped from
denying is the title of his landlord at the time of the commencement of the
landlord-tenant relation.32 If the title asserted is one that is alleged to have
been acquired subsequent to the commencement of that relation, the
presumption will not apply.33 Hence, the tenant may show that the landlord's
title has expired or been conveyed to another or himself; and he is not
estopped to deny a claim for rent, if he has been ousted or evicted by title
paramount.34 In the present case, what respondent is claiming is her title to
the subject property which she acquired subsequent to the commencement of
the landlord-tenant relation between her and the former owners of the
questioned condominium unit. Thus, the presumption under Section 2 (b), Rule
131 of the Rules of Court does not apply and respondent is not estopped from
asserting title over the disputed property.
As to whether or not an implied trust was created in respondent's favor, the
first sentence of Article 1448 of the Civil Code provides that "[t]here is an
implied trust when property is sold and the legal estate is granted to one party
but the price is paid by another for the purpose of having the beneficial interest
of the property." This is sometimes referred to as a purchase money resulting
trust, the elements of which are: (a) an actual payment of money, property or
services, or an equivalent, constituting valuable consideration; and (b) such
consideration must be furnished by the alleged beneficiary of a resulting
trust.35 The principle of a resulting trust is based on the equitable doctrine that
valuable consideration, and not legal title, determines the equitable title or
interest and are presumed always to have been contemplated by the
parties.36 They arise from the nature or circumstances of the consideration
involved in a transaction whereby one person thereby becomes invested with
legal title but is obligated in equity to hold his legal title for the benefit of
another.37
Intention - although only presumed, implied or supposed by law from the
nature of the transaction or from the facts and circumstances accompanying
the transaction, particularly the source of the consideration - is always an
element of a resulting trust and may be inferred from the acts or conduct of
the parties rather than from direct expression of conduct. 38 Certainly, intent as
an indispensable element, is a matter that necessarily lies in the evidence, that
is, by evidence, even circumstantial, of statements made by the parties at or
before the time title passes.39 Because an implied trust is neither dependent
upon an express agreement nor required to be evidenced by writing, Article
1457 of our Civil Code authorizes the admission of parole evidence to prove

their existence.40 Parole evidence that is required to establish the existence of


an implied trust necessarily has to be trustworthy and it cannot rest on loose,
equivocal or Indefinite declarations. 41 In the instant petition, the Court finds no
cogent reason to depart from the findings of the MeTC and the CA that, under
the circumstances of the case, the parole evidence presented by respondent
sufficiently proves that an implied trust was created in her favor.
Finally, a trust, which derives its strength from the confidence one reposes on
another, does not lose that character simply because of what appears in a legal
document.42 Applying this principle to the present case, petitioner Armando, as
trustee, cannot repudiate the trust by simply relying on the questioned Deed of
Assignment and Transfer of Rights and the Deed of Absolute Sale.
WHEREFORE, the instant petition is DENIED. The Decision and Resolution of
the Court of Appeals, dated December 22, 2010 and June 23, 2011,
respectively, in CA-G.R. SP No. 110357, are AFFIRMED.
SO ORDERED.

chanroblesvirtuallawlibrary

Velasco, Jr., (Chairperson), Villarama, Jr., Perez,** and Jardeleza, JJ., concur.

18. UNEXPLAINED POSSESSION IN


ROBBERY WITH FORCE UPON THINGS;
CIRCUMSTANTIAL EVIDENCE
G.R. No. 209137, July 01, 2015
EDUARDO CELEDONIO, Petitioner, v. PEOPLE OF THE
PHILIPPINES, Respondent.
DECISION
MENDOZA, J.:
This petition for review on certiorari under Rule 45 of the Rules of Court filed
by Eduardo Celedonio (Celedonio) assails the April 8, 2013 Decision1 and the
September 17, 2013 Resolution2 of the Court of Appeals (CA), in CA-G.R. CR
No. 34472, affirming the August 18, 2011 Decision3 of the Regional Trial Court,
Branch 73, Malabon City (RTC), in Criminal Case No. 35668-MN.
The Information,4 dated April 25, 2007, charged Celedonio with the crime of
Robbery with Force Upon Things, the accusatory portion of which reads:
chanRoble svirtualLawlibrary

Page 12 of 89
That on or about the 22nd day of April 2007, in the Municipality of Navotas,
Metro Manila, Philippines and within the jurisdiction of this Honorable Court,
the above-named accused, with intent to gain and by means of force upon
things, and without the consent of the owner, did then and there, wilfully,
unlawfully and feloniously enter the house of the herein complainant by
destroying the backdoor of said house, and once inside, take, rob and carry
away the following:
(1) one gold bracelet 24K Php8,000.00

(100) one hundred pcs. of Php20.00 bills worth Php2,000.00


(15) fifteen pcs. of Php100.00 bills worth Php1,500.00
owned and belonging to CARMENCITA DE GUZMAN y SERRANO, to the damage
and prejudice of the herein complainant, in the aforementioned amount of
Php223,000.00.

chanRoblesvirtualLa wlibrary

(3) necklace (1) one 24K and (2) two 18K Php42,000.00
(2) two digicam Sony player Php22,000.00
(1) one DVD portable Php5,000.00
(1) one wrist watch Tagheur Php30,000.00
(1) one sun glass Guess P Php5,000.00
(1) one camera Canon Php2,500.00
(1) one Gameboy advance Php5,000.00
(1) one calculator Php1,500.00
(1) one discman Sony Php3,000.00
(2) two pcs. 100.00 US dollar bills
(22) twenty two pcs. Php500.00 bills
(2) two necklace 18K worth Php30,000.00
(2) two bracelet worth Php11,500.00
(2) two gold ring worth Php8,000.00
(1) one wedding ring worth 14K worth Php1,500.00
(1) one wrist watch swiss military worth Php10,000.00
(1) one cellphone NOKIA 8250 worth Php3,000.00
(3) three pairs of earrings worth Php15,000.00
(3) three pcs. of 100.00 US dollars worth Php15,000.00
(60) sixty pcs. of Php50.00 bills worth Php3,000.00

Contrary to law.5
Version of the Prosecution
The evidence for the prosecution shows that on the evening of April 21, 2007,
a certain Adriano Marquez (Marquez) witnessed the robbery perpetrated in the
house of Carmencita De Guzman (De Guzman) while she was away to attend
to the wake of her deceased husband. No one was left in the house. Marquez,
whose house was opposite the house of De Guzman and Celedonio, which were
adjacent to each other, identified Celedonio as the culprit. Upon learning of the
incident, De Guzman reported it to the police and requested that Celedomo be
investigated for possibly having committed the crime, based on the account of
Marquez.
Later, a follow-up operation was conducted by PO1 Rommel Roque (PO1
Roque) and SPO2 Adrian Sugui (SPO2 Sugui), accompanied by Marquez. They
proceeded to Raja Humabon St., Navotas, to survey the area for the possible
identification and apprehension of the suspect. On their way, Marquez pointed
to a man on a motorcycle and said, "Sir, siya po si Eduardo Celedonio." The
police immediately flagged down Celedonio. PO1 Roque asked him if he was
Eduardo Celedonio, but he did not reply and just bowed his head.
SPO2 Sugui informed Celedonio of a complaint for robbery against him.
Celedonio still remained silent and just bowed his head. SPO2 Sugui asked
him, "Where are the stolen items?" Celedonio then alighted from his
motorcycle and opened its compartment where PO1 Roque saw some of the
stolen items, as per report of the incident, such as the portable DVD player and
a wristwatch, among others.6
chanrobleslaw

PO1 Roque asked Celedonio if the same were stolen, to which the latter
answered, "Iyan po."7 Thus, Celedonio was arrested and was informed of his
constitutional rights. More items were seized from Celedonio at the police
station.
Version of the Accused
After the prosecution rested its case, Celedonio filed his Demurrer to Evidence
(with leave of court) citing as his ground the alleged illegality of his arrest and
the illegal search on his motorcycle. The RTC denied the demurrer, stating that
the question of the legality of Celedonio's arrest had been mooted by his
arraignment and his active participation in the trial of the case. It considered
the seizure of the stolen items as legal not only because of Celedonio's
apparent consent to it, but also because the subject items were in a moving

Page 13 of 89
vehicle.8

chanrobleslaw

In his defense, Celedonio claimed that he was at home with his wife, sleeping,
at the time of the incident. His wife corroborated his statement.
In its Decision, dated August 18, 2011, the RTC found Celedonio guilty beyond
reasonable doubt of the crime of Robbery with Force Upon Things. The
dispositive portion of the RTC decision9 reads:
WHEREFORE, finding the accused EDUARDO CELEDONIO y MONIS
GUILTY beyond reasonable doubt for the offense of Robbery with Force Upon
Things as defined and penalized under Article 299 (a)2 of the Revised Penal
Code, he is therefore sentenced to an indeterminate penalty of 4 years and 2
months of prision correccional as minimum to 8 years and 1 day of prision
mayor as maximum. He is also ordered to pay private complainant the amount
of Php108,000.00 which is the worth of what has not been recovered from the
loss she suffered by reason of the robbery.
chanRoblesvirtualLa wlibrary

SO ORDERED.10
The trial court was convinced that the prosecution clearly established that: 1) a
robbery had been committed; 2) it was committed recently; 3) several of the
stolen items including cash were found in Celedonio's possession; and 4)
Celedonio had no valid explanation for his possession of the stolen goods. 11
chanrobleslaw

Insisting on his innocence, Celedonio appealed to the Court of Appeals (CA),


arguing that the RTC erred: 1) in convicting him of the crime despite the
insufficiency of the circumstantial evidence; 2) in not finding that the search
was illegal, rendering the articles recovered inadmissible; and 3) in not finding
that the prosecution witness Marquez was ill-motivated in testifying against
him.12
chanrobleslaw

The CA, however, affirmed the RTC in toto. It found that the totality of
circumstances warranted the finding that Celedonio was solely and directly
responsible for the crime.13
chanroble slaw

In addition, the CA brushed aside Celedonio's argument that he was illegally


arrested and that the items seized should be excluded as evidence. It stressed
that Celedonio was not arrested when he voluntarily opened the compartment
of his motorcycle. He was only brought to the police for investigation after
some of the stolen items were found in his motorcycle compartment. 14 Further,
Celedonio's failure to raise the issue before his arraignment constituted a
waiver on his part to question the legality of his arrest. 15
chanroble slaw

Celedonio moved for reconsideration, but his motion was denied.


Hence, the present petition.

ISSUES
I

WHETHER THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN


AFFIRMING THE TRIAL COURT'S RULING THAT THE PETITIONER'S
GUILT WAS PROVEN BASED ON CIRCUMSTANTIAL EVIDENCE.
II
WHETHER THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
NOT FINDING THAT THE SEARCH CONDUCTED ON THE PETITIONER
WAS ILLEGAL, RENDERING THE ARTICLES RECOVERED INADMISSIBLE.
III
WHETHER THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
NOT FINDING THAT THE PROSECUTION WITNESS ADRIANO MARQUEZ
WAS ILL-MOTIVATED IN TESTIFYING AGAINST THE PETITIONER.
The petition lacks merit.
Jurisprudence tells us that direct evidence of the crime is not the only matrix
from which a trial court may draw its conclusion and finding of guilt. The rules
on evidence allow a trial court to rely on circumstantial evidence to support its
conclusion of guilt. The lack of direct evidence does not ipso facto bar the
finding of guilt against the appellant. As long as the prosecution establishes the
accused-appellant's participation in the crime through credible and sufficient
circumstantial evidence that leads to the inescapable conclusion that he
committed the imputed crime, the latter should be convicted. 16
chanroble slaw

Circumstantial evidence is sufficient for conviction if: 1) there is more than one
circumstance; 2) the facts from which the inferences are derived are proven;
and 3) the combination of all the circumstances is such as to produce a
conviction beyond reasonable doubt.17
chanroble slaw

In this case, the prosecution sufficiently laid down the circumstances that,
when taken together, constituted an unbroken chain that led to a reasonable
conclusion that Celedonio was the perpetrator. The CA opined that:
xxx As correctly pointed out by the trial court, these circumstances are:
accused was a next door neighbor of private complainant; he was seen by
another neighbor going over the concrete fence separating their houses and
ransacking a room in complainant's house; during the time, no one was inside
complainant's house as all of them were at the wake of private complainant's
recently demised husband; two (2) days after, most of the items discovered to
have been stolen that night were found in the compartment of the accused's
motorcycle which he was riding on when accosted by the police; the items
recovered from him were identified by the complainant as her stolen property;
during the trial accused denied that the stolen items were found in his
possession and claimed that they were "planted" by the police investigators to
frame him up of the robbery. In short, the accused could not explain his
possession of the recently stolen items found in his sole possession.
chanRoblesvirtualLa wlibrary

Page 14 of 89
xxxx
We find the conviction of accused-appellant based on circumstantial evidence
factually and legally tenable, as the facts from which the aforementioned
circumstances arose have been proved through the positive testimony of
Adriano Marquez, POi Rommel Roque and Carmencita de Guzman. 18
The defense does not refute the existence of the commission of robbery. In
fact, Celedonio himself acknowledged that the prosecution's circumstantial
evidence, although weak, ambiguous and inconclusive, established that 1) a
robbery had been committed; 2) it was committed recently; 3) several of the
stolen items including cash were found in his possession; and 4) he had no
valid explanation for his possession of the stolen goods. 19 Celedonio, however,
still insisted that he cannot be convicted of the crime of robbery because 1) he
was not caught in exclusive possession of the stolen items; 2) the search
conducted on him was illegal thereby rendering the seized articles
inadmissible; and 3) the witness Marquez was ill-motivated in testifying against
him.
These arguments, however, do not hold water.
First, Celedonio was, in fact, caught in exclusive possession of some of the
stolen items when the police officers flagged down his motorcycle during their
follow-up operation. He failed to give a reasonable explanation as to his
possession of the said items. Section 3(j), Rule 131 of the Revised Rules of
Court provides that a person found in possession of a thing taken in the doing
of a recent wrongful act is the taker and the doer of the whole act; otherwise,
that thing which a person possesses, or exercises acts of ownership over, is
owned by him.
Celedonio never claimed ownership of the subject items. When the alleged
stolen items were found in his motorcycle compartment which he had control
over, the disputable presumption of being the taker of the stolen items arose.
He could have overcome the presumption, but he failed to give a justifiable and
logical explanation. Thus, the only plausible scenario that could be inferred
therefrom was that he took the items.

the items. Moreover, taking into consideration that the stolen items were in a
moving vehicle, the police had to immediately act on it.
Third, contrary to Celedonio's argument, Marquez was a credible witness.
Jurisprudence also tells us that where there is no evidence that the witnesses
of the prosecution were actuated by ill motive, it is presumed that they were
not so actuated and their testimony is entitled to full faith and credit. 21
chanroble slaw

In this case, if only to discredit Marquez, Celedonio claimed that they once had
a fight over a water meter. As correctly observed by the CA, however, such
allegation was too insignificant that it could not destroy whatever credibility
Marquez possessed as a witness. The CA, thus, posited:
xxx It is true that under the Rules of Court, a witness may be impeached by
evidence that his general reputation for truth, honesty or integrity is bad.
However, a witness cannot be impeached by evidence of particular wrongful
acts, unless there is a showing of previous conviction by final judgment such
that not even the existence of pending information maybe shown to impeach
him.
chanRoble svirtualLawlibrary

More so, in this case, wherein no information was filed against the witness, but
only the mere say so of the accused on Marquez' alleged involvement in a
quarrel with him over a water meter. Furthermore, no testimony was presented
to show that the reputation of Marquez for truth, honesty or integrity is bad;
no evil motive has been established against prosecution witness Marquez that
might prompt him to testify falsely against accused-appellant Celedonio.22
Alibi and denial were the only defenses of Celedonio. Unless he can strongly
support his claims that the items were "planted" and that it was physically
impossible for him to be in De Guzman's house other than the mere averment
that he was asleep at the time, his defenses cannot prevail over the strong
circumstantial evidence.23
chanroble slaw

Having established the sufficiency of the prosecution's evidence, the CA did not
commit any reversible error in upholding the RTC. In the absence of any
indication that the RTC and the CA overlooked facts or circumstances that
would result in a different ruling in this case, the Court will not disturb their
factual findings.24
chanrobleslaw

Second, no illegal search was made upon Celedonio. When the police officers
asked where the stolen items were, they merely made a general inquiry, and
not a search, as part of their follow-up operation. Records did not show that
the police officers even had the slightest hint that the stolen items were in
Celedonio's motorcycle compartment. Neither was there any showing that the
police officers frisked Celedonio or rummaged over his motorcycle. There was
no showing either of any force or intimidation on the part of the police officers
when they made the inquiry. Celedonio himself voluntarily opened his
motorcycle compartment. Worse, when he was asked if the items were the
stolen ones, he actually confirmed it.20 The police officers, therefore, were left
without any recourse but to take him into custody for further investigation. At
that instance, the police officers had probable cause that he could be the
culprit of the robbery. He did not have any explanation as to how he got hold of

WHEREFORE, the petition is DENIED.


SO ORDERED.

cralawla wlibrary

RULE 132
19. HAND WRITING EXPERT TESTIMONY
VS. EYE WITNESS TESTIMONY.

Page 15 of 89
GR NO. 202756, April 06, 2016

HEIRS OF CORAZON AFABLE SALUD, REPRESENTED BY


DEOGRACIAS A. SALUD, NAPOLA Y. SALUD, JOSEPH Y.
SALUD, & JOE VINCENT Y. SALUD, PETITIONERS,
~vs~
RURAL BANK OF SALINAS, INC. RESPONDENT.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari[1] seeks to set aside: 1) the February
23, 2012 Decision[2] of the Court of Appeals (CA) in CA-G.R. CV No. 90854
which reversed and set aside the November 15, 2007 Order [3] of the
Regional Trial Court (RTC) of Cavite City, Branch 16 in Civil Case No. N7469, and reinstated the RTCs June 8, 2007 Decision; [4] and 2) the CAs July
12, 2012 Resolution[5] denying petitioners Motion for Reconsideration.[6]
Factual Antecedents
Corazon Afable Salud (Corazon) was the registered owner of a parcel of
land with building (the Silver Coin Bldg.) in Marseilla Street, Rosario, Cavite
(the subject property), covered by Transfer Certificate of Title No. RT-19394
(TCT RT-19394).[7] On May 30, 1998 or at the age of 80, she passed away
leaving behind as her heirs her two adopted children, petitioner Deogracias
A. Salud (Deogracias) and Carmencita Salud Condol (Carmencita).
Deogracias is married to Napola Y. Salud (Napola); Joseph Y. Salud (Joseph)
and Joe Vincent Y. Salud (Vincent) are their children.
On January 8,2004, Deogracias, Napola, Joseph and Vincent instituted Civil
Case No. N-7469 against respondent Rural Bank of Salinas, Inc. (RBSI),
Carmencita, the Clerk of Court and Ex-Officio Sheriff of the RTC-Cavite City,
and the Cavite Register of Deeds. In their Complaint [8] for Declaration of
Nullity of Deeds of Mortgage, Special Power of Attorney, Extrajudicial
Foreclosure Sale, Certificate of Sale and Damages, with injunctive relief,
they essentially claimed that in 2000, Deogracias and Napola learned that
Carmencita obtained a P2 million loan from RBSI secured by three Deeds of
Mortgage[9] over the subject property executed by Carmencita on August
20, October 8 and October 31, 1996; that RBSI granted the loan on the
basis of a pro forma bank Special Power of Attorney[10] (August 20 SPA)
purportedly executed and signed by Corazon on August 20, 1996,
specifically authorizing Carmencita to utilize the subject property as
security for any loan/s obtained by the latter from RBSI; that they
immediately informed RBSI President and Manager Teodoro G. Salud

(Teodoro) who is their close relative that Corazon never authorized


Carmencita to mortgage the subject property, and that Corazons signature
on the August 20 SPA was a forgery; that they showed Teodoro another
special power of attorney (SPA) dated August 23, 1996 [11] executed by
Corazon which contained her true and genuine signature, and which
authorized Deogracias to 1) specifically collect the rentals from tenants of
the Silver Coin Bldg. and another building, 2) represent Corazon in any
transaction with said tenants and the utility companies, and 3) execute and
sign any paper or document relating to the tenants and utility companies;
that in 1990, the subject property was duly constituted as their family
home as inscribed in TCT RT-19394; [12] that for Carmencitas failure to pay
her loan obligation, the subject property was unduly foreclosed upon and
sold to RBSI in 2002; that the foreclosure process was defective in that a)
notice of extrajudicial sale was not given to Corazon, b) the notice of sale
was not posted in a conspicuous place, and c) the certificate of posting was
executed only after the auction sale;[13] that it is evident from the
Promissory Notes[14] executed by Carmencita that the loan she secured from
RBSI is her sole obligation and responsibility, and Corazon did not obtain
any benefit or advantage therefrom; that RBSI is in possession of the
certificate of title to the subject property, and refused to surrender the
same despite demand; and that the defendants were acting with malice
and bad faith in committing and perpetrating a forgery. Petitioners thus
prayed that injunctive relief be issued to enjoin RBSI from consolidating
title; that the mortgage deeds, August 20 SPA, and foreclosure and sale
proceedings be nullified and voided; that RBSI be ordered to surrender TCT
RT-19394 to them; and that P1 million as moral damages, P250,000.00 as
exemplary damages, P300,000.00 as attorneys fees plus appearance fees,
P50,000.00 as litigation expenses, and costs be awarded to them.
In its Answer, RBSI essentially alleged that Carmencita was duly authorized
by Corazon to secure a loan and mortgage the subject property in August
1996; that the proceeds of the loan was used to repair Corazons 10-door
apartment building in Makati and to pay for her medical and hospital
expenses; and that Corazons signature on the questioned August 20 SPA
was genuine and true.
On January 8, 2004, or after the filing of the Complaint, a 72-hour
Temporary Restraining Order (TRO) was issued enjoining the Cavite
Register of Deeds from acting on RBSIs application for consolidation of
ownership and from canceling TCT RT-19394, The TRO was extended until
January 28, 2004.

Page 16 of 89
After Civil Case No. N-7469 was raffled to Branch 16, the application for
injunctive relief was heard. On January 27, 2004, the RTC issued a Writ of
Preliminary Injunction.
At the pre-trial conference, the parties agreed that the only issue to be
resolved in the case is whether the signature of Corazon appearing on the
August 20 SPA was genuine, and that the August 20 SPA shall be subjected
to examination by a National Bureau of Investigation (NBI) handwriting
expert whose finding shall be binding upon them.[15]
On April 29, 2005, the designated NBI Documents Examiner, Jennifer
Dominguez (Dominguez), issued Questioned Document Report No. 231-405
(NBI report) with the conclusion that the questioned signature of Corazon
on the August 20 SPA and her standard signatures on sample documents
submitted for comparison were not written by one and the same
person.[16] The NBI report was based on 19 sample signatures submitted by
petitioners, but one of the two that were submitted by RBSI was
disregarded by Dominguez.[17]
During trial, Deogracias admitted that the signature appearing on one of
the sample documents submitted by RBSI tagged as sample S-D-2 and
also marked as Exhibit 5-A for RBSI was affixed by Corazon. [18]
Napola testified on the issue of damages and attorneys fees. [19]
For the defense, Teodoro testified among others that Corazon has been a
borrower of RBSI even prior to 1996; that in 1996, he was approached by
Corazon and Carmencita who indicated their desire to apply for another
loan with the subject property as collateral; that Corazon asked him if she
can allow Carmencita to be the borrower so that she would not have to
keep going to the bank; that he later informed Corazon that the RBSI board
of directors agreed to approve her loan application; that one week
thereafter or on August 20, 1996, Corazon and Carmencita returned and
filled out a P1 million loan application; that Corazon signed the August 20
SPA in his presence; that thereafter, he directed the banks loan supervisor
to process the necessary loan documents and have the same notarized;
that later on, Deogracias approached him on several occasions and
signified his intention to pay the loan but he was unable to do so and
instead, Deogracias filed the instant case; and that RBSI was compelled to
hire legal counsel to prosecute Civil Case No. N-7469. [20]
Arty. Gregorio M. Trias (Arty. Trias), the notary public who notarized the
August 20 SPA, testified that on August 20, 1996, Corazon appeared before
him to have the August 20 SPA notarized although when the said
document was brought to him the same was already signed by Corazon;

that he knew Corazon because in the past he notarized documents signed


by her; and that when he notarized the August 20 SPA, he did not inquire
whether the signature thereon was Corazons nor did he ask whether she
understood what the document meant.[21]
Dominguez, the NBI Document Examiner, testified and essentially
reiterated her original finding that there exist significant differences
between Corazons questioned signature on the August 20 SPA and the
standard sample signatures submitted for comparison, and that her
signature on the August 20 SPA and the sample documents submitted were
not written by one and the same person. [22] At the same time, she also
admitted that the signature on RBSIs S-D-2 or Exhibit 5-A and that
appearing on the questioned August 20 SPA could have been written by
one and the same person.[23]
Ruling of the Regional Trial Court
On June 8, 2007, the RTC issued its Decision, dismissing the complaint, viz.:
As a general rule, forgery cannot be presumed and must be proved by
clear, positive and convincing evidence. The burden of proof lies on
the party alleging forgery. In the examination of forged documents, the
expertise of questioned documents examiners is not mandatory and
while probably useful, they are indispensable [sic][24] in examining or
comparing handwriting. Hence, a finding of forgery does not depend
entirely on the testimony of handwriting experts. x x x
In the instant case, the presumption of validity and regularity prevails
over allegations of forgery and fraud. As against direct evidence
consisting of the testimony of a witness who was physically present at
the signing of the contract and who had personal knowledge thereof,
the testimony of Dominguez constitutes indirect or circumstantial
evidence at best. x x x Teodoro Salud, the witness to the special power
of attorney confirmed the genuineness, authenticity and due execution
thereof. Said witness having been physically present to see the
decedent Corazon x x x affix her signature to the questioned
document, the weight of evidence preponderates in favor of
defendants.
xxxx
It is emphasized that it was never denied by the plaintiffs that the
subject Special Power of Attorney was in fact notarized by Atty.
Gregorio M. Trias, a Notary Public, and the same was registered in his
notarial book. As Atty. Trias had testified, Corazon Salud appeared

Page 17 of 89
before him on August 20, 1996, the date of the special power of
attorney x x x.
xxxx
WHEREFORE, premises considered, the instant complaint for
declaration of nullity of deeds of mortgage, special power of attorney,
extrajudicial foreclosure sale, certificate of sale and damages is, as it
is hereby, ordered DISMISSED. The writ of preliminary injunction is
likewise DISSOLVED.
SO ORDERED.[25]

Petitioners filed a Motion for Reconsideration which was granted by the


RTC in its November 15, 2007 Order. The trial court held that since the
parties agreed to abide by, and submit the case for decision based on, the
NBI findings, then the resolution of this case should hinge on the NBI
findings. The RTC recalled that based on the NBI report, the questioned
signature in the August 20 SPA and the standard/sample signatures of
Corazon were not written by one and the same person. As regards
Dominguezs failure to include Exhibit 5 and S-D-2 in her examination,
the RTC brushed aside the same for being inconsequential.
[26]

In addition, the RTC ruled that based on its own examination there were
indeed striking differences in the August 20 SPA signature vis-a-vis
Corazons standard signatures. Thus, it concluded that Corazons signature
in the August 20 SPA was a forgery.
Moreover, the RTC ruled as follows:
Since the Court has already found that the SPA is a forged document,
it is useless to further ventilate on the invalidity of the notarization
made by Atty. Trias. It must be stated, nonetheless, that by notarizing
this forged document, Atty. Trias committed falsehood and misled or
allowed the Court to be misled by an artifice.
xxxx
Moreover, the Court doubts the impartiality of Atty. Trias. When he
notarized the forged SPA, he was working for defendant bank and was
holding office at defendant banks premises for more than ten (10)
years x x x His testimony is therefore tainted with manifest bias and
partiality. x x x
While Teodoro maintained that the SPA was signed by Corazon in his
presence, save from this bare allegation, however, there is no iota of
proof to support his claim. It has not been shown that he affixed his

signature as witness to the execution of the SPA and no one among


the attesting witnesses came forward to corroborate his claim. Even
Carmencita, who was allegedly present when the SPA was signed by
Corazon, failed to appear to substantiate Teodoros claim. The Court
notes that Carmencita was impleaded as defendant in this case, but
she neither filed her Answer nor came forward to refute plaintiffs
charges. As it were, Teodoros testimony should be taken with utmost
circumspection. x x x
xxxx
More importantly, the act of requiring Corazon to execute an SPA in
favor of Carmencita for a loan that would be processed and released
on the same day defies reason and common sense. x x x
xxxx
All told, although the special power of attorney was a public document
having in its favor the presumption of regularity, such presumption
was adequately refuted by competent witnesses and this Courts
visual analysis of the documents. Due to its knowledge of the defect of
the questioned document which it did not question, defendant bank
could not be considered a mortgagee in good faith. Though it is not
expected to conduct an exhaustive investigation on the history of the
mortgagors title, it cannot be excused from the duty of exercising the
due diligence required of a banking institution. Banks are expected to
exercise more care and prudence than private individuals in their
dealings, even those that involve registered lands, for their business is
affected with public interest.
xxxx
WHEREFORE, as prayed for by plaintiffs, the Decision dated June 8,
2007 is reconsidered and set aside. x x x
xxxx
SO ORDERED.[27]

Ruling of the Court of Appeals


In an appeal to the CA, RBSI asserted that the RTC erred in reconsidering
its original Decision; that the trial court disregarded the sample signatures
it submitted (Exhibits 5 and S-D-2); that the NBIs Dominguez herself
admitted that the questioned signature and its Exhibits 5 and S-D-2
could have been written by one and the same person; and that as a public

Page 18 of 89
document and with the testimonies of Teodoro and Atty. Trias, the August
20 SPA must be presumed to be regular.

The dispositive portion of the CA Decision reads as follows:


WHEREFORE, the appeal is GRANTED. The Order dated November 15,
2007 of the Regional Trial Court of Cavite City, Branch 16 in Civil Case
No. N-7469 is hereby REVERSED and SET ASIDE. The Decision dated
June 8, 2007 of the same court is hereby REINSTATED.

On February 23, 2012, the CA issued the assailed Decision finding merit in
the appeal. It held that the opinions of handwriting experts are merely
persuasive and not conclusive hence not binding on the courts.
Based on its own assessment, the CA found that petitioners failed to
overcome the presumption that Corazons signature in the August 20 SPA
was genuine and not forged. The CA observed that petitioners submitted
19 sample signatures of Corazon, denominated as S-1 through S-19,
while the respondent presented two signatures tagged as S-D-1 and SD-2. However, Dominguez failed to include in her examination S-D-2.
The CA observed that the RTC failed to take into account that during her
cross-examination, Dominguez admitted that the signatures appearing on
S-D-2 and the August 20 SPA could be written by one and the same
person. More important, even Deogracias admitted that the signature on
S-D-2 was Corazons.
In addition, the CA held that the NBI handwriting expert herself admitted
that age and health conditions could affect ones handwriting. In fact, in
her February 21, 1995 letter, Corazon expressed that she had difficulty in
writing because she was suffering from tremors. The CA pointed out that
Corazon was 77 years old when she wrote the letter, or one year before the
execution of the questioned August 20 SPA. According to the CA, slight
dissimilarities in handwriting are only natural and not indicative of forgery.
Moreover, the CA declared that the case should not be resolved based
solely on the NBI report. It noted that petitioners claim of forgery hinged
exclusively on the NBI report whereas RSBI erected its case not only on the
sample signatures of Corazon but also on the testimonies of Teodoro, who
testified that Corazon signed the August 20 SPA in his presence, and of
Atty. Trias who claimed that Corazon and Carmencita appeared before him
when he notarized the documents. As a notarized document, the August 20
SPA is presumed valid and regular; petitioners failed to submit convincing
proof of its falsity or nullity.
Finally, the appellate court took note of Deograciass admissions that
Corazon had on previous occasion constituted Carmencita as her attorneyin-fact in selling her property; that Camiencita took care of Corazon during
her hospital confinement in late 1996 until her death in 1998; and that
Carmencita paid Corazons hospital bills amounting to more than P5
million. The CA concluded that based on the foregoing, the likelihood that
Corazon executed the August 20 SPA in favor of Carmencita, is not remote.

SO ORDERED.[28]

Petitioners moved for reconsideration, but in its July 12, 2012 Resolution,
the CA stood its ground. Hence, the instant Petition.
Issues
Petitioners raise the following issues in this Petition:
22. The Court of Appeals erred in setting aside the pre-trial agreement
that the petitioners and respondent Bank are bound by the result of
the NBIs document examination.
23. The Court of Appeals erred in concluding that petitioners as
plaintiffs below failed to adduce preponderant evidence to prove that
the signature on the Special Power of Attorney purportedly belonging
to Corazon Afable Salud was forged. Particularly:
a. NBI Document Examiner Jennifer Dominguez was not
categorical in her finding that the subject signature was forged,
all because it was possible that an alleged standard signature
of Corazon Afable Salud (Exhibit 5 or Exhibit S-D-2) and the
subject signature were written by one and the same person.
b. The NBI Document Examiner did not rule out that several
factors could affect an individuals handwriting.
c. The testimony of respondent Banks Manager, Teodoro Salud,
that he saw Corazon Afable Salud signing the Special Power of
Attorney is a credible direct evidence of the authenticity of the
subject signature.
d. The Special Power of Attorney is a notarized document and is
therefore presumed regular and genuine.
e. Petitioner Deogracias Salud admitted that Corazon Afable
Salud appointed in the past Carmencita Salud Condol as her
attorney-in-fact and thus it was not improbable that she
appointed her for this particular transaction.

Page 19 of 89
f. Petitioner Deogracias Salud admitted that Carmencita Salud
Condol paid for Corazon Afable Saluds hospital expenses, the
funding for which could not have been but the proceeds of the
transaction involved in this case.[29]

Petitioners Arguments
In their Petition and Reply,[30] petitioners seek a reversal of the assailed CA
dispositions and reinstatement of the RTCs November 15,2007 Order,
arguing that RBSI is estopped from questioning or rejecting the NBI report
since it agreed during the pre-trial proceedings to abide by the results of
the NBI examination; that RBSI is bound by such stipulation and agreement
made during pre-trial which thus constitutes a judicial admission of the
findings contained in the NBI report. Petitioners also argue that the NBI
report deserves great weight and probative value; that Dominguezs
admission that there is a possibility that Exhibit 5-A and the August 20
SPA could have been signed by one and the same person should be
disregarded, because the preponderance of evidence points to the fact
that Carmencita forged Corazons signature in the August 20 SPA in order
to offer the subject property as collateral, thus insuring that her personal
loan application would be approved; that Deograciass testimony to the
effect that Corazon got mad when she learned that Carmencita forged
her signature and mortgaged the subject property for a personal loan, and
that Corazon did not need to secure a loan to pay off her hospital bills
since she had P14 million, and that it was Carmencita who actually paid for
the RBSI loans, cannot simply be ignored.
Petitioners add that it was erroneous for the CA to have considered RBSIs
Exhibit 5-A or S-D-2 since Dominguez herself did not utilize the same in
her examination of Corazons signature as it was already doubtful in the
first place; that even if Deogracias admitted that the signature (RBSIs
Exhibit 5-A) was Corazons, his opinion does not count as against that of
Dominguezs, which is scientific and more credible; that Teodoros
testimony is doubtful; that it made no sense that while Corazons property
was being mortgaged, she was not named as one of the principal debtors;
that if Teodoro wanted to spare Corazon the trouble of having to come to
the bank since she was then already old, then he should have asked her to
execute a SPA when she and Carmencita first came to the bank, instead of
asking her to return as she did one week later or on August 20, 1996; and
that the presumption of regularity attached to a notarized document is not
absolute, as such document may be shown to be a forgery instead.
Petitioners further contend that Atty. Triass testimony is suspect, since he
was negligent in his duties as a notary public in failing to check the

veracity of the entries in the bank documents submitted to him for


notarization and in not verifying Corazons signature on the August 20 SPA
when she appeared before him; that Atty. Triass impartiality is
questionable considering that he was connected with RBSI and held office
at the bank; and that as against the accounts of Teodoro and Atty. Trias,
Dominguezs is more credible as she is a disinterested witness, while the
two work for RBSI and are interested in securing a favorable judgment for
the bank.
Petitioners add that the circumstances surrounding Carmencitas loan
application are suspicious in that her loan was granted and released in just
one day: when Corazon and Carmencita returned to the bank on August 20,
1996 and submitted the required documents, the promissory note, real
estate mortgage and SPA were simultaneously executed and notarized,
and the loan proceeds were released. Corazon was not made a co-debtor
and the proceeds were released to Carmencita instead of Corazon who is
supposedly the beneficiary of the loan.
Finally, petitioners observed that since the CA did not make its own
independent assessment of the signatures in question, it was not in a
position to reverse the RTCs findings thereon.
Respondents Arguments
On the other hand, respondent argues in its Comment [31] that while it was
agreed during pre-trial that the parties shall abide by the findings of the
NBI, still, forgery cannot be presumed, and it must be proved by clear and
convincing evidence during trial; that the opinions of handwriting experts
are not binding upon the courts since they are not conclusive and are
merely persuasive; that the CA correctly relied on Exhibit 5-A/S-D-2
which is genuine and authentic as it was confirmed by Deogracias himself
to be Corazons signature; that the NBI report cannot be relied upon
completely in view of the fact that the signature (Exhibit 5-A) in one of
the sample documents (Exhibit 5) was intentionally disregarded, and yet
Dominguez later testified and admitted that the signature thereon and that
on the questioned August 20 SPA could have been affixed by one and the
same person; that the NBI report was defective in that it utilized an
erroneous methodology since Dominguez disregarded the sample
signatures submitted by RBSI; and that if Dominguez did not disregard
Exhibit 5-A/S-D-2, the conclusion in the NBI report would have been
different; instead, the only and inevitable conclusion would have been that
the questioned signature of Corazon in the August 20 SPA is genuine and
not a forgery.

Page 20 of 89
Respondent adds that in arriving at its conclusions, the CA carefully
considered: a) the applicable provisions of law; b) the inaccurate,
inconclusive and unreliable findings of the NBI; c) the apparent conflict
between the conclusion in the NBI report and Dominguezs admission on
the witness stand; and d) that petitioners evidence failed to defeat the
August 20 SPA, a notarized public document which enjoys the presumption
of regularity. It further contends that the issue of Corazons signature may
not be the subject of stipulation and instead, the parties should be allowed
to test the NBI report and Dominguezs competence.
Consequently, respondent prays for the denial of the instant Petition and
affirmance of the assailed CA dispositions.
Our Ruling
The Court denies the Petition.
Considering that the trial and appellate courts rendered diametrically
opposed opinions, the Court must examine the case at length.
Pursuant to Section 22, Rule 132 of the Rules of Court, [t]he handwriting
of a person may be proved by any witness who believes it to be the
handwriting of such person because he has seen the person write, or
has seen writing purporting to be his upon which the witness has acted or
been charged, and has thus acquired knowledge of the handwriting of such
person. Evidence respecting the handwriting may also be given by a
comparison, made by the witness or the court, with writings admitted or
treated as genuine by the party against whom the evidence is offered, or
proved to be genuine to the satisfaction of the judge. [32]
Under the Rules of Court, the genuineness of a handwriting may be
proved by the following:
(1) A witness who actually saw the person writing the instrument;
(2) A witness familiar with such handwriting and who can give his
opinion thereon, such opinion being an exception to the opinion rule;
(3) A comparison by the court of the questioned handwriting and
admitted genuine specimen thereof; and
(4) Expert evidence.
The law makes no preference, much less distinction among and
between the different means stated above in proving the handwriting
of a person. It is likewise clear from the foregoing that courts are not
bound to give probative value or evidentiary value to the opinions of

handwriting experts, as resort to handwriting experts is not


mandatory.[33]

While RBSI may have agreed to abide by the conclusions in the NBI report
relative to Corazons signature, the courts may not be compelled to adopt
such findings. Besides, RBSIs evidence does not depend upon the NBI
report and Dominguezs testimony; expert testimony is irrelevant to RBSI
in view of positive testimony from its witnesses to the effect that Corazon
appeared before them and signed the questioned August 20 SPA. Besides,
the questioned August 20 SPA is a notarized document. Only petitioners
are entirely dependent on the NBI report and Dominguezs testimony, since
they have no other way of proving that Corazon did not sign the
questioned SPA.
Essentially, petitioners evidence relative to Corazons handwriting consists
of: a) Deogracias testimony to the effect that Corazon got mad when
she learned that Carmencita forged her signature, that Corazon did not
need to secure a loan to pay off her hospital bills since she had P14 million,
and that it was Carmencita who actually paid for the RBSI loan; b) the NBI
report which concludes that the questioned signature of Corazon on the
August 20 SPA and her standard signatures on sample documents
submitted for comparison were not written by one and the same person;
and c) Dominguezs testimony.
For respondent, evidence consists primarily of the testimonies of Teodoro
and Atty. Trias.
After due consideration of the evidence, this Court finds that on August 20,
1996, Corazon was present at the RBSI premises with Carmencita who
applied for a loan. It is also established that prior to the transaction in
question, Corazon has been a borrower of RBSI and was not a stranger to
the bank and its loan arrangements; and annotations on TCT RT-19394
reveal that the subject property was mortgaged twice in 1992 and 1993 to
secure loans obtained by her from RBSI. [34] It likewise appears that one
week prior to August 20, 1996 Corazon and Carmencita met with Teodoro
to explore the possibility of Corazon taking out another loan which thus
prompted Teodoro to seek prior approval from the banks board of
directors. Since Corazon was not a first-time borrower or client of the bank,
Teodoro who is also a close relative of the family as admitted by
Deogracias himself in his Complaint was able to secure prior board
approval of a credit accommodation for her, such that when Corazon and
Carmencita returned to the RBSI on August 20, 1996, the bank was able to
complete all the loan documentation and release the proceeds that same
day. During the documentation process, Corazon executed and signed the

Page 21 of 89
questioned August 20 SPA in Teodoros presence. Thereafter, the said
document and other loan documents were submitted to Atty. Trias for
notarization. Corazon appeared before Atty. Trias who then notarized the
August 20 SPA and other loan documents without inquiring whether the
signature affixed on the SPA was hers indeed or that the said document
was her free act and deed, although he knew her very well as he has dealt
with her in the past when he notarized the loan, mortgage, and mortgage:
cancellation documents relative to the two previous loan and mortgage
transactions executed by Corazon in 1992 and 1993.[35]
There is no reason to doubt the testimonies of Teodoro and Atty. Trias. They
are straightforward, candid, and in some respects, they are supported by
admissions made by petitioners themselves. Notable is the undisputed fact
and fundamental premise that Corazon was physically present at RBSI on
August 20, 1996, when the questioned August 20 SPA was purportedly
executed. Since she was at the bank premises on said date, there is no
reason to doubt RBSIs claim that she executed and signed the August 20
SPA and in Teodoros presence, and that thereafter the said document was
notarized by Atty. Trias in the presence of Corazon; there was no need for
Carmencita to forge her signature because Corazon was already there. It is
more in accord with experience and logic to conclude that since Corazon
was already inside the bank, then she voluntarily executed and signed the
August 20 SPA in Teodoro and Carmencitas presence; any supposition that
Carmencita had to forge her signature on such document becomes
unnecessary and absurd.
As petitioners themselves claim in their Complaint, Teodoro is a close
relative; as such, he is more inclined toward telling the truth rather than
fabricate lies to prejudice petitioners. His loyalty is foremost to his family
and to his employer or business merely secondary. Either way, his actions
on August 20, 1996 betray his fidelity to his clients who are also his
relatives and to RBSI his employer. It may be added that contrary to
petitioners assertions, there is nothing unusual in the procedure taken by
the bank in approving and releasing the loan posthaste. Quite the contrary,
from a business point of view, Teodoros actions in performing service to a
valued client with alacrity were laudable; at the same time he created
good business for RBSI at record speed. As Corazon was a valued client
and with her valuable property put up as sufficient collateral, there is no
reason to delay Carmencitas loan application.
For his part, Atty. Trias was equally candid in his testimony. Against his own
interest, he admitted that he failed to inquire if the signature appearing on
the August 20 SPA was Corazons but that this was so because he already
knew Corazon very well for having dealt with her in the past. Indeed, what

matters is that the party who executed these documents appeared before
him and that the person acknowledging the instrument or document is
known to him and that he/she is the same person who executed it and
acknowledged that the same is his/her free act and deed. Thus, while Atty.
Trias did not verify Corazons identity and signature, he already knew her
well as he had dealt with her in the past; and from an examination of the
loan documents, he would have known that the party involved therein was
Corazon who was then present in person before him. Indeed, Corazon was
a valued RBSI client who was well-known by the bank officers and staff.
The fact that she is a prominent businessperson and individual in the
community; that Teodoro was her close relative; and that her million-peso
loan was pre-approved by the RBSI board even before she could submit a
loan application betray her stature as such.
Apart from being candid and credible, it may be said as well that Atty. Trias
has no reason to fabricate his testimony in order to favor RBSI or Corazon.
The little benefit he may obtain from doing so is not enough for him to
gamble his vocation as a lawyer. His testimony forms part of a credible
chain that extends to Teodoros convincing account of Corazons
whereabouts and actions on August 20, 1996. Thus, while Atty. Trias was
remiss in his duties as a notary, this does not affect the Courts conclusion;
the preponderance of evidence still points toward the direction of RBSI.
Atty. Trias should be reminded, however, not to repeat the same mistake,
or else the corresponding sanctions shall be meted upon him. Indeed, care
should be taken by notaries in the notarization process because at the
extreme, [a] defective notarization will strip the document of its public
character and reduce it to a private instrument. Consequently, when there
is a defect in the notarization of a document, the clear and convincing
evidentiary standard normally attached to a duly-notarized document is
dispensed with, and the measure to test the validity of such document is
preponderance of evidence.[36]
Petitioners argue that it was more in keeping with logic and common sense
that Corazon should have made herself a co-maker in the loan transaction.
They cite in the instant Petition that the Special Power of Attorney was
unnecessary in the perfection and consummation of the (loan) transaction
because all it took for respondent Bank to release the loan proceeds was
just a day from the time the loan was applied for and allegedly Corazon x x
x was in the Banks premises when the entire transaction, from start to
finish, was being done.[37] The opposite, however, is true. Since Corazon
permitted the subject property to be put up as collateral through a special
power of attorney issued to Carmencita, there was no need to make her a
co-maker of the loan. Petitioners concede that Teodoro wanted to spare

Page 22 of 89
Corazon the trouble of having to personally appear at the bank each time a
loan is applied for and processed, since she was then already old. [38] If this
is the case, then making her a co-maker of the loan defeats the declared
purpose.
Also, the fact that Carmencita was the sole beneficiary of the loan suggests
nothing. Three days after the August 20 SPA was executed and loan
proceeds were released to Carmencita, or on August 23, 1996, Deogracias
was himself granted a SPA by Corazon authorizing him to collect the
rentals due from tenants of the Silver Coin Bldg. and another building that
his mother owned. If there is anything that may be seen from these
circumstances, it is that Corazon loved her adopted children dearly and
gave to them generously. Besides, the fact that Deogracias himself was
issued a SPA by Corazon lends credence to the fact that Carmencita was
herself granted one just three days before.
While Deogracias testified that Corazon got mad when she learned that
Carmencita forged her signature, that Corazon did not need to secure a
loan to pay off her hospital bills since she had 514 million, and that it was
Carmencita who actually paid for the RBSI loan, his testimony cannot
thwart the accounts of Teodoro and Atty. Trias. Their testimonies are
credible while that of Deogracias is uncorroborated and self-serving. The
fact remains that Corazon freely and voluntarily accompanied Carmencita
to RBSI with the intention of assisting the latter in securing a loan by
offering her property as collateral. The motive for securing the loan is
irrelevant.
As for the NBI report and Dominguezs testimony, the Court agrees with
the CAs pronouncement that with Dominguezs admission during crossexamination that the questioned signature on the August 20 SPA and
Exhibit 5-A/S-D-2 could have been written by one and the same person,
and that with the changing circumstances such as age and health of the
individual whose signature is placed in issue, the handwriting or signature
could change, but that such change does not necessarily equate with
forgery. With these findings, the NBI report is consequently rendered
inconclusive and thus unreliable. Resultantly as well, petitioners main
piece of evidence has been debunked and discredited; their cause of action
has no leg to stand on. Even then, [t]he opinion of handwriting experts
are not necessarily binding upon the court, the experts function being to
place before the court data upon which the court can form its own
opinion.[39]
Finally, since the Court has found that Corazon was then physically present
at RBSI on August 20, 1996, where she voluntarily executed and signed the

August 20 SPA in favor of Carmencita and in the presence of the banks


President and Manager, and thereafter she personally caused the same to
be notarized before the banks notary public, then there is no need to
further examine and analyze her signature. The issue of the CAs failure to
conduct its own independent examination of Corazons questioned
signature is rendered moot and academic.
WHEREFORE, the Petition is DENIED. The February 23, 2012 Decision and
July 12, 2012 Resolution of the Court of Appeals in CA-G.R. CV No. 90854
are AFFIRMED.
SO ORDERED.
Carpio, (Chairperson), Brion, Mendoza, and Leonen, JJ., concur.

20. RECALLING A WITNESS IS THE


REMEDY TO CORRECT ERROR DURING
TRIAL AND NOT TO NULLIFY PRE-TRIAL.
Pdf.
21. AUTHENTICATION OF
DOCUMENT/POSITIVE IDENTIFICATION OF
ACCUSED; CIRCUMSTANTIAL EVIDENCE.
THIRD DIVISION
G.R. No. 191185, February 01, 2016
GUILBEMER FRANCO, Petitioner, v. PEOPLE OF THE
PHILIPPINES, Respondent.
DECISION
REYES, J.:
The Constitution presumes a person innocent until proven guilty by proof
beyond reasonable doubt. The prosecution cannot be allowed to draw strength

Page 23 of 89
from the weakness of the defense's evidence for it has the onus probandi in
establishing the guilt of the accused - ei incumbit probatio qui elicit, non que
negat he who asserts, not he who denies, must prove.1
chanRoble svirtualLawlibrary

Nature of the Case


Before the Court is a Petition for Review on Certiorari2 under Rule 45 of the
Rules of Court where petitioner Guilbemer Franco (Franco) assails the
Decision3 dated September 16, 2009 of the Court of Appeals (CA), in CA-G.R.
CR No. 31706, affirming the Decision4 dated February 27, 2008 of the Regional
Trial Court (RTC) of Manila, Branch 15, in Criminal Case No. 05-238613. The
RTC convicted Franco of the crime of Theft under an Information, which reads
as follows:
That on or about November 3, 2004, in the City of Manila, Philippines, the
said accused did then and there willfully, unlawfully and feloniously, with intent
to gain and without the knowledge and consent of the owner thereof, take,
steal and carry away one (1) Nokia 3660 Model cellular phone worth Php
18,500.00 belonging to BENJAMIN JOSEPH NAKAMOTO Y ERGUIZA to the
damage and prejudice of the said owner in the aforesaid amount of Php
18,500.00, Philippine Currency.
ChanRoblesVirtualawlibrary

Nakamoto, together with Jeoffrey Masangkay, a police officer who was also
working out at the gym, tried to locate Franco within the gym's vicinity but
they failed to find him. They proceeded to the police station and while there, a
report was received from another police officer that somebody saw Franco
along Coral Street, which is near the gym and that he was holding a cell phone.
They went to Coral Street but he was already gone. A vendor told them that he
saw a person who was holding a cell phone, which was then ringing and that
the person was trying to shut it off. When they went to Franco's house, they
were initially not allowed to come in but were eventually let in by Franco's
mother. They talked to Franco who denied having taken the cell phone. 9
chanroblesvirtuallawlibrary

Nakamoto then filed a complaint with the barangay but no settlement was
arrived thereat; hence, a criminal complaint for theft was filed against Franco
before the City Prosecutor's Office of Manila, docketed as I.S. No. 04K25849.10
chanroble svirtuallawlibrary

In his defense, Franco denied the charge, alleging that if Nakamoto had indeed
lost his cell phone at around 1:00 p.m., he and his witnesses could have
confronted him as at that time, he was still at the gym, having left only at
around 2:45 p.m.11 He also admitted to have taken a cap and cell phone from
the altar but claimed these to be his.12
chanRoble svirtualLawlibrary

Contrary to law.5
On September 5, 2005, Franco, assisted by counsel, pleaded not guilty to the
crime charged.6
chanroblesvirtuallawlibrary

Ruling of the RTC

chanRoble svirtualLawlibrary

The Facts

In its Decision dated February 27, 2008, the RTC convicted Franco of theft, the
dispositive portion of which reads:
IN VIEW OF THE FOREGOING, this Court finds [Franco], GUILTY beyond
reasonable doubt of the crime of theft penalized in paragraph I of Article 309 in
relation to Article 308 of the Revised Penal Code and hereby imposes upon him
the penalty of imprisonment of two (2) years, four (4) months and one (1) day
as minimum to seven (7) years and four (4) months as maximum and to pay
the complainant Php 18,500.00.
ChanRoblesVirtualawlibrary

The evidence for the prosecution established the following facts:


On November 3, 2004 at around 11:00 a.m., Benjamin Joseph Nakamoto
(Nakamoto) went to work out at the Body Shape Gym located at Malong
Street, Tondo, Manila. After he finished working out, he placed his Nokia 3660
cell phone worth PI8,500.00 on the altar where gym users usually put their
valuables and proceeded to the comfort room to change his clothes. After ten
minutes, he returned to get his cell phone, but it was already missing. Arnie
Rosario (Rosario), who was also working out, informed him that he saw Franco
get a cap and a cell phone from the altar. Nakamoto requested everyone not to
leave the gym, but upon verification from the logbook, he found out that
Franco had left within the time that he was in the shower.7

SO ORDERED.13
The RTC did not find Franco's defense credible and ruled that his denial cannot
be given evidentiary value over the positive testimony of Rosario. 14
chanroblesvirtuallawlibrary

chanroblesvirtuallawlibrary

Franco then appealed to the CA. 15

chanRoble svirtualLawlibrary

chanroble svirtuallawlibrary

The gym's caretaker, Virgilio Ramos (Ramos), testified that he saw Franco in
the gym but he was not working out and was just going around the area. In
fact, it was just Franco's second time at the gym. Ramos even met him near
the door and as Franco did not log out, he was the one who indicated it in their
logbook. When Nakamoto announced that his cell phone was missing and
asked that nobody leaves the place, he put an asterisk opposite the name of
Franco in the logbook to indicate that he was the only one who left the gym
after the cell phone was declared lost.8
chanroble svirtuallawlibrary

Ruling of the CA
In affirming the RTC decision, the CA found the elements of theft to have been
duly established. It relied heavily on the "positive testimony" of Rosario who
declared to have seen Franco take a cap and a cell phone from the altar. The
CA likewise gave credence to the testimony of Ramos who confirmed that it
was only Franco who left the gym immediately before Nakamoto announced
that his cell phone was missing. Ramos also presented the logbook and
affirmed having put an asterisk opposite the name "ELMER," which was entered
by the accused upon logging in. The CA stated that taken together, the

Page 24 of 89
foregoing circumstances are sufficient to support a moral conviction that
Franco is guilty, and at the same time, inconsistent with the hypothesis that he
is innocent.16 The CA further ruled that the RTC cannot be faulted for giving
more weight to the testimony of Nakamoto 17 and Rosario,18 considering that
Franco failed to show that they were impelled by an ill or improper motive to
falsely testify against him.19

In every criminal conviction, the prosecution is required to prove two things


beyond reasonable doubt: first, the fact of the commission of the crime
charged, or the presence of all the elements of the offense; and second, the
fact that the accused was the perpetrator of the crime. 24
chanroblesvirtuallawlibrary

chanroblesvirtuallawlibrary

In his petition for review, Franco presented the following issues for resolution,
to wit:
I.
ChanRoblesVirtualawlibrary

WHETHER THE HONORABLE [CA] ERRED IN GIVING WEIGHT AND CREDENCE


TO THE PROSECUTION WITNESSES' INCONSISTENT AND IRRECONCILABLE
TESTIMONIES.
chanRoblesvirtualLa wlibrary

II.
WHETHER THE HONORABLE [CA] ERRED IN AFFIRMING [FRANCO'S]
CONVICTION DESPITE THE FACT THAT THE SAME WAS BASED ON
FABRICATIONS AND PRESUMPTIONS.
chanRoble svirtualLawlibrary

III.
WHETHER. THE HONORABLE [CA] ERRED IN ACCEPTING THE VALUE OF THE
ALLEGEDLY STOLEN CELLULAR PHONE WITHOUT SUBSTANTIATING
EVIDENCE.20
Ruling of the Court
chanroblesvirtuallawlibrary

Preliminarily, the Court restates the rule that only errors of law and not of facts
are reviewable by this Court in a petition for review on certiorari under Rule 45
of the Revised Rules of Court. This rule applies with greater force when the
factual findings of the CA are in full agreement with that of the RTC. 21

Under Article 308 of the Revised Penal Code, the essential elements of the
crime of theft are: (1) the taking of personal property; (2) the property
belongs to another; (3) the taking away was done with intent to gain; (4) the
taking away was done without the consent of the owner; and (5) the taking
away is accomplished without violence or intimidation against person or force
upon things.25
cralawred

The corpus delicti in theft has two elements, to wit: (1) that the property was
lost by the owner; and (2) that it was lost by felonious taking. 26 In this case,
the crucial issue is whether the prosecution has presented proof beyond
reasonable doubt to establish the corpus delicti of the crime. In affirming
Franco's conviction, the CA ruled that the elements were established. Moreover,
the RTC and the CA apparently relied heavily on circumstantial evidence.
To sustain a conviction based on circumstantial evidence, Section 4, Rule 133
of the Rules of Court provides that the following requisites must concur: (1)
there must be more than one circumstance to convict; (2) the facts on which
the inference of guilt is based must be proved; and (3) the combination of all
the circumstances is such as to produce a conviction beyond reasonable doubt.
With respect to the third requisite, it is essential that the circumstantial
evidence presented must constitute an unbroken chain, which leads one to a
fair and reasonable conclusion pointing to the accused, to the exclusion of
others, as the guilty person.27
chanroblesvirtuallawlibrary

The prosecution presented three (3) witnesses - Nakamoto, the complainant;


Ramos, the gym's caretaker; and Rosario, another gym user.

chanroblesvirtuallawlibrary

The rule, however, is not ironclad. A departure therefrom may be warranted


when it is established that the RTC ignored, overlooked, misconstrued or
misinterpreted cogent facts and circumstances, which, if considered, will
change the outcome of the case. Considering that what is at stake here is
liberty, the Court has carefully reviewed the records of the case 22 and finds that
Franco should be acquitted.
Failure of the prosecution to prove Franco's guilt beyond reasonable
doubt
The burden of such proof rests with the prosecution, which must rely on the
strength of its case rather than on the weakness of the case for the defense.
Proof beyond reasonable doubt, or that quantum of proof sufficient to produce
a moral certainty that would convince and satisfy the conscience of those who
act in judgment, is indispensable to overcome the constitutional presumption
of innocence.23
chanroble svirtuallawlibrary

Their testimonies established the following circumstances: (1) Nakamoto


placed his cell phone on the altar,28 left and went to change his clothes, and
alter ten minutes, returned to get his cell phone but the same was already
missing;29 (2) Rosario saw Franco get a cap and a cell phone from the same
place;30 and (3) Ramos saw Franco leave the gym at 1:15 p.m. and the latter
failed to log out in the logbook.31 The RTC and the CA wove these
circumstances in order to arrive at the "positive identification" of Franco as the
perpetrator.32
chanroble svirtuallawlibrary

A perusal of their testimonies, however, shows that certain facts have been
overlooked by both courts.
For one, it was only Rosario who saw Franco get a cap and a cell phone from
the altar. His lone testimony, however, cannot be considered a positive
identification of Franco as the perpetrator.33
chanroblesvirtuallawlibrary

Page 25 of 89
In People v. Pondivida,34 the Court held:
Positive identification pertains essentially to proof of identity and not per se to
that of being an eyewitness to the very act of commission of the crime. There
are two types of positive identification. A witness may identify a suspect or
accused in a criminal case as the perpetrator of the crime as an eyewitness to
the very act of the commission of the crime. This constitutes direct evidence.
There may, however, be instances where, although a witness may not have
actually seen the very act of commission of a crime, he may still be able to
positively identify a suspect or accused as the perpetrator of a crime as for
instance when the latter is the person or one of the persons last seen with the
victim immediately before and right after the commission of the crime. This is
the second, type of positive identification, which forms part of circumstantial
evidence, which, when taken together with other pieces of evidence
constituting an unbroken chain, leads to only fair and reasonable conclusion,
which is that the accused is the author of the crime to the exclusion of all
others. x x x.35 (Emphasis omitted and underscoring ours)
Rosario's testimony definitely cannot fall under the first category of positive
identification. While it may support the conclusion that Franco took a cell phone
from the altar, it does not establish with certainty that what Franco feloniously
took, assuming that he did, was Nakamoto's cell phone. Rosario merely
testified that Franco took "a cell phone." He stated:
ChanRoblesVirtualawlibrary

A:

Yes, sir.

Q:

And after assisting you, what did Franco do?

A:

He took the cell phone of Mr. Nakamoto and his


cap at the same time and covered the cell phone
by his cap and left the place.

Q:

Where was that cell phone of the private


complainant placed at that time?

A:

At the top of the altar where is [sic] cap is also


located.

Q:

How far was that altar from where you were


working?

A:

Only inches.

Q:

It was directly in front of you?

A:

Yes, sir.

ChanRoblesVirtualawlibrary

Q:

How did you know that the said cell phone was
taken by the accused?

A:

[W]e were then in a conversation when I asked


him to spot or assist me with the weights that I
intended to carry. We were then situated in an
area very near the altar where his cap and cell
phone were placed. After assisting me, he
went to the area and took the cell phone and
the cap at the same time.

Q:

[W]ho were you talking [sic] at that time?

A:

Guilbemer Franco.

Q: What did you do when the accused took the


cap as well as the cell phone of the private
complainant?
A:

Q:

It was also [G]uilbemer Franco who helped or spot


you in the work out?

None, sir. I thought the cap and cell phone


was his.

Page 26 of 89

Q: How did you know that the cell phone


belongs to the private complainant?
A:

After Mr. Nakamoto came out from the


shower, he went directly to the altar to get
his cell phone which was not there anymore
and asked us where his cell phone and I told
him that I saw Mr. Franco get a cell phone
from that area.36 (Emphasis ours)

On cross-examination, Rosario also stated that he did not actually see Franco
take Nakamoto's cell phone37 but on re-direct, he clarified that he did not see
the cell phone of Nakamoto because he thought that the cell phone was owned
by Franco.38
chanroblesvirtuallawlibrary

What was firmly established by Rosarios testimony is that Franco took a cell
phone from the altar. But Franco even admitted such fact. 39 What stands out
from Rosario's testimony is that he was unable to particularly describe at first
instance what or whose cell phone Franco took from the altar. lie only assumed
that it was Nakamoto's at the time the latter announced that his cell phone was
missing. This was, in tact, observed by the RTC in the course of Rosario's
testimony, thus:
ChanRoblesVirtualawlibrary

COURT:

A:

What you actually saw was, [G]uilbemer


Franco was taking his cap together with the
cell phone placed beside the cap but you do
not know that [the] cell phone was Bj's or
Nakamoto's?

Q:

And on that day, you were able to see that


Nakamoto on four incidents, when he logged-in,
during work-out and when he went inside the C.
[R].?

A:

Yes, sir.

Q: Therefore, you did not see Nakamoto place


his cell phone at the Altar?
A:

Ramos, the gym caretaker, also testified that he did not see Franco take
Nakamoto's cell phone and only assumed that the cell phone on the altar was
Nakamoto's, thus -

Q: And do you know who owns that cell phone put


[sic] over the altar?
A:

A:

[Y]es, Your Honor.

Yes, Ma'am.40 (Emphasis ours)

Moreover, it must be noted that save for Nakamoto's statement that he placed
his cell phone at the altar, no one saw him actually place his cell phone there.
This was confirmed by Rosario -

COURT:

Benjamin Nakamoto.

Q: How do you know that it belongs to Benjamin


Nakamoto?
He is the only one who brings a cell phone to the
gym.
xxxx

COURT: You just presumed that the cell phone


taken by Guilbemer Franco was his?
A:

Yes, sir.41 (Emphasis ours)

Q: [D]id you actually see him take the cell phone of


Nakamoto?
A:

I did not see him take the [cell] phone but as soon
as the cell phone was lost, he was the only one
who left the gym.42
chanroble svirtuallawlibrary

Page 27 of 89
Neither can the prosecution's testimonial evidence fall under the second
category of positive identification, that is, Franco having been identified as the
person or one of the persons last seen immediately before and right after the
commission of the theft. Records show that there were other people in the gym
before and after Nakamoto lost his cell phone. In fact, Nakamoto himself
suspected Rosario of having taken his cell phone, thus:

Q: You did not suspect [Rosario] to have taken


the cell phone?

ChanRoblesVirtualawlibrary

ATTY. SANCHEZ:

A:

I also suspected, sir.43 (Emphasis ours)

Moreover, the prosecution witnesses confirmed that the altar is the usual spot
where the gym users place their valuables. According to Rosario:
ChanRoblesVirtualawlibrary

You said that you stayed inside the rest room for
more or less 10 minutes?

ATTY. SANCHEZ:
Q:

And in that place, you said there was a Sto. Nino?

A:

[Y]es, sir.

A:

At the Altar.

Q:

After 10 minutes, you don't know whether aside


from Franco somebody went out from the gym
because you were inside the c.r.?

Q: Those who work-out in that gym usually


place their things [on top of] the altar.

A:

Yes. sir.

Q:

xxxx

A:

Q: Therefore, there were people who place their


cell phones on top [of] the Altar?
A:

Q:

A:

As a matter of fact, one of your witness[es] who


went near the place where your cell phone was
placed was this Arnie Rosario?
Yes, sir.

Q:

And it was only the accused and [Rosario] who


were near the place where you said you placed
the cell phone?

A:

Yes, sir.

Yes, sir.

Yes, sir.

Q: Aside from Nakamoto, other people place


their things on top [of] the Altar?
A:

Yes, sir.44 (Emphasis ours)

The prosecution's evidence does not rule out the following possibilities: one,
that what Franco took was his own cell phone; two, even on the assumption
that Franco stole a cell phone from the altar, that what he feloniously took was
Nakamoto's cell phone, considering the feet that at the time Nakamoto was
inside the changing room, other people may have placed their cell phone on
the same spot; and three, that some other person may have taken Nakamoto's
cell phone.
It must be emphasized that "[c]ourts must judge the guilt or innocence of the

Page 28 of 89
accused based on facts and not on mere conjectures, presumptions, or
suspicions."45 It is iniquitous to base Franco's guilt on the presumptions of the
prosecution's witnesses for the Court has, time and again, declared that if the
inculpatory facts and circumstances are capable of two or more interpretations,
one of which being consistent with the innocence of the accused and the other
or others consistent with his guilt, then the evidence in view of the
constitutional presumption of innocence has not fulfilled the test of moral
certainty and is thus insufficient to support a conviction. 46
chanroble svirtuallawlibrary

Franco also asserts that the logbook from which his time in and time out at the
gym was based was not identified during the trial and was only produced after
Ramos testified.47 Ramos testified that when Nakamoto announced that his cell
phone was missing and asked that nobody leaves the place, he put an asterisk
opposite the name of Franco in the logbook to indicate that he was the only
one who left the gym after the cell phone was declared lost. 48
chanroble svirtuallawlibrary

Under the Rules on Evidence, documents are either public or private. Private
documents are those that do not fall under any of the enumerations in Section
19, Rule 132 of the Rules of Court.49Section 20 of the same Rule, in turn,
provides that before any private document is received in evidence, its due
execution and authenticity must be proved either by anyone who saw the
document executed or written, or by evidence of the genuineness of the
signature or handwriting of the maker.50
chanroblesvirtuallawlibrary

In this case, the foregoing rule was not followed. The testimony of Ramos
shows that the logbook, indeed, was not identified and authenticated during
the course of Ramos' testimony. At the time when Ramos was testifying, he
merely referred to the log in and log out time and the name of the person at
page 104 of the logbook that appears on line 22 of the entries for November 3,
2004. This was photocopied and marked as Exhibit "C-1." 51 Meanwhile, when
Nakamoto was presented as rebuttal witness, a page from the logbook was
again marked as Exhibit "D."52 The logbook or the particular page referred to
by Ramos was neither identified nor confirmed by him as the same logbook
which he used to log the ins and outs of the gym users, or that the writing and
notations on said logbook was his.
The prosecution contends, meanwhile, that the RTC's evaluation of the
witnesses' credibility may no longer be questioned at this stage.53 The Court is
not unmindful of the rule that the assignment of value and weight to the
testimony of a witness is best left to the discretion of the RTC. But an
exception to that rule shall be applied in this ease where certain facts of
substance and value, if considered, may affect the result. 54 In Lejano v.
People,55 the Court stated:
A judge must keep an open mind. He must guard against slipping into hasty
conclusion, often arising from a desire to quickly finish the job of deciding a
case. A positive declaration from a witness that he saw the accused commit the
crime should not automatically cancel out the accused's claim that he did not
do it. A lying witness can make as positive an identification as a truthful
ChanRoblesVirtualawlibrary

witness can. The lying witness can also say as forthrightly and unequivocally,
"He did it!" without blinking an eye.56
The facts and circumstances proven by the prosecution, taken together, are not
sufficient to justify the unequivocal conclusion that Franco feloniously took
Nakamoto's cell phone. No other convincing evidence was presented by the
prosecution that would link him to the theft.57 The fact Franco took a cell phone
from the altar does not necessarily point to the conclusion that it was
Nakamoto's cell phone that he took. In the appreciation of circumstantial
evidence, the rule is that the circumstances must be proved, and not
themselves presumed. The circumstantial evidence must exclude the
possibility that some other person has committed the offense charged. 58
chanroble svirtuallawlibrary

chanroblesvirtuallawlibrary

Franco, therefore, cannot be convicted of the crime charged in this case. There
is not enough evidence to do so. As a rule, in order to support a conviction on
the basis of circumstantial evidence, all the circumstances must be consistent
with the hypothesis that the accused is guilty. In this case, not all the facts on
which the inference of guilt is based were proved. The matter of what and
whose cell phone Franco took from the altar still remains uncertain.
chanRoble svirtualLawlibrary

Franco's defense of denial


The evidence of the prosecution must stand on its own weight and not rely on
the weakness of the defense.59 In this case, Franco did not deny that he was at
the Body Shape Gym on November 3, 2004, at around 1:00 p.m. and left the
place at around 2:45 p.m.60 He did not even deny that he took a cell phone
from the altar together with his cap. What he denied is that he took
Nakamoto's cell phone and instead, claimed that what he took is his own cell
phone.61 Denial may be weak but courts should not at once look at them with
disfavor. There are situations where an accused may really have no other
defenses but denial, which, if established to be the truth, may tilt the scales of
justice in his favor, especially when the prosecution evidence itself is weak. 62

chanroble svirtuallawlibrary

While it is true that denial partakes of the nature of negative and self-serving
evidence and is seldom given weight in law,63 the Court admits an exception
established by jurisprudence that the defense of denial assumes: significance
when the prosecution's evidence is such that it does not prove guilt beyond
reasonable doubt.64 The exception applies in the case at hand. The prosecution
failed to produce sufficient evidence to overturn the constitutional guarantee
that Franco is presumed to be innocent.
chanRoblesvirtualLa wlibrary

Value of the cell phone


It is also argued by Franco that the value of the cell phone must be duly
proved with reasonable degree of certainty. On the other hand, the people
contended that there has been a judicial admission of the same. 65 This issue,
however, is now moot and academic considering Franco's acquittal.
chanRoblesvirtualLa wlibrary

Conclusion

Page 29 of 89
The circumstantial evidence proven by the prosecution in this case failed to
pass the test of moral certainty necessary to warrant Franco's conviction.
Accusation is not synonymous with guilt.66 Not only that, where the inculpatory
facts and circumstances are capable of two or more explanations or
interpretations, one of which is consistent with the innocence of the accused
and the other consistent with his guilt, then the evidence does not meet or
hurdle the test of moral certainty required for conviction. 67
chanroblesvirtuallawlibrary

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


dated September 16, 2009 in CA-GR. CR No. 31706 is
hereby REVERSED and SET ASIDE. Petitioner Guilbemer Franco
is ACQUITTED of the crime of Theft charged in Criminal Case No. 05-238613
because his guilt was not proven beyond reasonable doubt.

should not be encouraged.


There is likewise serious reversible error, even grave abuse of discretion, when
the Sandiganbayan dismisses a case on demurrer to evidence without a full
statement of its evaluation of the evidence presented and offered and the
interpretation of the relevant law. After all, dismissal on the basis of demurrer
to evidence is similar to a judgment. It is a final order ruling on the merits of a
case.
This is a Petition1 for Review on Certiorari assailing the Sandiganbayan
Resolutions dated May 25, 20062 and September 13, 2006.3 The
Sandiganbayan deemed petitioner Republic of the Philippines (Republic) to
have waived the filing of its Formal Offer of Evidence 4 and granted the Motion
to Dismiss of respondents Spouses Ignacio Gimenez and Fe Roa Gimenez
(Gimenez Spouses) based on demurrer to evidence. 5
chanroblesvirtuallawlibrary

No costs.
SO ORDERED.

cralawla wlibrary

Velasco, Jr., (Chairperson), Peralta, Perez, and Jardeleza, JJ., concur.

cralawla wlibrary

22. FORMAL OFFER; LIBERAL ADMISSION


OF EVIDENCE.
G.R. No. 174673, January 11, 2016

The Republic, through the Presidential Commission on Good Government


(PCGG), instituted a Complaint6 for Reconveyance, Reversion, Accounting,
Restitution and Damages against the Gimenez Spouses before the
Sandiganbayan.7 "The Complaint seeks to recover . . . ill-gotten wealth . . .
acquired by [the Gimenez Spouses] as dummies, agents[,] or nominees of
former President Ferdinand E. Marcos and Imelda Marcos[.]"8
chanroble svirtuallawlibrary

During trial, the Republic presented documentary evidence attesting to the


positions held, business interests, income, and pertinent transactions of the
Gimenez Spouses.9 The Republic presented the testimonies of Atty. Tereso
Javier, Head of the Sequestered Assets Department of PCGG, and of Danilo R.V.
Daniel, Director of the Research and Development Department of
PCGG.10 Witnesses testified on the bank accounts and businesses owned or
controlled by the Gimenez Spouses.11
chanroblesvirtuallawlibrary

REPUBLIC OF THE PHILIPPINES, Petitioner, v. FE ROA GIMENEZ AND


IGNACIO B. GIMENEZ, Respondents.
DECISION

On February 27, 2006, the Sandiganbayan denied a motion to recall Danilo R.V.
Daniel's testimony.12The Republic then manifested that it was "no longer
presenting further evidence."13 Accordingly, the Sandiganbayan gave the
Republic 30 days or until March 29, 2006 "to file its formal offer of
evidence."14
chanroblesvirtuallawlibrary

LEONEN, J.:
Rules of procedure are not ends in themselves. The object of these rules is to
assist and facilitate a trial court's function to be able to receive all the evidence
of the parties, and evaluate their admissibility and probative value in the
context of the issues presented by the parties' pleadings in order to arrive at a
conclusion as to the facts that transpired. Having been able to establish the
facts, the trial court will then be able to apply the law and determine whether a
complainant is deserving of the reliefs prayed for in the pleading.
Dismissal on the basis of a very strict interpretation of procedural rules without
a clear demonstration of the injury to a substantive right of the defendant
weighed against 19 years of litigation actively participated in by both parties

On March 29, 2006, the Republic moved "for an extension of thirty (30) days
or until April 28, 2006, within which to file [its] formal offer of evidence." 15 This
Motion was granted by the Sandiganbayan in a Resolution of the same
date.16
chanroble svirtuallawlibrary

On April 27, 2006, the Republic moved for an additional 15 days or until May
13, 2006 within which to file its Formal Offer of Evidence. 17 This Motion was
granted by the Sandiganbayan in a Resolution dated May 8, 2006. 18 Following
this, no additional Motion for extension was filed by the Republic.
In the first assailed Resolution dated May 25, 2006, the Sandiganbayan
noted that the Republic failed to file its Formal Offer of Evidence

Page 30 of 89
notwithstanding repeated extensions and the lapse of 75 days from the date it
terminated its presentation of evidence.19 Thus, it declared that the Republic
waived the filing of its Formal Offer of Evidence. 20
chanroble svirtuallawlibrary

The first assailed Resolution provides:


It appearing that the plaintiff has long terminated the presentation of its
evidence on February 27, 2006, and it appearing further that it failed or
otherwise neglected to file its written formal offer of evidence for an
unreasonable period of time consisting of 75 days (i.e., 30 days original period
plus two extension periods totaling 45 days), the filing of said written formal
offer of evidence is hereby deemed WAIVED.
WHEREFORE, the reception of the defendants' evidence shall proceed on June
22 and 23, 2006, both at 8:30 o'clock [sic] in the morning as previously
scheduled.21
chanrobleslaw

Ignacio Gimenez filed a Motion to Dismiss on Demurrer to Evidence dated May


30, 2006.22 He argued that the Republic showed no right to relief as there was
no evidence to support its cause of action.23Fe Roa Gimenez filed a Motion to
Dismiss dated June 13, 2006 on the ground of failure to prosecute. 24Through
her own Motion to Dismiss, she joined Ignacio Gimenez's demurrer to
evidence.25
cralawred

account of Fe Roa Gimenez under Account Number 021000021, proving that


she issued several checks drawn against her TCMB account, payable to
individuals and entities such as Gliceria Tantoco, Vilma Bautista and The
Waldorf Towers, involving substantial sums in US Dollars. Exhibit N is the
Philippine National Bank (PNB), New York Branch Office Charge Ticket No. FT
56880 dated December 9, 1982 in the amount of US$30,000.00 for Fe Roa
Gimenez proving that she received said enormous amount from the PNB, New
York Branch Office, with clearance from the Central Bank, which amount was
charged against PNB Manila. Exhibit N-1 is the PNB New York Branch Advice
to Payee No. FT 56535 dated November 12, 1982 in the amount of
US$10,990.00 for Fe Roa Gimenez proving her receipt of such amount as
remitted from California Overseas Bank, Los Angeles. Exhibits O and series
(O1-O-8) refer to several Advices made by Bankers Trust AG Zurich-Geneve
Bank in Switzerland to respondent Fe Roa Gimenez proving that she
maintained a current account with said bank under Account Number 107094.50
and that from July 30, 1984 to August 30, 1984, she placed a substantial
amount on time deposit in several banks, namely, Hypobank, Luzemburg,
Luxemburg, Societe Generale, Paris and Bank of Nova Scotia, London.
Exhibit P is the Certification dated March 19, 2002 issued by Director Florino
O. Ibanez of the Office of the President proving that Fe Roa Gimenez, from
January 1, 1966 to April 1, 1986, worked with the Office of the President under
different positions, the last of which as Presidential Staff Director with a salary
of P87,072.00 per annum.

Two days after Fe Roa Gimenez's filing of the Motion to Dismiss or on June 15,
2006, the Republic filed a Motion for Reconsideration [of the first assailed
Resolution] and to Admit Attached Formal Offer of Evidence. 26 The pertinent
portions of the Republic's offer of documentary exhibits attached to the Motion
are summarized as follows:

Exhibit Q and series (Q-1-Q-18) is the Affirmation of Ralph Shapiro filed


with the United States Court of Appeals in the case entitled, "The Republic of
the Philippines vs. Ferdinand E. Marcos, et al." which discussed certain acts of
Fe Roa Gimenez and Vilma Bautista, among others, in relation to the funds of
the Marcoses.

Exhibits A to G and series consist of the Income Tax Returns, Certificate of


Income Tax Withheld On Compensation, Statement of Tax Withheld At Source,
Schedule of Interest Income, Royalties and Withholding Tax, Statement of
Assets, Liabilities & Net Worth of Ignacio B. Gimenez from 1980-1986 proving
his legitimate income during said period. Exhibits H -J and series refer to the
Deeds of Sale and Transfer Certificates of Title proving that spouses Gimenezes
acquired several real properties.

Exhibits R and S and series (R-1, R-9; S-1-S-10) refer to the Certificate of
Filing of Amended Articles of Incorporation of GEI Guaranteed Education, Inc.,
the Amended Articles of Incorporation of GEI Guaranteed Education, Inc., the
Treasurer's Affidavit executed by Ignacio Gimenez and the Director's Certificate
executed by Roberto B. Olanday, Ignacio Gimenez and Roberto Coyuto, Jr.
proving Ignacio Gimenez and Roberto Olanday's interests in GEI Guaranteed
Education, Inc.

Exhibits K and series (K-1-K-4) pertain to Checking Statements Summary


issued by the Bankers Trust Company (BTC) proving that Fe Roa Gimenez
maintained a current account under Account Number 34-714-415 with
BTC. Exhibits L and series (L1-L-114) are several BTC checks, proving that
from June 1982 to April 1984, Fe Roa Gimenez issued several checks against
her BTC Current Account No. 34-714-415 payable to some individuals and
entities such as Erlinda Oledan, Vilma Bautista, The Waldorf Towers, Cartier,
Gliceria Tantoco, Bulgari, Hammer Galleries and Renato Balestra, involving
substantial amount of money in US Dollars. Exhibits M and series (M1-M25) are several The Chase Manhattan Bank (TCMB) checks drawn against the

Exhibits T and series (T-1-T-8) are the Advices made by the Bankers Trust
AG Zurich-Geneve Bank in Switzerland to Ignacio Gimenez proving that he
maintained a current account with said bank under Account Number 101045.50
and that from March to June, 1984, he placed a substantial amount on time
deposit in several banks, namely, Credit Lyonnais, Brussels, Societe Generate,
Paris, Credit Commercial De France, Paris and Bank of Nova Scotia, London.
Exhibits U and V and series (U-1-U-5; V1-V-18) consist of the Affidavit
dated April 25, 1986 and the Declaration dated June 23, 1987 including the
attachments, of Oscar Carino, Vice-President and Manager of the PNB New York

Page 31 of 89
Branch, narrating in detail how the funds of the PNB New York Branch were
disbursed outside regular banking business upon the instructions of former
President Ferdinand E. Marcos and Imelda Marcos using Fe Roa Gimenez and
others as conduit.

Exhibit KK is the Table of Contents of Civil Case No. [0]007 before the
Sandiganbayan entitled "Republic of the Philippines vs. Ignacio B. Gimenez and
Fe Roa Gimenez, et. al.", including its Annexes which prove the assets and
liabilities of spouses Gimenezes.

Exhibits W and series (W-1-W-4) are the Debit memos from the PNB to Fe
Roa Gimenez while Exhibits X and X-1 are the Acknowledgments of said
respondent, proving that she received substantial amounts of money which
were coursed through the PNB to be used by the Marcos spouses for state
visits and foreign trips.

Exhibits KK-1 up to KK-12 are several transfer certificates of title and tax
declarations in the names of spouses Gimenezes, proving their acquisition of
several real properties.

Exhibit Y and series (Y-1-Y-2) is the Letter dated August 25, 1986 of Juan
C. Gatmaitan, Assistant Chief Legal Counsel of PNB to Charles G. LaBella,
Assistant United States Attorney regarding the ongoing investigation of
irregular transactions at the PNB, New York Branch proving that PNB
cooperated with the United States government in connection with the
investigation on the irregular transactions of Oscar Carino at PNB New York
Branch.
Exhibit Z is the service record of Fe Roa Gimenez issued by Florino O. Ibanez
of the Office of the President which proves that she worked with the Office of
the President from 1966-1986 holding different positions, the last of which was
Presidential Staff Director.
Exhibits AA and series (AA-1-AA-2) are the several Traders Royal Bank
checks drawn against Account No. 74-702836-9 under the account name of Fe
Roa Gimenez which prove that she issued said checks payable to individuals
and entities involving substantial amount of money.
Exhibits BB and CC and series (BB-1-BB-17; CC-1-CC-3) are the several
Transfer of Funds Advice from Traders Royal Bank Statements of Account of Fe
Roa Gimenez, proving that she maintained a current account under Account
No. 74-7028369 at Traders Royal Bank.
Exhibits HH and series (HH-1-HH-3) are the Certification dated October 3,
2002 of Lamberto R. Barbin, Officer-in-Charge, Malacanang Records Office,
that the Statement of Assets and Liabilities of spouses Marcoses for the years
1965 up to 1986 are not among the records on file in said Office except 1965,
1967 and 1969; the Statement of Assets and Liabilities as of December 31,
1969 and December 31, 1967 of former President Ferdinand Marcos; and the
Sworn Statement of Financial Condition, Assets, Income and Liabilities as of
December 31, 1965 of former President Ferdinand Marcos. These documentary
exhibits prove the assets and liabilities of former President Marcos for the years
1965, 1967 and 1969.
Exhibit II and series is [sic] the Statement of Assets and Liabilities as of
December 31,1969 submitted by Fe Roa Gimenez which prove that her assets
on that period amounted only to P39,500.00.

Exhibits KK-15, KK-18, KK-20 up to KK-27, KK-30, KK-32 up to KK-38


and KK-40 are the General Information Sheet, Certificate of Filing of Amended
Articles of Incorporation, and Amended Articles of Incorporation of various
corporations. These prove the corporations in which Ignacio B. Gimenez has
substantial interests.
Exhibits KK-41 up to KK-44 are the Writs and Letters of Sequestration
issued by the PCGG which prove that the shares of stocks of Ignacio Gimenez
in Ignacio B. Gimenez, Securities, Inc. and the real properties covered by
Transfer Certificates of Title Nos. 137638, 132807, 126693 and 126694 located
in San Fabian, Pangasinan, were sequestered by the PCGG.
Exhibit KK-45 is the Memorandum dated August 1, 1988 of Atty. Ralph S. Lee
and Alexander M. Berces, Team Supervisor and Investiogator, [sic]
respectively, of IRD, PCGG, proving that the PCGG conducted an investigation
on New City Builders, Inc., Transnational Construction Corporation, and OTO
Construction and Development Corporation in relation to Ignacio B. Gimenez
and Roberto O. Olanday.
Exhibits KK-48, KK-49 and KK-50 are certain Lis Pendens from the PCGG
addressed to the concerned Register of Deeds informing that the real
properties mentioned therein had been sequestered and are the subject of Civil
Case No. [0]007 before the Sandiganbayan.
Exhibits KK-51, KK-51-A, KK-52 and KK-52-A are the Letter and Writ of
Sequestration issued by the PCGG on Allied Banking Corporation and
Guaranteed Education Inc. pursuant to its mandate to go after ill-gotten
wealth.
Exhibits NN, 00, PP, QQ and QQ-1 refer to the Memorandum To All
Commercial Banks dated March 14, 1986 issued by then Central Bank
Governor Jose B. Fernandez and the Letter dated March 13, 1986 of Mary
Concepcion Bautista, PCGG Commissioner addressed to then Central Bank
Governor Fernandez requesting that names be added to the earlier request of
PCGG Chairman Jovito Salonga to instruct all commercial banks not to allow
any withdrawal or transfer of funds from the market placements under the
names of said persons, to include spouses Gimenezes, without authority from
PCGG.
Exhibits KK and series, NN, OO, PP, QQ and QQ-1 which prove the various

Page 32 of 89
real properties, business interests and bank accounts owned by spouses
Gimenezes were part of the testimony of Atty. Tereso Javier.
Exhibit RR and series (RR-1-RR-23) are the Affidavit dated July 24, 1987 of
Dominador Pangilinan, Acting President and President of Trader's Royal Bank,
and the attached Recapitulation, Status of Banker's Acceptances, Status of
Funds and Savings Account Ledger wherein he mentioned that Malacanang
maintained trust accounts at Trader's Royal Bank, the balance of which is
approximately 150-175 million Pesos, and that he was informed by Mr. Rivera
that the funds were given to him (Rivera) by Fe Roa Gimenez for deposit to
said accounts.
Exhibits SS and series (SS-1-SS-29) are the Affidavit dated July 23, 1987
of Apolinario K. Medina, Executive Vice President of Traders Royal Bank and
attachments, which include Recapitulation, Status of Funds, and Messages
from Traders Royal Bank Manila to various foreign banks. In his Affidavit,
Medina divulged certain numbered confidential trust accounts maintained by
Malacanang with the Trader's Royal Bank. He further stated that the deposits
were so substantial that he suspected that they had been made by President
Marcos or his family.
Exhibit TT and series (TT-1-TT-3) is [sic] the Memorandum dated July 19,
2005 of Danilo R.V. Daniel, then Director of the Research and Development
Department of PCGG regarding the investigation conducted on the ill-gotten
wealth of spouses Gimenezes, the subject matter of Civil Case No. [0]007. He
revealed that during the investigation on the ill-gotten wealth of spouses
Gimenezes, it was found out that from 1977 to 1982, several withdrawals, in
the total amount of P75,090,306.42 were made from Trust Account No. 128
(A/C 76-128) in favor of I.B. Gimenez, I.B. Gimenez Securities and Fe Roa
Gimenez.
Exhibits RR, SS, TT and their series prove that spouses Gimenez maintained
bank accounts of substantial amounts and gained control of various
corporations. These are also being offered as part of the testimony of Danilo
R.V. Daniel.27 (Emphasis in the original, citations omitted)
In the second assailed Resolution dated September 13, 2006, the
Sandiganbayan denied the Republic's Motion for Reconsideration and granted
the Gimenez Spouses' Motion to Dismiss.28According to the Sandiganbayan:

the plaintiff's counsel appear to be the same missing documents since 2004, or
almost two (2) years ago. The plaintiff had more than ample time to locate
them for its purpose. . . . Since they remain missing after lapse of the period
indicated by the Court, there is no reason why the search for these documents
should delay the filing of the formal offer of evidence.
[Petitioner's] counsel . . . admits that faced with other pressing matters, he
lost track of the time. We cannot just turn a blind eye on the negligence of the
parties and in their failure to observe the orders of this Court. The carelessness
of [petitioner's] counsel in keeping track of the deadlines is an unacceptable
reason for the Court to set aside its Order and relax the observance of the
period set for filing the formal offer of evidence. 29 (Citation omitted)
The Sandiganbayan also found that the Republic failed to prosecute its case for
an unreasonable length of time and to comply with the court's rules. 30 The
court also noted that the documentary evidence presented by the Republic
consisted mostly of certified true copies.31 However, the persons who certified
the documents as copies of the original were not presented. 32 Hence, the
evidence lacked probative value.33 The dispositive portion of the assailed
Resolution reads:
ACCORDINGLY, there being no valid and cogent justification shown by the
plaintiff for the Court to Grant its Motion for Reconsideration and admit its
Formal Offer of Evidence, the plaintiff's Motion for Reconsideration and to
Admit Attached Formal Offer of Evidence is DENIED. The Motion to Dismiss on
Demurrer to Evidence filed by the defendant Ignacio B. Gimenez and adopted
by defendant Fe Roa Gimenez is GRANTED. The case is then DISMISSED.
SO ORDERED.34 (Emphasis in the original)
The Republic filed its Petition for Review on Certiorari dated November 3, 2006
before this court.35
chanroble svirtuallawlibrary

The Gimenez Spouses were required to comment on the Petition. 36 This court
noted the separate Comments37 filed by the Gimenez Spouses.38 The Republic
responded to the Comments through a Consolidated Reply39 dated June 22,
2007.
In the Resolution40 dated August 29, 2007, this court required the parties to
submit their memoranda.41
chanroblesvirtuallawlibrary

While it is true that litigation is not a game of technicalities and that the higher
ends of substantial justice militate against dismissal of cases purely on
technical grounds, the circumstances of this case show that the ends of justice
will not be served if this Court allows the wanton disregard of the Rules of
Court and of the Court's orders. Rules of procedure are designed for the proper
and prompt disposition of cases. . . .
The reasons invoked by the plaintiff to justify its failure to timely file the formal
offer of evidence fail to persuade this Court. The missing exhibits mentioned by

On February 18, 2008, this court resolved to require the parties to "move in
the premises[.]"42
chanroble svirtuallawlibrary

On March 2, 2012, the Republic filed a Motion for Leave to Re-open


Proceedings, to File and Admit Attached Supplement to the Petition for
Certiorari.43 In this Supplement, the Republic argued that the second assailed
Resolution dated September 13, 2006 was void for failing to state the facts and
the law on which it was based.44 This Motion was granted, and the Gimenez

Page 33 of 89
Spouses were required to file their Comment on the Supplement to the
Petition.45 Thereafter, the Republic filed its Reply.46

Sandiganbayan, cannot be stressed enough. Due process is enshrined in the


Constitution, specifically the Bill of Rights.55 "Due process [in criminal cases]
guarantees the accused a presumption of innocence until the contrary is
proved[.]"56 "Mere suspicion of guilt should not sway judgment."57

chanroblesvirtuallawlibrary

Fe Roa Gimenez filed a Rejoinder47 dated December 19, 2012 which was
expunged by this court in a Resolution48 dated January 23, 2013. Ignacio
Gimenez's Motion for Leave to File and Admit Attached Rejoinder 49 was
denied.50

chanroblesvirtuallawlibrary

To determine whether a petition for review is the proper remedy to assail the
Sandiganbayan Resolutions, we review the nature of actions for reconveyance,
revision, accounting, restitution, and damages.

chanroble svirtuallawlibrary

The Republic raised the following issues:


Whether or not the Sandiganbayan gravely erred in dismissing the case in the
light of the allegations in the Complaint which were substantiated by
overwhelming evidence presented vis-a-vis the material admissions of spouses
Gimenezes as their answer failed to specifically deny that they were dummies
of former President Ferdinand E. Marcos and that they acquired illegal wealth
grossly disproportionate to their lawful income in a manner prohibited under
the Constitution and Anti-Graft Statutes.
Whether or not the Sandiganbayan gravely erred in denying petitioner's Motion
to Admit Formal Offer of Evidence on the basis of mere technicalities, depriving
petitioner of its right to due process.
Whether or not the Sandiganbayan gravely erred in making a sweeping
pronouncement that petitioner's evidence do not bear any probative value. 51

chanroble slaw

The issues for consideration of this court are:

Republic Act No. 137958 provides for the procedure by which forfeiture
proceedings may be instituted against public officers or employees who "[have]
acquired during his [or her] incumbency an amount of property which is
manifestly out of proportion to his [or her] salary as such public officer or
employee and to his [or her] other lawful income and the income from
legitimately acquired property, [which] property shall be presumed prima facie
to have been unlawfully acquired."59
chanroblesvirtuallawlibrary

This court has already settled the Sandiganbayan's jurisdiction over civil
forfeiture cases:
. . . violations of R.A. No. 1379 are placed under the jurisdiction of the
Sandiganbayan, even though the proceeding is civil in nature, since the
forfeiture of the illegally acquired property amounts to a penalty.60
chanroblesvirtuallawlibrary

First, whether a Petition for Review on Certiorari was the proper remedy to
assail the Sandiganbayan Resolutions; and
Second, whether the Sandiganbayan erred in holding that petitioner Republic of
the Philippines waived the filing of its Formal Offer of Evidence and in granting
respondents Ignacio Gimenez and Fe Roa Gimenez's Motion to Dismiss on
demurrer to evidence.
We grant the Petition.

Actions for reconveyance, revision, accounting, restitution, and damages for illgotten wealth are also called civil forfeiture proceedings.

chanRoblesvirtualLa wlibrary

I
Respondent Ignacio Gimenez pictures petitioner as being confused as to the
proper mode of review of the Sandiganbayan Resolutions. According to him,
petitioner claims that the Sandiganbayan committed grave abuse of
discretion.52 Hence, petitioner should have filed a petition for certiorari under
Rule 65 and not a petition for review under Rule 45 of the Rules of
Court.53 Nevertheless, the Sandiganbayan did not commit any error, and
petitioner has to show that the Sandiganbayan committed grave abuse of
discretion amounting to lack of or in excess of jurisdiction. 54

In Garcia v. Sandiganbayan, et al.,61 this court re-affirmed the doctrine that


forfeiture proceedings under Republic Act No. 1379 are civil in nature. 62 Civil
forfeiture proceedings were also differentiated from plunder cases:
. . . a forfeiture case under RA 1379 arises out of a cause of action separate
and different from a plunder case. ... In a prosecution for plunder, what is
sought to be established is the commission of the criminal acts in furtherance
of the acquisition of ill-gotten wealth. . . . On the other hand, all that the court
needs to determine, by preponderance of evidence, under RA 1379 is the
disproportion of respondent's properties to his legitimate income, it being
unnecessary to prove how he acquired said properties. As correctly formulated
by the Solicitor General, the forfeitable nature of the properties under the
provisions of RA 1379 does not proceed from a determination of a specific
overt act committed by the respondent public officer leading to the acquisition
of the illegal wealth.63 (Citation omitted)
To stress, the quantum of evidence required for forfeiture proceedings under
Republic Act No. 1379 is the same with other civil cases preponderance of
evidence.64
chanroblesvirtuallawlibrary

chanroblesvirtuallawlibrary

Observance of the proper procedure before courts, especially before the

When a criminal case based on demurrer to evidence is dismissed, the


dismissal is equivalent to an acquittal.65
chanroble svirtuallawlibrary

Page 34 of 89
As a rule, once the court grants the demurrer, the grant amounts to an
acquittal; any further prosecution of the accused would violate the
constitutional proscription on double jeopardy.66
chanroble slaw

Hence, the Republic may only assail an acquittal through a petition for
certiorari under Rule 65 of the Rules of Court:
Accordingly, a review of a dismissal order of the Sandiganbayan granting an
accused's demurrer to evidence may be done via the special civil action of
certiorari under Rule 65, based on the narrow ground of grave abuse of
discretion amounting to lack or excess of jurisdiction.67 (Citation omitted)
In this case, a civil forfeiture under Republic Act No. 1379, petitioner correctly
filed a Petition for Review on Certiorari under Rule 45 of the Rules of Court.
Section 1 of the Rule provides the mode of appeal from judgments, final
orders, or resolutions of the Sandiganbayan:
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.
II
Petitioner argues that substantial justice requires doing away with the
procedural technicalities.68 Loss of vital documentary proof warranted
extensions to file the Formal Offer of Evidence.69 Honest efforts to locate
several missing documents resulted in petitioner's inability to file the pleading
within the period granted by the Sandiganbayan. 70
chanroblesvirtuallawlibrary

Respondent Ignacio Gimenez argues that petitioner cannot fault the


Sandiganbayan for its incompetence during trial.71 Even if the evidence were
formally offered within the prescribed period, PCGG's evidence still had no
probative value.72 It is solely petitioner's fault "that the persons who certified to
the photocopies of the originals were not presented to testify [.]" 73 It is also
misleading to argue that the pieces of documentary evidence presented are
public documents.74 "The documents are not public in the sense that these are
official issuances of the Philippine government."75 "The bulk consists mainly of
notarized, private documents that have simply been certified true and
faithful."76
chanroble svirtuallawlibrary

According to respondent Fe Roa Gimenez, petitioner tries to excuse its nonfiling of the Formal Offer of Evidence within the prescribed period by raising its
efforts to locate the 66 missing documents.77However, the issue of the missing
documents was laid to rest during the hearing on November 16, 2004. 78 The
Sandiganbayan gave petitioner until March 2005 to produce the documents;
otherwise, these would be excluded.79 The testimonies of the witnesses related

to the missing documents would also be expunged from the case records. 80

chanroblesvirtuallawlibrary

Moreover, respondent Fe Roa Gimenez claims that "[t]he Sandiganbayan did


not err when it ruled that the great bulk of the documentary evidence offered
by the PCGG have no probative value."81 Aside from the 66 missing documents
it failed to present, almost all of petitioner's pieces of documentary evidence
were mere photocopies.82 The few that were certified true copies were not
testified on by the persons who certified these documents.83
chanroble svirtuallawlibrary

Our Rules of Court lays down the procedure for the formal offer of evidence.
Testimonial evidence is offered "at the time [a] witness is called to
testify."84 Documentary and object evidence, on the other hand, are offered
"after the presentation of a party's testimonial evidence." 85 Offer of
documentary or object evidence is generally done orally unless permission is
given by the trial court for a written offer of evidence. 86
chanroblesvirtuallawlibrary

More importantly, the Rules specifically provides that evidence must be


formally offered to be considered by the court. Evidence not offered is excluded
in the determination of the case.87 "Failure to make a formal offer within a
considerable period of time shall be deemed a waiver to submit it." 88
chanroble svirtuallawlibrary

Rule 132, Section 34 provides:


SEC. 34. Offer of evidence. The court shall consider no evidence which has
not been formally offered. The purpose for which the evidence is offered must
be specified.
The rule on formal offer of evidence is intertwined with the constitutional
guarantee of due process. Parties must be given the opportunity to review the
evidence submitted against them and take the necessary actions to secure
their case.89 Hence, any document or object that was marked for identification
is not evidence unless it was "formally offered and the opposing counsel [was]
given an opportunity to object to it or cross-examine the witness called upon to
prove or identify it."90
chanroblesvirtuallawlibrary

This court explained further the reason for the rule:


The Rules of Court provides that "the court shall consider no evidence which
has not been formally offered." A formal offer is necessary because judges are
mandated to rest their findings of facts and their judgment only and strictly
upon the evidence offered by the parties at the trial. Its function is to enable
the trial judge to know the purpose or purposes for which the proponent is
presenting the evidence. On the other hand, this allows opposing parties to
examine the evidence and object to its admissibility. Moreover, it facilitates
review as the appellate court will not be required to review documents not
previously scrutinized by the trial court.91 (Emphasis supplied, citations
omitted)
To consider a party's evidence which was not formally offered during trial would

Page 35 of 89
deprive the other party of due process. Evidence not formally offered has no
probative value and must be excluded by the court. 92
chanroblesvirtuallawlibrary

Petitioner's failure to file its written Formal Offer of Evidence of the numerous
documentary evidence presented within the prescribed period is a non-issue.
In its first assailed Resolution dated May 25, 2006, the Sandiganbayan
declared that petitioner waived the filing of its Formal Offer of Evidence when it
failed to file the pleading on May 13, 2006, the deadline based on the extended
period granted by the court. Petitioner was granted several extensions of time
by the Sandiganbayan totalling 75 days from the date petitioner terminated its
presentation of evidence. Notably, this 75-day period included the original 30day period. Subsequently, petitioner filed a Motion for Reconsideration and to
Admit Attached Formal Offer of Evidence, and the Formal Offer of Evidence.
In resolving petitioner's Motion for Reconsideration and to Admit Attached
Formal Offer of Evidence, the Sandiganbayan found the carelessness of
petitioner's counsel unacceptable. According to the Sandiganbayan, it could not
countenance the non-observance of the court's orders.
This court has long acknowledged the policy of the government to recover the
assets and properties illegally acquired or misappropriated by former President
Ferdinand E. Marcos, his wife Mrs. Imelda R. Marcos, their close relatives,
subordinates, business associates, dummies, agents or nominees. 93Hence, this
court has adopted a liberal approach regarding technical rules of procedure in
cases involving recovery of ill-gotten wealth:
In all the alleged ill-gotten wealth cases filed by the PCGG, this Court has seen
fit to set aside technicalities and formalities that merely serve to delay or
impede judicious resolution. This Court prefers to have such cases resolved on
the merits at the Sandiganbayan. But substantial justice to the Filipino people
and to all parties concerned, not mere legalisms or perfection of form, should
now be relentlessly and firmly pursued. Almost two decades have passed since
the government initiated its search for and reversion of such ill-gotten wealth.
The definitive resolution of such cases on the merits is thus long overdue. If
there is proof of illegal acquisition, accumulation, misappropriation, fraud or
illicit conduct, let it be brought out now. Let the ownership of these funds and
other assets be finally determined and resolved with dispatch, free from all the
delaying technicalities and annoying procedural sidetracks.94 (Emphasis
supplied, citation omitted)
To be clear, petitioner was able to file its Formal Offer of Evidence, albeit,
belatedly. Petitioner hurdled 19 years of trial before the Sandiganbayan to
present its evidence as shown in its extensive Formal Offer of Evidence. As
petitioner argues:
Undeniable from the records of the case is that petitioner was vigorous in
prosecuting the case. The most tedious and crucial stage of the litigation and
presentation of evidence has been accomplished. Petitioner completed its
presentation of evidence proving the ill-gotten nature and character of the

funds and assets sought to be recovered in the present case. It presented vital
testimonial and documentary evidence consisting of voluminous record proving
the gross disparity of the subject funds to spouses Gimenezes' combined
declared income which must be reconveyed to the Republic for being acquired
in blatant violation of the Constitution and the Anti-Graft statutes. 95
chanrobleslaw

This court is not unmindful of the difficulty in gathering voluminous


documentary evidence in cases of forfeiture of ill-gotten wealth acquired
throughout the years. It is never easy to prosecute corruption and take back
what rightfully belongs to the government and the people of the Republic.
This is not the first time that this court relaxed the rule on formal offer of
evidence.
Tan v. Lim96 arose from two civil Complaints: one for injunction and another for
legal redemption, which were heard jointly before the trial court. 97 The
defendant did not file a Formal Offer of Evidence in the injunction case 98 and
merely adopted the evidence offered in the legal redemption case. 99 The trial
court held that the defendant's failure to file his Formal Offer of Evidence in the
injunction case rendered the plaintiff's evidence therein as
uncontroverted.100 The Court of Appeals reversed the Decision and was
affirmed by this court.101 This court ruled that while the trial court's reasoning
in its Decision was technically sound, a liberal interpretation was more
appropriate and in line with substantial justice:
It may be true that Section 34, Rule 132 of the rules directs the court to
consider no evidence which has not been formally offered and that under
Section 35, documentary evidence is offered after presentation of testimonial
evidence. However, a liberal interpretation of these Rules would have convinced
the trial court that a separate formal offer of evidence in Civil Case No. 6518
was superfluous because not only was an offer of evidence made in Civil Case
No. 6521 that was being jointly heard by the trial court, counsel for Jose
Renato Lim had already declared he was adopting these evidences for Civil
Case No. 6518. The trial court itself stated that it would freely utilize in one
case evidence adduced in the other only to later abandon this posture. Jose
Renato Lim testified in Civil Case No. 6518. The trial court should have at least
considered his testimony since at the time it was made, the rules provided that
testimonial evidence is deemed offered at the time the witness is called to
testify. Rules of procedure should not be applied in a very rigid, technical case
as they are devised chiefly to secure and not defeat substantial justice.
....
The logic of the Court of Appeals is highly persuasive. Indeed, apparently, the
trial court was being overly technical about the non-submission of Jose Renato
Lim's formal offer of evidence. This posture not only goes against Section 6,
Rule 1 of the Rules of Civil Procedure decreeing a liberal construction of the
rules to promote a just, speedy and inexpensive litigation but ignores the
consistent rulings of the Court against utilizing the rules to defeat the ends of

Page 36 of 89
substantial justice. Despite the intervening years, the language of the Court in
Manila Railroad Co. vs. Attorney-General, still remains relevant:
"x x x. The purpose of procedure is not to thwart justice. Its proper aim is to
facilitate the application of justice to the rival claims of contending parties. It
was created not to hinder and delay but to facilitate and promote the
administration of justice. It does not constitute the thing itself which courts are
always striving to secure to litigants. It is designed as the means best adapted
to obtain that thing. In other words, it is a means to an end. It is the means by
which the powers of the court are made effective in just judgments. When it
loses the character of the one and takes on that of the other the administration
of justice becomes incomplete and unsatisfactory and lays itself open to grave
criticism."102(Emphasis supplied, citations omitted)
ChanRoblesVirtualawlibrary

Furthermore, "subsequent and substantial compliance . . . may call for the


relaxation of the rules of procedure."103

in food, mining and other businesses such as the Transnational Construction


Corporation, Total Systems Technology, Inc., Pyro Control Technology
Corporation, Asian Alliance, Inc., A & T Development Corporation, RBO Agro
Forestry Farm Development Corporation, Bathala Coal Mining Corporation, Coal
Basis Mining Corporation, Titan Coal Mining Corporation, GEI Guaranteed
Education, Inc., and I.B. Gimenez Securities, Inc.105
chanroble slaw

Despite the specific allegations in the Complaint, petitioner contends that


respondents merely gave general denials to the allegations in the
Complaint.106 "[N]o specific denial [was] made on the material allegations [in]
the [C]omplaint."107
chanroble svirtuallawlibrary

Respondents, on the other hand, assert that the Sandiganbayan was correct in
granting the Motion to Dismiss on demurrer to evidence.

chanroblesvirtuallawlibrary

Weighing the amount of time spent in litigating the case against the number of
delays petitioner incurred in submitting its Formal Offer of Evidence and the
state's policy on recovering ill-gotten wealth, this court is of the belief that it is
but only just that the Rules be relaxed and petitioner be allowed to submit its
written Formal Offer of Evidence. The Sandiganbayan's Resolutions should be
reversed.
chanRoble svirtualLawlibrary

III
According to petitioner, the Sandiganbayan erred when it granted the demurrer
to evidence filed by respondents and dismissed the case despite a "prima
facie foundation [based on the pleadings and documents on record] that
spouses Gimenezes amassed enormous wealth grossly disproportionate to their
lawful income or declared lawful assets."104
chanroble svirtuallawlibrary

Similarly, the Complaint alleged specific acts committed by respondent Ignacio


Gimenez:
[T]aking undue advantage of his relationship, influence, and connection, by
himself and/or in unlawful concert and active collaboration with former
President Ferdinand E. Marcos and Imelda R. Marcos for the purpose of
mutually enriching themselves and preventing the disclosure and recovery of
assets illegally obtained: (a) acted as the dummy, nominee or agent of former
President Ferdinand E. Marcos and Imelda R. Marcos in several corporations
such as, the Allied Banking Corporation, Acoje Mining Corporation, Baguio Gold
Mining, Multi National Resources, Philippine Oversees, Inc. and Pioneer Natural
Resources; (b) unlawfully obtained, through corporations organized by them
such as the New City Builders, Inc. (NCBI), multi-million peso contracts with
the government buildings, such as the University of Life Sports Complex and
Dining Hall as well as projects of the National Manpower Corporation, Human
Settlements, GSIS, and Maharlika Livelihood, to the gross and manifest
disadvantage of the Government and the Filipino people; and (c) in furtherance
of the above stated illegal purposes, organized several establishments engaged

Respondent Ignacio Gimenez claims that petitioner cannot be excused from


filing its Formal Offer of Evidence considering the numerous extensions given
by the Sandiganbayan. Petitioner had all the resources and time to gather,
collate, and secure the necessary evidence to build its case.108
chanroblesvirtuallawlibrary

Petitioner's presentation of evidence took 19 years to complete, and yet it


failed to submit the necessary documents and pleading. 109
chanroblesvirtuallawlibrary

Similarly, respondent Fe Roa Gimenez argues that petitioner was negligent in


failing to comply with the Sandiganbayan's orders considering the inordinate
amount of time given to petitioner to present evidence, which resulted in only
five witnesses in 19 years.110
chanroblesvirtuallawlibrary

To determine the propriety of granting respondents' Motion to Dismiss based


on Demurrer to Evidence, we review the nature of demurrer.
Rule 33, Section 1 of the Rules of Court provides:
SECTION 1. Demurrer to evidence. After the plaintiff has completed the
presentation of his evidence, the defendant may move for dismissal on the
ground that upon the facts and the law the plaintiff has shown no right to
relief. If his motion is denied, he shall have the right to present evidence. If the
motion is granted but on appeal the order of dismissal is reversed he shall be
deemed to have waived the right to present evidence.
In Oropesa v. Oropesa111 where this court affirmed the dismissal of the case on
demurrer to evidence due to petitioner's non-submission of the Formal Offer of
Evidence,112 demurrer to evidence was defined as:
. . . "an objection by one of the parties in an action, to the effect that the
evidence which his adversary produced is insufficient in point of law, whether
true or not, to make out a case or sustain the issue." We have also held that a
demurrer to evidence "authorizes a judgment on the merits of the case without
the defendant having to submit evidence on his part, as he would ordinarily

Page 37 of 89
have to do, if plaintiff's evidence shows that he is not entitled to the relief
sought."113 (Citations omitted)
This court has laid down the guidelines in resolving a demurrer to evidence:
A demurrer to evidence may be issued when, upon the facts and the law, the
plaintiff has shown no right to relief. Where the plaintiffs evidence together
with such inferences and conclusions as may reasonably be drawn therefrom
does not warrant recovery against the defendant, a demurrer to evidence
should be sustained. A demurrer to evidence is likewise sustainable when,
admitting every proven fact favorable to the plaintiff and indulging in his favor
all conclusions fairly and reasonably inferable therefrom, the plaintiff has failed
to make out one or more of the material elements of his case, or when there is
no evidence to support an allegation necessary to his claim. It should be
sustained where the plaintiff's evidence is prima facie insufficient for a
recovery.114
chanroble slaw

Furthermore, this court already clarified what the trial court determines when
acting on a motion to dismiss based on demurrer to evidence:
What should be resolved in a motion to dismiss based on a demurrer to
evidence is whether the plaintiff is entitled to the relief based on the facts and
the law. The evidence contemplated by the rule on demurrer is that which
pertains to the merits of the case, excluding technical aspects such as capacity
to sue. . . .115 (Emphasis supplied, citation omitted)
Petitioner, in its Supplement to the Petition, argued that the testimonial
evidence it had presented and offered during trial warranted consideration and
analysis.116 The Sandiganbayan erroneously excluded these testimonies in
determining whether to grant the motion to dismiss or not, hence:
. . . even assuming that the Sandiganbayan denied petitioner's formal offer of
evidence, petitioner still had testimonial evidence in its favor which should
[have] been considered. It behoved then upon the Sandiganbayan to discuss or
include in its discussion, at the very least, an analysis of petitioner's
testimonial evidence.117
chanroble slaw

With our ruling reversing the Sandiganbayan's Resolutions on petitioner's


Formal Offer of Evidence, what should be determined now by the
Sandiganbayan is whether petitioner's evidence is sufficient to entitle it to the
relief it seeks after the Sandiganbayan rested its case. Petitioner is required to
establish preponderance of evidence.

On another note, the evidence presented by the plaintiff consisted mainly of


certified true copies of the original. These certified copies of documentary
evidence presented by the plaintiff were not testified on by the person who
certified them to be photocopies of the original. Hence, these evidence do not
appear to have significant substantial probative value. 118
chanroblesvirtuallawlibrary

Petitioner faults the Sandiganbayan for making "a general and sweeping
statement that the evidence presented by petitioner lacked probative value for
the reason that they are mainly certified true copies which had not been
testified on by the person who certified [them]."119 Thus, its right to due
process was violated when the Sandiganbayan rejected petitioner's
documentary evidence in the same Resolution which dismissed the case. 120
chanroblesvirtuallawlibrary

Petitioner argues that: a) respondents unqualifiedly admitted the identity and


authenticity of the documentary evidence presented by petitioner; 121 and b) the
documents it presented were public documents, and there was no need for the
identification and authentication of the original documentary
exhibits.122 Petitioner relies on the Sandiganbayan Order123 dated August 6,
2002. The Order reads:
Considering the manifestation of Atty. Reno Gonzales, counsel for
plaintiff/PCGG, that the defendant Fe Roa Gimenez, through counsel, is willing
to stipulate that the documents to be presented and identified by the witness
are in her custody as Records Officer of the PCGG, the parties agreed to
dispense with the testimony of Ma. Lourdes Magno.
WHEREFORE, and as prayed for, the continuation of the presentation of
plaintiff's evidence is set on October 9 and 10, 2002, both at 8:30 o'clock [sic]
in the morning.
SO ORDERED.124 (Emphasis supplied)
Petitioner claims that the following exhibits were acquired in relation to the
PCGG's functions prescribed under Executive Order No. 1, Section 3(b), 125 and
form part of the official records of the PCGG: 126 "Certifications as to the various
positions held in Government by Fe Roa-Gimenez, her salaries and
compensation during her stint as a public officer, the BIR Income Tax Returns
and Statement of Assets and Liabilities showing the declared income of
spouses Gimenezes; the Articles of Incorporation of various corporations
showing spouses Gimenezes' interests on various corporations; and several
transactions involving huge amounts of money which prove that they acted as
conduit in the disbursement of government funds." 127
chanroble svirtuallawlibrary

In the second assailed Resolution, the Sandiganbayan granted respondents'


Motion to Dismiss based on the lack of Formal Offer of Evidence of petitioner.
At the same time, it observed that the pieces of documentary evidence
presented by petitioner were mostly certified true copies of the original. In
passing upon the probative value of petitioner's evidence, the Sandiganbayan
held:

On the other hand, respondent Ignacio Gimenez argues that petitioner's


documents are not "official issuances of the Philippine government." 128 They are
mostly notarized private documents.129Petitioner's evidence has no probative
value; hence, a dismissal on demurrer to evidence is only
proper.130 Respondent Fe Roa Gimenez claims that the Sandiganbayan did not

Page 38 of 89
err in holding that the majority of petitioner's documentary evidence has no
probative value, considering that most of these documents are only
photocopies.131

a public office, its contents may be proved by a certified copy issued by the
public officer in custody thereof. (Emphasis supplied)

chanroblesvirtuallawlibrary

The evidence presented by petitioner before the Sandiganbayan deserves


better treatment.
For instance, the nature and classification of the documents should have been
ruled upon. Save for certain cases, the original document must be presented
during trial when the subject of the inquiry is the contents of the
document.132 This is the Best Evidence Rule provided under Rule 130, Section 3
of the Rules of Court:
SEC. 3. Original document must be produced; exceptions. When the subject
of inquiry is the contents of a document, no evidence shall be admissible other
than the original document itself, except in the following cases:
(a) When the original has been lost or destroyed, or cannot be produced in
court, without bad faith on the part of the offeror;
(b) When the original is in the custody or under the control of the party against
whom the evidence is offered, and the latter fails to produce it after reasonable
notice;
(c) When the original consists of numerous accounts or other documents which
cannot be examined in court without great loss of time and the fact sought to
be established from them is only the general result of the whole; and
(d) When the original is a public record in the custody of a public officer or is
recorded in a public office.
In case of unavailability of the original document, secondary evidence may be
presented133 as provided for under Sections 5 to 7 of the same Rule:

In Citibank, N.A. v. Sabeniano,134 citing Estrada v. Hon. Desierto,135 this court


clarified the applicability of the Best Evidence Rule:
As the afore-quoted provision states, the best evidence rule applies only when
the subject of the inquiry is the contents of the document. The scope of the
rule is more extensively explained thus
But even with respect to documentary evidence, the best evidence rule applies
only when the content of such document is the subject of the inquiry. Where
the issue is only as to whether such document was actually executed, or
exists, or on the circumstances relevant to or surrounding its execution, the
best evidence rule does not apply and testimonial evidence is admissible (5
Moran, op. cit., pp. 76-66; 4 Martin, op. cit., p. 78). Any other substitutionary
evidence is likewise admissible without need for accounting for the original.
Thus, when a document is presented to prove its existence or condition it is
offered not as documentary, but as real, evidence. Parol evidence of the fact of
execution of the documents is allowed (Hernaez, et al. vs. McGrath, etc., et al.,
91Phil[.]565).xxx
In Estrada v. Desierto, this Court had occasion to rule that
It is true that the Court relied not upon the original but only [a] copy of the
Angara Diary as published in the Philippine Daily Inquirer on February 4-6,
2001. In doing so, the Court, did not, however, violate the best evidence rule.
Wigmore, in his book on evidence, states that:
"Production of the original may be dispensed with, in the trial court's
discretion, whenever in the case in hand the opponent does not bona fide
dispute the contents of the document and no other useful purpose will be
served by requiring production.
chanRoble svirtualLawlibrary

"xxx xxx xxx


SEC. 5. When original document is unavailable. When the original document
has been lost or destroyed, or cannot be produced in court, the offeror, upon
proof of its execution or existence and the cause of its unavailability without
bad faith on his part, may prove its contents by a copy, or by a recital of its
contents in some authentic document, or by the testimony of witnesses in the
order stated.
SEC. 6. When original document is in adverse party's custody or control. If
the document is in the custody or under the control of adverse party, he must
have reasonable notice to produce it. If after such notice and after satisfactory
proof of its existence, he fails to produce the document, secondary evidence
may be presented as in the case of its loss. (5a)
SEC. 7. Evidence admissible when original document is a public record. When
the original of a document is in the custody of a public officer or is recorded in

"In several Canadian provinces, the principle of unavailability has been


abandoned, for certain documents in which ordinarily no real dispute arised
[sic]. This measure is a sensible and progressive one and deserves universal
adoption (post, sec. 1233). Its essential feature is that a copy may be used
unconditionally, if the opponent has been given an opportunity to inspect it."
This Court did not violate the best evidence rule when it considered and
weighed in evidence the photocopies and microfilm copies of the PNs, MCs, and
letters submitted by the petitioners to establish the existence of respondent's
loans. The terms or contents of these documents were never the point of
contention in the Petition at bar. It was respondent's position that the PNs in
the first set (with the exception of PN No. 34534) never existed, while the PNs
in the second set (again, excluding PN No. 34534) were merely executed to
cover simulated loan transactions. As for the MCs representing the proceeds of
the loans, the respondent either denied receipt of certain MCs or admitted

Page 39 of 89
receipt of the other MCs but for another purpose. Respondent further admitted
the letters she wrote personally or through her representatives to Mr. Tan of
petitioner Citibank acknowledging the loans, except that she claimed that these
letters were just meant to keep up the ruse of the simulated loans. Thus,
respondent questioned the documents as to their existence or execution, or
when the former is admitted, as to the purpose for which the documents were
executed, matters which are, undoubtedly, external to the documents, and
which had nothing to do with the contents thereof.
Alternatively, even if it is granted that the best evidence rule should apply to
the evidence presented by petitioners regarding the existence of respondent's
loans, it should be borne in mind that the rule admits of the following
exceptions under Rule 130, Section 5 of the revised Rules of
Court[.]136 (Emphasis supplied, citation omitted)
Furthermore, for purposes of presenting these as evidence before courts,
documents are classified as either public or private. Rule 132, Section 19 of the
Rules of Court provides:
SEC. 19. Classes of Documents. For the purpose of their presentation in
evidence, documents are either public or private.
Public documents are:
(a) The written official acts, or records of the official acts of the sovereign
authority, official bodies and tribunals, and public officers, whether of the
Philippines, or of a foreign country;
(b) Documents acknowledge before a notary public except last wills and
testaments; and
(c) Public records, kept in the Philippines, of private documents required by law
to be entered therein.
All other writings are private.
The same Rule provides for the effect of public documents as evidence and the
manner of proof for public documents:
SEC. 23. Public documents as evidence. Documents consisting of entries in
public records made in the performance of a duty by a public officer are prima
facie evidence of the facts therein stated. All other public documents are
evidence, even against a third person, of the fact which gave rise to their
execution and of the date of the latter.
SEC. 24. Proof of official record. The record of public documents referred to
in paragraph (a) of Section 19, when admissible for any purpose, may be
evidenced by an official publication thereof or by a copy attested by the officer
having the legal custody of the record, or by his deputy, and accompanied, if

the record is not kept in the Philippines, with a certificate that such officer has
the custody. If the office in which the record is kept is in a foreign country, the
certificate may be made by a secretary of the embassy or legation, consul
general, consul, vice consul, or consular agent or by any officer in the foreign
service of the Philippines stationed in the foreign country in which the record is
kept, and authenticated by the seal of his office.
SEC. 25. What attestation of copy must state. Whenever a copy of a
document or record is attested for the purpose of evidence, the attestation
must state, in substance, that the copy is a correct copy of the original, or a
specific part thereof, as the case may be. The attestation must be under the
official seal of the attesting officer, if there be any, or if he be the clerk of a
court having a seal, under the seal of such court.
....
SEC. 27. Public record of a private document. An authorized public record of
a private document may be proved by the original record, or by a copy
thereof, attested by the legal custodian of the record, with an appropriate
certificate that such officer has the custody.
....
SEC. 30. Proof of notarial documents. Every instrument duly acknowledged
or proved and certified as provided by law, may be presented in evidence
without further proof, the certificate of acknowledgment being prima facie
evidence of the execution of the instrument or document involved. (Emphasis
supplied)
Emphasizing the importance of the correct classification of documents, this
court pronounced:
The nature of documents as either public or private determines how the
documents may be presented as evidence in court. A public document, by
virtue of its official or sovereign character, or because it has been
acknowledged before a notary public (except a notarial will) or a competent
public official with the formalities required by law, or because it is a public
record of a private writing authorized by law, is self-authenticating and
requires no further authentication in order to be presented as evidence in
court. In contrast, a private document is any other writing, deed, or instrument
executed by a private person without the intervention of a notary or other
person legally authorized by which some disposition or agreement is proved or
set forth. Lacking the official or sovereign character of a public document, or
the solemnities prescribed by law, a private document requires authentication
in the manner allowed by law or the Rules of Court before its acceptance as
evidence in court.137 (Emphasis supplied)
The distinction as to the kind of public document under Rule 132, Section 19 of
the Rules of Court is material with regard to the fact the evidence proves.
In Philippine Trust Company v. Hon. Court of Appeals, et al.,138 this court ruled
that:

Page 40 of 89
. . . not all types of public documents are deemed prima facie evidence of the
facts therein stated:
....
"Public records made in the performance of a duty by a public officer" include
those specified as public documents under Section 19(a), Rule 132 of the Rules
of Court and the acknowledgement, affirmation or oath, or jurat portion of
public documents under Section 19(c). Hence, under Section 23, notarized
documents are merely proof of the fact which gave rise to their execution (e.g.,
the notarized Answer to Interrogatories . . . is proof that Philtrust had been
served with Written Interrogatories), and of the date of the latter (e.g., the
notarized Answer to Interrogatories is proof that the same was executed on
October 12, 1992, the date stated thereon), but is not prima facie evidence of
the facts therein stated. Additionally, under Section 30 of the same Rule, the
acknowledgement in notarized documents is prima facie evidence of the
execution of the instrument or document involved (e.g., the notarized Answer
to Interrogatories is prima facie proof that petitioner executed the same).
The reason for the distinction lies with the respective official duties attending
the execution of the different kinds of public instruments. Official duties are
disputably presumed to have been regularly performed. As regards affidavits,
including Answers to Interrogatories which are required to be sworn to by the
person making them, the only portion thereof executed by the person
authorized to take oaths is the jurat. The presumption that official duty has
been regularly performed therefore applies only to the latter portion, wherein
the notary public merely attests that the affidavit was subscribed and sworn to
before him or her, on the date mentioned thereon. Thus, even though affidavits
are notarized documents, we have ruled that affidavits, being self-serving,
must be received with caution.139 (Emphasis supplied, citations omitted)
In Salas v. Sta. Mesa Market Corporation,140 this court discussed the difference
between mere copies of audited financial statements submitted to the Bureau
of Internal Revenue (BIR) and Securities and Exchange Commission (SEC), and
certified true copies of audited financial statements obtained or secured from
the BIR or the SEC which are public documents under Rule 132, Section 19(c)
of the Revised Rules of Evidence:

admissibility as evidence. Public documents are admissible in evidence even


without further proof of their due execution and genuineness. On the other
hand, private documents are inadmissible in evidence unless they are properly
authenticated. Section 20, Rule 132 of the Rules of Court provides:
....
Petitioner and respondents agree that the documents presented as evidence
were mere copies of the audited financial statements submitted to the BIR and
SEC. Neither party claimed that copies presented were certified true copies of
audited financial statements obtained or secured from the BIR or the SEC
which under Section 19(c), Rule 132 would have been public documents. Thus,
the statements presented were private documents. Consequently,
authentication was a precondition to their admissibility in evidence.
During authentication in court, a witness positively testifies that a document
presented as evidence is genuine and has been duly executed or that the
document is neither spurious nor counterfeit nor executed by mistake or under
duress. In this case, petitioner merely presented a memorandum attesting to
the increase in the corporation's monthly market revenue, prepared by a
member of his management team. While there is no fixed criterion as to what
constitutes competent evidence to establish the authenticity of a private
document, the best proof available must be presented. The best proof
available, in this instance, would have been the testimony of a representative
of SMMC's external auditor who prepared the audited financial statements.
Inasmuch as there was none, the audited financial statements were never
authenticated.141 (Emphasis supplied, citations omitted)
Indeed, in Republic v. Marcos-Manotoc,142 this court held that mere collection
of documents by the PCGG does not make such documents public documents
per se under Rule 132 of the Rules of Court:
The fact that these documents were collected by the PCGG in the course of its
investigations does not make them per se public records referred to in the
quoted rule.

The documents in question were supposedly copies of the audited financial


statements of SMMC. Financial statements (which include the balance sheet,
income statement and statement of cash flow) show the fiscal condition of a
particular entity within a specified period. The financial statements prepared by
external auditors who are certified public accountants (like those presented by
petitioner) are audited financial statements. Financial statements, whether
audited or not, are, as [a] general rule, private documents. However, once
financial statements are filed with a government office pursuant to a provision
of law, they become public documents.

Petitioner presented as witness its records officer, Maria Lourdes Magno, who
testified that these public and private documents had been gathered by and
taken into the custody of the PCGG in the course of the Commission's
investigation of the alleged ill-gotten wealth of the Marcoses. However, given
the purposes for which these documents were submitted, Magno was not a
credible witness who could testify as to their contents. To reiterate, "[i]f the
writings have subscribing witnesses to them, they must be proved by those
witnesses." Witnesses can testify only to those facts which are of their personal
knowledge; that is, those derived from their own perception. Thus, Magno
could only testify as to how she obtained custody of these documents, but not
as to the contents of the documents themselves.

Whether a document is public or private is relevant in determining its

Neither did petitioner present as witnesses the affiants of these Affidavits or

Page 41 of 89
Memoranda submitted to the court. Basic is the rule that, while affidavits may
be considered as public documents if they are acknowledged before a notary
public, these Affidavits are still classified as hearsay evidence. The reason for
this rule is that they are not generally prepared by the affiant, but by another
one who uses his or her own language in writing the affiant's statements, parts
of which may thus be either omitted or misunderstood by the one writing
them. Moreover, the adverse party is deprived of the opportunity to crossexamine the affiants. For this reason, affidavits are generally rejected for being
hearsay, unless the affiants themselves are placed on the witness stand to
testify thereon.143 (Citations omitted)
Notably, the Sandiganbayan's evaluation of the evidence presented by
petitioner was cursory. Its main reason for granting the Motion to Dismiss on
Demurrer to Evidence was that there was no evidence to consider due to
petitioner's failure to file its Formal Offer of Evidence. It brushed off the totality
of evidence on which petitioner built its case.
Even assuming that no documentary evidence was properly offered, this court
finds it clear from the second assailed Resolution that the Sandiganbayan did
not even consider other evidence presented by petitioner during the 19 years
of trial. The Sandiganbayan erred in ignoring petitioner's testimonial evidence
without any basis or justification. Numerous exhibits were offered as part of
the testimonies of petitioner's witnesses.

Javier."148

chanroblesvirtuallawlibrary

3) Exhibits "KK-15," "KK-18," "KK-20," "KK-27," "KK-30," "KK-32" to "KK-38"


and "KK-40"149 were offered "for the purpose of proving the corporations in
which Ignacio B. Gimenez has interest, and as part of the testimony of Tereso
Javier."150
chanroblesvirtuallawlibrary

4) Exhibit "KK-45"151 was offered "for the purpose of proving that the PCGG
conducted an investigation of New City Builders, Inc., Transnational
Construction Corporation, and OTO Construction and Development Corporation
in relation to Ignacio B. Gimenez and Roberto O. Olanday, and as part of the
testimony of Tereso Javier."152
chanroble svirtuallawlibrary

5) Exhibits "KK-48" to "KK-50"153 were offered "for the purpose of proving that
the PCGG formally filed notices of lis pendens with the Registers of Deeds of
Taytay, Rizal, Lucena City, Quezon and San Fabian, Pangasinan over the
properties mentioned in said notices in connection with Civil Case No. [0]007
pending with the Sandiganbayan, and as part of the testimony of Tereso
Javier."154
chanroblesvirtuallawlibrary

6) Exhibits "KK-51" to "KK-52"155 and their sub-markings were offered "for the
purpose of proving that the PCGG sequestered the shares of stock in Allied
Banking Corporation and Guaranteed Education, Inc. as stated in the said
writ/letter of sequestration, and as part of the testimony of Tereso Javier." 156

chanroble svirtuallawlibrary

Petitioner presented both testimonial and documentary evidence that tended to


establish a presumption that respondents acquired ill-gotten wealth during
respondent Fe Roa Gimenez's incumbency as public officer and which total
amount or value was manifestly out of proportion to her and her husband's
salaries and to their other lawful income or properties.
Petitioner presented five (5) witnesses, two (2) of which were Atty. Tereso
Javier and Director Danilo R.V. Daniel, both from the PCGG:
Petitioner presented as witnesses Atty. Tereso Javier, then Head of the
Sequestered Assets Department of PCGG, and Danilo R.V. Daniel, then Director
of the Research and Development Department of PCGG, who testified on the
bank accounts and businesses owned and/ or under the control of spouses
Gimenezes.144
chanroble slaw

7) Exhibits "NN" to "QQ"157 and their sub-markings were offered "for the
purpose of proving that the PCGG formally requested the Central Bank to
freeze the bank accounts of the spouses Igancio [sic] B. Gimenez and Fe Roa
Gimenez and that the Central Bank, acting on said request, issued a
memorandum to all commercial banks relative thereto. They are also being
offered as part of the testimony of Tereso Javier."158
chanroble svirtuallawlibrary

8) Exhibits "RR" to "RR-23"159 were offered "for the purpose of proving that
Dominador Pangilinan, former Acting President and President of Traders Royal
Bank, executed an affidavit on July 24, 1987 wherein he mentioned
Malacanang trust accounts maintained with the Traders Royal Bank the balance
of which was very high, approximately 150-175 million pesos, as indicated in
the monthly statements attached to his affidavit. They are also being offered
as part of the testimony of Danilo R.V. Daniel."160
chanroblesvirtuallawlibrary

Several exhibits excluded by the Sandiganbayan were offered as part of


petitioner's testimonial evidence:
1) Exhibit "KK"145 was offered "for the purpose of proving the assets or
properties of the spouses Ignacio B. Gimenez and Fe Roa Gimenez, and as part
of the testimony of Tereso Javier."146
chanroble svirtuallawlibrary

2) Exhibits "KK-1" to "KK-12"147 inclusive of sub-markings, were offered "for


the purpose of proving the real properties acquired by the spouses Ignacio B.
Gimenez and Fe Roa Gimenez, and as part of the testimony of Tereso

9) Exhibits "SS" to "SS-29"161 were offered "for the purpose of proving that
Apolinario K. Medina, Executive Vice President of Traders Royal Bank, executed
an Affidavit on July 23, 1987 wherein he mentioned about certain numbered
(confidential) trust accounts maintained with the Traders Royal Bank, the
deposits to which 'were so substantial in amount that (he) suspected that they
had been made by President Marcos or his family. They are also being offered
as part of the testimony of Danilo R.V. Daniel."162
chanroblesvirtuallawlibrary

10) Exhibits "TT" to "TT-3"163 were offered "for the purpose of proving that

Page 42 of 89
Director Danilo R.V. Daniel of the Research and Development Department of
the PCGG conducted an investigation on the ill-gotten wealth of the spouses
Ignacio and Fe Roa Gimenez and found that from 1977 to 1982, the total sum
of P75,090,306.42 was withdrawn from the account No. 128 (A/C 76-128) in
favor of I.B Gimenez, I.B. Gimenez Securities and Fe Roa Gimenez. They are
also being offered as part of the testimony of Director Danilo R.V. Daniel." 164

A judgment may be considered as one rendered on the merits "when it


determines the rights and liabilities of the parties based on the disclosed facts,
irrespective of formal, technical or dilatory objections"; or when the judgment
is rendered "after a determination of which party is right, as distinguished from
a judgment rendered upon some preliminary or formal or merely technical
point."174 (Citations omitted)

The court cannot arbitrarily disregard evidence especially when resolving a


demurrer to evidence which tests the sufficiency of the plaintiff's evidence.

To reiterate, "[d]emurrer to evidence authorizes a judgment on the merits of


the case without the defendant having to submit evidence on his [or her] part,
as he [or she] would ordinarily have to do, if plaintiff's evidence shows that he
[or she] is not entitled to the relief sought."175 The order of dismissal must be
clearly supported by facts and law since an order granting demurrer is a
judgment on the merits:

chanroble slaw

The difference between the admissibility of evidence and the determination of


its probative weight is canonical.165
chanroblesvirtuallawlibrary

Admissibility of evidence refers to the question of whether or not the


circumstance (or evidence) is to [be] considered at all. On the other hand, the
probative value of evidence refers to the question of whether or not it proves
an issue. Thus, a letter may be offered in evidence and admitted as such but
its evidentiary weight depends upon the observance of the rules on evidence.
Accordingly, the author of the letter should be presented as witness to provide
the other party to the litigation the opportunity to question him on the contents
of the letter. Being mere hearsay evidence, failure to present the author of the
letter renders its contents suspect. As earlier stated, hearsay evidence,
whether objected to or not, has no probative value.166 (Citations omitted)
The Sandiganbayan should have considered Atienza v. Board of Medicine, et
al.167 where this court held that it is better to admit and consider evidence for
determination of its probative value than to outright reject it based on very
rigid and technical grounds.168
chanroblesvirtuallawlibrary

Although trial courts are enjoined to observe strict enforcement of the rules of
evidence, in connection with evidence which may appear to be of doubtful
relevancy, incompetency, or admissibility, we have held that:
[I]t is the safest policy to be liberal, not rejecting them on doubtful or technical
grounds, but admitting them unless plainly irrelevant, immaterial or
incompetent, for the reason that their rejection places them beyond the
consideration of the court, if they are thereafter found relevant or competent;
on the other hand, their admission, if they turn out later to be irrelevant or
incompetent, can easily be remedied by completely discarding them or
ignoring them.169 (Emphasis supplied, citations omitted)
ChanRoblesVirtualawlibrary

A liberal application of the Rules is in line with the state's policy to recover illgotten wealth. In case of doubt, courts should proceed with caution in granting
a motion to dismiss based on demurrer to evidence. An order granting
demurrer to evidence is a judgment on the merits. 170 This is because while a
demurrer "is an aid or instrument for the expeditious termination of an
action,"171 it specifically "pertains to the merits of the case."172
chanroble svirtuallawlibrary

In Cabreza, Jr., et al. v. Cabreza,173 this court defined a judgment rendered on


the merits:

As it is settled that an order dismissing a case for insufficient evidence is a


judgment on the merits, it is imperative that it be a reasoned decision clearly
and distinctly stating therein the facts and the law on which it is
based.176 (Citation omitted)
To erroneously grant a dismissal simply based on the delay to formally offer
documentary evidence essentially deprives one party of due process.
chanRoble svirtualLawlibrary

IV
Respondents did not fail to specifically deny material averments in the
Complaint.
Under Rule 8, Section 10 of the Rules of Court, the "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."177 There are three modes of specific denial
provided for under the Rules:
1) by specifying each material allegation of the fact in the complaint, the truth
of which the defendant does not admit, and whenever practicable, setting forth
the substance of the matters which he will rely upon to support his denial; (2)
by specifying so much of an averment in the complaint as is true and material
and denying only the remainder; (3) by stating that the defendant is without
knowledge or information sufficient to form a belief as to the truth of a material
averment in the complaint, which has the effect of a denial. 178
chanrobleslaw

In paragraph 14 of the Complaint, the PCGG, through the Office of the Solicitor
General, averred that:
14. Defendant Fe Roa Gimenez, by herself and/or in unlawful concert with
Defendants Ferdinand E. Marcos and Imelda R. Marcos, taking undue
advantage of her position, influence and connection and with grave abuse of

Page 43 of 89
power and authority, in order to prevent disclosure and recovery of assets
illegally obtained:
(a) actively participated in the unlawful transfer of millions of dollars of
government funds into several accounts in her name in foreign countries;

Corporation, GEI Guaranteed Education, Inc., and I.B. Gimenez Securities,


Inc.181

(b) disbursed such funds from her various personal accounts for Defendants'
own use[,] benefit and enrichment;

11. Defendants Spouses Gimenez and Fe Roa specifically deny the allegations
contained in paragraphs 16, 16(a), 16(b) and 16(c) that defendant Gimenez
allegedly took advantage of his alleged relationship, influence and connection,
and that by himself or in alleged unlawful concert with defendants Marcos and
Imelda, for the alleged purpose of enriching themselves and preventing the
discovery of alleged illegally obtained assets: (1) allegedly acted as dummy,
nominee or agent of defendants Marcos and Imelda; (2) allegedly obtained
multi-million peso projects unlawfully; and (3) allegedly organized several
establishments, the truth being: (1) that defendant Gimenez never acted as
dummy, nominee or agent of defendants Marcos and Imelda; (2) that
defendant Gimen[e]z never once obtained any contract unlawfully; and (3) that
defendant Gimenez is a legitimate businessman and organized business
establishments legally and as he saw fit, all in accordance with his own plans
and for his own purposes.182

ChanRoblesVirtualawlibrary

(c) acted as conduit of the Defendants Ferdinand E. Marcos and Imelda R.


Marcos in purchasing the New York properties, particularly, the Crown Building,
Herald Center, 40 Wall Street, 200 Wall Street, Lindenmere Estate and
expensive works of arts;179
In their Answer, respondents claimed that;
9. Defendants Spouses Gimenez and Fe Roa specifically deny the allegations
contained in paragraphs 14(a), 14(b) and 14(c), the truth being that defendant
Fe Roa never took advantage of her position or alleged connection and
influence to allegedly prevent disclosure and recovery of alleged illegally
obtained assets, in the manner alleged in said paragraphs. 180

To which respondents specifically denied through the following paragraph:

chanroble slaw

chanroble svirtuallawlibrary

Similarly, the PCGG made material allegations in paragraph 16 of the


Complaint:
16. Defendant Ignacio B. Gimenez, taking undue advantage of his relationship,
influence, and connection, by himself and/or in unlawful concert and active
collaboration with Defendants Ferdinand E. Marcos and Imelda R. Marcos, for
the purpose of mutually enriching themselves and preventing the disclosure
and recovery of assets illegally obtained, among others:
(a) acted as the dummy, nominee or agent of Defendants Ferdinand E. Marcos
and Imelda R. Marcos, in several corporations such as, the Allied Banking
Corporation, Acoje Mining Corporation, Baguio Gold Mining, Multi National
Resources, Philippine Overseas, Inc. and Pioneer Natural Resources;
ChanRoblesVirtualawlibrary

(b) unlawfully obtained, through corporations organized by them such as the


the [sic] New City Builders, Inc. (NCBI), multimillion peso contracts with the
government for the construction of government buildings, such as the
University of Life Sports Complex and Dining Hall as well as projects of the
National Manpower Corporation, Human Settlements, GSIS, and Maharlika
Livelihood, to the gross and manifest disadvantage to Plaintiff and the Filipino
people.
(c) in furtherance of the above stated illegal purposes, organized several
establishments engaged in food, mining and other businesses such as the
Transnational Construction Corporation, Total Systems Technology, Inc., Pyro
Control Technology Corporation, Asian Alliance, Inc., A & T Development
Corporation, RBO Agro Forestry Farm Development Corporation, Bathala Coal
Mining Corporation, Coal Basis Mining Corporation, Titan Coal Mining

In Aquintey v. Spouses Tibong,183 this court held that using "specifically" in a


general denial does not automatically convert that general denial to a specific
one.184 The denial in the answer must be so definite as to what is admitted and
what is denied:
A denial is not made specific simply because it is so qualified by the defendant.
A general denial does not become specific by the use of the word "specifically."
When matters of whether the defendant alleges having no knowledge or
information sufficient to form a belief are plainly and necessarily within the
defendant's knowledge, an alleged "ignorance or lack of information" will not
be considered as a specific denial. Section 11, Rule 8 of the Rules also provides
that material averments in the complaint other than those as to the amount of
unliquidated damages shall be deemed admitted when not specifically denied.
Thus, the answer should be so definite and certain in its allegations that the
pleader s adversary should not be left in doubt as to what is admitted, what is
denied, and what is covered by denials of knowledge as sufficient to form a
belief.185(Emphasis supplied, citations omitted)
However, the allegations in the pleadings "must be contextualized and
interpreted in relation to the rest of the statements in the pleading." 186 The
denials in respondents' Answer comply with the modes provided for under the
Rules. We have held that the purpose of requiring specific denials from the
defendant is to make the defendant disclose the "matters alleged in the
complaint which he [or she] succinctly intends to disprove at the trial, together
with the matter which 'he [or she] relied upon to support the denial." 187 The
denials proffered by respondents sufficiently disclosed the matters they wished
to disprove and those they would rely upon in making their denials.
To summarize, the Sandiganbayan erred in granting the Motion to Dismiss on

Page 44 of 89
demurrer to evidence. It erred in making a sweeping declaration on the
probative value of the documentary evidence offered by petitioner and in
excluding other evidence offered during trial without full evaluation based on
reasons grounded in law and/or jurisprudence.

23. AUTHENTICATION OF DOCUMENT;


EXPERT WITNESS.

chanRoble svirtualLawlibrary

V
The third part of Rule 33, Section 1 of the Rules of Court provides that "[i]f the
motion [to dismiss] is granted but on appeal the order of dismissal is reversed
[the movant] shall be deemed to have waived the right to present evidence."
As this court held:
[I]f a demurrer to evidence is granted but on appeal the order of dismissal is
reversed, the movant shall be deemed to have waived the right to present
evidence. The movant who presents a demurrer to the plaintiff's evidence
retains the right to present their own evidence, if the trial court disagrees with
them; if the trial court agrees with them, but on appeal, the appellate court
disagrees with both of them and reverses the dismissal order, the defendants
lose the right to present their own evidence. The appellate court shall, in
addition, resolve the case and render judgment on the merits, inasmuch as a
demurrer aims to discourage prolonged litigations.188 (Citations omitted)
This procedure, however, does not apply.
In this case, we principally nullify the assailed Resolutions that denied the
admission of the Formal Offer of Evidence. It only follows that the Order
granting demurrer should be denied. This is not the situation contemplated in
Rule 33, Section 1.189 Respondents were not able to even comment on the
Formal Offer of Evidence. Due process now requires that we remand the case
to the Sandiganbayan. Respondents may, at their option and through proper
motion, submit their Comment. The Sandiganbayan should then rule on the
admissibility of the documentary and object evidence covered by the Formal
Offer submitted by petitioner. Respondents then may avail themselves of any
remedy thereafter allowed by the Rules.
WHEREFORE, the Petition is GRANTED. The assailed Resolutions dated May
25, 2006 and September 13, 2006 of the Sandiganbayan Fourth Division in
Civil Case No. 0007 are REVERSED and SET ASIDE. The case is remanded to
the Sandiganbayan for further proceedings with due and deliberate dispatch in
accordance with this Decision.
SO ORDERED.

G.R. No. 175378, November 11, 2015


MULTI-INTERNATIONAL BUSINESS DATA SYSTEM,
INC., Petitioner, v. RUEL MARTINEZ, Respondent.
DECISION
JARDELEZA, J.:
Before us is a petition for review on certiorari1 (petition) under Rule 45 filed by
Multi-International Business Data System, Inc. (petitioner) to annul and set
aside the Decision2 dated October 18, 2006 rendered by the Appeals (CA)
Sixteenth Division in CA G.R. CV No. 82686.
The Facts
Respondent Ruel Martinez (respondent) was the Operations Manager 3 of
petitioner from the last quarter of 1990 to January 22, 1999. 4 Sometime in
June 4, 1994, respondent applied for and was granted a car loan amounting to
P648,288.00.5 Both parties agreed that the loan was payable through
deductions from respondent's bonuses or commissions, if any.6 Further, if
respondent would be terminated for any cause before the end of the term of
the loan obligation, the unpaid balance would be immediately due and
demandable without need of demand.7 On November 11, 1998, petitioner sent
respondent a letter informing him of the breakdown of his outstanding
obligation with petitioner amounting to P418,012.78, detailing every bonus,
loan or advance obtained and deducted.8The subject vehicle remains with
respondent.9
In a letter dated November 24, 1998, respondent requested for a breakdown of
his benefits from petitioner as director/operations manager in case he will
resign from his position. In said letter, respondent stated that the computation
"is only for the assumed amount on my end to deduct whatever I owe the
Company."10

cralawla wlibrary

Carpio, (Chairperson), Bersamin,* Del Castillo, and Mendoza, JJ., concur.

In a letter dated January 22, 1999 which respondent received the next day,
petitioner terminated respondent for cause effective immediately and
demanded that respondent pay his outstanding loan of P418,012.78 and
surrender the car to petitioner within three days from receipt. 11 Despite this,
respondent failed to pay the outstanding balance.

Page 45 of 89
In a letter dated June 23, 1999, petitioner demanded respondent to pay his
loan within three days from receipt thereof at petitioner's office. 12 Again,
despite demand, respondent failed to pay his outstanding obligation.

September 10, 1996 were not established. In respondent's direct examination,


he merely testified that he knows Dy and her spouse but did not state that the
document was actually executed by Dy.21

On July 12, 1999, petitioner filed a complaint 13 with the Regional Trial Court of
Makati City, Branch 148 (trial court) against respondent praying that
respondent be ordered to pay his outstanding obligation of P418,012.78 plus
interest, and that respondent be held liable for exemplary damages, attorney's
fees and costs of the suit.14

On December 16, 2002, respondent filed a motion seeking the reconsideration


of the trial court's decision dated November 22, 2002. The trial court denied
this motion in its Order22 dated March 22, 2004.

In his answer15 dated August 28, 1999, respondent alleged that he already paid
his loan through deductions made from his compensation/salaries, bonuses
and commissions.16 During trial, respondent presented a certification dated
September 10, 1996 issued by petitioner's president, Helen Dy (Dy), stating
that respondent already paid the amount of P337,650.00 as of the said
date.17Respondent alleged that a simple accounting would show that the he
already paid the loan considering that it is payable within four years from
1994.18

Respondent appealed the trial court's decision with the CA. Docketed as CA
G.R. CV No. 82686, the appeal alleged that the parties agreed that the car loan
would be payable within four years from the time respondent secured the loan
in June 1994.23 Respondent alleged that he already completed his payment in
June 1998 and that the payment was done through salary deductions because
if it were otherwise, petitioner would be seeking full payment in the amount of
P648,288.00 and not only the balance of P418,012.78. 24 Respondent also
assailed the finding that the due execution of the certification dated September
10, 1996 was not proven. Respondent alleged that by mere comparison, one
can safely say that the signatures appearing in the certification and in Dy's
affidavit submitted before the National Labor Relations Commission are
signatures by one and the same person, Dy. Respondent claims that he is very
much familiar with the signature of Dy, his former boss for ten years and even
petitioner's witness, who is also its administrative manager, Aida Valle (Valle),
also identified the signature of Dy in the certification. 25

The Ruling of the Regional Trial Court


In its Decision19 dated November 22, 2002, the trial court ruled in favor of
petitioner. It decreed, thus:
chanRoblesvirtualLa wlibrary

WHEREFORE, judgment i[s] hereby rendered in favor of plaintiff as against the


defendant[ ] as follows:
1.

Ordering defendant to pay plaintiff the balance of his car loan in the
amount of Four Hundred Eighteen Thousand Twelve and 78/100 Pesos
([P]418,012.78) plus interest at the rate of twelve percent (12%) [per
annum] from [June 23,] 1999 until full payment;

2.

Ordering defendant Martinez to pay plaintiff the amount of Ten


Thousand Pesos ([P]10,000.00), by way of exemplary damages;

3.

Ordering defendant to pay plaintiff the amount of Twenty Thousand


Pesos ([P]20,000.00) by way of attorney's fees;

4.

Dismissing the counterclaims interposed by defendant;

5.

Ordering defendant to pay the costs of the suit.

SO ORDERED.20

ChanRoblesVirtualawlibrary

cralawla wlibrary

In arriving at the above pronouncement, the trial court held that the
respondent failed to present evidence to prove payment. The trial court also
held that the due execution and authenticity of the certification dated

The Ruling of the Court of Appeals

cralawre d

The CA in its Decision26 dated October 18, 2006 reversed the trial court and
ruled in favor of respondent in holding that the latter already fulfilled his loan
obligation with petitioner. The CA found credence in the following pieces of
evidence: (1) certification dated September 10, 1996 signed by Dy; (2)
deduction of the monthly installments from respondent's salary pursuant to the
agreement between him and petitioner; and (3) petitioner's admission of
respondent's installment payments made in the amount of P230,275.22. 27 The
CA held that Dy never denied nor confirmed in open court the authenticity of
her signature in the certification dated September 10,
1996.28 Citing Permanent Savings and Loan Bank v. Velarde29 and Consolidated
Bank and Trust Corporation (SOLIDBANK) v. Del Monte Motor Works,
Inc.,30 the CA held that Dy must declare under oath that she did not sign the
document or that it is otherwise false or fabricated.31
Thus, the CA reversed the trial court's ruling and held:

chanRoblesvirtualLa wlibrary

WHEREFORE, premises considered, the November 22, 2002 Decision of the


Regional Trial Court of Makati City, Branch 148, in Civil Case No. 99-1295, is
hereby REVERSED and SET ASIDE and a new one is
entered DISMISSING the complaint for lack of merit.
SO ORDERED.32 (Emphasis in the original)
cralawla wlibrary

Page 46 of 89
conclusive and binding on the parties and are not reviewable by this Court,
unless the case falls under any of the recognized exceptions in jurisprudence. 40

Hence, this petition.


The Issues
The issues for resolution are:

chanRoble svirtualLawlibrary

1.

Whether respondent has fulfilled his obligation with petitioner; and

2.

Whether the certification dated September 10, 1996 should be


admitted as basis for respondent's payment of his loan with
petitioner.33

cralawla wlibrary

Our Ruling
The petition is partly meritorious.
Verification/Certification on Non-Forum Shopping
Before going into the substantive merits of the case, we shall first resolve the
technical issue raised by respondent in his Comment 34 dated February 8, 2007
and Memorandum35 dated November 6, 2007.
Respondent alleged that the petition should be dismissed for failing to comply
with Section 4, Rule 45 of the Rules of Court in relation to Sections 4 and 5,
Rule 7 of the Rules of Court.36 Respondent alleged that the signature of Dy in
the Verification/Certification in the petition differs from her signature in the
letter dated November 11, 1998, thus, inferred that someone not authorized
signed the Verification/Certification.37
Upon a review of the records, however, we found Dy's signature in the petition
to be the same with Dy's signature in the Ex-Parte Manifestation of
Compliance38 dated February 22, 2005 which petitioner filed with the CA.
Respondent never objected to Dy's signature in petitioner's Ex-Parte
Manifestation of Compliance. Further, Dy did not refute that the signature in
the petition is hers. Thus, we find no reason to dismiss the petition outright
based on respondent's allegation.
Review of factual findings
Before going into the merits of the petition, we stress the well-settled rule that
only questions of law may be raised in a petition for review on certiorari under
Rule 45 of the Rules of Court, since "the Supreme Court is not a trier of
facts."39 It is not our function to review, examine and evaluate or weigh the
probative value of the evidence presented.
When supported by substantial evidence, the findings of fact of the CA are

In the present case, the factual findings of the trial court and the CA on
whether respondent has fully paid his car loan are conflicting. The trial court
found that no deductions were made from respondent's salary to establish full
payment of the car loan while the CA found otherwise. The trial court held,
thus:
chanRoble svirtualLawlibrary

Culled from the evidence adduced and the testimony of the witnesses, it
appears that the defendant himself admitted on cross-examination that no
deductions were made in his monthly salary. Thus, it was a mere presumption
of fact on his part that he had been able to fully pay off his car loan. The
testimony of the defendant creating merely an inference of payment will not be
regarded as conclusive on that issue. Thus, payment cannot be presumed by a
mere inference from surrounding circumstances. At most, the agreement that
the payments for the car loan shall be deducted from the defendant's salary
and bonus is only affirmative of the capacity or ability of the defendant to fulfill
his part of the bargain.
But whether or not there was actual payment through deductions from the
defendant's salary and bonus remains to be proven by independent and
credible evidence. As the saying goes: "a proof that an act could have been
done is no proof that it was actually done." Hence for failure to present
evidence to prove payment, defendant miserably failed in his defense and in
effect admitted the allegations of plaintiff.41
cralawla wlibrary

The CA, on the other hand, found that respondent sufficiently established that
deductions were made from his salary:
chanRoblesvirtualLa wlibrary

x x x Moreover, it had been sufficiently established by witness Aida Valle


(VALLE), Administrative manager of plaintiff-appellee MULTI-INTERNATIONAL,
that defendant-appellant MARTINEZ had been the only employee granted by
plaintiff-appellee MULTI-INTERNATIONAL a car loan as such [sic]. With that, it
can fairly be inferred that plaintiff-appellee MULT1-INTERNATlONAL's
asseveration that the deductions from the salary of defendant-appellant
MARTINEZ had not been reflected in his payslips is for naught, since indeed, no
such "item" in the payslip is provided, considering that it is only defendantappellant MARTINEZ who had been granted such car loan x x x. 42
cralawla wlibrary

Thus, the conflicting factual findings of the trial court and CA compel us to reevaluate the facts of this case, an exception to the rule that only questions of
law may be dealt with in a petition for certiorari under Rule 45.
Admissibility of the
certification dated
September 10, 1996
Respondent relies on the certification43 dated September 10, 1996 to bolster

Page 47 of 89
his defense that he already fully paid his car loan to petitioner. We affirm the
findings of the CA that the certification is admissible in evidence.
Section 22,44 Rule 132 of the Rules of Court explicitly authorizes the court to
compare the handwriting in issue with writings admitted or treated as genuine
by the party against whom the evidence is offered or proved to be genuine to
the satisfaction of the judge. In Jimenez v. Commission on Ecumenical Mission
and Relations of the United Presbyterian Church in the USA,45 we held:
chanRoblesvirtualLa wlibrary

It is also hornbook doctrine that the opinions of handwriting experts, even


those from the NBI and the PC, are not binding upon courts. This principle
holds true especially when the question involved is mere handwriting similarity
or dissimilarity, which can be determined by a visual comparison of specimens
of the questioned signatures with those of the currently existing ones.
Handwriting experts are usually helpful in the examination of forged documents
because of the technical procedure involved in analyzing them. But resort to
these experts is not mandatory or indispensable to the examination or the
comparison of handwriting. A finding of forgery does not depend entirely on
the testimonies of handwriting experts, because the judge must conduct an
independent examination of the questioned signature in order to arrive at a
reasonable conclusion as to its authenticity, x x x46 (Citations omitted)
cralawlawlibrary

The documents containing the signature of Dy which have been submitted by


petitioner as authentic are the following: (1) letter dated November 11,
1998;47 (2) termination letter dated January 22, 1999;48 (3) promissory note
dated June 17, 1994;49 and (4) chattel mortgage signed on June 27,
1994.50 Examining and analyzing the signatures in these documents with Dy's
signature in the certification, we find no substantial reason to doubt the latter's
authenticity. In fact, the testimonies of Dy herself and Valle support our
finding.
Dy testified on cross-examination as follows:

xxx
Q: Just answer the question please.
A: I said it looks like my signature.51 (Emphasis supplied)

cralawla wlibrary

On the other hand, Valle, on cross-examination testified as follows:

chanRoblesvirtualLa wlibrary

Q: If I show you Certification dated September 10, 1996 will you be able to
confirm if this is a Certification signed by the president?
A: It looked like the signature of the president but I think she will be
the one to testify because she was the one who signed.52 (Emphasis
supplied)
cralawla wlibrary

Aside from supporting our finding that the signature in the certification is
genuine, the foregoing testimonies of Dy and Valle substantially comply with
the other modes of authenticating a private document under Section 20, 53 Rule
132 of the Rules of Court.
Dy never testified that any forgery or fraud attended the certification. 54 In fact,
she did not deny the authenticity of her signature but actually admitted that
the signature therein looks like hers. Additionally, Valle, who is familiar with the
signature of Dy because of the requirements of her job, also positively testified
that the signature in the certification looks like that of Dy's. 55
The defenses of Dy that she does not have a copy or record of the certification
in her file and that the letterhead shows an old address are weak and do not
prove that the certification was not duly executed.
For having established the due execution and authentication of the certification
dated September 10, 1996, the certification should be admitted in evidence to
prove that respondent partially paid the car loan in the amount ofP337,650.00.

chanRoblesvirtualLa wlibrary

Q: Now, ms witness [sic], sometime in December 10, 1996, do you recall


having executed a certification to Mr. Martinez?
A: No.
Q: Just to refresh your memory, would you please identify if this is the
signature you signed given [sic] to Mr. Martinez?
A: Yeah. If looks like my signature, but...
Q: Is that your signature?
A: But I said it looks like my signature. I want you to notice something
because everytime...
Q: Just answer the question please. Is that your signature?
A: I said it looks like my signature.

Insufficient evidence to prove


full payment of loan
It is established that the one who pleads payment has the burden of proving it.
Even where the creditor alleges non-payment, the general rule is that the
debtor has the burden to prove payment, rather than the creditor. The debtor
has the burden of showing with legal certainty that the obligation has been
discharged by payment. Where the debtor introduces some evidence of
payment, the burden of going forward with the evidenceas distinct from the
general burden of proofshifts to the creditor, who is then under a duty of
producing some evidence to show non-payment.56
It must be emphasized that both parties have not presented any written
agreement or contract governing respondent's obligation. Nevertheless, it has
been established that respondent obtained a car loan amounting to
P648,288.00 from petitioner. Thus, the burden is now on respondent to prove

Page 48 of 89
that the obligation has already been extinguished by payment.

with petitioner.

Although not exclusive, a receipt of payment is the best evidence of the fact of
payment.57 We held that the fact of payment may be established not only by
documentary evidence but also by parol evidence.58

In Royal Cargo Corporation v. DFS Sports Unlimited, Inc., we held that the
defense of payment was not proven by the respondent's failure to present any
supporting evidence such as official receipts or the testimony of the person
who made payment or who had direct knowledge of the payment, among
others.62 Respondent's witness therein also assumed that payment was made
even in the absence of any receipt "once the accounting department of
respondent forwarded to her the original invoice which was stamped PAID". We
held in this case that such testimony and the invoices which were stamped
paid, are all self-serving and do not, by themselves, prove respondent's claim
of payment.63

Except for respondent's bare allegations that he has fully paid the P648,288.00
car loan, there is nothing in the records which shows that full payment has
indeed been made. Respondent did not present any receipt other than the
certification dated September 10, 1996 which only proves that respondent has
already paid P337,650.00 of the car loan. A balance of P310,638.00 still
remained.
Even respondent's testimony lacks credence. He alleged that the amortization
of the car loan was deducted from his salaries, bonuses and commissions.
However, he could not even answer nor give an estimate of how much bonuses
and commissions he receives from petitioner.59
Respondent also alleged that although deductions were made from his salaries,
bonuses and commissions, his payslips do not reflect such deductions because
"there is no such car loan field" in the accounting program for the
payroll.60 Respondent admitted in his testimony that he only presumed that the
deductions were being made from his salaries, bonuses and commissions, to
wit:

Nevertheless, even if the parties agreed to make deductions from respondent's


salary, bonuses and commissions, we agree with the trial court that this is
"only affirmative of the capacity or ability of the [respondent] to fulfill his part
of the bargain. But whether or not there was actual payment through
deductions from [respondent]'s salary and bonus remains to be proven by
independent and credible evidence."64

Q: So my question was that, whether or not your regular salary which was
received twice a month, the monthly amortization| s] are being deducted from
that? [sic]
A: There is no reflection in the payslip.

Finally, we find it questionable why respondent would agree on a setup where


petitioner would not give him any written acknowledgment receipt of his
payments or accounting of his loan.65Respondent should have insisted that
receipts be issued in his favor in the first place if it were true that the program
for issuing the payslips could not reflect the deductions from his salaries,
bonuses and commissions. Since he was the only employee who was given a
car loan, it would not have been an inconvenience for the petitioner. His actions
go against the legal presumption that a person takes ordinary care of his
concerns.66

Q: But do you know it was ever deducted from your monthly salary? [sic]
A: It must be deducted from my salary, [sic]

Statement of account is
self-serving

Q: You are assuming?


A: That is the agreement.
Q: That is the agreement but you don't know if it was indeed deducted?
A: Yes.61

Similarly, we find that the statement of account, showing the amount of


P418,012.78 as respondent's outstanding loan obligation to petitioner, is selfserving. Dy admitted that she prepared the statement of account. 67 However,
she neither explained clearly, during her testimony, the breakdown nor
supported the amounts stated therein with documentary evidence. 68

If indeed deductions were made on his salaries, bonuses and commissions,


respondent should have been confident in answering the questions propounded
on him during trial. Me should have presented his payslips and shown that
even if his payslips did not reflect any deductions for his car loan, deductions
were indeed made, by comparing the amount of compensation he could have
gotten based on his employment contract and the amount he actually received.
Respondent merely made calculations on what he presumed he already paid.
Further, respondent could have presented testimonies of persons other than
himself to prove payment of the loans. The letter dated November 24, 1998
showed that respondent was aware that he still had outstanding obligations

Although petitioner refers to the amount of P418,012.78 in the statement to


represent only the car loan obligation, the statement itself shows that the
amount also includes the cash advances of respondent from the company. The
trial court has already ruled that judgment cannot be rendered on the issue
regarding cash advances because this was not made subject of petitioner's
complaint and the same was not amended.69 Such issue was also not raised
with us on appeal. Further, it was not explained why Valle was not the one who
prepared the statement or was not asked to testify on the document when her
duties include supervising the accounting department and assisting in the
preparation of the employees' payroll.70

chanRoble svirtualLawlibrary

cralawla wlibrary

Page 49 of 89
Thus, having only proven payment to the extent of P337,650.00, respondent is
obligated to pay petitioner the balance of P310,638.00 with interest.
WHEREFORE, the instant petition is PARTIALLY GRANTED. The Court of
Appeals' Decision dated October 18, 2006 in CA G.R. CV No. 82686 is SET
ASIDE. The respondent is ORDERED to pay petitioner the balance of the car
loan in the amount of P310,638.00 plus interest at the rate of six percent (6%)
per annum computed from January 23, 199971 until the date of finality of this
judgment. The total amount shall thereafter earn interest at the rate of six
percent (6%) per annum72 until fully paid. The trial court's Decision dated
November 22, 2002 is AFFIRMED in all other respects.
SO ORDERED.

chanroblesvirtuallawlibrary

Velasco, Jr., (Chairperson), Peralta, Villarama, Jr., and Reyes, Jardeleza, JJ.,
concur.

No. 181683 was filed by Lorenzo Shipping Corporation (Lorenzo Shipping)


while the Petition docketed as G.R. No. 184568 was filed by National Power
Corporation.
In its September 14, 2007 Decision, 2 the Court of Appeals reversed and set
aside the February 18, 2002 Decision of the Regional Trial Court and entered
another judgment ordering Lorenzo Shipping to pay National Power Corporation
the amount of P876,286.00 as actual damages and P50,000.00 as attorney's
fees
and
expenses
of
litigation. 3
In its February 12, 2008 Amended Decision, 4 the Court of Appeals amended its
September 14, 2007 Decision to award National Power Corporation the amount
of P300,000.00 as temperate damages in lieu of the original award of
P876,286.00
as
actual
damages.
In its September 17, 2008 Resolution,5 the Court of Appeals denied National
Power
Corporation's
Motion
for
Reconsideration.
The February 18, 2002 Decision 6 of the Regional Trial Court dismissed National
Power Corporation's Complaint for damages against Lorenzo Shipping. 7

24. UNAUTHENTICATED PRIVATE


DOCUMENT IS INADMISSIBLE IN
EVIDENCE.

Lorenzo Shipping is the owner and operator of the commercial vessel MV


Lorcon Luzon.8 National Power Corporation is the owner of Power Barge 104, "a
non-propelled
power
plant
barge."9
On March 20, 1993, Power Barge 104 was berthed and stationed at the Makar
Wharf in General Santos City when the MV Lorcon Luzon "hit and rammed
Power
Barge
104."10

G.R. No. 181683, October 07, 2015


LORENZO SHIPPING
CORPORATION, Petitioner, v. NATIONAL POWER
CORPORATION, Respondent.
G.R. No. 184568
NATIONAL POWER CORPORATION, Petitioner, v. LORENZO
SHIPPING CORPORATION, Respondent.
DECISION
LEONEN, J.:
These consolidated Petitions for Review on Certiorari 1 are offshoots of the Court
of Appeals' disposition of CA-G.R. CV No. 76295. The Petition docketed as G.R.

At the time of the incident, Captain Mariano Villarias (Captain Villarias) served
as the Master of the MV Lorcon Luzon. However, the MV Lorcon Luzon was then
being piloted by Captain Homer Yape (Captain Yape), a Harbor Pilot from the
General Santos City pilotage district. 11 As underscored by Lorenzo Shipping, the
MV Lorcon Luzon was under Captain Yape's pilotage as it was mandatory to
yield
navigational
control
to
the
Harbor
Pilot
while
docking. 12
Testifying before the Board of Marine Inquiry, Captain Villarias recalled that
while the MV Lorcon Luzon was under Captain Yape's pilotage, he nevertheless
"always"13 remained at the side of Captain Yape. He likewise affirmed that he
heard and knew of Captain Yape's orders, "because I have to repeat his
order."14
As the MV Lorcon Luzon was docking, Captain Yape ordered the vessel to
proceed "slow ahead," making it move at the speed of about one (1) knot. As it
moved closer to dock, Captain Yape gave the order "dead slow ahead," making
the vessel move even slower. He then ordered the engine stopped. 15
As the MV Lorcon Luzon moved "precariously close" 16 to the wharf, Captain
Yape ordered the vessel to move backward, i.e., go "slow astern," and

Page 50 of 89
subsequently "full astern." Despite his orders, the engine failed to timely
respond. Thus, Captain Yape ordered the dropping of the anchor. Despite this,
the
MV
Lorcon
Luzon
rammed
into
Power
Barge
104. 17

of such ramming because [of] its improper presence[.]" 25 Lastly, Lorenzo


Shipping pointed out that National Power Corporation's action was barred by
laches as four (4) years had lapsed before it filed its Complaint. 26

Following this incident, Nelson Homena, Plant Manager of Power Barge 104,
filed a Marine Protest before the Board of Marine Inquiry. Captain Villarias also
filed his own Marine Protest. For his part, Captain Yape filed a Marine Accident
Report. The Board of Marine Inquiry conducted joint hearings on the Marine
Protests
and
Captain
Yape's
report.18

The Regional Trial Court issued the Decision 27 dated February 18, 2002
absolving Lorenzo Shipping of liability. It concluded that National Power
Corporation failed to establish Lorenzo Shipping's negligence. It underscored
that while the ramming was found to have been the result of the engine's
stoppage, no malfunctioning was recorded before and after the incident. The
Regional Trial Court further stated that Lorenzo Shipping was sued in its
capacity as the employer of Captain Villarias and that any liability it incurred
would have been only subsidiary. Nevertheless, as Lorenzo Shipping
supposedly exercised due diligence in its selection and supervision of Captain
Villarias,
no
liability
could
be
attributed
to
it. 28

To forestall the prescription of its cause of action for damages, National Power
Corporation filed before the Quezon City Regional Trial Court a Complaint for
Damages against Lorenzo Shipping. 19 In this Complaint, National Power
Corporation recalled the damage resulting from the ramming, as follows:

chanRoblesvirtualLa wlibrary

4. Due to the force and impact of the ramming, the three (3) nylon ropes of 4
inches [sic] diameter each securing the barge at the Makar Wharf-Philippines
[sic] Ports Authority Pier was instantaneously ripped off and the take [-] off
tower of the barge swayed causing flash over on the 69 KV line tripping the line
and isolated General Santos City from the Mindanao Grid. Consequently, the
General Santos Power Plant, Power Barge 102, interconnected with Power
Barge 104, all tripped off causing total blackout in General Santos City and its
underlying
areas;
5. Immediate investigation revealed that the ramming resulted to severe
damage to Ballast Tank No. 1 and metal deformation with approximate area of
two (2) sq. meters. The crack, 25 mm. [b]y 460 mm. [ojccurred two (2)
meters above the crater line and another one, 75 mm. by 310 mm. on the
water line caused a leak of waste oil into the sea . . .;
6. In addition to the physical damage caused to the Power Barge 104, plaintiff
suffered generation losses as a result of the tripping off of the line and the
failure of Power Barge 104 to generate electricity immediately after the
accident[.]20
Lorenzo Shipping filed a Motion to Dismiss grounded on the Regional Trial
Court's alleged lack of jurisdiction over the subject matter and National Power
Corporation's failure to exhaust administrative remedies. Lorenzo Shipping
underscored that the dispute was supposedly within the jurisdiction of the
Board of Marine Inquiry/Philippine Coast Guard. 21 The Regional Trial Court
denied
Lorenzo
Shipping's
Motion
to
Dismiss.22
On November 7, 1997, Lorenzo Shipping filed its Answer. It emphasized that at
the time of the incident, the MV Lorcon Luzon was commandeered by an official
Harbor Pilot to whom it was "mandatory . . . to yield operational
control";23 thus, any liability should be attributed to the Harbor Pilot and not to
the company. It added that "Makar Wharf is a berthing place only for selfpropelled vessel [sic]."24 As Power Barge 104 was not a self-propelled vessel, it
"had no right to lash itself on the Maka[r] Wharf. . . . [and] it assumed the risk

National

Power

Corporation

appealed

before

the

Court

of

Appeals.

The Court of Appeals rendered the Decision 29 dated September 14, 2007
reversing and setting aside the February 18, 2002 Decision of the Regional Trial
Court and entering another judgment ordering Lorenzo Shipping to pay
National Power Corporation the amount of P876,286.00 as actual damages and
P50,000.00
as
attorney's
fees
and
expenses
of
litigation. 30
The Court of Appeals reasoned that while the MV Lorcon Luzon was under
compulsory pilotage, Captain Villarias, the vessel's Master, remained to be its
overall commander. It added that he was remiss in his duties as he did nothing
in the crucial moments when Captain Yape's orders to go astern appeared to
not have been heeded.31 It cited Article 2180 of the Civil Code 32 in that an
employer's liability is primary and not subsidiary. It further noted that Lorenzo
Shipping failed to show that it exercised due diligence in the selection and
supervision
of
Captain
Villarias.33
Lorenzo

Shipping

filed

Motion

for

Reconsideration.

The Court of Appeals then issued the Amended Decision dated February 12,
2008.34 Noting that the amount of actual damages was not proven by National
Power Corporation, it awarded National Power Corporation the amount of
P300,000.00 as temperate damages in lieu of actual damages. The awards for
attorney's
fees
and
litigation
expenses
were
sustained.
National Power Corporation then filed a Motion for Reconsideration, which the
Court of Appeals denied in its Resolution dated September 17, 2008. 35
On March 31, 2008, Lorenzo Shipping filed the Petition for Review on
Certiorari36 docketed as G.R. No. 181683. It reiterated its position that no
liability could be attributed to it as the MV Lorcon Luzon was under compulsory
pilotage and that National Power Corporation assumed risk when it berthed a
non-propelled vessel in the Makar Wharf.37 It added that even assuming that it
was at fault, the award of P3 00,000.00 as temperate damages was still

Page 51 of 89
improper. It claimed that, from the text of Article 2224 of the Civil
Code,38 temperate damages can be awarded only in cases where pecuniary loss
may have been incurred, but whose exact amount, through the nature of the
injury suffered, e.g., injury to commercial credit or business goodwill, cannot
be ascertained. It argued that National Power Corporation was well in a
position to adduce proof of the exact amount of damage it incurred, but failed
to
do
so.39
On November 24, 2008, National Power Corporation filed its Comment 40 to
Lorenzo Shipping's Petition. It maintained that it was Lorenzo Shipping that
must be held liable and that it was able to show by "competent testimonial and
documentary evidence"41 that it must be compensated for actual damages in
the amount of P876,826.00. On April 7, 2009, Lorenzo Shipping filed its
Reply.42
In the meantime, on November 18, 2008, National Power Corporation filed its
own Petition for Review on Certiorari 43 docketed as G.R. No. 184568, arguing
how it had supposedly proven by competent evidence that it was entitled to
actual damages in the amount of F876,826.00. Lorenzo Shipping filed its
Comment44 on February 2, 2009. National Power Corporation filed its Reply45 on
June
22,
2009.
In the Resolution46 dated February 9, 2009, this court consolidated the Petitions
docketed
as
G.R.
Nos.
181683
and
184568.
For

resolution

are

the

following

issues:

chanRoble svirtualLawlibrary

First, whether Lorenzo Shipping Corporation is liable for the damage sustained
by Power Barge 104 when the MV Lorcon Luzon rammed into it, considering
that at the time of the ramming, the MV Lorcon Luzon was under mandatory
pilotage
by
Captain
Yape;
and
Second, assuming that liability is to be attributed to Lorenzo Shipping, what
damages, if any, may be awarded to National Power Corporation.
I
It is not disputed that the MV Lorcon Luzon, a vessel owned and operated by
Lorenzo Shipping, rammed into Power Barge 104 while attempting to dock at
the Makar Wharf. Likewise, it is not disputed that when it rammed into Power
Barge No. 104, the MV Lorcon Luzon was being piloted by Captain Yape. What
is in dispute is whether Captain Yape's pilotage suffices to absolve Lorenzo
Shipping of liability.
A Master's designation as the commander of a vessel is long-settled. This
47

court's citation in Yu Con v. Ipil of General Review of Legislation and


Jurisprudence explains that "Master" and "Captain" are synonymous terms:

"The name of captain or master is given, according to the kind of vessel, to the
person
in
charge
of
it.
"The first denomination is applied to those who govern vessels that navigate
the high seas or ships of large dimensions and importance, although they be
engaged
in
the
coastwise
trade.
"Masters are those who command smaller ships engaged exclusively in the
coastwise
trade.
"For the purposes of maritime commerce, the words 'captain' and Q 'master'
have the same meaning; both being the chiefs or commanders of ships. 48
Likewise, in Inter-Orient Maritime Enterprises, Inc. v. National Labor Relations
ChanRoblesVirtualawlibrary

Commission:

49

A master or captain, for purposes of maritime commerce, is one who has


command of a vessel. A captain commonly performs three (3) distinct roles:
(1) he is a general agent of the shipowner; (2) he is also commander and
technical director of the vessel; and (3) he is a representative of the country
under whose flag he navigates. Of these roles, by far the most important is the
role performed by the captain as commander of the vessel; for such role
(which, to our mind, is analogous to that of "Chief Executive Officer" [CEO] of a
present-day corporate enterprise) has to do with the operation and
preservation of the vessel during its voyage and the protection of the
passengers (if any) and crew and cargo. In his role as general agent of the
shipowner, the captain has authority to sign bills of lading, carry goods aboard
and deal with the freight earned, agree upon rates and decide whether to take
cargo. The ship captain, as agent of the shipowner, has legal authority to enter
into contracts with respect to the vessel and the trading of the vessel, subject
to applicable limitations established by statute, contract or instructions and
regulations of the shipowner. To the captain is committed the governance, care
and management of the vessel. Clearly, the captain is vested with both
management and fiduciary functions.50 (Emphasis supplied, citations omitted)
This notwithstanding, there are recognized instances when control of a vessel
is yielded to a pilot. Section 8 of Philippine Ports Authority (PPA) Administrative
Order No. 03-85, otherwise known as the Rules and Regulations Governing
Pilotage Services, the Conduct of Pilots and Pilotage Fees in Philippine
51

Ports, enumerates instances when vessels are subjected to compulsory


pilotage:
Sec. 8. Compulsory Pilotage Service For entering a harbor and anchoring
thereat, or passing through rivers or straits within a pilotage district, as well as
docking and undocking at any pier/wharf, or shifting from one berth or another,
every vessel engaged in coastwise and foreign trade shall be under compulsory
pilotage.
However, in the Ports of Manila and Cebu, and in such other ports as may be
allowed by this Authority, Ship Captains may pilot their vessels engaged in

Page 52 of 89
coastwise trade provided they meet / comply with the following minimum
qualifications / requirements:
a) Must be properly licensed as a Harbor Pilot by the Philippine Coast Guard for
Manila,
Cebu
and
other
authorized
ports;
b) Must have been a Master of an interisland vessel for at least three (3) years
prior
to
his
application
with
the
PPA;
c) Must be certified by a government physician as physically and mentally fit.
Vessels maneuvered by a Special Harbor Pilot shall be exempt from the
payment of all pilotage fees.52
The second paragraph of Section 8 identifies an instance when control of a
vessel need not be yielded to a pilot. Section 9 further enumerates exceptions
to compulsory pilotage:
ChanRoblesVirtualawlibrary

Sec. 9. Exemptions - In the following cases, pilotage service is not compulsory:

f)

Vessels calling at private ports whose owners have


formally waived the requirements of compulsory
pilotage.53

Section 32(f) of PPA Administrative Order No. 03-85 specifies the foremost
responsibility of a Harbor Pilot, that is, the direction of the vessel being piloted.
In addition, Section 32 (f) spells out the duration within which the Harbor Pilot
is to fulfill this responsibility. It likewise provides that the Master's failure to
carry out the Harbor Pilot's orders is a ground for absolving the Harbor Pilot of
liability:
Sec. 32. Duties and Responsibilities of the Pilots or Pilots' Association. The
duties and responsibilities of the Harbor Pilot shall be as follows:

chanRoble svirtualLawlibrary

....

a) Vessels engaged in coastwise trade undocking at


ed or berthed
Provided,
however,
that
his responsibility
shall cease at the moment the Master neglects or refuses to carry ou
all safely;
ports, except
at the
ports of
Manila,
Cebu,
Consistent with the yielding of control to a pilot, Section 11 of PPA
Iloilo, Tacloban, Davao, Zamboanga, Pulupandan,
Administrative Order No. 03-85 makes the Harbor Pilot liable for damage
Masinloc, and San Fernando,
caused by his or her negligence or fault. The same provision, however,
emphasizes that "overall command" of the vessel remains in the Master of the
vessel:

b) Government vessels,
c)

Vessels of foreign governments entitled to


courtesy,

d) Vessels that are authorized by BOT to engage in


daily ferry service plying between two places
within a port or between two ports,
e)

Phil. Flag vessels engaged in coastwise trade that


depart from an anchorage,

Sec. 11. Control of Vessels and Liability for Damage. On compulsory pilotage
grounds, the Harbor Pilot providing the service to a vessel shall be responsible
for the damage caused to a vessel or to life and property at ports due to his
negligence or fault. He can be absolved from liability if the accident is caused
by force majeure or natural calamities provided he has exercised prudence and
extra
diligence
to
prevent
or
minimize
the
damage.
The Master shall retain overall command of the vessel even on pilotage
grounds whereby he can countermand or overrule the order or command of the
Harbor Pilot on board. In such event, any damage caused to a vessel or to life
and property at ports by reason of the fault or negligence of the Master shall
be the responsibility and liability of the registered owner of the vessel
concerned
without
prejudice
to
recourse
against
said
Master.
Such liability of the owner or Master of the vessel or its pilots shall be
determined by competent authority in appropriate proceedings in the light of
the facts and circumstances of each particular case.55
Accordingly, it is settled that Harbor Pilots are liable only to the extent that
they can perform their function through the officers and crew of the piloted
ChanRoblesVirtualawlibrary

vessel.

56

Where there is failure by the officers and crew to adhere to their

orders, Harbor Pilots cannot be held liable.


Court of Appeals,

58

57

In Far Eastern Shipping Co. V.

this court explained the intertwined responsibilities of pilots

Page 53 of 89
and masters:
[W]here a compulsory pilot is in charge of a ship, the master being required to
permit him to navigate it, if the master observes that the pilot is incompetent
or physically incapable, then it is the duty of the master to refuse to permit the
pilot to act. But if no such reasons are present, then the master is justified in
relying upon the pilot, but not blindly. Under the circumstances of this case, if a
situation arose where the master, exercising that reasonable vigilance which
the master of a ship should exercise, observed, or should have observed, that
the pilot was so navigating the vessel that she was going, or was likely to go,
into danger, and there was in the exercise of reasonable care and vigilance an
opportunity for the master to intervene so as to save the ship from danger, the
master should have acted accordingly. The master of a vessel must exercise a
degree of vigilance commensurate with the circumstances. 59 (Citations omitted)
Thus, contrary to Lorenzo Shipping's assertion, the MV Lorcon Luzon's having
been piloted by Captain Yape at the time of the ramming does not
automatically absolve Lorenzo Shipping of liability. Clearing it of liability
requires a demonstration of how the Master, Captain Villarias, conducted
himself in those moments when it became apparent that the MV Lorcon Luzon's
engine had stopped and Captain Yape's orders to go "slow astern" and "full
astern" were not being heeded.

II
As noted by the Court of Appeals, Captain Villarias was remiss in his duties. In
his testimony before the Board of Marine Inquiry, Captain Villarias admitted
that about six (6) minutes had passed before he even realized that there was
an engine failure, let alone acted on this fact:

Atty.
Tepal:

Do you want to tell this Honorable Board


that before the ramming incident there
was an order from the harbor pilot for slow
eastern [sic] engine and there was no
response?

Capt
Villarias:

Yes, there was an order.

Atty.
Tepal:

Where were you at that time, Mr. Witness?

Capt.
Villarias:

I am always [at] the side of the harbor


pilot.

Atty.
Tepal:

Have you heard the harbor pilot issuing


the orders?

Capt.
Villarias:

Yes, because I have to repeat his order.

Significantly, Captain Mariano Villarias before the Board of Marine Inquiry


testified as follows:
chanRoble svirtualLawlibrary

"Atty.
Tapel:

Capt
Villarias:

Now, during the time of that accident, Mr.


Witness, how did you know that the cause
of the ramming on Power Barge No. 104
was due to engine failure?
There was no response upon the order or
the harbor pilot from slow to full eastern
[sic] engine.

Atty. Tepel Now, when there was no response[,] who


(sic):
is supposed to respond to the order of the
harbor pilot?
Capt.
Vilalrias:

It was the engine department.

Page 54 of 89
In the first place, six (6) minutes cannot be characterized as so quick and
fleeting that it deprived Captain Villarias and his crew of "the time they needed

Atty Tapel
(sic):

Who in the engine department is supposed


to respond to the order of the harbor pilot?

Capt.
Villarias:

The second engineer and the chief


engineer. The engineer on duty.

62

to arrest the momentum of the vessel." By way of reference, an entire song


of average length (or longer) could have played in Captain Villarias' head within
those six (6) minutes. The vessel had been performing the tedious task of
berthing and had been moving so fast that it was about to collide with the
docks in the wharf. Given these circumstances, it was only reasonable for
Captain Villarias, precisely because he was the vessel's Master, to remain
vigilant, to support and supplement Captain Yape's orders, and to take evasive
and counter measures should Captain Yape's attempts to safely berth prove to
be ineffectual. The Court of Appeals' observation is well-taken: "Even just a
minute without any response from the concerned department could have
alarmed him."

Atty.
Tepal:

And because there was no response from


the engine department[,] you concluded
that there was an engine failure which
caused the ramming of Napocor Power
Barge?

Capt.
Villarias:

Almost six (6) minutes there is no


response before I know that there was an
engine failure."60

In the Reply it filed in G.R. No. 181683, Lorenzo Shipping attempts to douse
the significance of Captain Villarias' inaction for six (6) minutes as follows:
The Court of Appeals held that Capt. Villarias was remiss in his duties because
he just stood besides [sic] the harbour pilot waiting for a response from the
engine department. He could have called the attention of Capt. Yape on his
miscalculations
in
the
docking
maneuvers
of
the
vessel.
But the Court of Appeals assumed that the unfolding circumstances on the
water that approached the wharf were in slow motion and permitted the
vessel's captain to have time to examine the situation and deliberate on it,
make a judgment that the pilot had given a wrong command, wrest from him
control of the vessel, and enable the crew down in its belly, at the time tuned
to the voice of the pilot, to realize that the latter's authority had been
superseded and that the command had reverted to the captain. As it were, no
evidence was presented to show that the captain and the crew had all the time
they needed to arrest the momentum of the vessel to which the pilot had
directed it.61
We disagree.

63

Lorenzo Shipping counters the observations of the Court of Appeals by


attempting to paint a picture of absurdity. It describes the confluence of events
as needing to have been in "slow motion" if the crew were to timely and
properly react. It conjures images of Captain Villarias "wrest[ing] from
64

[Captain Yape] control of the vessel" and the crew thrown into a confused
frenzy as they had to listen to Captain Villarias' voice.
This manner of arguing fails to impress. To reiterate, six (6) minutes were
more than enough time for Captain Villarias to have done something to remedy
the situation. It is not for us to hypothesize on whether the measures he took
would have been effectual. It remains that for six minutes, he did nothing. As
Master of the MV Lorcon Luzon, he should have been on his toes, keen and
ready to make decisions in a split second, especially in an evidently precarious
situation. His failure to timely act is too glaring to ignore.
Moreover, both Captain Villarias and Captain Yape must be presumed to have
been disciplined officers who knew fully well how to conduct themselves in such
a situation. There is no basis for contemplating a scenario where the Pilot and
the Master are battling for control of the MV Lorcon Luzon.
So, too, the crew must be presumed to have been trained to follow the
Master's commands. It is ridiculous to think that merely hearing Captain
Villarias' voice in lieu of Captain Yape's would throw the crew into paralyzed
confusion. Besides, from Captain Villarias' quoted testimony, the crew was
already listening to both his and Captain Yape's voices. He admitted that he
repeated Captain Yape's orders. The crew was, thus, properly disposed to heed
instructions coming from him. If at all, his failure to timely act despite the
crew's presumptive readiness to heed his command only highlights his
negligence.

ChanRoblesVirtualawlibrary

III
Equally futile is Lorenzo Shipping's claim that National Power Corporation must

Page 55 of 89
bear its own losses as it assumed the risk of injury when it moored a nonpropelled or stationary barge in the Makar Wharf.
It is pointless to even consider this. Apart from Lorenzo Shipping's own selfserving assertions, there is no basis for holding that Power Barge 104's
presence in the Makar Wharf was improper and tantamount to an assumption
of risk. Lorenzo Shipping could have very easily adduced proof attesting to
Makar Wharf's supposedly being exclusive to self-propelled vessels. It did not.
Nowhere in any of its submissions to this court did Lorenzo Shipping annex a
copy of the appropriate regulation, if any, that restricts the use of Makar Wharf
to self-propelled vessels or absolutely prohibits National Power Corporation
from using it as a berthing place for a power barge.
If at all, the MV Lorcon Luzon's ramming of a stationary object is even more
damaging to Lorenzo Shipping's cause. As explained in Far Eastern Shipping:

65

We start our discussion of the successive issues bearing in mind the evidentiary
rule in American jurisprudence that there is a presumption of fault against a
moving vessel that strikes a stationary object such as a dock or navigational
aid. In admiralty, this presumption does more than merely require the ship to
go forward and produce some evidence on the presumptive matter. The
moving vessel must show that it was without fault or that the collision was
occasioned by the fault of the stationary object or was the result of inevitable
accident. It has been held that such vessel must exhaust every reasonable
possibility which the circumstances admit and show that in each, they did all
that reasonable care required. In the absence of sufficient proof in rebuttal, the
presumption of fault attaches to a moving vessel which collides with a fixed
object and makes a prima facie case of fault against the vessel. Logic and
experience support this presumption:
The common sense behind the rule makes the burden a heavy one. Such
accidents simply do not occur in the ordinary course of things unless the vessel
has been mismanaged in some way. It is not sufficient for the respondent to
produce witnesses who testify that as soon as the danger became apparent
everything possible was done to avoid an accident. The question remains, How
then did the collision occur? The answer must be either that, in spite of the
testimony of the witnesses, what was done was too little or too late or, if not,
then the vessel was at fault for being in a position in which an unavoidable
collision would occur.66 (Emphasis supplied, citations omitted)
IV
We sustain the Court of Appeals' award to National Power Corporation of
P300,000.00 as temperate damages.
Article 2199 of the Civil Code spells out the basic requirement that
compensation by way of actual damages is awarded only to the extent that
pecuniary loss is proven:

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


adequate compensation only for such pecuniary loss suffered by him as he has
duly proved. Such compensation is referred to as actual or compensatory
damages.
The standard for proving pecuniary loss was explained in PNOC Shipping and
Transport Corp. v. Court of Appeals,

67

as follows:

A party is entitled to adequate compensation only for such pecuniary loss


actually suffered and duly proved. Indeed, basic is the rule that to recover
actual damages, the amount of loss must not only be capable of proof but
must actually be proven with a reasonable degree of certainty, premised upon
competent proof or best evidence obtainable of the actual amount thereof. The
claimant is duty-bound to point out specific facts that afford a basis for
measuring whatever compensatory damages are borne. A court cannot merely
rely on speculations, conjectures, or guesswork as to the fact and amount of
damages as well as hearsay or uncorroborated testimony whose truth is
suspect.68 (Citations omitted)
National Power Corporation bewails the Court of Appeals' observation that the
basis of its claims was "not properly receipted."

69

It counters that it was able


70

to show by "competent testimonial and documentary evidence" that it must


be compensated for actual damages in the amount of P876,826.00. It recalls
these pieces of evidence:

a.

Testimony of Mr. Nelson Homena, manager of Power Barge 104 [who]


testified on the damages [sic] sustained by said barge as a result of
the ramming incident caused by the negligence of M/V Lorcon Luzon.

b.

The "Total Incidental Cost for Drydock and Repair" prepared by the
Philippine Shipyard and Engineering Corporation ("PHILSECO") dated
14 October 1993 was presented which clearly enumerated and
itemized the actual damages [sic] sustained by Power Barge 104 and
repaired by PHILSECO.

c.

NPC Disbursement Voucher No. 093-121304 in the amount of


P6,775,839.02 covering a period up to 14 January 1994 as proof of
payment made by [National Power Corporation] to PHILSECO for
drydocking repairs of Power Barge 104.71

However, Lorenzo Shipping pointed out fatal flaws in these pieces of evidence.
These flaws led the Court of Appeals to reconsider its earlier award of actual
damages to National Power Corporation.
Regarding the "Total Incidental Cost for Drydock and Repair," which was
National Power Corporation's Exhibit "F" before the Regional Trial Court,
Lorenzo Shipping underscored that when the Regional Trial Court ruled on

Page 56 of 89
National Power Corporation's Formal Offer of Evidence, it denied the admission
of Exhibit "F" for not having been identified nor authenticated. It emphasized
that no witness came forward to attest to its authenticity and due execution,
let alone allowed himself or herself to be cross-examined on these points.

72

73

Regarding Disbursement Voucher No. 093-121304, Lorenzo Shipping pointed


out that while this attests to expenses paid to PHILSECO, it was silent on the
exact cost paid for the repair of Power Barge 104.

74

Nowhere in any of its submissions to this courtwhether in its Comment in


G.R. No. 181683 or in its Petition and/or Reply in G.R. No. 184568did
National Power Corporation rebut the flaws noted by Lorenzo Shipping.
Instead, it merely insisted on how actual damages are awarded on the basis of
the "best obtainable evidence,"

75

and how it has supposedly presented

"competent testimonial and documentary evidence"

76

It is basic that any material presented as evidence will not be considered


unless duly admitted by the court before which it is presented. Just as basic is
that a private document offered as authentic evidence shall not be admitted
unless its due execution and authenticity are established in the manner
specified by Rule 132, Section 30 of the Revised Rules on Evidence:
Section 20. Proof of private document. - Before any private document offered
as authentic is received in evidence, its due execution and authenticity must be
proved
either:

chanRoble svirtualLawlibrary

By

anyone

who

saw

the

document

executed

or

written;

or

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


maker.
Any other private document need only be identified as that which it is claimed
to be.
A bill of expenses, such as National Power Corporation's Exhibit "F", is
considered a private document as it does not fall under what the Revised Rules
77

Admissibility of evidence and weight accorded to evidence are two distinct


affairs. Rule 128, Section 3 of the Revised Rules on Evidence governs
admissibility and provides that "[e]vidence is admissible when it is relevant to
the issue and is not excluded by the law of these rules." When evidence has
"such a relation to the fact in issue as to induce belief in its existence or non79

existence," it is said to be relevant. When evidence is not excluded by law or


by the Rules, it is said to be competent.
The weight accorded to evidence is properly considered only after evidence has
been admitted. To this end, courts evaluate evidence in accordance with the
80

to prove its claims.

National Power Corporation's posturing fails to impress.

(a)

3. Denies the admission of Exhibit "F" and its submarkings for not having been
properly identified.78
It is of no consequence that the substance or contents of Exhibit "F" are such
that they specify an amount. It is of no consequence that it is purportedly of
such evidentiary weight that it could definitely establish National Power
Corporation's claims.
ChanRoblesVirtualawlibrary

Regarding Nelson Homena's testimony, Lorenzo Shipping emphasized that all


he indicated was how he and a certain Mr. Neri estimated the cost of damage
to be at about P1,000,000.00.

Court, it:

on Evidence defines to be public documents. Accordingly, for it to have been


admitted by the Regional Trial Court as authentic, Rule 132, Section 30 of the
Revised Rules on Evidence must have been complied with. National Power
Corporation failed in this respect. Thus, in the words of the Regional Trial

rules stipulated by Rule 133 of the Revised Rules on Evidence, consistent


with basic precepts of rationality and guided by judicially established
standards. It is improper to even speak of evidentiary weight when the piece of
evidence in question has not even been admitted.
Exhibit "F" was ruled to have been inadmissible for failing to comply with Rule
132, Section 20 thus, it failed the standard of competency. Consistent with
this, reliance on National Power Corporation's Exhibit "F" and its contents, so
as to establish the extent of National Power Corporation's pecuniary loss, is
misplaced. Not having been admitted, Exhibit "F" does not form part of the
body of evidence worthy of judicial consideration.
As National Power Corporation cannot rely on the "Total Incidental Cost for
Drydock and Repair," it is left to rely on the testimony of Nelson Hpmena and
on NPC Disbursement Voucher No. 093-121304.
However, as pointed out by Lorenzo Shipping, these pieces of evidence fall
short of the standard required for proving pecuniary loss, which shall be the
basis for awarding actual damages. As regards Nelson Homena's testimony, all
he did was give an estimate of P1,000,000.00. Certainly, a mere estimate does
not suffice as proof of actual pecuniary loss. As regards NPC Disbursement
Voucher No. 093-121304, all it attests to is a release of funds in favor of
PHILSECO in the total amount of P6,775,839.02, covering no specific
transaction but a period extending from January 14, 1994.

V
Clearly, National Power Corporation failed to establish the precise amount of

Page 57 of 89
pecuniary loss it suffered. Nevertheless, it remains that Power Barge 104
sustained damagewhich may be reckoned financiallyas a result of the MV
Lorcon Luzon's ramming into it. National Power Corporation suffered pecuniary
loss, albeit its precise extent or amount had not been established. Accordingly,
we sustain the Court of Appeals' conclusion that National Power Corporation is
entitled to temperate damages.
Articles 2224 and 2225 of the Civil Code govern temperate damages:
Article 2224. Temperate or moderate damages, which are more than nominal
but less than compensatory damages, may be recovered when the court finds
that some pecuniary loss has been suffered but its amount can not, from the
nature
of
the
case,
be
provided
with
certainty.
Article 2225. Temperate damages must be reasonable under the
circumstances.
Banking on Article 2224's text, which references "the nature of the case,"
Lorenzo Shipping asserts that temperate damages can be awarded only in
cases where pecuniary loss may have been incurred, but whose exact amount,
through the nature of the injury suffered, e.g., injury to commercial credit or
business goodwill, cannot be ascertained. It argues that because the
circumstances of this case are such that National Power Corporation could have
pleaded and proved a specifici.e., ascertainedamount of pecuniary loss but
failed to do so, temperate damages should not be awarded.

Inc. v. Delos Santos, a civil action for damages involving a vehicular collision,
temperate damages were awarded for the resulting damage sustained by a
cargo truck, after the plaintiff had failed to submit competent proof of actual
damages.82 (Citations omitted)
In resolving this case, we have had to sift through the parties'
competing claims as to who exactly is liable and to what extent.
Reduced to its fundamentals, however, this case remains to be about
damage sustained by property owned by National Power Corporation
when the MV Lorcon Luzon rammed into it. This damage is susceptible
to financial reckoning. Unfortunately for National Power Corporation, it
failed to establish the precise amount of its pecuniary loss. This vice of
precision notwithstanding, it would be improper to completely turn a
blind eye to the loss suffered by National Power Corporation and to
deny it, as Lorenzo Shipping suggests, of any form of recompense.
Under these circumstances, we sustain the Court of Appeals' award of
temperate damages.
WHEREFORE, the consolidated Petitions are DENIED. The Amended
Decision dated February 12, 2008 and Resolution dated September 17,
2008 of the Court of Appeals in CA-G.R. CV No. 76295
are AFFIRMED.
All monetary awards for damages shall earn interest at the legal rate
of 6% per annum from the date of the finality of this judgment until
fully paid.

Lorenzo Shipping is proposing an erroneous, narrow, and unduly restrictive


construction of Article 2224.

SO ORDERED.

This case is not the first instance that this court was confronted with the
ostensibly limiting language of Article 2224. In Republic of the Philippines v.

Brion, (Acting Chairperson), Peralta, Del Castillo, and Villarama,

81

Tuvera, this court already debunked the notion that temperate damages are
appropriate only in those cases in which pecuniary loss cannot, "by its nature,"
be ascertained:
Temperate or moderate damages avail when "the court finds that some
pecuniary loss has been suffered but its amount can not from the nature of the
case, be proved with certainty." The textual language might betray an intent
that temperate damages do not avail when the case, by its nature, is
susceptible to proof of pecuniary loss; and certainly the Republic could have
proved pecuniary loss herein. Still, jurisprudence applying Article 2224 is clear
that temperate damages may be awarded even in instances where pecuniary
loss
could
theoretically
have
been
proved
with
certainty.
In a host of criminal cases, the Court has awarded temperate damages to the
heirs of the victim in cases where the amount of actual damages was not
proven due to the inadequacy of the evidence presented by the prosecution.
These cases include People v. Oliano, People v. Suplito, People v. De la
Tongga, People v. Briones, and People v. Plazo. In Viron Transportation Co.,

chanroblesvirtuallawlibrary

Jr.,

**

JJ., concur.

chanroble slaw

25. UNAUTHENTICATED PRIVATE


DOCUMENT IS INADMISSIBLE IN
EVIDENCE.
G.R. No. 182208, October 14, 2015
ASIAN TERMINALS, INC., Petitioner, v. ALLIED GUARANTEE INSURANCE,
CO., INC., Respondent.
DECISION
PERALTA, J.:

Page 58 of 89
Before the Court is a petition for review on certiorari under Rule 45 of the
Rules of Court seeking to annul and set aside the Court of Appeals
Decision1 dated November 9, 2007 and Resolution2 dated March 26, 2008 in
CA-G.R. CV. No. 48661, which affirmed the trial court's finding that petitioner is
liable for the damage to certain goods within its custody.
The facts of the case follow.
Marina Port Services, Inc. (Marina), the predecessor of herein petitioner Asian
Terminals, Inc. (petitioner ATP), is an arrastre operator based in the South
Harbor, Port Area, Manila.3 On February 5, 1989, a shipment was made of
72,322 lbs. of kraft linear board (a type of paperboard) loaded and received
from the ports of Lake Charles, LA, and Mobile, AL, U.S.A., for transport and
delivery to San Miguel Corporation (San Miguel) in Manila, Philippines.4 The
vessel used was the M/V Nicole, operated by Transocean Marine, Inc.
(Transocean), a foreign corporation, whose Philippine representative is
Philippine Transmarine Carrier, Inc. (Philippine Transmarine).5
The M/V Nicole arrived in Manila on April 8, 1989 and, shortly thereafter, the
subject shipment was offloaded from the vessel to the arrastre Marina until
April 13, 1989.6 Thereafter, it was assessed that a total of 158 rolls of the
goods were "damaged" during shipping.7 Further, upon the goods' withdrawal
from the arrastre and their delivery, first, to San Miguel's customs broker,
Dynamic Brokerage Co. Inc. (Dynamic), and, eventually, to the consignee San
Miguel, another 54 rolls were found to have been damaged, for a total of 212
rolls of damaged shipment worth P755,666.84.8
Herein respondent Allied Guarantee Insurance, Co., Inc., (respondent Allied),
was the insurer of the shipment. Thus, it paid San Miguel P755,666.84 and was
subrogated in the latter's rights.9
On March 8, 1990, Allied filed a Complaint10 (and later, an Amended Complaint)
for maritime damages against Transocean, Philippine Transmarine, Dynamic
and Marina seeking to be indemnified for the P755,666.84 it lost in paying the
consignee San Miguel. The suit alleged that the shipment was loaded from the
ports of origin "in good and complete order condition," and all losses were due
to the fault of the named defendants.11 In addition, the suit sought legal
interest, 25% of the indemnity as attorney's fees, and costs of the suit. 12
In its Amended Answer with Compulsory Counterclaim and
Crossclaim,13 Marina denied the complaint's allegations and maintained that
158 rolls in the shipment were already in "bad order condition" when it turned
over the same to the consignee's representative/broker. It claimed due care
and diligence in the handling of the goods and that no damage was sustained
by the same while in its custody or care.14 It alleged that whatever damage
incurred was attributable to its co-defendants who should reimburse it for
whatever amount the latter may be adjudged liable.15
The other co-defendants Transocean and Philippine Transmarine also denied

most of the complaint's allegations and counter-alleged that a large portion of


"the shipment was already in torn/scuffed condition prior to loading" in their
vessel.16 In addition, they attributed the damage to the nature, vice or defect
of the goods, the perils and accidents of the sea, to pre-shipment loss and
insufficiency of packing.17 They claimed to have exercised the diligence
required by law so that the damage incurred was not their fault. 18
The case underwent trial and, thereafter, the Regional Trial Court (RTC) of
Makati City, Branch 148, found all the-defendants, including the predecessor of
herein petitioner, liable for the losses. The dispositive portion of the trial court's
Decision dated September 9, 1993 states:
cralawlawlibrary

WHEREFORE, premises considered, judgment is hereby rendered in favor of the


plaintiff and against the defendants, thereby ordering the latter to pay the
obligation in the following manner:
a) the amount of P623,935.76 plus interest corresponding to the 158 rolls of
kraft linear board that was damaged while in the custody of defendant
Transocean Inc. to be paid by the latter to the plaintiff with legal rate of
interest from the time when it was due and until fully paid;
ChanRoblesVirtualawlibrary

b) the amount of P131,731.08 plus interest corresponding to the additional 54


rolls of kraft linear board that was damaged, to be paid jointly and severally by
defendants Marina Port Services Inc. and Dynamic Brokerage Co. Inc. to the
plaintiff with legal rate of interest from the time when it was due until fully
paid;
ChanRoblesVirtualawlibrary

c) 25% of the aforesaid principal amounts as attorney's fees to be paid jointly


and severally by all the defendants.
d) plus costs of suit.
SO ORDERED.19
chanrobleslaw

The RTC found the defendant shipping company Transocean liable for the 158
rolls of damaged goods due to the latter's failure to observe the necessary
precautions and extraordinary diligence as common carrier to prevent such
damage.20 Then, the additional 54 rolls of the goods that were lost were found
to have been damaged while in the possession of Marina, the arrastre operator
and Dynamic, the broker.21 It found Marina and Dynamic solidarity liable for the
said damaged goods.22Thus, the trial court found all the defendants liable for
portions of the cargo that were damaged in their respective custody. It
dismissed the parties' counterclaims and crossclaims.
Marina, which changed its name to Asian Terminals Inc. (ATI), elevated the
case to the Court of Appeals.23 The lone assignment of error it attributes to the
RTC decision is:
chanRoblesvirtualLa wlibrary

Page 59 of 89
THE COURT A QUO ERRED IN RENDERING
ATI LIABLE FOR THE ADDITIONAL DAMAGES
SUSTAINED BY THE SUBJECT SHIPMENT.

Hence, the Court resolves the issues of whether or not petitioner has been
proven liable for the additional 54 rolls of damaged goods to respondent and, if
so, whether it is also liable for attorney's fees.

ATI maintained that the goods were withdrawn by the broker in the same
condition as they were discharged from the vessel.24 It argued that it is not
liable for the damage to the additional 54 rolls as these were discovered only
at the warehouse of San Miguel and these were the broker's responsibility after
they were released from ATI's custody until delivery to the consignee. 25 It
accused the trial court of merely speculating when it held ATI and Dynamic to
be jointly and severally liable for the the additional damage. 26

The court denies the petition with respect to the additional 54 rolls of damaged
goods, as petitioner's liability thereon was duly proven and well established
during trial. The rulings of both the trial and appellate courts in this respect are
upheld.

In its assailed Decision, the Court of Appeals did not sustain ATI's appeal and
affirmed the decision of the RTC, as follows:
cralawla wlibrary

At the outset, it is fairly evident that the petition prays for this Court to reexamine the factual-findings of the lower courts. But well-settled is the rule
that an appeal to the Court via a petition for review on certiorari under Rule 45
should raise or involve only pure questions of law.36 The distinction between
questions of law and questions of tact are explained in Microsoft Corporation v.
Maxicorp, Inc.37 as follows:
cralawlawlibrary

WHEREFORE, premises considered, the assailed September 9, 1993 Decision of


the Regional Trial Court of Makati City, Branch 148, in Civil Case No. 904661, is
hereby AFFIRMED.
SO ORDERED.27
chanrobleslaw

Like the trial court, the appellate court found the carriers Transocean and
Philippine Transmarine liable to the plaintiff insurer, the subrogee of the
consignee, for the 158 rolls of kraft linear board that were lost or damaged
while in the former's custody during shipping.28 The common carriers were held
liable because they were found unable to overcome the presumption of
negligence while in custody of the goods. 29 Then", the arrastre ATI and the
broker Dynamic were likewise found liable for the additional 54 rolls of the
same goods destroyed as both failed to prove the exercise of the amount of
diligence required in- the safekeeping of said goods.30 In particular, the
appellate court stated that ATI failed to present the Turn Over Inspector and
Bad Order Inspector as witnesses who could have testified that no additional
goods were damaged during its custody.31
ATI filed a motion for reconsideration of the above' decision, but the same was
denied by the appellate court.32
From the said decision, ATI filed the instant'petition for review.
Petitioner ATI argues that the appellate court erroneously failed to note the socalled Turn Over Survey of Bad Order Cargoes and the Requests for Bad Order
Survey which supposedly could absolve it from liability for the damaged
shipment.33 The reports were allegedly made prior to the shipment's turnover
from ATI to Dynamic and they purportedly show that no additional loss or
damage happened while the shipment was in ATI's custody as the reports only
mention the 158 rolls that were damaged during shipping or prior to ATI's
possession.34 ATI also assails the award of attorney's fees, stating that no
findings of fact or law mas made to justify the grant of such an award. 35

x x x A question of law exists when the doubt or difference centers on what the
law is'on a certain state of facts. A question of fact exists if the doubt centers
on the truth or falsity of the alleged facts. Though this delineation seems
simple, determining the true nature and extent of the distinction is sometimes
problematic. For example, it is incorrect to presume that all cases where the
facts are not in dispute automatically involve purely questions of law.
There is a question of law if the issue raised is capable of being resolved
without need of reviewing the probative value of the evidence. The resolution
of the issue must rest solely on what the law provides on the given set of
circumstances. Once it is clear that the issue invites a review of the evidence
presented, the question posed is one of fact. If the query requires a reevaluation of the credibility of witnesses, or the existence or relevance of
surrounding circumstances and their relation to each other, the issue in that
query is factual, x x x
chanroble slaw

A perusal of the current petition would show that it is disputing the facts as
found by the courts below. Verily, the nexus of the petition is the allegation
that the trial court did not appreciate the Turn Over Survey of Bad Order
Cargoes and the Requests for Bad Order Survey which were supposedly proof
that the goods suffered no additional damage while in petitioner's custody.
Plainly, the petition requests this Court to re-examine these particular evidence
and again weigh the same in relation to all other evidence in the case in the
hope that a conclusion different from those arrived at by the trial court and
appellate court may be reached. Such, however, is a resolution of a question of
fact.which is outside the office of a petition for review on certiorari under Rule
45.
Verily, there are exceptions to this rule that only questions of law may be
entertained by this Court in a petition for review on certiorari, such as when:
(1) the conclusion is grounded on speculations, surmises or conjectures;
(2) the inference is manifestly mistaken, absurd or impossible;
(3) there is grave abuse of discretion;

Page 60 of 89
(4) the judgment is based on a misapprehension of facts;
(5) the findings of fact are conflicting;
(6) there is no citation-of specific evidence on which the factual findings are
based;
(7) the findings of absence of facts are contradicted by the presence of
evidence on record; '
(8) the findings of the Court of Appeals are contrary to those of the trial court;
(9) the Court of Appeals manifestly overlooked certain relevant and undisputed
facts that, if properly considered, would justify a different conclusion;
(10) the findings of the Court of Appeals are beyond the issues of the case;
and
(11) such findings are contrary to the admissions of both parties. 38

claimed that the Marina personnel used a "grabbed lift." The consignee
sometimes used forklift(s), depending on the availability of equipment. Before
they received the cargoes from Marina, the condition of the cargoes were
already in damaged condition (sic). He noted that there were some
tearages due to the use of equipment in loading to their truck. When
they delivered the cargoes to the consignee's warehouse, they issued delivery
receipt(s). He does not know if there are additional damages (sic) sustained by
the cargoes from the time that they withdrew the same from the pier zone
(Marina's custody) up to the consignee's warehouse, x x x 40
xxxx

chanroble slaw

None of these, however, obtains in the case at bar. The petition fails to even
explain or argue if or why any of these apply to the present case. In fact, the
petition cites only three (3) of the said exceptions, namely:
cralawlawlibrary

(a) when the findings of facts of the appellate court are at variance with those
of the trial court;
(b) when the Court of Appeals manifestly overlooked certain relevant facts not
disputed by the parties which, if properly considered, would justify a different
conclusion; and
(c) when the judgment itself is based on misapprehension of facts. 39
chanrobleslaw

Still, none of the above applies in the present case. The first exception does
not apply as it is well established that the trial court and the Court of Appeals
have made similar findings in'this case as, in fact, the latter's decision fully
affirms the former's. Then, as for the second and'third exceptions, petitioner
could cite no undisputed fact that was "overlooked" by the Court of Appeals
and neither does it explain any "misapprehension" of established facts. And
even if it is granted, for argument's sake, that by "misapprehension" is meant
the trial court's alleged failure to see the significance of the Turn Over Survey
of Bad Order Cargoes and the Requests for Bad Order Survey in absolving
petitioner of liability over the additional, damage, the trial court had sufficiently
explained why it gave little or no credence to these pieces of evidence. The
trial court narrated:
cralawla wlibrary

Similarly," defendant Dynamic Brokerage Co., Inc., points to the same facts. Its
witness, Mr. Robert Rosario, Head of defendant's trucking department, whose
duties and functions consist of monitoring and supervising the delivery of
cargoes from the pier zone to the consignee's warehouse, claimed that
Dynamic received the subject cargoes in damaged condition and when it was
delivered to the consignee, San Miguel Corporation's warehouse, the condition
of the cargoes were the same as when it was received by Dynamic Brokerage.
He further claimed that the personnel of Marina Port Services loaded
the cargoes to Dynamic's truck. After the loading, their truck proceeded to
the consignee's warehouse which is located in Tabacalera, at United Nations,
Manila, and then they unloaded said cargoes with their equipments. He

It is noteworthy to mention that "in general, the nature of the work of an


arrastre operator covers the handling of cargoes at piers and wharves," which
was what exactly defendant Marina's function entails in this case. "To carry out
its duties, the arrastre is required to provide cargo handling equipment which
includes, among others, trailer, chassis for containers." On the other hand,
defendant Dynamic (which) in its capacity as broker, withdrew the 357 rolls of
kraft linear board from the custody of defendant Marina and delivered the
same to the consignee, San Miguel Corporation's warehouse in Tabacalera at
United Nations, Manila, is considered a common carrier.
Hence, the "legal relationship betw.een the consignee and the arrastre operator
is akin to that of a depositor and the warehouseman. The relationship between
the consignee and the common carrier is similar to that of the consignee and
the arrastre operator. Since it is the duty of the arrastre to take good care of
the goods that are in its custody and to deliver them in good condition to the
consignee, such responsibility also develops upon the carrier. Both the arrastre
and the carrier are, therefore, charged with and obligated to deliver the goods
in good condition to the consignee."41
chanrobleslaw

The trial court correctly held that the broker, Dynamic, cannot alone be held
liable for the additional 54 rolls of damaged goods since such damage occurred
during the following instances: (1) while the goods were in the custody of the
arrastre ATI; (2) when they were in transition from ATI's custody to that of
Dynamic (i.e., during loading to Dynamic's trucks); and (3) during Dynamic's
custody. While the trial court could not determine with pinpoint accuracy who
among the two caused which particular damage and in what proportion or
quantity, it was clear that both ATI and Dynamic failed to discharge the burden
of proving that damage on the 54 rolls did not occur during their custody. As
for petitioner ATI, in particular, what worked against it was the testimony, as
cited above, that its employees' use of the wrong lifting equipment while
loading the goods onto Dynamic's trucks had a role in causing the damage.
Such is a finding of fact made by the trial court which this Court, without a
justifiable ground, will not disturb,
As previously held by this Court, the arrastre operator's principal work is that
of handling cargo, so that its drivers/operators or employees should observe
the standards and measures necessary to prevent losses and damage to

Page 61 of 89
shipments under its custody.42 In the performance of its obligations, an arrastre
operator should observe the same degree of diligence as that required of a
common carrier and a warehouseman.43 Being the custodian of the goods
discharged from a vessel, an arrastre operator's duty is to take good care of
the goods and to turn them over to the party entitled to their
possession.44 With such a responsibility, the arrastre operator must prove that
the losses were not due to its negligence or to that of its employees. 45 And to
prove the exercise of diligence in handling the subject cargoes, petitioner must
do more than merely show the possibility that some other party could be
responsible for the loss or the damage.46 It must prove that it exercised due
care in the handling thereof.47
But ATI submits that the Turn Over Survey of Bad Order Cargoes and the
Requests for Bad Order Survey help establish that damage to the additional 54
rolls of goods did not happen in its custody. In particular, the Requests for Bad
Order Survey was allegedly signed by Dynamic's representative stating that
only 158 rolls were damaged as of the goods' transfer from ATI to Dynamic.
However, this Court has already held that a mere sign-off from the customs
broker's representative that he had received the subject shipment "in good
order and condition without exception" would not absolve the arrastre from
liability, simply because the representative's signature merely signifies that
said person thereby frees the arrastre from any liability for loss or damage to
the cargo so withdrawn while the same was in the custody of such
representative to whom the cargo was released, but it does not foreclose the
remedy or right of the consignee (or its subrogee) to prove that any loss or
damage to the subject shipment occurred while the same was under the
custody, control and possession of the arrastre operator.48 Additionally, the
finding of the trial court, as stated above, that at least some of the damage
occurred during ATI's custody cannot be ignored.
Certainly, ATI's reliance on the Turn Over Survey of Bad Order Cargoes as well
as the Requests for Bad Order Survey is misplaced. An examination of the
documents would even reveal that the first set of documents, the Turn Over
Survey of Bad Order Cargoes, pertain to the 158 rolls of damaged goods which
occurred during shipment and prior to ATI's custody.49 But responsibility for the
158 rolls was already established to be that of the common carrier and is no
longer disputed by the parties. Thus, this fact has little or no more relevance to
the issue of liability over the additional 54 rolls of damaged goods. Anent the
second set of documents, the Requests for Bad Order Survey, which mention
only 158 rolls of damaged goods and do not mention any additional damage,
the same do not result in an automatic exculpation of ATI from liability. As
previously stated, jurisprudence states that the signature by a-customs
broker's representative of "receipt in good order" does not foreclose the
consignee's or its subrogee's right or remedy to prove that additional loss or
damage to the subject shipment occurred while the same was under the
custody, control and possession of the arrastre operator.50 Further, it is unclear
whether these Requests for Bad Order Survey were executed prior to or after
loading was done onto Dynamic's trucks. As earlier indicated, there is
testimony that it was during the loading to the trucks that some or all of the

damage was incurred.


Since the relationship of an arrastre operator and a consignee is akin to that
between a warehouseman and a depositor, then, in instances when the
consignee claims any loss, the burden of proof is on the arrastre operator to
show that it complied with the obligation to deliver the goods and that the
losses were not due to its negligence or that of its employees. 51 ATI failed to
dislodge this burden. As observed by the Court of Appeals,
cralawlawlibrary

Marina, the arrastre operator, from the above evidence, was not able to
overcome the presumption of negligence. The Bad Order Cargo Receipts, the
Turn Over Survey of Bad Order Cargoes as well as the Request for Bad Order
Survey did not establish that the additional 54 rolls were in good condition
while in the custody of the arrastre. Said documents proved only that indeed
the 158 rolls were already damaged when they were discharged to the arrastre
operator and when it was subsequently withdrawn from the arrastre operator
by [the] customs broker. Further, the Turn Over Inspector and the Bad Order
Inspector who conducted the inspections and who signed the Turn Over Survey
of Bad [Order] Cargoes and the Request for Bad Order Survey, respectively,
were not presented by Marina as witnesses to verify the correctness of the
document and to testify that only 158 rolls was reported and no others
sustained damage while the shipment was in its possession.52
chanrobleslaw

The non-presentation of ATI of the so-called inspectors who prepared the


Requests for Bad Order Survey further proved detrimental to its case. The
inspectors could have verified on direct and cross-examination when the
additional damage was sustained and by whose fault. They could have testified
on whether the surveys on the 158 damaged rolls were the only ones prepared
by them or if there were others, pertaining to additional damage during ATI's
possession. Or they could have categorically stated whether all such additional
damage was sustained while in ATI's or Dynamic's custody alone. Instead, all
that ATI presented were the Requests for Bad Order Survey which, being
private documents that had not been authenticated by the inspectors who
prepared them, were correctly disregarded by the trial court and appellate
court. Private documents whose authenticity and due execution was not
established may not.be received in evidence and are hearsay.53
Failing to present the necessary evidence, ATI was unable to overcome the
presumption of its own negligence while in the custody of the goods.
As it is now established that there was negligence in both petitioner ATI's and
Dynamic's performance of their duties in the handling, storage and delivery of
the subject shipment to San Miguel, resulting in the loss of 54 rolls of kraft
linear board, both shall be solidarily liable for such loss.54
Anent the grant of attorney's fees, the Court sustains the petitioner's stance
that the same is unjustified. The Court has held, with respect to the award of
attorney's fees, as follows:
cralawla wlibrary

Page 62 of 89
We have consistently held that an award of attorney's fees under Article
2208 demands factual, legal, and equitable justification to avoid
speculation and conjecture surrounding the grant thereof. Due to the
special nature of the award of attorney's fees, a rigid standard is imposed on
the courts before these fees could be granted. Hence, it is imperative that
they clearly and distinctly set forth in their decisions the basis for the
award thereof. It is not enough that they merely state the amount of the
grant in the dispositive portion of their decisions. It bears reiteration that the
award of attorney's fees is an exception rather than the general rule; thus,
there must be compelling legal reason to bring the case within the exceptions
provided under Article 2208 of the Civil Code to justify the award. 55
chanrobleslaw

The court must always state the basis for the grant of attorney's fees before
such is justified, because the principle that is generally observed is that no
premium should be placed on the right to litigate.56 Under Article 2208 of the
New Civil Code, absent any stipulation from the parties as to the award of
attorney's fees, the instances under which the same may be granted is
restricted in the following manner:
cralawlawlibrary

chanroble slaw

In the case at bar, other than a mere mention that "plaintiff was constrained to
litigate to enforce its valid claim" by the trial court, 57 there is no other
compelling reason cited that would make the respondent entitled to attorney's
fees as held in the trial court's as well as the appellate court's decision. It has
been previously held trjat the mere fact of "having been forced to litigate to
protect one's interest" does not amount to the compelling legal reason that
would make a case covered by any of the exceptions provided under Article
2208.58 Although attorney's fees may be awarded when a claimant is
"compelled to litigate with third persons or incur expenses to protect his
interest" by reason of an unjustified act or omission on the part of the party
from whom it is sought, but when there is a lack of findings on the amount to
be awarded, and since there is no sufficient showing of bad faith in the
defendant's refusal to pay other than an erroneous assertion of the
righteousness of its cause, attorney's fees cannot be awarded against the
latter.59
Hence, such an award in the case at bar is unjustified and must be deleted.

Art. 2208. In the absence of stipulation, attorney's fees and expenses of


litigation, other than judicial costs, cannot be recovered, except:
cralawlawlibrary

(1) When exemplary damages are awarded;

In all cases, the attorney's fees and expenses of litigation must be


reasonable.

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


November 9,2007 in CA-G.R. CV. No. 48661 is AFFIRMED with
the MODIFICATION that the award of attorney's fees is DELETED.

ChanRoblesVirtualawlibrary

(2) When the defendant's act or omission has compelled the plaintiff to litigate
with third persons or to incur expenses to protect his Interest;

SO ORDERED.

(3) In criminal cases of malicious prosecution against the plaintiff;

Velasco, Jr., (Chairperson), Villarama, Jr., Mendoza,* and Jardeleza, JJ., concur.

chanroblesvirtuallawlibrary

ChanRoblesVirtualawlibrary

ChanRoblesVirtualawlibrary

(4) In case of a clearly unfounded civil action or proceeding against the


plaintiff;
ChanRoblesVirtualawlibrary

(5) Where the defendant acted in gross and evident bad faith in refusing to
satisfy the plaintiffs plainly valid, just and demandable claim;

26. JUDICIAL NOTICE OF SENATES


REPORT.

ChanRoblesVirtualawlibrary

(6) In actions for legal support;

G.R. No. 160684, September 02, 2015

ChanRoblesVirtualawlibrary

(7) In actions for the recovery of wages of household helpers, laborers and
skilled workers;
ChanRoblesVirtualawlibrary

(8) In actions for indemnity under workmen's compensation and employer's


liability laws;
ChanRoblesVirtualawlibrary

(9) In a separate civil action to recover civil liability arising from a crime;
(10) When at least double judicial.costs are awarded;

ChanRoblesVirtualawlibrary

(11) In any other case where the court deems it just and equitable that
attorney's fees and expenses of litigation should be recovered.

ChanRoblesVirtualawlibrary

CLT REALTY DEVELOPMENT


CORPORATION, Petitioner, v. HI-GRADE FEEDS
CORPORATION, REPUBLIC OF THE PHILIPPINES
(THROUGH THE OFFICE OF THE SOLICITOR GENERAL),
REGISTRY OF DEEDS OF METRO MANILA, DISTRICT III,
CALOOCAN CITY , AND THE COURT OF
APPEALS, Respondents.

Page 63 of 89

DECISION
PEREZ, J.:
The properties in dispute were formerly part of the notorious Maysilo Estate left
by Gonzalo Tuason, the vastness of which measures 1,660.26 hectares,
stretching across Caloocan City, Valenzuela, and Malabon, covered by five (5)
mother titles or Original Certificate of Title (OCT). One of the mother titles is
OCT No. 994, the mother title in dispute. Later on, smaller lots forming part of
the Maysilo Estate were sold to different persons. Several subsequent
subdivisions, consolidations, and one expropriation of the Estate, spawned
numerous legal disputes, living-up to the name "Land of Caveat Emptor."1 One
of these disputed lots was Lot 26, the property subject of this litigation.
Assailed in this Petition for Review on Certiorari are the Decision2 and
Resolution3 of the Court of Appeals in CA-G.R. CV No. 53770 dated 18 June
2003 and 28 October 2003, respectively, which annulled petitioner CLT Realty
Development Corporation's (CLT) TCT No. T-177013 and affirmed Hi-Grade
Feeds Corporation's (Hi-Grade) TCTs No. 237450 and No. T-146941.
The conflict arose due to an overlapping of the properties of CLT and Hi-Grade,
which prompted CLT to file a case for Annulment of Transfer Certificates of
Title, Recovery of Possession, and Damages before the Regional Trial Court
(RTC) of Caloocan City, Branch 121, docketed as Civil Case No. C-15463
against
Hi-Grade.
Version

of

Hi-Grade

Respondent Hi-Grade is the registered owner of two (2) parcels of land covered
by TCT Nos. 237450 and T-146941, derived from TCT No. 4211 of the Register
of Deeds of the Province of Rizal, registered under the names of Alejandro Ruiz
(Ruiz) and Mariano Leuterio (Leuterio), which is a derivative title of OCT No.
994,
the
mother
title.4
Tracing the line of transfer that preceded the title of Hi-Grade, it is averred that
TCT No. 4211 was registered under the names of Ruiz and Leuterio on 9
September 1918. Later, Lot 26 was sold to Francisco Gonzalez (Gonzalez),
which resulted in the cancellation of TCT No. 4211 and its replacement by TCT
No.
5261,
registered
under
the
name
of
Gonzalez. 5
Upon Gonzalez's death, TCT No. 5261 was cancelled and replaced by TCT No.
35486, registered under the name of his surviving spouse Rufina Narciso Vda.
De Gonzalez. The land covered by TCT No. 35486 was subdivided into seven
(7) lots under subdivision plan Psd-21154. By virtue of Psd-21154, TCT No.
35486 was cancelled and seven (7) new titles were issued, TCTs No. 1368 to
No.
1374,
registered
under
the
children
of
Gonzalez.
In 1947, the Government expropriated the seven lots. 6 By virtue of the

expropriation, TCTs No. 1368 to No. 1374 were cancelled and replaced by TCTs
No. 12836 to No. 12842. Afterwards, by virtue of Consolidated Subdivision Plan
Psd (LRC) Pcd-1828, the Government consolidated the titles and then further
subdivided
the
property
into
77
lots.
One of the 77 lots was registered in the name of Benito Villanueva under TCTs
No. 23027 to No. 23028, which was further subdivided into Lot-A and 17-B,
pursuant to subdivision plan Psd-276839. One of the properties in dispute is
Lot 17-B, which was later on registered in the name of Jose Madulid, Sr.
(Madulid, Sr.), under TCT No. C-32979, which was later on sold to Hi-Grade.
Another lot resulting from the Government's consolidation and subdivision of
the Maysilo Estate into 77 lots, is Lot No. 52, which was registered in the name
of Inocencio Alvarez (Alvarez) under TCT No. 7363. Soon after, Alvarez sold Lot
No. 52 to Madulid, Sr. TCT No. 7363 was cancelled and TCT No. 7364 was
issued to Madulid, Sr. Afterwards, Madulid, Sr. sold the lot to Hi-Grade. This is
another
one
of
the
properties
in
dispute.
As a review, first, Hi-Grade traces its title to TCTs No. 7364 and No. C-32979,
which were registered in the name Madulid, Sr., which in turn stemmed from
TCT
Nos.
36557-63/T-460.
TCT Nos. 36557-63/T-460 were derived from TCTs No. 1368 to No. 1374.
TCTs No. 1368 to No. 1374 stemmed from TCT No. 35486, which was
subdivided
into
smaller
lots.
TCT No. 35486 was derived from TCT No. 5261. TCT No. 5261 stemmed from
TCT
No.
4211.
Finally, TCT No. 4211 was derived from OCT No. 994, the mother title.
Version

of

CLT

CLT is the registered owner of TCT No. T-177013, by virtue of a Deed of


Absolute Sale with Real Estate Mortgage dated 10 December 1988, executed
by
the
former
registered
owner,
Estelita
I.
Hipolito.
CLT argued that Hi-Grade's title is null and void for being fake and spurious
based on the following:
1.

As shown in the face of TCT No. 4211, it purports to have been derived
from OCT No. 994;
ChanRoblesVirtualawlibrary

2.

The original copy of OCT No. 994, which is existing and in due form,
on file with the Registry of Deeds of Caloocan City, contains dilapidated
pages and no longer contains the pages where Lot No. 26 and some
other lots are supposedly inscribed.

Page 64 of 89
3.

Upon examination of the original copy of OCT No. 994, it can be seen
that the technical descriptions of the lots and the certificate itself are
entirely written in the English language. On the other hand, the
technical descriptions on the alleged TCTs No. 4211, No. 5261, and No.
35486 are still inscribed in the Spanish language.

4.

The dates of the original survey of OCT No. 994, the mother title of
TCT No. 4211, i.e., 8-27 September, 4-21 October and 17-18
November 1911, are not indicated on TCTs No. 4211, No. 5261, and
No. 35486. Rather, an entirely different date, 22 December 1917, is
indicated at the end of the Spanish technical descriptions on the
alleged TCTs No. 4211, No. 5261, and No. 35486.

5.

The parcel of land covered successively by TCTs No. 4211, No. 5261,
and No. 35486 is not identified by a lot number and there is no
reference or mention of Lot No. 26 of the Maysilo Estate in the
technical description of said titles.

6.

There is no subdivision survey plan number indicated on TCTs No.


4211, No. 5261, and No. 35486 covering the subdivision of Lot No. 26
of the Maysilo Estate.

7.

The plan Psd-21154 which subdivided the lot covered by TCT No.
35486 (formerly covered by TCT No. 4211, then TCT No. 5261), could
not be traced at the official depository of plans, which is the Lands
Management Bureau (LMB). According to the EDPS Listings of the
Records Management Division of the LMB, there is no record of Plan
Psd-21154. Said EDPS listings indicate those records which were
surveyed after the Second World War. It appears, from TCTs No. 1368
to No. 1374, plan PSD-21154 was done after the war on 15, 21, 29
September and 5-6 October 1946.

9.

TCT No. 4211 contains patent infirmities, inconsistencies, and


irregularities indicating that it is a falsified document representing a
fictitious title and is, therefore, null and void. The fact was confirmed
by an examination by the Forensic Chemistry Division of the National
Bureau of Investigation, which concluded that TCT No. 4211 was
prepared only sometime in the 1940s and not in 1918, as it is made to
appear on the face of the document. Thus, the series of titles from
where Hi-Grade's titles were derived, starting from TCTs No. 4211, No.
5261, and No. 35486, and up to and including the titles of Hi-Grade,
are also necessarily null and void.

During trial, CLT presented the following witnesses: (1) Ramon Velazquez
(Velazquez), Officer-in-Charge of the Survey Records Section, Records
Management Division of the LMB, who testified that the LMB does not have a
copy of Psd 21154; (2) Norberto Vasquez, Jr. (Vasquez), Deputy Register of
Deeds of Caloocan City, who identified the various titles relevant to the case;
(3) Juanito Bustalino (Bustalino), a licensed Geodetic Engineer, who testified
that CLT engaged his services to survey the subject property and discovered
that there was an overlap between CLT's and Hi-Grade's titles; (4) Atty. Rafael
Antonio M. Santos, one of the counsel of CLT; and (5) Aida R. Villora-Magsipoc,
a Forensic Chemist of the Forensic Division, National Bureau of Investigation,
who examined the titles as an expert witness.
On the other hand, Hi-Grade presented its sole witness, Atty. Jose Madulid,
counsel for and stockholder of Hi-Grade, and son of Hi-Grade's predecessor,
Jose Madulid, Sr., who testified that his family has been occupying the subject
properties under the concept of an owner for more than twenty-seven (27)
years, until the properties were transferred to Hi-Grade.

The Ruling of the RTC


7

8.

The technical descriptions inscribed on TCTs No. 1368 to No. 1374


show that the tie points deviated from the mother lot's tie point, which
is the Bureau of Lands Location Monument ("BLLM") No. 1, Caloocan.
Instead, different location monuments of the adjoining Piedad Estate
were used. The tie point used in TCT No. 1368 is B.M. 10, Piedad
Estate; while TCTs No. 1369 and No. 1470 used B.M. No. 8, Piedad
Estate; and TCTs No. 1371, No. 1372, No. 1373, and No. 1374 used
B.M. No. 7, Piedad Estate. The changing tie points resulted in the
shifting of the position of the seven lots in relation to the mother lot,
using their technical descriptions inscribed on the face of the titles.
Thus, when plotted, the seven lots do not fall exactly inside the
boundary of the mother lot. The same is true when the lots described
on the titles of Hi-Grade are plotted on the basis of their technical
descriptions inscribed on the titles.

After trial, the RTC ruled in favor of CLT. According to the RTC, Hi-Grade's title,
the older title, cannot prevail over CLT's title because it suffers from patent
defects and infirmities. Although Hi-Grade paid realty taxes on the subject
properties, it is not considered as a conclusive proof of ownership. The
dispositive portion of the Decision of the RTC dated 27 December 1995 reads:
WHEREFORE, premises considered and by preponderance of evidence,
judgment is hereby rendered in favor of the plaintiff CLT REALTY
DEVELOPMENT CORP. and against defendants HI-GRADE FEEDS CORP. et. al.,
ordering
1.

TCT Nos. 237450 and 146941 in the name of the defendant null and
void and accordingly ordering their cancellation;
ChanRoblesVirtualawlibrary

Page 65 of 89
2.

defendant to vacate the portion of Lot No. 26 presently occupied by it


and turn over possession of the same to the plaintiff; and

3.

defendant to pay the costs of suit.

SO ORDERED.8
Aggrieved, Hi-Grade filed a Motion for New Trial and/or Reconsideration on the
grounds of newly discovered evidence and serious and patent errors in the
court's appreciation of evidence and factual findings based on the decision of
the court in Civil Case No. C-15491, entitled "CLT v. Sto. Nio Kapithahayan
Association." The RTC denied the motion for utter lack of merit. According to
the RTC, the ruling in favor of Hi-Grade in Sto. Nio is not a newly-discovered
evidence, as Hi-Grade could not have failed to produce such evidence if it
exercised reasonable diligence. Hi-Grade's reliance in the aforesaid case is
already moot and academic as the court in Sto. Nio already reconsidered its
decision and upheld the validity of CLT's title.

The Ruling of the Court of Appeals


Impelled by the adverse ruling of the RTC, Hi-Grade elevated the case to the
Court of Appeals. During the pendency of the appeal, Hi-Grade filed a Motion to
Admit and Take Judicial Notice of Committee Report on Senate Inquiry into
Maysilo Estate Submitted by the Committees on Justice and Human Rights and
on Urban Planning, Housing and Resettlement (Senate Report) on 1 July 1998.

that the issuance of TCT No. 4211 failed to conform to the registration
procedures in 1917, the year it was issued. Also, Vasquez and Bustalino are
incompetent to testify on the customary practices in land registration at that
time. Reversing the Decision of the RTC, the Decision of the Court of Appeals
reads:
WHEREFORE, the decision appealed from is hereby REVERSED and SET ASIDE
and a new one entered DISMISSING CLT's complaint a quo and upholding the
validity of TCT Nos. 237450 and T-146941 of appellant Hi-Grade Feeds
Corporation.
Appellant CLT is further ordered to surrender its owner's duplicate copy of TCT
No. T-177013 to the Registrar of Deeds of Caloocan City who is hereby directed
to
effect
its
cancellation.
The other incidents are resolved as above indicated. No pronouncements as to
costs.
SO ORDERED.11
Hence, the present Petition for Review on Certiorari. In addition to the factual
issues raised in the trial court, the Petition raised the following arguments:

I.

The Court of Appeals went beyond the issues resolved by the trial
court and formulated its own issue regarding the date when OCT No.
994 was originally registered which it resolved on the basis of
extraneous purported evidence not presented before the trial court in
the instant case, in violation of petitioner CLT Realty's rights to due
process of law.

II.

The Court of Appeals perfunctorily, arbitrarily and blindly disregarded


the findings of fact and conclusions of the trial court arrived at after a
careful evaluation of the evidence presented by the parties and
established on record and substituted and supplanted the same with
its own conclusions based on extraneous evidence not presented and
admitted in evidence before the trial court.

III.

The Court of Appeals reversed the decision of the trial court despite
the fact that respondent Hi-Grade has failed to present evidence to
refute the established fact that the alleged titles from where its alleged
titles are derived from, i.e., the alleged TCT Nos. 4211, 5261, 35486
and 1368 to 1374, contain patent and inherent technical defects and
infirmities which render them spurious, void and ineffective.

IV.

The Court of Appeals unjustly made a wholesale rendition in its


questioned decision despite the pendency of important prejudicial
motions or incidents which it thereby either peremptorily resolved or

The Court of Appeals granted the motion in a Resolution dated 31 August


1998. Included in the Resolution, however, is a statement that although the
Court of Appeals takes judicial notice of the Senate Report, the Court of
Appeals is not bound by the findings and conclusions therein.

10

In the meantime, the Office of the Solicitor General (OSG), on behalf of the
Republic and in representation of the Administrator of the Land Registration
Authority, filed a Petition for Intervention dated 25 August 1998. The OSG
averred that its intervention is indispensable as it is pursuant to its duty to
preserve the integrity of the Torrens system of registration and to protect the
Assurance Fund, in connection with which it can initiate necessary actions for
the annulment of titles irregularly and fraudulently issued. The Court of
Appeals granted the OSG motion. The Court of Appeals resolved the issue on
intervention in the appealed Decision dated 18 June 2003. According to the
Court of Appeals, due to the magnitude and significance that will affect the
stability and integrity of the Torrens system, the State has sufficient interest in
the case.
Departing from the trial court's findings of fact, the Court of Appeals ruled as
baseless the trial court's reliance on the testimonies of CLT's witnesses,
Vasquez and Bustalmo, on the alleged patent infirmities and defects in TCT No.
4211. According to the Court of Appeals, Vasquez and Bustalino never testified

Page 66 of 89
rendered moot and academic, thus, violating petitioner CLT Realty's
right to due process of law.
V.

The Court of Appeals totally disregarded the rules on evidence and


surrendered the independence of the judiciary by giving full faith and
credence to the findings and conclusions contained in the Senate
Committee Report No. 1031 by taking judicial notice of the same,
which report was rendered pursuant to proceedings initiated and
conducted without notice to petitioner CLT Realty and thus in gross
violation of its right to due process, and was based on documents that
were never authenticated.

VI.

The Court of Appeals erroneously relied on the allegation raised in the


Republic's petitioner for intervention although the State has no legal
interest in the subject matter of the litigation of the instant case and
may not validly intervene in the instant case since the matter in
litigation are admittedly privately owned lands which will not revert to
the Republic.

VII.

The Court of Appeals blindly ignored the fact and worse, failed and
refused to rule on the issue that respondent Hi-Grade is guilty of
forum-shopping for which reason the latter's appeal before the Court
of Appeals should have been dismissed.12
Issues

I.
Whether or not the Court of Appeals committed a reversible error when it took
judicial notice of the Senate Report

II.
Whether or not the Court of Appeals committed a reversible error when it
admitted the Office of the Solicitor General's Petition for Intervention

III.
Which of the OCTs 994, that dated 19 April 1917 or that dated 3 May 1917, is
the valid title?

Our Ruling

First, the incidental matters.

I.
Whether or not the Court of Appeals committed a reversible error
when it took judicial notice of the Senate Report
CLT avers that taking judicial notice of the Senate Report is a violation of the
Rules of Court and CLT's right to due process. First, the Senate Report is
inadmissible and should not be given any probative value because it was
obtained in violation of Rule 132 of the Rules of Court, considering that the
Senate Report is unauthenticated and is thus deemed hearsay evidence.
Contrary to the mandatory procedure under Rule 132 of the Rules of Court,
which requires examination of documentary and testimonial evidence, the
Senate Report was not put to proof and CLT was deprived of the opportunity to
conduct a cross-examination on the Senate Report. And it is also contended
that the right of CLT to due process was violated because the proceedings in
the Senate were conducted without notice to CLT. Finally, the admission in
evidence of the Senate Report violated the time-honored principle of separation
of powers as it is an encroachment into the jurisdiction exclusive to the courts.
CLT misses the point. Taking judicial notice of acts of the Senate is well within
the ambit of the law. Section 1 of Rule 129 of the Revised Rules on Evidence
provides:
SECTION 1 . Judicial notice, when mandatory. A court shall take judicial
notice, without the introduction of evidence, of the existence and territorial
extent of states, their political history, forms of government and symbols of
nationality, the law of nations, the admiralty and maritime courts of the world
and their seals, the political constitution and history of the Philippines, the
official acts of legislative, executive and judicial departments of the
Philippines, the laws of nature, the measure of time, and the geographical
divisions, (1a) (Emphasis and underscoring supplied)
Judicial notice is the cognizance of certain facts that judges may properly take
13

and act on without proof because these facts are already known to them; it
is the duty of the court to assume something as a matter of fact without need
14

of further evidentiary support. Otherwise stated, by the taking of judicial


notice, the court dispenses with the traditional form of presentation of
evidence, i.e. the rigorous rules of evidence and court proceedings such as
cross-examination.

15

The Senate Report, an official act of the legislative department, may be taken
judicial notice of.
CLT posits that the Court of Appeals violated the time-honored principle of

Page 67 of 89
separation of powers when it took judicial notice of the Senate Report. This
contention is baseless. We adopt the pronouncements of this Court in Angeles
16

v. The Secretary of Justice:

To be sure, this Court did not merely rely on the DOJ and Senate reports
regarding OCT No. 994. In the 2007 Manotok case, this Court constituted a
Special Division of the Court of Appeals to hear the cases on remand, declaring
as
follows:

chanRoble svirtualLawlibrary

Since this Court is not a trier of fact[s], we are not prepared to adopt the
findings made by the DOJ and the Senate, or even consider whether these are
admissible as evidence, though such questions may be considered by the Court
of Appeals upon the initiative of the parties, x x x The reports cannot
conclusively supersede or overturn judicial decisions, but if admissible
they may be taken into account as evidence on the same level as the
other pieces of evidence submitted by the parties. The fact that they
were rendered by the DOJ and the Senate should not, in itself,
persuade the courts to accept them without inquiry. The facts and
arguments presented in the reports must still undergo judicial scrutiny
and analysis, and certainly the courts will have the discretion to accept
or reject them.17 (Emphasis and underscoring supplied)
Thus, the Senate Report shall not be conclusive upon the courts, but will be
examined and evaluated based on its probative value. The Court of Appeals
explained quite pointedly why the taking of judicial notice of the Senate Report
does not violate the republican principle. Thus:
However, the question of the binding effect of that Report upon this Court is
altogether a different matter. Certainly, a determination by any branch of
government on a justiciable matter which is properly before this Court for
adjudication does not bind the latter. The finding of the Senate committees
may be the appropriate basis for remedial legislation but when the issue of the
validity of a Torrens title is submitted to a court for resolution, only the latter
has the competence to make such a determination and once final, the same
binds not only the parties but all agencies of government. 18
That there is such a document as the Senate Report was all that was conceded
by the Court of Appeals. It did not allow the Senate Report to determine the
decision on the case.

II.
Whether or not the Court of Appeals committed a reversible error
when it admitted the Office of the Solicitor General's Petition for
Intervention
The Republic maintains that the proliferation of spurious or fake titles covering
the infamous Maysilo Estate poses a serious threat to the integrity of the
Torrens system and the Assurance Fund. The Republic asserts that because it is

bound to safeguard and protect the integrity of the Torrens system and
Assurance Fund, it is duty-bound to intervene in the present case. In granting
the intervention, the Court of Appeals ruled that considering the magnitude
and significance of the issues spawned by the Maysilo Estate, enough to affect
the stability and integrity of the Torrens system, the Republic is allowed to
intervene.
CLT, on the other hand, contends that the Republic's intervention is baseless.
According to CLT, the Republic has no legal interest in the properties as the
subject properties are not public lands and as such, will not revert to the
Republic. Further, there is no threat or claim against the Assurance Fund.
Anchoring on Presidential Decree No. 478 and Administrative Code of 1987,
CLT claims that the only action which the Office of the Solicitor General may file
on behalf of the Republic in connection with registered lands is an action for
the reversion to the Government of lands of the public domain and
improvements thereon, as well as lands held in violation of the Constitution.

19

This time, we agree with CLT.


Intervention is only allowed before or during trial. Citing Sps. Oliva v.
20

CA, CLT argues that the Petition for Intervention was time-barred for having
been filed beyond the period prescribed in Section 2, Rule 19 of the Rules of
Court, i.e., before rendition of judgment. In Oliva, the Court clarified that
intervention is unallowable when the case has already been submitted for
decision, when judgment has been rendered, or when judgment has already
became final and executory. And, intervention is only allowed when the
intervenors are indispensable parties.
Although we are cognizant of the exception that the Court may wield its power
to suspend its own rules and procedure in lieu of substantial justice and for
compelling reasons,
present case.

21

the attendant circumstances are not availing in the

The Republic is not an indispensable party in the instant litigation. An


indispensable party is a party-in-interest without whom no final determination
can be had of an action, and who shall be joined either as plaintiffs or
22

defendants. Here, even without the Republic as participant, a final


determination of the issues can be attained.
Anent the opportuness of intervention, the Court held in Cario v.
23

Ofilada that it may be allowed only before or during trial. The term trial is
used in its restricted sense, i.e., the period for the introduction of evidence by
both parties. The period of trial terminates when the judgment begins. As this
case was already in its appeal stage when intervention was sought, it could no
longer be allowed.
CLT further avers that because there was no claim against the Assurance Fund,

Page 68 of 89
intervention is improper. Section 95 of P.D. 1529 provides for the grounds
when a party can claim against the Assurance Fund:

of issuance of the decree of registration, as provided in Sections 41 and 42 of


the Land Registration Act or Section 40 of the P.D. 1529:

Section 95. Action for compensation from funds. A person who, without
negligence on his part, sustains loss or damage, or is deprived of land or any
estate or interest therein in consequence of the bringing of the land under the
operation of the Torrens system of arising after original registration of land,
through fraud or in consequence of any error, omission, mistake or
misdescription in any certificate of title or in any entry or memorandum in the
registration book, and who by the provisions of this Decree is barred or
otherwise precluded under the provision of any law from bringing an action for
the recovery of such land or the estate or interest therein, may bring an action
in any court of competent jurisdiction for the recovery of damages to be paid
out of the Assurance Fund.
Indeed, whatever party is favored in this case, the losing party may file a claim
against the Assurance Fund as the present case involves the operation of the
Torrens system. However, the action to claim against the Assurance Fund may
be dealt with in a separate proceeding.

Section 41. Immediately upon the entry of the decree of registration


the clerk shall send a certified copy thereof, under the seal of the court
to the register of deeds for the province, or provinces or city in which
the land lies, and the register of deeds shall transcribe the decree in a
book to be called the "Registration Book," in which a leaf, or leaves, in
consecutive order, shall be devoted exclusively to each title. The entry
made by the register of deeds in this book in each case shall be the
original certificate of title, and shall be signed by him and sealed with
the
seal
of
the
court. x
x
x

Now, the merits of this case.


Parenthetically, although the general rule is that the factual findings of the trial
court are accorded respect and are not generally disturbed on appeal, the
aforesaid rule does not apply in the case at bar, as the findings of the trial
24

court and the appellate court are contradictory.


We shall now discuss the bottom issues.

III.
Which off the OCTs 994, that dated 19 April 1917 or that dated 3 May
1917, is the valid title?
The mother title, OCT 994
The arguments of the parties come from apparently the same document.
Notably, however, the parties' OCTs No. 994 contain different dates of
registration, namely:
chanRoble svirtualLawlibrary

CLT's OCT No. 994 is dated 19 April 1917


Hi-Grade's OCT No. 994 is dated 3 May 1917
A title can only have one date of registration, as there can only be one title
covering the same property. The date of registration is reckoned from the time
of the title's transcription in the record book of the Registry of
Deeds.

25

Therefore, the date appearing on the face of a title refers to the date

Section 42. The certificate first registered in pursuance of the decree of


registration in regard to any parcel of land shall be entitled in the registration
book, "original certificate of title, entered pursuant to decree of the Court of
Land Registration, dated at" (stating the time and place of entry of decree and
the number of case). This certificate shall take effect upon the date of
the transcription of the decree. Subsequent certificates relating to the same
land shall be in like form, but shall be entitled "Transfer from number" (the
number of the next previous certificate relating to the same land), and also the
words "Originally registered" (date, volume, and page of registration).
(Emphases and underscoring supplied)
Based on Decree No. 36455 in Land Registration Case No. 4429, the decree
registering OCT No. 994, the date of the issuance is 19 April 1917 while on the
other hand, OCT No. 994 was received for transcription by the Register of
Deeds on 3 May 1917. In this case, the date which should be reckoned as the
date of registration of the title is the date when the mother title was received
for transcription, 3 May 1917. As correctly found by the Court of Appeals:
For sure, the very copy of OCT No. 994, presented by Appellee CLT no less and
marked as its Exhibit "D", shows on its face that the date April 19, 1917 refers
to the issuance of the decree of registration by the Honorable Norberto
Romualdez, while May 3, 1917 pertains to the date when the same decree was
Received for transcription in the Office of the Register of Deeds. 26
Therefore, as the date of transcription in the record book of the
Registry of Deeds is 3 May 1917, we rule that the genuine title is the
title of Hi-Grade.
The derivative title, TCT No. 4211
As correctly ruled by the Court of Appeals, CLT failed to prove by
preponderance of evidence, the alleged defects and infirmities in TCT
No. 4211, the title from whence Hi-Grade's titles were derived.
CLT failed to prove that TCT No. 4211 did not conform to the
registration procedures at the time it was prepared. Contrary to the
findings of the trial court, the Court cannot give credence to the

Page 69 of 89
27

28

testimony of CLT's witnesses, Vasquez and Bustalino. Vasquez is


the Deputy Register of Deeds of Caloocan City, while Bustalino is a
Geodetic Engineer. For their testimonies to matter, CLT must first
establish their competence as regards the registration rules in land
registration in 1918, at the time TCT No. 4211 was prepared. CLT
failed to discharge such burden.
On CLT's allegation that the Lands Management Bureau (LMB) has no
records of Psd 21154, we note that CLT did not prove that the LMB
indeed has no such records. CLT's witness, Velasquez, merely testified
that he cannot ascertain whether or not Psd 21154 was burned or lost
29

during the world war. Just as important, while Psd 21154 could not
be located, it was not only testified to that it may have been lost or
burned during the world war; a blue print copy of the same is being
kept in the vault of the Register of Deeds of Pasig City.
As regards the findings of the NBI Forensic Chemist on the age of TCT
No. 4211, the Court of Appeals correctly found that such findings are
inconclusive because the Chemist did not conclusively state that TCT
30

No. 4211 could not have been prepared in 1918. Also, the Chemist,
in her cross-examination, admitted that she did not know who supplied
her copies of the TCTs and that she has not seen any standard
document dated 1918.

31

On the matter regarding the discrepancy between the dates of survey


and issuance, tie points, and language used in TCT No. 4211 and OCT
No. 994, CLT's contention must fail for the obvious reason that the
basis of CLT's allegation is the non-existent mother title, OCT No. 994
dated 19 April 1917. Thus, as OCT No. 994 dated 19 April 1917 has
been established as null and void, it cannot serve as precedent for
ascertaining the genuineness of TCT No. 4211.
What matters most in this case is that CLT questioned the title of HiGrade for the purpose of having CLT's own title upheld. Instead of
establishing the genuineness of its own title, CLT attacked Hi-Grade's
titles. However, CLT failed to establish the chain of titles linking its TCT
No. T-177013 to the mother title, OCT No. 994. It failed to prove the
"circumstances under which its predecessor-in-interest acquired the
whole of Lot 26 of the Maysilo Estate. Ironically, it is even by CLT's
presentation of OCT No. 994 and of the succession of titles previous to
those held by appellant Hi-Grade that the latter's titles [was]
established as genuine derivative titles of OCT No. 994."

32

Indeed, CLT's evidence must stand or fall on its own merits and cannot
be allowed to draw strength from the alleged weakness of the
evidence of Hi-Grade. As already shown, such allegation was proven
wrong by documents on records.

As opposed to CLT's evidence on the alleged infirmities in Hi-Grade's


titles, Hi-Grade presented muniments of title, tax declarations or realty
33

tax payments, on the subject properties. While tax declarations and


receipts are inconclusive evidence of ownership or of the right to
possess land, they are prima facie proof of ownership or possession
and may become the basis of a claim for ownership when it is coupled
34

with proof of actual possession of the property.

In the case at bar,


35

Hi-Grade is the actual possessor of the subject property.

To sum up, Hi-Grade was able to establish the chain of titles linking its
titles, TCTs No. 237450 and T-14691, to the derivative title, TCT No.
36

4211, to the mother title, OCT No. 994. As borne by the records,
TCT No. 4211 was registered as a derivative title of OCT No. 994 on 9
September 1918.

37

On the other hand, CLT's title, TCT No. R-

38

17994, was registered also as a derivative title of OCT No. 994 only
on 12 September 1978. Thus, the reference of both parties is OCT No.
994, but with different dates: CLT's OCT No. 994 is dated 19 April
1917, while Hi-Grade's OCT No. 994 is dated 3 May 1917.
This factual issue of which OCT No. 994 is genuine is not a novel
matter. This Court, in Angeles v. The Secretary of
Justice,

39

citing Manotok Realty, Inc. v. CLT Realty Development


40

Corporation, exhaustively passed upon and ruled that the true and
valid OCT No. 994 was dated 3 May 1917, not 19 April 1917.
41

In the recent case of Syjuco v. Republic of the Philippines,


Court, reiterated the rulings in Angeles v. The Secretary of

this

42

Justice and Manotok Realty, Inc. v. CLT Realty Development


Corporation, that the true and valid OCT No. 994 was registered on 3
May 1917, not on 19 April 1917, and that any title that traces its
source from OCT No. 994 dated 19 April 1917, is deemed void and
inexistent.

43

As we have priorly pronounced, any title that traces its source to a


void title, is also void. The spring cannot rise higher than its
source. Nemo potest plus juris ad alium transferre quam ipse habet.
All titles that trace its source to OCT No. 994 dated 19 April 1917, are
therefore void, for such mother title is inexistent.

44

CLT so traces its

title to OCT No. 994 dated 19 April 1917, the title of CLT is void.

45
chanroblesvirtuallawlibrary

WHEREFORE, the petition is hereby DISMISSED. The Decision and


Resolution of the Court of Appeals in CA-G.R. CV No. 53770, entitled
"CLT Realty Development Corporation v. Hi-Grade Feeds Corporation,

Page 70 of 89
Register of Deeds of Metro Manila, District III," dated 18 June 2003
and 28 October 2003, respectively, are hereby AFFIRMED.
SO ORDERED.

chanroblesvirtuallawlibrary

Sereno, C.J., (Chairperson), Leonardo-De Castro, Bersamin,


and Perlas-Bernabe, JJ., concur.
27. PARTY OR HOSTILE WITNESS.

G.R. No. 214054, August 05, 2015

defenses be heard by the RTC on the ground that the suit is barred by the
statute of limitations and laches.5 The motion was denied by the court.6 On
appeal, the Court of Appeals (CA) in its December 22, 2010 Decision 7 ruled
that a preliminary hearing was proper pursuant to Section 6, 8 Rule 16 of the
Rules of Court due to the grounds cited by petitioner. There being no appeal,
the decision became final and executory on August 28, 2011. 9

re darclaw

On March 15, 2011, petitioner served interrogatories to parties 10 pursuant to


Sections 111 and 6,12Rule 25 of the Rules of Court to China Bank and required
Mr. George C. Yap, Account Officer of the Account Management Group, to
answer.
On June 22, 2011, George Yap executed his answers to interrogatories to
parties.13
re darclaw

NG MENG TAM, Petitioner, v. CHINA BANKING


CORPORATION, Respondent.
DECISION
VILLARAMA, JR., J.:
Before this Court is a direct recourse from the Regional Trial Court (RTC) via
petition1 for review on the question of whether Section 5 2 of the Judicial
Affidavit Rule (JAR) applies to hostile or adverse witnesses. The petition seeks
to annul and set aside the May 28, 2014 3 and August 27, 20144 Orders of the
RTC,
Branch
139,
Makati
City
in
Civil
Case
No.
08-1028.
This case stemmed from a collection suit filed by China Banking Corporation
(China Bank) against Ever Electrical Manufacturing Company Inc. (Ever), the
heirs of Go Tong, Vicente Go, George Go and petitioner Ng Meng Tam
sometime in December 2008. China Bank alleged that it granted Ever a loan
amounting to P5,532,331.63. The loan was allegedly backed by two surety
agreements executed by Vicente, George and petitioner in its favor, each for
P5,000,000.00, and dated December 9, 1993 and May 3, 1995, respectively.
When Ever defaulted in its payment, China Bank sent demand letters
collectively addressed to George, Vicente and petitioner. The demands were
unanswered. China Bank filed the complaint for collection docketed as Civil
Case No. 08-1028, which was raffled off to RTC Branch 62, Makati City.
In his Answer, petitioner alleged that the surety agreements were null and void
since these were executed before the loan was granted in 2004. Petitioner
posited that the surety agreements were contracts of adhesion to be construed
against the entity which drafted the same. Petitioner also alleged that he did
not
receive
any
demand
letter.
In the course of the proceedings, petitioner moved that his affirmative

In the meantime, having failed mediation and judicial dispute resolution, Civil
Case No. 08-1028 was re-raffled off to RTC Branch 139, Makati City.
Petitioner again moved for the hearing of his affirmative defenses. Because he
found Yaps answers to the interrogatories to parties evasive and not
responsive, petitioner applied for the issuance of a subpoena duces
tecum and ad testificandum against George Yap pursuant to Section 6,14 Rule
25
of
the
Revised
Rules
of
Court.
On April 29, 2014, when the case was called for the presentation of George Yap
as a witness, China Bank objected citing Section 5 of the JAR. China Bank said
that Yap cannot be compelled to testify in court because petitioner did not
obtain and present George Yaps judicial affidavit. The RTC required the parties
to submit their motions on the issue of whether the preparation of a judicial
affidavit by George Yap as an adverse or hostile witness is an exception to the
judicial
affidavit
rule.15

redarclaw

Petitioner contended that Section 5 does not apply to Yap because it specifically
excludes adverse party witnesses and hostile witnesses from its application.
Petitioner insists that Yap needed to be called to the stand so that he may be
qualified as a hostile witness pursuant to the Rules of Court.
China Bank, on the other hand, stated that petitioners characterization of Yaps
answers to the interrogatories to parties as ambiguous and evasive is a
declaration of what type of witness Yap is. It theorizes that the interrogatories
to parties answered by Yap serve as the judicial affidavit and there is no need
for
Yap
to
be
qualified
as
a
hostile
witness.
In its May 28, 2014 Order, the RTC denied for lack of merit petitioners motion
to examine Yap without executing a judicial affidavit. The RTC in interpreting
Section 5 of the JAR stated:
LawlibraryofCRAlaw

x x x The aforementioned provision, which allows the requesting party to avail


himself of the provisions of Rule 21 of the Rules of Court finds applicability to:

Page 71 of 89
(a) a government employee or official, or the requested witness, who is neither
the witness of the adverse party nor a hostile witness and (b) who unjustifiably
declines to execute a judicial affidavit or refuses without just cause to make
the relevant books, documents, or other things under his control available for
copying,
authentication,
and
eventual
production
in
court.
In the case at bar, witness George Yap is being utilized as an adverse witness
for the [petitioner]. Moreover, there was no showing that he unjustifiably
declines to execute a judicial affidavit. In fact, it was [China Bank]s counsel
who insisted that said witness judicial affidavit be taken. Thus, Section 5 of the
[JAR] which [petitioner] invoked to exempt him from the Rule finds no
application. Unless there is contrary ruling on the matter by the Supreme
Court, this court has no choice but to implement the rule as written.
On this note, this Court also finds no merit on the contention of [China Bank]
that the answer to the written interrogatories by witness George Yap already
constitutes his judicial affidavit. Inasmuch as the Court strictly implemented
the [JAR] on the part of [petitioner], so shall it rule in the same manner on the
part of [China Bank]. As correctly pointed out by [petitioner], the said answer
to interrogatories does not comply with Section 3 of the [JAR] which provides
for the contents of the judicial affidavit.16
In essence, the RTC ruled that Section 5 did not apply to Yap since he was an
adverse witness and he did not unjustifiably decline to execute a judicial
affidavit. It stated:
LawlibraryofCRAlaw

In view of the foregoing, the motion of the [petitioner] that witness George Yap
be examined without executing a Judicial Affidavit is hereby DENIED FOR
LACK OF MERIT.17
Petitioner moved for reconsideration but it was denied by the RTC in its August
18

27, 2014 Order.

The RTC reiterated its position and stated:

The RTC stressed that Section 5 of the JAR required the requested witness
refusal to be unjustifiable. It stated:
LawlibraryofCR Alaw

x x x the [JAR] requires that the refusal must be unjustifiable and without just
cause. It must be pointed out that [China Bank]s previous motions to quash
the subpoena was grounded on the claim that having already submitted to this
court his sworn written interrogatories, his being compelled to testify would be
unreasonable, oppressive and pure harassment. Thus, witness refusal to
testify cannot be considered unjustifiable since he raised valid grounds. 20
Hence, this petition.
Petitioner contends that the RTC committed a grave error when it interpreted
Section 5 to include adverse party and hostile witnesses. Based on the
wording of Section 5, adverse party and hostile witnesses are clearly excluded.
China Bank asserts that Yap neither refused unjustifiably nor without just cause
refused to a judicial affidavit. It cited the RTCs August 27, 2014 Order where
the court said that Yap had answered the interrogatories and to compel him to
testify in open court would be unreasonable, oppressive and pure
harassment. Moreover, it stated that based on the language used by Section 2
of the JAR the filing of judicial affidavits is mandatory.
The petition is anchored on the following arguments:

I
RTC BR. 139-MAKATI COMMITTED AN ERROR OF LAW WHEN IT INTERPRETED
SEC. 5 OF THE [JAR] CONTRARY TO ITS WORDINGS.
II

LawlibraryofCRAlaw

It must be pointed out that the [petitioner] [was] the [one] who invoked the
provisions of Section 5 of the [JAR] to compel the attendance of witness
George Yap and as such, it is their duty to show the applicability of the said
provisions to the case at bar. As stated in the challenged Order, Section 5 of
the [JAR] finds applicability to: (a) a government employee or official, or the
requested witness, who is neither the witness of the adverse party nor a hostile
witness and (b) who unjustifiably declines to execute a judicial affidavit or
refuses without just cause to make the relevant books, documents, or other
things under his control available for copying, authentication, and eventual
production in court. In the case at bar, [petitioner] [does] not deny that
witness George Yap is to be utilized as [his] adverse witness. On this score
alone, it is clear that the provisions invoked do not apply.19

LawlibraryofCRAlaw

RTC BR. 139-MAKATI COMMITTED AN ERROR OF LAW WHEN IT INTERPRETED


SEC. 5 [OF THE JAR] CONTRARY TO ITS PRACTICAL INTENTION AND COMMON
SENSE.
III
RTC BR. 139-MAKATI COMMITTED AN ERROR OF LAW WHEN IT EFFECTIVELY
DISREGARDED THE RELEVANT RULES ON MODE OF DISCOVERY WHICH
GOVERN THE PRESENTATION OF ADVERSE WITNESSES.
IV
ON

POLICY

LEVEL

AND

IN

THE

EVENT

RTC

BR.

139-MAKATIS

Page 72 of 89
INTERPRETATION AND APPLICATION OF SEC. 5 OF THE [JAR] IS CORRECT
(I.E., THAT OPPOSING PARTY WHO INTENDS TO PRESENT ADVERSE OR
HOSTILE WITNESS MUST GET AND SUBMIT THAT WITNESS JUDICIAL
AFFIDAVIT NO MATTER WHAT) IT IS HUMBLY SUBMITTED, WITH THE UTMOST
INDULGENCE OF THE HONORABLE SUPREME COURT, THAT THE SAME RULE BE
IMPROVED OR AMENDED BY PROVIDING SANCTIONS IN THE EVENT THE
ADVERSE OR HOSTILE WITNESS REFUSES TO ANSWER OR EXECUTE JUDICIAL
AFFIDAVIT AS REQUIRED BY THE OPPOSING PARTY.21

(1) The judicial affidavits of their witnesses, which shall take the place of such
witnesses
direct
testimonies;
and
(2) The parties documentary or object evidence, if any, which shall be
attached to the judicial affidavits and marked as Exhibits A, B, C, and so on in
the case of the complainant or the plaintiff, and as Exhibits 1, 2, 3, and so on
in
the
case
of
the
respondent
or
the
defendant.
xxxx

We grant the petition.

Section 3

THE JUDICIAL AFFIDAVIT RULE


APPLIES TO PENDING CASES

24

of the JAR enumerates the content of a judicial affidavit.


25

Under Section 10, parties are to be penalized if they do not conform to the
provisions of the JAR. Parties are however allowed to resort to the application
of a subpoena pursuant to Rule 21 of the Rules of Court in Section 5 of the JAR
in certain situations. Section 5 provides:

On September 4, 2012, the JAR was promulgated to address case congestion


and delays in courts. To this end, it seeks to reduce the time needed to take
22

witnesses testimonies.
The JAR took effect on January 1, 2013 and would
also apply to pending cases pursuant to Section 12 to wit:

LawlibraryofCR Alaw

LawlibraryofCRAlaw

Sec. 12. Effectivity. This rule shall take effect on January 1, 2013 following
its publication in two newspapers of general circulation not later than
September 15, 2012. It shall also apply to existing cases. (Emphasis
supplied)
The Court En Banc gave public prosecutors in first and second level courts one
year of modified compliance.
2014.

23

The JAR thus took full effect on January 1,

Sec. 5. Subpoena. If the government employee or official, or the requested


witness, who is neither the witness of the adverse party nor a hostile witness,
unjustifiably declines to execute a judicial affidavit or refuses without just
cause to make the relevant books, documents, or other things under his
control available for copying, authentication, and eventual production in court,
the requesting party may avail himself of the issuance of a subpoena ad
testificandum or duces tecum under Rule 21 of the Rules of Court. The rules
governing the issuance of a subpoena to the witness in this case shall be the
same as when taking his deposition except that the taking of a judicial affidavit
shal1 be understood to be ex parte.

Here, parties were presenting their evidence for the RTCs consideration when
the JAR took effect. Therefore, pursuant to Section 12 the JAR applies to the
present collection suit.

While we agree with the RTC that Section 5 has no application to Yap as he was
presented as a hostile witness we cannot agree that there is need for a finding
that witness unjustifiably refused to execute a judicial affidavit.

SECTION 5 OF THE JAR DOES NOT


APPLY TO ADVERSE PARTY WITNESSES

Section 5 of the JAR contemplates a situation where there is a (a) government


employee or official or (b) requested witness who is not the (1) adverse partys
witness nor (2) a hostile witness. If this person either (a) unjustifiably declines
to execute a judicial affidavit or (b) refuses without just cause to make the
relevant documents available to the other party and its presentation to court,
Section 5 allows the requesting party to avail of issuance of subpoena ad
testificandum or duces tecum under Rule 21 of the Rules of Court. Thus,
adverse party witnesses and hostile witnesses being excluded they are not
covered by Section 5. Expressio unius est exclusion alterius: the express
mention of one person, thing, or consequence implies the exclusion of all

The JAR primarily affects the manner by which evidence is presented in court.
Section 2(a) of the JAR provides that judicial affidavits are mandatorily filed by
parties to a case except in small claims cases. These judicial affidavits take the
place of direct testimony in court. It provides:
LawlibraryofCR Alaw

Sec. 2. Submission of Judicial Affidavits and Exhibits in lieu of direct


testimonies. (a) The parties shall file with the court and serve on the
adverse party, personally or by licensed courier service, not later than five days
before pre-trial or preliminary conference or the scheduled hearing with
respect
to
motions
and
incidents,
the
following:

LawlibraryofCR Alaw

others.

26
re darclaw

Here, Yap is a requested witness who is the adverse partys witness.


Regardless of whether he unjustifiably declines to execute a judicial affidavit or
refuses without just cause to present the documents, Section 5 cannot be

Page 73 of 89
made to apply to him for the reason that he is included in a group of
individuals expressly exempt from the provisions application.

delays may be avoided. Further written interrogatories aid the court in limiting
harassment and to focus on what is essential to a case. The Court stated:
LawlibraryofCR Alaw

The situation created before us begs the question: if the requested witness is
the adverse partys witness or a hostile witness, what procedure should be
followed?
The JAR being silent on this point, we turn to the provisions governing the
rules on evidence covering hostile witnesses specially Section 12, Rule 132 of
the Rules of Court which provides:
LawlibraryofCRAlaw

SEC. 12. Party may not impeach his own witness. Except with respect to
witnesses referred to in paragraphs (d) and (e) of Section 10, the party
producing a witness is not allowed to impeach his credibility.
A witness may be considered as unwilling or hostile only if so declared by the
court upon adequate showing of his adverse interest, unjustified reluctance to
testify, or his having misled the party into calling him to the witness stand.
The unwilling or hostile witness so declared, or the witness who is an adverse
party, may be impeached by the party presenting him in all respects as if he
had been called by the adverse party, except by evidence of his bad character.
He may also be impeached and cross-examined by the adverse party, but such
cross-examination must only be on the subject matter of his examination-inchief.
Before a party may be qualified under Section 12, Rule 132 of the Rules of
Court, the party presenting the adverse party witness must comply with
Section 6, Rule 25 of the Rules of Court which provides:
LawlibraryofCRAlaw

SEC. 6. Effect of failure to serve written interrogatories. Unless thereafter


allowed by the court for good cause shown and to prevent a failure of justice, a
party not served with written interrogatories may not be compelled by the
adverse party to give testimony in open court, or to give a deposition pending
appeal.
27

In Afulugencia v. Metropolitan Bank & Trust Co., this Court stated that in
civil cases, the procedure of calling the adverse party to the witness stand is

28

not allowed, unless written interrogatories are first served upon the latter.
There petitioners Spouses Afulugencia sought the issuance of a subpoena
duces tecum and ad testificandum to compel the officers of the bank to testify
and bring documents pertaining to the extrajudicial foreclosure and sale of a
certain parcel of land. Metrobank moved to quash the issuance of the
subpoenas on the ground of non-compliance with Section 6, Rule 25 of the
Rules of Court. In quashing the issuance of the subpoena, the Court reminded
litigants that the depositions are a mechanism by which fishing expeditions and

One of the purposes of the above rule is to prevent fishing expeditions and
needless delays; it is there to maintain order and facilitate the conduct of trial.
It will be presumed that a party who does not serve written interrogatories on
the adverse party beforehand will most likely be unable to elicit facts useful to
its case if it later opts to call the adverse party to the witness stand as its
witness. Instead, the process could be treated as a fishing expedition or an
attempt at delaying the proceedings; it produces no significant result that a
prior
written
interrogatories
might
bring.
Besides, since the calling party is deemed bound by the adverse partys
testimony, compelling the adverse party to take the witness stand may result
in the calling party damaging its own case. Otherwise stated, if a party cannot
elicit facts or information useful to its case through the facility of written
interrogatories or other mode of discovery, then the calling of the adverse
party to the witness stand could only serve to weaken its own case as a result
of the calling partys being bound by the adverse partys testimony, which may
only be worthless and instead detrimental to the calling partys cause.
Another reason for the rule is that by requiring prior written interrogatories,
the court may limit the inquiry to what is relevant, and thus prevent the calling
party from straying or harassing the adverse party when it takes the latter to
the
stand.
Thus, the rule not only protects the adverse party from unwarranted surprises
or harassment; it likewise prevents the calling party from conducting a fishing
expedition or bungling its own case. Using its own judgment and discretion, the
court can hold its own in resolving a dispute, and need not bear witness to the
parties perpetrating unfair court practices such as fishing for evidence,
badgering, or altogether ruining their own cases. Ultimately, such unnecessary
processes can only constitute a waste of the courts precious time, if not
pointless entertainment.29 (Citation omitted)
In this case, parties, with the approval of the Court, furnished and
answered interrogatories to parties pursuant to Rule 25 of the Rules of
Court. They therefore complied with Section 6 of Rule 25 of the Rules
of Court. Before the present controversy arose, the RTC had already
issued subpoenas for Yap to testify and produce documents. He was
called to the witness stand when China Bank interposed its objection
for non-compliance with Section 5 of the JAR. Having established that
Yap, as an adverse party witness, is not within Section 5 of the JARs
scope, the rules in presentation of adverse party witnesses as provided
for under the Rules of Court shall apply. In keeping with this Courts
decision in Afulugencia, there is no reason for the RTC not to proceed
with the presentation of Yap as a witness.

Page 74 of 89

MENDOZA, JJ.

In sum, Section 5 of the JAR expressly excludes from its application


adverse party and hostile witnesses. For the presentation of these
types of witnesses, the provisions on the Rules of Court under the
Revised Rules of Evidence and all other correlative rules including the
modes of deposition and discovery rules shall apply.

Promulgated:

WHEREFORE, the petition is GRANTED. The May 28, 2014 and


August 27, 2014 Orders of the Regional Trial Court, Branch 139,
Makati City are hereby ANNULLED and SET ASIDE.
No pronouncement as to costs.
SO ORDERED.

JESUS S. LUCAS,

June 6, 2011

cralawla wlibrary

Velasco, Jr., (Chairperson), Peralta, Perez, and Jardeleza, JJ., concur.

Respondent.

28. AUTHENTICATION OF DOCUMENT.


PDF.

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

29. EVIDENCE NOT OFFERED; EXCEPTION.


DNA EVIDENCE.
30.

SECOND DIVISION

JESSE U. LUCAS,

G.R. No. 190710

Petitioner,
Present:

CARPIO, J.,

DECISION

NACHURA, J.:

Chairperson,
- versus -

NACHURA,
PERALTA,
ABAD, and

Is a prima facie showing necessary before a


court can issue a DNA testing order? In this
petition for review on certiorari, we address this
question to guide the Bench and the Bar in

Page 75 of 89

dealing with a relatively new evidentiary tool.


Assailed in this petition are the Court of Appeals
(CA) Decision[1] dated September 25, 2009 and
Resolution dated December 17, 2009.

The antecedents of the case are, as follows:

On July 26, 2007, petitioner, Jesse U. Lucas, filed


a Petition to Establish Illegitimate Filiation (with
Motion for the Submission of Parties to DNA
Testing)[2] before the Regional Trial Court (RTC),
Branch 72, Valenzuela City. Petitioner narrated
that, sometime in 1967, his mother, Elsie Uy
(Elsie),
migrated
to Manila from Davao and
stayed with a certain Ate Belen (Belen) who
worked in a prominent nightspot in Manila. Elsie
would oftentimes accompany Belen to work. On
one occasion, Elsie got acquainted with
respondent, Jesus S. Lucas, at Belens workplace,
and an intimate relationship developed between
the two. Elsie eventually got pregnant and, on
March 11, 1969, she gave birth to petitioner,
Jesse U. Lucas. The name of petitioners father
was not stated in petitioners certificate of live
birth. However, Elsie later on told petitioner that

his father is respondent. On August 1, 1969,


petitioner was baptized at San Isidro Parish, Taft
Avenue, Pasay City.
Respondent
allegedly
extended financial support to Elsie and
petitioner for a period of about two years. When
the relationship of Elsie and respondent ended,
Elsie refused to accept respondents offer of
support and decided to raise petitioner on her
own. While petitioner was growing up, Elsie
made several attempts to introduce petitioner
to respondent, but all attempts were in vain.

Attached to the petition were the following: (a)


petitioners certificate of live birth; (b)
petitioners baptismal certificate; (c) petitioners
college diploma, showing that he graduated
from Saint Louis University in Baguio City with a
degree in Psychology; (d) his Certificate of
Graduation from the same school; (e) Certificate
of Recognition from the University of the
Philippines, College of Music; and (f) clippings of
several articles from different newspapers about
petitioner, as a musical prodigy.
Respondent was not served with a copy of the
petition. Nonetheless, respondent learned of the
petition to establish filiation. His counsel

Page 76 of 89

therefore went to the trial court on August 29,


2007 and obtained a copy of the petition.

Petitioner filed with the RTC a Very Urgent


Motion to Try and Hear the Case. Hence, on
September 3, 2007, the RTC, finding the petition
to be sufficient in form and substance, issued
the Order[3] setting the case for hearing and
urging anyone who has any objection to the
petition to file his opposition. The court also
directed that the Order be published once a
week for three consecutive weeks in any
newspaper
of
general
circulation
in
the Philippines, and that the Solicitor General be
furnished with copies of the Order and the
petition in order that he may appear and
represent the State in the case.

On September 4, 2007, unaware of the issuance


of the September 3, 2007 Order, respondent
filed a Special Appearance and Comment. He
manifested inter alia that: (1) he did not receive
the summons and a copy of the petition; (2) the
petition was adversarial in nature and therefore
summons should be served on him as
respondent; (3) should the court agree that

summons was required, he was waiving service


of
summons
and
making
a
voluntary
appearance; and (4) notice by publication of the
petition and the hearing was improper because
of the confidentiality of the subject matter. [4]

On September 14, 2007, respondent also filed a


Manifestation and Comment on Petitioners Very
Urgent
Motion
to
Try
and
Hear
the
Case. Respondent reiterated that the petition
for recognition is adversarial in nature; hence,
he should be served with summons.
After learning of the September 3, 2007 Order,
respondent filed a motion for reconsideration.
[5]
Respondent averred that the petition was not
in due form and substance because petitioner
could not have personally known the matters
that were alleged therein. He argued that DNA
testing cannot be had on the basis of a mere
allegation pointing to respondent as petitioners
father. Moreover, jurisprudence is still unsettled
on the acceptability of DNA evidence.
On July 30, 2008, the RTC, acting on
respondents motion for reconsideration, issued
an Order[6] dismissing the case. The court
remarked that, based on the case of Herrera v.

Page 77 of 89

Alba,[7] there are four significant procedural


aspects of a traditional paternity action which
the parties have to face: a prima facie case,
affirmative defenses, presumption of legitimacy,
and physical resemblance between the putative
father and the child. The court opined that
petitioner must first establish these four
procedural aspects before he can present
evidence of paternity and filiation, which may
include incriminating acts or scientific evidence
like blood group test and DNA test results. The
court observed that the petition did not show
that these procedural aspects were present.
Petitioner failed to establish a prima facie case
considering that (a) his mother did not
personally declare that she had sexual relations
with respondent, and petitioners statement as
to what his mother told him about his father
was clearly hearsay; (b) the certificate of live
birth was not signed by respondent; and (c)
although petitioner used the surname of
respondent, there was no allegation that he was
treated as the child of respondent by the latter
or his family. The court opined that, having
failed
to
establish
a prima
facie case,
respondent had no obligation to present any
affirmative defenses. The dispositive portion of
the said Order therefore reads:

WHEREFORE, for failure of the petitioner


to establish compliance with the four procedural
aspects of a traditional paternity action in his
petition, his motion for the submission of parties
to DNA testing to establish paternity and filiation
is hereby DENIED. This case is DISMISSED
without prejudice.
SO ORDERED.[8]

Petitioner seasonably filed a motion for


reconsideration to the Order dated July 30,
2008, which the RTC resolved in his favor. Thus,
on
October
20,
2008,
it
issued
the
[9]
Order setting aside the courts previous order,
thus:
WHEREFORE, in view of the foregoing, the
Order dated July 30, 2008 is hereby
reconsidered and set aside.

Let the Petition (with Motion for the


Submission of Parties to DNA Testing) be set for
hearing on January 22, 2009 at 8:30 in the
morning.

xxxx

Page 78 of 89
SO ORDERED.[10]

This time, the RTC held that the ruling on the


grounds relied upon by petitioner for filing the
petition is premature considering that a fullblown trial has not yet taken place. The court
stressed that the petition was sufficient in form
and substance. It was verified, it included a
certification against forum shopping, and it
contained a plain, concise, and direct statement
of the ultimate facts on which petitioner relies
on for his claim, in accordance with Section 1,
Rule 8 of the Rules of Court. The court remarked
that the allegation that the statements in the
petition were not of petitioners personal
knowledge is a matter of evidence. The court
also dismissed respondents arguments that
there is no basis for the taking of DNA test, and
that jurisprudence is still unsettled on the
acceptability of DNA evidence. It noted that the
new Rule on DNA Evidence[11] allows the conduct
of DNA testing, whether at the courts instance
or upon application of any person who has legal
interest in the matter in litigation.

Respondent
filed
a
Motion
for
Reconsideration of Order dated October 20,
2008 and for Dismissal of Petition, [12] reiterating
that (a) the petition was not in due form and
substance as no defendant was named in the
title, and all the basic allegations were hearsay;
and (b) there was no prima facie case, which
made the petition susceptible to dismissal.

The RTC denied the motion in the Order


dated January 19, 2009, and rescheduled the
hearing.[13]

Aggrieved, respondent filed a petition


for certiorari with the CA, questioning the
Orders dated October 20, 2008 and January 19,
2009.

On September 25, 2009, the CA decided


the petition for certiorari in favor of respondent,
thus:

WHEREFORE, the instant petition for


certiorari is hereby GRANTED for being

Page 79 of 89
meritorious. The assailed Orders dated October
20, 2008 and January 19, 2009 both issued by
the Regional Trial Court, Branch 172 of
Valenzuela City in SP. Proceeding Case No. 30-V07 are REVERSED and SET ASIDE. Accordingly,
the case docketed as SP. Proceeding Case No.
30-V-07 is DISMISSED.[14]

The CA held that the RTC did not acquire


jurisdiction over the person of respondent, as no
summons
had
been
served
on
him.
Respondents special appearance could not be
considered as voluntary appearance because it
was filed only for the purpose of questioning the
jurisdiction of the court over respondent.
Although respondent likewise questioned the
courts jurisdiction over the subject matter of the
petition, the same is not equivalent to a waiver
of his right to object to the jurisdiction of the
court over his person.

The CA remarked that petitioner filed the


petition to establish illegitimate filiation,
specifically seeking a DNA testing order to
abbreviate the proceedings. It noted that
petitioner failed to show that the four significant
procedural aspects of a traditional paternity

action had been met. The CA further held that a


DNA testing should not be allowed when the
petitioner has failed to establish a prima
facie case, thus:

While the tenor [of Section 4, Rule on DNA Evidence]


appears to be absolute, the rule could not really have
been intended to trample on the substantive rights of
the parties. It could have not meant to be an
instrument to promote disorder, harassment, or
extortion. It could have not been intended to legalize
unwarranted expedition to fish for evidence. Such will
be the situation in this particular case if a court may at
any time order the taking of a DNA test. If the DNA test
in compulsory recognition cases is immediately
available to the petitioner/complainant without
requiring first the presentation of corroborative proof,
then a dire and absurd rule would result. Such will
encourage and promote harassment and extortion.

xxxx

At the risk of being repetitious, the Court would like to


stress that it sees the danger of allowing an absolute
DNA testing to a compulsory recognition test even if
the plaintiff/petitioner failed to establish prima
facie proof. x x x If at anytime, motu proprio and
without pre-conditions, the court can indeed order the
taking of DNA test in compulsory recognition cases,

Page 80 of 89
then the prominent and well-to-do members of our
society will be easy prey for opportunists and
extortionists. For no cause at all, or even for [sic]
casual sexual indiscretions in their younger years
could be used as a means to harass them.
Unscrupulous women, unsure of the paternity of their
children may just be taking the chances-just in case-by
pointing to a sexual partner in a long past one-time
encounter. Indeed an absolute and unconditional
taking of DNA test for compulsory recognition case
opens wide the opportunities for extortionist to prey on
victims who have no stomach for scandal.[15]

Petitioner moved for reconsideration. On


December 17, 2009, the CA denied the motion
for lack of merit.[16]
In this petition for review on certiorari,
petitioner raises the following issues:
I.
WHETHER OR NOT THE COURT OF APPEALS
ERRED WHEN IT RESOLVED THE ISSUE OF LACK
OF JURISDICTION OVER THE PERSON OF HEREIN
RESPONDENT ALBEIT THE SAME WAS NEVER
RAISED IN THE PETITION FOR CERTIORARI.

I.A

WHETHER OR NOT THE COURT OF


APPEALS ERRED WHEN IT RULED
THAT JURISDICTION WAS NOT
ACQUIRED OVER THE PERSON OF
THE RESPONDENT.

I.B
WHETHER OR NOT THE COURT OF
APPEALS ERRED WHEN IT FAILED
TO
REALIZE
THAT
THE
RESPONDENT
HAD
ALREADY
SUBMITTED VOLUNTARILY TO THE
JURISDICTION OF THE COURT A
QUO.

I.C
WHETHER OR NOT THE COURT OF
APPEALS
ERRED
WHEN
IT
ESSENTIALLY RULED THAT THE
TITLE OF A PLEADING, RATHER
THAN ITS BODY, IS CONTROLLING.

II.
WHETHER OR NOT THE COURT OF APPEALS
ERRED WHEN IT ORDERED THE DISMISSAL OF
THE PETITION BY REASON OF THE MOTION
(FILED BY THE PETITIONER BEFORE THE

Page 81 of 89
COURT A QUO) FOR THE CONDUCT OF DNA
TESTING.

II.A
WHETHER OR NOT THE COURT OF
APPEALS
ERRED
WHEN
IT
ESSENTIALLY RULED THAT DNA
TESTING CAN ONLY BE ORDERED
AFTER
THE
PETITIONER
ESTABLISHES PRIMA FACIE PROOF
OF FILIATION.

III.
WHETHER OR NOT THE COURT OF APPEALS
ERRED WITH ITS MISPLACED RELIANCE ON THE
CASE OF HERRERA VS. ALBA,

ESPECIALLY
AS
REGARDS
THE
SIGNIFICANT PROCEDURAL ASPECTS
TRADITIONAL PATERNITY ACTION.[17]

FOUR
OF A

Petitioner contends that respondent never


raised as issue in his petition for certiorari the
courts lack of jurisdiction over his person.
Hence, the CA had no legal basis to discuss the
same, because issues not raised are deemed

waived or abandoned. At any rate, respondent


had already voluntarily submitted to the
jurisdiction of the trial court by his filing of
several motions asking for affirmative relief,
such as the (a) Motion for Reconsideration of
the Order dated September 3, 2007; (b) Ex
Parte Motion
to
Resolve
Motion
for
Reconsideration of the Order dated November
6, 2007; and (c) Motion for Reconsideration of
the Order dated October 20, 2008 and for
Dismissal of Petition. Petitioner points out that
respondent even expressly admitted that he has
waived his right to summons in his
Manifestation and Comment on Petitioners Very
Urgent Motion to Try and Hear the Case. Hence,
the issue is already moot and academic.

Petitioner argues that the case was adversarial


in nature. Although the caption of the petition
does not state respondents name, the body of
the petition clearly indicates his name and his
known address. He maintains that the body of
the petition is controlling and not the caption.

Finally, petitioner asserts that the motion for


DNA testing should not be a reason for the

Page 82 of 89

dismissal of the petition since it is not a legal


ground for the dismissal of cases. If the CA
entertained any doubt as to the propriety of
DNA testing, it should have simply denied the
motion.[18] Petitioner points out that Section 4 of
the Rule on DNA Evidence does not require that
there must be a prior proof of filiation before
DNA testing can be ordered. He adds that the
CA erroneously relied on the four significant
procedural aspects of a paternity case, as
enunciated in Herrera v. Alba.[19] Petitioner avers
that these procedural aspects are not applicable
at this point of the proceedings because they
are matters of evidence that should be taken up
during the trial.[20]

In his Comment, respondent supports the CAs


ruling on most issues raised in the petition
for certiorari and merely reiterates his previous
arguments. However, on the issue of lack of
jurisdiction, respondent counters that, contrary
to petitioners assertion, he raised the issue
before the CA in relation to his claim that the
petition was not in due form and substance.
Respondent denies that he waived his right to
the service of summons. He insists that the
alleged waiver and voluntary appearance was

conditional upon a finding by the court that


summons is indeed required. He avers that the
assertion of affirmative defenses, aside from
lack of jurisdiction over the person of the
defendant, cannot be considered as waiver of
the defense of lack of jurisdiction over such
person.

The petition is meritorious.

Primarily, we emphasize that the assailed


Orders of the trial court were orders denying
respondents motion to dismiss the petition for
illegitimate filiation. An order denying a motion
to dismiss is an interlocutory order which
neither terminates nor finally disposes of a
case, as it leaves something to be done by the
court before the case is finally decided on the
merits. As such, the general rule is that the
denial of a motion to dismiss cannot be
questioned
in
a
special
civil
action
for certiorari, which is a remedy designed to
correct errors of jurisdiction and not errors of
judgment. Neither can a denial of a motion to
dismiss be the subject of an appeal unless and

Page 83 of 89

until a final judgment or order is rendered. In a


number of cases, the court has granted the
extraordinary remedy of certiorari on the denial
of the motion to dismiss but only when it has
been tainted with grave abuse of discretion
amounting to lack or excess of jurisdiction. [21] In
the present case, we discern no grave abuse of
discretion on the part of the trial court in
denying the motion to dismiss.

The grounds for dismissal relied upon by


respondent were (a) the courts lack of
jurisdiction over his person due to the absence
of summons, and (b) defect in the form and
substance of the petition to establish
illegitimate filiation, which is equivalent to
failure to state a cause of action.

We need not belabor the issues on whether


lack of jurisdiction was raised before the CA,
whether the court acquired jurisdiction over the
person of respondent, or whether respondent
waived his right to the service of summons. We
find that the primordial issue here is actually
whether it was necessary, in the first place, to
serve summons on respondent for the court to

acquire jurisdiction over the case. In other


words,
was
the
service
of
summons
jurisdictional? The answer to this question
depends on the nature of petitioners action,
that is, whether it is an action in personam, in
rem, or quasi in rem.

An action in personam is lodged against a


person based on personal liability; an action in
rem is directed against the thing itself instead
of the person; while an action quasi in
rem names a person as defendant, but its
object is to subject that person's interest in a
property to a corresponding lien or obligation. A
petition directed against the "thing" itself or
the res, which concerns the status of a person,
like a petition for adoption, annulment of
marriage, or correction of entries in the birth
certificate, is an action in rem.[22]

In an action in personam, jurisdiction over


the person of the defendant is necessary for the
court to validly try and decide the case. In a
proceeding in rem or quasi in rem, jurisdiction
over the person of the defendant is not a

Page 84 of 89

prerequisite to confer jurisdiction on the court,


provided that the latter has jurisdiction over
the res. Jurisdiction over the resis acquired
either (a) by the seizure of the property under
legal process, whereby it is brought into actual
custody of the law, or (b) as a result of the
institution of legal proceedings, in which the
power of the court is recognized and made
effective. [23]

The herein petition to establish illegitimate


filiation is an action in rem. By the simple filing
of the petition to establish illegitimate filiation
before the RTC, which undoubtedly had
jurisdiction over the subject matter of the
petition, the latter thereby acquired jurisdiction
over the case. An in rem proceeding is validated
essentially through publication. Publication is
notice to the whole world that the proceeding
has for its object to bar indefinitely all who
might be minded to make an objection of any
sort to the right sought to be established.
[24]
Through publication, all interested parties
are deemed notified of the petition.

If at all, service of summons or notice is


made to the defendant, it is not for the purpose
of vesting the court with jurisdiction, but merely
for satisfying the due process requirements.
[25]
This is but proper in order to afford the
person concerned the opportunity to protect his
interest if he so chooses. [26] Hence, failure to
serve summons will not deprive the court of its
jurisdiction to try and decide the case. In such a
case, the lack of summons may be excused
where it is determined that the adverse party
had, in fact, the opportunity to file his
opposition, as in this case. We find that the due
process requirement with respect to respondent
has been satisfied, considering that he has
participated in the proceedings in this case and
he has the opportunity to file his opposition to
the petition to establish filiation.

To address respondents contention that the


petition should have been adversarial in form,
we further hold that the herein petition to
establish filiation was sufficient in form. It was
indeed adversarial in nature despite its caption
which lacked the name of a defendant, the
failure to implead respondent as defendant, and
the non-service of summons upon respondent. A

Page 85 of 89

proceeding is adversarial where the party


seeking relief has given legal warning to the
other party and afforded the latter an
opportunity
to
contest
it.[27] In
this
petitionclassified as an action in remthe notice
requirement for an adversarial proceeding was
likewise satisfied by the publication of the
petition and the giving of notice to the Solicitor
General, as directed by the trial court.

The petition sufficiently states the ultimate


facts relied upon by petitioner to establish his
filiation to respondent. Respondent, however,
contends that the allegations in the petition
were hearsay as they were not of petitioners
personal knowledge. Such matter is clearly a
matter of evidence that cannot be determined
at this point but only during the trial when
petitioner presents his evidence.

The petition to establish filiation is


sufficient in substance. It satisfies Section 1,
Rule 8 of the Rules of Court, which requires the
complaint to contain a plain, concise, and direct
statement of the ultimate facts upon which the
plaintiff bases his claim. A fact is essential if it
cannot be stricken out without leaving the
statement of the cause of action inadequate.
[28]
A complaint states a cause of action when it
contains the following elements: (1) the legal
right of plaintiff, (2) the correlative obligation of
the defendant, and (3) the act or omission of
the defendant in violation of said legal right. [29]

In a motion to dismiss a complaint based on


lack of cause of action, the question submitted
to the court for determination is the sufficiency
of the allegations made in the complaint to
constitute a cause of action and not whether
those allegations of fact are true, for said
motion must hypothetically admit the truth of
the
facts
alleged
in
the
complaint. [30]
The inquiry is confined to the four corners of the
complaint, and no other.[31] The test of the
sufficiency of the facts alleged in the complaint
is whether or not, admitting the facts alleged,
the court could render a valid judgment upon
the same in accordance with the prayer of the
complaint.[32]

Page 86 of 89

If the allegations of the complaint are sufficient


in form and substance but their veracity and
correctness are assailed, it is incumbent upon
the court to deny the motion to dismiss and
require the defendant to answer and go to trial
to prove his defense. The veracity of the
assertions of the parties can be ascertained at
the trial of the case on the merits.[33]

The statement in Herrera v. Alba[34] that


there are four significant procedural aspects in a
traditional paternity case which parties have to
face has been widely misunderstood and
misapplied in this case. A party is confronted by
these so-called procedural aspects during trial,
when the parties have presented their
respective evidence. They are matters of
evidence that cannot be determined at this
initial stage of the proceedings, when only the
petition to establish filiation has been filed. The
CAs observation that petitioner failed to
establish a prima facie casethe first procedural
aspect in a paternity caseis therefore
misplaced. A prima facie case is built by a
partys evidence and not by mere allegations in
the initiatory pleading.

Clearly then, it was also not the opportune


time to discuss the lack of a prima facie case
vis--vis the motion for DNA testing since no
evidence has, as yet, been presented by
petitioner. More essentially, it is premature to
discuss whether, under the circumstances, a
DNA testing order is warranted considering that
no such order has yet been issued by the trial
court. In fact, the latter has just set the said
case for hearing.

At any rate, the CAs view that it would be


dangerous to allow a DNA testing without
corroborative proof is well taken and deserves
the Courts attention. In light of this observation,
we find that there is a need to supplement the
Rule on DNA Evidence to aid the courts in
resolving motions for DNA testing order,
particularly in paternity and other filiation
cases. We, thus, address the question of
whether a prima facie showing is necessary
before a court can issue a DNA testing order.

Page 87 of 89

The Rule on DNA Evidence was enacted to


guide the Bench and the Bar for the introduction
and use of DNA evidence in the judicial system.
It provides the prescribed parameters on the
requisite elements for reliability and validity
(i.e., the
proper
procedures,
protocols,
necessary laboratory reports, etc.), the possible
sources of error, the available objections to the
admission of DNA test results as evidence as
well as the probative value of DNA evidence. It
seeks to ensure that the evidence gathered,
using various methods of DNA analysis, is
utilized effectively and properly, [and] shall not
be misused and/or abused and, more
importantly, shall continue to ensure that DNA
analysis serves justice and protects, rather than
prejudice the public.[35]

Not surprisingly, Section 4 of the Rule on


DNA Evidence merely provides for conditions
that are aimed to safeguard the accuracy and
integrity of the DNA testing. Section 4 states:

SEC. 4. Application for DNA Testing Order. The


appropriate court may, at any time, either motu
proprio or on application of any person who has

a legal interest in the matter in litigation, order


a DNA testing. Such order shall issue after due
hearing and notice to the parties upon a
showing of the following:
(a) A biological sample exists that is
relevant to the case;
(b) The biological sample: (i) was not
previously subjected to the type of
DNA testing now requested; or (ii) was
previously subjected to DNA testing,
but
the
results
may
require
confirmation for good reasons;
(c) The DNA testing uses a scientifically
valid technique;
(d) The DNA testing has the scientific
potential to produce new information
that is relevant to the proper
resolution of the case; and
(e) The existence of other factors, if any,
which the court may consider as
potentially affecting the accuracy or
integrity of the DNA testing.
This Rule shall not preclude a DNA
testing, without need of a prior court order, at
the behest of any party, including law
enforcement agencies, before a suit or
proceeding is commenced.

Page 88 of 89

This does not mean, however, that a DNA


testing order will be issued as a matter of right
if, during the hearing, the said conditions are
established.

In some states, to warrant the issuance of


the DNA testing order, there must be a show
cause hearing wherein the applicant must first
present sufficient evidence to establish a prima
facie case or a reasonable possibility of
paternity or good cause for the holding of the
test. [36] In these states, a court order for blood
testing is considered a search, which, under
their Constitutions (as in ours), must be
preceded by a finding of probable cause in order
to be valid. Hence, the requirement of a prima
facie case, or reasonable possibility, was
imposed in civil actions as a counterpart of a
finding of probable cause. The Supreme Court of
Louisiana eloquently explained

Although a paternity action is civil, not criminal,


the
constitutional
prohibition
against
unreasonable searches and seizures is still
applicable, and a proper showing of sufficient
justification under the particular factual
circumstances of the case must be made before

a court may order a compulsory blood test.


Courts in various jurisdictions have differed
regarding the kind of procedures which are
required, but those jurisdictions have almost
universally found that a preliminary showing
must
be
made
before
a
court
can
constitutionally order compulsory blood testing
in paternity cases. We agree, and find that, as a
preliminary matter, before the court may issue
an order for compulsory blood testing, the
moving party must show that there is a
reasonable possibility of paternity. As explained
hereafter, in cases in which paternity is
contested and a party to the action refuses to
voluntarily undergo a blood test, a show cause
hearing must be held in which the court can
determine whether there is sufficient evidence
to establish a prima facie case which warrants
issuance of a court order for blood testing.[37]

The same condition precedent should be


applied in our jurisdiction to protect the putative
father from mere harassment suits. Thus, during
the hearing on the motion for DNA testing, the
petitioner must present prima facie evidence or
establish a reasonable possibility of paternity.

Page 89 of 89

Notwithstanding these, it should be


stressed that the issuance of a DNA testing
order remains discretionary upon the court. The
court may, for example, consider whether there
is absolute necessity for the DNA testing. If
there is already preponderance of evidence to
establish paternity and the DNA test result
would only be corroborative, the court may, in
its discretion, disallow a DNA testing.

WHEREFORE, premises considered, the


petition is GRANTED. The Court of Appeals
Decision dated September 25, 2009 and
Resolution
dated
December
17,
2009
are REVERSED and SET ASIDE. The Orders

dated October 20, 2008 and January 19, 2009 of


the Regional Trial Court of Valenzuela City are A
FFIRMED.

SO ORDERED.